TASEKO MINES LIMITED
CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED DECEMBER 31, 2004

(Expressed in Canadian Dollars)
(Unaudited)

These financial statements have not been reviewed by the Company's auditors

TASEKO MINES LIMITED
Consolidated Balance Sheets
(Expressed in Canadian Dollars)
(Unaudited)

		December 31			September 30
		2004			2004
Assets
Current assets
Cash and equivalents	$	8,218,684		$	14,892,947
Restricted cash (note 6(a))		5,000,000			–
Amounts receivable		1,661,620			2,766,184
Advances to related parties (note 11)		–			194,857
Concentrate inventory		8,500,881			–
Supplies inventory		4,176,921			2,277,397
Prepaid expenses		161,754			210,015
		27,719,860			20,341,400
Prepaid lease payments (note 5)		4,410,460			–
Property, plant and equipment (note 5)		14,002,851			35,759,634
Reclamation deposits (notes 4, 6(a) and 6(d))		17,706,902			17,647,056
Promissory note (note 6(f))		68,513,242			68,172,380
Mineral property interests (note 6)		3,000			3,000
	$	132,356,315		$	141,923,470
Liabilities and Shareholders' Equity
Current liabilities
Operating line of credit (note 7)	$	1,090,724		$	1,857,740
Accounts payable and accrued liabilities		9,702,946			14,578,172
Advances from related parties (note 11)		80,624			–
Current portion of vehicle loans (note 7)		138,258			–
Income taxes (note 9)		23,744,000			23,744,000
		34,756,552			40,179,912
Vehicle loans (note 7)		171,784			–
Royalty obligation (note 6(f))		67,357,000			67,357,000
Deferred revenue (note 6(f))		1,706,250			1,750,000
Reclamation liability (note 5)		32,700,000			32,700,000
		136,691,586			141,986,912
Shareholders' equity (deficiency)
Share capital (note 8)		151,650,379			150,481,429
Convertible debenture (note 8(c))		20,847,200			20,577,225
Tracking preferred shares (note 4)		26,641,948			26,641,948
Contributed surplus (note 8(f))		5,112,137			4,947,588
Deficit		(208,586,935	)		(202,711,632	)
		(4,335,271	)		(63,442	)
Nature of operations (note 1)
Commitments (note 6)
Subsequent events (notes 8 and 12)
	$	132,356,315		$	141,923,470

See accompanying notes to consolidated financial statements.

Approved by the Board of Directors

/s/ Ronald W. Thiessen	/s/ Jeffrey R. Mason
Ronald W. Thiessen	Jeffrey R. Mason
Director	Director

TASEKO MINES LIMITED
Consolidated Statements of Operations
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended December 31
		2004			2003
Expenses
Conference and travel	$	12,995		$	40,269
Consulting		63,760			110,927
Corporation taxes		554			–
Depreciation		302,702			179,978
Exploration (schedule)		32,047			1,398,492
Interest and finance charges		41,785			19,339
Legal, accounting and audit		97,146		$	16,818
Office and administration		164,316			121,738
Property investigation		–			141,063
Restart project (schedule)		8,172,814			–
Shareholder communication		52,822			73,802
Stock-based compensation (note 8(d))		164,549			1,314,296
Trust and filing		6,114			4,395
		9,111,604			3,421,117
Other items
Interest and other income		5,735,716			135,289
Foreign exchange		(51,448	)		–
Loss on sale of equipment		(2,177,992	)		–
		3,506,276			135,289
Loss for the period	$	(5,605,328	)	$	(3,285,828	)
Basic and diluted loss per common share (notes 3(i) and 8)	$	(0.06	)	$	(0.06	)
Weighted average number of
common shares outstanding		95,773,608			57,481,236

Consolidated Statements of Deficit
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended December 31
		2004			2003
Deficit, beginning of period	$	(202,711,632	)	$	(121,069,356	)
Loss for the period		(5,605,328	)		(3,285,828	)
Accretion expense on convertible debenture		(269,975	)		(245,431	)
Deficit, end of period	$	(208,586,935	)	$	(124,600,615	)

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended December 31
Cash provided by (used for):		2004			2003
Operating activities
Loss for the period	$	(5,605,328	)	$	(3,285,828	)
Items not involving cash
Loss on sale of equipment		2,177,992			-
Accrued interest on reclamation deposits		(400,708	)		(111,720	)
Depreciation		302,702			179,978
Stock-based compensation		164,549			1,314,296
Deferred revenue		(43,750	)		-
Changes in non-cash operating working capital
Amounts receivable and prepaids		1,152,825			(4,565	)
Inventories		(10,400,405	)		(10,662	)
Accounts payable and accrued liabilities		(4,875,226	)		(15,674	)
		(17,527,349	)		(1,934,175	)
Investing activities
Purchase of property, plant and equipment		(2,774,622	)		(15,233	)
Proceeds received on sale of property, plant and equipment		22,050,711			-
Restricted cash		(5,000,000	)		-
		14,276,089			(15,233	)
Financing activities
Bank operating loan		(767,016	)		(280,038	)
Advances from related parties		275,481			455,184
Vehicle loans		310,042			-
Common shares issued for cash, net of issue costs		1,168,950			8,266,658
Prepaid lease payments		(4,410,460	)		-
		(3,423,003	)		8,441,804
Increase (decrease) in cash and equivalents		(6,674,263	)		6,492,396
Cash and equivalents, beginning of period		14,892,947			2,424,221
Cash and equivalents, end of period	$	8,218,684		$	8,916,617

Supplementary cash flow disclosures (note 9)

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Schedules of Exploration Expenses
(Expressed in Canadian Dollars)
(Unaudited)

