WHEATON RIVER MINERALS LTD

Annual Report

Year Ended December 31, 2004





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Managements Responsibility for Financial Reporting

The accompanying consolidated financial statements have been prepared by management and are in accordance with Canadian generally accepted accounting principles. Other information contained in this document has also been prepared by management and is consistent with the data contained in the consolidated financial statements. A system of internal control is maintained by management to provide reasonable assurance that assets are safeguarded and financial information is accurate and reliable.

The board of directors approves the financial statements and ensures that management discharges its financial responsibilities. The boards review is accomplished principally through the audit committee, which is composed of non-executive directors. The audit committee meets periodically with management and auditors to review financial reporting and control matters.

The consolidated financial statements have been audited by Deloitte & Touche LLP on behalf of the shareholders and their report follows.



|"Ian Telfer                          | "Peter Barnes"                                      
|------------------------------------ | ----------------------------------------------------
|Chairman and Chief Executive Officer | Executive Vice President and Chief Financial Officer
|March 4, 2005                        |                                                     



Independent Auditors Report

To the Shareholders of

Wheaton River Minerals Ltd

We have audited the consolidated balance sheets of Wheaton River Minerals Ltd as at December 31, 2004 and 2003 and the consolidated statements of operations, shareholders equity and cash flows for each of the years in the three-year period ended December 31, 2004.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and 2003 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2004 in accordance with Canadian generally accepted accounting principles.



Deloitte & Touche LLP

Chartered Accountants

Vancouver, Canada

February 25, 2005



Comments by Auditor on Canada-United States of America Reporting Differences

In the United States of America, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there are changes in accounting principles that have a material effect on the comparability of the Companys financial statements, such as the changes described in Note 22 to the consolidated financial statements.  Our report to the Shareholders, dated February 25, 2005, is expressed in accordance with Canadian reporting standards which do not require a reference to such changes in accounting principles in the independent auditors report when the change is properly accounted for and adequately disclosed in the consolidated financial statements.



Deloitte & Touche LLP

Chartered Accountants

Vancouver, Canada

February 25, 2005





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Consolidated Statements of Operations

Years Ended December 31

(US dollars and shares in thousands, except per share amounts)

|                                                          | Note   |   | 2004    |  |   | 2003    |  |   | 2002   
|--------------------------------------------------------- | ------ | - | ------- |  | - | ------- |  | - | -------
|Sales                                                     |        | $ | 419,182 |  | $ | 212,633 |  | $ | 34,693 
|Cost of sales                                             |        |   | 150,571 |  |   | 91,954  |  |   | 19,355 
|Depreciation and depletion                                |        |   | 47,498  |  |   | 32,393  |  |   | 3,028  
|Royalties                                                 |        |   | 7,338   |  |   | 3,712   |  |   | 28     
|                                                          |        |   | 205,407 |  |   | 128,059 |  |   | 22,411 
|Earnings from mining operations                           |        |   | 213,775 |  |   | 84,574  |  |   | 12,282 
|Expenses and other income                                 |        |   |         |  |   |         |  |   |        
|General and administrative                                |        |   | 12,975  |  |   | 9,654   |  |   | 6,329  
|Interest and finance fees                                 |        |   | 5,871   |  |   | 4,318   |  |   | 487    
|Exploration                                               |        |   | 3,494   |  |   | 1,875   |  |   | 2,126  
|Depreciation and amortization                             |        |   | 4,228   |  |   | 1,778   |  |   | 108    
|Corporate transaction costs                               | 5      |   | 6,934   |  |   | -       |  |   | -      
|Other expense (income)                                    | 6      |   | 2,301   |  |   | (8,430) |  |   | (4,823)
|                                                          |        |   | 35,803  |  |   | 9,195   |  |   | 4,227  
|Earnings before the following                             |        |   | 177,972 |  |   | 75,379  |  |   | 8,055  
|Equity in earnings of Minera Alumbrera Ltd.               | 4 (c)  |   | -       |  |   | 7,324   |  |   | -      
|Earnings before income taxes and non-controlling interest |        |   | 177,972 |  |   | 82,703  |  |   | 8,055  
|Income tax expense                                        | 7      |   | 35,144  |  |   | 25,044  |  |   | 2,453  
|Non-controlling interest                                  | 16     |   | 707     |  |   | -       |  |   | -      
|Net earnings                                              |        | $ | 142,121 |  | $ | 57,659  |  | $ | 5,602  
|                                                          |        |   |         |  |   |         |  |   |        
|Earnings per share                                        | 17 (d) |   |         |  |   |         |  |   |        
|Basic                                                     |        | $ | 0.25    |  | $ | 0.14    |  | $ | 0.04   
|Diluted                                                   |        | $ | 0.22    |  | $ | 0.13    |  | $ | 0.04   
|Weighted-average number of shares outstanding             | 17 (d) |   |         |  |   |         |  |   |        
|Basic                                                     |        |   | 568,442 |  |   | 412,035 |  |   | 137,327
|Diluted                                                   |        |   | 651,216 |  |   | 439,214 |  |   | 143,227







The accompanying notes form an integral part of these consolidated financial statements





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Consolidated Balance Sheets

At December 31

(US dollars and shares in thousands)

|                                                                                                                            | Note |   | 2004      |  |   | 2003    |  |  | 
|--------------------------------------------------------------------------------------------------------------------------- | ---- | - | --------- |  | - | ------- |  |  | 
|Assets                                                                                                                      |      |   |           |  |   |         |  |  | 
|Current                                                                                                                     |      |   |           |  |   |         |  |  | 
|Cash and cash equivalents                                                                                                   |      | $ | 161,131   |  | $ | 151,878 |  |  | 
|Appropriated cash                                                                                                           |      |   | -         |  |   | 8,840   |  |  | 
|Marketable securities                                                                                                       | 8    |   | 3,200     |  |   | 1,142   |  |  | 
|Accounts receivable                                                                                                         |      |   | 46,994    |  |   | 31,824  |  |  | 
|Income tax receivable                                                                                                       |      |   | 2,774     |  |   | -       |  |  | 
|Inventories                                                                                                                 | 9    |   | 31,554    |  |   | 26,809  |  |  | 
|Other                                                                                                                       |      |   | 8,940     |  |   | 4,287   |  |  | 
|                                                                                                                            |      |   | 254,593   |  |   | 224,780 |  |  | 
|Property, plant and equipment                                                                                               | 10   |   | 754,836   |  |   | 583,911 |  |  | 
|Stockpiled ore                                                                                                              | 9    |   | 58,820    |  |   | 60,736  |  |  | 
|Future income taxes                                                                                                         | 7    |   | 9,667     |  |   | 7,211   |  |  | 
|Silver contract                                                                                                             | 3    |   | 77,708    |  |   | -       |  |  | 
|Other                                                                                                                       | 11   |   | 18,661    |  |   | 14,367  |  |  | 
|                                                                                                                            |      | $ | 1,174,285 |  | $ | 891,005 |  |  | 
|Liabilities                                                                                                                 |      |   |           |  |   |         |  |  | 
|Current                                                                                                                     |      |   |           |  |   |         |  |  | 
|Accounts payable and accrued liabilities                                                                                    | 12   | $ | 41,323    |  | $ | 31,402  |  |  | 
|Income taxes payable                                                                                                        |      |   | 45,786    |  |   | 1,062   |  |  | 
|Current portion of long-term debt                                                                                           | 13   |   | -         |  |   | 41,000  |  |  | 
|Other                                                                                                                       |      |   | 2,001     |  |   | 3,832   |  |  | 
|                                                                                                                            |      |   | 89,110    |  |   | 77,296  |  |  | 
|Long-term debt                                                                                                              | 13   |   | -         |  |   | 81,423  |  |  | 
|Future income taxes                                                                                                         | 7    |   | 118,918   |  |   | 133,881 |  |  | 
|Deferred revenue                                                                                                            | 3    |   | 75,894    |  |   | -       |  |  | 
|Provision for reclamation and closure                                                                                       | 14   |   | 19,229    |  |   | 19,604  |  |  | 
|Future employee benefits and other                                                                                          | 15   |   | 22,450    |  |   | 22,683  |  |  | 
|                                                                                                                            |      |   | 325,601   |  |   | 334,887 |  |  | 
|Non-controlling interest                                                                                                    | 16   |   | 54,521    |  |   | -       |  |  | 
|Shareholders Equity                                                                                                        |      |   |           |  |   |         |  |  | 
|Share purchase options                                                                                                      | 17   |   | 15,630    |  |   | 877     |  |  | 
|Contributed surplus                                                                                                         |      |   | 704       |  |   | 600     |  |  | 
|Share purchase warrants                                                                                                     |      |   | 16,660    |  |   | -       |  |  | 
|Share capital                                                                                                               | 17   |   |           |  |   |         |  |  | 
|Common shares: Authorized - unlimited shares, no par value;
Issued and outstanding - 572,247 (December 31, 2003  - 533,697) |      |   | 586,345   |  |   | 505,090 |  |  | 
|Retained earnings                                                                                                           |      |   | 174,824   |  |   | 49,551  |  |  | 
|                                                                                                                            |      |   | 794,163   |  |   | 556,118 |  |  | 
|                                                                                                                            |      | $ | 1,174,285 |  | $ | 891,005 |  |  | 
|Commitments (note 20)                                                                                                       |      |   |           |  |   |         |  |  | 
|Subsequent events (note 23)                                                                                                 |      |   |           |  |   |         |  |  | 





