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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PCiDLreUacWonLmyezS3lexN1Dtx7tjWtRMowlGU1Bs/mwrPfRjHX1GmrYXH5rqy EwLwYtPx3AyQhQHjg7Oz/A== 0001044650-02-000009.txt : 20021205 0001044650-02-000009.hdr.sgml : 20021205 20021205165241 ACCESSION NUMBER: 0001044650-02-000009 CONFORMED SUBMISSION TYPE: 20-F PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020531 FILED AS OF DATE: 20021205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALAIS RESOURCES INC CENTRAL INDEX KEY: 0001044650 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 20-F SEC ACT: 1934 Act SEC FILE NUMBER: 000-29392 FILM NUMBER: 02849991 BUSINESS ADDRESS: STREET 1: PO BOX 427 STREET 2: V2P 6J7 CITY: CHILLIWACK STATE: A1 ZIP: 00000 BUSINESS PHONE: 6047953383 MAIL ADDRESS: STREET 1: PO BOX 427 STREET 2: V2P 6J7 CITY: CHILLIWACK STATE: A1 ZIP: 00000 20-F 1 third.htm 1: 2: 3: 4: 5: < 6: 7: 8: 9:

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UNITED STATES

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SECURITIES AND EXCHANGE COMMISSION

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Washington, D.C.<SPAN

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style="mso-spacerun: yes">  20549<SPAN

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20-F<o:p></o:p>

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<B

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<SPAN

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one)<o:p></o:p>

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___

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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES

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EXCHANGE ACT OF 1934

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OR

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<SPAN

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<SPAN

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style="mso-spacerun: yes">  X <SPAN

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style="mso-bidi-font-weight: normal"><SPAN

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style="mso-spacerun: yes">  ANNUAL REPORT PURSUANT TO

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SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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<SPAN

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style="mso-spacerun: yes">        For

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the fiscal year ended May 31, 2002

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OR

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___

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TRANSITION REPORT PURSUANT TO

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SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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<SPAN

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style="mso-spacerun: yes">        For

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the transition period from __________ to __________

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<SPAN

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<SPAN

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<SPAN

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style="FONT-SIZE: 10pt">Commission file number

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0-29392<o:p></o:p>

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<SPAN

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<SPAN

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<B

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style="FONT-SIZE: 15.5pt; FONT-FAMILY: 'Times New Roman'; mso-bidi-font-size: 10.0pt">CALAIS<SPAN

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<SPAN

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style="FONT-SIZE: 10pt">(Exact name of Registrant as specified in its

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charter)<o:p></o:p>

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<![if !supportEmptyParas]><![endif]> <o:p></o:p>

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<SPAN

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style="FONT-SIZE: 10pt">British Columbia, Canada<SPAN

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<SPAN

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organization)<o:p></o:p>

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<SPAN

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style="FONT-SIZE: 10pt">P.O. Box 427, Chilliwack, British Columbia<SPAN

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style="mso-spacerun: yes">  V2P 6J7<o:p></o:p>

386:

<SPAN

387:

style="FONT-SIZE: 10pt">(Address of principal executive

388:

offices)<o:p></o:p>

389:

<SPAN

390:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

391:

<SPAN

392:

style="FONT-SIZE: 10pt">Securities to be registered pursuant to Section 12(b) of

393:

the Act: None<o:p></o:p>

394:

<SPAN

395:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

396:

<SPAN

397:

style="FONT-SIZE: 10pt">Securities to be registered pursuant to Section 12(g) of

398:

the Act:<o:p></o:p>

399:

<SPAN

400:

style="FONT-SIZE: 10pt">Common Shares, without par

401:

value<o:p></o:p>

402:

<SPAN

403:

style="FONT-SIZE: 10pt">(Title of Class)<o:p></o:p>

404:

<SPAN

405:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

406:

Securities for which there is a

407:

reporting obligation pursuant to Section 15(d) of the Act:

408:

None<o:p></o:p>

409:

<SPAN

410:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

411:

Indicate the number of

412:

outstanding shares of each of the issuer's classes of capital or common stock as

413:

of the close of the period covered by the annual report.<SPAN

414:

style="mso-spacerun: yes">   

415:

10,676,718<o:p></o:p>

416:

<SPAN

417:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

418:

style="mso-spacerun: yes">                  

419:

<o:p></o:p>

420:

<SPAN

421:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

422:

<SPAN

423:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Indicate by check mark

424:

whether the registrant (1) has filed all reports required to be filed by Section

425:

13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12

426:

months (or for such shorter period that the registrant was required to file such

427:

reports), and (2) has been subject to such filing requirements for the past

428:

ninety days.

429:

Yes XXX   No

430:

___

431:

<o:p></o:p>

432:

<SPAN

433:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

434:

<SPAN

435:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Indicate by check mark which

436:

financial statement item the registrant has elected to follow: Item 17

437:

XXX   Item 18

438:

___<o:p></o:p><SPAN

439:

style="FONT-SIZE: 12pt; FONT-FAMILY: 'Courier New'; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Times New Roman'; mso-font-kerning: 14.0pt; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><BR

440:

style="PAGE-BREAK-BEFORE: always; mso-special-character: line-break"

441:

clear=all>

442:

<SPAN

443:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

444:

<SPAN

445:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

446:

<SPAN

447:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

448:

<SPAN

449:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Index to Exhibits on Page

450:

<o:p></o:p>

451:

<B

452:

style="mso-bidi-font-weight: normal">CALAIS

453:

RESOURCES INC.<o:p></o:p>

454:

<B

455:

style="mso-bidi-font-weight: normal">TABLE OF

456:

CONTENTS<o:p></o:p>

457:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

458:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

459:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

460:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

461:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

462:

<B

463:

style="mso-bidi-font-weight: normal">PART

464:

I<o:p></o:p>

465:

<B

466:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

467:

Item<SPAN

468:

style="mso-spacerun: yes">  1.<SPAN

469:

style="mso-spacerun: yes">   Identity of Directors, Senior

470:

Management and <o:p></o:p>

471:

<SPAN

472:

style="mso-spacerun: yes">          

473:

Advisers ......................................<SPAN

474:

style="mso-spacerun: yes">   <DEL

475:

cite="mailto:srreid" datetime="2002-12-03T12:21">n/a</DEL><INS

476:

cite="mailto:srreid" datetime="2002-12-03T12:21">03</INS><SPAN

477:

style="mso-bidi-font-weight: bold"><o:p></o:p>

478:

Item<SPAN

479:

style="mso-spacerun: yes">  2.<SPAN

480:

style="mso-spacerun: yes">   Offer Statistics and Expected

481:

Timetable........<SPAN

482:

style="mso-tab-count: 1">  <DEL

483:

cite="mailto:srreid" datetime="2002-12-03T12:21">n/a</DEL><INS

484:

cite="mailto:srreid" datetime="2002-12-03T12:21">03</INS><o:p></o:p>

485:

Item<SPAN

486:

style="mso-spacerun: yes">  3.<SPAN

487:

style="mso-spacerun: yes">   Key

488:

Information................................<SPAN

489:

style="mso-bidi-font-weight: bold"> <SPAN

490:

style="mso-spacerun: yes"> 03<o:p></o:p>

491:

<SPAN

492:

style="FONT-SIZE: 10pt">Item

493:

4.   Information on the

494:

Company..................... <SPAN

495:

style="mso-spacerun: yes"> <DEL

496:

cite="mailto:srreid" datetime="2002-12-03T13:58">04</DEL><INS

497:

cite="mailto:srreid" datetime="2002-12-03T13:58">05</INS><o:p></o:p>

498:

<SPAN

499:

style="FONT-SIZE: 10pt">Item

500:

5.   Operating and

501:

Financial Review and Prospects...

502:

<DEL cite="mailto:srreid"

503:

datetime="2002-12-03T13:58">09</DEL><INS cite="mailto:srreid"

504:

datetime="2002-12-03T13:58">11</INS><o:p></o:p>

505:

<SPAN

506:

style="FONT-SIZE: 10pt">Item

507:

6.   Directors, Senior

508:

Management and Employees.....

509:

<DEL cite="mailto:srreid"

510:

datetime="2002-12-03T13:58">13</DEL><INS cite="mailto:srreid"

511:

datetime="2002-12-03T13:58">1</INS><INS cite="mailto:srreid"

512:

datetime="2002-12-03T14:59">4</INS><o:p></o:p>

513:

Item

514:

7.   Major Shareholders

515:

& Related Party

516:

517:

<SPAN

518:

style="mso-spacerun: yes">          

519:

Transactions...................................<SPAN

520:

style="mso-spacerun: yes">   <DEL

521:

cite="mailto:srreid" datetime="2002-12-03T13:58">15</DEL><INS

522:

cite="mailto:srreid" datetime="2002-12-03T13:58">17</INS><o:p></o:p>

523:

Item

524:

8.   Financial

525:

Information.......................... <SPAN

526:

style="mso-tab-count: 1"><SPAN

527:

style="mso-spacerun: yes"> <DEL

528:

cite="mailto:srreid" datetime="2002-12-03T13:58">16</DEL><INS

529:

cite="mailto:srreid" datetime="2002-12-03T13:58">19</INS>

530:

<SPAN

531:

style="FONT-SIZE: 10pt">Item

532:

9.   The Offer and

533:

Listing..........................

534:

<DEL cite="mailto:srreid"

535:

datetime="2002-12-03T13:58">17</DEL><INS cite="mailto:srreid"

536:

datetime="2002-12-03T13:59">19</INS><o:p></o:p>

537:

<SPAN

538:

style="FONT-SIZE: 10pt">Item

539:

10.  Additional

540:

Information.........................

541:

<DEL cite="mailto:srreid"

542:

datetime="2002-12-03T13:59">18</DEL><INS cite="mailto:srreid"

543:

datetime="2002-12-03T13:59">20</INS><o:p></o:p>

544:

<SPAN

545:

style="FONT-SIZE: 10pt">Item

546:

11.  Quantitative and

547:

Qualitative Disclosures <o:p></o:p>

548:

<SPAN

549:

style="FONT-SIZE: 10pt"><SPAN

550:

style="mso-spacerun: yes">          

551:

About Market Risk..............................<SPAN

552:

style="mso-spacerun: yes">   <DEL

553:

cite="mailto:srreid" datetime="2002-12-03T13:59">23</DEL><INS

554:

cite="mailto:srreid" datetime="2002-12-03T13:59">27</INS><o:p></o:p>

555:

<SPAN

556:

style="FONT-SIZE: 10pt">Item

557:

12.  Description of

558:

Securities Other than Equity <o:p></o:p>

559:

<SPAN

560:

style="FONT-SIZE: 10pt"><SPAN

561:

style="mso-spacerun: yes">          

562:

Securities.....................................<SPAN

563:

style="mso-spacerun: yes">   <DEL

564:

cite="mailto:srreid" datetime="2002-12-03T13:59">n/a</DEL><INS

565:

cite="mailto:srreid" datetime="2002-12-03T13:59">27</INS><o:p></o:p>

566:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

567:

<B

568:

style="mso-bidi-font-weight: normal">PART

569:

II<o:p></o:p>

570:

<SPAN

571:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

572:

<SPAN

573:

style="FONT-SIZE: 10pt">Item 13.

574:

Defaults, Dividend Arrearages and Delinquencies<SPAN

575:

style="mso-spacerun: yes">  <INS cite="mailto:srreid"

576:

datetime="2002-12-03T14:58"><SPAN

577:

style="mso-spacerun: yes"> </INS><DEL

578:

cite="mailto:srreid" datetime="2002-12-03T13:59">n/a</DEL><INS

579:

cite="mailto:srreid" datetime="2002-12-03T13:59">27</INS><SPAN

580:

style="mso-spacerun: yes">  <o:p></o:p>

581:

<SPAN

582:

style="FONT-SIZE: 10pt">Item 14.

583:

Material Modifications to <INS cite="mailto:srreid"

584:

datetime="2002-12-03T14:41">the </INS>Rights of Security <o:p></o:p>

585:

<SPAN

586:

style="FONT-SIZE: 10pt"><SPAN

587:

style="mso-spacerun: yes">          

588:

Holders and Use of Proceeds....................<SPAN

589:

style="mso-spacerun: yes">   <DEL

590:

cite="mailto:srreid" datetime="2002-12-03T13:59">24</DEL><INS

591:

cite="mailto:srreid" datetime="2002-12-03T13:59">27</INS><o:p></o:p>

592:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

593:

<B

594:

style="mso-bidi-font-weight: normal">PART

595:

III<o:p></o:p>

596:

<SPAN

597:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

598:

<SPAN

599:

style="FONT-SIZE: 10pt">Item 17.

600:

Financial Statements...........................<SPAN

601:

style="mso-spacerun: yes">   <DEL

602:

cite="mailto:srreid" datetime="2002-12-03T13:59">25</DEL><INS

603:

cite="mailto:srreid" datetime="2002-12-03T13:59">2</INS><INS

604:

cite="mailto:srreid" datetime="2002-12-03T14:59">7</INS><o:p></o:p>

605:

<SPAN

606:

style="FONT-SIZE: 10pt">Item 18.

607:

Financial Statements...........................<SPAN

608:

style="mso-spacerun: yes">   <DEL

609:

cite="mailto:srreid" datetime="2002-12-03T13:59">n/a</DEL><INS

610:

cite="mailto:srreid" datetime="2002-12-03T13:59">28</INS><o:p></o:p>

611:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

612:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

613:

<SPAN

614:

style="FONT-SIZE: 10pt">Item 19.

615:

Exhibits.......................................<SPAN

616:

style="mso-spacerun: yes">   <DEL

617:

cite="mailto:srreid" datetime="2002-12-03T13:59">25</DEL><INS

618:

cite="mailto:srreid" datetime="2002-12-03T13:59">28</INS><o:p></o:p>

619:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

620:

<SPAN

621:

style="FONT-SIZE: 10pt">Signature

622:

Page............................................<SPAN

623:

style="mso-tab-count: 1">  <DEL

624:

cite="mailto:srreid" datetime="2002-12-03T13:59">26</DEL><INS

625:

cite="mailto:srreid" datetime="2002-12-03T13:59">29</INS><o:p></o:p>

626:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

627:

<SPAN

628:

style="FONT-SIZE: 10pt">Certification

629:

............................................<SPAN

630:

style="mso-tab-count: 1">  <DEL

631:

cite="mailto:srreid" datetime="2002-12-03T13:59">27</DEL><INS

632:

cite="mailto:srreid"

633:

datetime="2002-12-03T13:59">30</INS><o:p></o:p><SPAN

634:

style="FONT-SIZE: 10pt; FONT-FAMILY: 'Courier New'; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Times New Roman'; mso-font-kerning: 14.0pt; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><BR

635:

style="PAGE-BREAK-BEFORE: always" clear=all>

636:

<SPAN

637:

style="FONT-SIZE: 10pt"><INS

638:

cite="mailto:pdowad" datetime="2002-12-03T11:29"><SPAN

639:

style="mso-prop-change: pdowad 20021203T1141">ITEM 1.<SPAN

640:

style="mso-spacerun: yes">  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT

641:

AND ADVISERS<SPAN

642:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p></INS>

643:

<P class=MsoNormal

644:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

645:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:29"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

646:

<P class=MsoNormal

647:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

648:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

649:

datetime="2002-12-03T11:29">Not applicable.<o:p></o:p></INS>

650:

<P class=MsoNormal

651:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

652:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:29"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

653:

<P class=MsoNormal

654:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

655:

style="FONT-SIZE: 10pt"><INS

656:

cite="mailto:pdowad" datetime="2002-12-03T11:29"><SPAN

657:

style="mso-prop-change: pdowad 20021203T1141">ITEM 2.<SPAN

658:

style="mso-spacerun: yes">  OFFER STATISTICS AND EXPECTED

659:

TIMETABLE<SPAN

660:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p></INS>

661:

<P class=MsoNormal

662:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

663:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:29"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

664:

<P class=MsoNormal

665:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

666:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

667:

datetime="2002-12-03T11:29">Not applicable</INS><INS cite="mailto:pdowad"

668:

datetime="2002-12-03T11:30">.</INS><INS cite="mailto:pdowad"

669:

datetime="2002-12-03T11:29"><o:p></o:p></INS>

670:

<P class=MsoNormal

671:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

672:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:29"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

673:

<P class=MsoNormal

674:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1129"><SPAN

675:

style="FONT-SIZE: 10pt">ITEM 3.  KEY

676:

INFORMATION<o:p></o:p>

677:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

678:

<SPAN

679:

style="FONT-SIZE: 10pt"><INS

680:

cite="mailto:pdowad" datetime="2002-12-03T11:40"><SPAN

681:

style="mso-prop-change: pdowad 20021203T1141">A.<SPAN

682:

style="mso-tab-count: 1">    </INS><SPAN

683:

style="mso-prop-change: pdowad 20021203T1141"><SPAN

684:

style="mso-prop-change: pdowad 20021203T1141">Selected historical financial

685:

data<SPAN

686:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p>

687:

<SPAN

688:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

689:

The

690:

selected financial data <INS cite="mailto:pdowad" datetime="2002-12-03T11:31">as

691:

</INS>of <INS cite="mailto:pdowad" datetime="2002-12-03T11:32">and for </INS>the

692:

Company for Fiscal year ended May 31, 2002 is derived from the financial

693:

statements of the Company which have been audited by KPMG <SPAN

694:

style="FONT-SIZE: 8pt; mso-bidi-font-size: 10.0pt">LLP<SPAN

695:

style="FONT-SIZE: 10pt">, Independent Accountants, as indicated in their

696:

auditor’s report which is included elsewhere in this report. <INS

697:

cite="mailto:pdowad" datetime="2002-12-03T11:31"><SPAN

698:

style="mso-spacerun: yes"> The selected financial data as at May 31,

699:

2001 and for the years ended May 31, 2001</INS><INS cite="mailto:pdowad"

700:

datetime="2002-12-03T11:32"> and 2000 have been extracted from the financial

701:

statements of the Company included herein, which financial statements were

702:

audited by other auditors.  The

703:

selected financial data as of May 31, 2000, 1999 and 1998 and for the years

704:

ended May 31, 1999 and 1998 has been extracted from financial statements not

705:

included herein.</INS><o:p></o:p>

706:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

707:

The

708:

selected financial data should be read in conjunction with the consolidated

709:

financial statements and other financial information included elsewhere in this

710:

report.<o:p></o:p>

711:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

712:

The

713:

Company has not declared any dividends since incorporation and does not

714:

anticipate that it will do so in the foreseeable future.<SPAN

715:

style="mso-spacerun: yes">  The present policy of the Company is to

716:

retain future earnings for use in its operations and the expansion of its

717:

business.<o:p></o:p>

718:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

719:

The

720:

following selected financial data is derived from the financial statements of

721:

the Company, which have been prepared in accordance with Canadian Generally

722:

Accepted Accounting Principles (GAAP), the application of which, in the case of

723:

the Company, conforms in all material respects for the periods presented with

724:

U.S. GAAP, except as disclosed in footnotes to the financial

725:

statements.<o:p></o:p>

726:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

727:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

728:

<SPAN

729:

style="FONT-SIZE: 10pt">Selected Financial Data<o:p></o:p>

730:

<SPAN

731:

style="FONT-SIZE: 10pt">(CDN$ in 000, except per share

732:

data)<o:p></o:p>

733:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

734:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

735:

<TABLE

736:

style="MARGIN-LEFT: -0.05in; WIDTH: 535.5pt; BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt"

737:

cellSpacing=0 cellPadding=0 width=714 border=0>

738:

<TBODY>

739:

<TR>

740:

<TD

741:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

742:

vAlign=top width=30>

743:

<![if !supportEmptyParas]><![endif]> <SPAN

744:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

745:

<TD

746:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

747:

vAlign=top width=288>

748:

<![if !supportEmptyParas]><![endif]> <SPAN

749:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

750:

<TD

751:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

752:

vAlign=top width=72>

753:

<SPAN

754:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Year Ended

755:

5/31/02<o:p></o:p></TD>

756:

<TD

757:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

758:

vAlign=top width=78>

759:

<SPAN

760:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Year Ended

761:

5/31/01<o:p></o:p></TD>

762:

<TD

763:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

764:

vAlign=top width=85 colSpan=2>

765:

<SPAN

766:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Year Ended

767:

5/31/00<o:p></o:p></TD>

768:

<TD

769:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

770:

vAlign=top width=76>

771:

<SPAN

772:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Year Ended

773:

5/31/99<o:p></o:p></TD>

774:

<TD

775:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

776:

vAlign=top width=85 colSpan=2>

777:

<SPAN

778:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Year Ended

779:

5/31/98<o:p></o:p></TD></TR>

780:

<TR>

781:

<TD

782:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

783:

vAlign=top width=30>

784:

<![if !supportEmptyParas]><![endif]> <SPAN

785:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

786:

<TD

787:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

788:

vAlign=top width=288>

789:

<SPAN

790:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

791:

style="mso-spacerun: yes"> <SPAN

792:

style="mso-prop-change: pdowad 20021203T1134"><INS cite="mailto:pdowad"

793:

datetime="2002-12-03T11:34"><SPAN

794:

style="mso-prop-change: pdowad 20021203T1134">Canadian GAAP<SPAN

795:

style="mso-prop-change: pdowad 20021203T1134"><o:p></o:p></INS>

796:

<P class=MsoNormal

797:

style="MARGIN-LEFT: 51.2pt; TEXT-INDENT: -51.2pt; mso-list: none; mso-list-ins: pdowad 20021203T1134"><SPAN

798:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><INS

799:

cite="mailto:pdowad" datetime="2002-12-03T11:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

800:

<P class=MsoNormal

801:

style="MARGIN-LEFT: 51.2pt; TEXT-INDENT: -51.2pt; mso-text-indent-alt: -51.2pt; mso-list: none; mso-list-ins: pdowad 20021203T1134"><SPAN

802:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><INS

803:

cite="mailto:pdowad" datetime="2002-12-03T11:34"><SPAN

804:

style="mso-spacerun: yes"> </INS>Revenues<o:p></o:p></TD>

805:

<TD

806:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

807:

vAlign=top width=72>

808:

<SPAN

809:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0

810:

<o:p></o:p></TD>

811:

<TD

812:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

813:

vAlign=top width=78>

814:

<SPAN

815:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

816:

<TD

817:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

818:

vAlign=top width=85 colSpan=2>

819:

<SPAN

820:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

821:

<TD

822:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

823:

vAlign=top width=76>

824:

<SPAN

825:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

826:

<TD

827:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

828:

vAlign=top width=85 colSpan=2>

829:

<SPAN

830:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD></TR>

831:

<TR>

832:

<TD

833:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

834:

vAlign=top width=30>

835:

<![if !supportEmptyParas]><![endif]> <SPAN

836:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

837:

<TD

838:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

839:

vAlign=top width=288>

840:

<SPAN

841:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

842:

style="mso-spacerun: yes"> Loss for the

843:

year<o:p></o:p></TD>

844:

<TD

845:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

846:

vAlign=top width=72>

847:

<SPAN

848:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($551)<o:p></o:p></TD>

849:

<TD

850:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

851:

vAlign=top width=78>

852:

<SPAN

853:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($748)<o:p></o:p></TD>

854:

<TD

855:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

856:

vAlign=top width=85 colSpan=2>

857:

<SPAN

858:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($11,795)<o:p></o:p></TD>

859:

<TD

860:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

861:

vAlign=top width=76>

862:

<SPAN

863:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($619)<o:p></o:p></TD>

864:

<TD

865:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

866:

vAlign=top width=85 colSpan=2>

867:

<SPAN

868:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($856)<o:p></o:p></TD></TR>

869:

<TR>

870:

<TD

871:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

872:

vAlign=top width=30>

873:

<![if !supportEmptyParas]><![endif]> <SPAN

874:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

875:

<TD

876:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

877:

vAlign=top width=288>

878:

<SPAN

879:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

880:

style="mso-spacerun: yes"> Loss per

881:

Share<o:p></o:p></TD>

882:

<TD

883:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

884:

vAlign=top width=72>

885:

<SPAN

886:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.05)<o:p></o:p></TD>

887:

<TD

888:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

889:

vAlign=top width=78>

890:

<SPAN

891:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.08)<o:p></o:p></TD>

892:

<TD

893:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

894:

vAlign=top width=85 colSpan=2>

895:

<SPAN

896:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($1.24)<o:p></o:p></TD>

897:

<TD

898:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

899:

vAlign=top width=76>

900:

<SPAN

901:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.07)<o:p></o:p></TD>

902:

<TD

903:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

904:

vAlign=top width=85 colSpan=2>

905:

<SPAN

906:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.11)<o:p></o:p></TD></TR>

907:

<TR>

908:

<TD

909:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

910:

vAlign=top width=30>

911:

<![if !supportEmptyParas]><![endif]> <SPAN

912:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

913:

<TD

914:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

915:

vAlign=top width=288>

916:

<SPAN

917:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

918:

style="mso-spacerun: yes"> Dividends Per

919:

Share<o:p></o:p></TD>

920:

<TD

921:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

922:

vAlign=top width=72>

923:

<SPAN

924:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0.00<o:p></o:p></TD>

925:

<TD

926:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

927:

vAlign=top width=78>

928:

<SPAN

929:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0.00<o:p></o:p></TD>

930:

<TD

931:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

932:

vAlign=top width=85 colSpan=2>

933:

<SPAN

934:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0.00<o:p></o:p></TD>

935:

<TD

936:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

937:

vAlign=top width=76>

938:

<SPAN

939:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0.00<o:p></o:p></TD>

940:

<TD

941:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

942:

vAlign=top width=85 colSpan=2>

943:

<SPAN

944:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0.00<o:p></o:p></TD></TR>

945:

<TR>

946:

<TD

947:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

948:

vAlign=top width=30>

949:

<![if !supportEmptyParas]><![endif]> <SPAN

950:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

951:

<TD

952:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

953:

vAlign=top width=288>

954:

<SPAN

955:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

956:

style="mso-spacerun: yes"> Wtg. Avg. Shares

957:

(000)<o:p></o:p></TD>

958:

<TD

959:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

960:

vAlign=top width=72>

961:

<SPAN

962:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">10,185<o:p></o:p></TD>

963:

<TD

964:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

965:

vAlign=top width=78>

966:

<SPAN

967:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">9,618<o:p></o:p></TD>

968:

<TD

969:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

970:

vAlign=top width=85 colSpan=2>

971:

<SPAN

972:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">9,505<o:p></o:p></TD>

973:

<TD

974:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

975:

vAlign=top width=76>

976:

<SPAN

977:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">9,126<o:p></o:p></TD>

978:

<TD

979:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

980:

vAlign=top width=85 colSpan=2>

981:

<SPAN

982:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">7,943<o:p></o:p></TD></TR>

983:

<TR>

984:

<TD

985:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

986:

vAlign=top width=30>

987:

<![if !supportEmptyParas]><![endif]> <SPAN

988:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

989:

<TD

990:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

991:

vAlign=top width=288>

992:

<![if !supportEmptyParas]><![endif]> <SPAN

993:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

994:

<TD

995:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

996:

vAlign=top width=72>

997:

<![if !supportEmptyParas]><![endif]> <SPAN

998:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

999:

<TD

1000:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1001:

vAlign=top width=78>

1002:

<![if !supportEmptyParas]><![endif]> <SPAN

1003:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1004:

<TD

1005:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1006:

vAlign=top width=85 colSpan=2>

1007:

<![if !supportEmptyParas]><![endif]> <SPAN

1008:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1009:

<TD

1010:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1011:

vAlign=top width=76>

1012:

<![if !supportEmptyParas]><![endif]> <SPAN

1013:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1014:

<TD

1015:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1016:

vAlign=top width=85 colSpan=2>

1017:

<![if !supportEmptyParas]><![endif]> <SPAN

1018:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1019:

<TR>

1020:

<TD

1021:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1022:

vAlign=top width=30>

1023:

<![if !supportEmptyParas]><![endif]> <SPAN

1024:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1025:

<TD

1026:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1027:

vAlign=top width=288>

1028:

<SPAN

1029:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1030:

style="mso-spacerun: yes"> Working Capital

1031:

Deficiency<o:p></o:p></TD>

1032:

<TD

1033:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1034:

vAlign=top width=72>

1035:

<SPAN

1036:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($2,625)<o:p></o:p></TD>

1037:

<TD

1038:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1039:

vAlign=top width=78>

1040:

<SPAN

1041:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($1,262)<o:p></o:p></TD>

1042:

<TD

1043:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1044:

vAlign=top width=85 colSpan=2>

1045:

<SPAN

1046:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($5,241)<o:p></o:p></TD>

1047:

<TD

1048:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1049:

vAlign=top width=76>

1050:

<SPAN

1051:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($5,334)<o:p></o:p></TD>

1052:

<TD

1053:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1054:

vAlign=top width=85 colSpan=2>

1055:

<SPAN

1056:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($2,567)<o:p></o:p></TD></TR>

1057:

<TR>

1058:

<TD

1059:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1060:

vAlign=top width=30>

1061:

<![if !supportEmptyParas]><![endif]> <SPAN

1062:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1063:

<TD

1064:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1065:

vAlign=top width=288>

1066:

<SPAN

1067:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1068:

style="mso-spacerun: yes"> Long-Term

1069:

Debt<o:p></o:p></TD>

1070:

<TD

1071:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1072:

vAlign=top width=72>

1073:

<SPAN

1074:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$5,097<o:p></o:p></TD>

1075:

<TD

1076:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1077:

vAlign=top width=78>

1078:

<SPAN

1079:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$5,721<o:p></o:p></TD>

1080:

<TD

1081:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1082:

vAlign=top width=85 colSpan=2>

1083:

<SPAN

1084:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1085:

<TD

1086:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1087:

vAlign=top width=76>

1088:

<SPAN

1089:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1090:

<TD

1091:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1092:

vAlign=top width=85 colSpan=2>

1093:

<SPAN

1094:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD></TR>

1095:

<TR>

1096:

<TD

1097:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1098:

vAlign=top width=30>

1099:

<![if !supportEmptyParas]><![endif]> <SPAN

1100:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1101:

<TD

1102:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1103:

vAlign=top width=288>

1104:

<SPAN

1105:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1106:

style="mso-spacerun: yes"> Mineral

1107:

Properties<o:p></o:p></TD>

1108:

<TD

1109:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1110:

vAlign=top width=72>

1111:

<SPAN

1112:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$12,681<o:p></o:p></TD>

1113:

<TD

1114:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1115:

vAlign=top width=78>

1116:

<SPAN

1117:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$12,203<o:p></o:p></TD>

1118:

<TD

1119:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1120:

vAlign=top width=85 colSpan=2>

1121:

<SPAN

1122:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$12,069<o:p></o:p></TD>

1123:

<TD

1124:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1125:

vAlign=top width=76>

1126:

<SPAN

1127:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$21,589<o:p></o:p></TD>

1128:

<TD

1129:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1130:

vAlign=top width=85 colSpan=2>

1131:

<SPAN

1132:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$15,050<o:p></o:p></TD></TR>

1133:

<TR>

1134:

<TD

1135:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1136:

vAlign=top width=30>

1137:

<![if !supportEmptyParas]><![endif]> <SPAN

1138:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1139:

<TD

1140:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1141:

vAlign=top width=288>

1142:

<SPAN

1143:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1144:

style="mso-spacerun: yes"> Shareholder’s

1145:

Equity<o:p></o:p></TD>

1146:

<TD

1147:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1148:

vAlign=top width=72>

1149:

<SPAN

1150:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$5,086<o:p></o:p></TD>

1151:

<TD

1152:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1153:

vAlign=top width=78>

1154:

<SPAN

1155:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$5,390<o:p></o:p></TD>

1156:

<TD

1157:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1158:

vAlign=top width=85 colSpan=2>

1159:

<SPAN

1160:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$6,078<o:p></o:p></TD>

1161:

<TD

1162:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1163:

vAlign=top width=76>

1164:

<SPAN

1165:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$17,873<o:p></o:p></TD>

1166:

<TD

1167:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1168:

vAlign=top width=85 colSpan=2>

1169:

<SPAN

1170:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$15,147<o:p></o:p></TD></TR>

1171:

<TR>

1172:

<TD

1173:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1174:

vAlign=top width=30>

1175:

<![if !supportEmptyParas]><![endif]> <SPAN

1176:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1177:

<TD

1178:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1179:

vAlign=top width=288>

1180:

<SPAN

1181:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1182:

style="mso-spacerun: yes"> Total

1183:

Assets<o:p></o:p></TD>

1184:

<TD

1185:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1186:

vAlign=top width=72>

1187:

<SPAN

1188:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$13,166<o:p></o:p></TD>

1189:

<TD

1190:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1191:

vAlign=top width=78>

1192:

<SPAN

1193:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$12,788<o:p></o:p></TD>

1194:

<TD

1195:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1196:

vAlign=top width=85 colSpan=2>

1197:

<SPAN

1198:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$12,799<o:p></o:p></TD>

1199:

<TD

1200:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1201:

vAlign=top width=76>

1202:

<SPAN

1203:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$24,306<o:p></o:p></TD>

1204:

<TD

1205:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1206:

vAlign=top width=85 colSpan=2>

1207:

<SPAN

1208:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$18,865<o:p></o:p></TD></TR>

1209:

<TR>

1210:

<TD

1211:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1212:

vAlign=top width=30>

1213:

<![if !supportEmptyParas]><![endif]> <SPAN

1214:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1215:

<TD

1216:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1217:

vAlign=top width=288>

1218:

<![if !supportEmptyParas]><![endif]> <SPAN

1219:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1220:

<TD

1221:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1222:

vAlign=top width=72>

1223:

<![if !supportEmptyParas]><![endif]> <SPAN

1224:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1225:

<TD

1226:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1227:

vAlign=top width=78>

1228:

<![if !supportEmptyParas]><![endif]> <SPAN

1229:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1230:

<TD

1231:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1232:

vAlign=top width=85 colSpan=2>

1233:

<![if !supportEmptyParas]><![endif]> <SPAN

1234:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1235:

<TD

1236:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1237:

vAlign=top width=76>

1238:

<![if !supportEmptyParas]><![endif]> <SPAN

1239:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1240:

<TD

1241:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1242:

vAlign=top width=85 colSpan=2>

1243:

<![if !supportEmptyParas]><![endif]> <SPAN

1244:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1245:

<TR>

1246:

<TD

1247:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1248:

vAlign=top width=30>

1249:

<![if !supportEmptyParas]><![endif]> <SPAN

1250:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1251:

<TD

1252:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1253:

vAlign=top width=288>

1254:

<SPAN

1255:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1256:

style="mso-spacerun: yes"> <SPAN

1257:

style="mso-prop-change: pdowad 20021203T1135"><SPAN

1258:

style="mso-prop-change: pdowad 20021203T1135">US GAAP <SPAN

1259:

style="mso-prop-change: pdowad 20021203T1135"><INS cite="mailto:pdowad"

1260:

datetime="2002-12-03T11:34"><SPAN

1261:

style="mso-prop-change: pdowad 20021203T1135"><o:p></o:p></INS>

1262:

<P class=MsoNormal

1263:

style="mso-list: none; mso-list-ins: pdowad 20021203T1134"><SPAN

1264:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><INS

1265:

cite="mailto:pdowad" datetime="2002-12-03T11:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1266:

<P class=MsoNormal

1267:

style="TEXT-INDENT: 0in; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1134"><SPAN

1268:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><INS

1269:

cite="mailto:pdowad" datetime="2002-12-03T11:34"><SPAN

1270:

style="mso-spacerun: yes"> </INS>Mineral Properties

1271:

(3)<o:p></o:p></TD>

1272:

<TD

1273:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1274:

vAlign=top width=72>

1275:

<P class=MsoNormal

1276:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1221"

1277:

align=right><INS

1278:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1279:

<P class=MsoNormal

1280:

style="TEXT-INDENT: 0in; TEXT-ALIGN: right; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1221"

1281:

align=right><INS

1282:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1283:

<SPAN

1284:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1285:

<TD

1286:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1287:

vAlign=top width=78>

1288:

<P class=MsoNormal

1289:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1221"

1290:

align=right><INS

1291:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1292:

<P class=MsoNormal

1293:

style="TEXT-INDENT: 0in; TEXT-ALIGN: right; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1221"

1294:

align=right><INS

1295:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1296:

<SPAN

1297:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1298:

<TD

1299:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1300:

vAlign=top width=85 colSpan=2>

1301:

<P class=MsoNormal

1302:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1221"

1303:

align=right><INS

1304:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1305:

<P class=MsoNormal

1306:

style="TEXT-INDENT: 0in; TEXT-ALIGN: right; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1221"

1307:

align=right><INS

1308:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1309:

<SPAN

1310:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1311:

<TD

1312:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1313:

vAlign=top width=76>

1314:

<P class=MsoNormal

1315:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1221"

1316:

align=right><INS

1317:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1318:

<P class=MsoNormal

1319:

style="TEXT-INDENT: 0in; TEXT-ALIGN: right; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1221"

1320:

align=right><INS

1321:

cite="mailto:srreid" datetime="2002-12-03T12:21"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1322:

<SPAN

1323:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

1324:

<TD

1325:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1326:

vAlign=top width=85 colSpan=2>

1327:

<P class=MsoNormal

1328:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1222"

1329:

align=right><INS

1330:

cite="mailto:srreid" datetime="2002-12-03T12:22"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1331:

<P class=MsoNormal

1332:

style="TEXT-INDENT: 0in; TEXT-ALIGN: right; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1222"

1333:

align=right><INS

1334:

cite="mailto:srreid" datetime="2002-12-03T12:22"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

1335:

<SPAN

1336:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD></TR>

1337:

<TR>

1338:

<TD

1339:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1340:

vAlign=top width=30>

1341:

<![if !supportEmptyParas]><![endif]> <SPAN

1342:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1343:

<TD

1344:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1345:

vAlign=top width=288>

1346:

<SPAN

1347:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1348:

style="mso-spacerun: yes"> <DEL

1349:

cite="mailto:pdowad" datetime="2002-12-03T11:35">US GAAP

1350:

</DEL>Shareholders deficiency<o:p></o:p></TD>

1351:

<TD

1352:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1353:

vAlign=top width=72>

1354:

<SPAN

1355:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($7,596)<o:p></o:p></TD>

1356:

<TD

1357:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1358:

vAlign=top width=78>

1359:

<SPAN

1360:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($6,813)<o:p></o:p></TD>

1361:

<TD

1362:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1363:

vAlign=top width=85 colSpan=2>

1364:

<SPAN

1365:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($5,992)<o:p></o:p></TD>

1366:

<TD

1367:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1368:

vAlign=top width=76>

1369:

<SPAN

1370:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($3,716)<o:p></o:p></TD>

1371:

<TD

1372:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1373:

vAlign=top width=85 colSpan=2>

1374:

<SPAN

1375:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$97<o:p></o:p></TD></TR>

1376:

<TR>

1377:

<TD

1378:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1379:

vAlign=top width=30>

1380:

<![if !supportEmptyParas]><![endif]> <SPAN

1381:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1382:

<TD

1383:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1384:

vAlign=top width=288>

1385:

<SPAN

1386:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1387:

style="mso-spacerun: yes"> <DEL

1388:

cite="mailto:pdowad" datetime="2002-12-03T11:35">US GAAP

1389:

</DEL>Total Assets<o:p></o:p></TD>

1390:

<TD

1391:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1392:

vAlign=top width=72>

1393:

<SPAN

1394:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$485<o:p></o:p></TD>

1395:

<TD

1396:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1397:

vAlign=top width=78>

1398:

<SPAN

1399:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$585<o:p></o:p></TD>

1400:

<TD

1401:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1402:

vAlign=top width=85 colSpan=2>

1403:

<SPAN

1404:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$729<o:p></o:p></TD>

1405:

<TD

1406:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1407:

vAlign=top width=76>

1408:

<SPAN

1409:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$2,716<o:p></o:p></TD>

1410:

<TD

1411:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1412:

vAlign=top width=85 colSpan=2>

1413:

<SPAN

1414:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$3,815<o:p></o:p></TD></TR>

1415:

<TR>

1416:

<TD

1417:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1418:

vAlign=top width=30>

1419:

<![if !supportEmptyParas]><![endif]> <SPAN

1420:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1421:

<TD

1422:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1423:

vAlign=top width=288>

1424:

<![if !supportEmptyParas]><![endif]> <SPAN

1425:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1426:

<TD

1427:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1428:

vAlign=top width=72>

1429:

<![if !supportEmptyParas]><![endif]> <SPAN

1430:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1431:

<TD

1432:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1433:

vAlign=top width=78>

1434:

<![if !supportEmptyParas]><![endif]> <SPAN

1435:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1436:

<TD

1437:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1438:

vAlign=top width=85 colSpan=2>

1439:

<![if !supportEmptyParas]><![endif]> <SPAN

1440:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1441:

<TD

1442:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1443:

vAlign=top width=76>

1444:

<![if !supportEmptyParas]><![endif]> <SPAN

1445:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1446:

<TD

1447:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1448:

vAlign=top width=85 colSpan=2>

1449:

<![if !supportEmptyParas]><![endif]> <SPAN

1450:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1451:

<TR>

1452:

<TD

1453:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1454:

vAlign=top width=30>

1455:

<![if !supportEmptyParas]><![endif]> <SPAN

1456:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1457:

<TD

1458:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1459:

vAlign=top width=288>

1460:

<SPAN

1461:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1462:

style="mso-spacerun: yes"> <DEL

1463:

cite="mailto:pdowad" datetime="2002-12-03T11:35">US GAAP </DEL>Net

1464:

Loss (1), (2)<o:p></o:p></TD>

1465:

<TD

1466:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1467:

vAlign=top width=72>

1468:

<SPAN

1469:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($964)<o:p></o:p></TD>

1470:

<TD

1471:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1472:

vAlign=top width=78>

1473:

<SPAN

1474:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($1,004)<o:p></o:p></TD>

1475:

<TD

1476:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1477:

vAlign=top width=85 colSpan=2>

1478:

<SPAN

1479:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($2,275)<o:p></o:p></TD>

1480:

<TD

1481:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1482:

vAlign=top width=76>

1483:

<SPAN

1484:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($7,159)<o:p></o:p></TD>

1485:

<TD

1486:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1487:

vAlign=top width=85 colSpan=2>

1488:

<SPAN

1489:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($10,744)<o:p></o:p></TD></TR>

1490:

<TR>

1491:

<TD

1492:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1493:

vAlign=top width=30>

1494:

<![if !supportEmptyParas]><![endif]> <SPAN

1495:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1496:

<TD

1497:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1498:

vAlign=top width=288>

1499:

<SPAN

1500:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1501:

style="mso-spacerun: yes"> <DEL

1502:

cite="mailto:pdowad" datetime="2002-12-03T11:35">US GAAP

1503:

</DEL>EPS<o:p></o:p></TD>

1504:

<TD

1505:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1506:

vAlign=top width=72>

1507:

<SPAN

1508:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.09)<o:p></o:p></TD>

1509:

<TD

1510:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1511:

vAlign=top width=78>

1512:

<SPAN

1513:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.10)<o:p></o:p></TD>

1514:

<TD

1515:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1516:

vAlign=top width=85 colSpan=2>

1517:

<SPAN

1518:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.24)<o:p></o:p></TD>

1519:

<TD

1520:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1521:

vAlign=top width=76>

1522:

<SPAN

1523:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($0.78)<o:p></o:p></TD>

1524:

<TD

1525:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1526:

vAlign=top width=85 colSpan=2>

1527:

<SPAN

1528:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($1.35)<o:p></o:p></TD></TR>

1529:

<TR>

1530:

<TD

1531:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1532:

vAlign=top width=30>

1533:

<![if !supportEmptyParas]><![endif]> <SPAN

1534:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1535:

<TD

1536:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 513pt; PADDING-TOP: 0in"

1537:

vAlign=top width=684 colSpan=8>

1538:

<SPAN

1539:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1540:

<![if !supportEmptyParas]><![endif]> <SPAN

1541:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1542:

<TR>

1543:

<TD

1544:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1545:

vAlign=top width=30>

1546:

<P class=MsoNormal

1547:

style="MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; tab-stops: list 27.0pt; mso-list: l16 level1 lfo21; mso-list-change: '$%1\:1\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

1548:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(1)<SPAN

1549:

style="FONT: 7pt 'Times New Roman'">       

1550:

<![endif]><![if !supportEmptyParas]> <![endif]><SPAN

1551:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1552:

<TD

1553:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 328.45pt; PADDING-TOP: 0in"

1554:

vAlign=top width=438 colSpan=3>

1555:

<SPAN

1556:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Cumulative Net Loss

1557:

since incorporation is ($29,546).<o:p></o:p></TD>

1558:

<TD

1559:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.05pt; PADDING-TOP: 0in"

1560:

vAlign=top width=84>

1561:

<![if !supportEmptyParas]><![endif]> <SPAN

1562:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1563:

<TD

1564:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.5pt; PADDING-TOP: 0in"

1565:

vAlign=top width=78 colSpan=3>

1566:

<![if !supportEmptyParas]><![endif]> <SPAN

1567:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1568:

<TD

1569:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63pt; PADDING-TOP: 0in"

1570:

vAlign=top width=84>

1571:

<![if !supportEmptyParas]><![endif]> <SPAN

1572:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1573:

<TR>

1574:

<TD

1575:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1576:

vAlign=top width=30>

1577:

<![if !supportEmptyParas]><![endif]> <SPAN

1578:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1579:

<TD

1580:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1581:

vAlign=top width=288>

1582:

<![if !supportEmptyParas]><![endif]> <SPAN

1583:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1584:

<TD

1585:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1586:

vAlign=top width=72>

1587:

<![if !supportEmptyParas]><![endif]> <SPAN

1588:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1589:

<TD

1590:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1591:

vAlign=top width=78>

1592:

<![if !supportEmptyParas]><![endif]> <SPAN

1593:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1594:

<TD

1595:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.05pt; PADDING-TOP: 0in"

1596:

vAlign=top width=84>

1597:

<![if !supportEmptyParas]><![endif]> <SPAN

1598:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1599:

<TD

1600:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.5pt; PADDING-TOP: 0in"

1601:

vAlign=top width=78 colSpan=3>

1602:

<![if !supportEmptyParas]><![endif]> <SPAN

1603:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1604:

<TD

1605:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63pt; PADDING-TOP: 0in"

1606:

vAlign=top width=84>

1607:

<![if !supportEmptyParas]><![endif]> <SPAN

1608:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1609:

1610:

<TD

1611:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in; HEIGHT: 8.1pt"

1612:

vAlign=top width=30>

1613:

<P class=MsoNormal

1614:

style="MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; tab-stops: list 27.0pt; mso-list: l16 level1 lfo21; mso-list-change: '$%1\:2\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

1615:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(2)<SPAN

1616:

style="FONT: 7pt 'Times New Roman'">       

1617:

<![endif]><![if !supportEmptyParas]> <![endif]><SPAN

1618:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1619:

<TD

1620:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 391.5pt; PADDING-TOP: 0in; HEIGHT: 8.1pt"

1621:

vAlign=top width=522 colSpan=4>

1622:

<SPAN

1623:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Canadian GAAP Net Loss

1624:

ha<INS cite="mailto:pdowad" datetime="2002-12-03T11:35">s</INS><SPAN

1625:

class=msoDel><DEL cite="mailto:pdowad"

1626:

datetime="2002-12-03T11:35">ve</DEL> been adjusted to US GAAP for

1627:

the following:<o:p></o:p></TD>

1628:

<TD

1629:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.5pt; PADDING-TOP: 0in; HEIGHT: 8.1pt"

1630:

vAlign=top width=78 colSpan=3>

1631:

<![if !supportEmptyParas]><![endif]> <SPAN

1632:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1633:

<TD

1634:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63pt; PADDING-TOP: 0in; HEIGHT: 8.1pt"

1635:

vAlign=top width=84>

1636:

<![if !supportEmptyParas]><![endif]> <SPAN

1637:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1638:

<TR>

1639:

<TD

1640:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1641:

vAlign=top width=30>

1642:

<![if !supportEmptyParas]><![endif]> <SPAN

1643:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1644:

<TD

1645:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1646:

vAlign=top width=288>

1647:

<SPAN

1648:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Canadian GAAP Net

1649:

Loss<o:p></o:p></TD>

1650:

<TD

1651:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1652:

vAlign=top width=72>

1653:

<SPAN

1654:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($551)<o:p></o:p></TD>

1655:

<TD

1656:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1657:

vAlign=top width=78>

1658:

<SPAN

1659:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($748)<o:p></o:p></TD>

1660:

<TD

1661:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1662:

vAlign=top width=85 colSpan=2>

1663:

<SPAN

1664:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($11,795)<o:p></o:p></TD>

1665:

<TD

1666:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1667:

vAlign=top width=76>

1668:

<SPAN

1669:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($619)<o:p></o:p></TD>

1670:

<TD

1671:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1672:

vAlign=top width=85 colSpan=2>

1673:

<SPAN

1674:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($856)<o:p></o:p></TD></TR>

1675:

<TR>

1676:

<TD

1677:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1678:

vAlign=top width=30>

1679:

<![if !supportEmptyParas]><![endif]> <SPAN

1680:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1681:

<TD

1682:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1683:

vAlign=top width=288>

1684:

<SPAN

1685:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Expensed exploration

1686:

costs<o:p></o:p></TD>

1687:

<TD

1688:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1689:

vAlign=top width=72>

1690:

<SPAN

1691:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(479)<o:p></o:p></TD>

1692:

<TD

1693:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1694:

vAlign=top width=78>

1695:

<SPAN

1696:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(446)<o:p></o:p></TD>

1697:

<TD

1698:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1699:

vAlign=top width=85 colSpan=2>

1700:

<SPAN

1701:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(1,879)<o:p></o:p></TD>

1702:

<TD

1703:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1704:

vAlign=top width=76>

1705:

<SPAN

1706:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(6,540)<o:p></o:p></TD>

1707:

<TD

1708:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1709:

vAlign=top width=85 colSpan=2>

1710:

<SPAN

1711:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(9,888)<o:p></o:p></TD></TR>

1712:

<TR>

1713:

<TD

1714:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1715:

vAlign=top width=30>

1716:

<![if !supportEmptyParas]><![endif]> <SPAN

1717:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1718:

<TD

1719:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1720:

vAlign=top width=288>

1721:

<SPAN

1722:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Previously expensed

1723:

costs under U.S. GAAP written off for Canadian

1724:

GAAP<o:p></o:p></TD>

1725:

<TD

1726:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1727:

vAlign=top width=72>

1728:

<SPAN

1729:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1730:

<SPAN

1731:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1732:

<o:p></o:p></TD>

1733:

<TD

1734:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1735:

vAlign=top width=78>

1736:

<SPAN

1737:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1738:

<SPAN

1739:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">313<o:p></o:p></TD>

1740:

<TD

1741:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1742:

vAlign=top width=85 colSpan=2>

1743:

<SPAN

1744:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1745:

<SPAN

1746:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">11,399<o:p></o:p></TD>

1747:

<TD

1748:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1749:

vAlign=top width=76>

1750:

<SPAN

1751:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1752:

<SPAN

1753:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1754:

<o:p></o:p></TD>

1755:

<TD

1756:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1757:

vAlign=top width=85 colSpan=2>

1758:

<SPAN

1759:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

1760:

<SPAN

1761:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1762:

<o:p></o:p></TD></TR>

1763:

<TR>

1764:

<TD

1765:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1766:

vAlign=top width=30>

1767:

<![if !supportEmptyParas]><![endif]> <SPAN

1768:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1769:

<TD

1770:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1771:

vAlign=top width=288>

1772:

<SPAN

1773:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Stock-based

1774:

compensation <o:p></o:p></TD>

1775:

<TD

1776:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1777:

vAlign=top width=72>

1778:

<SPAN

1779:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">66<o:p></o:p></TD>

1780:

<TD

1781:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1782:

vAlign=top width=78>

1783:

<SPAN

1784:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(124)<o:p></o:p></TD>

1785:

<TD

1786:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1787:

vAlign=top width=85 colSpan=2>

1788:

<SPAN

1789:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1790:

<o:p></o:p></TD>

1791:

<TD

1792:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1793:

vAlign=top width=76>

1794:

<SPAN

1795:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1796:

<o:p></o:p></TD>

1797:

<TD

1798:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1799:

vAlign=top width=85 colSpan=2>

1800:

<SPAN

1801:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">–

1802:

<o:p></o:p></TD></TR>

1803:

<TR>

1804:

<TD

1805:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 22.5pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1806:

vAlign=top width=30>

1807:

<![if !supportEmptyParas]><![endif]> <SPAN

1808:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1809:

<TD

1810:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 215.85pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1811:

vAlign=top width=288>

1812:

<![if !supportEmptyParas]><![endif]> <SPAN

1813:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1814:

<TD

1815:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 54.05pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1816:

vAlign=top width=72>

1817:

<![if !supportEmptyParas]><![endif]> <SPAN

1818:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1819:

<TD

1820:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 58.55pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1821:

vAlign=top width=78>

1822:

<![if !supportEmptyParas]><![endif]> <SPAN

1823:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1824:

<TD

1825:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 63.5pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1826:

vAlign=top width=85 colSpan=2>

1827:

<![if !supportEmptyParas]><![endif]> <SPAN

1828:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1829:

<TD

1830:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 57.1pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1831:

vAlign=top width=76>

1832:

<![if !supportEmptyParas]><![endif]> <SPAN

1833:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1834:

<TD

1835:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 63.95pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1836:

vAlign=top width=85 colSpan=2>

1837:

<![if !supportEmptyParas]><![endif]> <SPAN

1838:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1839:

<TR>

1840:

<TD

1841:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1842:

vAlign=top width=30>

1843:

<![if !supportEmptyParas]><![endif]> <SPAN

1844:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1845:

<TD

1846:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1847:

vAlign=top width=288>

1848:

<SPAN

1849:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

1850:

style="mso-spacerun: yes">  US GAAP Net

1851:

Loss<o:p></o:p></TD>

1852:

<TD

1853:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1854:

vAlign=top width=72>

1855:

<SPAN

1856:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($964)<o:p></o:p></TD>

1857:

<TD

1858:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1859:

vAlign=top width=78>

1860:

<SPAN

1861:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($1,004)<o:p></o:p></TD>

1862:

<TD

1863:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1864:

vAlign=top width=85 colSpan=2>

1865:

<SPAN

1866:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($2,275)<o:p></o:p></TD>

1867:

<TD

1868:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1869:

vAlign=top width=76>

1870:

<SPAN

1871:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($7,159)<o:p></o:p></TD>

1872:

<TD

1873:

1874:

vAlign=top width=85 colSpan=2>

1875:

<SPAN

1876:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">($10,744)<o:p></o:p></TD></TR>

1877:

<TR>

1878:

<TD

1879:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1880:

vAlign=top width=30>

1881:

<![if !supportEmptyParas]><![endif]> <SPAN

1882:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1883:

<TD

1884:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

1885:

vAlign=top width=288>

1886:

<![if !supportEmptyParas]><![endif]> <SPAN

1887:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1888:

<TD

1889:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

1890:

vAlign=top width=72>

1891:

<![if !supportEmptyParas]><![endif]> <SPAN

1892:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1893:

<TD

1894:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

1895:

vAlign=top width=78>

1896:

<![if !supportEmptyParas]><![endif]> <SPAN

1897:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1898:

<TD

1899:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

1900:

vAlign=top width=85 colSpan=2>

1901:

<![if !supportEmptyParas]><![endif]> <SPAN

1902:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1903:

<TD

1904:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

1905:

vAlign=top width=76>

1906:

<![if !supportEmptyParas]><![endif]> <SPAN

1907:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1908:

<TD

1909:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in"

1910:

vAlign=top width=85 colSpan=2>

1911:

<![if !supportEmptyParas]><![endif]> <SPAN

1912:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR>

1913:

<TR>

1914:

<TD

1915:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

1916:

vAlign=top width=30>

1917:

<P class=MsoNormal

1918:

style="MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; tab-stops: list 27.0pt; mso-list: l16 level1 lfo21; mso-list-change: '$%1\:3\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

1919:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(3)<SPAN

1920:

style="FONT: 7pt 'Times New Roman'">       

1921:

<![endif]><![if !supportEmptyParas]> <![endif]><SPAN

1922:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1923:

<TD

1924:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 513pt; PADDING-TOP: 0in"

1925:

vAlign=top width=684 colSpan=8>

1926:

<SPAN

1927:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Amounts capitalized

1928:

under Canadian GAAP have been adjusted to US GAAP as

1929:

follows:<o:p></o:p></TD></TR>

1930:

1931:

<TD

1932:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1933:

vAlign=top width=30>

1934:

<![if !supportEmptyParas]><![endif]> <SPAN

1935:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1936:

<TD

1937:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1938:

vAlign=top width=288>

1939:

<SPAN

1940:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Canadian GAAP Mineral

1941:

Properties<o:p></o:p></TD>

1942:

<TD

1943:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1944:

vAlign=top width=72>

1945:

<SPAN

1946:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">12,681<o:p></o:p></TD>

1947:

<TD

1948:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1949:

vAlign=top width=78>

1950:

<SPAN

1951:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">12,203<o:p></o:p></TD>

1952:

<TD

1953:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1954:

vAlign=top width=85 colSpan=2>

1955:

<SPAN

1956:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">12,070<o:p></o:p></TD>

1957:

<TD

1958:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1959:

vAlign=top width=76>

1960:

<SPAN

1961:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">21,589<o:p></o:p></TD>

1962:

<TD

1963:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in; HEIGHT: 12.6pt"

1964:

vAlign=top width=85 colSpan=2>

1965:

<SPAN

1966:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">15,050<o:p></o:p></TD></TR>

1967:

<TR>

1968:

<TD

1969:

1970:

vAlign=top width=30>

1971:

<![if !supportEmptyParas]><![endif]> <SPAN

1972:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1973:

<TD

1974:

1975:

vAlign=top width=288>

1976:

<SPAN

1977:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Cumulative Expensed

1978:

exploration costs<SPAN

1979:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

1980:

<TD

1981:

1982:

vAlign=top width=72>

1983:

<SPAN

1984:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(12,681)<o:p></o:p></TD>

1985:

<TD

1986:

1987:

vAlign=top width=78>

1988:

<SPAN

1989:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(12,203)<o:p></o:p></TD>

1990:

<TD

1991:

1992:

vAlign=top width=85 colSpan=2>

1993:

<SPAN

1994:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(12,070)<o:p></o:p></TD>

1995:

<TD

1996:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 58.05pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

1997:

vAlign=top width=77 colSpan=2>

1998:

<P class=MsoNormal style="MARGIN-RIGHT: -5.4pt; TEXT-ALIGN: right"

1999:

align=right><SPAN

2000:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(21,589)<o:p></o:p></TD>

2001:

<TD

2002:

style="BORDER-RIGHT: medium none; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 63pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

2003:

vAlign=top width=84>

2004:

<P class=MsoNormal

2005:

style="MARGIN-LEFT: 0.9pt; TEXT-INDENT: -0.9pt; TEXT-ALIGN: right"

2006:

align=right><SPAN

2007:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(15,050)<o:p></o:p></TD></TR>

2008:

<TR>

2009:

<TD

2010:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in"

2011:

vAlign=top width=30>

2012:

<![if !supportEmptyParas]><![endif]> <SPAN

2013:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2014:

<TD

2015:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in"

2016:

vAlign=top width=288>

2017:

<SPAN

2018:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

2019:

style="mso-spacerun: yes">  US GAAP Mineral

2020:

Properties<o:p></o:p></TD>

2021:

<TD

2022:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in"

2023:

vAlign=top width=72>

2024:

<SPAN

2025:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

2026:

<TD

2027:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in"

2028:

vAlign=top width=78>

2029:

<SPAN

2030:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

2031:

<TD

2032:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in"

2033:

vAlign=top width=85 colSpan=2>

2034:

<SPAN

2035:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

2036:

<TD

2037:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in"

2038:

vAlign=top width=76>

2039:

<SPAN

2040:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD>

2041:

<TD

2042:

2043:

vAlign=top width=85 colSpan=2>

2044:

<SPAN

2045:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">$0<o:p></o:p></TD></TR>

2046:

2047:

<TD

2048:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 22.5pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2049:

vAlign=top width=30>

2050:

<![if !supportEmptyParas]><![endif]> <SPAN

2051:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2052:

<TD

2053:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 215.85pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2054:

vAlign=top width=288>

2055:

<![if !supportEmptyParas]><![endif]> <SPAN

2056:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2057:

<TD

2058:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 54.05pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2059:

vAlign=top width=72>

2060:

<![if !supportEmptyParas]><![endif]> <SPAN

2061:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2062:

<TD

2063:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 58.55pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2064:

vAlign=top width=78>

2065:

<![if !supportEmptyParas]><![endif]> <SPAN

2066:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2067:

<TD

2068:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.5pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2069:

vAlign=top width=85 colSpan=2>

2070:

<![if !supportEmptyParas]><![endif]> <SPAN

2071:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2072:

<TD

2073:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 57.1pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2074:

vAlign=top width=76>

2075:

<![if !supportEmptyParas]><![endif]> <SPAN

2076:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD>

2077:

<TD

2078:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 63.95pt; PADDING-TOP: 0in; HEIGHT: 4.5pt"

2079:

vAlign=top width=85 colSpan=2>

2080:

<![if !supportEmptyParas]><![endif]> <SPAN

2081:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><o:p></o:p></TD></TR><![if !supportMisalignedColumns]>

2082:

2083:

<TD

2084:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2085:

width=30></TD>

2086:

<TD

2087:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2088:

width=288></TD>

2089:

<TD

2090:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2091:

width=72></TD>

2092:

<TD

2093:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2094:

width=78></TD>

2095:

<TD

2096:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2097:

width=84></TD>

2098:

<TD

2099:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2100:

width=1></TD>

2101:

<TD

2102:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2103:

width=76></TD>

2104:

<TD

2105:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2106:

width=1></TD>

2107:

<TD

2108:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; BORDER-BOTTOM: medium none"

2109:

width=84></TD></TR><![endif]></TBODY></TABLE>

2110:

<SPAN

2111:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2112:

<SPAN

2113:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2114:

<SPAN

2115:

style="FONT-SIZE: 10pt"><INS

2116:

cite="mailto:pdowad" datetime="2002-12-03T11:40"><SPAN

2117:

style="mso-prop-change: pdowad 20021203T1141">B.<SPAN

2118:

style="mso-tab-count: 1">    </INS><SPAN

2119:

style="mso-prop-change: pdowad 20021203T1141"><SPAN

2120:

style="mso-prop-change: pdowad 20021203T1141">Exchange Rates<SPAN

2121:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p>

2122:

<SPAN

2123:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2124:

The

2125:

following table sets forth the <INS cite="mailto:pdowad"

2126:

datetime="2002-12-03T11:36">high and low </INS>rate of exchange for the Canadian

2127:

Dollar <INS cite="mailto:pdowad" datetime="2002-12-03T11:36">to the U.</INS><INS

2128:

cite="mailto:pdowad" datetime="2002-12-03T11:37">S.</INS><INS

2129:

cite="mailto:pdowad" datetime="2002-12-03T11:36"> dollar </INS>at the end of

2130:

each of the five most recent fiscal years ended May 31st, the average rates for

2131:

the year, and the range of high and low rates for each <DEL

2132:

cite="mailto:pdowad" datetime="2002-12-03T11:36">year</DEL><INS

2133:

cite="mailto:pdowad" datetime="2002-12-03T11:36">month in the last six months

2134:

ended October 31, 2002</INS>.<o:p></o:p>

2135:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2136:

For

2137:

purposes of this table, the rate of exchange means the noon buying rate in New

2138:

York City for cable transfers in foreign currencies as certified for

2139:

customs purposes by the Federal Reserve Bank of New York.<SPAN

2140:

style="mso-spacerun: yes">  The table sets forth the number of

2141:

Canadian Dollars required under that formula to buy one U.S. Dollar.  