		Property
Three months ended December 31, 2004		Prosperity		Gibraltar		Harmony		Total
Exploration expenses
Assays and analysis	$	4,487	$	–	$	–	$	4,487
Equipment rentals		1,788		–		–		1,788
Geological		1,351		–		–		1,351
Mine planning		6,341		–		18,080		24,421
Exploration expenses during the period		13,967		–		18,080		32,047
Cumulative expenses, beginning of period		41,646,184		15,979,154		70,338		57,695,676
Cumulative expenses, end of period	$	41,660,151	$	15,979,154	$	88,418	$	57,727,723
		Property
Three months ended December 31, 2003		Prosperity		Gibraltar		Harmony		Total
Exploration expenses
Assays and analysis	$	4,351	$	826,051	$	236	$	830,638
Drilling		–		397,596		–		397,596
Equipment rentals		844		26,198		–		27,042
Geological		–		179,557		2,480		182,037
Mine planning		16,698		64,965		4,368		86,031
Site activities		930		606,272		–		607,202
Exploration expenses during the period		22,823		2,100,639		7,084		2,130,546
Cumulative expenses, beginning of period		41,576,410		10,902,295		27,317		52,506,022
Cumulative expenses, end of period	$	41,599,233	$	13,002,934	$	34,401	$	54,636,568

TASEKO MINES LIMITED
Consolidated Schedules of Gibraltar Mine Restart Project Expenses
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended December 31
Mine Restart Project Expenses		2004			2003
Administration	$	79,035		$	–
Environmental		37,856			–
Mill		1,947,646			–
Mine		1,021,406			–
Mineral production, treatment and transportation		12,673,208			–
Sales of concentrate during restart period		(8,101,845	)		–
Site services		468,438			–
Warehouse		47,070			–
Expenses during the period		8,172,814			–
Cumulative expenses, beginning of period		14,982,008			–
Cumulative expenses, end of period	$	23,154,822		$	–

Consolidated Schedules of Mineral Production, Treatment and Transportation
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended December 31
Mineral Production, Treatment and Transportation Expenses		2004			2003
Administration	$	1,642,604		$	–
Environmental/water treatment		163,023			–
Landfill operations		(28,114	)		–
Mill		5,533,519			–
Mine		10,338,836			–
Mine planning		77,249			–
Other		876,280			–
Plant services		1,183,241			–
Transportation and treatment		1,387,451			–
Less: Inventory		(8,500,881	)		–
Expenses during the period	$	12,673,208		$	–

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

1.	Nature of operations
	Taseko Mines Limited ("Taseko" or the "Company") is a public company incorporated under the laws of the Province of British Columbia. At December 31, 2004, the Company's principal business activities related to the restart of operations of the Gibraltar Copper Mine, and exploration on the Company’s 100% owned Gibraltar-area exploration properties, the Prosperity Gold-Copper Property, and the Harmony Gold Property. The Gibraltar mine and the Prosperity Gold Property are located in south central British Columbia, Canada, near the City of Williams Lake. The Harmony Gold Property is located on Graham Island, Queen Charlotte Islands - Haida Gwaii, British Columbia.
	The recoverability of the amounts shown for the Gibraltar mine and related plant and equipment and supplies inventory is dependent upon the existence of economically recoverable mineral resources and future profitable production or proceeds from the disposition of the mine. The Company is exploring its Prosperity and Harmony mineral properties and has not yet determined the existence of economically recoverable reserves.
	The Company’s continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its mineral property interests, and upon future profitable production or proceeds from the disposition of its mineral property interests.
	These financial statements are prepared on the basis that the Company will continue as a going concern. The Company has recorded significant losses and operating cash flow deficiencies in each of the last three fiscal years. Management recognizes that the Company must generate additional financial resources in order to meet liabilities as they come due and to enable it to continue operations. The Company is actively pursuing restart of the Company’s operations at the Gibraltar mine and is continuing with its exploration programs. However, there can be no assurances that the Company will obtain sufficient financial resources and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing or successful restart, the Company will be required to curtail operations and exploration activities. These financial statements do not reflect adjustments, which could be material, to the carrying values of assets and liabilities which may be required should the Company be unable to continue as a going concern.
2.	Basis of presentation and principles of consolidation
	These financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). These consolidated financial statements include the accounts of Taseko, its wholly-owned private company subsidiaries, Gibraltar Mines Ltd. (note 6(a)), 688888 BC Ltd., and Cuisson Lake Mines Ltd., and its interest in Gibraltar Reclamation Trust Limited Partnership (“GRT Partnership”) (note 6(d)). All material intercompany accounts and transactions have been eliminated.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