Ian Telfer

Douglas Holtby

Director

Director





The accompanying notes form an integral part of these consolidated financial statements





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Consolidated Statements of Shareholders Equity

Years Ended December 31

(US dollars, shares and warrants in thousands)

|                                                                  | Common Shares | Share Purchase Warrants | Share Purchase Options | Contributed Surplus | Retained Earnings (Deficit) | Total
|----------------------------------------------------------------- | ------------- | ----------------------- | ---------------------- | ------------------- | --------------------------- | -----
|                                                                  | Shares        | Amount                  | Warrants               | Amount             
|At January 1, 2002                                                | 56,601        | $25,999                 | 13,000                 | $3,110              | $317                        | $600 
|Special warrants issued                                           | -             | -                       | 110,000                | 82,068              | -                           | -    
|Special warrants exercised                                        | 119,910       | 85,178                  | (119,910)              | (85,178)            | -                           | -    
|Warrants issued on exercise of special warrants                   | -             | -                       | 64,910                 | -                   | -                           | -    
|Share options exercised                                           | 1,355         | 411                     | -                      | -                   | -                           | -    
|Warrants exercised                                                | 3,450         | 2,010                   | (3,450)                | -                   | -                           | -    
|Shares issued on acquisition of Luismin SA de CV                  | 9,084         | 6,805                   | -                      | -                   | -                           | -    
|Share issue costs, net of tax                                     | -             | (5,251)                 | -                      | -                   | -                           | -    
|Fair value of share purchase options issued to non-employees      | -             | -                       | -                      | -                   | 93                          | -    
|Net earnings                                                      | -             | -                       | -                      | -                   | -                           | -    
|At December 31, 2002                                              | 190,400       | 115,152                 | 64,550                 | -                   | 410                         | 600  
|Share options exercised                                           | 6,621         | 5,431                   | -                      | -                   | -                           | -    
|Warrants exercised                                                | 9,602         | 5,192                   | (9,602)                | -                   | -                           | -    
|Shares and warrants issued                                        | 327,074       | 402,266                 | 100,360                | -                   | -                           | -    
|Share issue costs, net of tax                                     | -             | (22,951)                | -                      | -                   | -                           | -    
|Fair value of share purchase options issued to non-employees      | -             | -                       | -                      | -                   | 467                         | -    
|Net earnings                                                      | -             | -                       | -                      | -                   | -                           | -    
|At December 31, 2003                                              | 533,697       | 505,090                 | 155,308                | -                   | 877                         | 600  
|Cumulative effect of change in accounting policy (note 2 (t))     | -             | 1,883                   | -                      | -                   | 14,861                      | 104  
|Share options exercised                                           | 5,074         | 6,961                   | -                      | -                   | (1,863)                     | -    
|Warrants exercised                                                | 476           | 672                     | (476)                  | -                   | -                           | -    
|Shares and warrants issued on acquisition of Amapari (note 4 (a)) | 33,000        | 71,885                  | 21,516                 | 16,660              | -                           | -    
|Share issue costs, net of tax                                     | -             | (146)                   | -                      | -                   | -                           | -    
|Fair value of share purchase options issued                       | -             | -                       | -                      | -                   | 1,755                       | -    
|Net earnings                                                      | -             | -                       | -                      | -                   | -                           | -    
|At December 31, 2004                                              | 572,247       | $586,345                | 176,348                | $16,660             | $15,630                     | $704 

Shareholders Equity (note 17)







The accompanying notes form an integral part of these consolidated financial statements





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Consolidated Statements of Cash Flows

Years Ended December 31

(US dollars in thousands)

|                                                        | Note       |   | 2004      |  |   | 2003      |  |   | 2002    
|------------------------------------------------------- | ---------- | - | --------- |  | - | --------- |  | - | --------
|Operating Activities                                    |            |   |           |  |   |           |  |   |         
|Net earnings                                            |            | $ | 142,121   |  | $ | 57,659    |  | $ | 5,602   
|Reclamation expenditures                                |            |   | (1,050)   |  |   | (1,854)   |  |   | (685)   
|Defined benefit pension plan contributions              |            |   | (1,715)   |  |   | (463)     |  |   | -       
|Cash distribution from Minera Alumbrera Ltd.            |            |   | -         |  |   | 12,610    |  |   | -       
|Items not affecting cash                                |            |   |           |  |   |           |  |   |         
|Depreciation, depletion and amortization                |            |   | 51,726    |  |   | 34,171    |  |   | 3,136   
|Accretion expense on provision for reclamation          |            |   | 621       |  |   | 793       |  |   | 47      
|Amortization of deferred revenue                        |            |   | (575)     |  |   | -         |  |   | -       
|Gain on sale of marketable securities                   | 6          |   | (1,991)   |  |   | (2,095)   |  |   | (3,593) 
|Future employee benefits                                |            |   | 2,007     |  |   | 924       |  |   | 380     
|Future income taxes                                     | 7          |   | (12,308)  |  |   | 24,281    |  |   | 2,606   
|Share purchase options                                  | 6          |   | 6,801     |  |   | 467       |  |   | 199     
|Non-controlling interest                                | 16         |   | 707       |  |   | -         |  |   | -       
|Equity in earnings of Minera Alumbrera Ltd.             |            |   | -         |  |   | (7,324)   |  |   | -       
|Other                                                   |            |   | (1,365)   |  |   | 920       |  |   | (1,090) 
|Change in non-cash working capital                      | 18         |   | 22,835    |  |   | 6,589     |  |   | (2,241) 
|Cash generated by operating activities                  |            |   | 207,814   |  |   | 126,678   |  |   | 4,361   
|Financing Activities                                    |            |   |           |  |   |           |  |   |         
|Long-term debt                                          |            |   | -         |  |   | 75,000    |  |   | -       
|Repayment of long-term debt                             |            |   | (137,623) |  |   | (54,919)  |  |   | -       
|Common shares issued                                    | 17         |   | 5,770     |  |   | 390,522   |  |   | 2,421   
|Common share and special warrant issue costs            |            |   | (146)     |  |   | (25,551)  |  |   | (5,251) 
|Shares issued by subsidiary to non-controlling interest |            |   | 98,057    |  |   | -         |  |   | -       
|Debt issue costs                                        | 13 (a),(b) |   | (8,459)   |  |   | (4,242)   |  |   | -       
|Deferred gold put options                               |            |   | -         |  |   | (5,786)   |  |   | -       
|Special warrants issued                                 |            |   | -         |  |   | -         |  |   | 82,068  
|Cash (applied to) generated by financing activities     |            |   | (42,401)  |  |   | 375,024   |  |   | 79,238  
|Investing Activities                                    |            |   |           |  |   |           |  |   |         
|Proceeds on sale of marketable securities               |            |   | 34,243    |  |   | 4,013     |  |   | 6,169   
|Purchases of marketable securities                      |            |   | (32,812)  |  |   | -         |  |   | -       
|Property, plant and equipment                           |            |   | (90,646)  |  |   | (29,010)  |  |   | (5,214) 
|Acquisitions, net of cash acquired                      | 18         |   | (25,785)  |  |   | (347,766) |  |   | (76,886)
|Silver contracts purchased                              | 3          |   | (50,000)  |  |   | -         |  |   | -       
|Appropriated cash                                       |            |   | 8,840     |  |   | -         |  |   | -       
|Short-term money market instruments                     |            |   | -         |  |   | -         |  |   | 13,013  
|Other                                                   |            |   | -         |  |   | 3         |  |   | 520     
|Cash applied to investing activities                    |            |   | (156,160) |  |   | (372,760) |  |   | (62,398)
|Increase in cash and cash equivalents                   |            |   | 9,253     |  |   | 128,942   |  |   | 21,201  
|Cash and cash equivalents, beginning of year            |            |   | 151,878   |  |   | 22,936    |  |   | 1,735   
|Cash and cash equivalents, end of year                  |            | $ | 161,131   |  | $ | 151,878   |  | $ | 22,936  
|Supplemental cash flow information                      | 18         |   |           |  |   |           |  |   |         