2142:

The average rate means the average of the exchange rates on the last day of each

2143:

month during the period. <o:p></o:p>

2144:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2145:

<SPAN

2146:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2147:

<SPAN

2148:

style="FONT-SIZE: 10pt">U.S. Dollar/Canadian Dollar<o:p></o:p>

2149:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2150:

<SPAN

2151:

style="mso-spacerun: yes">                                

2152:

Average<SPAN

2153:

style="mso-spacerun: yes">    High<SPAN

2154:

style="mso-spacerun: yes">     Low<SPAN

2155:

style="mso-spacerun: yes">     

2156:

<o:p></o:p>

2157:

Month Ended 10/31/02<SPAN

2158:

style="mso-tab-count: 2">         

2159:

<SPAN

2160:

style="mso-spacerun: yes">              

2161:

1.60     <SPAN

2162:

style="mso-spacerun: yes">  1.56<SPAN

2163:

style="mso-tab-count: 1">     

2164:

<o:p></o:p>

2165:

Month Ended 09/30/02<SPAN

2166:

style="mso-tab-count: 2">         

2167:

<SPAN

2168:

style="mso-spacerun: yes">              

2169:

1.59     <SPAN

2170:

style="mso-spacerun: yes">  1.55<o:p></o:p>

2171:

Month Ended 08/31/02<SPAN

2172:

style="mso-tab-count: 2">         

2173:

<SPAN

2174:

style="mso-spacerun: yes">              

2175:

1.60     <SPAN

2176:

style="mso-spacerun: yes">  1.55<o:p></o:p>

2177:

Month Ended 07/31/02<SPAN

2178:

style="mso-tab-count: 2">         

2179:

<SPAN

2180:

style="mso-spacerun: yes">              

2181:

1.60     <SPAN

2182:

style="mso-spacerun: yes">  1.51<o:p></o:p>

2183:

Month Ended 06/30/02<SPAN

2184:

style="mso-tab-count: 1">    <SPAN

2185:

style="mso-tab-count: 1">     <SPAN

2186:

style="mso-spacerun: yes">               1.55<SPAN

2187:

style="mso-tab-count: 1">     <SPAN

2188:

style="mso-spacerun: yes">  1.50<o:p></o:p>

2189:

Month Ended 05/31/02<SPAN

2190:

style="mso-tab-count: 2">         

2191:

<SPAN

2192:

style="mso-spacerun: yes">              

2193:

1.57     <SPAN

2194:

style="mso-spacerun: yes">  1.53<o:p></o:p>

2195:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2196:

Fiscal Year Ended 05/31/02<SPAN

2197:

style="mso-tab-count: 2">         

2198:

1.57    1.60<SPAN

2199:

style="mso-tab-count: 1">     <SPAN

2200:

style="mso-spacerun: yes">  1.52<o:p></o:p>

2201:

Fiscal Year Ended 05/31/01<SPAN

2202:

style="mso-tab-count: 2">         

2203:

1.52    1.58<SPAN

2204:

style="mso-tab-count: 1">     <SPAN

2205:

style="mso-spacerun: yes">  1.47<o:p></o:p>

2206:

Fiscal Year Ended 05/31/00<SPAN

2207:

style="mso-tab-count: 2">         

2208:

1.47    1.51<SPAN

2209:

style="mso-tab-count: 1">     <SPAN

2210:

style="mso-spacerun: yes">  1.44<o:p></o:p>

2211:

Fiscal Year Ended 05/31/99<SPAN

2212:

style="mso-tab-count: 2">         

2213:

1.51    1.58<SPAN

2214:

style="mso-tab-count: 1">     <SPAN

2215:

style="mso-spacerun: yes">  1.45<o:p></o:p>

2216:

<SPAN

2217:

style="FONT-SIZE: 10pt">Fiscal Year Ended 05/31/98<SPAN

2218:

style="mso-spacerun: yes">          

2219:

1.14    1.46<SPAN

2220:

style="mso-spacerun: yes">      

2221:

1.37<o:p></o:p>

2222:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2223:

The current rate of exchange

2224:

was 1.58 on October 31, 2002.<o:p></o:p>

2225:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2226:

<P class=MsoNormal

2227:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1137"><SPAN

2228:

style="FONT-SIZE: 10pt"><INS

2229:

cite="mailto:pdowad" datetime="2002-12-03T11:40"><SPAN

2230:

style="mso-prop-change: pdowad 20021203T1141">C.<SPAN

2231:

style="mso-tab-count: 1">    </INS><SPAN

2232:

style="mso-prop-change: pdowad 20021203T1141"><INS cite="mailto:pdowad"

2233:

datetime="2002-12-03T11:38"><SPAN

2234:

style="mso-prop-change: pdowad 20021203T1141">Capitalization and

2235:

indebtedness</INS><SPAN

2236:

style="mso-prop-change: pdowad 20021203T1141"><INS cite="mailto:pdowad"

2237:

datetime="2002-12-03T11:37"><SPAN

2238:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p></INS>

2239:

<P class=MsoNormal

2240:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1137"><SPAN

2241:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:37"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2242:

<P class=MsoNormal

2243:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1137"><SPAN

2244:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

2245:

datetime="2002-12-03T11:38">Not applicable.<o:p></o:p></INS>

2246:

<P class=MsoNormal

2247:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2248:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2249:

<P class=MsoNormal

2250:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2251:

style="FONT-SIZE: 10pt"><INS

2252:

cite="mailto:pdowad" datetime="2002-12-03T11:40"><SPAN

2253:

style="mso-prop-change: pdowad 20021203T1141">D.<SPAN

2254:

style="mso-tab-count: 1">    </INS><SPAN

2255:

style="mso-prop-change: pdowad 20021203T1141"><INS cite="mailto:pdowad"

2256:

datetime="2002-12-03T11:38"><SPAN

2257:

style="mso-prop-change: pdowad 20021203T1141">Reasons for the offer and use of

2258:

proceeds.<SPAN

2259:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p></INS>

2260:

<P class=MsoNormal

2261:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2262:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2263:

<P class=MsoNormal

2264:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2265:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

2266:

datetime="2002-12-03T11:38">Not applicable.<o:p></o:p></INS>

2267:

<P class=MsoNormal

2268:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2269:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2270:

<P class=MsoNormal

2271:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1138"><SPAN

2272:

style="FONT-SIZE: 10pt"><INS

2273:

cite="mailto:pdowad" datetime="2002-12-03T11:40"><SPAN

2274:

style="mso-prop-change: pdowad 20021203T1141">E.<SPAN

2275:

style="mso-tab-count: 1">    </INS><SPAN

2276:

style="mso-prop-change: pdowad 20021203T1141"><INS cite="mailto:pdowad"

2277:

datetime="2002-12-03T11:38"><SPAN

2278:

style="mso-prop-change: pdowad 20021203T1141">Risk factors<SPAN

2279:

style="mso-prop-change: pdowad 20021203T1141"><o:p></o:p></INS>

2280:

<P class=MsoNormal

2281:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1139"><SPAN

2282:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:39"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2283:

<P class=MsoNormal

2284:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2285:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

2286:

datetime="2002-12-03T11:39"><DEL cite="mailto:srreid"

2287:

datetime="2002-12-03T12:28">[S – THIS WHOLE SECTION IS STILL

2288:

MISSING]</DEL></INS><INS cite="mailto:srreid"

2289:

datetime="2002-12-03T12:28">Investors should carefully consider the risks and

2290:

uncertainties described below before making an investment decision. If any of

2291:

the following risks actually occur, our business, financial condition or

2292:

operating results could be materially harmed. This could cause the trading price

2293:

of our common shares to decline, and you may lose all or part of your

2294:

investment.<o:p></o:p></INS>

2295:

<P class=MsoNormal

2296:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2297:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2298:

<P class=MsoNormal

2299:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><A

2300:

name=_Toc500203069></A><A name=_Toc500288338><SPAN

2301:

style="mso-bookmark: _Toc500203069"><INS

2302:

cite="mailto:srreid" datetime="2002-12-03T12:28">Risks Associated With Our

2303:

Financial Results</INS></A><SPAN

2304:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2305:

datetime="2002-12-03T12:28">:<o:p></o:p></INS>

2306:

<P class=MsoNormal

2307:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2308:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2309:

<P class=MsoNormal

2310:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2311:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2312:

datetime="2002-12-03T12:28">Our consolidated financial statements have been

2313:

prepared on the going concern basis, which presumes the realization of assets

2314:

and the settlement of liabilities in the normal course of operations.<SPAN

2315:

style="mso-spacerun: yes">  The application of the going concern

2316:

basis is dependent up the Company achieving profitable operations to generate

2317:

sufficient cash flows to fund continued operations, or, in the absence of

2318:

adequate cash flows from operations, obtaining additional financing.

2319:

<o:p></o:p></INS>

2320:

<P class=MsoNormal

2321:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2322:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2323:

<P class=MsoNormal

2324:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2325:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2326:

datetime="2002-12-03T12:28">The Company has reported losses and negative cash

2327:

flows from operations in the last three years.<SPAN

2328:

style="mso-spacerun: yes">  Management has commenced activities to

2329:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:31">obtain additional

2330:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:28">financing for its

2331:

operations</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:32">, however,

2332:

such financing is not assured</INS><INS cite="mailto:srreid"

2333:

datetime="2002-12-03T12:28">.

2334:

</INS><INS cite="mailto:srreid"

2335:

datetime="2002-12-03T12:32"><o:p></o:p></INS>

2336:

<P class=MsoNormal

2337:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1232"><SPAN

2338:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2339:

<P class=MsoNormal

2340:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1228"><A

2341:

name=_Toc500203070></A><A name=_Toc500288339><SPAN

2342:

style="mso-bookmark: _Toc500203070"><INS

2343:

cite="mailto:srreid" datetime="2002-12-03T12:28">Risks Associated With Our

2344:

Business And Operations</INS></A><SPAN

2345:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2346:

datetime="2002-12-03T12:28"><o:p></o:p></INS>

2347:

<P class=MsoNormal

2348:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><B

2349:

style="mso-bidi-font-weight: normal"><SPAN

2350:

style="FONT-SIZE: 10pt; mso-bidi-font-style: italic"><INS cite="mailto:srreid"

2351:

datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2352:

<P class=MsoNormal

2353:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><B

2354:

style="mso-bidi-font-weight: normal"><SPAN

2355:

style="FONT-SIZE: 10pt; mso-bidi-font-style: italic"><INS cite="mailto:srreid"

2356:

datetime="2002-12-03T12:28">We cannot be sure we will be able to locate proven

2357:

and probable reserves from our existing properties or future

2358:

properties</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:34"> nor can

2359:

we determine if, once located, it will be economically feasible to recovery the

2360:

minerals</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:28">.

2361:

</INS><INS cite="mailto:srreid"

2362:

datetime="2002-12-03T12:35">Proven and probable </INS><INS cite="mailto:srreid"

2363:

datetime="2002-12-03T12:38">reserves are difficult to determine w</INS><INS

2364:

cite="mailto:srreid" datetime="2002-12-03T12:35">ithout further exploration of

2365:

our prope</INS><INS cite="mailto:srreid"

2366:

datetime="2002-12-03T12:37">rties</INS><INS cite="mailto:srreid"

2367:

datetime="2002-12-03T12:38">. This exploration is subject to obtaining

2368:

sufficient financing to carry out </INS><INS cite="mailto:srreid"

2369:

datetime="2002-12-03T12:39">the exploration program, which financing is not

2370:

assured.  Without, sufficient

2371:

financing, additional exploration activities cannot commence.<SPAN

2372:

style="mso-spacerun: yes">  Upon determination of proven and

2373:

probable </INS><INS cite="mailto:srreid"

2374:

datetime="2002-12-03T12:40">reserves</INS><INS cite="mailto:srreid"

2375:

datetime="2002-12-03T12:39">,</INS><INS cite="mailto:srreid"

2376:

datetime="2002-12-03T12:40"> there is risk such reserves may not be

2377:

significantly large enough or </INS><INS cite="mailto:srreid"

2378:

datetime="2002-12-03T12:41">easily </INS><INS cite="mailto:srreid"

2379:

datetime="2002-12-03T12:40">accessible </INS><INS cite="mailto:srreid"

2380:

datetime="2002-12-03T12:41">to justify the economic cost of recovery of the

2381:

reserves.</INS><INS cite="mailto:srreid"

2382:

datetime="2002-12-03T12:28"><o:p></o:p></INS>

2383:

<P class=MsoNormal

2384:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2385:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2386:

<P class=MsoNormal

2387:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><B

2388:

style="mso-bidi-font-weight: normal"><SPAN

2389:

style="FONT-SIZE: 10pt; mso-bidi-font-style: italic"><INS cite="mailto:srreid"

2390:

datetime="2002-12-03T12:43">Title to mineral resources in certain jurisdictions

2391:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:44">may be</INS><INS

2392:

cite="mailto:srreid" datetime="2002-12-03T12:43"> difficult to</INS><INS

2393:

cite="mailto:srreid" datetime="2002-12-03T12:44"> </INS><INS

2394:

cite="mailto:srreid" datetime="2002-12-03T13:49">assert</INS><INS

2395:

cite="mailto:srreid" datetime="2002-12-03T12:44">. </INS><INS

2396:

cite="mailto:srreid" datetime="2002-12-03T12:43"><SPAN

2397:

style="mso-spacerun: yes">  </INS><INS cite="mailto:srreid"

2398:

datetime="2002-12-03T12:28"><SPAN

2399:

style="mso-spacerun: yes"> </INS><SPAN

2400:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2401:

datetime="2002-12-03T12:44">The Company exercises </INS><INS

2402:

cite="mailto:srreid" datetime="2002-12-03T12:28">significant due d</INS><INS

2403:

cite="mailto:srreid" datetime="2002-12-03T12:45">i</INS><INS

2404:

cite="mailto:srreid" datetime="2002-12-03T12:28">ligence in</INS><INS

2405:

cite="mailto:srreid" datetime="2002-12-03T12:45"> researching, assembling and

2406:

verifying claims to mineral exploration titles.<SPAN

2407:

style="mso-spacerun: yes">  The company operates in various foreign

2408:

jurisdictions in which title cannot </INS><INS cite="mailto:srreid"

2409:

datetime="2002-12-03T12:46">always be assured.</INS><INS cite="mailto:srreid"

2410:

datetime="2002-12-03T12:28"><o:p></o:p></INS>

2411:

<P class=MsoNormal

2412:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2413:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2414:

<P class=MsoNormal

2415:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><B

2416:

style="mso-bidi-font-weight: normal"><SPAN

2417:

style="FONT-SIZE: 10pt; mso-bidi-font-style: italic"><INS cite="mailto:srreid"

2418:

datetime="2002-12-03T12:28">Since we </INS><INS cite="mailto:srreid"

2419:

datetime="2002-12-03T12:47">operate in several foreign jurisdictions</INS><INS

2420:

cite="mailto:srreid" datetime="2002-12-03T12:28">, we face financial risks

2421:

associated with currency fluctuations and other risks relating to our

2422:

international operations which may adversely impact our business and results of

2423:

operations. </INS><SPAN

2424:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold; mso-bidi-font-style: italic"><INS

2425:

cite="mailto:srreid" datetime="2002-12-03T12:28">While we expect our

2426:

international revenues and expenses to be denominated predominantly in US

2427:

dollars, a portion of our international revenues and expenses may be denominated

2428:

in </INS><INS cite="mailto:srreid" datetime="2002-12-03T12:48">other </INS><INS

2429:

cite="mailto:srreid" datetime="2002-12-03T12:28">foreign currencies in the

2430:

future. Accordingly, we could experience the risks of fluctuating currencies and

2431:

could choose to engage in currency hedging activities, which may be unsuccessful

2432:

and expensive.<o:p></o:p></INS>

2433:

<P class=MsoNormal

2434:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><A

2435:

name=_Toc458487911></A><A name=_Toc458566736><SPAN

2436:

style="mso-bookmark: _Toc458487911"><INS

2437:

cite="mailto:srreid"

2438:

datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS></A><SPAN

2439:

style="mso-bookmark: _Toc458487911"><SPAN

2440:

style="mso-bookmark: _Toc458566736">

2441:

<P class=MsoNormal

2442:

style="TEXT-INDENT: 0in; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><A

2443:

name=_Toc500203071></A><A name=_Toc500288340><SPAN

2444:

style="mso-bookmark: _Toc500203071"><INS

2445:

cite="mailto:srreid" datetime="2002-12-03T12:28">Risks Which May Affect The

2446:

Value Of </INS><INS cite="mailto:srreid"

2447:

datetime="2002-12-03T12:49">Calais</INS><INS cite="mailto:srreid"

2448:

datetime="2002-12-03T12:28"> Shares</INS></A><SPAN

2449:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28">

2450:

<o:p></o:p></INS>

2451:

<P class=MsoNormal

2452:

style="TEXT-INDENT: 0in; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1228"><SPAN

2453:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2454:

<P class=MsoBodyText

2455:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1230"><B

2456:

style="mso-bidi-font-weight: normal"><SPAN

2457:

style="FONT-SIZE: 10pt; mso-bidi-font-style: italic"><INS cite="mailto:srreid"

2458:

datetime="2002-12-03T12:28">The exercise of our existing outstanding warrants

2459:

and options and the number of shares available for future issuance may

2460:

substantially dilute the value of our common shares. </INS><SPAN

2461:

style="FONT-SIZE: 10pt; mso-fareast-font-family: 'MS Mincho'"><INS

2462:

cite="mailto:srreid" datetime="2002-12-03T12:28">We have </INS><INS

2463:

cite="mailto:srreid" datetime="2002-12-03T12:49">10</INS><INS

2464:

cite="mailto:srreid" datetime="2002-12-03T12:28">0,000,000 shares of Common

2465:

Stock authorized, of which </INS><INS cite="mailto:srreid"

2466:

datetime="2002-12-03T12:50">10,676,718</INS><INS cite="mailto:srreid"

2467:

datetime="2002-12-03T12:28"> were outstanding at </INS><INS cite="mailto:srreid"

2468:

datetime="2002-12-03T12:50">May 31, 2002</INS><INS cite="mailto:srreid"

2469:

datetime="2002-12-03T12:28"> and an additional </INS><INS cite="mailto:srreid"

2470:

datetime="2002-12-03T12:51">1,574,053</INS><INS cite="mailto:srreid"

2471:

datetime="2002-12-03T12:28"> shares have been reserved for issuance upon the

2472:

exercise of outstanding options or warrants as of such date. Although our Board

2473:

of Directors has no present intention to do so, it has the authority, without

2474:

action by the shareholders, to issue authorized and unissued shares of Common

2475:

Stock. Any series of Preferred Stock, if and when established and issued, could

2476:

also have rights superior to shares of our Common Stock, particularly in regard

2477:

to voting,</INS><INS

2478:

cite="mailto:srreid" datetime="2002-12-03T12:30"> </INS><SPAN

2479:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

2480:

datetime="2002-12-03T12:30">the payment of dividends and upon liquidation of

2481:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T12:52">Calais</INS><INS

2482:

cite="mailto:srreid" datetime="2002-12-03T12:30">.<o:p></o:p></INS>

2483:

<P class=MsoNormal

2484:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: Unknown 19000000T0000"><SPAN

2485:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:37"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

2486:

<SPAN

2487:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

2488:

datetime="2002-12-03T13:50"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

2489:

class=msoDel><DEL cite="mailto:srreid"

2490:

datetime="2002-12-03T13:50"><o:p></o:p></DEL>

2491:

<B

2492:

style="mso-bidi-font-weight: normal">ITEM

2493:

4.  Information on the

2494:

Company<o:p></o:p>

2495:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2496:

<B

2497:

style="mso-bidi-font-weight: normal">A. History

2498:

and Development of the Company<o:p></o:p>

2499:

<B

2500:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2501:

<SPAN

2502:

style="FONT-SIZE: 10pt">Calais Resources Inc. (the "Registrant" or the

2503:

"Company") is engaged in the exploration and, when warranted, development of

2504:

natural resource properties.  The

2505:

Company’s primary properties are the Manhattan Properties in Nevada, the

2506:

Hendricks Claims in Colorado and the north Veraguas District mineral concessions

2507:

in the Republic of Panama. <o:p></o:p>

2508:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2509:

The

2510:

Company's head office is located at 9482 Williams St., Chilliwack, British

2511:

Columbia, Canada V2P 5G1; the contact person is Art Daher, Secretary and

2512:

Director; the telephone number is (604) 795-3383 and the facsimile number is

2513:

(604) 792-3676.<o:p></o:p>

2514:

The

2515:

Company's common shares trade on the OTCBB under trading symbol "CAAUF".<SPAN

2516:

style="mso-spacerun: yes">  The Company's fiscal year ends May

2517:

31st.<o:p></o:p>

2518:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2519:

The

2520:

Company's consolidated financial statements are stated in Canadian Dollars

2521:

(CDN$) and are prepared in accordance with Canadian Generally Accepted

2522:

Accounting Principles (GAAP); nevertheless, the consolidated financial

2523:

statements conform in all material respects with US GAAP, except as disclosed in

2524:

footnotes to the financial statements.<o:p></o:p>

2525:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2526:

<SPAN

2527:

style="FONT-SIZE: 10pt">Herein, all references to "$" and "CDN$" refer to

2528:

Canadian Dollars and all references to "US$" refer to United States Dollars.

2529:

Unless otherwise specified, all dollar amounts are expressed in Canadian Dollars

2530:

(CDN$). All references to common shares refer to the Company's Common Shares

2531:

without Par Value unless otherwise indicated.<o:p></o:p>

2532:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2533:

The

2534:

information contained in this Annual Report is current as at October 31,2002,

2535:

except where a different date is specified.<o:p></o:p>

2536:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2537:

The

2538:

Company has no mineral properties, which are producing revenue.<SPAN

2539:

style="mso-spacerun: yes">  The Company’s operations consist of

2540:

searching for commercially viable reserves.<SPAN

2541:

style="mso-spacerun: yes">  The Company has not developed any

2542:

mineral properties to date. The Colorado properties do have proven and probable

2543:

reserves.<o:p></o:p>

2544:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2545:

Incorporation/Name

2546:

Change<o:p></o:p>

2547:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2548:

The

2549:

Company was incorporated in British Columbia, Canada, on December 30, 1986 under

2550:

the name “Millennium Resources Inc.”.

2551:

Effective March 19, 1992, the name was changed to “Calais Resources

2552:

Inc.”.<o:p></o:p>

2553:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2554:

<SPAN

2555:

style="FONT-SIZE: 10pt">Stock Consolidation/Split<o:p></o:p>

2556:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2557:

<SPAN

2558:

style="FONT-SIZE: 10pt">Effective March 19 1992, the Company consolidated its

2559:

common shares on a one-for-five basis.

2560:

All references to the number of shares or per share data refer to

2561:

post-consolidation figures unless otherwise indicated.<o:p></o:p>

2562:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2563:

<SPAN

2564:

style="FONT-SIZE: 10pt">Fiscal 2002 Natural Resource Property

2565:

Acquisition/Exploration <o:p></o:p>

2566:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2567:

<SPAN

2568:

style="FONT-SIZE: 10pt">During Fiscal 2002, the Company continued to work on

2569:

raising capital. A detailed exploration program for each property has been

2570:

professionally prepared. The second of four annual payments was made for the

2571:

additional ownership in the Nevada Manhattan Agreement of Fiscal 2000. The

2572:

Company plans to commence surface mapping and sampling programs, followed by a

2573:

surface diamond drill program for its Nevada Manhattan District property in

2574:

January 2003, subject to raising additional capital. The Company also has plans

2575:

to commence a surface diamond drill program at its Consolidated Caribou Mines

2576:

project in April 2003.  A modest

2577:

surface mapping and sampling program is planned for the Panama project, followed

2578:

by a diamond drill program.  All of

2579:

these projects will be influenced by the success of financing

2580:

efforts.<o:p></o:p>

2581:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2582:

<SPAN

2583:

style="FONT-SIZE: 10pt">Fiscal 2001 Natural Resource Property

2584:

Acquisition/Exploration<o:p></o:p>

2585:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2586:

<SPAN

2587:

style="FONT-SIZE: 10pt">During Fiscal 2001, the Company continued to work on

2588:

raising capital for exploration purposes. A detailed exploration program for

2589:

each property has been professionally prepared. The Company had planned to

2590:

commence surface mapping and sampling programs, followed by a surface diamond

2591:

drill program for its Nevada Manhattan District property in February 2002. This

2592:

did not proceed due to lack of capital. The Company had planned to commence a

2593:

surface diamond drill program at its Consolidated Caribou Mines project in June

2594:

2002. This also did not proceed due to lack of capital. A modest surface mapping

2595:

and sampling program was planned for the Panama project, followed by a diamond

2596:

drill program. All of these projects were influenced by the lack of success in

2597:

financing efforts.<o:p></o:p>

2598:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2599:

<SPAN

2600:

style="FONT-SIZE: 10pt">Fiscal 2002 Financing<o:p></o:p>

2601:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2602:

<SPAN

2603:

style="FONT-SIZE: 10pt">During 2002, the Company secured a US $1,200,000 loan

2604:

from Peak National Bank which was used to pay shareholder loans, trade accounts

2605:

payable, and other long term debts as well as finance 2002

2606:

operations.<o:p></o:p>

2607:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2608:

<SPAN

2609:

style="FONT-SIZE: 10pt">Fiscal 2001 Financing<o:p></o:p>

2610:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2611:

The

2612:

Company relied on personal loans from certain directors and their family members

2613:

to help fund monthly overhead. The Company secured a US $200,000 loan from Peak

2614:

National Bank of Nederland, Colorado on November 7, 2000. The Company also sold

2615:

used RC drill equipment that was determined to be of no use for future

2616:

exploration programs.<o:p></o:p>

2617:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2618:

See

2619:

Item 4D. “Property, Plant and Equipment” regarding significant events in the

2620:

development of the Company’s business and capital expenditures over the last

2621:

three years.<o:p></o:p>

2622:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2623:

<B

2624:

style="mso-bidi-font-weight: normal"><SPAN

2625:

style="mso-prop-change: pdowad 20021203T1143"><SPAN

2626:

style="mso-prop-change: pdowad 20021203T1143">B. Business Overview<SPAN

2627:

style="mso-prop-change: pdowad 20021203T1143"><o:p></o:p>

2628:

<SPAN

2629:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2630:

<SPAN

2631:

style="FONT-SIZE: 10pt">2001/2002 Exploration & Development

2632:

Programs<o:p></o:p>

2633:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2634:

The

2635:

Company is in the business of researching, acquiring, exploring and, when

2636:

warranted, developing mineral properties. <o:p></o:p>

2637:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2638:

The

2639:

corporate philosophy has been to seek out and acquire potential gold mineral

2640:

properties in North America.  The

2641:

objective being to acquire an entire district that has 1 million ounces plus

2642:

commercial potential and is historically beyond the grass-root level in its

2643:

development.<o:p></o:p>

2644:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2645:

The

2646:

Company then endeavors to acquire the rights to the prospective and surrounding

2647:

claims.  It then proceeds through a

2648:

due diligence period to the commencement of a full scientific analysis of the

2649:

district, followed by an exploration and development program.<SPAN

2650:

style="mso-spacerun: yes">  Suitable results at each step in the

2651:

process are a prerequisite to further development.<SPAN

2652:

style="mso-spacerun: yes">  Upon suitable development of a mineral

2653:

deposit and reserve, the Company will then make the decision to either proceed

2654:

with the mining thereof, to joint venture with a major mining company, or to

2655:

sell outright.<o:p></o:p>

2656:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2657:

The

2658:

Company now has three projects at various stages of

2659:

exploration.<o:p></o:p>

2660:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2661:

<I

2662:

style="mso-bidi-font-style: normal">Caribou

2663:

Consolidated District, Colorado:<o:p></o:p>

2664:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2665:

The

2666:

Caribou Consolidated District, located in Colorado, is a 3.5 square mile

2667:

consolidated precious metals district. Historic production in the district dates

2668:

back to 1869. Production between 1977 and 1985 totaled $5 million through small

2669:

scale exploration development work and old mine dump reclamation. The district

2670:

consists of three modern surface plants, roads, power lines and is fully

2671:

permitted. 140,000 feet of diamond drilling has been completed to-date with a

2672:

modern core library. All data is in the Vulcan/Maptek program and has an

2673:

extensive database. The mine has high grade vein widths from 3 feet to 50 feet,

2674:

going to significant depths and significant strike lengths. The Caribou district

2675:

has recorded production dating back to 1869 of 300,000 oz. Gold and 20,000,000

2676:

silver. The next drill program may expand its resources to + 1 million ounces of

2677:

gold and 30/40 million ounces of silver. It may also potentially reveal several

2678:

new undeveloped targets.<o:p></o:p>

2679:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2680:

<I

2681:

style="mso-bidi-font-style: normal">Nevada

2682:

Manhattan District/Nye County, Nevada:<o:p></o:p>

2683:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2684:

The

2685:

Nevada Manhattan District is a 4 square mile district. Its historic production

2686:

dates back to 1860. Several high-grade gold mines consisting of the White Caps,

2687:

Bath, Earl, and Union Consolidated mines are located within this district.

2688:

Newmont is a very attractive mine, situated immediately to the South of the

2689:

Manhattan and Midway projects. The Barrick and Echo Bay mines, including the

2690:

Round Mountain site, are large scale production operations directly to the North

2691:

of the Manhattan district. The past ten years have been spent consolidating the

2692:

district. For the past three years, much energy has been spent developing a

2693:

geologic model for a core drilling program that will potentially hit a large

2694:

buried intrusive gold ore body. It is a gold feeder zone for the district. An

2695:

extensive database is ready for review. Upon receipt of adequate funding, a

2696:

drill program will be ready to commence with Q-West Drilling within a two month

2697:

period.<o:p></o:p>

2698:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2699:

<I

2700:

style="mso-bidi-font-style: normal">Faja de Oro

2701:

District/Republic of Panama:<o:p></o:p>

2702:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2703:

The

2704:

Faja de Oro district is a 61,000 acre mineral concession. Its historic gold

2705:

production dates back to 1200 A D. No one has ever completed a modern day,

2706:

professionally run exploration program to find the source of placer gold that is

2707:

found throughout the extensive river system and ocean placers. There has been

2708:

300,000 ounces of placer gold produced from crude techniques. Calais has

2709:

generated a geologic database that will be used for exploration programs that

2710:

have an excellent chance in locating high-grade gold veins and possible

2711:

stockwork/porphyry type gold deposits. This property is located between the

2712:

Teek/Adrian concessions to the east and the Cerro Colorado discoveries to the

2713:

west. The Faja de Oro is a major east, west structural

2714:

trend.<o:p></o:p>

2715:

<B

2716:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2717:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2718:

<SPAN

2719:

style="FONT-SIZE: 10pt">Sources of Funds<B

2720:

style="mso-bidi-font-weight: normal"><SPAN

2721:

style="COLOR: red"><o:p></o:p>

2722:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2723:

<SPAN

2724:

style="FONT-SIZE: 10pt">At 10/31/02 the Company had stock options

2725:

outstanding entitling the holders to acquire 965,250 shares at an exercise price

2726:

of Cdn $0.45 per share and 60,000 shares at an exercise price of Cdn $0.77. The

2727:

Company plans to continue in its efforts to secure financing through private

2728:

placements and stock options.<o:p></o:p>

2729:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2730:

<SPAN

2731:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold">The Peak National bank loan

2732:

is being renewed on a monthly basis by paying interest and a monthly renewal

2733:

fee. Peak National Bank has agreed to renew the loan for one year if the Company

2734:

pays ten percent of the principle ($US 120,000) and escrows one year of interest

2735:

at 10.5% per annum. Two of the Directors of the Company are providing working

2736:

capital until such time a private placement is completed to raise approximately

2737:

$US 250,000 in funds required to meet the terms of Peak National

2738:

Bank.<o:p></o:p>

2739:

<SPAN

2740:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2741:

<B

2742:

style="mso-bidi-font-weight: normal"><SPAN

2743:

style="FONT-SIZE: 10pt">Regulations and Government

2744:

Rules<o:p></o:p>

2745:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2746:

<SPAN

2747:

style="FONT-SIZE: 10pt">Normal practices to reduce noise, changes to air quality

2748:

and water quality are expected to be sufficient.<SPAN

2749:

style="mso-spacerun: yes">  The Company has obtained all necessary

2750:

permits in the United States and Canada for exploration/development work

2751:

performed to date and anticipates no material problems in obtaining the

2752:

necessary permits to proceed with development.<o:p></o:p>

2753:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2754:

The

2755:

Company is not aware of any proposed or existing Canadian or United States

2756:

regulations pertaining to environmental matters which might have a

2757:

material impact on the Company's future financial performance<B

2758:

style="mso-bidi-font-weight: normal"><o:p></o:p>

2759:

<B

2760:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2761:

<B

2762:

style="mso-bidi-font-weight: normal"><SPAN

2763:

style="FONT-SIZE: 10pt">Competition<o:p></o:p>

2764:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2765:

<SPAN

2766:

style="FONT-SIZE: 10pt">There is general competition from other mineral

2767:

exploration/development companies with operations similar to that of the

2768:

Company's.  Many of the companies

2769:

with which the Company competes have operations and financial strength many<SPAN

2770:

style="mso-spacerun: yes">                        

2771:

times that of the Company.<o:p></o:p>

2772:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2773:

<SPAN

2774:

style="FONT-SIZE: 10pt">Nevertheless, the market for the Company's possible

2775:

future production of minerals tends to be commodity oriented, rather than

2776:

company oriented.  Accordingly, the

2777:

Company expects to compete by keeping its production costs low through judicious

2778:

selection of which portions of the property to develop and by keeping

2779:

overhead charges within industry standards.<o:p></o:p>

2780:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2781:

<SPAN

2782:

style="FONT-SIZE: 10pt"><SPAN

2783:

style="mso-prop-change: pdowad 20021203T1144"><SPAN

2784:

style="mso-prop-change: pdowad 20021203T1144">C. Organizational Structure<SPAN

2785:

style="mso-prop-change: pdowad 20021203T1144"><o:p></o:p>

2786:

<SPAN

2787:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2788:

The

2789:

Company is the parent company in the corporate group and owns various wholly

2790:

owned subsidiaries either directly or indirectly.<SPAN

2791:

style="mso-spacerun: yes">  All material inter-company transactions

2792:

and balances have been eliminated in the consolidated financial statements

2793:

included in this report.   The

2794:

three active subsidiaries of the Company are Calais Resources Nevada Inc. and

2795:

Calais Resources Colorado Inc., both incorporated in the State of Nevada, and

2796:

Calais Resources International Inc., incorporated in

2797:

Bermuda.<o:p></o:p>

2798:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2799:

<SPAN

2800:

style="mso-prop-change: pdowad 20021203T1144"><SPAN

2801:

style="mso-prop-change: pdowad 20021203T1144">D. Property, plant and

2802:

Equipment<SPAN

2803:

style="mso-prop-change: pdowad 20021203T1144"><o:p></o:p>

2804:

<B

2805:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2806:

<B

2807:

style="mso-bidi-font-weight: normal">Executive

2808:

Offices<o:p></o:p>

2809:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2810:

The

2811:

Company's executive offices are located in premises of approximately 900 square

2812:

feet at 9482 Williams St., Chilliwack V2P 5G1.<SPAN

2813:

style="mso-spacerun: yes">  The Company began occupying this

2814:

facility in March 1998 and considers this facility to be adequate for its

2815:

current needs.<o:p></o:p>

2816:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2817:

<B

2818:

style="mso-bidi-font-weight: normal">Manhattan

2819:

Project<o:p></o:p>

2820:

<B

2821:

style="mso-bidi-font-weight: normal">Nevada,

2822:

USA; Gold Exploration<o:p></o:p>

2823:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2824:

<SPAN

2825:

style="FONT-SIZE: 10pt">Acquisition Details<o:p></o:p>

2826:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2827:

In

2828:

December of 1994, the Company acquired a 51% interest in certain patented and

2829:

unpatented claims located in Nevada from a company controlled by directors for

2830:

$1,176,000 US plus a 5% net smelter royalty. The Company can also acquire a 100%

2831:

interest in a further 89 claims in this property under this

2832:

agreement.<o:p></o:p>

2833:

<SPAN

2834:

style="FONT-SIZE: 10pt"><SPAN

2835:

style="mso-spacerun: yes"> <o:p></o:p>

2836:

The

2837:

Company entered into an agreement and settlement dated September 7, 2000 with

2838:

Nevada Manhattan Mining Incorporated to settle and purchase The Manhattan Mining

2839:

Incorporated’s 24.5% interest in the property. The Company agreed to make four

2840:

annual payments of US $75,000 each for a total of US $300,000. During the term

2841:

of the agreement the Company has agreed to pay Nevada Manhattan Mining

2842:

Incorporated a 2% net smelter return royalty. The Company can purchase the

2843:

entire Nevada Manhattan Mining Incorporated interest and royalty at anytime over

2844:

a thirty year period for US $7.5 million, which would include production

2845:

royalties.<o:p></o:p>

2846:

<SPAN

2847:

style="FONT-SIZE: 10pt"><SPAN

2848:

style="mso-spacerun: yes">       

2849:

<o:p></o:p>

2850:

By

2851:

staking, the Company also holds a 100% interest in 42 unpatented claims in the

2852:

Manhattan Mining district.<o:p></o:p>

2853:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2854:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2855:

<SPAN

2856:

style="FONT-SIZE: 10pt">Property

2857:

Description/Location/Access/Climate<o:p></o:p>

2858:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2859:

The

2860:

project is located around the old mining town of Manhattan, Nevada, USA.<SPAN

2861:

style="mso-spacerun: yes">  Manhattan is 15 miles southeast of Round

2862:

Mountain, Nevada, located on Highway 376, 20 miles from Carvers, Nevada, and 43

2863:

miles from Tonopah, Nevada.  The

2864:

project covers approximately 4600 acres of patented and unpatented Bureau of

2865:

Land Management (“BLM”) and US Forest Service (“USFS”)

2866:

land.<o:p></o:p>

2867:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2868:

The

2869:

Manhattan Project is divided into two main areas: i) 1800 acres held by the

2870:

Company (75.5%) and Argus Resources (24.5%) in 31 patented claims and 26

2871:

unpatented claims; and land held exclusively by the

2872:

Company.<o:p></o:p>

2873:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2874:

<SPAN

2875:

style="FONT-SIZE: 10pt">Previous Work<o:p></o:p>

2876:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2877:

The

2878:

historic mining in the area extends from 1866 to present with the major activity

2879:

taking place in the late 1860’s, between 1906 and 1921, and from the 1960’s

2880:

until present.  Placer and lode

2881:

mining took place principally in the Reliance, White Caps, Union Amalgamated,

2882:

Manhattan Consolidated, Earle, Big Four, and April Fool mines.<SPAN

2883:

style="mso-spacerun: yes">  There has been significant production in

2884:

recent years from adjoining property.<o:p></o:p>

2885:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2886:

<SPAN

2887:

style="FONT-SIZE: 10pt">Past exploratory drilling focused on delineating an

2888:

economic resource in the Cambrian Age limestone rocks around the White Caps and

2889:

Manhattan Consolidated Mines.

2890:

Several exploration companies drilled mainly RC holes to test theories of

2891:

mineralization in this rock type.<o:p></o:p>

2892:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2893:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2894:

<B

2895:

style="mso-bidi-font-weight: normal">Hendricks

2896:

Claims<o:p></o:p>

2897:

<B

2898:

style="mso-bidi-font-weight: normal">Colorado,

2899:

USA; Gold/Silver Exploration/Development<o:p></o:p>

2900:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2901:

<SPAN

2902:

style="FONT-SIZE: 10pt">Acquisition Details<o:p></o:p>

2903:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2904:

<SPAN

2905:

style="FONT-SIZE: 10pt">Included in the Colorado properties is a 100% working

2906:

interest in the Consolidated Caribou-Cross-Comstock-Panadora district mine area

2907:

which the Company acquired in 1997 for US $4,000,000 in stock, cash and final

2908:

property payments. After acquisition of 100% working interest the<SPAN

2909:

style="mso-spacerun: yes">  seller retains a 2% net smelter royalty

2910:

interest in the property. The Company has the right to buy back half of the net

2911:

smelter royalty (1%) for US $750,000. The seller has not sold any of the issued

2912:

shares for this acquisition through May 31, 2002. The company continues to have

2913:

100% ownership of 10 Patented claims that are continuations of the historic

2914:

Boulder County and Cardinal vein systems. The Colorado properties contain a

2915:

well<DEL cite="mailto:srreid" datetime="2002-12-03T14:40">

2916:

</DEL>documented mineral resource of 424,500 ounces of gold and

2917:

11,725,000 ounces of silver.<o:p></o:p>

2918:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2919:

<SPAN

2920:

style="FONT-SIZE: 10pt">Property

2921:

Description/Location/Access/Climate<o:p></o:p>

2922:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2923:

The

2924:

property includes the Cross Gold Mine, the Potosi Mine and several other

2925:

district properties.  The property

2926:

is on the east flank of the Front Range Mountains, approximately 23 miles west

2927:

of Boulder Colorado.  It is reached

2928:

by a five-mile all-weather graded road from the small town of Nederland, which

2929:

connects with Boulder via paved State Highway 119.<o:p></o:p>

2930:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2931:

The

2932:

project area encompasses claims with additional Federal claims on public lands

2933:

north and west of the Cross Mine.<o:p></o:p>

2934:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2935:

<SPAN

2936:

style="FONT-SIZE: 10pt">Gold and silver mineralization occurs in a broad,

2937:

west-northwest trending zone that includes the Cross Mine and extends about

2938:

2,500 feet on the property.<o:p></o:p>

2939:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2940:

<SPAN

2941:

style="FONT-SIZE: 10pt">Three-phase power, sufficient to service a 500 tpd (tons

2942:

per day) mine and mill complex, is installed and active on the property.<SPAN

2943:

style="mso-spacerun: yes">  An 18-gauge rail haulage system and

2944:

equipment, hoisting equipment, compressed air, water and ventilation services

2945:

are installed and maintained in good working condition in the Cross Mine.<SPAN

2946:

style="mso-spacerun: yes">  Mine water treatment facilities are

2947:

currently operating in compliance and were upgraded in recent

2948:

years.<o:p></o:p>

2949:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2950:

The

2951:

Cross Mine is fully permitted through the Colorado State Health Department, the

2952:

Colorado Division of Mines, Mine Safety and Health Administration, and the

2953:

Colorado Mined Land Reclamation Division.

2954:

Permitting includes a water discharge permit.<o:p></o:p>

2955:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2956:

<SPAN

2957:

style="FONT-SIZE: 10pt">Previous Work<o:p></o:p>

2958:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2959:

<SPAN

2960:

style="FONT-SIZE: 10pt">Silver ore was discovered in the region in 1869.<SPAN

2961:

style="mso-spacerun: yes">  A wagon road was completed in 1870 and

2962:

mining developed rapidly over the next few years with the highest production

2963:

coming from the Caribou and No-Name veins.