3.	Significant accounting policies
(a)	Cash and equivalents
	Cash and equivalents consist of cash and highly liquid investments, having maturity dates of three months or less from the date of acquisition, that are readily convertible to known amounts of cash.
(b)	Inventory
	Copper and molybdenum concentrates are reported at the lower of budgeted cost and net realizable value. Supplies inventory is reported at the lower of moving average cost and net realizable value.
(c)	Property, plant and equipment
	Plant and equipment are stated at cost less accumulated depreciation. Depreciation is recorded over the estimated economic life of the plant and equipment on a straight line basis at annual rates ranging from 1.3% to 16.5%, except for the solvent extraction/electrowinning plant and equipment included in Gibraltar mine plant and equipment (note 5), which are depreciated on a straight line basis at rates from 20% to 50% per annum.
(d)	Mineral property interests
	The Company capitalizes mineral property acquisition costs on a property-by-property basis. Exploration expenditures and option payments incurred prior to the determination of the feasibility of mining operations are charged to operations as incurred. Development expenditures incurred subsequent to such determination, to increase production, or to extend the life of existing production are capitalized, except as noted below. Such acquisition costs and deferred development expenditures are amortized and depreciated over the estimated life of the property, or written off to operations if the property is abandoned, allowed to lapse, or if there is little prospect of further work being carried out by the Company or its option or joint venture partners.
	All costs incurred by the Company during the standby care and maintenance period and restart at the Gibraltar mine are expensed as incurred.
	Mineral property acquisition costs include the cash consideration and the fair market value of common shares, based on the trading price of the shares at the agreement date, issued for mineral property interests, pursuant to the terms of the relevant agreement. Payments relating to a property acquired under an option or joint venture agreement, where such payments are made at the sole discretion of the Company, are recorded in the accounts upon payment.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	Costs related to feasibility work and the development of processing technology are expensed as incurred. Costs incurred subsequent to the determination of the feasibility of the processing technology will be capitalized and amortized over the life of the related plant.
	Administrative expenditures are expensed as incurred.
	The amount presented for mineral property interests represents costs incurred to date and the accumulated fair value of shares issued to date relating to acquisition costs, less write-downs, but does not necessarily reflect present or future values.
(e)	Share capital
	The Company records proceeds from share issuances net of issue costs. Shares issued for consideration other than cash are valued at the quoted market price on the date the agreement to issue shares was reached.
	The proceeds, net of issue costs, from common shares issued pursuant to flow-through share financing agreements are credited to share capital and the tax benefits of these exploration expenditures are transferred to the purchaser of the shares.
(f)	Stock-based compensation
	The Company has a share option plan which is described in note 8(d). The Company accounts for all non-cash stock-based payments and awards that are direct awards of stock, that call for settlement in cash or other assets, or that are share appreciation rights which call for settlement by the issuance of equity instruments, granted on or after October 1, 2002, using the fair value based method.
	Under the fair value based method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of non-cash stock-based payments is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the period and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of non-cash stock-based payments that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.
	Under the fair value based method, compensation cost attributable to awards that are direct awards of shares, or share appreciation rights which call for settlement by the issuance of equity instruments, is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards which call for settlement in cash or other assets is measured at fair value at the grant date and recognized over the vesting period. For awards that vest at the end of a vesting period, compensation cost is recognized on a straight-line basis; for

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period.
	Consideration received on the exercise of stock options is recorded as share capital and the related contributed surplus is transferred to share capital.
(g)	Income taxes
	The Company uses the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are computed based on differences between the carrying amounts of assets and liabilities on the balance sheet and their corresponding tax values, generally using the substantively enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Future income tax assets also result from unused loss carry forwards, resource-related pools, and other deductions. Future tax assets are recognized to the extent that they are considered more likely than not to be realized. The valuation of future income tax assets is adjusted, if necessary, by the use of a valuation allowance to reflect the estimated realizable amount.
(h)	Loss per common share
	Basic loss per common share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the period. For all periods presented, loss available to common shareholders equals the reported loss.
	Diluted loss per share is calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.
	In the Company’s case, diluted loss per share for all periods presented is the same as basic loss per share as the effect of the outstanding options and warrants would be anti-dilutive.
(i)	Fair value of financial instruments
	The carrying amounts of cash and equivalents, amounts receivable, prepaids, restricted cash, reclamation deposits, bank operating loan and accounts payable and accrued liabilities, approximate their fair values due to their short term nature.
	At December 31, 2004, the carrying values of the promissory note and the royalty obligation approximate their fair values.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	The fair values of the convertible debenture and the tracking preferred shares are not readily determinable with sufficient reliability due to the difficulty in obtaining appropriate market information. It is not practicable to determine the fair values of the advances due to/from related parties because of the related party nature of such amounts and the absence of a secondary market for such instruments. Details of the terms of these financial instruments are disclosed in these notes to the financial statements.
(j)	Use of estimates
	The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of management estimates relate to the impairment of mineral property interests and plant and equipment, the balance of reclamation liability, income taxes, rates for depreciation and the assumptions used in computing share-based compensation. Actual results could differ from these estimates.
(k)	Segment disclosures
	The Company operates in a single reportable operating segment, the exploration, development and operation of mineral property interests, within the geographic area of British Columbia, Canada.
(l)	Comparative figures
	Certain of the prior periods' comparative figures have been restated to conform with the presentation adopted for the current period.
4.	Arrangement agreement
	In October 2001, the Company and its subsidiary Gibraltar Mines Ltd. (“Gibraltar") completed the acquisition of the Harmony Gold Property and related assets from Continental Minerals Corporation ("Continental"), a British Columbia company with certain directors in common with Taseko, for 12,483,916 series "A" non-voting tracking preferred shares of Gibraltar and  $2.23 million cash. The tracking preferred shares are designed to track and capture the value of the Harmony Gold Property and will be redeemed for common shares of Taseko upon a realization event, such as a sale to a third party or commercial production at the Harmony Gold Property, or at the option of Gibraltar, if a realization event has not occurred within ten years. Accordingly, the tracking preferred shares have been classified within shareholders’ equity on the consolidated balance sheet.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

As this acquisition was a related party transaction not in the normal course of business and did not result in the culmination of an earnings process, the acquisition was recorded by the Company at the net book value of the assets transferred, net of cash consideration, as follows:

Assets acquired		Amount
Property and equipment	$	8,488
Reclamation deposit		175,000
Mineral property interests		28,811,296
	$	28,994,784
Consideration given
Cash	$	2,230,000
12,483,916 tracking preferred shares of Gibraltar		26,641,948
114,800 common shares of the Company to a dissenting shareholder		122,836
	$	28,994,784