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Notes to the Consolidated Financial Statements

Years Ended December 31 2004, 2003 and 2002

(US dollars)

1.   DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Wheaton River Minerals Ltd.  (the Company) is engaged in gold mining and related activities including exploration, extraction, processing, refining and reclamation.  The Company has mining operations in Mexico, Argentina and Australia, project development activities in Mexico and Brazil, and on-going exploration activities in Mexico, Australia and Brazil.  During 2002 it also carried on exploration activities in Canada.  During 2004, the Company completed the reclamation of the Golden Bear Mine in Canada, which ceased commercial production in 2001.

On March 18, 2003, the Company acquired the Peak Mine in Australia and a 25% indirect interest in the Alumbrera Mine in Argentina (note 4 (c)).  On June 24, 2003 the Company acquired an additional 12.5% indirect interest in the Alumbrera Mine (note 4 (c)).  On October 31, 2003, the Company acquired the Los Filos gold project, together with a 21.2% interest (of which 14% is a carried interest) in the El Limón gold project, both located in Mexico (note 4 (b)).

On January 9, 2004, the Company acquired the Amapari gold project in northern Brazil (note 4 (a)).

On October 15, 2004, the Company acquired a 75% interest in Silver Wheaton Corp. (Silver Wheaton), formerly Chap Mercantile Inc, pursuant to an agreement to sell 100% of the silver produced from the Companys Mexican operations to Silver Wheaton (note 3).  Subsequently, the Companys interest in Silver Wheaton was diluted to 65%.

On February 14, 2005, the Company successfully completed a business combination with Goldcorp Inc. (Goldcorp) (note 23).

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Canadian generally accepted accounting principles

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP).  Differences between Canadian and United States GAAP, which would have a material effect on these consolidated financial statements, are explained in Note 22.

(b)  Basis of presentation

These consolidated financial statements include the accounts of the Company and its subsidiaries.  Principal subsidiaries and investments at December 31, 2004 are listed below:

| | Subsidiary                                           | Location  | Ownership
Interest | Status                       | Operations and
Development Projects Owned                              
| | ---------------------------------------------------- | --------- | ------------------ | ---------------------------- | -----------------------------------------------------------------------
| | Luismin SA de CV (Luismin)                         | Mexico    | 100%               | Consolidated                 | San Dimas, San Martin and Nukay mines and Los Filos development project
| | Peak Gold Mines Pty Ltd.  (Peak)                   | Australia | 100%               | Consolidated                 | Peak mine                                                              
| | Mineraçao Pedra Branco do Amapari Ltd. a (Amapari) | Brazil    | 100%               | Consolidated                 | Amapari development project                                            
| | Minera Alumbrera Ltd.  (Alumbrera)                 | Argentina | 37.5%              | Proportionately consolidated | Alumbrera mine                                                         
| | Silver Wheaton Corp. (Silver Wheaton)              | Canada    | 65%                | Consolidated                 | Silver purchase contracts in Mexico and Sweden                         

(c)  Investment in Minera Alumbrera Ltd.

On March 18, 2003 the Company acquired a 25% indirect interest in Alumbrera which was accounted for using the equity method and the Companys share of earnings of Alumbrera have been included in the earnings of the Company since that date.

On June 24, 2003 the Company acquired an additional 12.5% indirect interest in Alumbrera.  As a result of this acquisition and acquisition of control of an intermediate holding company, the Company now has joint control over Alumbrera through certain matters requiring unanimous consent in the shareholders agreement and, therefore, the Company has proportionately consolidated its 37.5% share of the financial statements of Alumbrera from June 24, 2003 onwards.  On this basis, the Company records its 37.5% share of the assets, liabilities, revenues and expenses of Alumbrera in these consolidated financial statements.

(d)  Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period.  Significant areas where managements judgment is applied are asset valuations, depreciation and depletion, income taxes, employee future benefits, contingent liabilities and provision for reclamation.  Actual results could differ from those reported.

(e)  Foreign currency translation

The Companys functional and reporting currency is the United States dollar. Foreign currency monetary assets and liabilities are translated into United States dollars at the exchange rates prevailing at the balance sheet date.  Non-monetary assets denominated in foreign currencies are translated using the rate of exchange at the transaction date.  Foreign currency transactions are translated at the United States dollar rate prevailing on the transaction dates.  Foreign exchange gains and losses are included in the determination of earnings.

(f)  Financial instruments

The carrying values of cash and cash equivalents, appropriated cash, marketable securities, accounts receivable, accounts payable and accrued liabilities and long-term debt approximate their fair values.

The Company has employed metal, interest rate and Canadian dollar forward and option contracts to manage exposure to fluctuations in metal prices and foreign currency exchange rates.  Hedging gains or losses are recognized in sales when the hedged production is sold.

(g)  Revenue recognition

Revenue from the sale of metals is recognized in the accounts when title and risk passes to the buyer, collection is reasonably assured and the price is reasonably determinable.  Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays.  Adjustments to revenue for metal prices are recorded monthly and other adjustments are recorded on final settlement.  Refining and treatment charges are netted against revenue.

(h)  Exploration and development expenditures

Significant property acquisition costs are capitalized.  Exploration and development expenditures are expensed until a positive economic analysis has been completed that indicates the property is economically feasible.  Capitalized costs are written down to their estimated recoverable amount if the properties are determined to be uneconomic or are placed for sale.

(i)  Income and resource taxes

The provision for income and resource taxes is based on the liability method.  Future taxes arise from the recognition of the tax consequences of temporary differences by applying enacted or substantively enacted tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities.  The Company records a valuation allowance against any portion of those future income tax assets that it believes will, more likely than not, fail to be realized.

(j)  Earnings per share

Earnings per share calculations are based on the weighted average number of common shares and common share equivalents issued and outstanding during the year.  Diluted earnings per share are calculated using the treasury method, which requires the calculation of diluted earnings per share by assuming that outstanding share purchase options and warrants, with exercise prices that exceed the average market price of the common shares for the year, are exercised and the proceeds are used to repurchase shares of the Company at the average market price of the common shares for the period.

(k)  Cash and cash equivalents

Cash and cash equivalents include cash, and those short-term money market instruments that are readily convertible to cash with an original term of less than 91 days.

(l)  Short-term money market instruments

Short-term money market instruments are those which are due within one year but have an original term of greater than 90 days.

(m) Marketable securities

Marketable securities are carried at the lower of cost and market value on a portfolio basis.

(n)  Inventories

Product inventory is valued at the lower of average cost and net realizable value.  Inventories of supplies are valued at the lower of average cost and replacement cost net of a provision for obsolescence.  Inventories at December 31, 2004 included an obsolescence provision of $1,261,000 (2003 - $993,000).

(o)  Property, plant and equipment

Property, plant and equipment are recorded at cost.  Significant costs related to property acquisitions including undeveloped mineral interests are capitalized until the viability of the mineral interest is determined.  When it has been established that a mineral deposit is commercially mineable and a decision has been made to prepare a mining plan (which occurs upon completion of a positive economic analysis of the mineral deposit), the development costs subsequently incurred are capitalized.  Construction costs on development projects are capitalized until the mine is substantially complete and ready for productive use.  Major development expenditures incurred to expose the ore, increase production or extend the life of an existing mine are capitalized.  Capitalized costs are written down to their estimated recoverable amount if the properties are determined to be uneconomic or are placed for sale.

Interest and finance costs relating to the construction of plant and equipment are capitalized prior to the commencement of commercial production of a new mine.

Depletion of mine properties is charged on a unit-of-production basis over proven and probable reserves and a portion of resources expected to be converted to reserves.  Depreciation of plant and equipment is calculated using the straight-line method, based on estimated useful lives, over three to forty years.