2964:

The Cross ore deposit was discovered in 1873 and had minor intermittent

2965:

production until 1939.<o:p></o:p>

2966:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2967:

<SPAN

2968:

style="FONT-SIZE: 10pt">Hendricks Mining Company began the task of reopening the

2969:

mine in 1974.  Between 1977 and

2970:

1985, 27,000 short tons of ore was produced from four mine levels.<SPAN

2971:

style="mso-spacerun: yes">  Very little geological data, drilling or

2972:

assay information was available to guide this work.<o:p></o:p>

2973:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2974:

The

2975:

Hendricks Mining Company extensively explored the property by drifting, drilling

2976:

from both the surface and underground and by mapping and sampling.<SPAN

2977:

style="mso-spacerun: yes">  The mine workings in the Cross Mine have

2978:

been significantly expanded.<o:p></o:p>

2979:

<B

2980:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2981:

<B

2982:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2983:

<B

2984:

style="mso-bidi-font-weight: normal">Panama

2985:

Project,<o:p></o:p>

2986:

<B

2987:

style="mso-bidi-font-weight: normal">Republic

2988:

of Panama; Gold Exploration<o:p></o:p>

2989:

<B

2990:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

2991:

<SPAN

2992:

style="FONT-SIZE: 10pt">Acquisition Details<o:p></o:p>

2993:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

2994:

<SPAN

2995:

style="FONT-SIZE: 10pt">Pursuant to an agreement dated October 6, 2000, the

2996:

Company was granted the option to purchase a 40,000 acres mineral concession in

2997:

a historic gold producing district of Panama with Panama Mining of Golden Cycle

2998:

of Panama Incorporated.  The

2999:

Company’s agreement is for the hard rock mineral rights.<o:p></o:p>

3000:

<B

3001:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3002:

<SPAN

3003:

style="FONT-SIZE: 10pt">Previous Work<o:p></o:p>

3004:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3005:

<SPAN

3006:

style="FONT-SIZE: 10pt">Gold has been produced by primitive methods from streams

3007:

and high-grade veins in the region since the time of Columbus.<SPAN

3008:

style="mso-spacerun: yes">  There has been no modern day systematic

3009:

gold exploration to evaluate the resource potential of the veins on the

3010:

concession.<o:p></o:p>

3011:

<P class=MsoNormal

3012:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1448"><B

3013:

style="mso-bidi-font-weight: normal"><INS

3014:

cite="mailto:srreid"

3015:

datetime="2002-12-03T14:48"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3016:

<P class=MsoNormal

3017:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1448"><SPAN

3018:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3019:

datetime="2002-12-03T14:48">The Company spent exploration funds as

3020:

follows</INS><INS cite="mailto:srreid" datetime="2002-12-03T14:49"> in each of

3021:

the last three years</INS><INS cite="mailto:srreid"

3022:

datetime="2002-12-03T14:48">:</INS><SPAN

3023:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><INS cite="mailto:srreid"

3024:

datetime="2002-12-03T14:48">

3025:

<o:p></o:p></INS>

3026:

<P class=MsoNormal

3027:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1448"><SPAN

3028:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3029:

datetime="2002-12-03T14:48"><SPAN

3030:

style="mso-spacerun: yes">     <SPAN

3031:

style="mso-spacerun: yes">         <o:p></o:p></INS>

3032:

<TABLE style="BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt"

3033:

cellSpacing=0 cellPadding=0 border=0>

3034:

<TBODY>

3035:

3036:

<TD

3037:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3038:

vAlign=top width=163>

3039:

<P class=MsoHeader

3040:

style="TEXT-ALIGN: right; tab-stops: .5in; mso-list: none; mso-list-ins: srreid 20021203T1448"

3041:

align=right><![if !supportEmptyParas]><![endif]> <SPAN

3042:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3043:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3044:

<TD

3045:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3046:

vAlign=top width=108>

3047:

<P class=MsoNormal

3048:

style="TEXT-ALIGN: center; mso-list: none; mso-list-ins: srreid 20021203T1448"

3049:

align=center><INS cite="mailto:srreid"

3050:

datetime="2002-12-03T14:48">Fiscal<SPAN

3051:

style="mso-spacerun: yes">                          

3052:

2002<o:p></o:p></INS></TD>

3053:

<TD

3054:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3055:

vAlign=top width=108>

3056:

<P class=MsoNormal

3057:

style="TEXT-ALIGN: center; mso-list: none; mso-list-ins: srreid 20021203T1448"

3058:

align=center><INS cite="mailto:srreid"

3059:

datetime="2002-12-03T14:48">Fiscal <o:p></o:p></INS>

3060:

<P class=MsoNormal

3061:

style="TEXT-INDENT: 0in; TEXT-ALIGN: center; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1448"

3062:

align=center><INS cite="mailto:srreid"

3063:

datetime="2002-12-03T14:48">200</INS><INS cite="mailto:srreid"

3064:

datetime="2002-12-03T14:49">1</INS><INS cite="mailto:srreid"

3065:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3066:

<TD

3067:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3068:

vAlign=top width=108>

3069:

<P class=MsoNormal

3070:

style="TEXT-ALIGN: center; mso-list: none; mso-list-ins: srreid 20021203T1448"

3071:

align=center><INS cite="mailto:srreid"

3072:

datetime="2002-12-03T14:50">Fiscal<o:p></o:p></INS>

3073:

<P class=MsoNormal

3074:

style="TEXT-ALIGN: center; mso-list: none; mso-list-ins: srreid 20021203T1450"

3075:

align=center><INS cite="mailto:srreid"

3076:

datetime="2002-12-03T14:50">2000<o:p></o:p></INS></TD></TR>

3077:

3078:

<TD

3079:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3080:

vAlign=top width=163>

3081:

<P class=MsoNormal

3082:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1448"><SPAN

3083:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3084:

datetime="2002-12-03T14:48">Manhattan

3085:

Property<o:p></o:p></INS></TD>

3086:

<TD

3087:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3088:

vAlign=top width=108>

3089:

<P class=MsoNormal

3090:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3091:

align=right><INS cite="mailto:srreid"

3092:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3093:

datetime="2002-12-03T14:49">292,886</INS><INS cite="mailto:srreid"

3094:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3095:

<TD

3096:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3097:

vAlign=top width=108>

3098:

<P class=MsoNormal

3099:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3100:

align=right><INS cite="mailto:srreid"

3101:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3102:

datetime="2002-12-03T14:49">176,175</INS><INS cite="mailto:srreid"

3103:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3104:

<TD

3105:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3106:

vAlign=top width=108>

3107:

<P class=MsoNormal

3108:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3109:

align=right><INS cite="mailto:srreid"

3110:

datetime="2002-12-03T14:52">$2,366</INS><INS cite="mailto:srreid"

3111:

datetime="2002-12-03T14:50"><o:p></o:p></INS></TD></TR>

3112:

3113:

<TD

3114:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3115:

vAlign=top width=163>

3116:

<P class=MsoNormal

3117:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1448"><SPAN

3118:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3119:

datetime="2002-12-03T14:48">Colorado

3120:

Property<o:p></o:p></INS></TD>

3121:

<TD

3122:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3123:

vAlign=top width=108>

3124:

<P class=MsoNormal

3125:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3126:

align=right><INS cite="mailto:srreid"

3127:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3128:

datetime="2002-12-03T14:49">120,601</INS><INS cite="mailto:srreid"

3129:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3130:

<TD

3131:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3132:

vAlign=top width=108>

3133:

<P class=MsoNormal

3134:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3135:

align=right><INS cite="mailto:srreid"

3136:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3137:

datetime="2002-12-03T14:50">190,566</INS><INS cite="mailto:srreid"

3138:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3139:

<TD

3140:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3141:

vAlign=top width=108>

3142:

<P class=MsoNormal

3143:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3144:

align=right><INS cite="mailto:srreid"

3145:

datetime="2002-12-03T14:53">$185,962</INS><INS cite="mailto:srreid"

3146:

datetime="2002-12-03T14:50"><o:p></o:p></INS></TD></TR>

3147:

3148:

<TD

3149:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3150:

vAlign=top width=163>

3151:

<P class=MsoNormal

3152:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1448"><SPAN

3153:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

3154:

datetime="2002-12-03T14:48">Panama Property<o:p></o:p></INS></TD>

3155:

<TD

3156:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3157:

vAlign=top width=108>

3158:

<P class=MsoNormal

3159:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3160:

align=right><INS cite="mailto:srreid"

3161:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3162:

datetime="2002-12-03T14:49">65,070</INS><INS cite="mailto:srreid"

3163:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3164:

<TD

3165:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3166:

vAlign=top width=108>

3167:

<P class=MsoNormal

3168:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3169:

align=right><INS cite="mailto:srreid"

3170:

datetime="2002-12-03T14:48">$</INS><INS cite="mailto:srreid"

3171:

datetime="2002-12-03T14:50">78,988</INS><INS cite="mailto:srreid"

3172:

datetime="2002-12-03T14:48"><o:p></o:p></INS></TD>

3173:

<TD

3174:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3175:

vAlign=top width=108>

3176:

<P class=MsoNormal

3177:

style="TEXT-ALIGN: right; mso-list: none; mso-list-ins: srreid 20021203T1448"

3178:

align=right><INS cite="mailto:srreid"

3179:

datetime="2002-12-03T14:53">$ -</INS><INS cite="mailto:srreid"

3180:

datetime="2002-12-03T14:50"><o:p></o:p></INS></TD></TR></TBODY></TABLE>

3181:

<B

3182:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3183:

<B

3184:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3185:

<B

3186:

style="mso-bidi-font-weight: normal">ITEM

3187:

5.  OPERATING AND FINANCIAL REVIEW

3188:

AND PROSPECTS<o:p></o:p>

3189:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3190:

<B

3191:

style="mso-bidi-font-weight: normal"><SPAN

3192:

style="mso-prop-change: pdowad 20021203T1144"><SPAN

3193:

style="mso-prop-change: pdowad 20021203T1144">A. Operating Results<SPAN

3194:

style="mso-prop-change: pdowad 20021203T1144"><o:p></o:p>

3195:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3196:

<SPAN

3197:

style="FONT-SIZE: 10pt">The Company is in the business

3198:

of acquiring and exploring mineral properties with the aim of

3199:

participating in the development of them to a stage where they can be

3200:

exploited at a profit.  At that

3201:

stage, the Company's operations would to some extent<INS cite="mailto:pdowad"

3202:

datetime="2002-12-03T11:44"> </INS><DEL cite="mailto:pdowad"

3203:

datetime="2002-12-03T11:44"> </DEL>be dependent on the world market

3204:

prices of any mineral produced.   The Company does not have any<INS

3205:

cite="mailto:pdowad" datetime="2002-12-03T11:44"> </INS><DEL

3206:

cite="mailto:pdowad"

3207:

datetime="2002-12-03T11:44"> </DEL>properties<INS

3208:

cite="mailto:pdowad" datetime="2002-12-03T11:44"> </INS><DEL

3209:

cite="mailto:pdowad" datetime="2002-12-03T11:44"> </DEL>with

3210:

material production of minerals, and operations on its properties are

3211:

exploratory searches for commercially producible deposits.<o:p></o:p>

3212:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3213:

<SPAN

3214:

style="FONT-SIZE: 10pt">Nearly<INS cite="mailto:pdowad"

3215:

datetime="2002-12-03T11:45"> </INS><DEL cite="mailto:pdowad"

3216:

datetime="2002-12-03T11:45"> </DEL>all<INS cite="mailto:pdowad"

3217:

datetime="2002-12-03T11:45"> </INS><DEL cite="mailto:pdowad"

3218:

datetime="2002-12-03T11:45"> </DEL>of the Company's activities are

3219:

directed<INS cite="mailto:pdowad" datetime="2002-12-03T11:45"> </INS><SPAN

3220:

class=msoDel><DEL cite="mailto:pdowad"

3221:

datetime="2002-12-03T11:45"> </DEL>to exploration and development

3222:

programs.  Yearly<INS

3223:

cite="mailto:pdowad" datetime="2002-12-03T11:45"> </INS><DEL

3224:

cite="mailto:pdowad" datetime="2002-12-03T11:45"> </DEL>variations

3225:

in individual property expenditures generally reflect increases or decreases in

3226:

specific exploration and development costs based on previous results and the

3227:

Company's decisions regarding the allocation of exploration expenditures

3228:

between projects.<o:p></o:p>

3229:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3230:

<SPAN

3231:

style="mso-spacerun: yes">                 

3232:

Geographic Segments<o:p></o:p>

3233:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3234:

<TABLE

3235:

style="MARGIN-LEFT: 57.15pt; BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt"

3236:

cellSpacing=0 cellPadding=0 border=0>

3237:

<TBODY>

3238:

<TR>

3239:

<TD

3240:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3241:

vAlign=top width=120>

3242:

<B

3243:

style="mso-bidi-font-weight: normal">Net

3244:

Loss/Year:<o:p></o:p></TD>

3245:

<TD

3246:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3247:

vAlign=top width=120>

3248:

<B

3249:

style="mso-bidi-font-weight: normal"><SPAN

3250:

style="FONT-SIZE: 10pt">2002<B

3251:

style="mso-bidi-font-weight: normal"><SPAN

3252:

style="FONT-SIZE: 10pt"><o:p></o:p></TD>

3253:

<TD

3254:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3255:

vAlign=top width=105>

3256:

<B

3257:

style="mso-bidi-font-weight: normal"><SPAN

3258:

style="FONT-SIZE: 10pt">2001<o:p></o:p></TD>

3259:

<TD

3260:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3261:

vAlign=top width=120>

3262:

<B

3263:

style="mso-bidi-font-weight: normal"><SPAN

3264:

style="FONT-SIZE: 10pt">2000<o:p></o:p></TD></TR>

3265:

<TR>

3266:

<TD

3267:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3268:

vAlign=top width=120>

3269:

<SPAN

3270:

style="FONT-SIZE: 10pt">Canada<o:p></o:p></TD>

3271:

<TD

3272:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3273:

vAlign=top width=120>

3274:

<SPAN

3275:

style="FONT-SIZE: 10pt">($261,143)<o:p></o:p></TD>

3276:

<TD

3277:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3278:

vAlign=top width=105>

3279:

<SPAN

3280:

style="FONT-SIZE: 10pt">($487,017)<o:p></o:p></TD>

3281:

<TD

3282:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3283:

vAlign=top width=120>

3284:

<SPAN

3285:

style="FONT-SIZE: 10pt">($11,730,509)<o:p></o:p></TD></TR>

3286:

<TR>

3287:

<TD

3288:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3289:

vAlign=top width=120>

3290:

<SPAN

3291:

style="FONT-SIZE: 10pt">United States<o:p></o:p></TD>

3292:

<TD

3293:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3294:

vAlign=top width=120>

3295:

<SPAN

3296:

style="FONT-SIZE: 10pt">($289,866)<o:p></o:p></TD>

3297:

<TD

3298:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3299:

vAlign=top width=105>

3300:

<SPAN

3301:

style="FONT-SIZE: 10pt">($260,851)<o:p></o:p></TD>

3302:

<TD

3303:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3304:

vAlign=top width=120>

3305:

<SPAN

3306:

style="FONT-SIZE: 10pt">($64,534)<o:p></o:p></TD></TR>

3307:

<TR>

3308:

<TD

3309:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3310:

vAlign=top width=120>

3311:

<B

3312:

style="mso-bidi-font-weight: normal"><SPAN

3313:

style="FONT-SIZE: 10pt">TOTAL<o:p></o:p></TD>

3314:

<TD

3315:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3316:

vAlign=top width=120>

3317:

<B

3318:

style="mso-bidi-font-weight: normal"><SPAN

3319:

style="FONT-SIZE: 10pt">($551,009)<o:p></o:p></TD>

3320:

<TD

3321:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3322:

vAlign=top width=105>

3323:

<B

3324:

style="mso-bidi-font-weight: normal"><SPAN

3325:

style="FONT-SIZE: 10pt">($747,868)<o:p></o:p></TD>

3326:

<TD

3327:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3328:

vAlign=top width=120>

3329:

<B

3330:

style="mso-bidi-font-weight: normal"><SPAN

3331:

style="FONT-SIZE: 10pt">($11,795,043)<o:p></o:p></TD></TR>

3332:

<TR>

3333:

<TD

3334:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 348.75pt; PADDING-TOP: 0in"

3335:

vAlign=top width=465 colSpan=4>

3336:

<B

3337:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3338:

<B

3339:

style="mso-bidi-font-weight: normal"><SPAN

3340:

style="FONT-SIZE: 10pt">Identifiable Assets at year

3341:

end:<o:p></o:p>

3342:

<![if !supportEmptyParas]><![endif]> <B

3343:

style="mso-bidi-font-weight: normal"><SPAN

3344:

style="FONT-SIZE: 10pt"><o:p></o:p></TD></TR>

3345:

<TR>

3346:

<TD

3347:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3348:

vAlign=top width=120>

3349:

<![if !supportEmptyParas]><![endif]> <B

3350:

style="mso-bidi-font-weight: normal"><SPAN

3351:

style="FONT-SIZE: 10pt"><o:p></o:p></TD>

3352:

<TD

3353:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3354:

vAlign=top width=120>

3355:

<B

3356:

style="mso-bidi-font-weight: normal"><SPAN

3357:

style="FONT-SIZE: 10pt">2002<o:p></o:p></TD>

3358:

<TD

3359:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3360:

vAlign=top width=105>

3361:

<B

3362:

style="mso-bidi-font-weight: normal"><SPAN

3363:

style="FONT-SIZE: 10pt">2001<o:p></o:p></TD>

3364:

<TD

3365:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3366:

vAlign=top width=120>

3367:

<B

3368:

style="mso-bidi-font-weight: normal"><SPAN

3369:

style="FONT-SIZE: 10pt">2000<o:p></o:p></TD></TR>

3370:

<TR>

3371:

<TD

3372:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3373:

vAlign=top width=120>

3374:

<SPAN

3375:

style="FONT-SIZE: 10pt">Canada<o:p></o:p></TD>

3376:

<TD

3377:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3378:

vAlign=top width=120>

3379:

<SPAN

3380:

style="FONT-SIZE: 10pt">$291,993<o:p></o:p></TD>

3381:

<TD

3382:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3383:

vAlign=top width=105>

3384:

<SPAN

3385:

style="FONT-SIZE: 10pt">$295,978<o:p></o:p></TD>

3386:

<TD

3387:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3388:

vAlign=top width=120>

3389:

<SPAN

3390:

style="FONT-SIZE: 10pt">$445,728<o:p></o:p></TD></TR>

3391:

<TR>

3392:

<TD

3393:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3394:

vAlign=top width=120>

3395:

<SPAN

3396:

style="FONT-SIZE: 10pt">United States<o:p></o:p></TD>

3397:

<TD

3398:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3399:

vAlign=top width=120>

3400:

<SPAN

3401:

style="FONT-SIZE: 10pt">$12,874,048<o:p></o:p></TD>

3402:

<TD

3403:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3404:

vAlign=top width=105>

3405:

<SPAN

3406:

style="FONT-SIZE: 10pt">$12,491,799<o:p></o:p></TD>

3407:

<TD

3408:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3409:

vAlign=top width=120>

3410:

<SPAN

3411:

style="FONT-SIZE: 10pt">$12,353,217<o:p></o:p></TD></TR>

3412:

<TR>

3413:

<TD

3414:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 90.15pt; PADDING-TOP: 0in"

3415:

vAlign=top width=120>

3416:

<B

3417:

style="mso-bidi-font-weight: normal"><SPAN

3418:

style="FONT-SIZE: 10pt">TOTAL<o:p></o:p></TD>

3419:

<TD

3420:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3421:

vAlign=top width=120>

3422:

<B

3423:

style="mso-bidi-font-weight: normal"><SPAN

3424:

style="FONT-SIZE: 10pt">$13,166,041<o:p></o:p></TD>

3425:

<TD

3426:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 78.6pt; PADDING-TOP: 0in"

3427:

vAlign=top width=105>

3428:

<B

3429:

style="mso-bidi-font-weight: normal"><SPAN

3430:

style="FONT-SIZE: 10pt">$12,787,777<o:p></o:p></TD>

3431:

<TD

3432:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.25in; PADDING-TOP: 0in"

3433:

vAlign=top width=120>

3434:

<B

3435:

style="mso-bidi-font-weight: normal"><SPAN

3436:

style="FONT-SIZE: 10pt">$12,798,945<o:p></o:p></TD></TR></TBODY></TABLE>

3437:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3438:

Net

3439:

Losses for Fiscal 2002 were

3440:

($551,009). <o:p></o:p>

3441:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3442:

<SPAN

3443:

style="FONT-SIZE: 10pt">Loss Per Share for Fiscal 2002 were

3444:

($0.05).<o:p></o:p>

3445:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3446:

<SPAN

3447:

style="FONT-SIZE: 10pt">Under US GAAP, Net Loss for 2002, would have been

3448:

($963,626). <o:p></o:p>

3449:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3450:

<SPAN

3451:

style="FONT-SIZE: 10pt">Under US GAAP Loss Per Share for Fiscal 2002 would have

3452:

been ($0.09). <B

3453:

style="mso-bidi-font-weight: normal"><o:p></o:p>

3454:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3455:

<SPAN

3456:

style="FONT-SIZE: 10pt">Fiscal 2002 compared to Fiscal

3457:

2001<o:p></o:p>

3458:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3459:

The

3460:

Company had no revenues in each of the last three fiscal years.<SPAN

3461:

style="mso-spacerun: yes">   Operating expenditures for fiscal

3462:

2002 were $564,221 compared to $436,200 in fiscal 2001.<SPAN

3463:

style="mso-spacerun: yes">  Expenditures increased over 2001 due to

3464:

debt service cost increases of $232,061 from $35,288 in fiscal 2001 to $267,349

3465:

in fiscal 2002.  The increase in

3466:

debt service costs was a result of the new bank loan of $USD 1,200,000 being

3467:

obtain<DEL cite="mailto:srreid" datetime="2002-12-03T14:44">

3468:

</DEL><INS cite="mailto:srreid" datetime="2002-12-03T14:44">ed </INS>from

3469:

Peak National Bank in the year.

3470:

This increase was offset by reductions in foreign exchange adjustments

3471:

from $75,207 in fiscal 2001 to $4,699 in fiscal 2002 due to less exposure to

3472:

exchange rate fluctuations and a reduction in wages from $58,639 in fiscal 2001

3473:

to $nil in fiscal 2002.   No

3474:

wages were paid in 2002 due to limited resources available to the

3475:

Company.<o:p></o:p>

3476:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3477:

<SPAN

3478:

style="FONT-SIZE: 10pt">Fiscal 2001 compared to Fiscal

3479:

2000<o:p></o:p>

3480:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3481:

The

3482:

Company had no revenues in each of the last three fiscal years.<SPAN

3483:

style="mso-spacerun: yes">   Operating expenditures for fiscal

3484:

2001 were $436,200 compared to $397,200 in fiscal 2000.<SPAN

3485:

style="mso-spacerun: yes">  Expenditures increased over 2000 due to

3486:

consulting fee increases of $71,727 from $nil in fiscal 2000 to $71,727 in

3487:

fiscal 2001.  The increase in

3488:

consulting fees, related to related party debt restructuring in fiscal 2001, was

3489:

partially offset by reductions in wages of $20,161 from $78,800 in fiscal 2000

3490:

to $58,639 in fiscal 2000. <o:p></o:p>

3491:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3492:

<SPAN

3493:

style="FONT-SIZE: 10pt">Fiscal 2002<o:p></o:p>

3494:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3495:

The

3496:

Company has made the second of four annual payments for the additional ownership

3497:

stated in the Nevada Manhattan agreement of fiscal period

3498:

2000.<o:p></o:p>

3499:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3500:

<SPAN

3501:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3502:

datetime="2002-12-03T14:48">The Company spent exploration funds as

3503:

follows:</DEL><SPAN

3504:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><DEL

3505:

cite="mailto:srreid" datetime="2002-12-03T14:48"><SPAN

3506:

style="mso-spacerun: yes">   </DEL><SPAN

3507:

class=msoDel><DEL cite="mailto:srreid"

3508:

datetime="2002-12-03T14:48"><o:p></o:p></DEL>

3509:

<SPAN

3510:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3511:

datetime="2002-12-03T14:48"><SPAN

3512:

style="mso-spacerun: yes">             

3513:

</DEL><DEL cite="mailto:srreid"

3514:

datetime="2002-12-03T14:48"><o:p></o:p></DEL>

3515:

<TABLE style="BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt"

3516:

cellSpacing=0 cellPadding=0 border=0>

3517:

<TBODY>

3518:

3519:

<TD

3520:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3521:

vAlign=top width=163>

3522:

<![if !supportEmptyParas]><![endif]> <SPAN

3523:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3524:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3525:

<TD

3526:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3527:

vAlign=top width=108>

3528:

<SPAN

3529:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3530:

datetime="2002-12-03T14:48">Fiscal<SPAN

3531:

style="mso-spacerun: yes">                          

3532:

2001</DEL><DEL cite="mailto:srreid"

3533:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3534:

<TD

3535:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3536:

vAlign=top width=108>

3537:

<SPAN

3538:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3539:

datetime="2002-12-03T14:48">Fiscal </DEL><DEL

3540:

cite="mailto:srreid"

3541:

datetime="2002-12-03T14:48"><o:p></o:p></DEL>

3542:

<SPAN

3543:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3544:

datetime="2002-12-03T14:48">2002</DEL><DEL

3545:

cite="mailto:srreid"

3546:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD></TR>

3547:

3548:

<TD

3549:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3550:

vAlign=top width=163>

3551:

<SPAN

3552:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3553:

datetime="2002-12-03T14:48">Manhattan Property</DEL><SPAN

3554:

class=msoDel><DEL cite="mailto:srreid"

3555:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3556:

<TD

3557:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3558:

vAlign=top width=108>

3559:

<SPAN

3560:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3561:

datetime="2002-12-03T14:48">$176,175</DEL><DEL

3562:

cite="mailto:srreid"

3563:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3564:

<TD

3565:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3566:

vAlign=top width=108>

3567:

<SPAN

3568:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3569:

datetime="2002-12-03T14:48">$292,886</DEL><DEL

3570:

cite="mailto:srreid"

3571:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD></TR>

3572:

3573:

<TD

3574:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3575:

vAlign=top width=163>

3576:

<SPAN

3577:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3578:

datetime="2002-12-03T14:48">Colorado Property</DEL><SPAN

3579:

class=msoDel><DEL cite="mailto:srreid"

3580:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3581:

<TD

3582:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3583:

vAlign=top width=108>

3584:

<SPAN

3585:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3586:

datetime="2002-12-03T14:48">$190,566</DEL><DEL

3587:

cite="mailto:srreid"

3588:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3589:

<TD

3590:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3591:

vAlign=top width=108>

3592:

<SPAN

3593:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3594:

datetime="2002-12-03T14:48">$120,601</DEL><DEL

3595:

cite="mailto:srreid"

3596:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD></TR>

3597:

3598:

<TD

3599:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 1.7in; PADDING-TOP: 0in"

3600:

vAlign=top width=163>

3601:

<SPAN

3602:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3603:

datetime="2002-12-03T14:48">Panama Property</DEL><SPAN

3604:

class=msoDel><DEL cite="mailto:srreid"

3605:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3606:

<TD

3607:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3608:

vAlign=top width=108>

3609:

<SPAN

3610:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3611:

datetime="2002-12-03T14:48">$78,988</DEL><DEL

3612:

cite="mailto:srreid"

3613:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD>

3614:

<TD

3615:

style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 81pt; PADDING-TOP: 0in"

3616:

vAlign=top width=108>

3617:

<SPAN

3618:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3619:

datetime="2002-12-03T14:48">$65,070</DEL><DEL

3620:

cite="mailto:srreid"

3621:

datetime="2002-12-03T14:48"><o:p></o:p></DEL></TD></TR></TBODY></TABLE>

3622:

<SPAN

3623:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

3624:

datetime="2002-12-03T14:48"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

3625:

class=msoDel><DEL cite="mailto:srreid"

3626:

datetime="2002-12-03T14:48"><o:p></o:p></DEL>

3627:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3628:

<SPAN

3629:

style="FONT-SIZE: 10pt">Other than the above, the Company does not know of any

3630:

trends, demands, commitments, events or uncertainties that will result in,<SPAN

3631:

class=msoDel><DEL cite="mailto:srreid" datetime="2002-12-03T12:53">

3632:

</DEL> or that are reasonably likely to result in, its liquidity

3633:

either materially increasing <DEL cite="mailto:srreid"

3634:

datetime="2002-12-03T12:53"> </DEL>or decreasing <SPAN

3635:

class=msoDel><DEL cite="mailto:srreid"

3636:

datetime="2002-12-03T12:53"> </DEL>at present or <SPAN

3637:

class=msoDel><DEL cite="mailto:srreid"

3638:

datetime="2002-12-03T12:53"> </DEL>in<DEL

3639:

cite="mailto:srreid" datetime="2002-12-03T12:53"> </DEL> the <SPAN

3640:

class=msoDel><DEL cite="mailto:srreid"

3641:

datetime="2002-12-03T12:53"> </DEL>foreseeable future. Material

3642:

increases or decreases in the Company's liquidity are substantially

3643:

determined by the success or failure of its exploration programs or

3644:

the acquisition of projects.<o:p></o:p>

3645:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3646:

The

3647:

Company intends to raise required additional funds by selling equity or

3648:

debt securities, and/or by selling or joint venturing its properties until

3649:

it develops a cash flow from operations.   While the Company has been

3650:

successful in raising the necessary funds in the past, there can be no assurance

3651:

it can continue to do so.  If such

3652:

funds cannot be secured, the Company will be forced to curtail its

3653:

exploration/development efforts.<o:p></o:p>

3654:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3655:

<SPAN

3656:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold">The Company believes it will

3657:

have adequate access of funds to carry on operations through May 31, 2003,

3658:

however, receipt of these funds is not assured. Calais is presently working with

3659:

a number of private investors and mineral related companies towards completing a

3660:

private placement and/or debt based financing based on management's assessment

3661:

of the state of financial markets and the long-term needs of the Company. Two of

3662:

the Companies directors are providing working capital until a private placement

3663:

is completed. Payments to maintain the integrity of the three gold district

3664:

properties have been kept current.<o:p></o:p>

3665:

<SPAN

3666:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3667:

<B

3668:

style="mso-bidi-font-weight: normal"><SPAN

3669:

style="mso-prop-change: pdowad 20021203T1145"><SPAN

3670:

style="mso-prop-change: pdowad 20021203T1145">B. Liquidity and Capital

3671:

Resources<SPAN

3672:

style="mso-prop-change: pdowad 20021203T1145"><o:p></o:p>

3673:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3674:

In

3675:

the early years of the Company<INS cite="mailto:srreid"

3676:

datetime="2002-12-03T14:44">’s</INS> operations, the Company would acquire small

3677:

property claims, either individually or in joint venture with another junior

3678:

company.  These properties were

3679:

frequently purchased using the issuance of common shares as the Company had

3680:

limited liquidity.  The number of

3681:

shares to be issued was determined following negotiation with arms-length

3682:

sellers and reflected the price of the common shares at that time.<SPAN

3683:

style="mso-spacerun: yes">  Both the Company and the seller were

3684:

aware that Canadian regulatory approval was required prior to stock issuance and

3685:

that market values of such shares to be issued could change.<SPAN

3686:

style="mso-spacerun: yes">  Shares were recorded at fair market

3687:

value at the time of issuance.

3688:

Also, these properties were frequently very speculative ventures and

3689:

subsequent exploration did not discover commercially viable reserves.<SPAN

3690:

style="mso-spacerun: yes">  The Company wrote-off its investment in

3691:

such non-viable properties when such a determination was

3692:

made.<o:p></o:p>

3693:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3694:

In

3695:

recent years the Company has limited its investment to larger properties where

3696:

the Company believed the prospects and opportunities for significant reserves

3697:

were better and, if such reserves were discovered, that property development and

3698:

production could be financed and/or the property sold or joint ventured with a

3699:

major mining company.

3700:

<o:p></o:p>

3701:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3702:

The

3703:

Company issued a total of 100,000 shares for the Panama properties in January

3704:

2001, and a further 100,000 shares for the Panama properties in November of 2001

3705:

for a one year option on the Panama placer ground. This option has been extended

3706:

for another year.<o:p></o:p>

3707:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3708:

The

3709:

Company’s Hendrick’s property has an engineering report which indicates

3710:

mineralization insufficient for the Company to attempt production.<SPAN

3711:

style="mso-spacerun: yes">  The Company is continuing to explore

3712:

this property to determine if commercially viable reserves are

3713:

present.<o:p></o:p>

3714:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3715:

<SPAN

3716:

style="FONT-SIZE: 10pt">The auditors’ report with respect to our financial

3717:

statements for the year ended May 31, 2002 includes an explanatory paragraph

3718:

which describes conditions that raise substantial doubt about our ability to

3719:

continue as a going concern.  The

3720:

financial statements do not include any adjustment that might result from the

3721:

outcome of these uncertainties. The going concern basis of presentation assumes

3722:

that the Company will continue in operation for the foreseeable future and be

3723:

able to realize its assets and discharge its liabilities and commitments in the

3724:

normal course of business. There is significant doubt about the appropriateness

3725:

of the use of the going concern assumption because the Company experienced

3726:

significant losses in 2002 and 2001 and has experienced significant negative

3727:

cash flow from operations over a number of years. In addition, the Company

3728:

recently had to seek an extension on repayment of a $1,200,000 US loan.

3729:

Subsequent to the year-end, the Company began seeking approximately $2,300,000

3730:

US in financing to repay the bank loan, trade creditors and provide operating

3731:

funds. The Company is actively pursuing various options with potential lenders

3732:

and investors which, if accepted, will in management’s view, enable the Company

3733:

to achieve its business plans. No agreements with potential lenders or investors

3734:

have been reached yet and there can be no assurance that such agreements will be

3735:

reached. The ability of the Company to continue as a going concern and to

3736:

realize the carrying value of its assets and discharge its liabilities when due

3737:

is dependent on the successful completion of the actions taken or planned, some

3738:

of which are described above, which management believes will mitigate the

3739:

adverse conditions and events which raise doubt about the validity of the<SPAN

3740:

style="mso-spacerun: yes">  “going concern” assumption used in

3741:

preparing these financial statements. There is no certainty that these and other

3742:

strategies will be sufficient to permit the Company to continue beyond May 31,

3743:

2003. The financial statements do not reflect adjustments that would be

3744:

necessary if the “going concern” assumption were not appropriate. If the “going

3745:

concern” basis was not appropriate for these financial statements, then

3746:

adjustments would be necessary in the carrying value of assets and liabilities,

3747:

the reported revenues and expenses, and the balance sheet classifications

3748:

used.<o:p></o:p>

3749:

<SPAN

3750:

style="FONT-SIZE: 10pt"><SPAN

3751:

style="mso-spacerun: yes"> <o:p></o:p>

3752:

<SPAN

3753:

style="FONT-SIZE: 10pt">Material Capital Commitments/Significant

3754:

Uncertainties<o:p></o:p>

3755:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3756:

<SPAN

3757:

style="FONT-SIZE: 10pt">Further resource exploration and development is a

3758:

speculative business and involves a high degree of risk.<SPAN

3759:

style="mso-spacerun: yes">  The marketability of minerals, which may

3760:

be acquired or discovered by the Company, will be affected by numerous factors

3761:

beyond the control of the Company.  These factors include

3762:

market fluctuations, the proximity and capacity of mineral markets and

3763:

processing equipment, government regulations, including regulations

3764:

relating to prices, taxes, royalties, land tenure, land use,

3765:

importing and exploration of minerals, and environmental

3766:

protection.  The exact effect of these factors cannot be

3767:

accurately predicted, the combination of these factors may result in the Company

3768:

not receiving an adequate return on capital.<o:p></o:p>

3769:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3770:

<SPAN

3771:

style="FONT-SIZE: 10pt">Mining operations generally involve a high

3772:

degree of risk. Hazards such as unusual or

3773:

unexpected formations and other conditions are involved. The

3774:

Company may become subject to liability for pollution, collapses or

3775:

hazards against which it cannot insure or against which it may have a material,

3776:

adverse effect on the Company's financial position.<o:p></o:p>

3777:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3778:

<SPAN

3779:

style="FONT-SIZE: 10pt">There is no assurance that the Company or its joint

3780:

venture partners in the Company's projects will be successful in obtaining the

3781:

required financing.<o:p></o:p>

3782:

<B

3783:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3784:

<P class=MsoNormal

3785:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1158"><B

3786:

style="mso-bidi-font-weight: normal"><INS

3787:

cite="mailto:pdowad" datetime="2002-12-03T11:59">C.<SPAN

3788:

style="mso-tab-count: 1">    Research and develoment,

3789:

patents and licenses, etc.<o:p></o:p></INS>

3790:

<P class=MsoNormal

3791:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3792:

style="mso-bidi-font-weight: normal"><INS

3793:

cite="mailto:pdowad"

3794:

datetime="2002-12-03T11:59"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3795:

<P class=MsoNormal

3796:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3797:

style="mso-bidi-font-weight: normal"><INS

3798:

cite="mailto:pdowad" datetime="2002-12-03T11:59">Not

3799:

applicable.<o:p></o:p></INS>

3800:

<P class=MsoNormal

3801:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3802:

style="mso-bidi-font-weight: normal"><INS

3803:

cite="mailto:pdowad"

3804:

datetime="2002-12-03T11:59"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3805:

<P class=MsoNormal

3806:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; tab-stops: -4.5pt; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3807:

style="mso-bidi-font-weight: normal"><INS

3808:

cite="mailto:pdowad" datetime="2002-12-03T12:00">D.<SPAN

3809:

style="mso-tab-count: 1">    </INS><INS

3810:

cite="mailto:pdowad" datetime="2002-12-03T11:59">Trend

3811:

information.<o:p></o:p></INS>

3812:

<P class=MsoNormal

3813:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3814:

style="mso-bidi-font-weight: normal"><INS

3815:

cite="mailto:pdowad"

3816:

datetime="2002-12-03T11:59"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3817:

<P class=MsoNormal

3818:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1159"><B

3819:

style="mso-bidi-font-weight: normal"><INS

3820:

cite="mailto:pdowad" datetime="2002-12-03T11:59">Not applicable</INS><SPAN

3821:

style="mso-prop-change: pdowad 20021203T1159"><INS cite="mailto:pdowad"

3822:

datetime="2002-12-03T11:58"><SPAN

3823:

style="mso-prop-change: pdowad 20021203T1159"><o:p></o:p></INS>

3824:

<P class=MsoNormal

3825:

style="MARGIN-LEFT: 0.25in; TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1158"><B

3826:

style="mso-bidi-font-weight: normal"><SPAN

3827:

style="mso-prop-change: pdowad 20021203T1157"><![if !supportEmptyParas]><![endif]> <SPAN

3828:

style="mso-prop-change: pdowad 20021203T1157"><o:p></o:p>

3829:

<B

3830:

style="mso-bidi-font-weight: normal">Critical

3831:

Accounting Policies<o:p></o:p>

3832:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3833:

The

3834:

Company’s discussion and analysis of its financial condition and results of

3835:

operations, including the discussion on liquidity and capital resources, are

3836:

based on its consolidated financial statements that have been prepared in

3837:

accordance with Canadian generally accepted accounting principles. The

3838:

preparation of these financial statements requires management to make estimates

3839:

and judgments that affect reported amounts of assets, liabilities, revenues and

3840:

expenses, and related disclosure of contingent assets and liabilities. On an

3841:

ongoing basis, management re-evaluates its estimates and judgments, particularly

3842:

those related to the determination of the impairment of long<INS

3843:

cite="mailto:pdowad" datetime="2002-12-03T11:46">-</INS><DEL

3844:

cite="mailto:pdowad" datetime="2002-12-03T11:46"> </DEL>lived assets.

3845:

Management bases its estimates and judgments on historical experience,

3846:

contractual arrangements and commitments and on various other assumptions that

3847:

it believes are reasonable in the circumstances. Changes in these estimates and

3848:

judgments will impact the amounts recognized in the consolidated financial

3849:

statements, and the impact may be material. Management believes the following

3850:

critical accounting policies require more significant estimates and judgments in

3851:

the preparation of the consolidated financial statements.<o:p></o:p>

3852:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3853:

The

3854:

consolidated financial statements have been prepared on the going concern basis,

3855:

which assumes the realization of assets and liquidation of liabilities in the

3856:

normal course of operations. If the Company was not to continue as a going

3857:

concern, it would likely not be able to realize on its assets at values

3858:

comparable to the carrying value or the fair value estimates reflected in the

3859:

balances set out in the preparation of the consolidated financial statements. As

3860:

described elsewhere in this report, at May 31, 2002, there are certain

3861:

conditions that currently exist which raise substantial doubt about the validity

3862:

of this assumption. While the Company anticipates raising additional private

3863:

placement funds to remove the substantial doubt, these private placements are

3864:

not assured. Failure to raise additional funds may result in the Company

3865:

curtailing operations or writing assets and liabilities down to liquidation

3866:

values, or both.<INS cite="mailto:pdowad"

3867:

datetime="2002-12-03T11:47"><o:p></o:p></INS>

3868:

<P class=MsoNormal

3869:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1147"><SPAN

3870:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T11:47"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3871:

<P class=MsoNormal

3872:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1147"><SPAN

3873:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

3874:

datetime="2002-12-03T11:47">For Canadian GAAP purposes, the Company capitalizes

3875:

exploration costs incurred.  The

3876:

</INS><INS cite="mailto:pdowad" datetime="2002-12-03T11:51">recoverability of

3877:

the capitalized costs include</INS><INS cite="mailto:pdowad"

3878:

datetime="2002-12-03T11:52">s</INS><INS cite="mailto:pdowad"

3879:

datetime="2002-12-03T11:51"> consideration</INS><INS cite="mailto:srreid"

3880:

datetime="2002-12-03T12:23">s</INS><INS cite="mailto:pdowad"

3881:

datetime="2002-12-03T11:51"> primarily of management</INS><INS

3882:

cite="mailto:pdowad" datetime="2002-12-03T11:53">’s exploration, development and

3883:

holding plans and expectations with respect to the property, </INS><INS

3884:

cite="mailto:pdowad" datetime="2002-12-03T11:51">potential mineralization, costs

3885:

to recovery, commodity prices and </INS><INS cite="mailto:pdowad"

3886:

datetime="2002-12-03T11:54">the potential for third party agreements on

3887:

development.  Certain of these

3888:

factors are beyond the Company’s control.

3889:

Other factors, such as management’s plans and expectations, while

3890:

supporting continued capitalization at this time may change and that change may

3891:

be material to the financial statements.</INS><o:p></o:p>

3892:

<B

3893:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3894:

<SPAN

3895:

style="FONT-SIZE: 10pt">Legal proceedings

3896:

<SPAN

3897:

style="COLOR: red"><o:p></o:p>

3898:

<B

3899:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3900:

<SPAN

3901:

style="FONT-SIZE: 10pt">Other than discussed below, the Company knows of no

3902:

material, active or pending legal proceedings against them.<SPAN

3903:

style="mso-spacerun: yes">  Other than discussed below, the Company

3904:

in not involved as a plaintiff in any material proceeding or pending

3905:

litigation.<o:p></o:p>

3906:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3907:

<SPAN

3908:

style="FONT-SIZE: 10pt">Other than discussed below, the Company knows of no

3909:

active or pending proceedings against anyone that might materially adversely

3910:

affect an interest of the Company.<o:p></o:p>

3911:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3912:

A

3913:

Writ of Summons and Statement of Claim was filed in Supreme Court of British

3914:

Columbia on May 21, 2002 re monies owing and payable to Devlin Jensen for

3915:

services provided in the amount of $63,368 plus interest and costs incurred

3916:

therein.<o:p></o:p>

3917:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3918:

A

3919:

Claim made in Alberta by BDO Dunwoody for services provided in the amount of

3920:

$48,864 plus interest and costs incurred therein.<o:p></o:p>

3921:

<B

3922:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3923:

The

3924:

Company has provided for these claims.<o:p></o:p>

3925:

<B

3926:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3927:

<B

3928:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

3929:

<B

3930:

style="mso-bidi-font-weight: normal">ITEM

3931:

6.  DIRECTORS, SENIOR MANAGEMENT AND

3932:

EMPLOYEES<o:p></o:p>

3933:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3934:

<P class=MsoNormal

3935:

style="MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; TEXT-ALIGN: justify; tab-stops: list .75in; mso-text-indent-alt: -.5in; mso-list: l24 level1 lfo26; mso-list-ins: pdowad 20021203T1201"><![if !supportLists]><SPAN

3936:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

3937:

datetime="2002-12-03T12:01">A.<SPAN

3938:

style="FONT: 7pt 'Times New Roman'">                           

3939:

</INS><![endif]><INS

3940:

cite="mailto:pdowad" datetime="2002-12-03T12:01">Directors and senior

3941:

management<o:p></o:p></INS>

3942:

<P class=MsoNormal

3943:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1201"><SPAN

3944:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:01"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

3945:

<P class=MsoNormal

3946:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1201"><SPAN

3947:

style="FONT-SIZE: 10pt">The following table lists, as of November 29, 2002, the

3948:

names of all the Directors of the Registrant.<SPAN

3949:

style="mso-spacerun: yes">  The Directors generally serve in their

3950:

respective capacities from their election on the day of the Annual General

3951:

Meeting of the Registrant, last held on November 14, 2002 and will serve until

3952:

the next Annual General Meeting or until a successor is duly elected, unless the

3953:

office is vacated in accordance with the Articles of the

3954:

Registrant.<o:p></o:p>

3955:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3956:

<SPAN

3957:

style="FONT-SIZE: 10pt">Casual vacancies on the Board of Directors are filled by

3958:

the remaining Directors and the persons filling those vacancies hold office

3959:

until the next Annual General Meeting at which time they may be re-elected or

3960:

replaced.<o:p></o:p>

3961:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

3962:

<SPAN

3963:

style="FONT-SIZE: 10pt">Directors<o:p></o:p>

3964:

<SPAN

3965:

style="FONT-SIZE: 10pt"><SPAN

3966:

style="mso-spacerun: yes">                                                      

3967:

Date First<o:p></o:p>

3968:

<SPAN

3969:

style="FONT-SIZE: 10pt">Name<SPAN

3970:

style="mso-spacerun: yes">     <SPAN

3971:

style="mso-spacerun: yes">                            Age<SPAN

3972:

style="mso-spacerun: yes">     Elected or

3973:

Appointed<o:p></o:p>

3974:

<SPAN

3975:

style="FONT-SIZE: 10pt">Marlowe Harvey<SPAN

3976:

style="mso-spacerun: yes">                      

3977:

3978:

49<SPAN

3979:

style="mso-spacerun: yes">         

3980:

July 1992<o:p></o:p>

3981:

Melvin W. Martin

3982:

(1)<SPAN

3983:

style="mso-spacerun: yes">               

3984:

<SPAN

3985:

style="mso-spacerun: yes">       62<SPAN

3986:

style="mso-spacerun: yes">       October

3987:

1992

3988:

<SPAN

3989:

style="FONT-SIZE: 10pt">Art Daher<SPAN

3990:

style="mso-spacerun: yes">                           

3991:

3992:

70

3993:

November 1995<o:p></o:p>

3994:

<SPAN

3995:

style="FONT-SIZE: 10pt">Tom Hendricks<SPAN

3996:

style="mso-tab-count: 1">                              

3997:

53   <SPAN

3998:

style="mso-spacerun: yes">    December

3999:

1997<o:p></o:p>

4000:

<SPAN

4001:

style="FONT-SIZE: 10pt">Robert Akright (1)<SPAN

4002:

style="mso-tab-count: 1">                         

4003:

78   <SPAN

4004:

style="mso-spacerun: yes">      August

4005:

1998<o:p></o:p>

4006:

<SPAN

4007:

style="FONT-SIZE: 10pt">Tom Patton (1)<SPAN

4008:

style="mso-tab-count: 1">                             

4009:

59   <SPAN

4010:

style="mso-spacerun: yes">        June

4011:

2000<o:p></o:p>

4012:

<SPAN

4013:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4014:

<P class=MsoNormal

4015:

style="MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; TEXT-ALIGN: justify; tab-stops: list 27.0pt; mso-list: l26 level1 lfo5; mso-list-change: '$%1\:1\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

4016:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(1)<SPAN

4017:

style="FONT: 7pt 'Times New Roman'">       

4018:

<![endif]><SPAN

4019:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">Members of the Audit

4020:

Committee of the Board of Directors.<o:p></o:p>

4021:

<P class=MsoNormal

4022:

style="MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; TEXT-ALIGN: justify; tab-stops: list 27.0pt; mso-text-indent-alt: -27.0pt; mso-list: l26 level1 lfo5; mso-list-change: '$%1\:2\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

4023:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(2)<SPAN

4024:

style="FONT: 7pt 'Times New Roman'">       

4025:

<![endif]><SPAN

4026:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">All Directors are residents

4027:

and citizens of Canada with the exception of Tom Hendricks and Robert Akright of

4028:

Colorado, U.S.A. and Tom Patton of Washington, U.S.A.<o:p></o:p>

4029:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4030:

The

4031:

following table lists, as of October 31, 2002, the names of all of the Executive

4032:

Officers of the Registrant.

4033:

Executive Officers are appointed by the Board of Directors and hold

4034:

office indefinitely at the pleasure of the Board of Directors.<SPAN

4035:

style="mso-spacerun: yes">  <o:p></o:p>

4036:

<SPAN

4037:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4038:

<SPAN

4039:

style="FONT-SIZE: 10pt">Executive Officers<o:p></o:p>

4040:

<SPAN

4041:

style="FONT-SIZE: 10pt"><SPAN

4042:

style="mso-spacerun: yes">                                                      

4043:

Date First <o:p></o:p>

4044:

<SPAN

4045:

style="FONT-SIZE: 10pt">Name<SPAN

4046:

style="mso-spacerun: yes">              

4047:

Age   Title<SPAN

4048:

style="mso-spacerun: yes">                

4049:

Appointed to Position<o:p></o:p>

4050:

<SPAN

4051:

style="FONT-SIZE: 10pt">Tom Hendricks<SPAN

4052:

style="mso-tab-count: 1">       53<SPAN

4053:

style="mso-spacerun: yes">   President & CEO<SPAN

4054:

style="mso-spacerun: yes">         

4055:

<SPAN

4056:

style="mso-spacerun: yes">         June

4057:

2000

4058:

<o:p></o:p>

4059:

<SPAN

4060:

style="FONT-SIZE: 10pt">Robert Akright<SPAN

4061:

style="mso-tab-count: 1">      78<SPAN

4062:

style="mso-tab-count: 1">   Vice President<SPAN

4063:

style="mso-tab-count: 3">               

4064:

June

4065:

2000<o:p></o:p>

4066:

<SPAN

4067:

style="FONT-SIZE: 10pt">Melvin Martin<SPAN

4068:

style="mso-tab-count: 1">       62<SPAN

4069:

style="mso-tab-count: 1">   Chairman of the Board<SPAN

4070:

style="mso-spacerun: yes">     <SPAN

4071:

style="mso-tab-count: 1">    <SPAN

4072:

style="mso-spacerun: yes">    March

4073:

1999<o:p></o:p>

4074:

<SPAN

4075:

style="FONT-SIZE: 10pt">Andrew Murray<SPAN

4076:

style="mso-spacerun: yes">      52<SPAN

4077:

style="mso-spacerun: yes">   VP Finance/Administration<SPAN

4078:

style="mso-spacerun: yes">       October

4079:

1992<o:p></o:p>

4080:

Art

4081:

Daher<SPAN

4082:

style="mso-spacerun: yes">         

4083:

70   Secretary<SPAN

4084:

style="mso-spacerun: yes">                  

4085:

November

4086:

1995<o:p></o:p>

4087:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4088:

No

4089:

Director and/or Executive Officer has been the subject of any order,

4090:

judgment, or decree of any governmental agency or administrator

4091:

or of any court or competent jurisdiction, revoking or suspending

4092:

for cause any license, permit or other authority of such person or of any

4093:

corporation of which he is a Director and/or Executive Officer, to engage in the

4094:

securities business or in the sale of a particular security or temporarily or

4095:

permanently restraining or enjoining any such person or any corporation of

4096:

which he is an officer or director from engaging

4097:

in or continuing any conduct, practice, or employment

4098:

in connection with the purchase or sale of securities, or

4099:

convicting such person of any felony or misdemeanor involving a security

4100:

 or any aspect of the securities business or of theft or of any

4101:

felony.<o:p></o:p>

4102:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4103:

<SPAN

4104:

style="FONT-SIZE: 10pt">While the Executive Officers/Directors of the Company

4105:

are involved in other business ventures and do not spend full time on the

4106:

affairs of the Company, the Company believes that each devotes as much time to

4107:

the affairs of the Company as are required to satisfactorily carry out their

4108:

duty.<o:p></o:p>

4109:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4110:

<SPAN

4111:

style="FONT-SIZE: 10pt">There are no family relationships between any

4112:

two or more Directors or Executive Officers.<SPAN

4113:

style="mso-spacerun: yes">   There are no arrangements or

4114:

understandings between any two or more Directors or

4115:

Executive Officers, pursuant to which he was selected as a Director or

4116:

Executive Officer.<o:p></o:p>

4117:

<B

4118:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4119:

<SPAN

4120:

style="FONT-SIZE: 10pt"><INS

4121:

cite="mailto:pdowad" datetime="2002-12-03T12:02"><SPAN

4122:

style="mso-prop-change: pdowad 20021203T1202">B.<SPAN

4123:

style="mso-tab-count: 1">    </INS><SPAN

4124:

style="mso-prop-change: pdowad 20021203T1202"><SPAN

4125:

style="mso-prop-change: pdowad 20021203T1202">Compensation<SPAN

4126:

style="mso-prop-change: pdowad 20021203T1202"><DEL

4127:

cite="mailto:pdowad" datetime="2002-12-03T12:02"><SPAN

4128:

style="mso-prop-change: pdowad 20021203T1202"> of Officers and

4129:

Directors</DEL><SPAN

4130:

style="mso-prop-change: pdowad 20021203T1202"><SPAN

4131:

style="mso-prop-change: pdowad 20021203T1202"><o:p></o:p>

4132:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4133:

The

4134:

Company has no formal plan for compensating its Directors for their service in

4135:

their capacity as Directors.   Directors are entitled to reimbursement for

4136:

reasonable travel and other out-of-pocket expenses incurred in connection with

4137:

attendance at meetings of the Board of Directors.<SPAN

4138:

style="mso-spacerun: yes">  The Board of Directors may award special

4139:

remuneration to any Director undertaking any special services on behalf of the

4140:

Company other than services ordinarily required of a Director.<SPAN

4141:

style="mso-spacerun: yes">  Other than indicated below no Director

4142:

received any compensation for his services as a Director, including committee

4143:

participation and/or special assignments.<o:p></o:p>

4144:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4145:

The

4146:

Company grants stock options to Directors, Executive Officers and

4147:

employees; refer to "Options to Purchase Securities from Registrant or

4148:

Subsidiaries", below.<o:p></o:p>

4149:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4150:

<SPAN

4151:

style="FONT-SIZE: 10pt">Other than described below, no funds were set aside or

4152:

accrued by the Company during Fiscal 2002 to provide pension, retirement or

4153:

similar benefits for Directors or Executive Officers.<o:p></o:p>

4154:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4155:

The

4156:

Company has no plans or arrangements in respect of

4157:

remuneration received or that may be received by Executive Officers

4158:

of the Company in Fiscal 2003 to compensate <DEL

4159:

cite="mailto:pdowad" datetime="2002-12-03T11:55"> </DEL>such

4160:

officers in the event of termination of employment (as a result of resignation,

4161:

retirement, change of control) or a change of responsibilities following a

4162:

change of control, where the value of such compensation exceeds US $60,000 per

4163:

Executive Officer.<o:p></o:p>

4164:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4165:

No

4166:

Executive Officer/Director received other compensation in excess of the lesser

4167:

of US $25,000 or 10% of such officer's cash compensation, and all Executive

4168:

Officers/Directors as a group did not receive other compensation which exceeded

4169:

US $25,000 times the number of persons in the group or 10% of the

4170:

compensation.<o:p></o:p>

4171:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4172:

<SPAN

4173:

style="FONT-SIZE: 10pt">Except for the stock option program discussed below,

4174:

<DEL cite="mailto:srreid"

4175:

datetime="2002-12-03T13:08"> </DEL>the Company has no material bonus

4176:

or profit sharing plans <DEL cite="mailto:srreid"

4177:

datetime="2002-12-03T13:08"> </DEL>pursuant to which cash or

4178:

non-cash compensation is or may be paid to the Company's Directors or Executive

4179:

Officers.<INS cite="mailto:pdowad"

4180:

datetime="2002-12-03T12:03"><o:p></o:p></INS>

4181:

<P class=MsoNormal

4182:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1203"><SPAN

4183:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

4184:

datetime="2002-12-03T12:03"><DEL cite="mailto:srreid"

4185:

datetime="2002-12-03T13:51"><![if !supportEmptyParas]> <![endif]><o:p></o:p></DEL></INS>

4186:

<P class=MsoNormal

4187:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1203"><SPAN

4188:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

4189:

datetime="2002-12-03T12:03"><DEL cite="mailto:srreid"

4190:

datetime="2002-12-03T12:56">[WHERE IS THE INFORMATION REQUIRED BY ITEM 6C AND

4191:

D]</DEL></INS><INS cite="mailto:srreid"

4192:

datetime="2002-12-03T13:03"><o:p></o:p></INS>

4193:

<P class=MsoNormal

4194:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1303"><SPAN

4195:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:03"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4196:

<P class=MsoNormal

4197:

style="MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; TEXT-ALIGN: justify; tab-stops: list .5in; mso-text-indent-alt: -.5in; mso-list: l3 level1 lfo31; mso-list-ins: srreid 20021203T1303"><![if !supportLists]><SPAN

4198:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4199:

datetime="2002-12-03T13:03">C.<SPAN

4200:

style="FONT: 7pt 'Times New Roman'">               

4201:

</INS><![endif]><INS

4202:

cite="mailto:srreid" datetime="2002-12-03T13:03"><SPAN

4203:

style="mso-spacerun: yes"> Board

4204:

Practices<o:p></o:p></INS>

4205:

<P class=MsoNormal

4206:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1303"><SPAN

4207:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:56"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4208:

<P class=MsoNormal

4209:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1306"><SPAN

4210:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4211:

datetime="2002-12-03T13:06">The Directors generally serve in their respective

4212:

capacities from their election on the day of the Annual General Meeting of the

4213:

Registrant, last held on November 14, 2002 and will serve until the next Annual

4214:

General Meeting or until a successor is duly elected, unless the office is

4215:

vacated in accordance with the Articles of the

4216:

Registrant.<o:p></o:p></INS>

4217:

<P class=MsoNormal

4218:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1306"><SPAN

4219:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:06"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4220:

<P class=MsoNormal

4221:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1303"><SPAN

4222:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4223:

datetime="2002-12-03T13:06">Casual vacancies on the Board of Directors are

4224:

filled by the remaining Directors and the persons filling those vacancies hold

4225:

office until the next Annual General Meeting at which time they may be

4226:

re-elected or replaced.<o:p></o:p></INS>

4227:

<P class=MsoNormal

4228:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1306"><SPAN

4229:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:06"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4230:

<P class=MsoNormal

4231:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1306"><SPAN

4232:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4233:

datetime="2002-12-03T13:06">The Company does not have any formal service

4234:

contracts with Directors.<o:p></o:p></INS>

4235:

<P class=MsoNormal

4236:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1307"><SPAN

4237:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:07"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4238:

<P class=MsoNormal

4239:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1307"><SPAN

4240:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4241:

datetime="2002-12-03T13:07">The members of the audit committee are listed under

4242:

Item 6A. </INS><INS cite="mailto:srreid" datetime="2002-12-03T13:12"><SPAN

4243:

style="mso-spacerun: yes"> There are no formal terms of reference

4244:

for this committee.  </INS><INS

4245:

cite="mailto:srreid" datetime="2002-12-03T13:03"><o:p></o:p></INS>

4246:

<P class=MsoNormal

4247:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1302"><SPAN

4248:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:56"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4249:

<P class=MsoNormal

4250:

style="MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; TEXT-ALIGN: justify; tab-stops: list .5in; mso-text-indent-alt: -.5in; mso-list: l31 level1 lfo30; mso-list-ins: srreid 20021203T1302"><![if !supportLists]><SPAN

4251:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4252:

datetime="2002-12-03T13:02">D.<SPAN

4253:

style="FONT: 7pt 'Times New Roman'">               

4254:

</INS><![endif]><INS

4255:

cite="mailto:srreid" datetime="2002-12-03T13:02"><SPAN

4256:

style="mso-spacerun: yes"> </INS><INS cite="mailto:srreid"

4257:

datetime="2002-12-03T12:56">Employees<o:p></o:p></INS>

4258:

<P class=MsoNormal

4259:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1257"><SPAN

4260:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:57"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4261:

<P class=MsoNormal

4262:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1257"><SPAN

4263:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T12:58">As

4264:

of May 31, 2002, the company had no employees.<o:p></o:p></INS>

4265:

<P class=MsoNormal

4266:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1301"><SPAN

4267:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4268:

<B

4269:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4270:

<SPAN

4271:

style="FONT-SIZE: 10pt">Options to purchase securities from registrant or

4272:

subsidiaries<o:p></o:p>

4273:

<SPAN

4274:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4275:

<SPAN

4276:

style="FONT-SIZE: 10pt">Stock Options to purchase securities from Registrant can

4277:

be granted to Directors and Employees of the Company on terms and conditions

4278:

acceptable to the regulatory authorities in Canada, notably the Canadian Venture

4279:

Exchange and the British Columbia Securities Commission.<SPAN

4280:

style="mso-spacerun: yes">  The Registrant has no formal written

4281:

stock option plan.<o:p></o:p>

4282:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4283:

<SPAN

4284:

style="FONT-SIZE: 10pt">Under the stock option program, stock options for up to

4285:

10%  of the number of issued and outstanding common shares may be granted

4286:

from time to time, provided that stock options in favor of any one individual

4287:

may not exceed 5% of the issued and outstanding common shares.<SPAN

4288:

style="mso-spacerun: yes">  No stock option granted under the stock

4289:

option program is transferable by the optionee other than by will or the laws of

4290:

descent/distribution and each stock option is exercisable during the lifetime of

4291:

the optionee only by such optionee.<o:p></o:p>

4292:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4293:

The

4294:

exercise price of all stock options granted under the stock option program must

4295:

be at least equal to the fair market value (subject to regulated discounts) of

4296:

such common shares on the date of grant, and the maximum term of each stock

4297:

option may not exceed five years.<o:p></o:p>

4298:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4299:

The

4300:

exercise prices for stock options are determined in accordance

4301:

with OTC Bulletin Board ("OTCBB") guidelines and reflect the average closing

4302:

price of the Registrant's common shares for the ten trading days on the OTCBB

4303:

immediately preceding the day on which the Directors grant and publicly announce

4304:

the stock options (subject to a regulatory-acceptable discount<SPAN

4305:

style="mso-bidi-font-weight: bold">)<B

4306:

style="mso-bidi-font-weight: normal">, <SPAN

4307:

style="mso-bidi-font-weight: bold">and/or at a price no lower than $0.45

4308:

exercise price per share. <o:p></o:p>

4309:

<B

4310:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4311:

<B

4312:

style="mso-bidi-font-weight: normal"><SPAN

4313:

style="mso-spacerun: yes">  <B

4314:

style="mso-bidi-font-weight: normal"><SPAN

4315:

style="FONT-SIZE: 10pt"><o:p></o:p>

4316:

The

4317:

names and titles of Directors and Executive Officers of the Registrant to whom

4318:

outstanding stock options have been granted and the number of common shares

4319:

subject to such options are set forth below as of 10/31/02, as well as the

4320:

number of options granted to Directors and all employees as a

4321:

group.<o:p></o:p>

4322:

<SPAN

4323:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4324:

<SPAN

4325:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4326:

<SPAN

4327:

style="FONT-SIZE: 10pt">Stock Options Outstanding<o:p></o:p>

4328:

<SPAN

4329:

style="FONT-SIZE: 6.5pt; mso-bidi-font-size: 10.0pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4330:

<SPAN

4331:

style="FONT-SIZE: 10pt"><SPAN

4332:

style="mso-spacerun: yes">                        

4333:

Number of

4334:

Shares of

4335:

CDN$<o:p></o:p>

4336:

<SPAN

4337:

style="mso-spacerun: yes">                                     

4338:

Common<SPAN

4339:

style="mso-spacerun: yes">    Exercise<SPAN

4340:

style="mso-spacerun: yes">   Expiration<o:p></o:p>

4341:

Name<SPAN

4342:

style="mso-spacerun: yes">      <SPAN

4343:

style="mso-tab-count: 3">             

4344:

<SPAN

4345:

style="mso-spacerun: yes">                  Stock<SPAN

4346:

style="mso-spacerun: yes">      Price<SPAN

4347:

style="mso-spacerun: yes">        

4348:

Date<o:p></o:p>

4349:

Andrew Murray<SPAN

4350:

style="mso-tab-count: 5">                            

4351:

89,000

4352:

0.45  <SPAN

4353:

style="mso-spacerun: yes">   10/26/2003<o:p></o:p>

4354:

Art Daher<SPAN

4355:

style="mso-tab-count: 6">                                

4356:

50,000

4357:

0.45  <SPAN

4358:

style="mso-spacerun: yes">   10/26/2003<o:p></o:p>

4359:

Art Daher<SPAN

4360:

style="mso-tab-count: 4">                    

4361:

<SPAN

4362:

style="mso-tab-count: 2">       50,000<SPAN

4363:

style="mso-tab-count: 1">      0.45<SPAN

4364:

style="mso-tab-count: 1">  <SPAN

4365:

style="mso-spacerun: yes">   08/11/2005<o:p></o:p>

4366:

Robert Akright<SPAN

4367:

style="mso-tab-count: 5">                           

4368:

100,000

4369:

0.45  <SPAN

4370:

style="mso-spacerun: yes">   10/26/2003

4371:

Tom

4372:

Hendricks<SPAN

4373:

style="mso-tab-count: 5">                            

4374:

100,000

4375:

0.45  <SPAN

4376:

style="mso-spacerun: yes">   10/26/2003<o:p></o:p>

4377:

<SPAN

4378:

style="FONT-SIZE: 10pt">Melvin Martin<SPAN

4379:

style="mso-tab-count: 5">                            

4380:

75,000

4381:

0.45  <SPAN

4382:

style="mso-spacerun: yes">   10/26/2003<o:p></o:p>

4383:

Tom

4384:

Patton<SPAN

4385:

style="mso-tab-count: 4">                   

4386:

<SPAN

4387:

style="mso-spacerun: yes">       

4388:

100,000<SPAN

4389:

style="mso-tab-count: 1">     0.45<SPAN

4390:

style="mso-tab-count: 1">  <SPAN

4391:

style="mso-spacerun: yes">   08/11/2005<o:p></o:p>

4392:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4393:

<SPAN

4394:

style="FONT-SIZE: 10pt">Total Officers/Directors (6 persons) <SPAN

4395:

style="mso-tab-count: 1">    

4396:

650,250<o:p></o:p>

4397:

<SPAN

4398:

style="FONT-SIZE: 10pt">Total Employees (9 persons)<SPAN

4399:

style="mso-spacerun: yes">         

4400:

4401:

375,000<o:p></o:p>

4402:

<B

4403:

style="mso-bidi-font-weight: normal">Total

4404:

Officers/Directors/Employees<SPAN

4405:

style="mso-spacerun: yes">     

4406:

1,025,250<o:p></o:p>

4407:

<B

4408:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4409:

<B

4410:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4411:

<SPAN

4412:

style="FONT-SIZE: 10pt">Warrants<o:p></o:p>

4413:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4414:

<SPAN

4415:

style="FONT-SIZE: 10pt">Warrants Outstanding <o:p></o:p>

4416:

<SPAN

4417:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4418:

<P class=MsoNormal

4419:

style="MARGIN-LEFT: 1in; TEXT-INDENT: 0.5in; TEXT-ALIGN: center"

4420:

align=center><SPAN

4421:

style="mso-spacerun: yes"> <SPAN

4422:

style="mso-tab-count: 2">          

4423:

US $<o:p></o:p>

4424:

<SPAN

4425:

style="mso-spacerun: yes">                            

4426:

Number of shares

4427:

4428:

Exercise

4429:

Expiration<o:p></o:p>

4430:

Name<SPAN

4431:

style="mso-spacerun: yes">      <SPAN

4432:

style="mso-tab-count: 3">             

4433:

<SPAN

4434:

style="mso-spacerun: yes">       of

4435:

common stock<SPAN

4436:

style="mso-spacerun: yes">       

4437:

Price<SPAN

4438:

style="mso-spacerun: yes">        

4439:

Date<o:p></o:p>

4440:

Joyce & Ron Guiel<SPAN

4441:

style="mso-tab-count: 4">                  

4442:

62,500<SPAN

4443:

style="mso-tab-count: 2">         

4444:

0.80  <SPAN

4445:

style="mso-spacerun: yes">   09/12/2003<o:p></o:p>

4446:

National Capital<SPAN

4447:

style="mso-tab-count: 4">                   

4448:

486,303 <SPAN

4449:

style="mso-tab-count: 2">        

4450:

0.81  <SPAN

4451:

style="mso-spacerun: yes">   10/23/2004<o:p></o:p>

4452:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4453:

<SPAN

4454:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold">All warrants were issued

4455:

subsequent to the Company’s May 31, 2002 fiscal year end.<o:p></o:p>

4456:

<B

4457:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4458:

<B

4459:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4460:

<B

4461:

style="mso-bidi-font-weight: normal">ITEM

4462:

7.  MAJOR SHAREHOLDERS AND RELATED

4463:

PARTY TRANSACTIONS <SPAN

4464:

style="FONT-SIZE: 10pt"><o:p></o:p>

4465:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4466:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4467:

The

4468:

Registrant is a publicly owned corporation, the shares of which are owned by

4469:

Canadian and US residents, and residents of other countries. The

4470:

Registrant is not owned or controlled directly or indirectly by another

4471:

corporation or any foreign government, other than disclosed

4472:

below.<o:p></o:p>

4473:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4474:

<P class=MsoNormal

4475:

style="MARGIN-LEFT: 0.75in; TEXT-INDENT: -0.75in; TEXT-ALIGN: justify; tab-stops: list .75in; mso-text-indent-alt: -.75in; mso-list: l18 level1 lfo27; mso-list-ins: pdowad 20021203T1204"><![if !supportLists]><SPAN

4476:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

4477:

datetime="2002-12-03T12:04">A.<SPAN

4478:

style="FONT: 7pt 'Times New Roman'">                           

4479:

</INS><![endif]><INS

4480:

cite="mailto:pdowad" datetime="2002-12-03T12:04">Major

4481:

shareholders<o:p></o:p></INS>

4482:

<P class=MsoNormal

4483:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1204"><SPAN

4484:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:04"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4485:

<P class=MsoNormal

4486:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1204"><SPAN

4487:

style="FONT-SIZE: 10pt">The only persons known to the Registrant to be holding,

4488:

as of 10/31/02, 10% or more beneficial interest in the Registrant’s outstanding

4489:

stock was Marlowe Harvey, as described below.<o:p></o:p>

4490:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4491:

The

4492:

following table lists, as of 10/31/02, all Directors and Executive Officers who

4493:

beneficially own the Registrant's voting securities and the amount of the

4494:

Registrant's voting securities owned by the Directors and Executive Officers as

4495:

a group.<o:p></o:p>

4496:

<SPAN

4497:

style="FONT-SIZE: 10pt"><SPAN

4498:

style="mso-spacerun: yes">                         

4499:

<o:p></o:p>

4500:

<SPAN

4501:

style="FONT-SIZE: 10pt"><SPAN

4502:

style="mso-spacerun: yes">      

4503:

Shareholdings of Directors and Executive Officers<o:p></o:p>

4504:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4505:

Title<SPAN

4506:

style="mso-spacerun: yes">                                

4507:

Amount and Nature

4508:

Percent<o:p></o:p>

4509:

<SPAN

4510:

style="mso-spacerun: yes">  of<SPAN

4511:

style="mso-spacerun: yes">                                     

4512:

of Beneficial<SPAN

4513:

style="mso-spacerun: yes">       

4514:

of<o:p></o:p>

4515:

Class<SPAN

4516:

style="mso-spacerun: yes">    Name of Beneficial

4517:

Owner<SPAN

4518:

style="mso-spacerun: yes">            

4519:

Ownership   Class

4520:

#<o:p></o:p>

4521:

<SPAN

4522:

style="FONT-SIZE: 10pt">Common

4523:

Marlowe Harvey (1)<SPAN

4524:

style="mso-spacerun: yes">                  

4525:

1,881,500

4526:

17.5%<o:p></o:p>

4527:

Common<SPAN

4528:

style="mso-spacerun: yes">   Tom Hendricks (3)<SPAN

4529:

style="mso-tab-count: 4">                     

4530:

804,364

4531:

7.5%<o:p></o:p>

4532:

Common<SPAN

4533:

style="mso-spacerun: yes">   Melvin Martin (2)<SPAN

4534:

style="mso-spacerun: yes">                     

4535:

524,500

4536:

4.9%<o:p></o:p>

4537:

Common<SPAN

4538:

style="mso-spacerun: yes">   Andrew Murray (4)<SPAN

4539:

style="mso-spacerun: yes">                     

4540:

140,900

4541:

1.3%<o:p></o:p>

4542:

Common<SPAN

4543:

style="mso-spacerun: yes">   Art Daher (5)<SPAN

4544:

style="mso-spacerun: yes">                         

4545:

256,160

4546:

2.4%<o:p></o:p>

4547:

Common<SPAN

4548:

style="mso-spacerun: yes">   Robert Akright (6)<SPAN

4549:

style="mso-tab-count: 4">                    

4550:

100,000

4551:

0.9%<o:p></o:p>

4552:

Common<SPAN

4553:

style="mso-spacerun: yes">   Tom Patton<SPAN

4554:

style="mso-tab-count: 1">     (7)<SPAN

4555:

style="mso-tab-count: 4">                    

4556:

100,000

4557:

0.9%<o:p></o:p>

4558:

<SPAN

4559:

style="FONT-SIZE: 10pt"><SPAN

4560:

style="mso-spacerun: yes">        

4561:

Total Directors/Officers<SPAN

4562:

style="mso-spacerun: yes">            

4563:

3,807,424

4564:

35.4%<o:p></o:p>

4565:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4566:

<SPAN

4567:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(1)<SPAN

4568:

style="mso-spacerun: yes">  150,000 shares are escrowed where resale

4569:

is controlled by<o:p></o:p>

4570:

<SPAN

4571:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4572:

style="mso-spacerun: yes">     Canadian regulatory

4573:

authorities.<o:p></o:p>

4574:

<SPAN

4575:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4576:

style="mso-spacerun: yes">     Excludes 132,000 stock

4577:

options held by members of Mr. Harvey’s<o:p></o:p>

4578:

<SPAN

4579:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4580:

style="mso-spacerun: yes">     family, where he

4581:

disclaims beneficial ownership and does not<o:p></o:p>

4582:

<SPAN

4583:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4584:

style="mso-spacerun: yes">     exercise voting

4585:

control.<o:p></o:p>

4586:

<SPAN

4587:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(2)<SPAN

4588:

style="mso-spacerun: yes">  75,000 represent currently exercisable

4589:

stock options.<o:p></o:p>

4590:

<SPAN

4591:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(3)<SPAN

4592:

style="mso-spacerun: yes">  100,000 represent currently exercisable

4593:

stock options.<o:p></o:p>

4594:

<SPAN

4595:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(4)<SPAN

4596:

style="mso-spacerun: yes">  89,000 represent currently exercisable

4597:

stock options.<o:p></o:p>

4598:

<SPAN

4599:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(5)<SPAN

4600:

style="mso-spacerun: yes">  100,000 represent currently exercisable

4601:

stock options.<o:p></o:p>

4602:

<P class=MsoNormal

4603:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l7 level1 lfo9; mso-list-change: '$%1\:6\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

4604:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(6)<SPAN

4605:

style="FONT: 7pt 'Times New Roman'">  <![endif]><SPAN

4606:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4607:

style="mso-spacerun: yes">  100,000 represent currently

4608:

exercisable stock options.<o:p></o:p>

4609:

<P class=MsoNormal

4610:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l7 level1 lfo9; mso-list-change: '$%1\:7\:0\:$' pdowad 20021203T1127"><![if !supportLists]><SPAN

4611:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt">(7)<SPAN

4612:

style="FONT: 7pt 'Times New Roman'">  <![endif]><SPAN

4613:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4614:

style="mso-spacerun: yes">  100,000 represent currently

4615:

exercisable stock options.<o:p></o:p>

4616:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4617:

#

4618:

 Based on 10,744,218 shares outstanding as of 10/31/02 and

4619:

share<o:p></o:p>

4620:

<SPAN

4621:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4622:

style="mso-spacerun: yes">   purchase warrants and stock

4623:

options held by each beneficial holder<o:p></o:p>

4624:

<SPAN

4625:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

4626:

style="mso-spacerun: yes">   exercisable within sixty

4627:

days.<o:p></o:p>

4628:

<B

4629:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4630:

<SPAN

4631:

style="FONT-SIZE: 10pt">Interest of Management in certain transactions

4632:

<o:p></o:p>

4633:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4634:

The

4635:

following are the only transactions since June 01, 2001, or proposed

4636:

transactions, which have materially affected or will materially affect the

4637:

Company in which any director, executive officer, or beneficial holder of more

4638:

that 10% of the outstanding common shares, or any of their respective relatives,

4639:

spouses, associates or affiliates has had or  will  have  any

4640:

direct or material indirect interest.

4641:

Management believes the transactions referenced below were on terms at

4642:

least as favorable to the Company as the Company could have obtained from

4643:

unaffiliated parties.<o:p></o:p>

4644:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4645:

<SPAN

4646:

style="FONT-SIZE: 10pt">Purchases of Common Shares by

4647:

Officers/Directors<o:p></o:p>

4648:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4649:

<SPAN

4650:

style="FONT-SIZE: 10pt">During Fiscal 2002, the Company issued 721,000 common

4651:

shares for services provided valued at $216,300 to directors or to companies

4652:

controlled by directors of the Company.<INS cite="mailto:pdowad"

4653:

datetime="2002-12-03T12:04"><o:p></o:p></INS>

4654:

<P class=MsoNormal

4655:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1204"><SPAN

4656:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:04"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4657:

<P class=MsoNormal

4658:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1204"><SPAN

4659:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

4660:

datetime="2002-12-03T12:04"><DEL cite="mailto:srreid"

4661:

datetime="2002-12-03T13:20">[WHERE ARE ITEMS 7B AND C </DEL><INS

4662:

datetime="2002-12-03T12:05"><DEL cite="mailto:srreid"

4663:

datetime="2002-12-03T13:20">–</DEL><INS datetime="2002-12-03T12:04"><SPAN

4664:

class=msoDel><DEL cite="mailto:srreid" datetime="2002-12-03T13:20"> C

4665:

</DEL><INS datetime="2002-12-03T12:05"><DEL

4666:

cite="mailto:srreid" datetime="2002-12-03T13:20">IS

4667:

N/A]</DEL></INS></INS></INS></INS><INS cite="mailto:srreid"

4668:

datetime="2002-12-03T13:20"><o:p></o:p></INS>

4669:

<P class=MsoNormal

4670:

style="MARGIN-LEFT: 0.75in; TEXT-INDENT: -0.75in; TEXT-ALIGN: justify; tab-stops: list .75in; mso-text-indent-alt: -.75in; mso-list: l18 level1 lfo27; mso-list-ins: srreid 20021203T1321"><![if !supportLists]><SPAN

4671:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4672:

datetime="2002-12-03T13:21">B.<SPAN

4673:

style="FONT: 7pt 'Times New Roman'">                           

4674:

</INS><![endif]><INS

4675:

cite="mailto:srreid" datetime="2002-12-03T13:20">Related Party

4676:

Transactions</INS><INS cite="mailto:srreid"

4677:

datetime="2002-12-03T13:21"><o:p></o:p></INS>

4678:

<P class=MsoNormal

4679:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1321"><SPAN

4680:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:20"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4681:

<P class=MsoNormal

4682:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1320"><SPAN

4683:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4684:

datetime="2002-12-03T13:26">Directors</INS><INS cite="mailto:srreid"

4685:

datetime="2002-12-03T13:27">, their</INS><INS cite="mailto:srreid"

4686:

datetime="2002-12-03T13:26"> family members</INS><INS cite="mailto:srreid"

4687:

datetime="2002-12-03T13:27">, or companies controlled by the directors</INS><INS

4688:

cite="mailto:srreid" datetime="2002-12-03T13:26"> of the Company, have lent the

4689:

company funds on various terms and conditions over the last three years as

4690:

follows:<o:p></o:p></INS>

4691:

<P class=MsoNormal

4692:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1328"><SPAN

4693:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:28"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4694:

<P class=MsoNormal

4695:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1330"><SPAN

4696:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4697:

datetime="2002-12-03T13:30"><SPAN

4698:

style="mso-spacerun: yes"> <o:p></o:p></INS>

4699:

<TABLE

4700:

style="BORDER-RIGHT: medium none; BORDER-TOP: medium none; BORDER-LEFT: medium none; WIDTH: 504.9pt; BORDER-BOTTOM: medium none; BORDER-COLLAPSE: collapse; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-border-alt: solid windowtext .5pt"

4701:

cellSpacing=0 cellPadding=0 width=673 border=1>

4702:

<TBODY>

4703:

4704:

<TD

4705:

style="BORDER-RIGHT: windowtext 0.5pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 0.5pt solid; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: windowtext 0.5pt solid; WIDTH: 3.45in; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid"

4706:

vAlign=top width=331>

4707:

<![if !supportEmptyParas]><![endif]> <SPAN

4708:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4709:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4710:

<TD

4711:

style="BORDER-RIGHT: windowtext 0.5pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 0.5pt solid; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 85.5pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid; mso-border-left-alt: solid windowtext .5pt"

4712:

vAlign=top width=114>

4713:

<SPAN

4714:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4715:

datetime="2002-12-03T13:31">May 31, 2002</INS><INS cite="mailto:srreid"

4716:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4717:

<TD

4718:

4719:

vAlign=top width=114>

4720:

<SPAN

4721:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4722:

datetime="2002-12-03T13:31">May 31, 2001</INS><INS cite="mailto:srreid"

4723:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4724:

<TD

4725:

4726:

vAlign=top width=114>

4727:

<SPAN

4728:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4729:

datetime="2002-12-03T13:31">May 31, 2000</INS><INS cite="mailto:srreid"

4730:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD></TR>

4731:

4732:

<TD

4733:

style="BORDER-RIGHT: windowtext 0.5pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: windowtext 0.5pt solid; WIDTH: 3.45in; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid; mso-border-top-alt: solid windowtext .5pt"

4734:

vAlign=top width=331>

4735:

<SPAN

4736:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4737:

datetime="2002-12-03T13:31">Debentures payable, without interest, due

4738:

May</INS><INS cite="mailto:srreid" datetime="2002-12-03T13:33"> </INS><INS

4739:

cite="mailto:srreid" datetime="2002-12-03T13:31">11, 2011, convertible to

4740:

common shares at an exercise price</INS><INS cite="mailto:srreid"

4741:

datetime="2002-12-03T13:33"> of $1.23 at holders discretion;

4742:

unsecured</INS><INS cite="mailto:srreid"

4743:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4744:

<TD

4745:

style="BORDER-RIGHT: windowtext 0.5pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 85.5pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 0.5pt solid; mso-border-top-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt"

4746:

vAlign=top width=114>

4747:

<P class=MsoNormal

4748:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1333"><SPAN

4749:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4750:

datetime="2002-12-03T13:33"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4751:

<P class=MsoNormal

4752:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1333"><SPAN

4753:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4754:

datetime="2002-12-03T13:33"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4755:

<P class=MsoNormal

4756:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1333"><SPAN

4757:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4758:

datetime="2002-12-03T13:33"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4759:

<SPAN

4760:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4761:

datetime="2002-12-03T13:33">$5,097,105</INS><INS cite="mailto:srreid"

4762:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4763:

<TD

4764:

4765:

vAlign=top width=114>

4766:

<P class=MsoNormal

4767:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4768:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4769:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4770:

<P class=MsoNormal

4771:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4772:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4773:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4774:

<P class=MsoNormal

4775:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4776:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4777:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4778:

<SPAN

4779:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4780:

datetime="2002-12-03T13:34">$5,442,018</INS><INS cite="mailto:srreid"

4781:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD>

4782:

<TD

4783:

4784:

vAlign=top width=114>

4785:

<P class=MsoNormal

4786:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4787:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4788:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4789:

<P class=MsoNormal

4790:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4791:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4792:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4793:

<P class=MsoNormal

4794:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4795:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4796:

datetime="2002-12-03T13:34"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4797:

<SPAN

4798:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4799:

datetime="2002-12-03T13:34">$<SPAN

4800:

style="mso-spacerun: yes">      </INS><INS

4801:

cite="mailto:srreid" datetime="2002-12-03T13:37"><SPAN

4802:

style="mso-spacerun: yes">  </INS><INS

4803:

cite="mailto:srreid" datetime="2002-12-03T13:34">-<SPAN

4804:

style="mso-spacerun: yes">    </INS><INS

4805:

cite="mailto:srreid"

4806:

datetime="2002-12-03T13:30"><o:p></o:p></INS></TD></TR>

4807:

4808:

<TD

4809:

4810:

vAlign=top width=331>

4811:

<SPAN

4812:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4813:

datetime="2002-12-03T13:34">Shareholder loans, </INS><INS

4814:

cite="mailto:srreid" datetime="2002-12-03T13:35">without interest or

4815:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T13:34">fixed terms

4816:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T13:35">of repayment;

4817:

unsecured</INS><INS cite="mailto:srreid"

4818:

datetime="2002-12-03T13:34"><o:p></o:p></INS></TD>

4819:

<TD

4820:

4821:

vAlign=top width=114>

4822:

<P class=MsoNormal

4823:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1335"><SPAN

4824:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4825:

datetime="2002-12-03T13:35"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4826:

<P class=MsoNormal

4827:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1333"><SPAN

4828:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4829:

datetime="2002-12-03T13:35">$

4830:

546,138</INS><INS cite="mailto:srreid"

4831:

datetime="2002-12-03T13:34"><o:p></o:p></INS></TD>

4832:

<TD

4833:

4834:

vAlign=top width=114>

4835:

<P class=MsoNormal

4836:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1336"><SPAN

4837:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4838:

datetime="2002-12-03T13:36"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4839:

<P class=MsoNormal

4840:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4841:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4842:

datetime="2002-12-03T13:36">$

4843:

895,893</INS><INS cite="mailto:srreid"

4844:

datetime="2002-12-03T13:34"><o:p></o:p></INS></TD>

4845:

<TD

4846:

4847:

vAlign=top width=114>

4848:

<P class=MsoNormal

4849:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1336"><SPAN

4850:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4851:

datetime="2002-12-03T13:36"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4852:

<P class=MsoNormal

4853:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1334"><SPAN

4854:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4855:

datetime="2002-12-03T13:36">$6,007,629</INS><INS cite="mailto:srreid"

4856:

datetime="2002-12-03T13:34"><o:p></o:p></INS></TD></TR></TBODY></TABLE>

4857:

<P class=MsoNormal

4858:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1338"><SPAN

4859:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4860:

<P class=MsoNormal

4861:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1338"><SPAN

4862:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4863:

<P class=MsoNormal

4864:

4865:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4866:

datetime="2002-12-03T13:38">C.<SPAN

4867:

style="FONT: 7pt 'Times New Roman'">                           

4868:

</INS><![endif]><INS

4869:

cite="mailto:srreid" datetime="2002-12-03T13:38">Interests of experts and

4870:

counsel<o:p></o:p></INS>

4871:

<P class=MsoNormal

4872:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1338"><SPAN

4873:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:38"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

4874:

<P class=MsoNormal

4875:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; mso-text-indent-alt: -.25in; mso-list: none; mso-list-ins: srreid 20021203T1338"><SPAN

4876:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

4877:

datetime="2002-12-03T13:38">Not applicable</INS><o:p></o:p>

4878:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4879:

<SPAN

4880:

style="FONT-SIZE: 10pt">ITEM 8. FINANCIAL INFORMATION<SPAN

4881:

style="FONT-SIZE: 10pt"><o:p></o:p>

4882:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4883:

The

4884:

Company's financial statements are stated in Canadian Dollars (CDN$)

4885:

and are prepared in accordance with Canadian Generally Accepted Accounting

4886:

Principles (GAAP), the application of which, in the case of the Company,

4887:

conforms in all material respects for the periods presented with US GAAP, except

4888:

as disclosed in footnotes to the financial statements.<o:p></o:p>

4889:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4890:

The

4891:

audited financial statements for the year ended May 31, 2002 as required under

4892:

ITEM #17 are included hereto immediately following the text of this annual

4893:

report. The audit report of KPMG LLP, Independent Auditors, are included herein

4894:

immediately preceding the financial statements.<o:p></o:p>

4895:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4896:

<B

4897:

style="mso-bidi-font-weight: normal">ITEM 9.

4898:

THE OFFER AND LISTING<o:p></o:p>

4899:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4900:

The

4901:

Company's common shares were approved for trading on the NASD OTC Bulletin Board

4902:

in the United States, under the symbol "CAAUF" on February 1, 1999.<SPAN

4903:

style="mso-spacerun: yes">  The Company voluntarily de-listed from

4904:

trading on the Vancouver Stock Exchange, now known as the Canadian Venture

4905:

Exchange, effective March 15, 1999.

4906:

The initial public offering was effective, only in Canada, on the

4907:

Vancouver Stock Exchange under the auspices of the British Columbia Securities

4908:

Commission in February 1988 under a former name, “Millennium Resources

4909:

Inc.".<o:p></o:p>

4910:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4911:

The

4912:

high and low sales prices on the OTC Bulletin Board for actual trades of the

4913:

Company's common shares from date of listing is as follows:<SPAN

4914:

style="mso-spacerun: yes">  <o:p></o:p>

4915:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

4916:

<SPAN

4917:

style="FONT-SIZE: 10pt">OTC Bulletin Board - Common Shares Trading

4918:

Activity<o:p></o:p>

4919:

<SPAN

4920:

style="mso-spacerun: yes"> <SPAN

4921:

style="mso-tab-count: 8">                                              

4922:

<o:p></o:p>

4923:

<SPAN

4924:

style="mso-tab-count: 1">      <SPAN

4925:

style="mso-spacerun: yes"> <SPAN

4926:

style="mso-tab-count: 6">                                  

4927:

<SPAN

4928:

style="mso-spacerun: yes">   U.S.

4929:

Dollars<o:p></o:p>

4930:

<SPAN

4931:

style="mso-spacerun: yes"> Period<SPAN

4932:

style="mso-spacerun: yes">                       

4933:

<SPAN

4934:

style="mso-spacerun: yes">             High<SPAN

4935:

style="mso-spacerun: yes">        

4936:

Low<o:p></o:p>

4937:

<SPAN

4938:

style="FONT-SIZE: 10pt">Month ended 10/31/02<SPAN

4939:

style="mso-spacerun: yes">                           

4940:

$0.60

4941:

$0.28<o:p></o:p>

4942:

<SPAN

4943:

style="FONT-SIZE: 10pt">Month ended 09/30/02<SPAN

4944:

style="mso-spacerun: yes">                           

4945:

$0.80

4946:

$0.26<o:p></o:p>

4947:

<SPAN

4948:

style="FONT-SIZE: 10pt">Month ended 08/31/02<SPAN

4949:

style="mso-spacerun: yes">                           

4950:

$0.75

4951:

$0.26<o:p></o:p>

4952:

<SPAN

4953:

style="FONT-SIZE: 10pt">Month ended 07/31/02<SPAN

4954:

style="mso-spacerun: yes">                           

4955:

$0.50

4956:

$0.20<o:p></o:p>

4957:

<SPAN

4958:

style="FONT-SIZE: 10pt">Month ended 06/30/02<SPAN

4959:

style="mso-spacerun: yes">                           

4960:

$0.51

4961:

$0.20<o:p></o:p>

4962:

<SPAN

4963:

style="FONT-SIZE: 10pt">Month ended 05/31/02<SPAN

4964:

style="mso-spacerun: yes">                           

4965:

$0.34

4966:

$0.32<o:p></o:p>

4967:

<SPAN

4968:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

4969:

<SPAN

4970:

style="FONT-SIZE: 10pt">Three months ended 08/31/02<SPAN

4971:

style="mso-tab-count: 4">                   

4972:

$0.75

4973:

$0.20<o:p></o:p>

4974:

<SPAN

4975:

style="FONT-SIZE: 10pt">Three months ended 05/31/02<SPAN

4976:

style="mso-tab-count: 4">                   

4977:

$0.34

4978:

$0.07<o:p></o:p>

4979:

<SPAN

4980:

style="FONT-SIZE: 10pt">Three months ended 02/28/02<SPAN

4981:

style="mso-tab-count: 4">                   

4982:

$0.13

4983:

$0.05<o:p></o:p>

4984:

<SPAN

4985:

style="FONT-SIZE: 10pt">Three months ended 11/30/01<SPAN

4986:

style="mso-tab-count: 4">                   

4987:

$0.22

4988:

$0.12<o:p></o:p>

4989:

<SPAN

4990:

style="FONT-SIZE: 10pt">Three months ended 08/31/01<SPAN

4991:

style="mso-tab-count: 4">                   

4992:

$0.38

4993:

$0.28<o:p></o:p>

4994:

<SPAN

4995:

style="FONT-SIZE: 10pt">Three months ended 05/31/01<SPAN

4996:

style="mso-tab-count: 4">                   

4997:

$0.33

4998:

$0.20<o:p></o:p>

4999:

<SPAN

5000:

style="FONT-SIZE: 10pt">Three months ended 02/28/01<SPAN

5001:

style="mso-tab-count: 4">                   

5002:

$0.16

5003:

$0.06<o:p></o:p>

5004:

<SPAN

5005:

style="FONT-SIZE: 10pt">Three months ended 11/30/00<SPAN

5006:

style="mso-tab-count: 4">                   

5007:

$0.44

5008:

$0.09<o:p></o:p>

5009:

<SPAN

5010:

style="FONT-SIZE: 10pt">Three months ended 08/31/00<SPAN

5011:

style="mso-tab-count: 4">                   

5012:

$0.25

5013:

$0.09<o:p></o:p>

5014:

<SPAN

5015:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5016:

Year

5017:

ended 05/31/02<SPAN

5018:

style="mso-spacerun: yes">                            

5019:

$0.38

5020:

$0.05 <o:p></o:p>

5021:

Year

5022:

ended 05/31/01<SPAN

5023:

style="mso-spacerun: yes">                            

5024:

$0.44

5025:

$0.06 <o:p></o:p>

5026:

Year

5027:

ended 05/31/00<SPAN

5028:

style="mso-spacerun: yes">       <SPAN

5029:

style="mso-spacerun: yes">                      $0.44<SPAN

5030:

style="mso-spacerun: yes">     

5031:

$0.05<o:p></o:p>

5032:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5033:

<SPAN

5034:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5035:

<SPAN

5036:

style="FONT-SIZE: 10pt">Canadian Venture Exchange - Common Shares Trading

5037:

Activity<o:p></o:p>

5038:

<SPAN

5039:

style="mso-spacerun: yes"> <SPAN

5040:

style="mso-tab-count: 8">                                              

5041:

<o:p></o:p>

5042:

<SPAN

5043:

style="mso-tab-count: 1">      <SPAN

5044:

style="mso-spacerun: yes"> <SPAN

5045:

style="mso-tab-count: 6">                                  

5046:

5047:

Canadian Dollars<o:p></o:p>

5048:

<SPAN

5049:

style="mso-spacerun: yes"> Period<SPAN

5050:

style="mso-spacerun: yes">                       

5051:

<SPAN

5052:

style="mso-spacerun: yes">             High<SPAN

5053:

style="mso-spacerun: yes">        

5054:

Low<o:p></o:p>

5055:

Year

5056:

ended 05/31/99<SPAN

5057:

style="mso-spacerun: yes">                            

5058:

$2.50

5059:

$0.71 <o:p></o:p>

5060:

Year

5061:

ended 05/31/98<SPAN

5062:

style="mso-spacerun: yes">                            

5063:

$9.00

5064:

$2.00<o:p></o:p>

5065:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5066:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5067:

The

5068:

Company's common shares are issued in registered form and the following

5069:

information is taken from the records of CIBC Mellon Trust Company, located in

5070:

Vancouver, British Columbia, Canada, the registrar and transfer agent for the

5071:

common shares.<o:p></o:p>

5072:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5073:

On

5074:

10/31/02, the shareholders' list for the Company's common shares showed 341

5075:

registered shareholders and 10,744,218 common shares outstanding. 38 of these

5076:

shareholders were U.S. residents, holding 1,958,967 shares representing

5077:

18.2% of the issued and outstanding common shares.<o:p></o:p>

5078:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5079:

The

5080:

Company has researched the indirect holding by depository institutions and

5081:

estimates that there are 38 "holders of record" resident in the United States,

5082:

holding the aforementioned 1,958,967 common shares.<o:p></o:p>

5083:

<SPAN

5084:

style="FONT-SIZE: 10pt">Based on this research and other research into the

5085:

indirect holdings of other financial institutions, the Company believes that it

5086:

has in excess of 750 beneficial owners of its common

5087:

shares.<o:p></o:p>

5088:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5089:

The

5090:

Company's common shares are not registered to trade in the United States in the

5091:

form of American Depository Receipts (ADR's) or similar

5092:

certificates.<o:p></o:p>

5093:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5094:

The

5095:

Company is unaware of any active market in the United States for its common

5096:

shares.<o:p></o:p>

5097:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5098:

The

5099:

Company has not declared any dividends for the last five fiscal years

5100:

and does not plan to declare dividends in the foreseeable

5101:

future.<o:p></o:p>

5102:

<B

5103:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5104:

<B

5105:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5106:

<B

5107:

style="mso-bidi-font-weight: normal">ITEM 10.

5108:

ADDITIONAL INFORMATION<INS cite="mailto:srreid"

5109:

datetime="2002-12-03T13:40"><o:p></o:p></INS>

5110:

<P class=MsoNormal

5111:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1340"><B

5112:

style="mso-bidi-font-weight: normal"><INS

5113:

cite="mailto:srreid"

5114:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5115:

<P class=MsoNormal

5116:

style="MARGIN-LEFT: 0.5in; TEXT-INDENT: -0.5in; TEXT-ALIGN: justify; tab-stops: list .5in; mso-text-indent-alt: -.5in; mso-list: l9 level1 lfo32; mso-list-ins: srreid 20021203T1340"><![if !supportLists]><B

5117:

style="mso-bidi-font-weight: normal"><INS

5118:

cite="mailto:srreid" datetime="2002-12-03T13:40">A.<SPAN

5119:

style="FONT: 7pt 'Times New Roman'">               

5120:

</INS><![endif]><B

5121:

style="mso-bidi-font-weight: normal"><INS

5122:

cite="mailto:srreid" datetime="2002-12-03T13:40">Share

5123:

Capital<o:p></o:p></INS>

5124:

<P class=MsoNormal

5125:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><B

5126:

style="mso-bidi-font-weight: normal"><INS

5127:

cite="mailto:srreid"

5128:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5129:

<P class=MsoNormal

5130:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5131:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5132:

datetime="2002-12-03T13:40">The authorized capital of the Registrant is

5133:

100,000,000 common shares without par value of which 10,744,218 were issued and

5134:

outstanding at 10/31/02.<o:p></o:p></INS>

5135:

<P class=MsoNormal

5136:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5137:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5138:

<P class=MsoNormal

5139:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5140:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5141:

datetime="2002-12-03T13:40">All of the authorized common shares of the

5142:

Registrant are of the same class and, once issued, rank equally as to dividends,

5143:

voting powers, and participation in assets.<SPAN

5144:

style="mso-spacerun: yes">  Holders of common shares are entitled to

5145:

one vote for each share held of record in all matters to be acted upon by the

5146:

shareholders.   Holders of

5147:

common shares are entitled to receive such dividends as may be declared from

5148:

time to time by the Board of Directors, in its discretion, out of funds legally

5149:

available therefore.<o:p></o:p></INS>

5150:

<P class=MsoNormal

5151:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5152:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5153:

<P class=MsoNormal

5154:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5155:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5156:

datetime="2002-12-03T13:40">Upon liquidation, dissolution or winding up of the

5157:

Registrant, holders of common shares are entitled to receive pro rata the assets

5158:

of the Registrant, if any, remaining after payments of all debts and

5159:

liabilities.  No shares have been

5160:

issued subject to call or assessment.

5161:

There are no pre-emptive or conversion rights and no provisions for

5162:

redemption or purchase for cancellation, surrender, or sinking or purchase

5163:

funds.<o:p></o:p></INS>

5164:

<P class=MsoNormal

5165:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5166:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5167:

<P class=MsoNormal

5168:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5169:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5170:

datetime="2002-12-03T13:40">The Company is not aware of any Restrictions or

5171:

limitations on the rights of non-resident or foreign owners to hold, vote, or

5172:

receive remittance on the Registrant's securities, other than those discussed in

5173:

"Exchange Controls and Other Limitations Affecting Security

5174:

Holders".<o:p></o:p></INS>

5175:

<P class=MsoNormal

5176:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5177:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5178:

<P class=MsoNormal

5179:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5180:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5181:

datetime="2002-12-03T13:40">There are no restrictions on the repurchase or

5182:

redemption of common shares of the Registrant while there is any arrearage in

5183:

the payment of dividends or sinking fund

5184:

installments.<o:p></o:p></INS>

5185:

<P class=MsoNormal

5186:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5187:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5188:

<P class=MsoNormal

5189:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5190:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5191:

datetime="2002-12-03T13:40">Provisions as to the modification, amendment or

5192:

variation of such shareholder rights or provisions are contained in the <I

5193:

style="mso-bidi-font-style: normal">Company Act of British Columbia.<SPAN

5194:

style="mso-spacerun: yes">  Unless the <I

5195:

style="mso-bidi-font-style: normal">Company Act or the Registrant's Articles

5196:

or memorandum otherwise provide, any action to be taken by a resolution of the

5197:

members may be taken by an ordinary resolution or by a vote of a majority or

5198:

more of the shares represented at the shareholders'

5199:

meeting.<o:p></o:p></INS>

5200:

<P class=MsoNormal

5201:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5202:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5203:

<P class=MsoNormal

5204:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5205:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5206:

datetime="2002-12-03T13:40">The Registrant's Articles and the <I

5207:

style="mso-bidi-font-style: normal">B.C. Company Act contain provisions,

5208:

which require a "special resolution" for effecting certain corporate

5209:

actions.  Such a "special

5210:

resolution" requires a three-quarters vote of shareholders rather than a simple

5211:

majority for passage.  The principle

5212:

corporate actions that require a "special resolution"

5213:

include:<o:p></o:p></INS>

5214:

<P class=MsoNormal

5215:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5216:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid" datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5217:

<P class=MsoNormal

5218:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5219:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5220:

datetime="2002-12-03T13:40">a.

5221:

Transferring Company's jurisdiction from British

5222:

Columbia<o:p></o:p></INS>

5223:

<P class=MsoNormal

5224:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5225:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5226:

datetime="2002-12-03T13:40">    to another

5227:

jurisdiction;<o:p></o:p></INS>

5228:

<P class=MsoNormal

5229:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5230:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5231:

datetime="2002-12-03T13:40">b.

5232:

Giving material financial assistance to executive

5233:

officers<o:p></o:p></INS>

5234:

<P class=MsoNormal

5235:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5236:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5237:

datetime="2002-12-03T13:40">

5238:

and/or directors;<o:p></o:p></INS>

5239:

<P class=MsoNormal

5240:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5241:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5242:

datetime="2002-12-03T13:40">c.

5243:

Material conflicts of interest by Directors;<o:p></o:p></INS>

5244:

<P class=MsoNormal

5245:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5246:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5247:

datetime="2002-12-03T13:40">d.

5248:

Disposing of all or substantially all of the

5249:

Company's<o:p></o:p></INS>

5250:

<P class=MsoNormal

5251:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5252:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5253:

datetime="2002-12-03T13:40">

5254:

undertakings;<o:p></o:p></INS>

5255:

<P class=MsoNormal

5256:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5257:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5258:

datetime="2002-12-03T13:40">e.

5259:

Removing a Director before the expiration of his term

5260:

of<o:p></o:p></INS>

5261:

<P class=MsoNormal

5262:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5263:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5264:

datetime="2002-12-03T13:40">

5265:

office;<o:p></o:p></INS>

5266:

<P class=MsoNormal

5267:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5268:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5269:

datetime="2002-12-03T13:40">f.

5270:

Certain alterations of share capital;<o:p></o:p></INS>

5271:

<P class=MsoNormal

5272:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5273:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5274:

datetime="2002-12-03T13:40">

5275:

(1) increasing the number of authorized

5276:

shares;<o:p></o:p></INS>

5277:

<P class=MsoNormal

5278:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5279:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5280:

datetime="2002-12-03T13:40">

5281:

(2) subdivision, consolidation and/or changes in

5282:

shares;<o:p></o:p></INS>

5283:

<P class=MsoNormal

5284:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5285:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5286:

datetime="2002-12-03T13:40">

5287:

(3) reduction in capital<o:p></o:p></INS>

5288:

<P class=MsoNormal

5289:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5290:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5291:

datetime="2002-12-03T13:40">g.

5292:

Changing the Company name;<o:p></o:p></INS>

5293:

<P class=MsoNormal

5294:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5295:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5296:

datetime="2002-12-03T13:40">h.

5297:

Altering any restrictions on the Company's business;

5298:

and<o:p></o:p></INS>

5299:

<P class=MsoNormal

5300:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><SPAN

5301:

style="FONT-SIZE: 10pt"><INS cite="mailto:srreid"

5302:

datetime="2002-12-03T13:40">i.

5303:

Amalgamations with another company.<o:p></o:p></INS>

5304:

<P class=MsoNormal

5305:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1340"><B

5306:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5307:

<P class=MsoNormal

5308:

5309:

style="mso-bidi-font-weight: normal"><INS

5310:

cite="mailto:srreid" datetime="2002-12-03T13:42">B.<SPAN

5311:

style="FONT: 7pt 'Times New Roman'">               

5312:

</INS><![endif]><B

5313:

style="mso-bidi-font-weight: normal"><INS

5314:

cite="mailto:srreid" datetime="2002-12-03T13:41">Memorandum and

5315:

</INS><INS cite="mailto:srreid" datetime="2002-12-03T13:42">articles of

5316:

association.<o:p></o:p></INS>

5317:

<P class=MsoNormal

5318:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1342"><B

5319:

style="mso-bidi-font-weight: normal"><INS

5320:

cite="mailto:srreid"

5321:

datetime="2002-12-03T13:42"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5322:

<P class=MsoNormal

5323:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1342"><SPAN

5324:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><SPAN

5325:

style="mso-prop-change: srreid 20021203T1353"><INS cite="mailto:srreid"

5326:

datetime="2002-12-03T13:42"><SPAN

5327:

style="mso-prop-change: srreid 20021203T1353">Incorporate</INS><SPAN

5328:

style="mso-prop-change: srreid 20021203T1353"><INS cite="mailto:srreid"

5329:

datetime="2002-12-03T13:53"><SPAN

5330:

style="mso-prop-change: srreid 20021203T1353">d</INS><SPAN

5331:

style="mso-prop-change: srreid 20021203T1353"><INS cite="mailto:srreid"

5332:

datetime="2002-12-03T13:42">

5333:

by reference</INS><INS cite="mailto:srreid" datetime="2002-12-03T13:53">

5334:

– see Item 19. </INS><INS cite="mailto:srreid"

5335:

datetime="2002-12-03T13:54">“</INS><INS cite="mailto:srreid"

5336:

datetime="2002-12-03T13:53">Exhibits</INS><INS cite="mailto:srreid"

5337:

datetime="2002-12-03T13:54">”</INS><SPAN

5338:

style="mso-prop-change: srreid 20021203T1353"><INS cite="mailto:srreid"

5339:

datetime="2002-12-03T13:42"><SPAN

5340:

style="mso-prop-change: srreid 20021203T1353">.<SPAN

5341:

style="mso-prop-change: srreid 20021203T1353"><o:p></o:p></INS>

5342:

<P class=MsoNormal

5343:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1342"><B

5344:

style="mso-bidi-font-weight: normal"><INS

5345:

cite="mailto:srreid"

5346:

datetime="2002-12-03T13:42"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5347:

<P class=MsoNormal

5348:

5349:

style="mso-bidi-font-weight: normal"><INS

5350:

cite="mailto:srreid" datetime="2002-12-03T13:43">C.<SPAN

5351:

style="FONT: 7pt 'Times New Roman'">               

5352:

</INS><![endif]><B

5353:

style="mso-bidi-font-weight: normal"><INS

5354:

cite="mailto:srreid" datetime="2002-12-03T13:42">Material

5355:

contracts.</INS><INS cite="mailto:srreid"

5356:

datetime="2002-12-03T13:43"><o:p></o:p></INS>

5357:

<P class=MsoNormal

5358:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1343"><B

5359:

style="mso-bidi-font-weight: normal"><INS

5360:

cite="mailto:srreid"

5361:

datetime="2002-12-03T13:43"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5362:

<P class=MsoNormal

5363:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1343"><SPAN

5364:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><SPAN

5365:

style="mso-prop-change: srreid 20021203T1354"><INS cite="mailto:srreid"

5366:

datetime="2002-12-03T13:43"><SPAN

5367:

style="mso-prop-change: srreid 20021203T1354">Not applicable.</INS><SPAN

5368:

style="mso-prop-change: srreid 20021203T1354"><INS cite="mailto:srreid"

5369:

datetime="2002-12-03T13:42"><SPAN

5370:

style="mso-prop-change: srreid 20021203T1354"><o:p></o:p></INS>

5371:

<P class=MsoNormal

5372:

style="MARGIN-LEFT: 0.25in; TEXT-ALIGN: justify; mso-list: none; mso-list-ins: srreid 20021203T1343"><B

5373:

style="mso-bidi-font-weight: normal"><INS

5374:

cite="mailto:srreid"

5375:

datetime="2002-12-03T13:42"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

5376:

<P class=MsoNormal

5377:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1342"><B

5378:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5379:

<B

5380:

style="mso-bidi-font-weight: normal"><INS

5381:

cite="mailto:srreid" datetime="2002-12-03T13:41">D.<SPAN

5382:

style="mso-spacerun: yes">    </INS>Exchange Controls

5383:

and Other Limitations Affecting Security Holders<o:p></o:p>

5384:

<B

5385:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5386:

<B

5387:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5388:

The

5389:

Investment Canada Act (the “ICA”), which became effective on 6/30/85, regulates

5390:

the acquisition by non-Canadians of control of a Canadian business

5391:

enterprise.  In effect, the ICA

5392:

required review by Investment Canada, the agency which administers the ICA, and

5393:

approval by the Canadian government in the case of an acquisition of control of

5394:

a Canadian business by a non-Canadian (other than a “NAFTA investor” as defined

5395:

in the ICA) where:  (i) in the case

5396:

of a direct acquisition  (for

5397:

example, through a share purchase or asset purchase), the assets of the business

5398:

are $5 million or more in value; or (ii) in<SPAN

5399:

style="mso-spacerun: yes">  the<SPAN

5400:

style="mso-spacerun: yes">  case<SPAN

5401:

style="mso-spacerun: yes">  of an indirect<SPAN

5402:

style="mso-spacerun: yes">  acquisition<SPAN

5403:

style="mso-spacerun: yes">  (for<SPAN

5404:

style="mso-spacerun: yes">  example,<SPAN

5405:

style="mso-spacerun: yes">  the acquisition<SPAN

5406:

style="mso-spacerun: yes">  of

5407:

the foreign parent of the

5408:

Canadian  business)

5409:

where  the Canadian business has

5410:

assets of $50 million or  more

5411:

in  value or if the Canadian

5412:

business represents more than  50%

5413:

of  the assets of the original group

5414:

and the Canadian  business has

5415:

assets of $5 million or more in value.

5416:

<o:p></o:p>

5417:

<SPAN

5418:

style="FONT-SIZE: 10pt">Review and approval are also required for acquisition or

5419:

establishment of a new business in areas concerning “Canada’s cultural heritage

5420:

or national identity” such as book publishing, film production and distribution,

5421:

television and radio, production and distribution of<SPAN

5422:

style="mso-spacerun: yes">  music, and the oil and natural gas

5423:

industry, regardless  of the size of

5424:

the investment.<o:p></o:p>

5425:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5426:

In

5427:

the context of the Company, in essence, three methods of acquiring control of a

5428:

Canadian business are regulated by the ICA:<SPAN

5429:

style="mso-spacerun: yes">  (i) the acquisition of all or

5430:

substantially all of the assets used in carrying on the Canadian business;<SPAN

5431:

style="mso-spacerun: yes">  (ii) the acquisition, directly or

5432:

indirectly, of voting shares of a Canadian corporation carrying on the Canadian

5433:

business;  (iii) the acquisition of

5434:

voting shares of an entity which controls, directly or indirectly, another

5435:

entity carrying on a Canadian business.

5436:

An acquisition of a majority of the voting interests of an<SPAN

5437:

style="mso-spacerun: yes">  entity,<SPAN

5438:

style="mso-spacerun: yes">  including a corporation, is deemed<SPAN

5439:

style="mso-spacerun: yes">  to

5440:

be  an acquisition<SPAN

5441:

style="mso-spacerun: yes">  of control under the ICA.<SPAN

5442:

style="mso-spacerun: yes">  An acquisition of less than one-third of

5443:

the voting shares of a corporation is deemed not to be an acquisition of

5444:

control.  An acquisition of less

5445:

than a majority, but one-third or more, of the voting shares of a corporation is

5446:

presumed to be an acquisition of control unless<SPAN

5447:

style="mso-spacerun: yes">  it

5448:

can  be established that<SPAN

5449:

style="mso-spacerun: yes">  on

5450:

the  acquisition<SPAN

5451:

style="mso-spacerun: yes">  the corporation is not, in fact,

5452:

controlled by the acquirer through the

5453:

ownership  of voting

5454:

shares.   For partnerships,

5455:

trusts, joint ventures or other unincorporated entities, an acquisition of less

5456:

than a majority of the voting interests is deemed not to be an acquisition of

5457:

control.<o:p></o:p>

5458:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5459:

<SPAN

5460:

style="FONT-SIZE: 10pt">In  1988,

5461:

the ICA was amended pursuant to the Free Trade Agreement dated 1/2/88 between

5462:

Canada and the United States to relax the restriction of the ICA.<SPAN

5463:

style="mso-spacerun: yes">  As a result of these amendments, except

5464:

where the Canadian business is in the cultural, oil and gas, uranium, financial

5465:

services or transportation sectors, the threshold for direct acquisition of

5466:

control by U.S. investors and other foreign investors acquiring control of a

5467:

Canadian business from U.S. investors has been raised from<SPAN

5468:

style="mso-spacerun: yes">  $5 million to $150 million of gross

5469:

assets, and indirect acquisitions are not reviewable.<o:p></o:p>

5470:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5471:

In

5472:

addition to the foregoing, the ICA requires that all other acquisitions of

5473:

control of Canadian businesses by non-Canadians are subject to formal

5474:

notification to the Canadian government.

5475:

These provisions require a foreign investor to give notice in the

5476:

required form, which notices are for information, as opposed to review,

5477:

purposes.<o:p></o:p>

5478:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5479:

<B

5480:

style="mso-bidi-font-weight: normal"><SPAN

5481:

style="FONT-SIZE: 10pt">Taxation<o:p></o:p>

5482:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5483:

The

5484:

following summary of the material Canadian federal income tax considerations

5485:

generally applicable in respect of the common shares reflects the Company’s

5486:

opinion, based on tax advice provided by BDO Dunwoody, Chartered Accountants,

5487:

Calgary, Alberta, Canada and BDO Seidman, Denver, Colorado, USA.<SPAN

5488:

style="mso-spacerun: yes">  The tax consequences to any particular

5489:

holder of common shares will vary according to the status of that holder as an

5490:

individual, trust, corporation or member of a partnership, the jurisdiction in

5491:

which that holder is subject to taxation, the place where that holder is

5492:

resident and, generally, according to that holder’s particular

5493:

circumstances.  This summary is

5494:

applicable only to holders who are resident in the United States, have never

5495:

been resident in Canada, deal at arm’s length with the Company, hold their

5496:

common shares as capital property and who will not use or hold the common shares

5497:

in carrying on business in Canada.