As previously noted, the Gibraltar tracking preferred shares are redeemable for common shares of Taseko upon the occurrence of certain value realization events for the Harmony Gold Property. The tracking preferred shares are redeemable at specified prices per common share of Taseko starting at $3.39 and escalating by $0.25 per year. If a realization event does not occur on or before October 16, 2011, Gibraltar has the right to redeem the tracking preferred shares for Taseko common shares at a deemed price equal to the greater of the average 20 day trading price of the common shares of Taseko and $10.00. The Taseko common shares to be issued to Continental upon a realization event will in turn be distributed pro-rata, after adjustment for any taxes, to the holders of redeemable preferred shares of Continental that were issued to Continental shareholders at the time of the Arrangement Agreement.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

5. Property, plant and equipment

		December 31, 2004						September 30, 2004
Equipment - Prosperity
Property and Harmony				Accumulated		Net book				Accumulated		Net book
Property		Cost		depreciation		value		Cost		depreciation		value
Field	$	11,879	$	10,767	$	1,112	$	11,879	$	10,677	$	1,202
Computer and office		15,172		14,330		842		15,172		14,262		910
Total Prosperity Property
and Harmony Property	$	27,051	$	25,097	$	1,954	$	27,051	$	24,939	$	2,112
Gibraltar Mine				Accumulated		Net book				Accumulated		Net book
Plant and equipment		Cost		depreciation		value		Cost		depreciation		value
Buildings and equipment	$	5,931,580	$	510,980	$	5,420,600	$	5,931,580	$	492,030	$	5,439,550
Mine equipment		10,604,461		2,772,159		7,832,302		32,458,793		2,544,160		29,914,633
Plant and equipment		975,493		697,584		277,909		975,493		666,369		309,124
Vehicles		598,770		135,633		463,137		198,519		115,426		83,093
Computer equipment		101,162		94,213		6,949		101,162		90,040		11,122
Total Gibraltar mine	$	18,211,466	$	4,210,569	$	14,000,897	$	39,665,547	$	3,908,025	$	35,757,522
Total property, plant
and equipment	$	18,238,517	$	4,235,666	$	14,002,851	$	39,692,598	$	3,932,964	$	35,759,634

In accordance with the Gibraltar mine permit, the Company has pledged the mine's plant and certain equipment which, when taken at market value and combined with reclamation deposits (approximately $17.7 million at December 31, 2004), provide the Government of British Columbia with the required security for the estimated reclamation liability on the Gibraltar mine of $32.7 million.

In March 2004, the Company purchased a mining shovel for approximately US$10.1 million ($13.0 million). In May 2004, the Company purchased five mine haul trucks for approximately US$8.2 million ($10.7 million).

During the period ended December 31, 2004, the Company sold the mining shovel and the five haul trucks for approximately US$18.3 million ($22.0 million), of which approximately US$14.7 million ($17.5 million) was received in November 2004, net of a 20% down payment (US$3.7 million, or $4.4 million) which was funded by the Company and represent prepaid lease payments. The purchaser leased the shovel and trucks to a subsidiary of Ledcor CMI Ltd. ("Ledcor"), the Company's joint venture partner at the Gibraltar mine (note 6(a)), and this equipment forms part of Ledcor's contribution to the joint venture.

The Company has also guaranteed residual values totaling US$7.1 million ($8.5 million) on this equipment at the end of the lease term in November 2008.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

6. Mineral property interests

		December 31,		September 30,
		2004		2004
Gibraltar Copper Mine (note 6(a))	$	1,000	$	1,000
Prosperity Gold-Copper Property (note 6(b))		1,000		1,000
Harmony Gold Property (note 6(c))		1,000		1,000
	$	3,000	$	3,000

(a)	Gibraltar Copper Mine
	In July 1999, the Company acquired a 100% interest in the Gibraltar Copper Mine mineral property, located near Williams Lake, British Columbia, Canada from Boliden Westmin (Canada) Limited ("BWCL") for $3.3 million. The acquisition included plant and equipment and supplies inventory of the Gibraltar mine, and $8 million of funds set aside for future reclamation. As part of its 1999 operating permits, the Company had agreed to incur a total of $4 million on reclamation and environmental programs during the six year period July 1999 to July 2005. The Gibraltar mine final reclamation and closure plan is updated every five years. The most recent reclamation plan and closure report was approved by the British Columbia Ministry of Energy and Mines in 2004. Pursuant to this approved closure plan, the Ministry agreed that the Company had satisfied the $4 million reclamation obligation required under the 1999 operating permits.
	The agreement contained certain indemnification clauses. The $8 million of funds set aside for future reclamation were considered a "Qualified Environmental Trust" for Canadian income tax purposes. During the year ended September 30, 2003, the Government of British Columbia released these funds from the Trust, which resulted in an income inclusion to the Company, and consequently resulted the Company utilizing $3.57 million of tax pools otherwise available to it. The Company has made claim to BWCL for this estimated tax liability under the indemnification terms of the agreement.
	During the year ended September 30, 2001, Gibraltar Mines Ltd., Gibraltar Engineering Services Limited Partnership (the "GESL Partnership") (see note 6(d)), and Cominco Engineering Services Ltd. ("CESL") concluded a Memorandum of Agreement ("MOA") to jointly complete an evaluation for a potential hydrometallurgical copper refinery (using CESL technology) at the Gibraltar mine. Expenses incurred in excess of the $2.7 million agreed to in the original MOA were funded by the Company and the GESL Partnership. During fiscal 2002 and 2003, the Company acquired the business carried on by the GESL Partnership (note 6(d)).
	The Company retained Procorp Services Limited Partnership ("Procorp") to provide technical, financial, management and marketing services related to all facets of the start-up, expansion and development of the Gibraltar mine and the proposed hydrometallurgical refinery. Procorp is a mining services, financing and marketing partnership comprised of experienced, specialized independent contractors as well as members who are also directors and officers of the Company. Compensation to Procorp included an initial payment of US$0.9 million for services rendered in fiscal 2001 and 2002 (which has been paid) and a second payment of US$0.9 million upon