Evaluations of the carrying values of each operation and development property are undertaken in each reporting period to determine if estimated undiscounted future net cash flows are less than the carrying value.  Estimated undiscounted future net cash flows are calculated using estimated production sales prices and operating costs, capital costs and reclamation and closure costs.  If it is determined that the future net cash flows from an operation or development property are less than the carrying value then a write-down is recorded with a charge to operations.

(p)  Silver contract

Contracts for which settlement is called for in silver are recorded at cost.  These assets are depreciated on a unit-of-sale basis over the estimated recoverable reserves and resources at the mine corresponding to the specific contract.

Evaluations of the carrying values of each contract are undertaken in each reporting period to determine if estimated undiscounted future net cash flows are less than the carrying value.  Estimated undiscounted future net cash flows are calculated using estimated production, sales prices and purchase costs.  If it is determined that the future net cash flows from an operation are less than the carrying value then a write-down is recorded with a charge to operations.

(q)  Deferred revenue and non-controlling interest

Non-controlling interest exists on less than wholly-owned subsidiaries of the Company and represents the outside interests share of the carrying values of the subsidiaries.  When the subsidiary company issues its own shares to outside interests, a dilution gain or loss arises as a result of the difference between the Companys share of the proceeds and the underlying equity of the shares involved.  Dilution gains that do not represent the culmination of earnings are deferred and recognized as revenue on a systematic basis.

(r)  Provision for reclamation and closure

On January 1, 2003 the Company adopted the standard of the CICA Handbook, Asset Retirement Obligations, which requires that the fair value of liabilities for asset retirement obligations be recognized in the period in which they are incurred.  A corresponding increase to the carrying amount of the related assets is generally recorded and depreciated over the life of the asset.  The amount of the liability is subject to re-measurement at each reporting period.  This differs from the prior practice that involved accruing for the estimated reclamation and closure liability through charges to income on a unit-of-production basis over the estimated life of the mine.  The effect of the change had no material impact on the Companys consolidated financial statements.

Reclamation and closure costs have been estimated based on the Companys interpretation of current regulatory requirements. The fair value of the estimated reclamation and closure expenses for Luismin, Los Filos, Peak, Alumbrera and Amapari were recorded as a liability on acquisition.  Fair value was determined as the discounted future cash expenditures.

(s)  Future employee benefits

Seniority premiums, to which some employees are entitled upon termination of employment after 15 years of service, as well as the obligations under the Companys non-contributory retirement plan for employees, are recognized as expenses of the years in which the services are rendered.  This is completed through contributions to an irrevocable trust fund and the establishment of accruals, based on actuarial studies made by independent actuaries.

(t)  Stock-based compensation

Effective January 1, 2004, the Company adopted the amended recommendations of the CICA Handbook Section 3870,Stock-based Compensation and Other Stock-based Payments.  Under the amended standards of this Section, the fair value of all stock-based awards granted are estimated using the Black-Scholes model and are recorded in operations over their vesting periods.  The compensation cost related to share purchase options granted after January 1, 2004 is recorded in operations.

Previously, the Company provided note disclosure of pro forma net earnings and pro forma earnings per share as if the fair value based method had been used to account for share purchase options granted to employees, directors and officers after January 1, 2002.  The amended recommendations have been applied retroactively from January 1, 2002 without restatement of prior periods.  As a result, as of January 1, 2004, retained earnings decreased by $16,848,000, share purchase options (a separate component of shareholders' equity) increased by $14,861,000, share capital increased by $1,883,000 and contributed surplus increased by $104,000.

The total compensation expense recognized in the statement of operations for share purchase options granted in 2004 amounted to $6,801,000.   Had the same basis been applied to share purchase options granted in 2003 and 2002, net earnings would have been as follows:

| | (in thousands, except per share amounts)       |  |  |  |   | 2003     |  |   | 2002 
| | ---------------------------------------------- |  |  |  | - | -------- |  | - | -----
| | Net earnings                                   |  |  |  | $ | 57,659   |  | $ | 5,602
| | Additional compensation expense                |  |  |  |   | (15,925) |  |   | (923)
| | Pro forma net earnings                         |  |  |  | $ | 41,734   |  | $ | 4,679
| | Pro forma basic and diluted earnings per share |  |  |  | $ | 0.10     |  | $ | 0.03 

Stock-based compensation expense is determined using an option pricing model assuming no dividends are to be paid, a weighted average volatility of the Companys share price of 50% (2003  60%; 2002  70%), an annual risk free interest rate of 3% (2003  4%; 2002  5%) and expected lives of three years (2003  three years; 2002  five years).

(u)  Comparative amounts

Certain comparative amounts have been reclassified to conform to presentation in the current year.

3.   SILVER WHEATON CORP.

On October 15, 2004, the Company entered into an agreement to sell to Silver Wheaton, an inactive public company, all of the silver produced by Wheatons Luismin mining operations in Mexico for upfront consideration of $36.7 million (Cdn$46 million) in cash and 540 million (pre-consolidation) Silver Wheaton common shares, plus a per ounce cash payment of the lesser of $3.90 and the prevailing market price of delivered silver, subject to adjustment (the Luismin Transaction).

The Luismin Transaction resulted in the acquisition of control by Wheaton of Silver Wheaton.  As a result, Wheaton has consolidated Silver Wheatons results of operations from the date of acquisition, and the cost of the Luismin silver contract has been recorded by Silver Wheaton at Wheatons carrying value of the Luismin silver properties, plus acquisition costs of $430,000.  Upon consolidation, this resulted in a dilution gain of $34,857,000 which has been deferred and is being amortized on a unit-of-sale basis under the Luismin Transaction.

On December 8, 2004, Silver Wheaton entered into an agreement to purchase all of the silver produced by Lundin Mining Corporations Zinkgruvan mine in Sweden for a payment of $50 million in cash, 30 million (pre-consolidation) Silver Wheaton common shares and 30 million Silver Wheaton common share purchase warrants.  In addition, a per ounce cash payment of the lesser of $3.90 and the prevailing market price, subject to adjustment, is due (the Zinkgruvan Transaction).  The Zinkgruvan mine is expected to produce approximately two million ounces of silver annually for a minimum of 20 years.  The allocation of the purchase price is as follows:

| | (in thousands)                            |   |        |  |  |  |  |  | 
| | ----------------------------------------- | - | ------ |  |  |  |  |  | 
| | Purchase price: (a)                       |   |        |  |  |  |  |  | 
| | Cash                                      | $ | 50,000 |  |  |  |  |  | 
| | Silver Wheaton common shares and warrants |   | 27,866 |  |  |  |  |  | 
| | Acquisition costs                         |   | 53     |  |  |  |  |  | 
| |                                           | $ | 77,919 |  |  |  |  |  | 

(a)

As of December 31, 2004, $211,000 has been amortized to operations such that the net book value of the silver contract at December 31, 2004 is $77,708,000.

In connection with the Zinkgruvan Transaction, Silver Wheaton raised gross proceeds of $51 million from a private placement of 81 million subscription receipt units.  Wheaton did not participate in this private placement.

Following the Zinkgruvan Transaction and the related financing, Wheatons interest in Silver Wheaton was diluted from approximately 75% to 65%, resulting in a dilution gain of $41,612,000 which has been deferred and is being amortized on a unit-of-sale basis under the Luismin Transaction.

| | (in thousands)                                    |   |        |  |  |  |  |  | 
| | ------------------------------------------------- | - | ------ |  |  |  |  |  | 
| | Deferred revenue:                                 |   |        |  |  |  |  |  | 
| | At January 1, 2004                                | $ | -      |  |  |  |  |  | 
| | Dilution gain arising from Luismin Transaction    |   | 34,857 |  |  |  |  |  | 
| | Dilution gain arising from Zinkgruvan Transaction |   | 41,612 |  |  |  |  |  | 
| | Deferred revenue recognized in the year           |   | (575)  |  |  |  |  |  | 
| | At December 31, 2004                              | $ | 75,894 |  |  |  |  |  | 

4.   ACQUISITIONS

(a)  Amapari gold development project

On January 9, 2004 the Company acquired a 100% interest in the Amapari gold development project in Brazil for total consideration of $114,649,000 including acquisition costs.  Of the purchase price, $25,000,000 was paid in cash and $88,545,000 by way of 33 million Wheaton common shares and 21.5 million Series B common share purchase warrants.