5498:

Special rules, which are not discussed in this summary, may apply to a

5499:

United States holder that is an issuer that carries on business in Canada and

5500:

elsewhere.<o:p></o:p>

5501:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5502:

<SPAN

5503:

style="FONT-SIZE: 10pt">This summary is based upon the provisions of the Income

5504:

Tax Act of Canada and the regulations thereunder (collectively, the “Tax Act, or

5505:

ITA”) and the Canada-United States Tax Convention as amended by the Protocols

5506:

thereto (the “Tax Convention”) as at the date of the Registration Statement and

5507:

the current administrative practices of Revenue Canada, Customs, Excise and

5508:

Taxation.  This summary does not

5509:

take into account Canadian provincial income tax

5510:

consequences.<o:p></o:p>

5511:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5512:

<SPAN

5513:

style="FONT-SIZE: 10pt">This summary is not exhaustive of all possible income

5514:

tax consequences.  It is not

5515:

intended as legal or tax advice to any particular holder of common stock and

5516:

should not be so construed.  Each

5517:

holder should consult his own tax advisor with respect to the income tax

5518:

consequences applicable to him in his own particular

5519:

circumstances.<o:p></o:p>

5520:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5521:

<SPAN

5522:

style="FONT-SIZE: 10pt">North American Free Trade Agreement

5523:

(Canada)<o:p></o:p>

5524:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5525:

The

5526:

Investment Act was amended with the North American Free Trade Agreement<SPAN

5527:

style="mso-spacerun: yes">  (NAFTA) to provide for special review

5528:

thresholds for Americans (including

5529:

“American-controlled “entities” as defined in the Investment Act). Under

5530:

the Investment Act, as amended, an investment in the Registrant’s common shares

5531:

by an American would be reviewable only if it was an investment to acquire

5532:

control of the Registrant and the value of the assets of the Registrant was

5533:

equal to or greater than a specified amount<SPAN

5534:

style="mso-spacerun: yes">  (the<SPAN

5535:

style="mso-spacerun: yes">  “Review Threshold”), which increases in

5536:

stages.  The Review Threshold is

5537:

currently  $150 million and remains

5538:

at $150 million in constant 1992 dollars (calculated as prescribed in the

5539:

Investment Act) after 1992.<o:p></o:p>

5540:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5541:

<SPAN

5542:

style="FONT-SIZE: 10pt">Disposition of Common Shares<SPAN

5543:

style="FONT-SIZE: 10pt"><o:p></o:p>

5544:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5545:

If

5546:

a non-resident were to dispose of common shares of the Company to another

5547:

Canadian corporation which deals or is deemed to deal on a non-arm’s length

5548:

basis with the non-resident and which, immediately after the disposition, is

5549:

connected with the Company  (i.e.,

5550:

which holds shares representing more than 10% of the voting power and more than

5551:

10% of the market value of all issued and outstanding shares of the Company),

5552:

the amount by which the fair market value of any consideration<SPAN

5553:

style="mso-spacerun: yes">   (other than any<SPAN

5554:

style="mso-spacerun: yes">  shares<SPAN

5555:

style="mso-spacerun: yes">  of the purchaser corporation)<SPAN

5556:

style="mso-spacerun: yes">  exceeds the paid-up capital of the<SPAN

5557:

style="mso-spacerun: yes">  common shares sold will be deemed to be

5558:

taxable as a dividend paid  by<SPAN

5559:

style="mso-spacerun: yes">  the purchasing corporation, either

5560:

immediately or  eventually<SPAN

5561:

style="mso-spacerun: yes">  by means<SPAN

5562:

style="mso-spacerun: yes">  of a deduction in computing the paid-up

5563:

capital  of<SPAN

5564:

style="mso-spacerun: yes">  the purchasing<SPAN

5565:

style="mso-spacerun: yes">  corporation,<SPAN

5566:

style="mso-spacerun: yes">  and subject to withholding<SPAN

5567:

style="mso-spacerun: yes">  taxes<SPAN

5568:

style="mso-spacerun: yes">  as

5569:

described below.<o:p></o:p>

5570:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5571:

<SPAN

5572:

style="FONT-SIZE: 10pt">Under the Tax Act, a gain from the sale of common shares

5573:

by a non-resident will not be subject to Canadian tax, provided the shareholder

5574:

(and/or persons who do not deal at arm’s length with the shareholder) have not

5575:

held a “substantial interest” in the Company<SPAN

5576:

style="mso-spacerun: yes">  (25% or more of the shares of any class

5577:

of the Company’s stock) at any time in the five years preceding the

5578:

disposition.  Generally, the Tax

5579:

Convention will exempt from Canadian taxation any capital gain realized by a

5580:

resident of the United States, provided that the value of the common shares is

5581:

not derived principally from real property situated in

5582:

Canada.<o:p></o:p>

5583:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5584:

<SPAN

5585:

style="FONT-SIZE: 10pt">Dividend<SPAN

5586:

style="FONT-SIZE: 10pt"><o:p></o:p>

5587:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5588:

In

5589:

the case of any dividends paid to non-residents, the Canadian tax is withheld by

5590:

the Company, which remits only the net amount to the shareholder.<SPAN

5591:

style="mso-spacerun: yes">  By virtue of Article X of the Tax

5592:

Convention, the rate of tax on dividends paid to residents of the United States

5593:

is generally limited to 15% of the gross dividend (or 5% in the case of certain

5594:

corporate shareholders owning at least 10% of the Company’s voting shares).<SPAN

5595:

style="mso-spacerun: yes">   In the absence of the Tax

5596:

Convention provisions, the rate of Canadian withholding tax imposed on

5597:

non-residents is 25% of the gross dividend.<SPAN

5598:

style="mso-spacerun: yes">   <o:p></o:p>

5599:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5600:

<SPAN

5601:

style="FONT-SIZE: 10pt">Stock dividends received by non-residents from the

5602:

Company are taxable by Canada as ordinary dividends and therefore the

5603:

withholding tax rates will be applicable.<o:p></o:p>

5604:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5605:

<SPAN

5606:

style="FONT-SIZE: 10pt">Where a holder disposes of common shares to the

5607:

Company  (unless the Company

5608:

acquired the common shares in the open market in the manner in which shares

5609:

would normally be purchased by any member of the public), this will result in a

5610:

deemed dividend to the U.S. holder equal to the amount by which the

5611:

consideration paid by the Company exceeds the paid-up capital of such

5612:

stock.  The amount of such dividend

5613:

will be subject to withholding tax as described above.<o:p></o:p>

5614:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5615:

<SPAN

5616:

style="FONT-SIZE: 10pt">Capital Gains<SPAN

5617:

style="FONT-SIZE: 10pt"><o:p></o:p>

5618:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5619:

A

5620:

non-resident of Canada is not subject to tax under the ITA in respect of a

5621:

capital gain realized upon the disposition of a share of a class that is listed

5622:

on a prescribed stock exchange unless the share represents “taxable Canadian

5623:

property” to the holder thereof.  A

5624:

common share of the Company will be taxable Canadian property to a non-resident

5625:

holder if, at any time during the period of five years immediately preceding the

5626:

disposition, the non-resident holder, persons with whom the non-resident holder

5627:

did not deal at arm’s length, or the non-resident holder and persons with whom

5628:

he/she did not deal at arm’s length owned 25% or more of the issued shares of

5629:

any class or series of the Company.

5630:

In the case of a non-resident holder to whom shares of the Company

5631:

represent taxable Canadian property and who is resident in the United States, no

5632:

Canadian tax will be payable on a capital gain realized on such shares by reason

5633:

of the Tax <o:p></o:p>

5634:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5635:

<SPAN

5636:

style="FONT-SIZE: 10pt">Convention unless the value of such shares is derived

5637:

principally from real property situated in Canada or the non-resident holder

5638:

previously held the shares while resident in Canada.<SPAN

5639:

style="mso-spacerun: yes">  The Company believes that the value of

5640:

its common shares is derived from real property situated outside

5641:

Canada.<o:p></o:p>

5642:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5643:

<SPAN

5644:

style="FONT-SIZE: 10pt">Certain United States Federal Income Tax

5645:

Consequences<o:p></o:p>

5646:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5647:

The

5648:

following is a discussion of certain possible United States Federal income tax

5649:

consequences, under the law, generally applicable to a U.S. Holder (as defined

5650:

below) of common shares of the Company.

5651:

This discussion does not address all potentially relevant Federal income

5652:

tax matters and it does not address consequences peculiar to persons subject to

5653:

special provisions of Federal income tax law, such as those described below as

5654:

excluded from the definition of a U.S. Holder. In addition, this discussion does

5655:

not cover any state, local or foreign tax consequences.<o:p></o:p>

5656:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5657:

The

5658:

following discussion is based upon the sections of the Internal Revenue Code of

5659:

1986, as amended (“the Code”), Treasury Regulations,<SPAN

5660:

style="mso-spacerun: yes">  published<SPAN

5661:

style="mso-spacerun: yes">  Internal<SPAN

5662:

style="mso-spacerun: yes">  Revenue<SPAN

5663:

style="mso-spacerun: yes">   Service (“IRS”) rulings, published

5664:

administrative positions of the  IRS

5665:

and  court decisions that are

5666:

currently applicable, any or  all of

5667:

which could be materially and adversely changed, possibly on a retroactive

5668:

basis, at any time.  In addition,

5669:

the discussion does not consider the potential effects, both adverse and

5670:

beneficial, of recently proposed legislation which, if enacted, could be

5671:

applied, possibly on a retroactive basis, at any time.<SPAN

5672:

style="mso-spacerun: yes">  The following discussion is for general

5673:

information only and is not intended to be, nor should it be construed to be,

5674:

legal or tax advice to any holder or prospective holder of common shares of the

5675:

Company and no opinion or representation with respect to the United States

5676:

Federal income tax consequences to any such holder or prospective holder is

5677:

made.  Accordingly, holders and

5678:

prospective holders  of common

5679:

shares of  the<SPAN

5680:

style="mso-spacerun: yes">  Company<SPAN

5681:

style="mso-spacerun: yes">  should consult their own tax advisors

5682:

about the federal, state, local, and

5683:

foreign  tax<SPAN

5684:

style="mso-spacerun: yes">  consequences<SPAN

5685:

style="mso-spacerun: yes">  of

5686:

purchasing,  owning<SPAN

5687:

style="mso-spacerun: yes">   and disposing of common shares of

5688:

the Company.<o:p></o:p>

5689:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5690:

<SPAN

5691:

style="FONT-SIZE: 10pt">U.S. Holders<o:p></o:p>

5692:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5693:

As

5694:

used herein, a (“U.S. Holder”) includes a holder of common shares of the Company

5695:

who is a citizen or resident of the United States, a corporation created or

5696:

organized in or under the laws of the United States or of any political

5697:

subdivision thereof and any other person or entity whose ownership of common

5698:

shares of the Company is effectively connected with the conduct of a trade or

5699:

business in the United States.

5700:

A  U.S. Holder<SPAN

5701:

style="mso-spacerun: yes">  does not include persons subject to

5702:

special  provisions of<SPAN

5703:

style="mso-spacerun: yes">  Federal income tax law, such as<SPAN

5704:

style="mso-spacerun: yes">  tax-exempt<SPAN

5705:

style="mso-spacerun: yes">  organizations, qualified<SPAN

5706:

style="mso-spacerun: yes">  retirement plans, financial

5707:

institutions,  insurance companies,

5708:

real estate investment trusts, regulated

5709:

investment companies,

5710:

broker-dealers, non-resident alien

5711:

individuals  or foreign<SPAN

5712:

style="mso-spacerun: yes">  corporations<SPAN

5713:

style="mso-spacerun: yes">  whose ownership of common shares<SPAN

5714:

style="mso-spacerun: yes">  of

5715:

the Company  is<SPAN

5716:

style="mso-spacerun: yes">  not effectively connected with the<SPAN

5717:

style="mso-spacerun: yes">  conduct<SPAN

5718:

style="mso-spacerun: yes">  of

5719:

a trade  or<SPAN

5720:

style="mso-spacerun: yes">  business in the United States and<SPAN

5721:

style="mso-spacerun: yes">  shareholders<SPAN

5722:

style="mso-spacerun: yes">  who acquired <SPAN

5723:

style="mso-spacerun: yes"> their<SPAN

5724:

style="mso-spacerun: yes">  stock through the exercise of<SPAN

5725:

style="mso-spacerun: yes">  employee<SPAN

5726:

style="mso-spacerun: yes">  stock options or otherwise as

5727:

compensation.<o:p></o:p>

5728:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5729:

<SPAN

5730:

style="FONT-SIZE: 10pt">Distributions on Common Shares of the

5731:

Company<o:p></o:p>

5732:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5733:

<SPAN

5734:

style="FONT-SIZE: 10pt">U.S. Holders receiving dividend distributions (including

5735:

constructive dividends) with respect to common shares of

5736:

the<o:p></o:p>

5737:

<SPAN

5738:

style="FONT-SIZE: 10pt">Company are required to include in gross income for

5739:

United States Federal income tax purposes the gross amount of such distributions

5740:

to the extent that the Company has current or accumulated earnings and profits,

5741:

without reduction for any Canadian income tax withheld from such

5742:

distributions.  Such Canadian tax

5743:

withheld may be credited, subject to certain limitations, against the U.S.

5744:

Holder’s United States Federal Income tax liability or, alternatively, may be

5745:

deducted in computing the U.S. Holder’s United States Federal taxable income by

5746:

those who itemize deductions.  (See

5747:

more detailed discussion at “Foreign Tax Credit” below).<SPAN

5748:

style="mso-spacerun: yes">  To the extent that distributions exceed

5749:

current or accumulated earnings and profits of the Company, they will be treated

5750:

first as a return of capital up to the U.S. Holder’s adjusted basis in the

5751:

common shares and thereafter as gain from the sale or exchange of the common

5752:

shares.  Preferential tax rates for

5753:

long-term capital gains are applicable to a U.S. Holder which is an individual,

5754:

estate or trust.  There are

5755:

currently no preferential tax rates for long-term capital gains for a U.S.

5756:

Holder which is a corporation.<o:p></o:p>

5757:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5758:

<SPAN

5759:

style="FONT-SIZE: 10pt">Dividends paid on the common shares of the Company will

5760:

not generally be eligible for the dividends received deduction provided to

5761:

corporations receiving dividends from certain United States corporations.<SPAN

5762:

style="mso-spacerun: yes">   A U.S. Holder which is a

5763:

corporation may, under certain circumstances, be entitled to a 70% deduction of

5764:

the United States source portion of dividends received from the Company (unless

5765:

the Company qualifies as a “foreign personal holding company” or a<SPAN

5766:

style="mso-spacerun: yes">  “passive foreign investment company”, as

5767:

defined below) if such U.S. Holder owns shares representing at least 10% of the

5768:

voting power and value of the Company.

5769:

The availability of this deduction is subject to several complex

5770:

limitations, which are beyond the scope of this

5771:

discussion.<o:p></o:p>

5772:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5773:

<SPAN

5774:

style="FONT-SIZE: 10pt">Foreign Tax Credit<SPAN

5775:

style="FONT-SIZE: 10pt"><o:p></o:p>

5776:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5777:

A

5778:

U.S. Holder who pays (or has withheld from distributions) Canadian income tax

5779:

with respect to the ownership of common shares of the Company may be entitled,

5780:

at the option of the U.S. Holder, to either a deduction or a tax credit for such

5781:

foreign tax paid or withheld.

5782:

Generally, it will be more advantageous to claim a credit because a

5783:

credit reduces United States Federal income taxes on a dollar-for-dollar basis,

5784:

while a deduction merely reduces the taxpayer’s income subject to tax.<SPAN

5785:

style="mso-spacerun: yes">  This election is made on year-by-year

5786:

basis and applies to all foreign income taxes (or taxes in lieu of income tax)

5787:

paid by (or withheld from) the U.S. Holder during the year.<SPAN

5788:

style="mso-spacerun: yes">  <o:p></o:p>

5789:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5790:

<SPAN

5791:

style="FONT-SIZE: 10pt">There are significant and complex limitations which

5792:

apply to the credit, among which is the general limitation that the credit

5793:

cannot exceed the proportionate share of the U.S. Holder’s United States income

5794:

tax liability that the U.S. Holder’s foreign source income bears to his/her or

5795:

its worldwide taxable income.  In

5796:

the determination of the application of this limitation, the various items of

5797:

income and deduction must be classified into foreign and domestic sources.<SPAN

5798:

style="mso-spacerun: yes">  Complex rules govern this classification

5799:

process.  There are further

5800:

limitations on the foreign tax credit for certain types of income such as

5801:

“passive income”, “high withholding tax interest”, “financial services income”,

5802:

“shipping income”, and certain other classifications of income.<SPAN

5803:

style="mso-spacerun: yes">  The availability of the foreign tax

5804:

credit and the application of the limitations on the credit are fact specific

5805:

and holders and prospective holders of common shares of the Company should

5806:

consult their own tax advisors regarding their individual

5807:

circumstances.<o:p></o:p>

5808:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5809:

<SPAN

5810:

style="FONT-SIZE: 10pt">Disposition of Common Shares of the

5811:

Company<o:p></o:p>

5812:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5813:

A

5814:

U.S.  Holder will recognize gain or

5815:

loss upon the sale of common shares of the Company equal to the difference, if

5816:

any, between  (i) the amount of cash

5817:

plus the fair market value of any property received, and (ii) the shareholder’s

5818:

tax basis in the common shares of the Company.<SPAN

5819:

style="mso-spacerun: yes">  This gain or loss will be capital gain

5820:

or loss if the common shares are capital asset in the hands of the U.S. Holder,

5821:

which will be a short-term or long-term capital gain or loss depending upon the

5822:

holding period of the U.S. Holder.

5823:

Gains and losses are netted and combined according to special rules in

5824:

arriving at the overall capital gain or loss for a particular tax year.<SPAN

5825:

style="mso-spacerun: yes">  Deductions for net capital losses are

5826:

subject to significant limitations.

5827:

For U.S. Holders who are individuals, any unused portion of such net

5828:

capital loss may be carried over to be used in later tax years until such net

5829:

capital loss is thereby exhausted.

5830:

For U.S. Holders who are corporations (other than corporations subject to

5831:

Subchapter S of the Code), an unused net capital loss may be carried back three

5832:

years from the loss year and carried forward five years from the loss year to be

5833:

offset against capital gains until such net capital loss is thereby

5834:

exhausted.<o:p></o:p>

5835:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5836:

<SPAN

5837:

style="FONT-SIZE: 10pt">Other considerations<o:p></o:p>

5838:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5839:

In

5840:

the following four circumstances, the above sections of the discussion may not

5841:

describe the United States Federal income tax consequences resulting from the

5842:

holding and disposition of common shares of the Company.<SPAN

5843:

style="mso-spacerun: yes">  However, on the basis of (a) the number

5844:

of shareholders of its common shares, (b) the majority ownership of its shares

5845:

by Canadian residents, and (c) the majority of its assets are actively managed

5846:

(not passively held), the Company believes that its is neither a “Foreign

5847:

Personal Holding Company”, “Foreign Investment Company”, “Passive Foreign

5848:

Investment Company”, nor a “Controlled Foreign

5849:

Corporation”.<o:p></o:p>

5850:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5851:

<SPAN

5852:

style="FONT-SIZE: 10pt">Foreign Personal Holding Company<SPAN

5853:

style="FONT-SIZE: 10pt"><o:p></o:p>

5854:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5855:

If

5856:

at any time during a taxable year more than 50% of the total combined voting

5857:

power or the total value of the Company outstanding shares is owned, actually or

5858:

constructively, by five or fewer individuals who are citizens or residents of

5859:

the United States and 50% or more of the Company’s gross income for such year

5860:

was derived from certain passive sources (e.g. from dividends received from its

5861:

subsidiaries), the Company would be treated as a “foreign personal holding

5862:

company.”  In that event, U.S.

5863:

Holders that hold common shares of the Company would be required to include in

5864:

gross income for such year their allowable portions of such passive income to

5865:

the extent the Company does not actually distribute such

5866:

income.<o:p></o:p>

5867:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5868:

<SPAN

5869:

style="FONT-SIZE: 10pt">Foreign Investment Company<SPAN

5870:

style="FONT-SIZE: 10pt"><o:p></o:p>

5871:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5872:

If

5873:

50% or more of the combined voting power or total value of the Company

5874:

outstanding shares are held, actually or constructively,<SPAN

5875:

style="mso-spacerun: yes">  by citizens or residents of the

5876:

United  States, United States

5877:

domestic partnerships or corporations, or

5878:

estates or  trusts other than

5879:

foreign estates or trusts (as

5880:

defined  by the<SPAN

5881:

style="mso-spacerun: yes">  Code Section 7701(a)(31)), and the

5882:

Company is found  to<SPAN

5883:

style="mso-spacerun: yes">  be engaged primarily in the business of

5884:

investing, reinvesting,  or trading

5885:

in securities, commodities, or any interest therein,<SPAN

5886:

style="mso-spacerun: yes">  it is<SPAN

5887:

style="mso-spacerun: yes">  possible<SPAN

5888:

style="mso-spacerun: yes">  that the Company might be treated<SPAN

5889:

style="mso-spacerun: yes">  as

5890:

a  “foreign investment<SPAN

5891:

style="mso-spacerun: yes">  company”<SPAN

5892:

style="mso-spacerun: yes">  as defined in Section 1246<SPAN

5893:

style="mso-spacerun: yes">  of

5894:

the  Code, causing<SPAN

5895:

style="mso-spacerun: yes">  all<SPAN

5896:

style="mso-spacerun: yes">  or

5897:

part of any gain realized

5898:

by  a<SPAN

5899:

style="mso-spacerun: yes">  U.S.<SPAN

5900:

style="mso-spacerun: yes">  Holder selling or exchanging common

5901:

shares of the Company to be treated as ordinary income rather than capital

5902:

gains.<o:p></o:p>

5903:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5904:

<SPAN

5905:

style="FONT-SIZE: 10pt">Passive Foreign Investment Company<SPAN

5906:

style="FONT-SIZE: 10pt"><o:p></o:p>

5907:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5908:

As

5909:

a foreign corporation with U.S. Holders, the Company could potentially be

5910:

treated as a passive foreign investment company (“PFIC”), as defined in Section

5911:

1297 of the Code, depending upon the percentage of the Company’s income which is

5912:

passive, or the percentage of the Company’s assets which is held for the purpose

5913:

of producing passive income.<o:p></o:p>

5914:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5915:

<SPAN

5916:

style="FONT-SIZE: 10pt">Certain United States income tax legislation contains

5917:

rules governing PFICs, which can have significant tax effects on U.S.

5918:

shareholders of foreign corporations.

5919:

These rules do not apply to non-U.S. shareholders.<SPAN

5920:

style="mso-spacerun: yes">  Section 1297(a) of the Code defines PFIC

5921:

as a corporation that is not formed in the United States and, for any taxable

5922:

year, either (i) 75% or more of its gross income is “passive income”, which

5923:

includes interest, dividends and certain rents and royalties or (ii) the average

5924:

percentage, by fair market value (or, if the company is a controlled foreign

5925:

corporation or makes an election, by adjusted tax basis), of its assets that

5926:

produce or are held for the production of

5927:

“passive income” is 50% or more.

5928:

The taxation of a US shareholder who owns stock in a PFIC is extremely

5929:

complex and is therefore beyond the scope of this discussion.<SPAN

5930:

style="mso-spacerun: yes">  US persons should consult with their own

5931:

tax advisors with regards to the impact of these rules.<o:p></o:p>

5932:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5933:

<SPAN

5934:

style="FONT-SIZE: 10pt">Controlled Foreign Corporation<o:p></o:p>

5935:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5936:

If

5937:

more than 50% of the voting power of all classes of stock or the total value of

5938:

the stock of the Company is owned, directly or indirectly, by citizens or

5939:

residents of the United States, United States domestic partnerships and

5940:

corporations or estates or trusts other than foreign estates or trusts, each of

5941:

whom own 10% or more of the total combined voting power of all classes of stock

5942:

of the Company or the total value of the stock of (“United States shareholder”),

5943:

the Company could be treated as a controlled foreign corporation” under Subpart

5944:

F of the Code.<o:p></o:p>

5945:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5946:

<SPAN

5947:

style="FONT-SIZE: 10pt">This classification would effect many complex results

5948:

including the required inclusion by such United States shareholders in income of

5949:

their pro rata share: of “Subpart F Income” (as specially defined by the Code)

5950:

of the Company; of the Company’s earnings invested in U.S. property; and of

5951:

earnings invested “excess passive assets” (as specifically defined by the Code).

5952:

The Company, In addition, under Section 1248 of the Code, gain from the sale or

5953:

exchange of common shares of the Company by a U.S. person who is or was a United

5954:

States shareholder (as defined in the Code) at any time during the five years

5955:

period ending with the sale or exchange is treated as ordinary dividend income

5956:

to the extent of earnings and profits of the Company attributable to the stock

5957:

sold or exchanged.  Because of the

5958:

complexity of Subpart F, and because it is not clear that the Company is a

5959:

controlled foreign corporation, a more detailed review of these rules is outside

5960:

of the scope of this discussion.<o:p></o:p>

5961:

<B

5962:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5963:

<B

5964:

style="mso-bidi-font-weight: normal">Change in

5965:

Accountants<o:p></o:p>

5966:

<SPAN

5967:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5968:

The

5969:

Company changed accountants effective 11/20/01 from Evancic Perrault Robertson,

5970:

Certified General Accountants to KPMG LLP, Chartered Accountants. There were no

5971:

reportable disagreements between the Company and its former auditor and there

5972:

have been no reservations, adverse or qualified opinions, or denial of opinion

5973:

contained in the former auditor’s reports.

5974:

<o:p></o:p>

5975:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

5976:

The

5977:

resignation of the former auditors and the recommendation to appoint the new

5978:

auditors were considered and approved by the Board of

5979:

Directors.<o:p></o:p>

5980:

<B

5981:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5982:

<B

5983:

style="mso-bidi-font-weight: normal">ITEM 11.

5984:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK<SPAN

5985:

class=msoDel><DEL cite="mailto:srreid"

5986:

datetime="2002-12-03T14:45">S</DEL><SPAN

5987:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><o:p></o:p>

5988:

<SPAN

5989:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

5990:

We

5991:

have operations in Canada, the United States and a number of countries outside

5992:

of the United States and therefore we are subject to risks typical of an

5993:

international business including, but not limited to, differing economic

5994:

conditions, changes in political climate, differing tax structures, other

5995:

regulations and restrictions and foreign exchange rate volatility.<SPAN

5996:

style="mso-spacerun: yes">  Accordingly, our future results could be

5997:

materially adversely affected by changes in these or other

5998:

factors.<o:p></o:p>

5999:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6000:

Our

6001:

capital and mineral exploration expenditures are substantially in U.S. dollars.

6002:

We incur the majority of our administrative expenses in Canadian dollars.<SPAN

6003:

style="mso-spacerun: yes">  We are exposed, in the normal course of

6004:

business, to foreign currency risks on these expenditures. We have evaluated our

6005:

exposure to these risks and have determined that our only significant foreign

6006:

currency exposure at this time is to the U.S. dollar.<SPAN

6007:

style="mso-spacerun: yes">  <o:p></o:p>

6008:

<SPAN

6009:

style="FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-family: 'Times New Roman'"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6010:

The

6011:

Company does not engage in hedging transactions and our gains and losses on

6012:

foreign currency transactions are not significant.<o:p></o:p>

6013:

<P class=MsoNormal

6014:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1355"><SPAN

6015:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><INS cite="mailto:srreid"

6016:

datetime="2002-12-03T13:55"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6017:

<B

6018:

style="mso-bidi-font-weight: normal"><INS

6019:

cite="mailto:srreid" datetime="2002-12-03T13:56">ITEM 12.<SPAN

6020:

style="mso-spacerun: yes">    DESCRIPTION OF SECURITIES

6021:

OTHER THAN DEBT SECURITIES</INS><SPAN

6022:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><INS cite="mailto:srreid"

6023:

datetime="2002-12-03T13:56"><o:p></o:p></INS>

6024:

<P class=MsoNormal

6025:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1356"><SPAN

6026:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><INS cite="mailto:srreid"

6027:

datetime="2002-12-03T13:56"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6028:

<P class=MsoNormal

6029:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: srreid 20021203T1356"><SPAN

6030:

style="FONT-SIZE: 10pt; mso-bidi-font-weight: bold"><INS cite="mailto:srreid"

6031:

datetime="2002-12-03T13:56">Not applicable</INS><SPAN

6032:

style="mso-prop-change: srreid 20021203T1356"><SPAN

6033:

style="mso-prop-change: srreid 20021203T1356"><o:p></o:p>

6034:

<B

6035:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6036:

<B

6037:

style="mso-bidi-font-weight: normal">PART

6038:

II<o:p></o:p>

6039:

<P class=MsoNormal

6040:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1206"><SPAN

6041:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:06"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6042:

<SPAN

6043:

style="FONT-SIZE: 10pt"><INS

6044:

cite="mailto:pdowad" datetime="2002-12-03T12:06"><SPAN

6045:

style="mso-prop-change: pdowad 20021203T1207">ITEM 13.<SPAN

6046:

style="mso-tab-count: 1">    <SPAN

6047:

style="mso-prop-change: pdowad 20021203T1207">DEFAULTS, DIVIDEND ARREARAGES AND

6048:

DELINQUENCIES<SPAN

6049:

style="mso-prop-change: pdowad 20021203T1207"><o:p></o:p></INS>

6050:

<P class=MsoNormal

6051:

style="TEXT-ALIGN: justify; mso-list: none; mso-list-ins: pdowad 20021203T1207"><SPAN

6052:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:07"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6053:

<P class=MsoNormal

6054:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1207"><SPAN

6055:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

6056:

datetime="2002-12-03T12:07">Not applicable</INS><o:p></o:p>

6057:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6058:

<B

6059:

style="mso-bidi-font-weight: normal">ITEM

6060:

14.  MATERIAL MODIFICATIONS TO THE

6061:

RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS<o:p></o:p>

6062:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6063:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6064:

The

6065:

Company has not materially altered the rights of security holders since the last

6066:

annual report.  <SPAN

6067:

class=msoDel><DEL cite="mailto:srreid" datetime="2002-12-03T13:44">A summary of

6068:

the rights of security holders follows.</DEL><o:p></o:p>

6069:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6070:

<SPAN

6071:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

6072:

datetime="2002-12-03T12:07"><DEL cite="mailto:srreid"

6073:

datetime="2002-12-03T13:44">[THIS STUFF BELOW SHOULD – IT SEEMS TO ME – BE IN

6074:

ITEM 10.A]</DEL><INS

6075:

datetime="2002-12-03T12:07"><o:p></o:p></INS></INS>

6076:

<P class=MsoNormal

6077:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1207"><SPAN

6078:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:07"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6079:

<P class=MsoNormal

6080:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1207"><SPAN

6081:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6082:

datetime="2002-12-03T13:40">The authorized capital of the Registrant is

6083:

100,000,000 common shares without par value of which 10,744,218 were issued and

6084:

outstanding at 10/31/02.</DEL><DEL

6085:

cite="mailto:srreid"

6086:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6087:

<SPAN

6088:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6089:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6090:

class=msoDel><DEL cite="mailto:srreid"

6091:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6092:

<SPAN

6093:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6094:

datetime="2002-12-03T13:40">All of the authorized common shares of the

6095:

Registrant are of the same class and, once issued, rank equally as to dividends,

6096:

voting powers, and participation in assets.<SPAN

6097:

style="mso-spacerun: yes">  Holders of common shares are entitled to

6098:

one vote for each share held of record in all matters to be acted upon by the

6099:

shareholders.   Holders of

6100:

common shares are entitled to receive such dividends as may be declared from

6101:

time to time by the Board of Directors, in its discretion, out of funds legally

6102:

available therefore.</DEL><DEL cite="mailto:srreid"

6103:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6104:

<SPAN

6105:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6106:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6107:

class=msoDel><DEL cite="mailto:srreid"

6108:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6109:

<SPAN

6110:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6111:

datetime="2002-12-03T13:40">Upon liquidation, dissolution or winding up of the

6112:

Registrant, holders of common shares are entitled to receive pro rata the assets

6113:

of the Registrant, if any, remaining after payments of all debts and

6114:

liabilities.  No shares have been

6115:

issued subject to call or assessment.

6116:

There are no pre-emptive or conversion rights and no provisions for

6117:

redemption or purchase for cancellation, surrender, or sinking or purchase

6118:

funds.</DEL><DEL cite="mailto:srreid"

6119:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6120:

<SPAN

6121:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6122:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6123:

class=msoDel><DEL cite="mailto:srreid"

6124:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6125:

<SPAN

6126:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6127:

datetime="2002-12-03T13:40">The Company is not aware of any Restrictions or

6128:

limitations on the rights of non-resident or foreign owners to hold, vote, or

6129:

receive remittance on the Registrant's securities, other than those discussed in

6130:

"Exchange Controls and Other Limitations Affecting Security

6131:

Holders".</DEL><DEL cite="mailto:srreid"

6132:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6133:

<SPAN

6134:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6135:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6136:

class=msoDel><DEL cite="mailto:srreid"

6137:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6138:

<SPAN

6139:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6140:

datetime="2002-12-03T13:40">There are no restrictions on the repurchase or

6141:

redemption of common shares of the Registrant while there is any arrearage in

6142:

the payment of dividends or sinking fund installments.</DEL><SPAN

6143:

class=msoDel><DEL cite="mailto:srreid"

6144:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6145:

<SPAN

6146:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6147:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6148:

class=msoDel><DEL cite="mailto:srreid"

6149:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6150:

<SPAN

6151:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6152:

datetime="2002-12-03T13:40">Provisions as to the modification, amendment or

6153:

variation of such shareholder rights or provisions are contained in the

6154:

</DEL><DEL

6155:

cite="mailto:srreid" datetime="2002-12-03T13:40">Company

6156:

Act</DEL><DEL cite="mailto:srreid"

6157:

datetime="2002-12-03T13:40"> of British Columbia.<SPAN

6158:

style="mso-spacerun: yes">  Unless the </DEL><I

6159:

style="mso-bidi-font-style: normal"><DEL cite="mailto:srreid"

6160:

datetime="2002-12-03T13:40">Company Act</DEL><DEL

6161:

cite="mailto:srreid" datetime="2002-12-03T13:40"> or the Registrant's Articles

6162:

or memorandum otherwise provide, any action to be taken by a resolution of the

6163:

members may be taken by an ordinary resolution or by a vote of a majority or

6164:

more of the shares represented at the shareholders' meeting.</DEL><SPAN

6165:

class=msoDel><DEL cite="mailto:srreid"

6166:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6167:

<SPAN

6168:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6169:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6170:

class=msoDel><DEL cite="mailto:srreid"

6171:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6172:

<SPAN

6173:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6174:

datetime="2002-12-03T13:40">The Registrant's Articles and the </DEL><I

6175:

style="mso-bidi-font-style: normal"><DEL cite="mailto:srreid"

6176:

datetime="2002-12-03T13:40">B.C. Company Act </DEL><SPAN

6177:

class=msoDel><DEL cite="mailto:srreid" datetime="2002-12-03T13:40">contain

6178:

provisions, which require a "special resolution" for effecting certain corporate

6179:

actions.  Such a "special

6180:

resolution" requires a three-quarters vote of shareholders rather than a simple

6181:

majority for passage.  The principle

6182:

corporate actions that require a "special resolution" include:</DEL><SPAN

6183:

class=msoDel><DEL cite="mailto:srreid"

6184:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6185:

<SPAN

6186:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6187:

datetime="2002-12-03T13:40"><![if !supportEmptyParas]> <![endif]></DEL><SPAN

6188:

class=msoDel><DEL cite="mailto:srreid"

6189:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6190:

<SPAN

6191:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6192:

datetime="2002-12-03T13:40">a.

6193:

Transferring Company's jurisdiction from British

6194:

Columbia</DEL><DEL cite="mailto:srreid"

6195:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6196:

<SPAN

6197:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6198:

datetime="2002-12-03T13:40">    to another

6199:

jurisdiction;</DEL><DEL cite="mailto:srreid"

6200:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6201:

<SPAN

6202:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6203:

datetime="2002-12-03T13:40">b.

6204:

Giving material financial assistance to executive

6205:

officers</DEL><DEL cite="mailto:srreid"

6206:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6207:

<SPAN

6208:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6209:

datetime="2002-12-03T13:40">

6210:

and/or directors;</DEL><DEL

6211:

cite="mailto:srreid"

6212:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6213:

<SPAN

6214:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6215:

datetime="2002-12-03T13:40">c.

6216:

Material conflicts of interest by Directors;</DEL><SPAN

6217:

class=msoDel><DEL cite="mailto:srreid"

6218:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6219:

<SPAN

6220:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6221:

datetime="2002-12-03T13:40">d.

6222:

Disposing of all or substantially all of the Company's</DEL><SPAN

6223:

class=msoDel><DEL cite="mailto:srreid"

6224:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6225:

<SPAN

6226:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6227:

datetime="2002-12-03T13:40">

6228:

undertakings;</DEL><DEL cite="mailto:srreid"

6229:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6230:

<SPAN

6231:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6232:

datetime="2002-12-03T13:40">e.

6233:

Removing a Director before the expiration of his term

6234:

of</DEL><DEL cite="mailto:srreid"

6235:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6236:

<SPAN

6237:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6238:

datetime="2002-12-03T13:40">

6239:

office;</DEL><DEL cite="mailto:srreid"

6240:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6241:

<SPAN

6242:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6243:

datetime="2002-12-03T13:40">f.

6244:

Certain alterations of share capital;</DEL><DEL

6245:

cite="mailto:srreid"

6246:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6247:

<SPAN

6248:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6249:

datetime="2002-12-03T13:40">

6250:

(1) increasing the number of authorized shares;</DEL><SPAN

6251:

class=msoDel><DEL cite="mailto:srreid"

6252:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6253:

<SPAN

6254:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6255:

datetime="2002-12-03T13:40">

6256:

(2) subdivision, consolidation and/or changes in

6257:

shares;</DEL><DEL cite="mailto:srreid"

6258:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6259:

<SPAN

6260:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6261:

datetime="2002-12-03T13:40">

6262:

(3) reduction in capital</DEL><DEL

6263:

cite="mailto:srreid"

6264:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6265:

<SPAN

6266:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6267:

datetime="2002-12-03T13:40">g.

6268:

Changing the Company name;</DEL><DEL

6269:

cite="mailto:srreid"

6270:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6271:

<SPAN

6272:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6273:

datetime="2002-12-03T13:40">h.

6274:

Altering any restrictions on the Company's business;

6275:

and</DEL><DEL cite="mailto:srreid"

6276:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6277:

<SPAN

6278:

style="FONT-SIZE: 10pt"><DEL cite="mailto:srreid"

6279:

datetime="2002-12-03T13:40">i.

6280:

Amalgamations with another company.</DEL><DEL

6281:

cite="mailto:srreid"

6282:

datetime="2002-12-03T13:40"><o:p></o:p></DEL>

6283:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6284:

<B

6285:

style="mso-bidi-font-weight: normal">PART

6286:

III<o:p></o:p>

6287:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6288:

<B

6289:

style="mso-bidi-font-weight: normal">ITEM

6290:

17.  FINANCIAL

6291:

STATEMENTS<o:p></o:p>

6292:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6293:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6294:

The

6295:

Company's financial statements are stated in Canadian Dollars (CDN$)

6296:

and are prepared in accordance with Canadian Generally Accepted Accounting

6297:

Principles (GAAP), the application of which, in the case of the Company,

6298:

conforms in all material respects for the periods presented with US  GAAP,

6299:

except as disclosed in footnotes to the financial

6300:

statements.<o:p></o:p>

6301:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6302:

The

6303:

audited financial statements for the year ended May 31, 2002 as required under

6304:

ITEM #17 are included hereto immediately following the text of this annual

6305:

report. The audit report of KPMG LLP, Independent Auditors, are included herein

6306:

immediately preceding the financial statements.<INS cite="mailto:pdowad"

6307:

datetime="2002-12-03T12:08"><o:p></o:p></INS>

6308:

<P class=MsoNormal

6309:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1208"><SPAN

6310:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:08"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6311:

<P class=MsoNormal

6312:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1208"><SPAN

6313:

style="FONT-SIZE: 10pt"><INS

6314:

cite="mailto:pdowad" datetime="2002-12-03T12:08"><SPAN

6315:

style="mso-prop-change: pdowad 20021203T1208">I<SPAN

6316:

style="mso-prop-change: pdowad 20021203T1208">TEM 18.<SPAN

6317:

style="mso-tab-count: 1">    <SPAN

6318:

style="mso-prop-change: pdowad 20021203T1208">FINANCIAL STATEMENTS<SPAN

6319:

style="mso-prop-change: pdowad 20021203T1208"><o:p></o:p></INS>

6320:

<P class=MsoNormal

6321:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1208"><SPAN

6322:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad" datetime="2002-12-03T12:08"><![if !supportEmptyParas]> <![endif]><o:p></o:p></INS>

6323:

<P class=MsoNormal

6324:

style="TEXT-INDENT: 0in; TEXT-ALIGN: justify; mso-text-indent-alt: 0in; mso-list: none; mso-list-ins: pdowad 20021203T1208"><SPAN

6325:

style="FONT-SIZE: 10pt"><INS cite="mailto:pdowad"

6326:

datetime="2002-12-03T12:08">Not applicable.<SPAN

6327:

style="mso-spacerun: yes">  The Company has elected to file under

6328:

Item 17.</INS><o:p></o:p>

6329:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6330:

<B

6331:

style="mso-bidi-font-weight: normal">ITEM

6332:

19.

6333:

EXHIBITS<o:p></o:p>

6334:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6335:

<B

6336:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6337:

<B

6338:

style="mso-bidi-font-weight: normal">(A)

6339:

Audited Financial Statements<o:p></o:p>

6340:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6341:

<P class=MsoNormal

6342:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l2 level1 lfo11; mso-list-change: \F0D8 pdowad 20021203T1127"><![if !supportLists]><SPAN

6343:

style="FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">Ø<SPAN

6344:

style="FONT: 7pt 'Times New Roman'">      

6345:

<![endif]>Auditor's Report, dated

6346:

October 18, 2002<o:p></o:p>

6347:

<P class=MsoNormal

6348:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l22 level1 lfo12; mso-list-change: \F0D8 pdowad 20021203T1127"><![if !supportLists]><SPAN

6349:

style="FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">Ø<SPAN

6350:

style="FONT: 7pt 'Times New Roman'">      

6351:

<![endif]><INS cite="mailto:pdowad"

6352:

datetime="2002-12-03T12:09">C</INS><DEL cite="mailto:pdowad"

6353:

datetime="2002-12-03T12:09">B</DEL><INS cite="mailto:pdowad"

6354:

datetime="2002-12-03T12:09">onsolidated B</INS>alance Sheets at May 31, 2002 and

6355:

2001 <o:p></o:p>

6356:

<P class=MsoNormal

6357:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l8 level1 lfo13; mso-list-change: \F0D8 pdowad 20021203T1127"><![if !supportLists]><SPAN

6358:

style="FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">Ø<SPAN

6359:

style="FONT: 7pt 'Times New Roman'">      

6360:

<![endif]><INS cite="mailto:pdowad"

6361:

datetime="2002-12-03T12:09">Consolidated </INS>Statements of Operations and

6362:

Deficit<o:p></o:p>

6363:

<SPAN

6364:

style="FONT-SIZE: 10pt">   for

6365:

the Year<INS cite="mailto:pdowad" datetime="2002-12-03T12:09">s</INS> ended May

6366:

31, 2002, 2001 and 2000<o:p></o:p>

6367:

<P class=MsoNormal

6368:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l12 level1 lfo14; mso-list-change: \F0D8 pdowad 20021203T1127"><![if !supportLists]><SPAN

6369:

style="FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">Ø<SPAN

6370:

style="FONT: 7pt 'Times New Roman'">      

6371:

<![endif]><INS cite="mailto:pdowad"

6372:

datetime="2002-12-03T12:10">Consolidated </INS>Statements of <SPAN

6373:

class=msoDel><DEL cite="mailto:pdowad" datetime="2002-12-03T12:09">Changes in

6374:

</DEL>Cash Flows<o:p></o:p>

6375:

<SPAN

6376:

style="FONT-SIZE: 10pt">   for

6377:

the Years ended May 31, 2002, 2001 and 2000<o:p></o:p>

6378:

<P class=MsoNormal

6379:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; TEXT-ALIGN: justify; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l27 level1 lfo15; mso-list-change: \F0D8 pdowad 20021203T1127"><![if !supportLists]><SPAN

6380:

style="FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">Ø<SPAN

6381:

style="FONT: 7pt 'Times New Roman'">      

6382:

<![endif]>Notes to <SPAN

6383:

class=msoDel><DEL cite="mailto:pdowad" datetime="2002-12-03T12:10">the

6384:

</DEL><INS cite="mailto:pdowad" datetime="2002-12-03T12:10">Consolidated

6385:

</INS>Financial Statements<o:p></o:p>

6386:

<B

6387:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6388:

<B

6389:

style="mso-bidi-font-weight: normal">(B)<SPAN

6390:

style="mso-spacerun: yes">  Additions to

6391:

exhibits<o:p></o:p>

6392:

<SPAN

6393:

style="FONT-SIZE: 10pt"><SPAN

6394:

style="mso-spacerun: yes">                                                            

6395:

<o:p></o:p>

6396:

<SPAN

6397:

style="FONT-SIZE: 10pt">     1.<SPAN

6398:

style="mso-spacerun: yes">  Certificate of Incorporation, Name

6399:

Changes<o:p></o:p>

6400:

<SPAN

6401:

style="FONT-SIZE: 10pt"><SPAN

6402:

style="mso-spacerun: yes">        

6403:

and Articles/By-Laws of the Company.<o:p></o:p>

6404:

--

6405:

Included by reference of 20F Registration Statement Amendment #2

6406:

--<o:p></o:p>

6407:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6408:

<SPAN

6409:

style="FONT-SIZE: 10pt">

6410:

2.  Instruments defining the

6411:

rights of holders<o:p></o:p>

6412:

<SPAN

6413:

style="FONT-SIZE: 10pt"><SPAN

6414:

style="mso-spacerun: yes">        

6415:

of equity or debt securities being registered.<o:p></o:p>

6416:

--

6417:

Included by reference of 20F Registration Statement Amendment #2

6418:

--<o:p></o:p>

6419:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6420:

<SPAN

6421:

style="FONT-SIZE: 10pt">

6422:

3.  Other

6423:

Exhibits:<o:p></o:p>

6424:

<P class=MsoNormal

6425:

style="MARGIN-LEFT: 83.25pt; TEXT-INDENT: -83.25pt; TEXT-ALIGN: justify; tab-stops: list 83.25pt; mso-text-indent-alt: -21.0pt; mso-list: l25 level1 lfo3; mso-list-change: '%1\:1\:4\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6426:

style="FONT-SIZE: 10pt">a.<SPAN

6427:

style="FONT: 7pt 'Times New Roman'">     

6428:

<![endif]>Notice/Information

6429:

Circular for Annual General Meetings<o:p></o:p>

6430:

<SPAN

6431:

style="FONT-SIZE: 10pt">   held

6432:

November 14, 2002 -- Included by reference Form 6K --<o:p></o:p>

6433:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6434:

<![if !supportEmptyParas]><![endif]> <o:p></o:p><SPAN

6435:

6436:

style="PAGE-BREAK-BEFORE: always; mso-special-character: line-break"

6437:

clear=all>

6438:

<![if !supportEmptyParas]><![endif]> <SPAN

6439:

style="FONT-SIZE: 10pt"><o:p></o:p>

6440:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6441:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6442:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6443:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6444:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6445:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6446:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6447:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6448:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6449:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6450:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6451:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6452:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6453:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6454:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6455:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6456:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6457:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6458:

SIGNATURE PAGE

6459:

<SPAN

6460:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6461:

<SPAN

6462:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6463:

<SPAN

6464:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6465:

<SPAN

6466:

style="FONT-SIZE: 10pt">Pursuant to the requirements of section 12g of the

6467:

Securities Exchange Act of 1934, the Registrant certifies that it meets all of

6468:

the requirements for filing on Form 20-F and has duly caused this Annual Report

6469:

to its Registration Statement to be signed on its behalf by the undersigned,

6470:

thereunto duly authorized.<o:p></o:p>

6471:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6472:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6473:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6474:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6475:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6476:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6477:

<SPAN

6478:

style="FONT-SIZE: 10pt">Calais Resources Inc.: SEC File No.

6479:

0-29392<o:p></o:p>

6480:

<SPAN

6481:

style="FONT-SIZE: 10pt">Registrant<o:p></o:p>

6482:

<SPAN

6483:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6484:

<SPAN

6485:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6486:

<SPAN

6487:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6488:

<SPAN

6489:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6490:

<SPAN

6491:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6492:

<SPAN

6493:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6494:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6495:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6496:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6497:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6498:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6499:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6500:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6501:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6502:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6503:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6504:

<SPAN

6505:

style="FONT-SIZE: 10pt">Dated NOVEMBER 22 ,2002 <SPAN

6506:

style="mso-spacerun: yes"> <SPAN

6507:

style="mso-tab-count: 2">          

6508:

By   “ART DAHER”

6509:

<SPAN

6510:

style="mso-spacerun: yes">  <SPAN

6511:

style="mso-tab-count: 1">    <o:p></o:p>

6512:

<SPAN

6513:

style="FONT-SIZE: 9pt; mso-bidi-font-size: 10.0pt"><SPAN

6514:

style="mso-tab-count: 4">                          

6515:

<SPAN

6516:

style="mso-tab-count: 1">   <SPAN

6517:

style="mso-spacerun: yes">  <SPAN

6518:

style="mso-tab-count: 1">     <SPAN

6519:

style="mso-spacerun: yes">   Art Daher,

6520:

Secretary/Director<o:p></o:p>

6521:

<B

6522:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6523:

<B

6524:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6525:

<B

6526:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6527:

<B

6528:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6529:

<B

6530:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6531:

<B

6532:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6533:

<B

6534:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6535:

<B

6536:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6537:

<B

6538:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6539:

<SPAN

6540:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p><B

6541:

style="mso-bidi-font-weight: normal"><SPAN

6542:

6543:

style="PAGE-BREAK-BEFORE: always; mso-special-character: line-break"

6544:

clear=all>

6545:

<![if !supportEmptyParas]><![endif]> <B

6546:

style="mso-bidi-font-weight: normal"><SPAN

6547:

style="FONT-SIZE: 10pt"><o:p></o:p>

6548:

<B

6549:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6550:

<B

6551:

style="mso-bidi-font-weight: normal"><SPAN

6552:

style="FONT-SIZE: 10pt">CERTIFICATIONS<o:p></o:p>

6553:

<B

6554:

style="mso-bidi-font-weight: normal"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6555:

<SPAN

6556:

style="FONT-SIZE: 10pt"><![if !supportEmptyParas]><![endif]> <o:p></o:p>

6557:

I, CERTIFY

6558:

THAT:<o:p></o:p>

6559:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6560:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6561:

<P class=MsoList

6562:

style="TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:1\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6563:

style="FONT-SIZE: 10pt">1.<SPAN

6564:

style="FONT: 7pt 'Times New Roman'">   

6565:

<![endif]>I HAVE REVIEWED THIS

6566:

ANNUAL REPORT ON Form 20-F of Calais Resources Inc.<o:p></o:p>

6567:

<P class=MsoNormal

6568:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:2\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6569:

style="FONT-SIZE: 10pt">2.<SPAN

6570:

style="FONT: 7pt 'Times New Roman'">   

6571:

<![endif]>Based on my knowledge,

6572:

this annual report does not contain any untrue statement of a material fact or

6573:

omit to state a material fact necessary to make the statements made, in light of

6574:

the circumstances under which such statements were made, not misleading with

6575:

respect to the period covered by this annual report; and<o:p></o:p>

6576:

<P class=MsoNormal

6577:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:3\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6578:

style="FONT-SIZE: 10pt">3.<SPAN

6579:

style="FONT: 7pt 'Times New Roman'">   

6580:

<![endif]>Based on my knowledge, the

6581:

financial statements, and other financial information included in this annual

6582:

report, fairly present in all material respects the financial condition, results

6583:

of operations and cash flows of the registrant as of, and for, the periods

6584:

presented in this annual report.<o:p></o:p>

6585:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6586:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6587:

Date: November 22, 2002<SPAN

6588:

style="mso-tab-count: 2">      

6589:

/s/_”MELVIN MARTIN”________________<o:p></o:p>

6590:

<SPAN

6591:

style="mso-tab-count: 6">                                   

6592:

MELVIN MARTIN / Director<o:p></o:p>

6593:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6594:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6595:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6596:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6597:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6598:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6599:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6600:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6601:

I, CERTIFY

6602:

THAT:<o:p></o:p>

6603:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6604:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6605:

<P class=MsoList

6606:

style="TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:4\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6607:

style="FONT-SIZE: 10pt">4.<SPAN

6608:

style="FONT: 7pt 'Times New Roman'">   

6609:

<![endif]>I HAVE REVIEWED THIS

6610:

ANNUAL REPORT ON Form 20-F of Calais Resources Inc.<o:p></o:p>

6611:

<P class=MsoNormal

6612:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:5\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6613:

style="FONT-SIZE: 10pt">5.<SPAN

6614:

style="FONT: 7pt 'Times New Roman'">   

6615:

<![endif]>Based on my knowledge,

6616:

this annual report does not contain any untrue statement of a material fact or

6617:

omit to state a material fact necessary to make the statements made, in light of

6618:

the circumstances under which such statements were made, not misleading with

6619:

respect to the period covered by this annual report; and<o:p></o:p>

6620:

<P class=MsoNormal

6621:

style="MARGIN-LEFT: 0.25in; TEXT-INDENT: -0.25in; tab-stops: list .25in; mso-text-indent-alt: -.25in; mso-list: l19 level1 lfo7; mso-list-change: '%1\:6\:0\:\.' pdowad 20021203T1127"><![if !supportLists]><SPAN

6622:

style="FONT-SIZE: 10pt">6.<SPAN

6623:

style="FONT: 7pt 'Times New Roman'">   

6624:

<![endif]>Based on my knowledge, the

6625:

financial statements, and other financial information included in this annual

6626:

report, fairly present in all material respects the financial condition, results

6627:

of operations and cash flows of the registrant as of, and for, the periods

6628:

presented in this annual report.<o:p></o:p>

6629:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6630:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6631:

Date: November 22, 2002<SPAN

6632:

style="mso-tab-count: 2">       /s/_”ART

6633:

DAHER”____________<o:p></o:p>

6634:

<SPAN

6635:

style="mso-tab-count: 6">                                   

6636:

ART DAHER / Secretary/Director<o:p></o:p>

6637:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6638:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6639:

<![if !supportEmptyParas]><![endif]> <o:p></o:p>

6640:

6641:

class=MsoNormal><![if !supportEmptyParas]><![endif]> <o:p></o:p></DIV></BODY></HTML>

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"urn:schemas-microsoft-com:office:excel"><HEAD>

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15:

16:

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<o:DocumentProperties>

21:

<o:Author>Laurie Rempel</o:Author>

22:

<o:LastAuthor>Laurie Rempel</o:LastAuthor>

23:

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<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Consolidated<SPAN

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style="mso-spacerun: yes">  Financial Statements of</TD>

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<TD class=xl38 style="mso-ignore: colspan" colSpan=3>CALAIS RESOURCES

622:

INC.</TD>

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<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Years ended May 31,

637:

2002 and 2001</TD>

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<TD class=xl37>(In Canadian dollars)</TD>

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<TD class=xl40 style="HEIGHT: 18.75pt" colSpan=6 height=25>MANAGEMENT’S

828:

STATEMENT OF RESPONSIBILITY</TD>

829:

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<TD class=xl39 style="HEIGHT: 64.5pt" colSpan=6 height=86>Management is

847:

responsible for the preparation of the accompanying consolidated financial

848:

statements and for their integrity and objectivity.<SPAN

849:

style="mso-spacerun: yes">  The consolidated statements have

850:

been prepared in accordance with Canadian generally accepted accounting

851:

principles and are considered by management to present fairly the

852:

financial position and operating results of the Company.<SPAN

853:

style="mso-spacerun: yes">  The significant accounting

854:

policies followed are described in the notes to the consolidated financial

855:

statements.</TD>

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864:

<TD class=xl39 style="HEIGHT: 52.5pt" colSpan=6 height=70>Management has

865:

established internal control systems to provide reliable accounting

866:

records and safeguard Company assets.<SPAN

867:

style="mso-spacerun: yes">  The consolidated financial

868:

statements have been audited by the independent auditors KPMG LLP,

869:

Chartered Accountants, whose report outlines the scope of their

870:

examination and their opinion on the consolidated financial statements.</TD>

871:

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873:

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875:

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879:

<TD class=xl39 style="HEIGHT: 25.5pt" colSpan=6 height=34>The auditors

880:

have full rights to meet separately with the Audit Committee to discuss

881:

the results of their examination and their opinions on the adequacy of

882:

internal controls and the quality of financial reporting.</TD>

883:

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890:

891:

<TD class=xl39 style="HEIGHT: 26.25pt" colSpan=6 height=35>The Audit

892:

Committee of the Company reports their finding to the Board of Directors

893:

for its consideration in approving the financial statements for

894:

issuance.</TD>

895:

896:

897:

898:

899:

900:

901:

902:

903:

904:

905:

906:

907:

908:

909:

910:

911:

912:

913:

914:

915:

916:

917:

918:

<TD class=xl58>"signed by Art Daher"</TD>

919:

920:

921:

922:

923:

<TD class=xl39 style="HEIGHT: 12.75pt" colSpan=2 height=17>Calais

924:

Resources Inc.</TD>

925:

926:

927:

928:

929:

<TD class=xl39 style="HEIGHT: 12.75pt" colSpan=2 height=17>Chilliwack,

930:

BC</TD>

931:

932:

933:

934:

935:

936:

937:

938:

939:

940:

941:

942:

943:

944:

945:

<TD class=xl44 style="HEIGHT: 12.75pt" colSpan=2 height=17

946:

x:num="37547">October 18, 2002</TD>

947:

948:

949:

950:

951:

952:

953:

954:

955:

956:

957:

958:

959:

960:

961:

962:

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964:

965:

966:

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968:

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971:

972:

973:

974:

975:

976:

977:

978:

979:

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981:

982:

983:

984:

985:

986:

987:

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989:

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998:

999:

1000:

1001:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1002:

height=17></TD>

1003:

1004:

1005:

1006:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1007:

height=17></TD>

1008:

1009:

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<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1012:

height=17></TD>

1013:

1014:

1015:

1016:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1017:

height=17></TD>

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1019:

1020:

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<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1022:

height=17></TD>

1023:

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1025:

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1032:

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1038:

1039:

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1047:

1048:

1049:

1050:

1051:

<TD class=xl40 style="HEIGHT: 17.25pt" colSpan=6 height=23>AUDITORS'

1052:

REPORT TO THE DIRECTORS</TD>

1053:

1054:

1055:

1056:

1057:

1058:

<TD class=xl39 style="HEIGHT: 90.75pt" colSpan=6 height=121>We have

1059:

audited the consolidated balance sheet of Calais Resources Inc. as at May

1060:

31, 2002 and the consolidated statements of operations and deficit and

1061:

cash flows for the year then ended.