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	successful recommencement of commercial production of the Gibraltar mine using the CESL technology prior to October 31, 2005. In addition, the Company agreed, subject to regulatory approval, to issue to Procorp 3.5 million warrants to purchase common shares of the Company at a price of $1.70 per share for two years and a royalty of US$0.01 per pound of copper sold, upon successful recommencement of commercial production using the hydrometallurgical refinery by October 31, 2005.
	The Gibraltar mine had been on care and maintenance since being acquired in 1999 and commenced restart activities during the year ended September 30, 2004. During fiscal 2001, due to continued uncertainty regarding start-up and an extended cycle of depressed metal prices, the Company wrote down the accumulated mineral property interest acquisition costs of $5.9 million to a nominal amount of $1,000.
	Part of the Gibraltar mine consists of waste rock dumps which the Company has an obligation to reclaim. On November 1, 2002, the Company entered into a Landfill Management Agreement and an associated Partnering Agreement with the Cariboo Regional District (“CRD”), whereby the CRD funded the Company to construct (which was completed by the Company), operate, manage and maintain, on an ongoing basis, a municipal landfill on certain of the waste rock dumps for the CRD for the life of the landfill, expected to be in excess of 80 years. As a result of these agreements, the Company’s reclamation obligation was reduced and accordingly, during fiscal 2003, the Government of British Columbia released $2.5 million of the reclamation deposits held.
	During the year ended September 30, 2004, the Company formed a joint venture with Ledcor CMI Ltd. (“Ledcor”), whereby Ledcor would commission, restart, and operate the Gibraltar mine. As operator, Ledcor’s primary responsibility would be commissioning and operating the mine in addition to other aspects of mine operations, including drilling, blasting, loading and hauling of ore and waste as well as the recruitment of personnel and the maintenance of equipment and facilities. Ledcor will contribute to the joint venture its own mine equipment and will purchase or lease additional equipment as necessary. Taseko would contribute to the joint venture certain mineral rights and usage rights to the existing mill and equipment.
	Pursuant to the joint venture agreement, the Company is required to maintain a bank account with a balance of at least $5 million in a joint "product revenue account", for the purposes of providing working capital for operations and general administrative costs.
(b)	Prosperity Gold-Copper Property
	The Company owns 100% of the Prosperity Gold-Copper Property, consisting of 196 mineral claims covering the mineral rights for approximately 85 square km in the Clinton Mining Division in south central British Columbia, Canada. The $28.66 million cash and share consideration to acquire the Prosperity property was written down to a nominal $1,000 value in fiscal 2001, to reflect the extended depressed conditions in the metals markets.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

(c)	Harmony Gold Property
	Under the terms of an arrangement agreement (note 4), the Company acquired a 100% interest in the Harmony Gold Property in fiscal 2002.
	The Company does not believe there has been a fundamental change in the nature of the Harmony Gold Property; however, as the Company had not conducted significant exploration or development on the property in the last several years the Harmony Gold Property was written down to a nominal value of $1,000 during the year ended September 30, 2004.
(d)	Acquisition agreements
	Gibraltar Engineering Services Limited Partnership
	In December 2001, the GESL Partnership completed a private placement of limited partnership units for aggregate proceeds of $1.85 million. In February 2002, the Company issued 4,966,659 Taseko common shares at $0.44 per share to acquire Gibraltar Refinery (2002) Ltd., which had acquired certain of the private placement units of the GESL Partnership. The Company also issued 50,000 Taseko common shares to its financial adviser in connection with this acquisition. A further $3 million of expenditures were incurred by the GESL Partnership, which were financed by a separate partnership, the GESL Refinery Process ("GRP") Partnership, for a total financing amount of $4.85 million. In December 2002, a general partnership interest in the GRP Partnership was acquired and financed by a third party for $3.0 million. In April 2003, under a plan of arrangement, the Company issued 7,446,809 Taseko common shares for total consideration of $3.5 million to complete the acquisition of Gibraltar Engineering Services Limited ("GESL"), which had acquired the remaining business of the GESL Partnership.
	Gibraltar Reclamation Trust Limited Partnership
	In December 2003, the GRT Partnership completed a private placement of limited partnership units for aggregate proceeds of $18.6 million, and entered into a joint venture arrangement with Gibraltar Mines Ltd. to proceed towards restarting the Gibraltar mine with the funds raised. Gibraltar Mines Ltd., as its contribution to the joint venture, was to contribute the use of its mine assets and fund the start-up expenses of the Gibraltar mine, and the GRT Partnership funded a qualifying environmental trust (“QET”), which consequently allowed Gibraltar Mines Ltd. to access other funds then held by the Government of British Columbia as a security for the mine’s environmental reclamation obligations. Under the joint venture agreement, the GRT Partnership was to be entitled to certain revenues or production share from the Gibraltar mine following the resumption of production. In March 2004, the Company issued 7,967,742 common shares at $2.79 per share for total consideration of $22.23 million to acquire all of the units of the GRT Partnership. In conjunction with this agreement, certain directors and officers of the Company personally guaranteed certain obligations to third parties on behalf of the Company to the extent of $4.5 million. In consideration for the guarantee, the Company issued 225,000 common shares at $2.00 per share to those directors and officers.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