The acquisition of Amapari has been accounted for using the purchase method.  The allocation of the purchase price is summarized in the table below.

| | (in thousands)                            |   |          |  |  |  |  |  | 
| | ----------------------------------------- | - | -------- |  |  |  |  |  | 
| | Purchase price:                           |   |          |  |  |  |  |  | 
| | Cash paid                                 | $ | 25,000   |  |  |  |  |  | 
| | Shares and share purchase warrants issued |   | 88,545   |  |  |  |  |  | 
| | Acquisition costs                         |   | 1,104    |  |  |  |  |  | 
| |                                           | $ | 114,649  |  |  |  |  |  | 
| | Net assets acquired:                      |   |          |  |  |  |  |  | 
| | Cash                                      | $ | 319      |  |  |  |  |  | 
| | Non-cash working capital                  |   | (2,368)  |  |  |  |  |  | 
| | Property, plant and equipment             |   | 131,898  |  |  |  |  |  | 
| | Debt acquired                             |   | (15,200) |  |  |  |  |  | 
| |                                           | $ | 114,649  |  |  |  |  |  | 

Project debt of $15,200,000 due to Anglogold Brazil Ltda., assumed in connection with the acquisition, was repaid in June 2004 out of cash on hand.

(b)  Los Filos and El Limón gold development projects

On October 31, 2003, the Company acquired a 100% interest in the Los Filos gold development project, together with a 21.2% interest (of which 14% is a carried interest) in the El Limón gold project from Teck Cominco Limited and Miranda Mining Corporation.  Both projects are located in Mexico.  The purchase price was $89,486,000 including acquisition costs.  The acquisition has been accounted for using the purchase method and the allocation of the purchase price is summarized in the table below.

| | (in thousands)                                            |   |          |  |  |  |  |  | 
| | --------------------------------------------------------- | - | -------- |  |  |  |  |  | 
| | Purchase price:                                           |   |          |  |  |  |  |  | 
| | Cash paid                                                 | $ | 87,020   |  |  |  |  |  | 
| | Acquisition costs                                         |   | 2,466    |  |  |  |  |  | 
| |                                                           | $ | 89,486   |  |  |  |  |  | 
| | Net assets acquired:                                      |   |          |  |  |  |  |  | 
| | Cash                                                      | $ | 263      |  |  |  |  |  | 
| | Property, plant and equipment                             |   | 137,780  |  |  |  |  |  | 
| | Future income tax assets                                  |   | 922      |  |  |  |  |  | 
| | Non-cash working capital                                  |   | (1,080)  |  |  |  |  |  | 
| | Provision for reclamation and closure                     |   | (1,000)  |  |  |  |  |  | 
| | Future income tax and deferred profit sharing liabilities |   | (47,399) |  |  |  |  |  | 
| |                                                           | $ | 89,486   |  |  |  |  |  | 

(c)  Minera Alumbrera Ltd.  and Peak Gold Mines Pty Ltd.

On March 18, 2003 the Company acquired a 25% indirect interest in Alumbrera and a 100% interest in Peak from Rio Tinto Ltd.  (Rio Tinto).  The acquisition of the 25% interest in Alumbrera was through intermediate holding companies with assets relating solely to the investment in Alumbrera.  The purchase price for Alumbrera and Peak totaled $214,227,000 including acquisition costs.  Alumbrera and Peak operate gold and copper mines located in Argentina and Australia, respectively.

On June 24, 2003 the Company acquired an additional 12.5% indirect interest in Alumbrera from Rio Algom Ltd.  (Rio Algom, a subsidiary of BHP Billiton Ltd. ) for a purchase price of $90,156,000 including acquisition costs.  This purchase price was satisfied by a cash payment of $65,000,000, a promissory note due to Rio Algom in the amount of $25,000,000 (note 13(c)) and acquisition costs paid of $156,000.  As a result of the acquisition of an additional 12.5% indirect interest in Alumbrera and acquisition of control of an intermediate holding company, the Company obtained joint control over Alumbrera through certain matters requiring unanimous consent in the shareholders agreement.

(i)   Minera Alumbrera Ltd.

The acquisition of the 37.5% interest in Alumbrera has been accounted for using the purchase method and the results of Alumbrera have been included in the earnings of the Company as follows: 25% interest on an equity basis from date of acquisition, March 18, 2003, to June 23, 2003 and 37.5% interest on a proportionate consolidation basis from June 24, 2003 onwards.  The total purchase price was $270,459,000 including acquisition costs.  The allocation of the purchase price as at June 24, 2003 is summarized in the table below.

| | (in thousands)                                                    |   |          |  |  |  |  |  | 
| | ----------------------------------------------------------------- | - | -------- |  |  |  |  |  | 
| | Purchase price:                                                   |   |          |  |  |  |  |  | 
| | Acquisition of 25% interest, effective March 18, 2003             |   |          |  |  |  |  |  | 
| | Cash paid                                                         | $ | 180,000  |  |  |  |  |  | 
| | Acquisition costs                                                 |   | 303      |  |  |  |  |  | 
| | Equity in earnings  March 18 - June 23, 2003                     |   | 7,324    |  |  |  |  |  | 
| | Cash distribution received                                        |   | (11,210) |  |  |  |  |  | 
| |                                                                   |   | 176,417  |  |  |  |  |  | 
| | Acquisition of additional 12.5% interest, effective June 24, 2003 |   |          |  |  |  |  |  | 
| | Cash paid                                                         |   | 65,000   |  |  |  |  |  | 
| | Promissory note                                                   |   | 25,000   |  |  |  |  |  | 
| | Acquisition costs                                                 |   | 156      |  |  |  |  |  | 
| | Cash distribution received                                        |   | (1,400)  |  |  |  |  |  | 
| |                                                                   | $ | 265,173  |  |  |  |  |  | 
| | Net assets acquired:                                              |   |          |  |  |  |  |  | 
| | Cash                                                              | $ | 21,103   |  |  |  |  |  | 
| | Appropriated cash                                                 |   | 8,763    |  |  |  |  |  | 
| | Non-cash working capital                                          |   | 36,835   |  |  |  |  |  | 
| | Property, plant and equipment                                     |   | 269,409  |  |  |  |  |  | 
| | Other                                                             |   | 58,376   |  |  |  |  |  | 
| | Provision for reclamation and closure                             |   | (4,918)  |  |  |  |  |  | 
| | Future income tax liabilities                                     |   | (47,053) |  |  |  |  |  | 
| | Long-term debt                                                    |   | (77,342) |  |  |  |  |  | 
| |                                                                   | $ | 265,173  |  |  |  |  |  | 

(ii)   Peak Gold Mines Pty Ltd.

The acquisition of 100% of Peak has been accounted for using the purchase method and the results of Peaks operations have been included in the Companys results of operations from March 18, 2003.  The allocation of the purchase price is summarized in the table below.

| |                                       | Purchase Price Allocation
| | ------------------------------------- | -------------------------
| | (in thousands)                        |                          
| | Purchase price:                       |                          
| | Cash paid                             | $                        
| | Acquisition costs                     |                          
| |                                       | $                        
| | Net assets acquired:                  |                          
| | Cash                                  | $                        
| | Non-cash working capital              |                          
| | Property, plant and equipment         |                          
| | Future income tax assets              |                          
| | Other non-current assets              |                          
| | Provision for reclamation and closure |                          
| | Other non-current liabilities         |                          
| |                                       | $                        

During the year ended December 31, 2004, Rio Tinto filed certain 2003 tax returns which included the results of Peak up until the date of acquisition by Wheaton.  As a result, the tax balances of Peak as at the acquisition date, March 18, 2003, were restated and the purchase price allocation has been amended to reflect these changes.

(d)  Luismin SA de CV

On June 19, 2002 the Company acquired all of the outstanding shares of Luismin.  Under the purchase agreement, the Company acquired Luismin for $55,160,000 in cash and 9,084,090 common shares of the Company.  The Company also advanced $19,840,000 to Luismin to repay its outstanding bank debt.  The Company incurred acquisition costs of $3,266,000.  As part of the purchase consideration, a contingent payment of 11,355,113 of the Companys common shares was due if the price of silver averaged $5 or more per ounce over a period of 60 consecutive trading days prior to June 19, 2004.  On September 29, 2003, this condition was satisfied and the additional shares were issued in October 2003.  As a result, the carrying value of property, plant and equipment was increased by $32,893,000, future income tax liability was increased by $10,526,000 and share capital was increased by $22,367,000, the fair value of the shares on September 29, 2003.