1062:

These financial statements are the responsibility of the Company's

1063:

management.  Our

1064:

responsibility is to express an opinion on these<SPAN

1065:

style="mso-spacerun: yes">  financial statements based on our

1066:

audit.  The consolidated

1067:

financial statements as at May 31, 2001 and for the years ended May 31,

1068:

2001 and 2000 were audited by another auditor, who expressed an opinion

1069:

without reservation on those statements in their report, dated October 17,

1070:

2001, except as to Note 5 which was as of November 21, 2001.</TD>

1071:

1072:

1073:

<TD class=xl39 style="HEIGHT: 96.75pt" colSpan=6 height=129>With respect

1074:

to the consolidated financial statements for the year ended May 31, 2002,

1075:

we conducted our audit in accordance with Canadian generally accepted

1076:

auditing standards and United States generally accepted auditing

1077:

standards.  Those standards

1078:

require that we plan and perform an audit to obtain reasonable assurance

1079:

whether the financial statements are free of material misstatement.<SPAN

1080:

style="mso-spacerun: yes">  An audit includes examining, on a

1081:

test basis, evidence supporting the amounts and disclosures in the

1082:

financial statements.  An

1083:

audit also includes assessing the accounting principles used and

1084:

significant estimates made by management, as well as evaluating the

1085:

overall financial statement presentation.</TD>

1086:

1087:

1088:

<TD class=xl39 style="HEIGHT: 83.25pt" colSpan=6 height=111>In our

1089:

opinion, these consolidated financial statements present fairly, in all

1090:

material respects, the financial position of the Company as at May 31,

1091:

2002 and the results of its operations and its cash flows for the year

1092:

then ended in accordance with Canadian generally accepted accounting

1093:

principles.  As required by

1094:

the Company Act (British Columbia), we report that in our opinion these

1095:

principles have been applied, after giving retroactive effect to the

1096:

change in accounting for net loss per share explained in Note 2(j) to the

1097:

financial statements, on a consistent basis.</TD>

1098:

1099:

1100:

1101:

1102:

1103:

1104:

<TD class=xl57>"signed KPMG LLP"</TD>

1105:

1106:

1107:

1108:

1109:

<TD class=xl39 style="HEIGHT: 12.75pt" colSpan=6 height=17>Chartered

1110:

Accountants</TD>

1111:

1112:

1113:

1114:

1115:

1116:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1117:

height=17>Chilliwack, Canada</TD>

1118:

1119:

1120:

1121:

1122:

1123:

1124:

1125:

1126:

1127:

<TD class=xl44 style="HEIGHT: 12.75pt" colSpan=2 height=17

1128:

x:num="37547">October 18, 2002</TD>

1129:

1130:

1131:

1132:

1133:

1134:

1135:

1136:

1137:

1138:

1139:

1140:

1141:

1142:

1143:

1144:

1145:

1146:

1147:

1148:

1149:

1150:

1151:

1152:

1153:

1154:

1155:

1156:

1157:

1158:

1159:

1160:

1161:

1162:

1163:

1164:

1165:

1166:

1167:

1168:

1169:

1170:

1171:

1172:

1173:

1174:

1175:

1176:

1177:

1178:

1179:

1180:

1181:

1182:

1183:

1184:

1185:

1186:

1187:

1188:

1189:

1190:

1191:

1192:

1193:

1194:

1195:

1196:

1197:

1198:

1199:

1200:

1201:

1202:

1203:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1204:

height=17></TD>

1205:

1206:

1207:

1208:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1209:

height=17></TD>

1210:

1211:

1212:

1213:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1214:

height=17></TD>

1215:

1216:

1217:

1218:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1219:

height=17></TD>

1220:

1221:

1222:

1223:

<TD class=xl39 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1224:

height=17></TD>

1225:

1226:

1227:

1228:

1229:

1230:

1231:

1232:

1233:

1234:

1235:

1236:

1237:

1238:

1239:

1240:

1241:

1242:

1243:

<TD class=xl40 style="HEIGHT: 34.5pt" colSpan=6 height=46>COMMENTS BY

1244:

AUDITOR FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE</TD>

1245:

1246:

1247:

<TD class=xl39 style="HEIGHT: 101.25pt" colSpan=6 height=135>In the United

1248:

States, reporting standards require the addition of an explanatory

1249:

paragraph (following the opinion paragraph) when the financial statements

1250:

are affected by conditions and events that cast substantial doubt on the

1251:

Company's ability to continue as a going concern, such as those described

1252:

in note 1 to the consolidated financial statements.<SPAN

1253:

style="mso-spacerun: yes">  Our report to the directors dated

1254:

October 18, 2002 is expressed in accordance with Canadian reporting

1255:

standards which does not permit a reference to such events and conditions

1256:

in the auditors' report when these are adequately disclosed in the

1257:

financial statements.</TD>

1258:

1259:

1260:

1261:

<TD class=xl57>"signed by KPMG LLP"</TD>

1262:

1263:

1264:

1265:

1266:

<TD class=xl39 style="HEIGHT: 12.75pt" colSpan=6 height=17>Chartered

1267:

Accountants</TD>

1268:

1269:

1270:

1271:

1272:

1273:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1274:

height=17>Chilliwack, Canada</TD>

1275:

1276:

1277:

1278:

1279:

1280:

1281:

1282:

<TD class=xl44 style="HEIGHT: 12.75pt" colSpan=2 height=17

1283:

x:num="37547">October 18, 2002</TD>

1284:

1285:

1286:

1287:

1288:

1289:

1290:

1291:

1292:

1293:

1294:

1295:

1296:

1297:

1298:

1299:

1300:

1301:

1302:

1303:

1304:

1305:

1306:

1307:

1308:

1309:

1310:

1311:

1312:

1313:

1314:

1315:

1316:

1317:

1318:

1319:

1320:

1321:

1322:

1323:

1324:

1325:

1326:

1327:

1328:

1329:

1330:

1331:

1332:

1333:

1334:

1335:

1336:

1337:

1338:

1339:

1340:

1341:

1342:

1343:

1344:

1345:

1346:

1347:

1348:

1349:

1350:

1351:

1352:

1353:

1354:

1355:

1356:

1357:

1358:

1359:

1360:

1361:

<TD class=xl27 style="HEIGHT: 23.25pt; mso-ignore: colspan" colSpan=3

1362:

height=31>CALAIS RESOURCES INC.</TD>

1363:

1364:

1365:

1366:

1367:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1368:

height=17>Consolidated Balance Sheets</TD>

1369:

1370:

1371:

1372:

1373:

1374:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1375:

height=17>Expressed in Canadian Dollars</TD>

1376:

1377:

1378:

1379:

1380:

1381:

1382:

1383:

1384:

1385:

1386:

1387:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1388:

height=17>May 31, 2002 and 2001</TD>

1389:

1390:

1391:

1392:

1393:

1394:

1395:

1396:

1397:

1398:

1399:

1400:

1401:

1402:

1403:

1404:

1405:

1406:

1407:

1408:

<TD class=xl28 style="HEIGHT: 20.25pt; mso-ignore: colspan" colSpan=2

1409:

height=27>Assets</TD>

1410:

1411:

1412:

1413:

1414:

1415:

1416:

1417:

1418:

1419:

1420:

1421:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1422:

height=17>Current assets:</TD>

1423:

1424:

1425:

1426:

1427:

1428:

1429:

1430:

1431:

<TD class=xl31 x:num="0"><SPAN

1432:

style="mso-spacerun: yes"> $<SPAN

1433:

style="mso-spacerun: yes">                 

1434:

- </TD>

1435:

<TD class=xl31 x:num="632"><SPAN

1436:

style="mso-spacerun: yes"> $<SPAN

1437:

style="mso-spacerun: yes">              

1438:

632 </TD>

1439:

1440:

1441:

1442:

<TD class=xl25 x:str="Restricted cash (Note 5) ">Restricted cash (Note 5)

1443:

</TD>

1444:

1445:

1446:

1447:

1448:

1449:

1450:

<TD class=xl25 x:str="Advances receivable ">Advances receivable </TD>

1451:

1452:

1453:

1454:

1455:

1456:

1457:

<TD class=xl25>Other receivables</TD>

1458:

1459:

1460:

1461:

1462:

1463:

1464:

<TD class=xl25 x:str="Inventories ">Inventories </TD>

1465:

1466:

1467:

1468:

1469:

1470:

1471:

<TD class=xl131>Prepaid expenses and deposits</TD>

1472:

1473:

1474:

1475:

1476:

1477:

1478:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1479:

height=17></TD>

1480:

1481:

1482:

1483:

1484:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1485:

height=17>Capital assets (Note 3)</TD>

1486:

1487:

1488:

1489:

1490:

1491:

1492:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1493:

height=17>Mineral properties (Note 4)</TD>

1494:

1495:

1496:

1497:

1498:

1499:

1500:

1501:

1502:

1503:

1504:

1505:

1506:

1507:

1508:

1509:

1510:

<TD class=xl35 x:num="13166041"><SPAN

1511:

style="mso-spacerun: yes"> $<SPAN

1512:

style="mso-spacerun: yes">   13,166,041 </TD>

1513:

<TD class=xl35 x:num="12787777"><SPAN

1514:

style="mso-spacerun: yes"> $<SPAN

1515:

style="mso-spacerun: yes">    12,787,777 </TD>

1516:

1517:

1518:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1519:

height=17></TD>

1520:

1521:

1522:

1523:

<TD class=xl28 style="HEIGHT: 20.25pt; mso-ignore: colspan" colSpan=4

1524:

height=27>Liabilities and Shareholders' Equity</TD>

1525:

1526:

1527:

1528:

1529:

1530:

1531:

1532:

1533:

1534:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1535:

height=17>Current liabilities:</TD>

1536:

1537:

1538:

1539:

1540:

1541:

1542:

<TD class=xl25 x:str="Bank overdraft ">Bank overdraft </TD>

1543:

1544:

<TD class=xl31 x:num="9399"><SPAN

1545:

style="mso-spacerun: yes"> $<SPAN

1546:

style="mso-spacerun: yes">          

1547:

9,399 </TD>

1548:

<TD class=xl31 x:str="-"> -

1549:

</TD>

1550:

1551:

1552:

1553:

<TD class=xl25 style="mso-ignore: colspan" colSpan=2>Accounts payable and

1554:

accrued liabilities</TD>

1555:

1556:

1557:

1558:

1559:

1560:

1561:

1562:

1563:

1564:

1565:

1566:

1567:

1568:

<TD class=xl135 style="WIDTH: 227pt" width=303 colSpan=2

1569:

x:str="Advances from shareholders, without interest or fixed terms of repayment; unsecured ">Advances

1570:

from shareholders, without interest or fixed terms of repayment; unsecured

1571:

</TD>

1572:

1573:

1574:

1575:

1576:

1577:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1578:

height=17></TD>

1579:

1580:

1581:

1582:

1583:

<TD class=xl24 style="HEIGHT: 7.5pt; mso-ignore: colspan" colSpan=4

1584:

height=10></TD>

1585:

1586:

1587:

1588:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1589:

height=17>Long-term debt (Note 6)</TD>

1590:

1591:

1592:

1593:

1594:

1595:

1596:

1597:

1598:

1599:

1600:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1601:

height=17>Shareholders' equity:</TD>

1602:

1603:

1604:

1605:

1606:

1607:

1608:

<TD class=xl25>Share capital (Note 7)</TD>

1609:

1610:

1611:

1612:

1613:

1614:

1615:

<TD class=xl131>Deficit</TD>

1616:

1617:

1618:

1619:

1620:

1621:

1622:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1623:

height=17></TD>

1624:

1625:

1626:

1627:

1628:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1629:

height=17>General and future operations (Note 1)</TD>

1630:

1631:

1632:

1633:

1634:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1635:

height=17>Contingency (Note 10)</TD>

1636:

1637:

1638:

1639:

1640:

1641:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1642:

height=17>Commitments (Note 13)</TD>

1643:

1644:

1645:

1646:

1647:

1648:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1649:

height=17>Subsequent event (Note

1650:

15)</TD>

1651:

1652:

1653:

1654:

1655:

1656:

1657:

1658:

1659:

1660:

1661:

1662:

1663:

1664:

1665:

1666:

<TD class=xl35 x:num="13166041"><SPAN

1667:

style="mso-spacerun: yes"> $<SPAN

1668:

style="mso-spacerun: yes">   13,166,041 </TD>

1669:

<TD class=xl35 x:num="12787777"><SPAN

1670:

style="mso-spacerun: yes"> $<SPAN

1671:

style="mso-spacerun: yes">    12,787,777 </TD>

1672:

1673:

1674:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1675:

height=17></TD>

1676:

1677:

1678:

1679:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1680:

height=17>On behalf of the Board:</TD>

1681:

1682:

1683:

1684:

1685:

1686:

1687:

1688:

1689:

1690:

1691:

1692:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1693:

height=17>  <FONT

1694:

class=font8><SPAN

1695:

style="mso-spacerun: yes">             "A.

1696:

Daher"<SPAN

1697:

style="mso-spacerun: yes">                            

1698:

<SPAN

1699:

style="mso-spacerun: yes">      Director</TD>

1700:

1701:

1702:

1703:

1704:

1705:

1706:

1707:

1708:

1709:

1710:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1711:

height=17>  <FONT

1712:

class=font8><SPAN

1713:

style="mso-spacerun: yes">             "M.

1714:

Marten"<SPAN

1715:

style="mso-spacerun: yes">                          

1716:

<SPAN

1717:

style="mso-spacerun: yes">      Director</TD>

1718:

1719:

1720:

1721:

1722:

1723:

1724:

1725:

1726:

1727:

1728:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1729:

height=17>See accompanying notes to consolidated financial statements.</TD>

1730:

1731:

1732:

1733:

<TD class=xl24 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=4

1734:

height=17></TD>

1735:

1736:

1737:

<TD class=xl38 style="HEIGHT: 23.25pt; mso-ignore: colspan" colSpan=3

1738:

height=31>CALAIS RESOURCES INC.</TD>

1739:

1740:

1741:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=3 height=17>Consolidated

1742:

Statement of Operations and Deficit</TD>

1743:

1744:

1745:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=2 height=17>Expressed in

1746:

Canadian Dollars</TD>

1747:

1748:

1749:

1750:

1751:

1752:

1753:

1754:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

1755:

height=17>Years ended May 31, 2002, 2001 and 2000</TD>

1756:

1757:

1758:

1759:

1760:

1761:

1762:

1763:

1764:

1765:

1766:

1767:

1768:

1769:

1770:

1771:

1772:

1773:

1774:

1775:

1776:

1777:

1778:

1779:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1780:

height=17>Revenues</TD>

1781:

1782:

<TD class=xl45 x:num="0"><SPAN

1783:

style="mso-spacerun: yes"> $<SPAN

1784:

style="mso-spacerun: yes">                

1785:

- </TD>

1786:

<TD class=xl53 x:num="0"><SPAN

1787:

style="mso-spacerun: yes"> $<SPAN

1788:

style="mso-spacerun: yes">                 

1789:

- </TD>

1790:

<TD class=xl45 x:num="0"><SPAN

1791:

style="mso-spacerun: yes"> $<SPAN

1792:

style="mso-spacerun: yes">                  

1793:

- </TD>

1794:

1795:

1796:

1797:

1798:

1799:

1800:

1801:

1802:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

1803:

height=17>Expenses:</TD>

1804:

1805:

1806:

1807:

1808:

1809:

<TD class=xl37>Advertising</TD>

1810:

1811:

<TD class=xl50 x:num="1947"><SPAN

1812:

style="mso-spacerun: yes">            

1813:

1,947 </TD>

1814:

<TD class=xl50 x:num="4523"><SPAN

1815:

style="mso-spacerun: yes">             

1816:

4,523 </TD>

1817:

<TD class=xl46 x:num="2684"><SPAN

1818:

style="mso-spacerun: yes">              

1819:

2,684 </TD>

1820:

1821:

1822:

1823:

<TD class=xl25>Amortization</TD>

1824:

1825:

<TD class=xl51 x:num="7043"><SPAN

1826:

style="mso-spacerun: yes">            

1827:

7,043 </TD>

1828:

<TD class=xl51 x:num="10694"><SPAN

1829:

style="mso-spacerun: yes">           

1830:

10,694 </TD>

1831:

<TD class=xl46 x:num="15395"><SPAN

1832:

style="mso-spacerun: yes">            

1833:

15,395 </TD>

1834:

1835:

1836:

1837:

<TD class=xl25>Consulting fees</TD>

1838:

1839:

<TD class=xl51 x:num="91500"><SPAN

1840:

style="mso-spacerun: yes">          

1841:

91,500 </TD>

1842:

<TD class=xl51 x:num="71727"><SPAN

1843:

style="mso-spacerun: yes">           

1844:

71,727 </TD>

1845:

<TD class=xl46 x:num="0"><SPAN

1846:

style="mso-spacerun: yes">                     

1847:

- </TD>

1848:

1849:

1850:

1851:

<TD class=xl25>Filing fees, licenses, permits</TD>

1852:

1853:

<TD class=xl51 x:num="2586"><SPAN

1854:

style="mso-spacerun: yes">            

1855:

2,586 </TD>

1856:

<TD class=xl51 x:num="2924"><SPAN

1857:

style="mso-spacerun: yes">             

1858:

2,924 </TD>

1859:

<TD class=xl46 x:num="2014"><SPAN

1860:

style="mso-spacerun: yes">              

1861:

2,014 </TD>

1862:

1863:

1864:

1865:

<TD class=xl25>Foreign exchange</TD>

1866:

1867:

<TD class=xl51 x:num="4699"><SPAN

1868:

style="mso-spacerun: yes">            

1869:

4,699 </TD>

1870:

<TD class=xl51 x:num="75207"><SPAN

1871:

style="mso-spacerun: yes">           

1872:

75,207 </TD>

1873:

<TD class=xl46 x:num="61499"><SPAN

1874:

style="mso-spacerun: yes">            

1875:

61,499 </TD>

1876:

1877:

1878:

1879:

<TD class=xl25>Insurance</TD>

1880:

1881:

<TD class=xl51 x:num="2591"><SPAN

1882:

style="mso-spacerun: yes">            

1883:

2,591 </TD>

1884:

<TD class=xl51 x:num="1303"><SPAN

1885:

style="mso-spacerun: yes">             

1886:

1,303 </TD>

1887:

<TD class=xl46 x:num="-2461"><SPAN

1888:

style="mso-spacerun: yes">             

1889:

(2,461)</TD>

1890:

1891:

1892:

1893:

<TD class=xl25>Interest and bank charges</TD>

1894:

1895:

<TD class=xl51 x:num="267349"><SPAN

1896:

style="mso-spacerun: yes">         

1897:

267,349 </TD>

1898:

<TD class=xl51 x:num="35288"><SPAN

1899:

style="mso-spacerun: yes">           

1900:

35,288 </TD>

1901:

<TD class=xl46 x:num="45624"><SPAN

1902:

style="mso-spacerun: yes">            

1903:

45,624 </TD>

1904:

1905:

1906:

1907:

<TD class=xl25>Office and general</TD>

1908:

1909:

<TD class=xl51 x:num="8889"><SPAN

1910:

style="mso-spacerun: yes">            

1911:

8,889 </TD>

1912:

<TD class=xl51 x:num="15807"><SPAN

1913:

style="mso-spacerun: yes">           

1914:

15,807 </TD>

1915:

<TD class=xl46 x:num="17734"><SPAN

1916:

style="mso-spacerun: yes">            

1917:

17,734 </TD>

1918:

1919:

1920:

1921:

<TD class=xl25>Professional fees</TD>

1922:

1923:

<TD class=xl51 x:num="128478"><SPAN

1924:

style="mso-spacerun: yes">         

1925:

128,478 </TD>

1926:

<TD class=xl51 x:num="133999"><SPAN

1927:

style="mso-spacerun: yes">         

1928:

133,999 </TD>

1929:

<TD class=xl46 x:num="139583"><SPAN

1930:

style="mso-spacerun: yes">          

1931:

139,583 </TD>

1932:

1933:

1934:

1935:

1936:

1937:

<TD class=xl50 x:num="19800"><SPAN

1938:

style="mso-spacerun: yes">          

1939:

19,800 </TD>

1940:

<TD class=xl50 x:num="0"><SPAN

1941:

style="mso-spacerun: yes">                    

1942:

- </TD>

1943:

<TD class=xl46 x:num="0"><SPAN

1944:

style="mso-spacerun: yes">                     

1945:

- </TD>

1946:

1947:

1948:

1949:

<TD class=xl37>Telephone</TD>

1950:

1951:

<TD class=xl50 x:num="13997"><SPAN

1952:

style="mso-spacerun: yes">          

1953:

13,997 </TD>

1954:

<TD class=xl50 x:num="12871"><SPAN

1955:

style="mso-spacerun: yes">           

1956:

12,871 </TD>

1957:

<TD class=xl46 x:num="16010"><SPAN

1958:

style="mso-spacerun: yes">            

1959:

16,010 </TD>

1960:

1961:

1962:

1963:

<TD class=xl25>Transfer agent fees</TD>

1964:

1965:

<TD class=xl51 x:num="2521"><SPAN

1966:

style="mso-spacerun: yes">            

1967:

2,521 </TD>

1968:

<TD class=xl51 x:num="3551"><SPAN

1969:

style="mso-spacerun: yes">             

1970:

3,551 </TD>

1971:

<TD class=xl46 x:num="4310"><SPAN

1972:

style="mso-spacerun: yes">              

1973:

4,310 </TD>

1974:

1975:

1976:

1977:

<TD class=xl25>Travel</TD>

1978:

1979:

<TD class=xl51 x:num="2001"><SPAN

1980:

style="mso-spacerun: yes">            

1981:

2,001 </TD>

1982:

<TD class=xl51 x:num="7211"><SPAN

1983:

style="mso-spacerun: yes">             

1984:

7,211 </TD>

1985:

<TD class=xl46 x:num="1037"><SPAN

1986:

style="mso-spacerun: yes">              

1987:

1,037 </TD>

1988:

1989:

1990:

1991:

<TD class=xl25>Utilities</TD>

1992:

1993:

<TD class=xl51 x:num="10820"><SPAN

1994:

style="mso-spacerun: yes">          

1995:

10,820 </TD>

1996:

<TD class=xl51 x:num="2456"><SPAN

1997:

style="mso-spacerun: yes">             

1998:

2,456 </TD>

1999:

<TD class=xl46 x:num="14950"><SPAN

2000:

style="mso-spacerun: yes">            

2001:

14,950 </TD>

2002:

2003:

2004:

2005:

<TD class=xl60>Wages and benefits</TD>

2006:

2007:

<TD class=xl62 x:num="0"><SPAN

2008:

style="mso-spacerun: yes">                   

2009:

- </TD>

2010:

<TD class=xl62 x:num="58639"><SPAN

2011:

style="mso-spacerun: yes">           

2012:

58,639 </TD>

2013:

<TD class=xl59 x:num="78800"><SPAN

2014:

style="mso-spacerun: yes">            

2015:

78,800 </TD>

2016:

2017:

2018:

2019:

<TD class=xl52 x:num="564221"><SPAN

2020:

style="mso-spacerun: yes">    564,221 </TD>

2021:

<TD class=xl52 x:num="436200"><SPAN

2022:

style="mso-spacerun: yes">    436,200 </TD>

2023:

<TD class=xl46 x:num="397179" x:fmla="=SUM(F220:F234)"><SPAN

2024:

style="mso-spacerun: yes">          

2025:

397,179 </TD>

2026:

2027:

2028:

2029:

2030:

2031:

2032:

2033:

2034:

2035:

2036:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2037:

height=17>Loss before the undernoted</TD>

2038:

2039:

<TD class=xl50 x:num="-564221"><SPAN

2040:

style="mso-spacerun: yes">        

2041:

(564,221)</TD>

2042:

<TD class=xl50 x:num="-436200"><SPAN

2043:

style="mso-spacerun: yes">        

2044:

(436,200)</TD>

2045:

<TD class=xl46 x:num="-397179" x:fmla="=F217-F235"><SPAN

2046:

style="mso-spacerun: yes">         

2047:

(397,179)</TD>

2048:

2049:

2050:

2051:

2052:

2053:

2054:

2055:

2056:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2057:

height=17>Other income (expenses):</TD>

2058:

2059:

2060:

2061:

2062:

2063:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Loss on abandonment

2064:

of mineral properties</TD>

2065:

<TD class=xl73 x:str="-"> -

2066:

</TD>

2067:

<TD class=xl73 x:num="-312749"><SPAN

2068:

style="mso-spacerun: yes">        

2069:

(312,749)</TD>

2070:

<TD class=xl46 x:num="-11399044"><SPAN

2071:

style="mso-spacerun: yes">     

2072:

(11,399,044)</TD>

2073:

2074:

2075:

2076:

<TD class=xl37>Gain on sale of capital assets</TD>

2077:

2078:

<TD class=xl73 x:num="7142"><SPAN

2079:

style="mso-spacerun: yes">            

2080:

7,142 </TD>

2081:

<TD class=xl73 x:str="-"> -

2082:

</TD>

2083:

<TD class=xl46 x:num="0"><SPAN

2084:

style="mso-spacerun: yes">                     

2085:

- </TD>

2086:

2087:

2088:

2089:

<TD class=xl37>Interest income</TD>

2090:

2091:

<TD class=xl73 x:num="3092"><SPAN

2092:

style="mso-spacerun: yes">            

2093:

3,092 </TD>

2094:

<TD class=xl73 x:num="1081"><SPAN

2095:

style="mso-spacerun: yes">             

2096:

1,081 </TD>

2097:

<TD class=xl46 x:num="1180"><SPAN

2098:

style="mso-spacerun: yes">              

2099:

1,180 </TD>

2100:

2101:

2102:

2103:

<TD class=xl60>Rental income</TD>

2104:

2105:

<TD class=xl76 x:num="2978"><SPAN

2106:

style="mso-spacerun: yes">            

2107:

2,978 </TD>

2108:

<TD class=xl76 x:str="-"> -

2109:

</TD>

2110:

<TD class=xl59 x:num="0"><SPAN

2111:

style="mso-spacerun: yes">                     

2112:

- </TD>

2113:

2114:

2115:

2116:

<TD class=xl52 x:num="13212"><SPAN

2117:

style="mso-spacerun: yes">     13,212 </TD>

2118:

<TD class=xl52 x:num="-311668"><SPAN

2119:

style="mso-spacerun: yes">   (311,668)</TD>

2120:

<TD class=xl46 x:num="-11397864" x:fmla="=SUM(F240:F243)"><SPAN

2121:

style="mso-spacerun: yes">     

2122:

(11,397,864)</TD>

2123:

2124:

2125:

2126:

2127:

2128:

2129:

2130:

2131:

2132:

2133:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2134:

height=17>Loss for the year</TD>

2135:

2136:

<TD class=xl50 x:num="-551009"><SPAN

2137:

style="mso-spacerun: yes">        

2138:

(551,009)</TD>

2139:

<TD class=xl50 x:num="-747868"><SPAN

2140:

style="mso-spacerun: yes">        

2141:

(747,868)</TD>

2142:

<TD class=xl46 x:num="-11795043" x:fmla="=F237+F244"><SPAN

2143:

style="mso-spacerun: yes">     

2144:

(11,795,043)</TD>

2145:

2146:

2147:

2148:

2149:

2150:

2151:

2152:

2153:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2154:

height=17>Deficit, beginning of year</TD>

2155:

2156:

<TD class=xl50 x:num="-16686097"><SPAN

2157:

style="mso-spacerun: yes">    (16,686,097)</TD>

2158:

<TD class=xl50 x:num="-15938229"><SPAN

2159:

style="mso-spacerun: yes">     (15,938,229)</TD>

2160:

<TD class=xl46 x:num="-4143186"><SPAN

2161:

style="mso-spacerun: yes">       

2162:

(4,143,186)</TD>

2163:

2164:

2165:

<TD class=xl39 style="HEIGHT: 12.75pt" height=17><SPAN

2166:

style="mso-spacerun: yes"> </TD>

2167:

2168:

2169:

2170:

2171:

2172:

<TD class=xl63 style="HEIGHT: 13.5pt; mso-ignore: colspan" colSpan=2

2173:

height=18>Deficit, end of year</TD>

2174:

2175:

<TD class=xl64 x:num="-17237106"><SPAN

2176:

style="mso-spacerun: yes"> $ (17,237,106)</TD>

2177:

<TD class=xl64 x:num="-16686097"><SPAN

2178:

style="mso-spacerun: yes"> $<SPAN

2179:

style="mso-spacerun: yes">  (16,686,097)</TD>

2180:

<TD class=xl126 style="BORDER-TOP: medium none" x:num="-15938229"

2181:

x:fmla="=SUM(F246:F248)"><SPAN

2182:

style="mso-spacerun: yes">     

2183:

(15,938,229)</TD>

2184:

2185:

2186:

2187:

2188:

2189:

2190:

2191:

2192:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2193:

height=17>Net loss per common share, basic and diluted</TD>

2194:

<TD class=xl65 x:num="-00.05"><SPAN

2195:

style="mso-spacerun: yes"> $<SPAN

2196:

style="mso-spacerun: yes">          

2197:

(0.05)</TD>

2198:

<TD class=xl65 x:num="-00.08"><SPAN

2199:

style="mso-spacerun: yes"> $<SPAN

2200:

style="mso-spacerun: yes">           

2201:

(0.08)</TD>

2202:

<TD class=xl137 x:num="-1.24"><SPAN

2203:

style="mso-spacerun: yes"> $<SPAN

2204:

style="mso-spacerun: yes">            

2205:

(1.24)</TD>

2206:

2207:

2208:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2209:

height=17>Weighted average common shares outstanding,</TD>

2210:

2211:

2212:

2213:

<TD class=xl66 style="HEIGHT: 13.5pt; mso-ignore: colspan" colSpan=2

2214:

height=18>   basic and

2215:

diluted</TD>

2216:

2217:

2218:

10,184,635 </TD>

2219:

<TD class=xl67 x:num="9618218"><SPAN

2220:

style="mso-spacerun: yes">    9,618,218 </TD>

2221:

<TD class=xl136 x:num="9505718"><SPAN

2222:

style="mso-spacerun: yes">        

2223:

9,505,718 </TD>

2224:

2225:

2226:

2227:

2228:

2229:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=4 height=17>See

2230:

accompanying notes to consolidated financial statements.</TD>

2231:

2232:

2233:

2234:

2235:

2236:

2237:

2238:

2239:

2240:

<TD class=xl38 style="HEIGHT: 23.25pt; mso-ignore: colspan" colSpan=3

2241:

height=31>CALAIS RESOURCES INC.</TD>

2242:

2243:

2244:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=2 height=17>Consolidated

2245:

Statement of Cash Flows</TD>

2246:

2247:

2248:

2249:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=2 height=17>Expressed in

2250:

Canadian Dollars</TD>

2251:

2252:

2253:

2254:

2255:

2256:

2257:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2258:

height=17>Years ended May 31, 2002, 2001 and 2000</TD>

2259:

2260:

2261:

2262:

2263:

2264:

2265:

2266:

2267:

2268:

2269:

<TD class=xl56 style="BORDER-TOP: medium none; HEIGHT: 12.75pt"

2270:

height=17> </TD>

2271:

2272:

2273:

2274:

2275:

2276:

2277:

2278:

2279:

2280:

2281:

2282:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2283:

height=17>Cash provided by (used in):</TD>

2284:

2285:

2286:

2287:

2288:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2289:

height=17>Operations:</TD>

2290:

2291:

2292:

2293:

2294:

2295:

2296:

2297:

2298:

<TD class=xl31 x:num="-551009"><SPAN

2299:

style="mso-spacerun: yes"> $<SPAN

2300:

style="mso-spacerun: yes">     

2301:

(551,009)</TD>

2302:

<TD class=xl31 x:num="-747868"><SPAN

2303:

style="mso-spacerun: yes"> $<SPAN

2304:

style="mso-spacerun: yes">     

2305:

(747,868)</TD>

2306:

<TD class=xl45 x:num="-11795043"><SPAN

2307:

style="mso-spacerun: yes"> $<SPAN

2308:

style="mso-spacerun: yes">   (11,795,043)</TD>

2309:

2310:

2311:

2312:

<TD class=xl37>Items not involving cash:</TD>

2313:

2314:

2315:

2316:

2317:

2318:

2319:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2320:

height=17>Amortization</TD>

2321:

2322:

<TD class=xl73 x:num="7043"><SPAN

2323:

style="mso-spacerun: yes">            

2324:

7,043 </TD>

2325:

<TD class=xl73 x:num="10694"><SPAN

2326:

style="mso-spacerun: yes">           

2327:

10,694 </TD>

2328:

<TD class=xl46 x:num="15395"><SPAN

2329:

style="mso-spacerun: yes">            

2330:

15,395 </TD>

2331:

2332:

2333:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2334:

height=17>Shares issued for services</TD>

2335:

2336:

<TD class=xl73 x:num="141300"><SPAN

2337:

style="mso-spacerun: yes">         

2338:

141,300 </TD>

2339:

<TD class=xl73 x:num="45000"><SPAN

2340:

style="mso-spacerun: yes">           

2341:

45,000 </TD>

2342:

2343:

2344:

2345:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2346:

height=17>Loss on abandonment of mineral properties</TD>

2347:

<TD class=xl73 x:str="-"> -

2348:

</TD>

2349:

<TD class=xl73 x:num="312749"><SPAN

2350:

style="mso-spacerun: yes">         

2351:

312,749 </TD>

2352:

<TD class=xl46 x:num="11399044"><SPAN

2353:

style="mso-spacerun: yes">      

2354:

11,399,044 </TD>

2355:

2356:

2357:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2358:

height=17>Gain on sale of capital assets</TD>

2359:

2360:

<TD class=xl73 x:num="-7142"><SPAN

2361:

style="mso-spacerun: yes">           

2362:

(7,142)</TD>

2363:

<TD class=xl73 x:str="-"> -

2364:

</TD>

2365:

<TD class=xl46 x:num="0"><SPAN

2366:

style="mso-spacerun: yes">                     

2367:

- </TD>

2368:

2369:

2370:

2371:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Change in non cash

2372:

operating working capital:</TD>

2373:

2374:

2375:

2376:

2377:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2378:

height=17>Restricted cash</TD>

2379:

2380:

<TD class=xl73 x:num="-67415"><SPAN

2381:

style="mso-spacerun: yes">         

2382:

(67,415)</TD>

2383:

<TD class=xl73 x:str="-"> -

2384:

</TD>

2385:

<TD class=xl46 x:num="0"><SPAN

2386:

style="mso-spacerun: yes">                     

2387:

- </TD>

2388:

2389:

2390:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2391:

height=17>Advances receivable</TD>

2392:

2393:

<TD class=xl73 x:str="-"> -

2394:

</TD>

2395:

<TD class=xl73 x:num="65594"><SPAN

2396:

style="mso-spacerun: yes">           

2397:

65,594 </TD>

2398:

<TD class=xl46 x:num="-71266"><SPAN

2399:

style="mso-spacerun: yes">           

2400:

(71,266)</TD>

2401:

2402:

2403:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2404:

height=17>Other receivables</TD>

2405:

2406:

<TD class=xl73 x:num="818"><SPAN

2407:

style="mso-spacerun: yes">               

2408:

818 </TD>

2409:

<TD class=xl73 x:num="5218"><SPAN

2410:

style="mso-spacerun: yes">             

2411:

5,218 </TD>

2412:

<TD class=xl46 x:num="-5632"><SPAN

2413:

style="mso-spacerun: yes">             

2414:

(5,632)</TD>

2415:

2416:

2417:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2418:

height=17>Prepaid expenses and deposits</TD>

2419:

2420:

<TD class=xl73 x:str="-"> -

2421:

</TD>

2422:

<TD class=xl73 x:num="7343"><SPAN

2423:

style="mso-spacerun: yes">             

2424:

7,343 </TD>

2425:

<TD class=xl46 x:num="-11803"><SPAN

2426:

style="mso-spacerun: yes">           

2427:

(11,803)</TD>

2428:

2429:

2430:

2431:

<TD class=xl60 style="mso-ignore: colspan" colSpan=2><SPAN

2432:

style="mso-spacerun: yes">     Accounts payable

2433:

and accrued liabilities</TD>

2434:

<TD class=xl76 x:num="-185712"><SPAN

2435:

style="mso-spacerun: yes">        

2436:

(185,712)</TD>

2437:

<TD class=xl76 x:num="80293"><SPAN

2438:

style="mso-spacerun: yes">           

2439:

80,293 </TD>

2440:

<TD class=xl59 x:num="71309"><SPAN

2441:

style="mso-spacerun: yes">            

2442:

71,309 </TD>

2443:

2444:

2445:

2446:

<TD class=xl73 x:num="-662117"><SPAN

2447:

style="mso-spacerun: yes">        

2448:

(662,117)</TD>

2449:

<TD class=xl73 x:num="-220977"><SPAN

2450:

style="mso-spacerun: yes">        

2451:

(220,977)</TD>

2452:

<TD class=xl46 x:num="-397996" x:fmla="=SUM(F269:F280)"><SPAN

2453:

style="mso-spacerun: yes">         

2454:

(397,996)</TD>

2455:

2456:

2457:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2458:

height=17>Financing:</TD>

2459:

2460:

2461:

2462:

2463:

2464:

2465:

2466:

2467:

<TD class=xl73 x:num="1832616"><SPAN

2468:

style="mso-spacerun: yes">      

2469:

1,832,616 </TD>

2470:

<TD class=xl73 x:str="-"> -

2471:

</TD>

2472:

<TD class=xl46 x:num="0"><SPAN

2473:

style="mso-spacerun: yes">                     

2474:

- </TD>

2475:

2476:

2477:

2478:

<TD class=xl37>Advances from (to) shareholders</TD>

2479:

2480:

<TD class=xl73 x:num="-274755"><SPAN

2481:

style="mso-spacerun: yes">        

2482:

(274,755)</TD>

2483:

<TD class=xl73 x:num="330292"><SPAN

2484:

style="mso-spacerun: yes">         

2485:

330,292 </TD>

2486:

<TD class=xl46 x:num="187802"><SPAN

2487:

style="mso-spacerun: yes">          

2488:

187,802 </TD>

2489:

2490:

2491:

2492:

2493:

2494:

<TD class=xl76 x:num="-623575"><SPAN

2495:

style="mso-spacerun: yes">        

2496:

(623,575)</TD>

2497:

<TD class=xl76 x:num="278662"><SPAN

2498:

style="mso-spacerun: yes">         

2499:

278,662 </TD>

2500:

<TD class=xl59 x:num="0"><SPAN

2501:

style="mso-spacerun: yes">                     

2502:

- </TD>

2503:

2504:

2505:

2506:

<TD class=xl73 x:num="934286"><SPAN

2507:

style="mso-spacerun: yes">         

2508:

934,286 </TD>

2509:

<TD class=xl73 x:num="608954"><SPAN

2510:

style="mso-spacerun: yes">         

2511:

608,954 </TD>

2512:

<TD class=xl46 x:num="187802" x:fmla="=SUM(F283:F285)"><SPAN

2513:

style="mso-spacerun: yes">          

2514:

187,802 </TD>

2515:

2516:

2517:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2518:

height=17>Investments:</TD>

2519:

2520:

2521:

2522:

2523:

2524:

2525:

<TD class=xl37>Mineral properties</TD>

2526:

2527:

<TD class=xl73 x:num="-289106"><SPAN

2528:

style="mso-spacerun: yes">        

2529:

(289,106)</TD>

2530:

<TD class=xl73 x:num="-373383"><SPAN

2531:

style="mso-spacerun: yes">        

2532:

(373,383)</TD>

2533:

<TD class=xl46 x:num="-122057"><SPAN

2534:

style="mso-spacerun: yes">         

2535:

(122,057)</TD>

2536:

2537:

2538:

2539:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Proceeds from

2540:

disposal of capital assets</TD>

2541:

<TD class=xl73 x:num="7412"><SPAN

2542:

style="mso-spacerun: yes">            

2543:

7,412 </TD>

2544:

<TD class=xl73 x:str="-"> -

2545:

</TD>

2546:

<TD class=xl46 x:num="312925"><SPAN

2547:

style="mso-spacerun: yes">          

2548:

312,925 </TD>

2549:

2550:

2551:

2552:

<TD class=xl60>Net additions to capital assets</TD>

2553:

2554:

<TD class=xl76 x:num="-506"><SPAN

2555:

style="mso-spacerun: yes">              

2556:

(506)</TD>

2557:

<TD class=xl76 x:num="-1416"><SPAN

2558:

style="mso-spacerun: yes">            

2559:

(1,416)</TD>

2560:

<TD class=xl59 x:num="0"><SPAN

2561:

style="mso-spacerun: yes">                     

2562:

- </TD>

2563:

2564:

2565:

2566:

<TD class=xl73 x:num="-282200"><SPAN

2567:

style="mso-spacerun: yes">        

2568:

(282,200)</TD>

2569:

<TD class=xl73 x:num="-374799"><SPAN

2570:

style="mso-spacerun: yes">        

2571:

(374,799)</TD>

2572:

<TD class=xl46 x:num="190868" x:fmla="=SUM(F288:F290)"><SPAN

2573:

style="mso-spacerun: yes">          

2574:

190,868 </TD>

2575:

2576:

2577:

2578:

2579:

2580:

2581:

2582:

2583:

2584:

2585:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2586:

height=17>Increase (decrease) in cash</TD>

2587:

2588:

<TD class=xl73 x:num="-10031"><SPAN

2589:

style="mso-spacerun: yes">         

2590:

(10,031)</TD>

2591:

<TD class=xl73 x:num="13178"><SPAN

2592:

style="mso-spacerun: yes">           

2593:

13,178 </TD>

2594:

<TD class=xl46 x:num="-19326" x:fmla="=F281+F286+F291"><SPAN

2595:

style="mso-spacerun: yes">           

2596:

(19,326)</TD>

2597:

2598:

2599:

2600:

2601:

2602:

2603:

2604:

2605:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2606:

height=17>Cash (bank overdraft), beginning of year</TD>

2607:

2608:

<TD class=xl73 x:num="632"><SPAN

2609:

style="mso-spacerun: yes">               

2610:

632 </TD>

2611:

<TD class=xl73 x:num="-12546"><SPAN

2612:

style="mso-spacerun: yes">          

2613:

(12,546)</TD>

2614:

<TD class=xl46 x:num="6780"><SPAN

2615:

style="mso-spacerun: yes">              

2616:

6,780 </TD>

2617:

2618:

2619:

2620:

2621:

2622:

2623:

2624:

2625:

<TD class=xl63 style="HEIGHT: 13.5pt; mso-ignore: colspan" colSpan=2

2626:

height=18>Cash (bank overdraft), end of year</TD>

2627:

2628:

<TD class=xl35 x:num="-9399"><SPAN

2629:

style="mso-spacerun: yes"> $<SPAN

2630:

style="mso-spacerun: yes">        

2631:

(9,399)</TD>

2632:

<TD class=xl35 x:num="632"><SPAN

2633:

style="mso-spacerun: yes"> $<SPAN

2634:

style="mso-spacerun: yes">             

2635:

632 </TD>

2636:

<TD class=xl105 style="BORDER-TOP: medium none" x:num="-12546"

2637:

x:fmla="=SUM(F293:F295)"><SPAN

2638:

style="mso-spacerun: yes"> $<SPAN

2639:

style="mso-spacerun: yes">        

2640:

(12,546)</TD>

2641:

2642:

2643:

<TD class=xl37 style="HEIGHT: 9.75pt; mso-ignore: colspan" colSpan=3

2644:

height=13></TD>

2645:

2646:

2647:

2648:

2649:

<TD class=xl37 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2650:

height=17>Supplementary cash flow information:</TD>

2651:

2652:

2653:

2654:

2655:

<TD class=xl68 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2656:

height=17>Interest paid</TD>

2657:

2658:

<TD class=xl31 x:num="195877"><SPAN

2659:

style="mso-spacerun: yes"> $<SPAN

2660:

style="mso-spacerun: yes">      

2661:

195,877 </TD>

2662:

<TD class=xl31 x:num="35288"><SPAN

2663:

style="mso-spacerun: yes"> $<SPAN

2664:

style="mso-spacerun: yes">        

2665:

35,288 </TD>

2666:

<TD class=xl148 x:num="45624"><SPAN

2667:

style="mso-spacerun: yes"> $<SPAN

2668:

style="mso-spacerun: yes">         

2669:

45,624 </TD>

2670:

2671:

2672:

<TD class=xl68 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2673:

height=17>Income taxes paid</TD>

2674:

2675:

<TD class=xl73 x:str="-"> -

2676:

</TD>

2677:

<TD class=xl73 x:str="-"> -

2678:

</TD>

2679:

<TD class=xl134 x:num="0"><SPAN

2680:

style="mso-spacerun: yes">                   

2681:

-   </TD>

2682:

2683:

2684:

<TD class=xl68 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2685:

height=17>Interest received</TD>

2686:

2687:

<TD class=xl73 x:num="3092"><SPAN

2688:

style="mso-spacerun: yes">            

2689:

3,092 </TD>

2690:

<TD class=xl73 x:num="1081"><SPAN

2691:

style="mso-spacerun: yes">             

2692:

1,081 </TD>

2693:

<TD class=xl134 x:num="1180"><SPAN

2694:

style="mso-spacerun: yes">              

2695:

1,180 </TD>

2696:

2697:

2698:

<TD class=xl68 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2699:

height=17>Non cash transactions:</TD>

2700:

2701:

2702:

2703:

2704:

2705:

2706:

<TD class=xl25 style="mso-ignore: colspan" colSpan=2><SPAN

2707:

style="mso-spacerun: yes">  Shares issued for mineral property

2708:

development</TD>

2709:

<TD class=xl73 x:num="30000"><SPAN

2710:

style="mso-spacerun: yes">          

2711:

30,000 </TD>

2712:

<TD class=xl73 x:num="15000"><SPAN

2713:

style="mso-spacerun: yes">           

2714:

15,000 </TD>

2715:

<TD class=xl134 x:num="0"><SPAN

2716:

style="mso-spacerun: yes">                   

2717:

-   </TD>

2718:

2719:

2720:

2721:

<TD class=xl25 style="mso-ignore: colspan" colSpan=2><SPAN

2722:

style="mso-spacerun: yes">  Amortization capitalized to

2723:

mineral properties</TD>

2724:

<TD class=xl73 x:num="36645"><SPAN

2725:

style="mso-spacerun: yes">          

2726:

36,645 </TD>

2727:

<TD class=xl73 x:num="57346"><SPAN

2728:

style="mso-spacerun: yes">           

2729:

57,346 </TD>

2730:

<TD class=xl134 x:num="1757431"><SPAN

2731:

style="mso-spacerun: yes">        

2732:

1,757,431 </TD>

2733:

2734:

2735:

2736:

<TD class=xl25 colSpan=3

2737:

x:str=" Shares issued for repayment of shareholder "><SPAN

2738:

style="mso-spacerun: yes">  Shares issued for repayment of

2739:

shareholder </TD>

2740:

2741:

2742:

2743:

2744:

2745:

2746:

advances</TD>

2747:

2748:

<TD class=xl73 x:num="75000"><SPAN

2749:

style="mso-spacerun: yes">          

2750:

75,000 </TD>

2751:

<TD class=xl73 x:str="-"> -

2752:

</TD>

2753:

<TD class=xl134 x:num="0"><SPAN

2754:

style="mso-spacerun: yes">                   

2755:

-   </TD>

2756:

2757:

2758:

2759:

2760:

Advances receivable reclassified to mineral</TD>

2761:

2762:

2763:

2764:

2765:

properties</TD>

2766:

2767:

<TD class=xl78 x:num="122806"><SPAN

2768:

style="mso-spacerun: yes">         

2769:

122,806 </TD>

2770:

<TD class=xl78 x:str="-"> -

2771:

</TD>

2772:

<TD class=xl147 x:num="0"><SPAN

2773:

style="mso-spacerun: yes">                   

2774:

-   </TD>

2775:

2776:

2777:

2778:

2779:

2780:

2781:

2782:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=4 height=17>See

2783:

accompanying notes to consolidated financial statements.</TD>

2784:

2785:

2786:

2787:

<TD class=xl38 style="HEIGHT: 23.25pt; mso-ignore: colspan" colSpan=3

2788:

height=31>CALAIS RESOURCES INC.</TD>

2789:

2790:

2791:

<TD class=xl25 style="HEIGHT: 12.75pt" colSpan=3 height=17>Notes to

2792:

Consolidated Financial Statements</TD>

2793:

2794:

2795:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

2796:

height=17>Expressed in Canadian Dollars</TD>

2797:

2798:

2799:

2800:

2801:

2802:

2803:

<TD class=xl25 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2804:

height=17>Years ended May 31, 2002, 2001 and 2000</TD>

2805:

2806:

2807:

2808:

2809:

2810:

2811:

2812:

2813:

2814:

<TD class=xl80>General and future operations:</TD>

2815:

2816:

2817:

2818:

2819:

<TD class=xl43 style="WIDTH: 448pt" width=597 colSpan=5>Calais Resources

2820:

Inc. (the "Company") was incorporated under the laws of the Province of

2821:

British Columbia on December 30, 1986.<SPAN

2822:

style="mso-spacerun: yes">  The Company is currently in the

2823:

process of exploring and developing various mineral properties to

2824:

determine whether these properties contain ore reserves that are

2825:

economically recoverable.  The

2826:

recoverability of the amounts shown for the mineral properties and related

2827:

deferred costs is dependent upon the existence of economically recoverable

2828:

reserves, the ability of the Company to obtain necessary financing to

2829:

complete their development and upon future profitable production.</TD>

2830:

2831:

2832:

2833:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>These consolidated

2834:

financial statements have been prepared on a going concern basis in

2835:

accordance with Canadian generally accepted accounting principles.<SPAN

2836:

style="mso-spacerun: yes">  The going concern basis of

2837:

presentation assumes that the Company will continue in operation for the

2838:

foreseeable future and be able to realize its assets and discharge its

2839:

liabilities and commitments in the normal course of business.<SPAN

2840:

style="mso-spacerun: yes">  There is significant doubt about

2841:

the appropriateness of the use of the going concern assumption because the

2842:

Company experienced significant losses in 2002 and 2001 and has

2843:

experienced significant negative cash flow from operations over a number

2844:

of years.  In addition, the

2845:

Company  recently had to seek

2846:

an extension on repayment of a $1,200,000 US loan (see Note 5).</TD>

2847:

2848:

2849:

2850:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Subsequent to the

2851:

year end, the Company began seeking approximately $2,300,000 US in

2852:

financing to repay the bank loan, trade creditors and provide operating

2853:

funds.  The Company is

2854:

actively pursuing various options with potential lenders and investors

2855:

which, if accepted, will in management's view, enable the Company to

2856:

achieve its business plans.

2857:

No agreements with potential lenders or investors have been reached

2858:

yet and there can be no assurance that such agreements will be reached.</TD>

2859:

2860:

2861:

2862:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The ability of the

2863:

Company to continue as a going concern and to realize the carrying value

2864:

of its assets and discharge its liabilities when due is dependent on the

2865:

successful completion of the actions taken or planned, some of which are

2866:

described above, which management believes will mitigate the adverse

2867:

conditions and events which raise doubt about the validity of the "going

2868:

concern" assumption used in preparing these financial statements.<SPAN

2869:

style="mso-spacerun: yes">  There is no certainty that these

2870:

and other strategies will be sufficient to permit the Company to continue

2871:

beyond May 31, 2003.</TD>

2872:

2873:

2874:

2875:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The financial

2876:

statements do not reflect adjustments that would be necessary if the

2877:

"going concern" assumption were not appropriate.<SPAN

2878:

style="mso-spacerun: yes">  If the "going concern" basis was

2879:

not appropriate for these financial statements, then adjustments would be

2880:

necessary in the carrying value of assets and liabilities, the reported

2881:

revenues and expenses, and the balance sheet classifications used.</TD>

2882:

2883:

2884:

2885:

2886:

2887:

2888:

<TD class=xl80>Significant accounting policies:</TD>

2889:

2890:

2891:

2892:

<TD class=xl80 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

2893:

height=17></TD>

2894:

2895:

2896:

2897:

<TD class=xl39>Basis of consolidation:</TD>

2898:

2899:

2900:

2901:

2902:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>These financial

2903:

statements include the accounts of the Company and its wholly-owned

2904:

subsidiaries.  Calais

2905:

International Inc., Recursos Calais S.A. de C.V., Calais Resources Nevada

2906:

Inc., Calais Resources Colorado Inc. and Recursos Calais La Paloma S.A. de

2907:

C.V.   All material

2908:

inter-company transactions and balances have been eliminated.</TD>

2909:

2910:

2911:

2912:

2913:

2914:

2915:

<TD class=xl39>Use of estimates:</TD>

2916:

2917:

2918:

2919:

2920:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The preparation of

2921:

financial statements in conformity with Canadian generally accepted

2922:

accounting principles requires management to make estimates and

2923:

assumptions that affect the reported amounts of assets and liabilities and

2924:

disclosure of contingent assets and liabilities at the date of the

2925:

financial statements and the reported amounts of revenues and expenses

2926:

during the year.  Actual

2927:

results could differ from those estimates.</TD>

2928:

2929:

2930:

2931:

2932:

2933:

2934:

<TD class=xl39>Cash equivalents:</TD>

2935:

2936:

2937:

2938:

2939:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Cash equivalents

2940:

consist of short-term deposits with maturity of ninety days or less.</TD>

2941:

2942:

2943:

2944:

2945:

2946:

2947:

<TD class=xl39>Financial instruments:</TD>

2948:

2949:

2950:

2951:

2952:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company's

2953:

financial instruments consist of cash, restricted cash, other receivables,

2954:

advances receivable, bank overdraft, accounts payable and accrued

2955:

liabilities, bank loan, long-term debt and advances from

2956:

shareholders.  Unless

2957:

otherwise noted, it is management's opinion that the Company is not

2958:

exposed to significant interest, currency or credit risks arising from

2959:

these financial instruments.