(e)	Farmout Agreement
	In December 2003, the Company entered into a Farmout Agreement (the "Agreement") with Northern Dynasty Minerals Ltd. ("Northern Dynasty") and Rockwell Ventures Inc. ("Rockwell"), each public companies with certain directors in common with the Company. Under the terms of the Agreement, the Company granted to Northern Dynasty, and to Rockwell, rights to earn joint venture working interests, subject to a maximum of $650,000 in the case of Northern Dynasty and $200,000 in the case of Rockwell, on certain exploration properties located in the vicinity of the Gibraltar mine property. For a period of 150 days after Northern Dynasty and Rockwell earned their working interests, the Company had the right to purchase their interests at 110% in cash or in common shares of the Company, at the Company's option. If the Company elected to issue common shares, the common shares to be issued were to have been valued at the weighted average ten-day trading price as traded on the TSX Venture Exchange.
	In December 2003, Northern Dynasty earned an interest in these properties to the extent of $650,000 and Rockwell earned an interest in these properties to the extent of $200,000. In March 2004, Taseko exercised its right to purchase the interests earned by Northern Dynasty and Rockwell by issuing 256,272 common shares to Northern Dynasty and 78,853 common shares to Rockwell.
(f)	Royalty Agreement
	In September 2004, the Company entered into agreements with an unrelated investment partnership, the Red Mile Resources No. 2 Limited Partnership (“Red Mile”). Gibraltar Mines Ltd. sold to Red Mile a royalty for $67.357 million cash, which cash was received on September 29, 2004. These funds were subsequently loaned to a financial institution (and a promissory note received) and the Company has pledged these funds to secure its obligations under the agreements.
	Pursuant to the agreements, the Company received an aggregate of $10.5 million in fees and interest for services performed in relation to the Red Mile transaction, of which $5.25 million was received on each of September 2004 and in December 2004.
	The amount of $5.25 million received in September 2004 included $1.75 million for indemnifying an affiliate of Red Mile from any claims relating to a breach by Gibraltar Mines Ltd. under the royalty agreement. The funds received in respect of the indemnification are presented as deferred revenue, and are recognized over the expected remaining life of the royalty agreement.
	Annual royalties will be payable by Gibraltar Mines Ltd. at rates ranging from $0.01 per pound to $0.14 per pound of copper produced during the period from the commencement of commercial production (as defined in the agreement) to December 2014. Gibraltar Mines Ltd. is entitled to

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	have released to it funds held under the promissory note to fund its royalty obligations to the extent of its royalty payments.
	The Company has a pre-emptive option to effectively purchase (“call”) the royalty interest by acquiring the Red Mile partnership units at a future date in consideration of a payment commensurate with the funds received by the Company. Under certain circumstances, the investors in Red Mile also have a right to sell (“put”) their Red Mile partnership units to the Company; however such right is subject to the Company's pre-emptive right to exercise the “call” in advance of any “put” being exercised and completed.
	The Company has granted to Red Mile a net profits interest (“NPI”), which survives any “put” or “call” of the Red Mile units. For the years 2011 to 2014, the NPI is 2% if the price of copper averages US$2.50 to US$2.74 per pound, 3% if the price of copper averages US$2.75 to US$2.99 per pound and 4% if the price of copper averages US$3.00 per pound or greater for any year during that period. The US-dollar pricing amounts specified above are based upon an exchange rate of US$0.75 for CDN$1.00, and shall be adjusted from time to time by any variation of such exchange rates. No NPI is payable until the Company reaches a pre-determined aggregate level of revenues less defined operating costs and expenditures.
7.	Operating line of credit and vehicle loans
	The Company has an unsecured $2 million operating line of credit with a Canadian chartered bank at an interest rate of prime, due on demand, with no fixed terms of repayment. At December 31, 2004, approximately $1.09 million was outstanding on this line of credit. This operating line of credit is guaranteed by a director of the Company.
	The Company has a series of loans related to certain of the on-road vehicles used at the mine site, at interest rates ranging from 0% to 9.75%. Most of these loans have a term of 36 months, and are secured by the vehicles to which they relate. The required payments on these loans over the next five years is as follows:

		Remainder of
		2005		2006		2007		2008		2009
Principal	$	103,290	$	141,563	$	53,386	$	11,803	$	-
Interest		8,142		7,013		2,836		152		-
Total	$	111,432	$	148,576	$	56,222	$	11,955	$	-

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

8	Share capital
(a)	Authorized
	Authorized share capital of the Company consists of 200,000,000 common shares without par value.
(b)	Issued and outstanding

	Number
Common shares	of Shares		Amount
Balance, September 30, 2003	53,880,973	$	99,446,319
Issued during the year
Share purchase options at $0.50 per share	4,265,000		2,132,500
Share purchase options at $0.40 per share	152,500		61,000
Share purchase options at $0.25 per share	75,000		18,750
Share purchase options at $0.55 per share	380,000		209,000
Share purchase options at $0.65 per share	25,500		16,575
Fair value of stock options allocated to shares issued on exercise			290,000
Share purchase warrants at $0.58 per share	276,596		160,426
Share purchase warrants at $0.55 per share	414,850		228,168
Share purchase warrants at $0.40 per share	302,250		120,900
Share purchase warrants at $0.50 per share	7,393,751		3,696,876
Share purchase warrants at $0.75 per share	473,332		354,999
Private placement at $0.60 per share, net of issue costs	6,700,000		3,910,728
Private placement at $2.00 per share, net of issue costs	3,900,000		7,323,943
Private placement at $1.25 per share, net of issue costs	8,000,000		9,533,206
For acquisition of Gibraltar Reclamation Trust Limited Partnership
at $2.79 per share, net of issue costs (note 6(d))	7,967,742		22,193,039
Loan guarantee at $2.00 per share (note 6(d))	225,000		450,000
Farmout agreement at $2.79 per share (note 6(e))	335,125		935,000
Balance, September 30, 2004	94,767,619	$	151,081,429
Issued during the period
Share purchase options at $0.40 per share	22,500		9,000
Share purchase options at $0.81 per share	10,000		8,100
Share purchase options at $1.65 per share	10,000		16,500
Share purchase options at $1.36 per share	60,000		81,600
Share purchase warrants at $0.75 per share	1,405,001		1,053,750
Balance, December 31, 2004	96,275,120	$	152,250,379

(c)	Convertible debenture
	On July 21, 1999, in connection with the acquisition of the Gibraltar mine, the Company issued a $17 million interest-free debenture to BWCL, which is due on July 21, 2009, but is convertible

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

into common shares of the Company over a 10 year period commencing at a price of $3.14 per share in year one and escalating by $0.25 per share per year thereafter ($4.39 per share as at December 31, 2004). BWCL’s purchase of the convertible debenture was receivable as to $4,000,000 in July 1999, $1,000,000 on October 19, 1999, $3,500,000 on July 21, 2000, and $8,500,000 by December 31, 2000, all of which were received. BWCL has the right to convert, in part or in all from time to time, the debenture into fully paid common shares of the Company from year one to year ten.