This acquisition has been accounted for using the purchase method and results from Luismins operations have been included in the Companys results of operations from June 19, 2002.  The allocation of the purchase price is summarized in the table below:

| | (in thousands)                           |   |          |  |  |  |  |  | 
| | ---------------------------------------- | - | -------- |  |  |  |  |  | 
| | Purchase price:                          |   |          |  |  |  |  |  | 
| | Cash                                     | $ | 55,160   |  |  |  |  |  | 
| | Cash advanced to repay Luismin bank debt |   | 19,840   |  |  |  |  |  | 
| | Shares issued                            |   | 29,172   |  |  |  |  |  | 
| | Acquisition costs                        |   | 3,266    |  |  |  |  |  | 
| |                                          | $ | 107,438  |  |  |  |  |  | 
| | Net assets acquired:                     |   |          |  |  |  |  |  | 
| | Cash                                     | $ | 1,380    |  |  |  |  |  | 
| | Non-cash working capital                 |   | (1,888)  |  |  |  |  |  | 
| | Property, plant and equipment            |   | 145,696  |  |  |  |  |  | 
| | Provision for reclamation and closure    |   | (9,072)  |  |  |  |  |  | 
| | Future employee benefits                 |   | (7,504)  |  |  |  |  |  | 
| | Future income tax assets                 |   | 6,500    |  |  |  |  |  | 
| | Future income tax liabilities            |   | (27,674) |  |  |  |  |  | 
| |                                          | $ | 107,438  |  |  |  |  |  | 

5.   CORPORATE TRANSACTION COSTS

On March 30, 2004, Wheaton and IAMGold Corporation (IAMGold) announced that their boards of directors had unanimously agreed to combine the companies, subject to shareholder approvals and certain other conditions.  On July 6, 2004, IAMGold did not receive the necessary shareholder approvals to effect the proposed combination and Wheaton terminated the agreement to combine with IAMGold.  As a result, the Company has written off $3,486,000 of related costs.

During May 2004, Coeur dAlene Mines Corporation (Coeur) launched an unsolicited takeover bid for Wheaton and on September 28, 2004, Coeur announced they had failed to garner enough support to pursue their bid.  Costs incurred to successfully reject this bid amounted to $1,160,000, which have been written off.

On December 6, 2004, Wheaton announced it had reached an agreement in principle to combine with Goldcorp through a share exchange take-over bid (note 23).  On February 14, 2005, the combination was substantially completed when 69% of Wheaton common shares were tendered to the Goldcorp offer.  As at December 31, 2004, $2,288,000 had been incurred to successfully effect the merger, which has been written off in these financial statements.

6.   OTHER (EXPENSE) INCOME

| | (in thousands)                                 |  |   | 2004    |  |   | 2003  |  |   | 2002 
| | ---------------------------------------------- |  | - | ------- |  | - | ----- |  | - | -----
| | Interest income                                |  | $ | 2,966   |  | $ | 1,591 |  | $ | 480  
| | Gain on sale of marketable securities          |  |   | 1,991   |  |   | 2,095 |  |   | 3,593
| | Foreign exchange gain (loss)                   |  |   | 2,449   |  |   | 6,774 |  |   | (71) 
| | Share purchase option expense                  |  |   | (6,801) |  |   | (467) |  |   | (199)
| | Accretion expense on provision for reclamation |  |   | (621)   |  |   | (793) |  |   | (47) 
| | Other                                          |  |   | (2,285) |  |   | (770) |  |   | 1,067
| |                                                |  | $ | (2,301) |  | $ | 8,430 |  | $ | 4,823

7.   INCOME TAXES

| | (in thousands)                        |   | 2004     |  |   | 2003   |  |   | 2002 
| | ------------------------------------- | - | -------- |  | - | ------ |  | - | -----
| | Current income tax expense (recovery) | $ | 45,514   |  | $ | 763    |  | $ | (153)
| | Future income tax (recovery) expense  |   | (10,370) |  |   | 24,281 |  |   | 2,606
| |                                       | $ | 35,144   |  | $ | 25,044 |  | $ | 2,453

Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes.  These differences result from the following items:

| | (in thousands)                                                                                    |   | 2004     |  |   | 2003    |  |   | 2002 
| | ------------------------------------------------------------------------------------------------- | - | -------- |  | - | ------- |  | - | -----
| | Earnings before income taxes                                                                      | $ | 177,972  |  | $ | 82,703  |  | $ | 8,055
| | Canadian federal and provincial income tax rates                                                  |   | 35.6%    |  |   | 37.6%   |  |   | 39.6%
| | Income tax expense based on above rates                                                           |   | 63,394   |  |   | 31,113  |  |   | 3,190
| | Increase (decrease) in income taxes due to:                                                       |   |          |  |   |         |  |   |      
| | Lower statutory tax rates on earnings of foreign subsidiaries                                     |   | (6,573)  |  |   | (4,941) |  |   | (578)
| | Changes to Mexican tax regulations including reduction in future corporate income tax rates       |   | (12,719) |  |   | -       |  |   | -    
| | Foreign exchange differentials on foreign currency monetary items and other permanent differences |   | (8,616)  |  |   | -       |  |   | -    
| | Non-deductible expenditures                                                                       |   | 1,830    |  |   | 1,196   |  |   | -    
| | Tax included in equity earnings of Minera Alumbrera Ltd.                                          |   | -        |  |   | (3,139) |  |   | -    
| | Valuation allowance                                                                               |   | -        |  |   | 508     |  |   | -    
| | Resource and other taxes                                                                          |   | -        |  |   | -       |  |   | (153)
| | Other                                                                                             |   | (2,172)  |  |   | 307     |  |   | (6)  
| |                                                                                                   | $ | 35,144   |  | $ | 25,044  |  | $ | 2,453

At December 31, 2004, the Company had non-capital losses available for tax purposes in Canada of $32,205,000 (2003 - $15,210,000) that expire from 2007 to 2011 and $15,493,000 (2003 - $33,490,000) that expire from 2005 to 2014 in foreign jurisdictions.  At December 31, 2004, the Company had capital losses in Canada in the amount of $40,685,000 (2003 - $11,014,000) to be carried forward indefinitely and applied to future capital gains.

The components of future income taxes are as follows:

| | (in thousands)                                   |   | 2004      |  |   | 2003      |  |  | 
| | ------------------------------------------------ | - | --------- |  | - | --------- |  |  | 
| | Future income tax assets                         |   |           |  |   |           |  |  | 
| | Non-capital losses                               | $ | 10,445    |  | $ | 13,985    |  |  | 
| | Deductible temporary differences and other       |   | 26,404    |  |   | 14,948    |  |  | 
| | Value of future income tax assets                |   | 36,849    |  |   | 28,933    |  |  | 
| | Recoverable asset taxes                          |   | 1,529     |  |   | 953       |  |  | 
| | Valuation allowance                              |   | (3,938)   |  |   | (4,411)   |  |  | 
| | Future income tax assets                         |   | 34,440    |  |   | 25,475    |  |  | 
| | Future income tax liabilities                    |   |           |  |   |           |  |  | 
| | Total taxable temporary differences              |   | (143,691) |  |   | (152,145) |  |  | 
| | Future income tax liabilities, net               | $ | (109,251) |  | $ | (126,670) |  |  | 
| |                                                  |   |           |  |   |           |  |  | 
| | Presented on the Consolidated Balance Sheets as: |   |           |  |   |           |  |  | 
| | Future income tax assets                         | $ | 9,667     |  | $ | 7,211     |  |  | 
| | Future income tax liabilities                    |   | (118,918) |  |   | (133,881) |  |  | 
| | Future income tax liabilities, net               | $ | (109,251) |  | $ | (126,670) |  |  | 

8.   MARKETABLE SECURITIES

| | (in thousands)                         |   | 2004  |  |   | 2003  |  |  | 
| | -------------------------------------- | - | ----- |  | - | ----- |  |  | 
| | Marketable securities at market values | $ | 6,061 |  | $ | 1,702 |  |  | 

9.   INVENTORIES

| | (in thousands)                   |   | 2004   |  |   | 2003   |  |  | 
| | -------------------------------- | - | ------ |  | - | ------ |  |  | 
| | Supplies inventory               | $ | 10,145 |  | $ | 10,083 |  |  | 
| | Stockpiled ore                   |   | 62,847 |  |   | 62,174 |  |  | 
| | Work in process                  |   | 3,823  |  |   | 2,891  |  |  | 
| | Finished goods                   |   | 13,559 |  |   | 12,397 |  |  | 
| |                                  |   | 90,374 |  |   | 87,545 |  |  | 
| | Less: non-current stockpiled ore |   | 58,820 |  |   | 60,736 |  |  | 
| |                                  | $ | 31,554 |  | $ | 26,809 |  |  | 

Non-current stockpiled ore is primarily comprised of lower grade ore at Alumbrera, which will be processed later in the mine life.  This inventory is valued at the lower of cost and net realizable value.