2960:

The fair values of these financial instruments approximate their

2961:

carrying values, unless otherwise noted.</TD>

2962:

2963:

2964:

2965:

2966:

2967:

2968:

<TD class=xl39>Inventories:</TD>

2969:

2970:

2971:

2972:

2973:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Inventories

2974:

consist of mining equipment held for resale.<SPAN

2975:

style="mso-spacerun: yes">  Inventories are recorded at the

2976:

lower of cost or net realizable value.</TD>

2977:

2978:

2979:

2980:

2981:

2982:

2983:

<TD class=xl39>Mineral properties:</TD>

2984:

2985:

2986:

2987:

2988:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company is

2989:

engaged in the acquisition, exploration and development of mineral

2990:

properties.  All acquisition,

2991:

exploration and related direct overhead expenditures are deferred and will

2992:

be depleted over the estimated life of the property.<SPAN

2993:

style="mso-spacerun: yes">  The estimated life of a property

2994:

depends on whether the property contains economically recoverable reserves

2995:

that can be brought into production.

2996:

The costs relating to a property abandoned are written off when the

2997:

decision to abandon is made.</TD>

2998:

2999:

3000:

3001:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The total amount

3002:

recorded for mineral properties and deferred exploration expenditures

3003:

represents costs incurred to date and does not reflect present or future

3004:

values.</TD>

3005:

3006:

3007:

3008:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Proceeds from

3009:

disposition of mineral properties are normally credited to the capitalized

3010:

costs with no gain or loss being recognized unless the sale is significant

3011:

to the capitalized property costs.

3012:

For such significant dispositions, a gain or loss would be

3013:

recognized.</TD>

3014:

3015:

3016:

3017:

3018:

3019:

3020:

3021:

<TD class=xl39>Capital assets and amortization:</TD>

3022:

3023:

3024:

3025:

3026:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Capital assets are

3027:

recorded at cost and are amortized over the estimated useful life on the

3028:

declining balance method at rates of 20% to 30% per annum.<SPAN

3029:

style="mso-spacerun: yes">  Amortization related to

3030:

exploration and mining equipment is capitalized as a mineral property

3031:

cost.</TD>

3032:

3033:

3034:

3035:

3036:

3037:

3038:

<TD class=xl39>Foreign currency translation:</TD>

3039:

3040:

3041:

3042:

3043:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5

3044:

x:str="For domestic companies and integrated foreign operations, monetary assets and liabilities are translated into Canadian dollars at exchange rates prevailing at the balance sheet date. Other assets and liabilities are translated at exchange rates prevailing at the dates of the transactions. Income and expenses are translated at average exchange rates prevailing during the year. Exchange gains or losses are included in earnings for the year. ">For

3045:

domestic companies and integrated foreign operations, monetary assets and

3046:

liabilities are translated into Canadian dollars at exchange rates

3047:

prevailing at the balance sheet date.<SPAN

3048:

style="mso-spacerun: yes">  Other assets and liabilities are

3049:

translated at exchange rates prevailing at the dates of the

3050:

transactions.  Income and

3051:

expenses are translated at average exchange rates prevailing during the

3052:

year.  Exchange gains or

3053:

losses are included in earnings for the year.<SPAN

3054:

style="mso-spacerun: yes">  </TD>

3055:

3056:

3057:

3058:

3059:

3060:

3061:

<TD class=xl39>Income taxes:</TD>

3062:

3063:

3064:

3065:

3066:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company

3067:

follows the asset and liability method of accounting for income

3068:

taxes.  Under this method,

3069:

current taxes are recognized for the estimated income taxes payable for

3070:

the current period.</TD>

3071:

3072:

3073:

3074:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Future income

3075:

taxes are provided based on the estimated future tax effects of temporary

3076:

differences between financial statement carrying amounts of existing

3077:

assets and liabilities and their respective tax bases as well as the

3078:

benefit of losses available to be carried forward to future years for tax

3079:

purposes.</TD>

3080:

3081:

3082:

3083:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Future tax assets

3084:

and liabilities are measured using enacted or substantively enacted tax

3085:

rates that are expected to apply to taxable income in the years in which

3086:

those temporary differences are expected to be recovered or settled.<SPAN

3087:

style="mso-spacerun: yes">  The effect on future tax assets

3088:

and liabilities of a change in tax rates is recognized in operations in

3089:

the period that includes the enactment or substantive enactment date.<SPAN

3090:

style="mso-spacerun: yes">  A valuation allowance is recorded

3091:

for future tax assets when it is not more likely than not that such future

3092:

tax assets will be realized.</TD>

3093:

3094:

3095:

3096:

3097:

3098:

<TD class=xl39 style="HEIGHT: 12.75pt" height=17><SPAN

3099:

style="mso-spacerun: yes"> (j)</TD>

3100:

<TD class=xl39>Net loss per share:</TD>

3101:

3102:

3103:

3104:

3105:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5

3106:

x:str="During the year the company adopted the new provisions of CICA Handbook Section 3500, earnings per share. ">During

3107:

the year the company adopted the new provisions of CICA Handbook Section

3108:

3500, earnings per share.  </TD>

3109:

3110:

3111:

3112:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Basic net loss per

3113:

share is computed using the weighted average number of common shares

3114:

outstanding during the period.

3115:

Diluted loss per share is computed using the weighted average

3116:

number of common shares and potentially dilutive common shares outstanding

3117:

during the period.  As the

3118:

Company has a net loss in the years ending May 31, 2001 and 2002, basic

3119:

and diluted net loss per share are the same.</TD>

3120:

3121:

3122:

3123:

3124:

3125:

3126:

<TD class=xl39>Stock based compensation:</TD>

3127:

3128:

3129:

3130:

3131:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5

3132:

x:str="The Company has stock based compensation plans. No compensation expense is recognized for these plans when stock or stock options are issued to employees. Consideration paid by employees on the exercise of stock options is credited to common shares. For consideration paid to an employee for the repurchase of stock options, the excess of the consideration paid over the carrying amount of the stock option cancelled is charged to retained earnings. ">The

3133:

Company has stock based compensation plans.<SPAN

3134:

style="mso-spacerun: yes">  No compensation expense is

3135:

recognized for these plans when stock or stock options are issued to

3136:

employees.  Consideration paid

3137:

by employees on the exercise of stock options is credited to common

3138:

shares.  For consideration

3139:

paid to an employee for the repurchase of stock options, the excess of the

3140:

consideration paid over the carrying amount of the stock option cancelled

3141:

is charged to retained earnings.

3142:

</TD>

3143:

3144:

3145:

3146:

3147:

3148:

3149:

3150:

<TD class=xl80>Capital assets:</TD>

3151:

3152:

3153:

3154:

3155:

3156:

3157:

3158:

3159:

3160:

3161:

3162:

3163:

3164:

3165:

3166:

3167:

3168:

3169:

3170:

3171:

3172:

3173:

3174:

3175:

3176:

3177:

3178:

3179:

3180:

3181:

3182:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3183:

height=17>Land</TD>

3184:

3185:

<TD class=xl31 x:num="8215"><SPAN

3186:

style="mso-spacerun: yes"> $<SPAN

3187:

style="mso-spacerun: yes">          

3188:

8,215 </TD>

3189:

<TD class=xl31 x:num="8215"><SPAN

3190:

style="mso-spacerun: yes"> $<SPAN

3191:

style="mso-spacerun: yes">           

3192:

8,215 </TD>

3193:

3194:

3195:

3196:

3197:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3198:

height=17>Furniture</TD>

3199:

3200:

<TD class=xl73 x:num="10947"><SPAN

3201:

style="mso-spacerun: yes">           

3202:

10,947 </TD>

3203:

<TD class=xl73 x:num="10947"><SPAN

3204:

style="mso-spacerun: yes">            

3205:

10,947 </TD>

3206:

3207:

3208:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3209:

height=17>Computer equipment</TD>

3210:

3211:

<TD class=xl73 x:num="37494"><SPAN

3212:

style="mso-spacerun: yes">           

3213:

37,494 </TD>

3214:

<TD class=xl73 x:num="37494"><SPAN

3215:

style="mso-spacerun: yes">            

3216:

37,494 </TD>

3217:

3218:

3219:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3220:

height=17>Automotive equipment</TD>

3221:

3222:

<TD class=xl73 x:num="57331"><SPAN

3223:

style="mso-spacerun: yes">           

3224:

57,331 </TD>

3225:

<TD class=xl73 x:num="57331"><SPAN

3226:

style="mso-spacerun: yes">            

3227:

57,331 </TD>

3228:

3229:

3230:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3231:

height=17>Exploration/mining equipment</TD>

3232:

3233:

<TD class=xl73 x:num="498988"><SPAN

3234:

style="mso-spacerun: yes">         

3235:

498,988 </TD>

3236:

<TD class=xl73 x:num="508642"><SPAN

3237:

style="mso-spacerun: yes">          

3238:

508,642 </TD>

3239:

3240:

3241:

<TD class=xl69 style="HEIGHT: 12.75pt" height=17>Soft<SPAN

3242:

style="DISPLAY: none">ware</TD>

3243:

3244:

3245:

3246:

<TD class=xl76 x:num="6260"><SPAN

3247:

style="mso-spacerun: yes">             

3248:

6,260 </TD>

3249:

<TD class=xl76 x:num="6024"><SPAN

3250:

style="mso-spacerun: yes">              

3251:

6,024 </TD>

3252:

3253:

3254:

3255:

<TD class=xl73 x:num="619235"><SPAN

3256:

style="mso-spacerun: yes">         

3257:

619,235 </TD>

3258:

<TD class=xl73 x:num="628653"><SPAN

3259:

style="mso-spacerun: yes">          

3260:

628,653 </TD>

3261:

3262:

3263:

3264:

<TD class=xl37>Accumulated depreciation</TD>

3265:

3266:

3267:

3268:

3269:

3270:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3271:

height=17>Furniture</TD>

3272:

3273:

<TD class=xl73 x:num="7065"><SPAN

3274:

style="mso-spacerun: yes">             

3275:

7,065 </TD>

3276:

<TD class=xl73 x:num="6189"><SPAN

3277:

style="mso-spacerun: yes">              

3278:

6,189 </TD>

3279:

3280:

3281:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3282:

height=17>Computer equipment</TD>

3283:

3284:

<TD class=xl73 x:num="30502"><SPAN

3285:

style="mso-spacerun: yes">           

3286:

30,502 </TD>

3287:

<TD class=xl73 x:num="27968"><SPAN

3288:

style="mso-spacerun: yes">            

3289:

27,968 </TD>

3290:

3291:

3292:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3293:

height=17>Automotive equipment</TD>

3294:

3295:

<TD class=xl73 x:num="47506"><SPAN

3296:

style="mso-spacerun: yes">           

3297:

47,506 </TD>

3298:

<TD class=xl73 x:num="43970"><SPAN

3299:

style="mso-spacerun: yes">            

3300:

43,970 </TD>

3301:

3302:

3303:

<TD class=xl69 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=2

3304:

height=17>Exploration/mining equipment</TD>

3305:

3306:

<TD class=xl73 x:num="401825"><SPAN

3307:

style="mso-spacerun: yes">         

3308:

401,825 </TD>

3309:

<TD class=xl73 x:num="374834"><SPAN

3310:

style="mso-spacerun: yes">          

3311:

374,834 </TD>

3312:

3313:

3314:

<TD class=xl69 style="HEIGHT: 12.75pt" height=17>Soft<SPAN

3315:

style="DISPLAY: none">ware</TD>

3316:

3317:

3318:

3319:

<TD class=xl76 x:num="6121"><SPAN

3320:

style="mso-spacerun: yes">             

3321:

6,121 </TD>

3322:

<TD class=xl76 x:num="6024"><SPAN

3323:

style="mso-spacerun: yes">              

3324:

6,024 </TD>

3325:

3326:

3327:

3328:

<TD class=xl73 x:num="493019"><SPAN

3329:

style="mso-spacerun: yes">         

3330:

493,019 </TD>

3331:

<TD class=xl73 x:num="458985"><SPAN

3332:

style="mso-spacerun: yes">          

3333:

458,985 </TD>

3334:

3335:

3336:

3337:

3338:

3339:

3340:

3341:

3342:

<TD class=xl63>Net book value</TD>

3343:

3344:

3345:

<TD class=xl35 x:num="126216"><SPAN

3346:

style="mso-spacerun: yes"> $<SPAN

3347:

style="mso-spacerun: yes">      

3348:

126,216 </TD>

3349:

<TD class=xl35 x:num="169668"><SPAN

3350:

style="mso-spacerun: yes"> $<SPAN

3351:

style="mso-spacerun: yes">        

3352:

169,668 </TD>

3353:

3354:

3355:

3356:

3357:

3358:

3359:

3360:

3361:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Amortization of

3362:

$36,645 (2001 - $57,346) related to exploration equipment was capitalized

3363:

to mineral properties during the year.</TD>

3364:

3365:

3366:

3367:

3368:

3369:

3370:

3371:

<TD class=xl80>Mineral properties:</TD>

3372:

3373:

3374:

3375:

3376:

3377:

3378:

3379:

3380:

3381:

3382:

3383:

3384:

3385:

3386:

3387:

3388:

3389:

3390:

3391:

3392:

3393:

3394:

3395:

3396:

3397:

<TD class=xl37>Nevada U.S.A.</TD>

3398:

3399:

3400:

<TD class=xl31 x:num="3297789"><SPAN

3401:

style="mso-spacerun: yes"> $<SPAN

3402:

style="mso-spacerun: yes">     3,297,789 </TD>

3403:

<TD class=xl31 x:num="3004902"><SPAN

3404:

style="mso-spacerun: yes"> $<SPAN

3405:

style="mso-spacerun: yes">      3,004,902

3406:

</TD>

3407:

3408:

3409:

3410:

<TD class=xl37>Colorado, U.S.A.</TD>

3411:

3412:

3413:

<TD class=xl73 x:num="9239606"><SPAN

3414:

style="mso-spacerun: yes">      

3415:

9,239,606 </TD>

3416:

<TD class=xl73 x:num="9119006"><SPAN

3417:

style="mso-spacerun: yes">        

3418:

9,119,006 </TD>

3419:

3420:

3421:

3422:

<TD class=xl37>Panama, Central America</TD>

3423:

3424:

3425:

<TD class=xl73 x:num="144058"><SPAN

3426:

style="mso-spacerun: yes">         

3427:

144,058 </TD>

3428:

<TD class=xl73 x:num="78988"><SPAN

3429:

style="mso-spacerun: yes">            

3430:

78,988 </TD>

3431:

3432:

3433:

3434:

3435:

3436:

3437:

3438:

3439:

3440:

3441:

3442:

3443:

<TD class=xl35 x:num="12681453"><SPAN

3444:

style="mso-spacerun: yes"> $<SPAN

3445:

style="mso-spacerun: yes">   12,681,453 </TD>

3446:

<TD class=xl35 x:num="12202896"><SPAN

3447:

style="mso-spacerun: yes"> $<SPAN

3448:

style="mso-spacerun: yes">    12,202,896 </TD>

3449:

3450:

3451:

3452:

3453:

3454:

3455:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Title to mining

3456:

properties involves certain inherent risks due to the difficulties of

3457:

determining the validity of certain claims as well as the potential for

3458:

problems arising from the frequently ambiguous conveyancing history

3459:

characteristics of many mining properties.<SPAN

3460:

style="mso-spacerun: yes">  The Company has investigated title

3461:

to all of its mineral properties and, to the best of its knowledge, title

3462:

to all of its properties are in good standing.<SPAN

3463:

style="mso-spacerun: yes">  The majority of the properties in

3464:

which the Company has committed to earn an interest are located outside

3465:

Canada.  The Company is

3466:

therefore relying on title opinions by legal counsel who are basing such

3467:

opinions on the laws of the respective country.</TD>

3468:

3469:

3470:

3471:

3472:

3473:

3474:

3475:

<TD class=xl39>Nevada, U.S.A.:</TD>

3476:

3477:

3478:

3479:

3480:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>In December 1994,

3481:

the Company acquired a 51% interest in certain patented and unpatented

3482:

claims located in Nevada from a company controlled by directors for

3483:

$1,176,000 US plus a 5% net smelter royalty.<SPAN

3484:

style="mso-spacerun: yes">  The Company can also acquire a

3485:

100% interest in a further 89 claims in this property under this

3486:

agreement.</TD>

3487:

3488:

3489:

3490:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company

3491:

entered into an agreement and settlement dated September 7, 2000 with

3492:

Nevada Manhattan Mining Incorporated to settle and purchase Nevada

3493:

Manhattan Mining Incorporated's 24.5% interest in the property.<SPAN

3494:

style="mso-spacerun: yes">  The Company agreed to make four

3495:

annual payments of US $75,000 each for a total of US $300,000.<SPAN

3496:

style="mso-spacerun: yes">  During the term of the agreement

3497:

the Company has agreed to pay Nevada Manhattan Mining Incorporated a 2%

3498:

net smelter return royalty.

3499:

The Company can purchase the entire Nevada Manhattan Mining

3500:

Incorporated interest and royalty at anytime over a thirty-year period for

3501:

US $7,500,000, which would include production royalties.</TD>

3502:

3503:

3504:

3505:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company also

3506:

holds a 100% interest in 42 unpatented claims in the Manhattan Mining

3507:

district by staking.</TD>

3508:

3509:

3510:

3511:

3512:

3513:

3514:

3515:

<TD class=xl39>Colorado, U.S.A.</TD>

3516:

3517:

3518:

3519:

3520:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Included in the

3521:

Colorado properties is a 100% working interest in the Consolidated

3522:

Caribou-Cross-Comstock-Panadora district mine area which the Company

3523:

acquired in 1997 for US $4,000,000 in stock, cash and final property

3524:

payments.  After acquisition

3525:

of 100% working interest the seller retains a 2% net smelter royalty

3526:

interest in the property.  The

3527:

Company has the right to buy back half of the net smelter royalty (1%) for

3528:

US $750,000.  The seller has

3529:

not sold any of the issued shares for this acquisition through May 31,

3530:

2002.  During 2000, the

3531:

Company acquired 100% ownership of 10 patented claims that are

3532:

continuations of the historic Boulder County and Cardinal vein

3533:

systems.  The Colorado

3534:

properties contain a well-documented mineral resource of 424,500 ounces of

3535:

gold and 11,725,000 ounces of silver.</TD>

3536:

3537:

3538:

3539:

3540:

3541:

3542:

3543:

<TD class=xl39>Panama, Central America:</TD>

3544:

3545:

3546:

3547:

3548:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company owns

3549:

hard rock mining concessions to 61,000 acres (24,686 hectares) in the

3550:

eastern Veraguas District of Panama in Central America in 2001.<SPAN

3551:

style="mso-spacerun: yes">  The acquisition was made through a

3552:

five-year agreement with Panama Mining of Golden Cycle Incorporated, the

3553:

seller.  The Company issued

3554:

100,000 shares of stock to the seller.<SPAN

3555:

style="mso-spacerun: yes">  The Company is obligated to pay

3556:

the seller a 2% net smelter return on any hard rock mineral

3557:

production.  The Company can

3558:

purchase the concessions from the seller at anytime during the five-year

3559:

option period for US $5,000,000.

3560:

Upon completion of the purchase the 2% net smelter return would

3561:

terminate.  The Company is

3562:

obligated to pay the annual taxes and holding fees during the option

3563:

period.</TD>

3564:

3565:

3566:

3567:

3568:

3569:

3570:

3571:

3572:

3573:

3574:

3575:

3576:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Loan payable with

3577:

interest only payments at 10.5% per annum.<SPAN

3578:

style="mso-spacerun: yes">   The loan principal of

3579:

$1,200,000 US is due in full on September 12, 2002; and the loan is

3580:

secured by deed of trust over mineral properties.</TD>

3581:

3582:

3583:

3584:

3585:

<TD class=xl25 colSpan=5>Cash of $67,415 is held in an escrow account for

3586:

monthly interest payments.</TD>

3587:

3588:

3589:

3590:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Subsequent to May

3591:

31, 2002, the due date of the loan was extended to November 16, 2002 in

3592:

exchange for a renewal fee.

3593:

The bank has agreed to subsequent extensions beyond November 16,

3594:

2002 for monthly renewal fees, and has agreed to extend the loan for one

3595:

year upon the Company paying down 10% of the principal (US$120,000).</TD>

3596:

3597:

3598:

3599:

3600:

3601:

3602:

3603:

3604:

3605:

3606:

3607:

3608:

3609:

3610:

3611:

3612:

3613:

3614:

3615:

3616:

3617:

3618:

3619:

3620:

3621:

3622:

3623:

3624:

<TD class=xl85 style="WIDTH: 298pt" width=398 colSpan=3>Debentures

3625:

payable, without interest, due May 2011, convertible to common shares at

3626:

an exercise price of $1.23 at holders discretion; unsecured</TD>

3627:

<TD class=xl31 x:num="5097105"><SPAN

3628:

style="mso-spacerun: yes"> $<SPAN

3629:

style="mso-spacerun: yes">     5,097,105 </TD>

3630:

<TD class=xl31 x:num="5442018"><SPAN

3631:

style="mso-spacerun: yes"> $<SPAN

3632:

style="mso-spacerun: yes">      5,442,018

3633:

</TD>

3634:

3635:

3636:

3637:

<TD class=xl85 style="WIDTH: 298pt" width=398 colSpan=3>Promissory note

3638:

payable, with interest at 11.5% per annum; unsecured</TD>

3639:

3640:

3641:

3642:

3643:

3644:

3645:

3646:

3647:

3648:

3649:

3650:

3651:

3652:

3653:

<TD class=xl35 x:num="5097105"><SPAN

3654:

style="mso-spacerun: yes"> $<SPAN

3655:

style="mso-spacerun: yes">     5,097,105 </TD>

3656:

<TD class=xl35 x:num="5720680"><SPAN

3657:

style="mso-spacerun: yes"> $<SPAN

3658:

style="mso-spacerun: yes">      5,720,680

3659:

</TD>

3660:

3661:

3662:

3663:

<TD class=xl158 style="WIDTH: 448pt" width=597 colSpan=5>All debentures

3664:

are held by companies or persons related to a shareholder and

3665:

director.  It is not

3666:

practicable to determine the fair value of the debentures and advances

3667:

from shareholders due to their related party nature and the absence of a

3668:

secondary market for such instruments.</TD>

3669:

3670:

3671:

<TD style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=17

3672:

height=17></TD></TR>

3673:

3674:

3675:

<TD class=xl80>Share capital:</TD>

3676:

3677:

3678:

3679:

<TD class=xl80 style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=3

3680:

height=17></TD>

3681:

3682:

3683:

3684:

<TD class=xl25 colSpan=3>Authorized:

3685:

100,000,000 Common shares without par value</TD>

3686:

3687:

3688:

3689:

<TD class=xl39>Issued:</TD>

3690:

3691:

3692:

3693:

3694:

3695:

3696:

3697:

3698:

3699:

3700:

3701:

3702:

3703:

3704:

3705:

3706:

3707:

3708:

3709:

3710:

3711:

<TD class=xl37>Common</TD>

3712:

<TD class=xl74>Number</TD>

3713:

3714:

<TD class=xl74>Number</TD>

3715:

3716:

3717:

3718:

3719:

3720:

3721:

<TD class=xl60 x:str="shares ">shares </TD>

3722:

<TD class=xl89>of shares</TD>

3723:

<TD class=xl89 x:str="Amount ">Amount </TD>

3724:

<TD class=xl89 x:str="of shares ">of shares </TD>

3725:

<TD class=xl95>Amount</TD>

3726:

3727:

3728:

3729:

3730:

3731:

3732:

3733:

3734:

3735:

3736:

3737:

3738:

3739:

3740:

3741:

<TD class=xl37>Balance, beginning of year</TD>

3742:

<TD class=xl73 x:num="9855718"><SPAN

3743:

style="mso-spacerun: yes">      9,855,718

3744:

</TD>

3745:

<TD class=xl31 x:num="22076307"><SPAN

3746:

style="mso-spacerun: yes"> $<SPAN

3747:

style="mso-spacerun: yes">  22,076,307 </TD>

3748:

<TD class=xl73 x:num="9655718"><SPAN

3749:

style="mso-spacerun: yes">      

3750:

9,655,718 </TD>

3751:

<TD class=xl31 x:num="22016307"><SPAN

3752:

style="mso-spacerun: yes"> $<SPAN

3753:

style="mso-spacerun: yes">    22,016,307 </TD>

3754:

3755:

3756:

3757:

3758:

3759:

3760:

3761:

3762:

<TD class=xl37>Shares issued for debt or services</TD>

3763:

<TD class=xl73 x:num="721000"><SPAN

3764:

style="mso-spacerun: yes">        

3765:

721,000 </TD>

3766:

<TD class=xl73 x:num="216300"><SPAN

3767:

style="mso-spacerun: yes">         

3768:

216,300 </TD>

3769:

<TD class=xl73 x:num="100000"><SPAN

3770:

style="mso-spacerun: yes">         

3771:

100,000 </TD>

3772:

<TD class=xl73 x:num="45000"><SPAN

3773:

style="mso-spacerun: yes">            

3774:

45,000 </TD>

3775:

3776:

3777:

3778:

3779:

3780:

3781:

3782:

<TD class=xl37>Issued for acquisition of mineral</TD>

3783:

3784:

3785:

3786:

3787:

3788:

3789:

3790:

3791:

3792:

property</TD>

3793:

<TD class=xl73 x:num="100000"><SPAN

3794:

style="mso-spacerun: yes">        

3795:

100,000 </TD>

3796:

<TD class=xl73 x:num="30000"><SPAN

3797:

style="mso-spacerun: yes">          

3798:

30,000 </TD>

3799:

<TD class=xl73 x:num="100000"><SPAN

3800:

style="mso-spacerun: yes">         

3801:

100,000 </TD>

3802:

<TD class=xl73 x:num="15000"><SPAN

3803:

style="mso-spacerun: yes">            

3804:

15,000 </TD>

3805:

3806:

3807:

3808:

3809:

3810:

3811:

3812:

3813:

3814:

3815:

3816:

3817:

3818:

3819:

3820:

3821:

<TD class=xl63>Balance, end of year</TD>

3822:

<TD class=xl55 x:num="10676718"><SPAN

3823:

style="mso-spacerun: yes">    10,676,718 </TD>

3824:

<TD class=xl35 x:num="22322607"><SPAN

3825:

style="mso-spacerun: yes"> $<SPAN

3826:

style="mso-spacerun: yes">  22,322,607 </TD>

3827:

<TD class=xl55 x:num="9855718"><SPAN

3828:

style="mso-spacerun: yes">      

3829:

9,855,718 </TD>

3830:

<TD class=xl35 x:num="22076307"><SPAN

3831:

style="mso-spacerun: yes"> $<SPAN

3832:

style="mso-spacerun: yes">    22,076,307 </TD>

3833:

3834:

3835:

3836:

3837:

3838:

3839:

3840:

3841:

3842:

3843:

3844:

<TD style="mso-ignore: colspan" colSpan=3>No shares were issued in the

3845:

year ended May 31, 2000.</TD>

3846:

3847:

3848:

3849:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Included in issued

3850:

and outstanding capital stock are 150,000 contingently cancelable shares

3851:

that are held in escrow and may not be traded without regulatory

3852:

approval.</TD>

3853:

3854:

3855:

3856:

3857:

3858:

3859:

3860:

<TD class=xl39>Stock options:</TD>

3861:

3862:

3863:

3864:

3865:

3866:

3867:

3868:

3869:

3870:

3871:

3872:

3873:

<TD class=xl74>Weighted</TD>

3874:

3875:

3876:

3877:

<TD class=xl74>average</TD>

3878:

3879:

3880:

3881:

<TD class=xl74>exercise price</TD>

3882:

3883:

3884:

<TD class=xl69 style="HEIGHT: 12.75pt" height=17>Dat<SPAN

3885:

style="DISPLAY: none">e</TD>

3886:

3887:

3888:

3889:

<TD class=xl97 x:str="Number ">Number </TD>

3890:

<TD class=xl89>per share</TD>

3891:

3892:

3893:

3894:

3895:

3896:

3897:

3898:

3899:

3900:

<TD class=xl25 colSpan=3>Issued and outstanding, May 31, 2000 and

3901:

1999<SPAN

3902:

style="mso-spacerun: yes">                         

3903:

(i)</TD>

3904:

<TD class=xl73 x:num="824250"><SPAN

3905:

style="mso-spacerun: yes">         

3906:

824,250 </TD>

3907:

<TD class=xl107 x:num="00.45"><SPAN

3908:

style="mso-spacerun: yes"> $<SPAN

3909:

style="mso-spacerun: yes">             

3910:

0.45 </TD>

3911:

3912:

3913:

3914:

3915:

<TD class=xl37>Issued in 2000</TD>

3916:

3917:

3918:

<TD class=xl73 x:num="155000"><SPAN

3919:

style="mso-spacerun: yes">         

3920:

155,000 </TD>

3921:

<TD class=xl99 x:num="00.45"><SPAN

3922:

style="mso-spacerun: yes">                

3923:

0.45 </TD>

3924:

3925:

3926:

3927:

<TD class=xl60>Expired in the year</TD>

3928:

3929:

3930:

<TD class=xl76 x:num="-14000"><SPAN

3931:

style="mso-spacerun: yes">          

3932:

(14,000)</TD>

3933:

<TD class=xl100 x:num="-00.45"><SPAN

3934:

style="mso-spacerun: yes">               

3935:

(0.45)</TD>

3936:

3937:

3938:

3939:

3940:

3941:

3942:

3943:

3944:

3945:

3946:

3947:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Issued and

3948:

outstanding, May 31, 2001</TD>

3949:

3950:

<TD class=xl73 x:num="965250"><SPAN

3951:

style="mso-spacerun: yes">         

3952:

965,250 </TD>

3953:

<TD class=xl99 x:num="00.45"><SPAN

3954:

style="mso-spacerun: yes">                

3955:

0.45 </TD>

3956:

3957:

3958:

3959:

<TD class=xl37>Issued in the year</TD>

3960:

3961:

3962:

<TD class=xl73 x:num="60000"><SPAN

3963:

style="mso-spacerun: yes">           

3964:

60,000 </TD>

3965:

<TD class=xl99 x:num="00.77"><SPAN

3966:

style="mso-spacerun: yes">                

3967:

0.77 </TD>

3968:

3969:

3970:

3971:

3972:

3973:

3974:

3975:

3976:

3977:

3978:

3979:

<TD class=xl63>Balance, May 31, 2002</TD>

3980:

3981:

3982:

<TD class=xl55 x:num="1025250"><SPAN

3983:

style="mso-spacerun: yes">      

3984:

1,025,250 </TD>

3985:

<TD class=xl108 x:num="00.47"><SPAN

3986:

style="mso-spacerun: yes"> $<SPAN

3987:

style="mso-spacerun: yes">  0.47 </TD>

3988:

3989:

3990:

3991:

3992:

3993:

3994:

<TD class=xl25 colSpan=5>During 2001, these options were re-priced from

3995:

$1.34 to $0.45.</TD>

3996:

3997:

3998:

3999:

4000:

4001:

4002:

<TD class=xl25 colSpan=5>Options outstanding at May 31, 2002 are as

4003:

follows:</TD>

4004:

4005:

4006:

4007:

4008:

4009:

4010:

4011:

4012:

4013:

4014:

4015:

4016:

<TD class=xl74>Weighted</TD>

4017:

4018:

4019:

4020:

4021:

4022:

<TD class=xl74>Average</TD>

4023:

4024:

4025:

4026:

4027:

<TD class=xl74>Exercise price</TD>

4028:

4029:

<TD class=xl74>Remaining</TD>

4030:

4031:

4032:

4033:

4034:

4035:

<TD class=xl89>Number</TD>

4036:

<TD class=xl89>per share</TD>

4037:

<TD class=xl89>Expiry date</TD>

4038:

4039:

4040:

4041:

4042:

4043:

4044:

4045:

4046:

4047:

4048:

4049:

<TD class=xl37>Director and employee options</TD>

4050:

<TD class=xl73 x:num="116250"><SPAN

4051:

style="mso-spacerun: yes">        

4052:

116,250 </TD>

4053:

4054:

4055:

<TD class=xl74>.2 years</TD>

4056:

4057:

4058:

4059:

<TD class=xl37>Other</TD>

4060:

<TD class=xl73 x:num="60000"><SPAN

4061:

style="mso-spacerun: yes">         

4062:

60,000 </TD>

4063:

4064:

4065:

<TD class=xl74>1.1 years</TD>

4066:

4067:

4068:

4069:

<TD class=xl37>Director and employee options</TD>

4070:

<TD class=xl73 x:num="694000"><SPAN

4071:

style="mso-spacerun: yes">        

4072:

694,000 </TD>

4073:

4074:

<TD class=xl109 x:num="37895">October-2003</TD>

4075:

<TD class=xl74>1.4 years</TD>

4076:

4077:

4078:

4079:

<TD class=xl37>Director and employee options</TD>

4080:

<TD class=xl73 x:num="155000"><SPAN

4081:

style="mso-spacerun: yes">        

4082:

155,000 </TD>

4083:

4084:

<TD class=xl109 x:num="38565">August-2005</TD>

4085:

<TD class=xl74>3.3 years</TD>

4086:

4087:

4088:

4089:

4090:

4091:

4092:

4093:

4094:

4095:

4096:

4097:

<TD class=xl55 x:num="1025250"><SPAN

4098:

style="mso-spacerun: yes">      1,025,250

4099:

</TD>

4100:

4101:

4102:

<TD class=xl94>1.5 years</TD>

4103:

4104:

4105:

4106:

4107:

4108:

4109:

4110:

4111:

<TD class=xl25 colSpan=5>All outstanding options are exercisable when

4112:

issued.</TD>

4113:

4114:

4115:

4116:

4117:

4118:

4119:

4120:

<TD class=xl25 colSpan=5>Warrants</TD>

4121:

4122:

4123:

4124:

4125:

4126:

4127:

4128:

4129:

4130:

4131:

4132:

4133:

<TD class=xl74>Weighted</TD>

4134:

4135:

4136:

4137:

4138:

<TD class=xl74>Average</TD>

4139:

4140:

4141:

4142:

4143:

4144:

<TD class=xl74>exercise price</TD>

4145:

4146:

4147:

4148:

4149:

4150:

4151:

<TD class=xl89>Number</TD>

4152:

<TD class=xl89>per share</TD>

4153:

4154:

4155:

4156:

4157:

4158:

4159:

4160:

4161:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Issued and

4162:

outstanding, May 31, 1999</TD>

4163:

4164:

<TD class=xl73 x:num="537000"><SPAN

4165:

style="mso-spacerun: yes">         

4166:

537,000 </TD>

4167:

<TD class=xl107 x:num="10"><SPAN

4168:

style="mso-spacerun: yes"> $<SPAN

4169:

style="mso-spacerun: yes">           

4170:

10.00 </TD>

4171:

4172:

4173:

4174:

<TD class=xl37>Expired in year</TD>

4175:

4176:

4177:

<TD class=xl73 x:num="-537000"><SPAN

4178:

style="mso-spacerun: yes">        

4179:

(537,000)</TD>

4180:

<TD class=xl99 x:num="10"><SPAN

4181:

style="mso-spacerun: yes">              

4182:

10.00 </TD>

4183:

4184:

4185:

4186:

4187:

4188:

4189:

4190:

4191:

4192:

4193:

4194:

<TD class=xl87 style="mso-ignore: colspan" colSpan=2>Balance, May 31,

4195:

2002, 2001 and 2000</TD>

4196:

4197:

<TD class=xl129 x:num="0" x:fmla="=SUM(E487:E488)"><SPAN

4198:

style="mso-spacerun: yes">                    

4199:

- </TD>

4200:

<TD class=xl140 x:num="0" x:fmla="=F487-F488"><SPAN

4201:

style="mso-spacerun: yes"> $<SPAN

4202:

style="mso-spacerun: yes">                

4203:

-   </TD>

4204:

4205:

4206:

4207:

4208:

4209:

4210:

4211:

<TD class=xl25 style="mso-ignore: colspan" colSpan=3>Subsequent to the

4212:

year end, the following warrants were issued:</TD>

4213:

4214:

4215:

4216:

4217:

4218:

4219:

4220:

4221:

4222:

4223:

4224:

<TD class=xl123>Exercise</TD>

4225:

<TD class=xl149>Expiry</TD>

4226:

4227:

4228:

4229:

4230:

4231:

<TD class=xl89>Number</TD>

4232:

<TD class=xl89>price</TD>

4233:

4234:

4235:

4236:

4237:

4238:

4239:

4240:

4241:

4242:

<TD class=xl24>In conjunction with share issuance</TD>

4243:

4244:

<TD class=xl151 x:num="62500"><SPAN

4245:

style="mso-spacerun: yes">          

4246:

62,500 </TD>

4247:

<TD class=xl152 x:num="00.8"><SPAN

4248:

style="mso-spacerun: yes"> $<SPAN

4249:

style="mso-spacerun: yes">            

4250:

0.80 </TD>

4251:

4252:

4253:

4254:

4255:

<TD class=xl25>For services</TD>

4256:

4257:

<TD class=xl153 x:num="486303"><SPAN

4258:

style="mso-spacerun: yes">         

4259:

486,303 </TD>

4260:

<TD class=xl154 x:num="00.81"><SPAN

4261:

style="mso-spacerun: yes"> $<SPAN

4262:

style="mso-spacerun: yes">            

4263:

0.81 </TD>

4264:

4265:

4266:

4267:

4268:

4269:

4270:

4271:

4272:

4273:

4274:

4275:

4276:

4277:

4278:

4279:

<TD class=xl80>Income taxes:</TD>

4280:

4281:

4282:

4283:

4284:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company has

4285:

income tax loss carryforwards of approximately $3,049,000 which are

4286:

available to reduce future taxable income.<SPAN

4287:

style="mso-spacerun: yes">  The benefits of the losses have

4288:

not been recognized in the financial statements.<SPAN

4289:

style="mso-spacerun: yes">  The losses will expire as

4290:

follows:</TD>

4291:

4292:

4293:

4294:

4295:

4296:

4297:

4298:

4299:

4300:

4301:

4302:

4303:

4304:

<TD class=xl33 style="BORDER-TOP: medium none">Canada</TD>

4305:

4306:

<TD class=xl33 style="BORDER-TOP: medium none">Total</TD>

4307:

4308:

4309:

4310:

4311:

4312:

4313:

4314:

4315:

4316:

4317:

4318:

<TD class=xl31 x:num="72000"><SPAN

4319:

style="mso-spacerun: yes"> $<SPAN

4320:

style="mso-spacerun: yes">        

4321:

72,000 </TD>

4322:

<TD class=xl31 x:num="0"><SPAN

4323:

style="mso-spacerun: yes"> $<SPAN

4324:

style="mso-spacerun: yes">                 

4325:

- </TD>

4326:

<TD class=xl31 x:num="72000"><SPAN

4327:

style="mso-spacerun: yes"> $<SPAN

4328:

style="mso-spacerun: yes">         

4329:

72,000 </TD>

4330:

4331:

4332:

4333:

4334:

4335:

<TD class=xl73 x:num="547000"><SPAN

4336:

style="mso-spacerun: yes">         

4337:

547,000 </TD>

4338:

<TD class=xl73 x:num="0"><SPAN

4339:

style="mso-spacerun: yes">                    

4340:

- </TD>

4341:

<TD class=xl73 x:num="547000"><SPAN

4342:

style="mso-spacerun: yes">          

4343:

547,000 </TD>

4344:

4345:

4346:

4347:

4348:

4349:

<TD class=xl73 x:num="13000"><SPAN

4350:

style="mso-spacerun: yes">          

4351:

13,000 </TD>

4352:

<TD class=xl73 x:num="0"><SPAN

4353:

style="mso-spacerun: yes">                    

4354:

- </TD>

4355:

<TD class=xl73 x:num="13000"><SPAN

4356:

style="mso-spacerun: yes">            

4357:

13,000 </TD>

4358:

4359:

4360:

4361:

4362:

4363:

<TD class=xl73 x:num="105000"><SPAN

4364:

style="mso-spacerun: yes">         

4365:

105,000 </TD>

4366:

<TD class=xl73 x:num="0"><SPAN

4367:

style="mso-spacerun: yes">                    

4368:

- </TD>

4369:

<TD class=xl73 x:num="105000"><SPAN

4370:

style="mso-spacerun: yes">          

4371:

105,000 </TD>

4372:

4373:

4374:

4375:

4376:

4377:

4378:

4379:

<TD class=xl73 x:num="222000"><SPAN

4380:

style="mso-spacerun: yes">         

4381:

222,000 </TD>

4382:

<TD class=xl73 x:num="0"><SPAN

4383:

style="mso-spacerun: yes">                    

4384:

- </TD>

4385:

<TD class=xl73 x:num="222000"><SPAN

4386:

style="mso-spacerun: yes">          

4387:

222,000 </TD>

4388:

4389:

4390:

4391:

4392:

4393:

<TD class=xl73 x:num="150000"><SPAN

4394:

style="mso-spacerun: yes">         

4395:

150,000 </TD>

4396:

<TD class=xl73 x:num="496000"><SPAN

4397:

style="mso-spacerun: yes">         

4398:

496,000 </TD>

4399:

<TD class=xl73 x:num="646000"><SPAN

4400:

style="mso-spacerun: yes">          

4401:

646,000 </TD>

4402:

4403:

4404:

4405:

4406:

4407:

<TD class=xl73 x:num="264000"><SPAN

4408:

style="mso-spacerun: yes">         

4409:

264,000 </TD>

4410:

<TD class=xl73 x:num="255000"><SPAN

4411:

style="mso-spacerun: yes">         

4412:

255,000 </TD>

4413:

<TD class=xl73 x:num="519000"><SPAN

4414:

style="mso-spacerun: yes">          

4415:

519,000 </TD>

4416:

4417:

4418:

4419:

4420:

4421:

<TD class=xl73 x:num="0"><SPAN

4422:

style="mso-spacerun: yes">                   

4423:

- </TD>

4424:

<TD class=xl73 x:num="84000"><SPAN

4425:

style="mso-spacerun: yes">           

4426:

84,000 </TD>

4427:

<TD class=xl73 x:num="84000"><SPAN

4428:

style="mso-spacerun: yes">            

4429:

84,000 </TD>

4430:

4431:

4432:

4433:

4434:

4435:

<TD class=xl73 x:num="0"><SPAN

4436:

style="mso-spacerun: yes">                   

4437:

- </TD>

4438:

<TD class=xl73 x:num="398000"><SPAN

4439:

style="mso-spacerun: yes">         

4440:

398,000 </TD>

4441:

<TD class=xl73 x:num="398000"><SPAN

4442:

style="mso-spacerun: yes">          

4443:

398,000 </TD>

4444:

4445:

4446:

4447:

4448:

4449:

<TD class=xl73 x:num="0"><SPAN

4450:

style="mso-spacerun: yes">                   

4451:

- </TD>

4452:

<TD class=xl73 x:num="443000"><SPAN

4453:

style="mso-spacerun: yes">         

4454:

443,000 </TD>

4455:

<TD class=xl73 x:num="443000"><SPAN

4456:

style="mso-spacerun: yes">          

4457:

443,000 </TD>

4458:

4459:

4460:

4461:

4462:

4463:

4464:

4465:

4466:

4467:

4468:

4469:

4470:

4471:

<TD class=xl35 x:num="1373000"><SPAN

4472:

style="mso-spacerun: yes"> $<SPAN

4473:

style="mso-spacerun: yes">    1,373,000 </TD>

4474:

<TD class=xl35 x:num="1676000"><SPAN

4475:

style="mso-spacerun: yes"> $<SPAN

4476:

style="mso-spacerun: yes">     1,676,000 </TD>

4477:

<TD class=xl35 x:num="3049000"><SPAN

4478:

style="mso-spacerun: yes"> $<SPAN

4479:

style="mso-spacerun: yes">      3,049,000

4480:

</TD>

4481:

4482:

4483:

4484:

4485:

4486:

4487:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Significant

4488:

components of the Company's future tax assets are shown below.<SPAN

4489:

style="mso-spacerun: yes">  A valuation allowance has been

4490:

recognized to fully offset the net future tax assets as realization of

4491:

such net assets is uncertain.</TD>

4492:

4493:

4494:

4495:

4496:

4497:

4498:

4499:

4500:

4501:

4502:

4503:

4504:

4505:

4506:

4507:

4508:

4509:

4510:

4511:

4512:

4513:

4514:

<TD class=xl37>Future tax assets:</TD>

4515:

4516:

4517:

4518:

4519:

Operating loss carryforwards</TD>

4520:

4521:

4522:

<TD class=xl31 x:num="1186000"><SPAN

4523:

style="mso-spacerun: yes"> $<SPAN

4524:

style="mso-spacerun: yes">     1,186,000 </TD>

4525:

<TD class=xl31 x:num="943000"><SPAN

4526:

style="mso-spacerun: yes"> $<SPAN

4527:

style="mso-spacerun: yes">        

4528:

943,000 </TD>

4529:

4530:

4531:

4532:

<TD class=xl60>   Capital

4533:

assets</TD>

4534:

4535:

4536:

<TD class=xl76 x:num="27000"><SPAN

4537:

style="mso-spacerun: yes">           

4538:

27,000 </TD>

4539:

<TD class=xl76 x:num="15000"><SPAN

4540:

style="mso-spacerun: yes">            

4541:

15,000 </TD>

4542:

4543:

4544:

4545:

4546:

4547:

4548:

4549:

4550:

4551:

<TD class=xl73 x:num="1213000"><SPAN

4552:

style="mso-spacerun: yes">      

4553:

1,213,000 </TD>

4554:

<TD class=xl73 x:num="958000"><SPAN

4555:

style="mso-spacerun: yes">          

4556:

958,000 </TD>

4557:

4558:

4559:

4560:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Valuation allowance

4561:

for future tax assets</TD>

4562:

4563:

<TD class=xl73 x:num="-1213000"><SPAN

4564:

style="mso-spacerun: yes">     

4565:

(1,213,000)</TD>

4566:

<TD class=xl73 x:num="-958000"><SPAN

4567:

style="mso-spacerun: yes">         

4568:

(958,000)</TD>

4569:

4570:

4571:

4572:

4573:

4574:

4575:

4576:

4577:

<TD class=xl63>Net future tax assets</TD>

4578:

4579:

4580:

<TD class=xl35 x:num="0"><SPAN

4581:

style="mso-spacerun: yes"> $<SPAN

4582:

style="mso-spacerun: yes">                 

4583:

- </TD>

4584:

<TD class=xl35 x:num="0"><SPAN

4585:

style="mso-spacerun: yes"> $<SPAN

4586:

style="mso-spacerun: yes">                  

4587:

- </TD>

4588:

4589:

4590:

4591:

4592:

4593:

4594:

4595:

4596:

4597:

<TD class=xl80>Related party transactions:</TD>

4598:

4599:

4600:

4601:

4602:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>During the year,

4603:

the Company paid, primarily through the issuance of common stock, $82,500

4604:

(2001 - $45,000) to several directors for various services provided to the

4605:

Company throughout the year.

4606:

The Company also paid the spouse of a director $30,000 in stock

4607:

(2001 - nil) for counter-signing the bank loan (see Note 5) and $19,800 in

4608:

stock (2001 - nil) for office rent.</TD>

4609:

4610:

4611:

4612:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>These transactions

4613:

are in the normal course of operations and are measured at the exchange

4614:

amount, which is the amount of consideration established and agreed to by

4615:

the related parties.</TD>

4616:

4617:

4618:

4619:

4620:

4621:

4622:

4623:

<TD class=xl80>Contingency:</TD>

4624:

4625:

4626:

4627:

4628:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company is

4629:

negotiating with a shareholder and director of the Company for claims of

4630:

past wages, salary remuneration and expenses in the approximate amount of

4631:

USD $544,700 ($832,302 Cdn).

4632:

Included in advances from shareholders is $383,430 Cdn provided for

4633:

this claim.  The claim is

4634:

under negotiation, the outcome of which is undeterminable.<SPAN

4635:

style="mso-spacerun: yes">  Accordingly, no additional

4636:

provision has been recorded.

4637:

Additional amounts, if any, will be recorded in the period such

4638:

amounts are determinable.</TD>

4639:

4640:

4641:

4642:

4643:

4644:

4645:

4646:

<TD class=xl80>Segmented information:</TD>

4647:

4648:

4649:

4650:

4651:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company

4652:

operates principally in the mining industry segment.</TD>

4653:

4654:

4655:

4656:

<TD class=xl25 colSpan=5>The Company's operations are in the following

4657:

geographical locations:</TD>

4658:

4659:

4660:

4661:

4662:

4663:

4664:

4665:

4666:

4667:

4668:

4669:

4670:

4671:

4672:

4673:

4674:

4675:

4676:

4677:

4678:

4679:

4680:

4681:

4682:

4683:

4684:

4685:

Canada</TD>

4686:

4687:

<TD class=xl31 x:num="261143"><SPAN

4688:

style="mso-spacerun: yes"> $<SPAN

4689:

style="mso-spacerun: yes">      

4690:

261,143 </TD>

4691:

<TD class=xl31 x:num="487017"><SPAN

4692:

style="mso-spacerun: yes"> $<SPAN

4693:

style="mso-spacerun: yes">      

4694:

487,017 </TD>

4695:

<TD class=xl31 x:num="11730509"><SPAN

4696:

style="mso-spacerun: yes"> $<SPAN

4697:

style="mso-spacerun: yes">    11,730,509 </TD>

4698:

4699:

4700:

4701:

<TD class=xl37>   United

4702:

States</TD>

4703:

4704:

<TD class=xl73 x:num="289866"><SPAN

4705:

style="mso-spacerun: yes">         

4706:

289,866 </TD>

4707:

<TD class=xl73 x:num="260851"><SPAN

4708:

style="mso-spacerun: yes">         

4709:

260,851 </TD>

4710:

<TD class=xl73 x:num="64534"><SPAN

4711:

style="mso-spacerun: yes">            

4712:

64,534 </TD>

4713:

4714:

4715:

4716:

4717:

4718:

4719:

4720:

4721:

4722:

4723:

4724:

<TD class=xl55 x:num="551009"><SPAN

4725:

style="mso-spacerun: yes">         

4726:

551,009 </TD>

4727:

<TD class=xl55 x:num="747868"><SPAN

4728:

style="mso-spacerun: yes">         

4729:

747,868 </TD>

4730:

<TD class=xl55 x:num="11795043" x:fmla="=SUM(F546:F547)"><SPAN

4731:

style="mso-spacerun: yes">      

4732:

11,795,043 </TD>

4733:

4734:

4735:

4736:

4737:

4738:

4739:

4740:

4741:

<TD class=xl37>Identifiable assets at end of year:</TD>

4742:

4743:

4744:

4745:

4746:

4747:

4748:

Canada</TD>

4749:

4750:

<TD class=xl73 x:num="291993"><SPAN

4751:

style="mso-spacerun: yes">         

4752:

291,993 </TD>

4753:

<TD class=xl73 x:num="295978"><SPAN

4754:

style="mso-spacerun: yes">         

4755:

295,978 </TD>

4756:

<TD class=xl73 x:num="445728"><SPAN

4757:

style="mso-spacerun: yes">          

4758:

445,728 </TD>

4759:

4760:

4761:

4762:

<TD class=xl37>   United

4763:

States</TD>

4764:

4765:

<TD class=xl73 x:num="12874048"><SPAN

4766:

style="mso-spacerun: yes">     12,874,048 </TD>

4767:

<TD class=xl73 x:num="12491799"><SPAN

4768:

style="mso-spacerun: yes">      12,491,799

4769:

</TD>

4770:

<TD class=xl73 x:num="12353217"><SPAN

4771:

style="mso-spacerun: yes">      

4772:

12,353,217 </TD>

4773:

4774:

4775:

4776:

4777:

4778:

4779:

4780:

4781:

4782:

4783:

<TD class=xl35 x:num="13166041"><SPAN

4784:

style="mso-spacerun: yes"> $<SPAN

4785:

style="mso-spacerun: yes">  13,166,041 </TD>

4786:

<TD class=xl35 x:num="12787777"><SPAN

4787:

style="mso-spacerun: yes"> $<SPAN

4788:

style="mso-spacerun: yes">   12,787,777 </TD>

4789:

<TD class=xl35 x:num="12798945" x:fmla="=SUM(F552:F553)"><SPAN

4790:

style="mso-spacerun: yes"> $<SPAN

4791:

style="mso-spacerun: yes">    12,798,945 </TD>

4792:

4793:

4794:

4795:

4796:

4797:

4798:

<TD class=xl80>Financial instruments:</TD>

4799:

4800:

4801:

4802:

4803:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5

4804:

x:str="The Company holds various forms of financial instruments. The nature of these instruments and the Company's operations expose the Company to foreign currency risk, interest rate risk and industry credit risk. ">The

4805:

Company holds various forms of financial instruments.<SPAN

4806:

style="mso-spacerun: yes">  The nature of these instruments

4807:

and the Company's operations expose the Company to foreign currency risk,

4808:

interest rate risk and industry credit risk.<SPAN

4809:

style="mso-spacerun: yes">  </TD>

4810:

4811:

4812:

4813:

4814:

4815:

4816:

4817:

<TD class=xl39>Foreign currency risk:</TD>

4818:

4819:

4820:

4821:

4822:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>A significant

4823:

portion of the Company's operations are located in the United States and

4824:

the Company manages its exposure to foreign currency fluctuations by

4825:

maintaining U.S. currency bank accounts and denominates its commitments

4826:

and contracts in U.S. dollar equivalents.</TD>

4827:

4828:

4829:

4830:

4831:

4832:

4833:

4834:

<TD class=xl39>Credit risk:</TD>

4835:

4836:

4837:

4838:

4839:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company's

4840:

receivables are mainly for cost recoveries from related parties.<SPAN

4841:

style="mso-spacerun: yes">  The Company has no significant

4842:

credit risk as it has the ability to net amounts receivable against

4843:

accounts payable for services rendered by these parties.</TD>

4844:

4845:

4846:

4847:

4848:

4849:

4850:

4851:

<TD class=xl80>Commitments:</TD>

4852:

4853:

4854:

4855:

4856:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The Company is

4857:

committed under option and lease agreements to expend on exploration

4858:

expenditures and property option payments amounts as disclosed in Notes 4

4859:

(a), (b), and (c) in the form of cash and/or stock as detailed therein.</TD>

4860:

4861:

4862:

4863:

4864:

4865:

4866:

4867:

<TD class=xl80>Comparative figures:</TD>

4868:

4869:

4870:

4871:

4872:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Certain balances

4873:

in the preceding period have been reclassified to conform with the current

4874:

year's financial statement presentation.</TD>

4875:

4876:

4877:

4878:

4879:

4880:

4881:

4882:

<TD class=xl80>Subsequent event:</TD>

4883:

4884:

4885:

4886:

4887:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Subsequent to May

4888:

31, 2002, the Company settled $36,889 of trade accounts payable with

4889:

67,500 common shares valued at $38,800.</TD>

4890:

4891:

4892:

4893:

4894:

4895:

4896:

4897:

<TD class=xl159 style="WIDTH: 448pt" width=597 colSpan=5>Differences

4898:

between Canadian and United States of America generally accepted

4899:

accounting principles:</TD>

4900:

4901:

4902:

4903:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Generally accepted

4904:

accounting principles (“GAAP”) and practices in the United States of

4905:

America (“U.S. GAAP”) differ in certain respects from Canadian GAAP.