From the commencement of the sixth year to the tenth year, the Company has the right to automatically convert the debenture into common shares at the then-prevailing market price. Since the Company has the right and the intention to settle the convertible debenture through the issuance of common shares, notwithstanding the Company’s right to settle the debenture with cash, it has been included as a separate component of shareholders’ equity on the balance sheet.

Accounting standards in Canada for compound financial instruments require the Company to allocate the proceeds received from the convertible debenture between (i) the fair value of the option to convert the debenture into common shares and (ii) the fair value of the future cash outflows related to the debenture. At issuance, the Company estimated the fair value of the conversion option by deducting the present value of the future cash outflows of the convertible debenture, calculated using a risk-adjusted discount rate of 10%, from the face value of the principal of the convertible debenture. The residual carrying value of the convertible debenture is required to be accreted to the face value of the convertible debenture over the life of the debenture by, in the Company’s case, a direct charge to deficit. During the year ended September 30, 2003, the Company restated the prior years' convertible debenture and deficit balances within shareholders’ equity on the balance sheet and the statements of deficit for the years ended September 30, 2002 and 2001 to reflect the required accretion of the convertible debenture.

		Three months
		ended		Year ended
		December 31,		September 30,
		2004		2004
Present value of convertible debenture
Beginning of period	$	10,754,763	$	9,777,058
Accretion for the period		269,975		977,705
End of period		11,024,738		10,754,763
Conversion right		9,822,462		9,822,462
	$	20,847,200	$	20,577,225

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

		December 31,		September 30,
		2004		2004
Summary of the convertible debenture terms
Principal amount of convertible debenture	$	17,000,000	$	17,000,000
Price per common share of the unexercised conversion right	$	4.39	$	4.39
Number of common shares potentially issuable under
unexercised conversion right		3,872,437		3,872,437

(d)	Share purchase option plan
	The Company has a share purchase option plan approved by the shareholders that allows it to grant a maximum of 10% of the issued and outstanding common shares of the Company at the time an option is granted, less common shares reserved or issued in the plan, subject to regulatory terms and approval, to its employees, officers, directors and consultants. The exercise price of each option may be set equal to or greater than the closing market price of the common shares on the TSX Venture Exchange on the day prior to the date of the grant of the option, less any allowable discounts. Options have a maximum term of ten years and terminate 30 to 90 days following the termination of the optionee’s employment or term of engagement, except in the case of retirement or death. Vesting of options is at the discretion of the Board of Directors at the time the options are granted.
	The continuity of share purchase options is as follows:

	For the three month
	period ended
	December 31,				For the years ended September 30,
	2004				2004				2003
	Number			Average	Number			Average	Number			Average
	of shares			Price	of shares			Price	of shares			Price
Opening balance	8,627,500		$	1.13	4,685,000		$	0.48	4,145,000		$	0.50
Granted during the period	–			0.58	8,855,500			1.12	770,000			0.41
Exercised during the period	(102,500	)		1.12	(4,898,000	)		0.50	(40,000	)		0.50
Expired/cancelled during period	–			–	(15,000	)		1.36	(190,000	)		0.50
Closing balance	8,525,000		$	1.13	8,627,500		$	1.13	4,685,000		$	0.48
Contractual remaining life (years)				1.68				1.93				1.03
Range of exercise prices	$0.25-$1.65				$0.25-$1.65				$0.25-$0.50

As at December 31, 2004, 8,177,500 of the options outstanding had vested with optionees.

Subsequent to December 31, 2004, to February 8, 2005, a total of 487,000 options were exercised for gross proceeds of $436,100.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

The exercise prices of all share purchase options granted during the period were equal to the market price at the grant date. Using an option pricing model with the assumptions noted below, the estimated fair value of all options granted during the period have been reflected in the statement of operations as follows:

		Three months
		ended		Year ended
		December 31,		September 30,
		2004		2004
Total compensation cost recognized in operations,
credited to contributed surplus	$	164,549	$	5,172,244

The weighted average assumptions used to estimate the fair value of options granted during the year were:

Risk free interest rate	3%
Expected life	2.4 years
Volatility	94%
Expected dividends	nil

(e)	Share purchase warrants
	The continuity of share purchase warrants is as follows:

		Outstanding			Outstanding
	Exercise	September 30,			December 31,
Expiry dates	price	2004	Issued	Exercised	2004
January 8, 2006	$0.40	375,000	–	–	375,000
December 31, 2005	$0.75	6,226,668	–	1,405,001	4,821,667	(i)
March 10, 2005	$2.25	3,900,000	–	–	3,900,000	(ii)
September 28, 2006	$1.40	8,000,000	–	–	8,000,000	(iii)
		18,501,668	–	1,405,001	17,096,667

(i)	Subject to a 45-day accelerated expiry upon notice if, at any time after the regulatory four-month hold period, the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $1.50 for ten consecutive trading days. As at December 31, 2004, management had not given notice of this accelerated expiry.
(ii)	Subject to a 45-day accelerated expiry upon notice if, at any time after the regulatory four-month hold period, the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $4.50 for ten consecutive trading days.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