10.   PROPERTY, PLANT AND EQUIPMENT

| |                              |          | 2004                  |          |  |          | 2003                  |         
| | ---------------------------- | -------- | --------------------- | -------- |  | -------- | --------------------- | --------
| | (in thousands)               | Cost     | Accumulated Depletion | Net      |  | Cost     | Accumulated Depletion | Net     
| | Mineral properties           |          |                       |          |  |          |                       |         
| | Luismin mines, Mexico        | $134,265 | $(12,899)             | $121,366 |  | $120,736 | $(6,070)              | $114,666
| | Peak mine, Australia         | 30,411   | (5,849)               | 24,562   |  | 25,672   | (2,518)               | 23,154  
| | Alumbrera mine, Argentina    | 27,142   | (7,374)               | 19,768   |  | 27,142   | (2,091)               | 25,051  
| |                              | 191,818  | (26,122)              | 165,696  |  | 173,550  | (10,679)              | 162,871 
| | Plant and equipment          |          |                       |          |  |          |                       |         
| | Luismin mines, Mexico        | 50,808   | (6,316)               | 44,492   |  | 42,519   | (3,334)               | 39,185  
| | Peak mine, Australia         | 20,579   | (5,500)               | 15,079   |  | 17,726   | (1,736)               | 15,990  
| | Alumbrera mine, Argentina    | 254,627  | (45,634)              | 208,993  |  | 246,559  | (20,553)              | 226,006 
| | Corporate, Canada            | 596      | (324)                 | 272      |  | 456      | (261)                 | 195     
| |                              | 326,610  | (57,774)              | 268,836  |  | 307,260  | (25,884)              | 281,376 
| | Properties under development |          |                       |          |  |          |                       |         
| | Amapari, Brazil              | 168,521  | -                     | 168,521  |  | 145      | -                     | 145     
| | Los Filos, Mexico            | 104,654  | -                     | 104,654  |  | 93,691   | -                     | 93,691  
| | El Limón, Mexico             | 42,294   | -                     | 42,294   |  | 42,161   | -                     | 42,161  
| | Other, Mexico                | 4,835    | -                     | 4,835    |  | 3,667    | -                     | 3,667   
| |                              | 320,304  | -                     | 320,304  |  | 139,664  | -                     | 139,664 
| |                              | $838,732 | $(83,896)             | $754,836 |  | $620,474 | $(36,563)             | $583,911

In 2003 the Company sold the La Guitarra Mine in Mexico to Genco Resources Ltd.  (Genco) for shares and cash totaling $5,000,000.  Consideration received on closing was 1,380,315 shares of Genco with a fair value of $1,000,000 and a promissory note for $4,000,000 to be repaid over eight years in cash or equivalent shares of $500,000 per annum.    Due to uncertainty surrounding the collectibility of the promissory note, the repayment of the note will be recorded in operations when received.

During 2004 the Company received an additional 790,427 shares and sold 617,315 shares for net proceeds of $435,000.

11.   OTHER NON-CURRENT ASSETS

| | (in thousands)                               |  |   | 2004   |  |   | 2003   |  |  | 
| | -------------------------------------------- |  | - | ------ |  | - | ------ |  |  | 
| | Deferred gold put options (note 13 (b))      |  | $ | 4,339  |  | $ | 5,786  |  |  | 
| | Deferred debt issue costs (note 13 (a), (b)) |  |   | 8,931  |  |   | 3,497  |  |  | 
| | Royalty advances                             |  |   | 4,293  |  |   | 3,123  |  |  | 
| | Other                                        |  |   | 1,098  |  |   | 1,961  |  |  | 
| |                                              |  | $ | 18,661 |  | $ | 14,367 |  |  | 

12.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

| | (in thousands)              |   | 2004   |  |   | 2003   |  |  | 
| | --------------------------- | - | ------ |  | - | ------ |  |  | 
| | Accounts payable trade      | $ | 28,344 |  | $ | 15,198 |  |  | 
| | Accrued liabilities         |   | 4,114  |  |   | 6,709  |  |  | 
| | Accrued employee benefits   |   | 4,791  |  |   | 2,814  |  |  | 
| | Customer payment in advance |   | -      |  |   | 3,396  |  |  | 
| | Other                       |   | 4,074  |  |   | 3,285  |  |  | 
| |                             | $ | 41,323 |  | $ | 31,402 |  |  | 

13.   LONG-TERM DEBT

| | (in thousands)                         |   | 2004 |  |   | 2003    |  |  | 
| | -------------------------------------- | - | ---- |  | - | ------- |  |  | 
| | Corporate debt                         |   |      |  |   |         |  |  | 
| | Acquisition facility (a)               | $ | -    |  | $ | -       |  |  | 
| | Revolving working capital facility (b) |   | -    |  |   | -       |  |  | 
| | Term loan (b)                          |   | -    |  |   | 45,000  |  |  | 
| | Total bank indebtedness                |   | -    |  |   | 45,000  |  |  | 
| | Promissory note (c)                    |   | -    |  |   | 19,443  |  |  | 
| |                                        |   | -    |  |   | 64,443  |  |  | 
| | Non-recourse project debt              |   |      |  |   |         |  |  | 
| | Alumbrera (Wheatons 37.5% share) (d)  |   | -    |  |   | 57,980  |  |  | 
| |                                        |   | -    |  |   | 122,423 |  |  | 
| | Less: current portion                  |   | -    |  |   | 41,000  |  |  | 
| |                                        | $ | -    |  | $ | 81,423  |  |  | 

(a)  In August 2004, the Company entered into a $300 million acquisition facility which is available to finance up to three separate acquisitions.  The facility is available until November 24, 2005, and amounts drawn down are required to be refinanced or repaid by February 24, 2006.  Net proceeds from any debt refinancing or equity issue (not undertaken in connection with an acquisition) together with the net proceeds from significant asset sales, will be applied to repay amounts outstanding under the facility.  Security will be granted under the facility only over acquired assets, together with guarantees by any subsidiaries of Wheaton which acquire such assets.  Amounts drawn down under the facility will bear interest at LIBOR plus 2.25% per annum, increasing to LIBOR plus 4.5% per annum over the term of the facility.  Undrawn amounts are subject to a 1% per annum commitment fee.

Debt issue costs of $7,182,000 have been deferred and are amortized to earnings over the term of the debt facility.  An amount of $1,730,000 has been amortized to December 31, 2004.  A further $1,125,000 of debt issue costs will be payable upon the first draw down under this facility (note 19).

(b)  During 2003 the Company entered into a $75,000,000 loan facility which consisted of a $50,000,000 term loan bearing interest at LIBOR plus 2.75% and a $25,000,000 revolving working capital facility bearing interest at LIBOR plus 3%.  During 2004, the Company amended the facility such that the full $75,000,000 is a revolving working capital facility.  The amended facility bears interest at LIBOR plus 1.625% to 2.25% depending on covenant ratios, has no net repayment terms, and matures in June 2007.  Undrawn amounts are subject to a 0.65% per annum commitment fee.  During 2004, the Company repaid the outstanding amount out of cash on hand, but the facility remains available.

Under the terms of the loan agreement, during 2003 the Company acquired options to sell 700,000 ounces of gold at a price of $300 per ounce during the period January 2004 to June 2008.  The cost of $5,786,000 was deferred and is amortized against sales as the options expire or are exercised.  An amount of $1,447,000 has been amortized to December 31, 2004 (December 31, 2003 - $nil).  The fair value of the 525,024 ounces of unexpired put options at December 31, 2004 was $280,000 (December 31, 2003  700,000 ounces with a fair value of $2,030,000).  During 2003, the Company entered into a gold-indexed interest rate swap transaction which had a fair value at December 31, 2004, of minus $1,111,000.  The facility is secured by corporate guarantees of Luismin and Amapari.