4906:

Differences which may materially affect these consolidated financial

4907:

statements are:</TD>

4908:

4909:

4910:

4911:

4912:

4913:

4914:

4915:

<TD class=xl25 colSpan=3>Mineral property exploration and development

4916:

expenditures</TD>

4917:

4918:

4919:

4920:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5

4921:

x:str='Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" in the U.S. requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing the review for recoverability, the Company is to estimate the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is measured, equal to the excess of the carrying amount over the fair value of the assets. United States Security and Exchange Commission staff have indicated that their interpretation of SFAS 121 requires mineral property exploration and development costs to be expensed as incurred until commercially minable deposits are determi ned to exist within a particular property as cash flows cannot be reasonably estimated prior to such determination. '>Statement

4922:

of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for

4923:

the Impairment of Long-Lived Assets and for Long-Lived Assets to be

4924:

Disposed of" in the U.S. requires that long-lived assets be reviewed for

4925:

impairment whenever events or changes in circumstances indicate that the

4926:

carrying amount of an asset may not be recoverable.<SPAN

4927:

style="mso-spacerun: yes">  In performing the review for

4928:

recoverability, the Company is to estimate the future cash flows expected

4929:

to result from the use of the asset and its eventual disposition.<SPAN

4930:

style="mso-spacerun: yes">  If the sum of the expected future

4931:

cash flows (undiscounted and without interest charges) is less than the

4932:

carrying amount of the asset, an impairment loss is measured, equal to the

4933:

excess of the carrying amount over the fair value of the assets.<SPAN

4934:

style="mso-spacerun: yes">  United States Security and

4935:

Exchange Commission staff have indicated that their interpretation of SFAS

4936:

121 requires mineral property exploration and development costs to be

4937:

expensed as incurred until commercially minable deposits are determined to

4938:

exist within a particular property as cash flows cannot be reasonably

4939:

estimated prior to such determination.<SPAN

4940:

style="mso-spacerun: yes">  </TD>

4941:

4942:

4943:

4944:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Accordingly, for

4945:

all periods presented, the Company has expensed exploration and

4946:

development costs incurred for U.S. GAAP purposes.<SPAN

4947:

style="mso-spacerun: yes">  Once proved and probable reserves

4948:

are established, capitalization of related costs would commence.<SPAN

4949:

style="mso-spacerun: yes">  This is significantly different

4950:

from the accounting policy under Canadian GAAP, as detailed in the mineral

4951:

properties significant accounting policy note.</TD>

4952:

4953:

4954:

4955:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>Under U.S. GAAP,

4956:

additional exploration costs for mineral properties that would be written

4957:

off are as follows:</TD>

4958:

4959:

4960:

4961:

4962:

4963:

4964:

4965:

4966:

4967:

4968:

4969:

4970:

4971:

4972:

4973:

4974:

4975:

4976:

4977:

4978:

4979:

4980:

4981:

4982:

<TD class=xl128 style="mso-ignore: colspan" colSpan=2>Mineral exploration

4983:

and development costs</TD>

4984:

4985:

4986:

<TD class=xl136 x:num="122057"><SPAN

4987:

style="mso-spacerun: yes">          

4988:

122,057 </TD>

4989:

4990:

4991:

4992:

4993:

4994:

4995:

4996:

4997:

4998:

<TD>Stock-based compensation</TD>

4999:

5000:

5001:

5002:

5003:

5004:

5005:

<TD class=xl42 style="WIDTH: 448pt" width=597 colSpan=5

5006:

x:str='Statement of Financial Accounting Standards No. 123 ("SFAS 123") requires that stock-based compensation be accounted for based on a fair value methodology, although it allows the effects to be disclosed in the notes to the financial statements rather than in the statement of operations for employee awards. SFAS 123 allows an entity to continue to measure compensation costs for employee stock-based compensation plans using the intrinsic value based method of accounting as prescribed by APB Opinion No. 25 ("APB 25") and related interpretations. The Company has elected to measure compensation cost for those employee plans using APB 25. As such, compensation expense under fixed plans is recorded only if the market value of the underlying stock at the date of granting exceeds the exercise price. If the exercise price of a fixed option award is reduced, the award is accounted for as a variable award from the date of modification to the final measurement date upon which the award is exercised, i s forfeited, or expires unexercised. Compensation cost is adjusted in subsequent periods up to the measurement date for changes in the quoted market price. '>Statement

5007:

of Financial Accounting Standards No. 123 ("SFAS 123") requires that

5008:

stock-based compensation be accounted for based on a fair value

5009:

methodology, although it allows the effects to be disclosed in the notes

5010:

to the financial statements rather than in the statement of operations for

5011:

employee awards.  SFAS 123

5012:

allows an entity to continue to measure compensation costs for employee

5013:

stock-based compensation plans using the intrinsic value based method of

5014:

accounting as prescribed by APB Opinion No. 25 ("APB 25") and related

5015:

interpretations.  The Company

5016:

has elected to measure compensation cost for those employee plans using

5017:

APB 25.  As such, compensation

5018:

expense under fixed plans is recorded only if the market value of the

5019:

underlying stock at the date of granting exceeds the exercise price.<SPAN

5020:

style="mso-spacerun: yes">  If the exercise price of a fixed

5021:

option award is reduced, the award is accounted for as a variable award

5022:

from the date of modification to the final measurement date upon which the

5023:

award is exercised, is forfeited, or expires unexercised.<SPAN

5024:

style="mso-spacerun: yes">  Compensation cost is adjusted in

5025:

subsequent periods up to the measurement date for changes in the quoted

5026:

market price.  </TD>

5027:

5028:

5029:

5030:

<TD class=xl42 style="WIDTH: 448pt" width=597 colSpan=5

5031:

x:str="Compensation expense (recovery) recognized for employee fixed and variable awards for the year ended May 31, 2002 would be $(65,940) (2001 - $123,638; 2000 - $nil). ">Compensation

5032:

expense (recovery) recognized for employee fixed and variable awards for

5033:

the year ended May 31, 2002 would be $(65,940) (2001 - $123,638; 2000 -

5034:

$nil). </TD>

5035:

5036:

5037:

5038:

5039:

5040:

5041:

5042:

5043:

5044:

<TD class=xl42 style="WIDTH: 448pt" width=597 colSpan=5>The Company has

5045:

150,000 common shares held in escrow.<SPAN

5046:

style="mso-spacerun: yes">  The release of the shares is

5047:

contingent on certain performance conditions.<SPAN

5048:

style="mso-spacerun: yes">  Compensation under U.S. GAAP, if

5049:

any, is recognized when the contingency is resolved and the shares are

5050:

released from escrow based upon value of the shares as they become

5051:

releasable.  As at May 31,

5052:

2002, no shares are releaseable from escrow. No similiar compensation

5053:

expense would be recognized under Canadian GAAP.</TD>

5054:

5055:

5056:

5057:

5058:

5059:

5060:

5061:

<TD class=xl42 style="WIDTH: 448pt" width=597 colSpan=5>Under Canadian

5062:

GAAP, future tax assets and liabilities are recorded at substantially

5063:

enacted tax rates.  Under U.S.

5064:

GAAP, deferred tax assets and liabilities are recorded at enacted tax

5065:

rates.  Recording Canadian

5066:

deferred tax assets and liabilities at enacted tax rates would not change

5067:

recorded net assets or shareholders' equity under U.S. GAAP.</TD>

5068:

5069:

5070:

5071:

5072:

5073:

5074:

5075:

5076:

5077:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>The following

5078:

table presents the consolidated balance sheet, statement of operations and

5079:

deficit, and cash flows under U.S. GAAP:</TD>

5080:

5081:

5082:

5083:

5084:

5085:

5086:

5087:

<TD class=xl48>Balance Sheet</TD>

5088:

5089:

5090:

5091:

5092:

5093:

5094:

5095:

5096:

5097:

5098:

5099:

5100:

5101:

5102:

5103:

5104:

5105:

5106:

5107:

5108:

5109:

5110:

5111:

5112:

5113:

5114:

<TD class=xl37>Total assets under Canadian GAAP</TD>

5115:

5116:

5117:

<TD class=xl31 x:num="13166041"><SPAN

5118:

style="mso-spacerun: yes"> $<SPAN

5119:

style="mso-spacerun: yes">   13,166,041 </TD>

5120:

<TD class=xl31 x:num="12787777"><SPAN

5121:

style="mso-spacerun: yes"> $<SPAN

5122:

style="mso-spacerun: yes">    12,787,777 </TD>

5123:

5124:

5125:

5126:

<TD class=xl37 style="mso-ignore: colspan" colSpan=3>Adjustments to

5127:

mineral property exploration and development</TD>

5128:

5129:

5130:

5131:

5132:

expenditures  (a)</TD>

5133:

5134:

5135:

<TD class=xl46 x:num="-12681453"><SPAN

5136:

style="mso-spacerun: yes">     (12,681,453)</TD>

5137:

<TD class=xl75 x:num="-12202896"><SPAN

5138:

style="mso-spacerun: yes">     

5139:

(12,202,896)</TD>

5140:

5141:

5142:

5143:

5144:

5145:

5146:

5147:

5148:

5149:

5150:

<TD class=xl63>Total assets under U.S. GAAP</TD>

5151:

5152:

5153:

<TD class=xl55 x:num="484588" x:fmla="=SUM(E601:E603)"><SPAN

5154:

style="mso-spacerun: yes">         

5155:

484,588 </TD>

5156:

<TD class=xl55 x:num="584881" x:fmla="=SUM(F601:F603)"><SPAN

5157:

style="mso-spacerun: yes">          

5158:

584,881 </TD>

5159:

5160:

5161:

5162:

5163:

5164:

5165:

5166:

5167:

5168:

5169:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Total liabilities

5170:

under Canadian and U.S. GAAP</TD>

5171:

5172:

<TD class=xl117 x:num="8080540"><SPAN

5173:

style="mso-spacerun: yes"> $<SPAN

5174:

style="mso-spacerun: yes">     8,080,540 </TD>

5175:

<TD class=xl117 x:num="7397567"><SPAN

5176:

style="mso-spacerun: yes"> $<SPAN

5177:

style="mso-spacerun: yes">      7,397,567

5178:

</TD>

5179:

5180:

5181:

5182:

5183:

5184:

5185:

5186:

5187:

5188:

5189:

<TD class=xl37>Share capital, Canadian GAAP</TD>

5190:

5191:

5192:

<TD class=xl73 x:num="22322607"><SPAN

5193:

style="mso-spacerun: yes">      22,322,607

5194:

</TD>

5195:

<TD class=xl73 x:num="22076307"><SPAN

5196:

style="mso-spacerun: yes">      

5197:

22,076,307 </TD>

5198:

5199:

5200:

5201:

<TD class=xl37>Gain on sale of subsidiary</TD>

5202:

5203:

5204:

<TD class=xl73 x:num="-430000"><SPAN

5205:

style="mso-spacerun: yes">        

5206:

(430,000)</TD>

5207:

<TD class=xl73 x:num="-430000"><SPAN

5208:

style="mso-spacerun: yes">         

5209:

(430,000)</TD>

5210:

5211:

5212:

5213:

<TD class=xl37>Stock-based compensation<SPAN

5214:

style="mso-spacerun: yes">  (b)</TD>

5215:

5216:

5217:

<TD class=xl73 x:num="57698"><SPAN

5218:

style="mso-spacerun: yes">           

5219:

57,698 </TD>

5220:

<TD class=xl73 x:num="123638"><SPAN

5221:

style="mso-spacerun: yes">          

5222:

123,638 </TD>

5223:

5224:

5225:

5226:

5227:

5228:

5229:

5230:

5231:

5232:

5233:

5234:

<TD class=xl37>Share capital, U.S. GAAP</TD>

5235:

5236:

5237:

<TD class=xl73 x:num="21950305" x:fmla="=SUM(E609:E611)"><SPAN

5238:

style="mso-spacerun: yes">      21,950,305

5239:

</TD>

5240:

<TD class=xl73 x:num="21769945" x:fmla="=SUM(F609:F611)"><SPAN

5241:

style="mso-spacerun: yes">      

5242:

21,769,945 </TD>

5243:

5244:

5245:

5246:

<TD class=xl37>Accumulated deficit, U.S. GAAP</TD>

5247:

5248:

5249:

<TD class=xl73 x:num="-29546257"><SPAN

5250:

style="mso-spacerun: yes">     (29,546,257)</TD>

5251:

<TD class=xl73 x:num="-28582631"><SPAN

5252:

style="mso-spacerun: yes">     

5253:

(28,582,631)</TD>

5254:

5255:

5256:

5257:

5258:

5259:

5260:

5261:

5262:

5263:

5264:

5265:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Shareholders’

5266:

deficiency, U.S. GAAP</TD>

5267:

5268:

<TD class=xl73 x:num="-7595952" x:fmla="=SUM(E613:E614)"><SPAN

5269:

style="mso-spacerun: yes">     

5270:

(7,595,952)</TD>

5271:

<TD class=xl73 x:num="-6812686" x:fmla="=SUM(F613:F614)"><SPAN

5272:

style="mso-spacerun: yes">       

5273:

(6,812,686)</TD>

5274:

5275:

5276:

5277:

5278:

5279:

5280:

5281:

5282:

5283:

5284:

<TD class=xl63 style="mso-ignore: colspan" colSpan=3>Shareholders’

5285:

deficiency and liabilities under U.S. GAAP</TD>

5286:

<TD class=xl35 x:num="484588"><SPAN

5287:

style="mso-spacerun: yes"> $<SPAN

5288:

style="mso-spacerun: yes">      

5289:

484,588 </TD>

5290:

<TD class=xl35 x:num="584881"><SPAN

5291:

style="mso-spacerun: yes"> $<SPAN

5292:

style="mso-spacerun: yes">        

5293:

584,881 </TD>

5294:

5295:

5296:

5297:

5298:

5299:

5300:

<TD class=xl156 colSpan=2>Statement of Operations and Deficit</TD>

5301:

5302:

5303:

5304:

5305:

5306:

5307:

5308:

5309:

5310:

5311:

5312:

5313:

<TD class=xl74>Cumulative from</TD>

5314:

<TD class=xl26>Year ended</TD>

5315:

<TD class=xl26>Year ended</TD>

5316:

<TD class=xl26>Year ended</TD>

5317:

5318:

5319:

5320:

5321:

<TD class=xl74>Inception to</TD>

5322:

5323:

5324:

5325:

5326:

5327:

5328:

5329:

5330:

5331:

5332:

5333:

5334:

5335:

5336:

5337:

5338:

5339:

5340:

5341:

<TD class=xl37>Net loss under Canadian GAAP</TD>

5342:

<TD class=xl31 x:num="-17237106"><SPAN

5343:

style="mso-spacerun: yes"> $(17,237,106)</TD>

5344:

<TD class=xl31 x:num="-551009"><SPAN

5345:

style="mso-spacerun: yes"> $<SPAN

5346:

style="mso-spacerun: yes">     

5347:

(551,009)</TD>

5348:

<TD class=xl31 x:num="-747868"><SPAN

5349:

style="mso-spacerun: yes"> $<SPAN

5350:

style="mso-spacerun: yes">     

5351:

(747,868)</TD>

5352:

<TD class=xl31 x:num="-11795043"><SPAN

5353:

style="mso-spacerun: yes"> $<SPAN

5354:

style="mso-spacerun: yes">   (11,795,043)</TD>

5355:

5356:

5357:

5358:

<TD class=xl37>Adjustments:</TD>

5359:

5360:

5361:

5362:

5363:

5364:

<TD class=xl37 x:str=" Mineral property exploration "><SPAN

5365:

style="mso-spacerun: yes">  Mineral property exploration </TD>

5366:

5367:

5368:

5369:

5370:

5371:

<TD class=xl37><SPAN

5372:

style="mso-spacerun: yes">       

5373:

and development expenditures</TD>

5374:

<TD class=xl73 x:num="-12681453"><SPAN

5375:

style="mso-spacerun: yes">   (12,681,453)</TD>

5376:

<TD class=xl73 x:num="-478557"><SPAN

5377:

style="mso-spacerun: yes">        

5378:

(478,557)</TD>

5379:

<TD class=xl73 x:num="-445729"><SPAN

5380:

style="mso-spacerun: yes">        

5381:

(445,729)</TD>

5382:

<TD class=xl73 x:num="-1879488"><SPAN

5383:

style="mso-spacerun: yes">       

5384:

(1,879,488)</TD>

5385:

5386:

5387:

5388:

<TD class=xl37 x:str=" Loss on mineral property "><SPAN

5389:

style="mso-spacerun: yes">  Loss on mineral property </TD>

5390:

5391:

5392:

5393:

5394:

<TD class=xl37><SPAN

5395:

style="mso-spacerun: yes">     

5396:

exploration previously recorded</TD>

5397:

5398:

5399:

5400:

5401:

<TD class=xl37><SPAN

5402:

style="mso-spacerun: yes">      for U.S.

5403:

GAAP</TD>

5404:

<TD class=xl73 x:num="0"><SPAN

5405:

style="mso-spacerun: yes">                  

5406:

- </TD>

5407:

<TD class=xl73 x:num="0"><SPAN

5408:

style="mso-spacerun: yes">                   

5409:

- </TD>

5410:

<TD class=xl73 x:num="312749"><SPAN

5411:

style="mso-spacerun: yes">         

5412:

312,749 </TD>

5413:

<TD class=xl73 x:num="11399044"><SPAN

5414:

style="mso-spacerun: yes">      

5415:

11,399,044 </TD>

5416:

5417:

5418:

5419:

<TD class=xl37>   Gain on

5420:

sale of subsidiary</TD>

5421:

<TD class=xl73 x:num="430000"><SPAN

5422:

style="mso-spacerun: yes">        

5423:

430,000 </TD>

5424:

<TD class=xl73 x:num="0"><SPAN

5425:

style="mso-spacerun: yes">                   

5426:

- </TD>

5427:

<TD class=xl73 x:num="0"><SPAN

5428:

style="mso-spacerun: yes">                    

5429:

- </TD>

5430:

<TD class=xl73 x:num="0"><SPAN

5431:

style="mso-spacerun: yes">                     

5432:

- </TD>

5433:

5434:

5435:

5436:

<TD class=xl37>Stock-based compensation</TD>

5437:

<TD class=xl73 x:num="-57698"><SPAN

5438:

style="mso-spacerun: yes">        

5439:

(57,698)</TD>

5440:

<TD class=xl73 x:num="65940"><SPAN

5441:

style="mso-spacerun: yes">          

5442:

65,940 </TD>

5443:

<TD class=xl73 x:num="-123638"><SPAN

5444:

style="mso-spacerun: yes">        

5445:

(123,638)</TD>

5446:

<TD class=xl73 x:num="0"><SPAN

5447:

style="mso-spacerun: yes">                     

5448:

- </TD>

5449:

5450:

5451:

5452:

5453:

5454:

5455:

5456:

5457:

5458:

5459:

5460:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Net loss, being

5461:

comprehensive loss,</TD>

5462:

5463:

5464:

5465:

5466:

5467:

under U.S. GAAP</TD>

5468:

<TD class=xl73 x:num="-29546257" x:fmla="=SUM(C626:C634)"><SPAN

5469:

style="mso-spacerun: yes">   (29,546,257)</TD>

5470:

<TD class=xl73 x:num="-963626" x:fmla="=SUM(D626:D634)"><SPAN

5471:

style="mso-spacerun: yes">        

5472:

(963,626)</TD>

5473:

<TD class=xl73 x:num="-1004486" x:fmla="=SUM(E626:E634)"><SPAN

5474:

style="mso-spacerun: yes">     

5475:

(1,004,486)</TD>

5476:

<TD class=xl73 x:num="-2275487" x:fmla="=SUM(F626:F634)"><SPAN

5477:

style="mso-spacerun: yes">       

5478:

(2,275,487)</TD>

5479:

5480:

5481:

5482:

5483:

5484:

5485:

5486:

5487:

<TD class=xl37>Accumulated opening deficit under</TD>

5488:

5489:

5490:

5491:

5492:

5493:

<TD class=xl73 x:num="0"><SPAN

5494:

style="mso-spacerun: yes">                  

5495:

- </TD>

5496:

<TD class=xl73 x:num="-28582631"><SPAN

5497:

style="mso-spacerun: yes">    (28,582,631)</TD>

5498:

<TD class=xl73 x:num="-27578145"><SPAN

5499:

style="mso-spacerun: yes">     (27,578,145)</TD>

5500:

<TD class=xl73 x:num="-25302658"><SPAN

5501:

style="mso-spacerun: yes">     

5502:

(25,302,658)</TD>

5503:

5504:

5505:

5506:

5507:

5508:

5509:

5510:

5511:

<TD class=xl63>Ending deficit, U.S. GAAP</TD>

5512:

<TD class=xl35 x:num="-29546257" x:fmla="=SUM(C637:C640)"><SPAN

5513:

style="mso-spacerun: yes"> $(29,546,257)</TD>

5514:

<TD class=xl35 x:num="-29546257" x:fmla="=SUM(D637:D640)"><SPAN

5515:

style="mso-spacerun: yes"> $ (29,546,257)</TD>

5516:

<TD class=xl35 x:num="-28582631" x:fmla="=SUM(E637:E640)"><SPAN

5517:

style="mso-spacerun: yes"> $<SPAN

5518:

style="mso-spacerun: yes">  (28,582,631)</TD>

5519:

<TD class=xl35 x:num="-27578145" x:fmla="=SUM(F637:F640)"><SPAN

5520:

style="mso-spacerun: yes"> $<SPAN

5521:

style="mso-spacerun: yes">   (27,578,145)</TD>

5522:

5523:

5524:

5525:

5526:

5527:

5528:

5529:

5530:

<TD class=xl128 style="mso-ignore: colspan" colSpan=2>Net loss per share,

5531:

basic and diluted, U.S. GAAP</TD>

5532:

<TD class=xl155 x:num="-00.09"><SPAN

5533:

style="mso-spacerun: yes"> $<SPAN

5534:

style="mso-spacerun: yes">          

5535:

(0.09)</TD>

5536:

<TD class=xl155 x:num="-00.1"><SPAN

5537:

style="mso-spacerun: yes"> $<SPAN

5538:

style="mso-spacerun: yes">           

5539:

(0.10)</TD>

5540:

<TD class=xl155 x:num="-00.24"><SPAN

5541:

style="mso-spacerun: yes"> $<SPAN

5542:

style="mso-spacerun: yes">            

5543:

(0.24)</TD>

5544:

5545:

5546:

5547:

5548:

5549:

5550:

5551:

5552:

5553:

<TD class=xl156 colSpan=2>Statement of Cash Flows</TD>

5554:

5555:

5556:

5557:

<TD class=xl85 style="WIDTH: 448pt" width=597 colSpan=5>For Canadian GAAP,

5558:

cash flows relating to mineral property exploration and development

5559:

expenditures are reported as investing activities.<SPAN

5560:

style="mso-spacerun: yes">  For U.S. GAAP purposes, these

5561:

costs would be characterized as operating activities.<SPAN

5562:

style="mso-spacerun: yes">  Under U.S. GAAP financing

5563:

activities would include financing through the Company's bank

5564:

overdraft.  Accordingly, the

5565:

effect of these differences on the statements of cash flows are summarized

5566:

as follows:</TD>

5567:

5568:

5569:

5570:

5571:

5572:

5573:

5574:

5575:

5576:

5577:

5578:

5579:

5580:

5581:

5582:

5583:

5584:

5585:

<TD style="HEIGHT: 27.75pt; mso-ignore: colspan" colSpan=17

5586:

height=37></TD></TR>

5587:

5588:

5589:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Cash used in

5590:

operations under Canadian GAAP</TD>

5591:

<TD class=xl31 x:num="-662117"><SPAN

5592:

style="mso-spacerun: yes"> $<SPAN

5593:

style="mso-spacerun: yes">     

5594:

(662,117)</TD>

5595:

<TD class=xl31 x:num="-220977"><SPAN

5596:

style="mso-spacerun: yes"> $<SPAN

5597:

style="mso-spacerun: yes">     

5598:

(220,977)</TD>

5599:

<TD class=xl31 x:num="-397996"><SPAN

5600:

style="mso-spacerun: yes"> $<SPAN

5601:

style="mso-spacerun: yes">       

5602:

(397,996)</TD>

5603:

5604:

5605:

5606:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Adjustment for

5607:

mineral exploration costs</TD>

5608:

<TD class=xl75 x:num="-289106"><SPAN

5609:

style="mso-spacerun: yes">        

5610:

(289,106)</TD>

5611:

<TD class=xl75 x:num="-373383"><SPAN

5612:

style="mso-spacerun: yes">        

5613:

(373,383)</TD>

5614:

<TD class=xl75 x:num="-122057"><SPAN

5615:

style="mso-spacerun: yes">         

5616:

(122,057)</TD>

5617:

5618:

5619:

5620:

5621:

5622:

5623:

5624:

5625:

5626:

5627:

5628:

<TD class=xl63 style="mso-ignore: colspan" colSpan=2>Cash used in

5629:

operations under U.S. GAAP</TD>

5630:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="-951223"

5631:

x:fmla="=SUM(D651:D652)"><SPAN

5632:

style="mso-spacerun: yes">        

5633:

(951,223)</TD>

5634:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="-594360"

5635:

x:fmla="=SUM(E651:E652)"><SPAN

5636:

style="mso-spacerun: yes">        

5637:

(594,360)</TD>

5638:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="-520053"

5639:

x:fmla="=SUM(F651:F652)"><SPAN

5640:

style="mso-spacerun: yes">         

5641:

(520,053)</TD>

5642:

5643:

5644:

5645:

5646:

5647:

5648:

5649:

5650:

5651:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Cash provided by

5652:

(used in) investments under</TD>

5653:

5654:

5655:

5656:

5657:

<TD class=xl37>  Canadian

5658:

GAAP</TD>

5659:

5660:

<TD class=xl75 x:num="-282200"><SPAN

5661:

style="mso-spacerun: yes">        

5662:

(282,200)</TD>

5663:

<TD class=xl75 x:num="-374799"><SPAN

5664:

style="mso-spacerun: yes">        

5665:

(374,799)</TD>

5666:

<TD class=xl75 x:num="190868"><SPAN

5667:

style="mso-spacerun: yes">          

5668:

190,868 </TD>

5669:

5670:

5671:

5672:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Adjustment for

5673:

mineral exploration costs</TD>

5674:

<TD class=xl75 x:num="289106"><SPAN

5675:

style="mso-spacerun: yes">         

5676:

289,106 </TD>

5677:

<TD class=xl75 x:num="373383"><SPAN

5678:

style="mso-spacerun: yes">         

5679:

373,383 </TD>

5680:

<TD class=xl75 x:num="122057"><SPAN

5681:

style="mso-spacerun: yes">          

5682:

122,057 </TD>

5683:

5684:

5685:

5686:

5687:

5688:

5689:

5690:

5691:

5692:

5693:

5694:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Cash provided by

5695:

(used in) investments</TD>

5696:

5697:

5698:

5699:

5700:

<TD class=xl128>   under

5701:

U.S. GAAP</TD>

5702:

5703:

<TD class=xl144 x:num="6906" x:fmla="=SUM(D657:D658)"><SPAN

5704:

style="mso-spacerun: yes"> $<SPAN

5705:

style="mso-spacerun: yes">         

5706:

6,906 </TD>

5707:

<TD class=xl144 x:num="-1416" x:fmla="=SUM(E657:E658)"><SPAN

5708:

style="mso-spacerun: yes"> $<SPAN

5709:

style="mso-spacerun: yes">         

5710:

(1,416)</TD>

5711:

<TD class=xl144 x:num="312925" x:fmla="=SUM(F657:F658)"><SPAN

5712:

style="mso-spacerun: yes"> $<SPAN

5713:

style="mso-spacerun: yes">        

5714:

312,925 </TD>

5715:

5716:

5717:

5718:

5719:

5720:

5721:

5722:

5723:

5724:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Financing activities

5725:

under Canadian GAAP</TD>

5726:

<TD class=xl31 x:num="934286"><SPAN

5727:

style="mso-spacerun: yes"> $<SPAN

5728:

style="mso-spacerun: yes">      

5729:

934,286 </TD>

5730:

<TD class=xl31 x:num="608954"><SPAN

5731:

style="mso-spacerun: yes"> $<SPAN

5732:

style="mso-spacerun: yes">      

5733:

608,954 </TD>

5734:

<TD class=xl31 x:num="187802"><SPAN

5735:

style="mso-spacerun: yes"> $<SPAN

5736:

style="mso-spacerun: yes">        

5737:

187,802 </TD>

5738:

5739:

5740:

5741:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Increase (decrease)

5742:

in bank overdraft</TD>

5743:

<TD class=xl75 x:num="9399"><SPAN

5744:

style="mso-spacerun: yes">            

5745:

9,399 </TD>

5746:

<TD class=xl75 x:num="-12546"><SPAN

5747:

style="mso-spacerun: yes">          

5748:

(12,546)</TD>

5749:

<TD class=xl75 x:num="12546"><SPAN

5750:

style="mso-spacerun: yes">            

5751:

12,546 </TD>

5752:

5753:

5754:

5755:

5756:

5757:

5758:

5759:

5760:

5761:

5762:

5763:

<TD class=xl63 style="mso-ignore: colspan" colSpan=2>Financing activities

5764:

under U.S. GAAP</TD>

5765:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="943685"><SPAN

5766:

style="mso-spacerun: yes">         

5767:

943,685 </TD>

5768:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="596408"><SPAN

5769:

style="mso-spacerun: yes">         

5770:

596,408 </TD>

5771:

<TD class=xl129 style="BORDER-TOP: medium none" x:num="200348"

5772:

x:fmla="=SUM(F663:F664)"><SPAN

5773:

style="mso-spacerun: yes">          

5774:

200,348 </TD>

5775:

5776:

5777:

5778:

5779:

5780:

5781:

5782:

5783:

5784:

<TD class=xl37 style="mso-ignore: colspan" colSpan=2>Increase (decrease)

5785:

in cash under Canadian GAAP</TD>

5786:

<TD class=xl75 x:num="-10031"><SPAN

5787:

style="mso-spacerun: yes">         

5788:

(10,031)</TD>

5789:

<TD class=xl75 x:num="13178"><SPAN

5790:

style="mso-spacerun: yes">           

5791:

13,178 </TD>

5792:

<TD class=xl75 x:num="-19326"><SPAN

5793:

style="mso-spacerun: yes">           

5794:

(19,326)</TD>

5795:

5796:

5797:

5798:

5799:

5800:

5801:

5802:

5803:

5804:

<TD class=xl128 style="mso-ignore: colspan" colSpan=2>Additional bank

5805:

overdraft financing (repayment)</TD>

5806:

<TD class=xl78 x:num="9399"><SPAN

5807:

style="mso-spacerun: yes">            

5808:

9,399 </TD>

5809:

<TD class=xl78 x:num="-12546"><SPAN

5810:

style="mso-spacerun: yes">          

5811:

(12,546)</TD>

5812:

<TD class=xl78 x:num="12456"><SPAN

5813:

style="mso-spacerun: yes">            

5814:

12,456 </TD>

5815:

5816:

5817:

5818:

5819:

5820:

5821:

5822:

5823:

5824:

<TD class=xl63 style="mso-ignore: colspan" colSpan=2>Increase (decrease)

5825:

in cash under U.S. GAAP</TD>

5826:

<TD class=xl35 x:num="-632"><SPAN

5827:

style="mso-spacerun: yes"> $<SPAN

5828:

style="mso-spacerun: yes">           

5829:

(632)</TD>

5830:

<TD class=xl35 x:num="632"><SPAN

5831:

style="mso-spacerun: yes"> $<SPAN

5832:

style="mso-spacerun: yes">             

5833:

632 </TD>

5834:

<TD class=xl35 x:num="-6780"><SPAN

5835:

style="mso-spacerun: yes"> $<SPAN

5836:

style="mso-spacerun: yes">          

5837:

(6,780)</TD>

5838:

5839:

5840:

5841:

5842:

5843:

5844:

5845:

5846:

5847:

5848:

5849:

<TD class=xl63 style="mso-ignore: colspan" colSpan=2>Cash, beginning of

5850:

year, U.S. GAAP</TD>

5851:

<TD class=xl35 x:num="632"><SPAN

5852:

style="mso-spacerun: yes"> $<SPAN

5853:

style="mso-spacerun: yes">            

5854:

632 </TD>

5855:

<TD class=xl35 x:num="0"><SPAN

5856:

style="mso-spacerun: yes"> $<SPAN

5857:

style="mso-spacerun: yes">                 

5858:

- </TD>

5859:

<TD class=xl35 x:num="6780"><SPAN

5860:

style="mso-spacerun: yes"> $<SPAN

5861:

style="mso-spacerun: yes">           

5862:

6,780 </TD>

5863:

5864:

5865:

5866:

5867:

5868:

5869:

5870:

5871:

5872:

5873:

5874:

<TD class=xl35 x:num="0"><SPAN

5875:

style="mso-spacerun: yes"> $<SPAN

5876:

style="mso-spacerun: yes">                

5877:

- </TD>

5878:

<TD class=xl35 x:num="632"><SPAN

5879:

style="mso-spacerun: yes"> $<SPAN

5880:

style="mso-spacerun: yes">             

5881:

632 </TD>

5882:

<TD class=xl35 x:num="0"><SPAN

5883:

style="mso-spacerun: yes"> $<SPAN

5884:

style="mso-spacerun: yes">                  

5885:

- </TD>

5886:

5887:

5888:

<TD style="HEIGHT: 12.75pt; mso-ignore: colspan" colSpan=17

5889:

height=17></TD></TR>

5890:

5891:

5892:

<TD class=xl24>Development stage enterprise:</TD>

5893:

5894:

5895:

5896:

5897:

5898:

5899:

5900:

<TD class=xl42 style="WIDTH: 448pt" width=597 colSpan=5>The Company meets

5901:

the definition of a Development stage enterprises under FAS No. 7.<SPAN

5902:

style="mso-spacerun: yes">  The following additional

5903:

disclosures would be required under U.S. GAAP.</TD>

5904:

5905:

5906:

5907:

5908:

5909:

5910:

5911:

<TD class=xl24 colSpan=4

5912:

x:str="Consolidated statements of operations and deficit (U.S. GAAP) ">Consolidated

5913:

statements of operations and deficit (U.S. GAAP) </TD>

5914:

5915:

5916:

5917:

5918:

5919:

5920:

5921:

5922:

5923:

5924:

5925:

<TD class=xl123>Cumulative</TD>

5926:

5927:

5928:

5929:

5930:

5931:

<TD class=xl26>from inception</TD>

5932:

5933:

5934:

5935:

5936:

5937:

5938:

<TD class=xl124> Dec 30,

5939:

1986</TD>

5940:

5941:

5942:

5943:

5944:

5945:

5946:

5947:

5948:

5949:

5950:

5951:

5952:

5953:

5954:

5955:

5956:

5957:

5958:

5959:

5960:

5961:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Operating,

5962:

exploration and administrative expenses</TD>

5963:

5964:

<TD class=xl45 x:num="-21536007"><SPAN

5965:

style="mso-spacerun: yes"> $<SPAN

5966:

style="mso-spacerun: yes">   (21,536,007)</TD>

5967:

5968:

5969:

5970:

<TD class=xl24>Loss on disposition of subsidiary</TD>

5971:

5972:

5973:

<TD class=xl46 x:num="-12107072"><SPAN

5974:

style="mso-spacerun: yes">     

5975:

(12,107,072)</TD>

5976:

5977:

5978:

5979:

<TD class=xl24>Other income</TD>

5980:

5981:

5982:

<TD class=xl46 x:num="4096822"><SPAN

5983:

style="mso-spacerun: yes">        

5984:

4,096,822 </TD>

5985:

5986:

5987:

5988:

5989:

5990:

5991:

5992:

<TD class=xl34 style="mso-ignore: colspan" colSpan=3>Net loss for the

5993:

period since inception to May 31, 2002</TD>

5994:

5995:

<TD class=xl105 x:num="-29546257" x:fmla="=SUM(F690:F692)"><SPAN

5996:

style="mso-spacerun: yes"> $<SPAN

5997:

style="mso-spacerun: yes">   (29,546,257)</TD>

5998:

5999:

6000:

6001:

6002:

6003:

6004:

6005:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Consolidated

6006:

statements of cash flows</TD>

6007:

6008:

6009:

6010:

6011:

6012:

6013:

6014:

6015:

6016:

6017:

6018:

<TD class=xl123>Cumulative</TD>

6019:

6020:

6021:

6022:

6023:

6024:

<TD class=xl26>from inception</TD>

6025:

6026:

6027:

6028:

6029:

6030:

6031:

<TD class=xl124> Dec 30,

6032:

1986</TD>

6033:

6034:

6035:

6036:

6037:

6038:

6039:

6040:

6041:

6042:

6043:

6044:

6045:

6046:

6047:

6048:

6049:

6050:

6051:

6052:

6053:

6054:

<TD class=xl24>Operating activities</TD>

6055:

6056:

6057:

<TD class=xl45 x:num="-9968960"><SPAN

6058:

style="mso-spacerun: yes"> $<SPAN

6059:

style="mso-spacerun: yes">     (9,968,960)</TD>

6060:

6061:

6062:

6063:

<TD class=xl24>Financing activities</TD>

6064:

6065:

6066:

<TD class=xl46 x:num="15695740"><SPAN

6067:

style="mso-spacerun: yes">      

6068:

15,695,740 </TD>

6069:

6070:

6071:

6072:

<TD class=xl24>Investing activities</TD>

6073:

6074:

6075:

<TD class=xl46 x:num="-5726780"><SPAN

6076:

style="mso-spacerun: yes">       

6077:

(5,726,780)</TD>

6078:

6079:

6080:

6081:

6082:

6083:

6084:

6085:

<TD class=xl34 style="mso-ignore: colspan" colSpan=2>Net cash inflows from

6086:

inception to May 31, 2002</TD>

6087:

6088:

6089:

<TD class=xl105 x:str="$ -"><SPAN

6090:

style="mso-spacerun: yes"> $<SPAN

6091:

style="mso-spacerun: yes">                  

6092:

- </TD>

6093:

6094:

6095:

6096:

6097:

6098:

6099:

6100:

<TD class=xl24 colSpan=4>Additional shareholders' equity disclosures

6101:

required under FAS No. 7 would include:</TD>

6102:

6103:

6104:

6105:

6106:

6107:

6108:

6109:

6110:

6111:

6112:

6113:

<TD class=xl123>Deficit</TD>

6114:

6115:

6116:

6117:

6118:

<TD class=xl157 colSpan=2>Common shares</TD>

6119:

<TD class=xl26>accumulated</TD>

6120:

6121:

6122:

6123:

6124:

6125:

<TD class=xl95>Number</TD>

6126:

<TD class=xl95>Amount</TD>

6127:

<TD class=xl125>since inception</TD>

6128:

6129:

6130:

6131:

6132:

6133:

6134:

6135:

<TD class=xl24>Balance at inception</TD>

6136:

6137:

<TD class=xl106 x:num="0"><SPAN

6138:

style="mso-spacerun: yes">                   

6139:

- </TD>

6140:

<TD>$<SPAN

6141:

style="mso-spacerun: yes">                   

6142:

-</TD>

6143:

<TD class=xl45 x:str="$ -"><SPAN

6144:

style="mso-spacerun: yes"> $<SPAN

6145:

style="mso-spacerun: yes">                  

6146:

- </TD>

6147:

6148:

6149:

6150:

<TD class=xl24>  Issued for

6151:

cash</TD>

6152:

6153:

6154:

6155:

6156:

6157:

6158:

6159:

December 1986</TD>

6160:

6161:

6162:

6163:

6164:

6165:

6166:

6167:

6168:

January 1987</TD>

6169:

6170:

<TD class=xl75 x:num="80000"><SPAN

6171:

style="mso-spacerun: yes">          

6172:

80,000 </TD>

6173:

<TD class=xl46 x:num="100000"><SPAN

6174:

style="mso-spacerun: yes">         

6175:

100,000 </TD>

6176:

6177:

6178:

6179:

6180:

6181:

April 1987</TD>

6182:

6183:

<TD class=xl106 x:num="150000"><SPAN

6184:

style="mso-spacerun: yes">         

6185:

150,000 </TD>

6186:

<TD class=xl46 x:num="7500"><SPAN

6187:

style="mso-spacerun: yes">             

6188:

7,500 </TD>

6189:

6190:

6191:

6192:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6193:

under U.S. GAAP</TD>

6194:

6195:

6196:

<TD class=xl46 x:num="-108647"><SPAN

6197:

style="mso-spacerun: yes">         

6198:

(108,647)</TD>

6199:

6200:

6201:

6202:

6203:

6204:

6205:

6206:

6207:

6208:

6209:

6210:

<TD class=xl24>Balance May 31, 1987</TD>

6211:

6212:

6213:

<TD class=xl45 x:num="107501"><SPAN

6214:

style="mso-spacerun: yes"> $<SPAN

6215:

style="mso-spacerun: yes">      

6216:

107,501 </TD>

6217:

<TD class=xl45 x:num="-108647"><SPAN

6218:

style="mso-spacerun: yes"> $<SPAN

6219:

style="mso-spacerun: yes">       

6220:

(108,647)</TD>

6221:

6222:

6223:

6224:

<TD class=xl24>  Issued for

6225:

cash</TD>

6226:

6227:

6228:

6229:

6230:

6231:

6232:

6233:

6234:

September 1987</TD>

6235:

6236:

<TD class=xl75 x:num="11600"><SPAN

6237:

style="mso-spacerun: yes">          

6238:

11,600 </TD>

6239:

<TD class=xl46 x:num="14500"><SPAN

6240:

style="mso-spacerun: yes">           

6241:

14,500 </TD>

6242:

6243:

6244:

6245:

6246:

6247:

March 1988</TD>

6248:

6249:

<TD class=xl75 x:num="100000"><SPAN

6250:

style="mso-spacerun: yes">         

6251:

100,000 </TD>

6252:

<TD class=xl46 x:num="150000"><SPAN

6253:

style="mso-spacerun: yes">         

6254:

150,000 </TD>

6255:

6256:

6257:

6258:

6259:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6260:

under U.S. GAAP</TD>

6261:

6262:

6263:

<TD class=xl46 x:num="-42412"><SPAN

6264:

style="mso-spacerun: yes">           

6265:

(42,412)</TD>

6266:

6267:

6268:

6269:

6270:

6271:

6272:

6273:

6274:

6275:

6276:

6277:

<TD class=xl24>Balance May 31, 1988</TD>

6278:

6279:

6280:

<TD class=xl45 x:num="272001"><SPAN

6281:

style="mso-spacerun: yes"> $<SPAN

6282:

style="mso-spacerun: yes">      

6283:

272,001 </TD>

6284:

<TD class=xl45 x:num="-151059"><SPAN

6285:

style="mso-spacerun: yes"> $<SPAN

6286:

style="mso-spacerun: yes">       

6287:

(151,059)</TD>

6288:

6289:

6290:

6291:

<TD class=xl24>  Issued for

6292:

cash</TD>

6293:

6294:

6295:

6296:

6297:

6298:

6299:

6300:

6301:

August 1988</TD>

6302:

6303:

<TD class=xl75 x:num="31000"><SPAN

6304:

style="mso-spacerun: yes">          

6305:

31,000 </TD>

6306:

<TD class=xl46 x:num="54250"><SPAN

6307:

style="mso-spacerun: yes">           

6308:

54,250 </TD>

6309:

6310:

6311:

6312:

6313:

<TD class=xl24>  Issued upon

6314:

exercise of warrants</TD>

6315:

6316:

6317:

6318:

6319:

6320:

6321:

6322:

August 1988</TD>

6323:

6324:

<TD class=xl75 x:num="20000"><SPAN

6325:

style="mso-spacerun: yes">          

6326:

20,000 </TD>

6327:

<TD class=xl46 x:num="40000"><SPAN

6328:

style="mso-spacerun: yes">           

6329:

40,000 </TD>

6330:

6331:

6332:

6333:

6334:

6335:

March 1989</TD>

6336:

6337:

<TD class=xl75 x:num="5000"><SPAN

6338:

style="mso-spacerun: yes">            

6339:

5,000 </TD>

6340:

<TD class=xl46 x:num="10000"><SPAN

6341:

style="mso-spacerun: yes">           

6342:

10,000 </TD>

6343:

6344:

6345:

6346:

6347:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6348:

under U.S. GAAP</TD>

6349:

6350:

6351:

<TD class=xl46 x:num="-185968"><SPAN

6352:

style="mso-spacerun: yes">         

6353:

(185,968)</TD>

6354:

6355:

6356:

6357:

6358:

6359:

6360:

6361:

6362:

6363:

6364:

6365:

<TD class=xl24>Balance May 31, 1989</TD>

6366:

6367:

6368:

<TD class=xl45 x:num="376251"><SPAN

6369:

style="mso-spacerun: yes"> $<SPAN

6370:

style="mso-spacerun: yes">      

6371:

376,251 </TD>

6372:

<TD class=xl45 x:num="-337027"><SPAN

6373:

style="mso-spacerun: yes"> $<SPAN

6374:

style="mso-spacerun: yes">       

6375:

(337,027)</TD>

6376:

6377:

6378:

6379:

<TD class=xl24>  Issued for

6380:

cash</TD>

6381:

6382:

6383:

6384:

6385:

6386:

6387:

6388:

6389:

July 1989</TD>

6390:

6391:

<TD class=xl75 x:num="40000"><SPAN

6392:

style="mso-spacerun: yes">          

6393:

40,000 </TD>

6394:

<TD class=xl46 x:num="136000"><SPAN

6395:

style="mso-spacerun: yes">         

6396:

136,000 </TD>

6397:

6398:

6399:

6400:

6401:

<TD class=xl24>  Issued upon

6402:

exercise of options</TD>

6403:

6404:

6405:

6406:

6407:

6408:

6409:

6410:

August 1989</TD>

6411:

6412:

<TD class=xl75 x:num="20000"><SPAN

6413:

style="mso-spacerun: yes">          

6414:

20,000 </TD>

6415:

<TD class=xl46 x:num="75000"><SPAN

6416:

style="mso-spacerun: yes">           

6417:

75,000 </TD>

6418:

6419:

6420:

6421:

6422:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6423:

under U.S. GAAP</TD>

6424:

6425:

6426:

<TD class=xl46 x:num="-54515"><SPAN

6427:

style="mso-spacerun: yes">           

6428:

(54,515)</TD>

6429:

6430:

6431:

6432:

6433:

6434:

6435:

6436:

6437:

6438:

6439:

6440:

<TD class=xl24>Balance May 31, 1990</TD>

6441:

6442:

6443:

<TD class=xl45 x:num="587251"><SPAN

6444:

style="mso-spacerun: yes"> $<SPAN

6445:

style="mso-spacerun: yes">      

6446:

587,251 </TD>

6447:

<TD class=xl45 x:num="391542"><SPAN

6448:

style="mso-spacerun: yes"> $<SPAN

6449:

style="mso-spacerun: yes">        

6450:

391,542 </TD>

6451:

6452:

6453:

6454:

<TD class=xl24>  Acquisition

6455:

of Cinsonix Limited</TD>

6456:

6457:

6458:

6459:

6460:

6461:

6462:

6463:

6464:

July 1989</TD>

6465:

6466:

<TD class=xl75 x:num="1000000"><SPAN

6467:

style="mso-spacerun: yes">      

6468:

1,000,000 </TD>

6469:

<TD class=xl46 x:num="750000"><SPAN

6470:

style="mso-spacerun: yes">         

6471:

750,000 </TD>

6472:

6473:

6474:

6475:

6476:

<TD class=xl24>  Issued for

6477:

finder's fee</TD>

6478:

6479:

<TD class=xl106 x:num="30000"><SPAN

6480:

style="mso-spacerun: yes">          

6481:

30,000 </TD>

6482:

<TD class=xl46 x:num="90000"><SPAN

6483:

style="mso-spacerun: yes">           

6484:

90,000 </TD>

6485:

6486:

6487:

6488:

6489:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6490:

under U.S. GAAP</TD>

6491:

6492:

6493:

<TD class=xl46 x:num="-1179904"><SPAN

6494:

style="mso-spacerun: yes">       

6495:

(1,179,904)</TD>

6496:

6497:

6498:

6499:

6500:

6501:

6502:

6503:

6504:

6505:

6506:

6507:

<TD class=xl24>Balance May 31, 1991</TD>

6508:

6509:

6510:

<TD class=xl45 x:num="1427251"><SPAN

6511:

style="mso-spacerun: yes"> $<SPAN

6512:

style="mso-spacerun: yes">     1,427,251 </TD>

6513:

<TD class=xl45 x:num="-1571446"><SPAN

6514:

style="mso-spacerun: yes"> $<SPAN

6515:

style="mso-spacerun: yes">     (1,571,446)</TD>

6516:

6517:

6518:

6519:

<TD class=xl24>  Issued for

6520:

mineral properties</TD>

6521:

6522:

6523:

6524:

6525:

6526:

6527:

6528:

6529:

April 1992</TD>

6530:

6531:

<TD class=xl75 x:num="50000"><SPAN

6532:

style="mso-spacerun: yes">          

6533:

50,000 </TD>

6534:

<TD class=xl46 x:num="20000"><SPAN

6535:

style="mso-spacerun: yes">           

6536:

20,000 </TD>

6537:

6538:

6539:

6540:

6541:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6542:

under U.S. GAAP</TD>

6543:

6544:

6545:

<TD class=xl46 x:num="-71702"><SPAN

6546:

style="mso-spacerun: yes">           

6547:

(71,702)</TD>

6548:

6549:

6550:

6551:

6552:

6553:

6554:

6555:

6556:

6557:

6558:

6559:

<TD class=xl24>Balance May 31, 1992</TD>

6560:

6561:

6562:

<TD class=xl45 x:num="1447251"><SPAN

6563:

style="mso-spacerun: yes"> $<SPAN

6564:

style="mso-spacerun: yes">     1,447,251 </TD>

6565:

<TD class=xl45 x:num="-1643148"><SPAN

6566:

style="mso-spacerun: yes"> $<SPAN

6567:

style="mso-spacerun: yes">     (1,643,148)</TD>

6568:

6569:

6570:

6571:

<TD class=xl24>  Issued for

6572:

cash</TD>

6573:

6574:

6575:

6576:

6577:

6578:

6579:

6580:

6581:

July 1992</TD>

6582:

6583:

<TD class=xl75 x:num="1000000"><SPAN

6584:

style="mso-spacerun: yes">      

6585:

1,000,000 </TD>

6586:

<TD class=xl46 x:num="150000"><SPAN

6587:

style="mso-spacerun: yes">         

6588:

150,000 </TD>

6589:

6590:

6591:

6592:

6593:

6594:

March 1993</TD>

6595:

6596:

<TD class=xl75 x:num="600000"><SPAN

6597:

style="mso-spacerun: yes">         

6598:

600,000 </TD>

6599:

<TD class=xl46 x:num="132000"><SPAN

6600:

style="mso-spacerun: yes">         

6601:

132,000 </TD>

6602:

6603:

6604:

6605:

6606:

<TD class=xl24>  Issued for

6607:

debt settlement</TD>

6608:

6609:

6610:

6611:

6612:

6613:

6614:

6615:

6616:

August 1992</TD>

6617:

6618:

<TD class=xl75 x:num="115468"><SPAN

6619:

style="mso-spacerun: yes">         

6620:

115,468 </TD>

6621:

<TD class=xl46 x:num="23094"><SPAN

6622:

style="mso-spacerun: yes">           

6623:

23,094 </TD>

6624:

6625:

6626:

6627:

6628:

<TD class=xl24>  Issued for

6629:

finder's fee</TD>

6630:

6631:

<TD class=xl75 x:num="30000"><SPAN

6632:

style="mso-spacerun: yes">          

6633:

30,000 </TD>

6634:

<TD class=xl46 x:num="26100"><SPAN

6635:

style="mso-spacerun: yes">           

6636:

26,100 </TD>

6637:

6638:

6639:

6640:

6641:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6642:

under U.S. GAAP</TD>

6643:

6644:

6645:

<TD class=xl46 x:num="-118136"><SPAN

6646:

style="mso-spacerun: yes">         

6647:

(118,136)</TD>

6648:

6649:

6650:

6651:

6652:

6653:

6654:

6655:

6656:

6657:

6658:

6659:

<TD class=xl24>Balance May 31, 1993</TD>

6660:

6661:

6662:

<TD class=xl45 x:num="1778445"><SPAN

6663:

style="mso-spacerun: yes"> $<SPAN

6664:

style="mso-spacerun: yes">     1,778,445 </TD>

6665:

<TD class=xl45 x:num="-1761284"><SPAN

6666:

style="mso-spacerun: yes"> $<SPAN

6667:

style="mso-spacerun: yes">     (1,761,284)</TD>

6668:

6669:

6670:

6671:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2><SPAN

6672:

style="mso-spacerun: yes">  Issued for mineral properties Oct.

6673:

1993</TD>

6674:

<TD class=xl75 x:num="50000"><SPAN

6675:

style="mso-spacerun: yes">          

6676:

50,000 </TD>

6677:

<TD class=xl75 x:num="30500"><SPAN

6678:

style="mso-spacerun: yes">           

6679:

30,500 </TD>

6680:

6681:

6682:

6683:

6684:

<TD class=xl24>  Issued for

6685:

exercise of warrants</TD>

6686:

6687:

6688:

6689:

6690:

6691:

6692:

6693:

June 1993</TD>

6694:

6695:

<TD class=xl75 x:num="1000000"><SPAN

6696:

style="mso-spacerun: yes">      

6697:

1,000,000 </TD>

6698:

<TD class=xl46 x:num="150000"><SPAN

6699:

style="mso-spacerun: yes">         

6700:

150,000 </TD>

6701:

6702:

6703:

6704:

6705:

6706:

September 1993</TD>

6707:

6708:

<TD class=xl75 x:num="145000"><SPAN

6709:

style="mso-spacerun: yes">         

6710:

145,000 </TD>

6711:

<TD class=xl46 x:num="31900"><SPAN

6712:

style="mso-spacerun: yes">           

6713:

31,900 </TD>

6714:

6715:

6716:

6717:

6718:

<TD class=xl24>  Issued for

6719:

cash January 1994</TD>

6720:

6721:

<TD class=xl75 x:num="170000"><SPAN

6722:

style="mso-spacerun: yes">         

6723:

170,000 </TD>

6724:

<TD class=xl75 x:num="102000"><SPAN

6725:

style="mso-spacerun: yes">         

6726:

102,000 </TD>

6727:

6728:

6729:

6730:

6731:

<TD class=xl24 style="mso-ignore: colspan" colSpan=2>Net loss for the year

6732:

under U.S. GAAP</TD>

6733:

6734:

6735:

<TD class=xl46 x:num="-329175"><SPAN

6736:

style="mso-spacerun: yes">         

6737:

(329,175)</TD>

6738:

6739:

6740:

6741:

6742:

6743:

6744:

6745:

6746:

6747:

6748:

6749:

<TD class=xl24>Balance May 31, 1994</TD>

6750:

6751:

6752:

<TD class=xl45 x:num="2092845"><SPAN

6753:

style="mso-spacerun: yes"> $<SPAN

6754:

style="mso-spacerun: yes">     2,092,845 </TD>

6755:

<TD class=xl45 x:num="-2090459"><SPAN

6756:

style="mso-spacerun: yes"> $<SPAN

6757:

style="mso-spacerun: yes">     (2,090,459)</TD>

6758:

6759:

6760:

6761:

<TD class=xl24>  Issued for

6762:

cash November 1994</TD>

6763:

6764:

<TD class=xl75 x:num="200000"><SPAN

6765:

style="mso-spacerun: yes">         

6766:

200,000 </TD>

6767:

<TD class=xl75 x:num="150000"><SPAN

6768:

style="mso-spacerun: yes">         

6769:

150,000 </TD>

6770:

6771:

6772:

6773:

6774:

<TD class=xl24>  Issued for

6775:

exercise of warrants</TD>

6776:

6777:

6778:

6779:

6780:

6781:

6782:

6783:

October 1994</TD>

6784:

6785:

<TD class=xl75 x:num="205000"><SPAN

6786:

style="mso-spacerun: yes">         

6787:

205,000 </TD>

6788:

<TD class=xl46 x:num="55000"><SPAN

6789:

style="mso-spacerun: yes">           

6790:

55,000 </TD>

6791:

6792:

6793:

6794:

6795:

6796:

December 1994</TD>

6797:

6798:

<TD class=xl75 x:num="40000"><SPAN

6799:

style="mso-spacerun: yes">& -----END PRIVACY-ENHANCED MESSAGE-----