(iii)	Subject to a 45-day accelerated expiry upon notice if, at any time after the regulatory four-month hold period, the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $2.80 for ten consecutive trading days.
Subsequent to December 31, 2004, to February 8, 2005, a total of 358,333 warrants were exercised for gross proceeds of $268,750. The continuity of share purchase warrants during the previous fiscal year is as follows:

		Outstanding			Outstanding
	Exercise	September 30,			September 30,
Expiry dates	price	2003	Issued	Exercised	2004
October 19, 2003	$0.58	276,596	–	(276,596)	–
December 27, 2003	$0.55	414,850	–	(414,850)	–
January 8, 2006	$0.40	375,000	–	–	375,000
December 31, 2003	$0.40	302,250	–	(302,250)	–
December 31, 2004	$0.50	7,393,751	–	(7,393,751)	–
December 31, 2005	$0.75	–	6,700,000	(473,332)	6,226,668
March 10, 2005	$2.25	–	3,900,000	–	3,900,000
September 28, 2006	$1.40	–	8,000,000	–	8,000,000
		8,762,447	18,600,000	(8,860,779)	17,096,667

(f) Contributed surplus

Balance, September 30, 2003	$	65,344
Changes during fiscal 2004:
Non-cash stock-based compensation (note 8(d))		5,172,244
Fair value of stock options allocated to shares issued on exercise		(290,000	)
Contributed surplus, September 30, 2004		4,947,588
Changes during fiscal 2004:
Non-cash stock-based compensation (note 8(d))		164,549
Contributed surplus, December 31, 2004	$	5,112,137

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

9.	Income taxes
	As at September 30, 2004 and 2003, the tax effect of the significant components within the Company’s future tax assets were as follows:

		2004			2003
Mineral properties	$	7,472,000		$	–
Loss carry forwards		1,412,000			1,778,000
Equipment		15,000			1,085,000
Reclamation obligation		5,359,000			–
Royalty obligation		23,979,000			–
Other tax pools		740,000			775,000
		38,977,000			3,638,000
Valuation allowance		(38,977,000	)		(3,638,000	)
Future income tax asset	$	–		$	–

	The Company has accrued a tax provision of a subsidiary company of $23.7 million. This provision reflects an amount which management believes is less than likely of ever becoming payable. The subsidiary has a June 30, 2005 taxation year end. Prior to making its ultimate tax calculations, the subsidiary will consider tax planning strategies which might be put in place subsequent to the Company's financial reporting date of September 30, 2004. In addition, the subsidiary would exhaust all appeals if any taxes in connection with this accrual were actually assessed against the subsidiary. The amount represents a potential liability which has been recognized in a conservative manner in accordance with Canadian generally accepted accounting principles. It does not represent a payable amount based on any filed, or expected to be filed, tax return. It does not arise from a transaction in any completed taxation year, nor has any taxation authority assessed the amount or any portion thereof as payable.
	At September 30, 2004, the Company’s tax attributes include non-capital losses for income tax purposes in Canada totaling approximately $3,063,000 expiring in various periods from 2005 to 2014.
10.	Supplementary cash flow disclosures
	In addition to the non-cash operating, financing and investing activities primarily disclosed, the Company’s non-cash operating, financing and investing activities were as follows:

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

		December 31,		September 30,		September 30,
		2004		2004		2003
Issuance of common shares on acquisition of remaining
business of GESL Partnership		–		–		3,500,000
Issuance of common shares on acquisition of Gibraltar
Reclamation Trust Limited Partnership		–		22,230,000		–
Issuance of common shares for loan guarantee (note 7)		–		450,000		–
Accretion of convertible debenture (note 8(c))		269,975		977,705		888,823
Fair value of stock options allocated to shares issued on
exercise		–		290,000		–
		December 31,		September 30,		September 30,
		2004		2004		2003
Supplemental cash flow information
Cash paid during the period for
Interest	$	41,785	$	49,294	$	101,942
Taxes	$	554	$	45,352	$	6,135

11. Related party transactions and advances

		Three months
		ended			Year ended
		December 31,			September 30,
Transactions		2004			2004
Hunter Dickinson Inc.
Services rendered to the Company and its subsidiaries
and reimbursement of third party expenses (a)	$	177,357		$	806,970
Hunter Dickinson Group Inc.
Consulting services rendered to the Company (b)	$	3,200		$	12,800
Tom Milner Enterprises Inc.
Consulting services rendered to the Company (c)	$	58,073		$	115,155
		December 31,			September 30,
Advances		2004			2004
Advances to (from) (d)
Hunter Dickinson Inc. (a)	$	(77,200	)	$	198,281
Hunter Dickinson Group Inc. (b)		(3,424	)		(3,424	)
Advances to (from) related parties	$	(80,624	)	$	194,857

(a) Hunter Dickinson Inc. ("HDI") is a private company with certain directors in common that provides geological, corporate development, administrative and management services to, and incurs third party costs on behalf of, the Company and its subsidiaries on a full cost recovery basis pursuant to an agreement dated December 31, 1996.

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended December 31, 2004
(Expressed in Canadian Dollars)
(Unaudited)

	(b)	Hunter Dickinson Group Inc. is a private company with certain directors in common that provides consulting services to the Company.
	(c)	Tom Milner Enterprises Inc. is a private company controlled by a director of the Company that provides consulting services to the Company.
	(d)	Advances are non-interest bearing and due on demand.
12.	Subsequent events
	Subsequent to December 31, 2004, to February 8, 2005:
	(a)	487,000 options were exercised for gross proceeds of $436,100 (note 8(d)).
	(b)	358,333 warrants were exercised for gross proceeds of $268,750 (note 8(e)).