Debt issue costs of $5,519,000 have been deferred and are amortized to earnings over the term of the debt.  An amount of $2,040,000 has been amortized to December 31, 2004 (December 31, 2003 - $745,000).

(c)  The promissory note was due to Rio Algom, and had a maturity date of May 30, 2005.  During 2004, the Company repaid the outstanding amount out of cash on hand.

(d)  The Alumbrera project debt was incurred in 1997 to finance the construction and operation of the Alumbrera Mine.  During 2004 Alumbrera repaid the outstanding debt out of cash on hand.

(e)  Project debt of $15,200,000 due to Anglogold Brazil Ltd. a, assumed in connection with the acquisition, was repaid in June 2004 out of cash on hand (note 4 (a)).

(f)  The Company has an Aus$5,000,000 ($3,895,000), unsecured, revolving working capital facility for its Peak mine operations of which $nil was drawn down at December 31, 2004.  The loan bears interest related to the Australian Treasury Bill rate plus 1.5% per annum.

14.   PROVISION FOR RECLAMATION AND CLOSURE

| | (in thousands)           |   |         |  |  |  |  |  | 
| | ------------------------ | - | ------- |  |  |  |  |  | 
| | At January 1, 2003       | $ | 11,271  |  |  |  |  |  | 
| | Reclamation expenditures |   | (1,854) |  |  |  |  |  | 
| | Accretion expense        |   | 793     |  |  |  |  |  | 
| | Amounts acquired         |   | 10,063  |  |  |  |  |  | 
| | Disposition of liability |   | (830)   |  |  |  |  |  | 
| | Other                    |   | 161     |  |  |  |  |  | 
| | At December 31, 2003     |   | 19,604  |  |  |  |  |  | 
| | Reclamation expenditures |   | (1,050) |  |  |  |  |  | 
| | Accretion expense        |   | 621     |  |  |  |  |  | 
| | Other                    |   | 54      |  |  |  |  |  | 
| | At December 31, 2004     | $ | 19,229  |  |  |  |  |  | 

The total undiscounted amount of estimated cash flows required to settle the obligations is $31,915,000 (2003 - $29,030,000), which has been discounted using discount rates ranging from 5-7%.  Certain obligations at Luismin amounting to $5,657,000 will be paid over the next two years and will be funded from operating cash flows.  The remainder of the obligations are not expected to be paid within the foreseeable future and will be funded from operating cash flows at the time.

During 2004, the Company completed the reclamation of the Golden Bear Mine and subsequent to December 31, 2004 entered into a memorandum of understanding toward divestiture of the Golden Bear mining claims and road.

15.   FUTURE EMPLOYEE BENEFITS AND OTHER

| | (in thousands)                       |   | 2004   |  |   | 2003   |  |  | 
| | ------------------------------------ | - | ------ |  | - | ------ |  |  | 
| | Defined benefit pension plan (a)     | $ | 1,761  |  | $ | 2,796  |  |  | 
| | Deferred employee profit sharing (b) |   | 18,814 |  |   | 17,398 |  |  | 
| | Other                                |   | 1,875  |  |   | 2,489  |  |  | 
| |                                      | $ | 22,450 |  | $ | 22,683 |  |  | 

(a)  The Company has a defined benefit pension plan for certain Mexican employees.  Information on this plan is as follows:

| | (in thousands)                                          |   | 2004     |  |   | 2003     |  |   | 2002    
| | ------------------------------------------------------- | - | -------- |  | - | -------- |  | - | --------
| | Change in plan assets                                   |   |          |  |   |          |  |   |         
| | Fair value of plan assets, beginning of year            | $ | 673      |  | $ | 228      |  | $ | -       
| | Increase due to acquisition of Luismin                  |   | -        |  |   | -        |  |   | 180     
| | Actual return on plan assets                            |   | (32)     |  |   | 16       |  |   | 70      
| | Benefits paid                                           |   | (610)    |  |   | -        |  |   | (14)    
| | Contributions                                           |   | 1,715    |  |   | 463      |  |   | -       
| | Foreign exchange rate changes                           |   | 5        |  |   | (34)     |  |   | (8)     
| | Fair value of plan assets, end of year                  | $ | 1,751    |  | $ | 673      |  | $ | 228     
| | Projected benefit obligation                            |   |          |  |   |          |  |   |         
| | Benefit obligations, beginning of year                  | $ | 4,104    |  | $ | 3,147    |  | $ | -       
| | Increase due to acquisition of Luismin                  |   | -        |  |   | -        |  |   | 3,029   
| | Service cost                                            |   | 310      |  |   | 259      |  |   | 149     
| | Benefits paid                                           |   | (610)    |  |   | -        |  |   | (14)    
| | Interest cost                                           |   | 329      |  |   | 244      |  |   | 135     
| | Foreign exchange rate changes                           |   | (6)      |  |   | (257)    |  |   | (123)   
| | Plan amendment/past service cost                        |   | 275      |  |   | 649      |  |   | -       
| | Actuarial loss (gain)                                   |   | 142      |  |   | 62       |  |   | (29)    
| | Benefit obligations, end of year                        | $ | 4,544    |  | $ | 4,104    |  | $ | 3,147   
| | Excess of projected benefit obligation over plan assets | $ | 2,793    |  | $ | 3,431    |  | $ | 2,919   
| | Unamortized past service costs                          |   | (613)    |  |   | (649)    |  |   | -       
| | Unamortized net actuarial (loss) gain                   |   | (366)    |  |   | 14       |  |   | 89      
| | Unamortized transitional obligation                     |   | (53)     |  |   | -        |  |   | -       
| | Accrued net pension liability                           | $ | 1,761    |  | $ | 2,796    |  | $ | 3,008   
| | Employee future benefits expense                        |   |          |  |   |          |  |   |         
| | Service cost                                            | $ | 310      |  | $ | 259      |  | $ | 149     
| | Interest cost                                           |   | 329      |  |   | 244      |  |   | 135     
| | Expected return on assets                               |   | (72)     |  |   | (25)     |  |   | (8)     
| | Amortization of past service amount                     |   | 39       |  |   | -        |  |   | -       
| | Net expense                                             | $ | 606      |  | $ | 478      |  | $ | 276     
| | Significant assumptions used                            |   |          |  |   |          |  |   |         
| | Discount rate                                           |   | 9%       |  |   | 9%       |  |   | 9%      
| | Expected long-term rate of return on plan assets        |   | 9%       |  |   | 9%       |  |   | 9%      
| | Rate of compensation increase                           |   | 6%       |  |   | 6%       |  |   | 6%      
| | Estimated average remaining service life                |   | 12 years |  |   | 12 years |  |   | 11 years

The Companys contributions have been made in accordance with actuarial valuation reports for funding purposes which have been prepared as at December 31, 2004, 2003 and 2002.  The next valuation report for funding purposes must be as of a date no later than December 31, 2005.

The weighted average asset allocations of the Companys defined benefit pension plan for certain Mexican employees at December 31, by asset category are as follows:

| | Asset Category    |  | 2004 |  |  | 2003 |  |  | 
| | ----------------- |  | ---- |  |  | ---- |  |  | 
| | Debt securities   |  | 94%  |  |  | 80%  |  |  | 
| | Equity securities |  | 6%   |  |  | 20%  |  |  | 
| | Total             |  | 100% |  |  | 100% |  |  | 

(b)  Mexico deferred profit sharing

Under Mexican tax laws, the Company is required to remit 10% of taxable income to employees as statutory profit sharing.  The provision for deferred profit sharing is based on the liability method.  Deferred profit sharing liabilities arise from the recognition of the differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities.

(c)  The Company has a defined contribution pension plan for certain Australian employees.  The current service cost for 2004 was $846,000 (2003 - $552,000; 2002 - $nil).

16.   NON-CONTROLLING INTEREST

Non-controlling interest arose as a result of the Silver Wheaton transaction (note 3).  The details of non-controlling interest are as follows:

| | (in thousands)                                               |   |        |  |  |  |  |  | 
| | ------------------------------------------------------------ | - | ------ |  |  |  |  |  | 
| | Balance, beginning of year                                   | $ | -      |  |  |  |  |  | 
| | Arising upon acquisition of Silver Wheaton, October 15, 2004 |   | 19,472 |  |  |  |  |  | 
| | Increase on issuance of shares of subsidiary                 |   | 34,342 |  |  |  |  |  | 
| | Share of earnings                                            |   | 707    |  |  |  |  |  | 
| | Balance, end of year                                         | $ | 54,521 |  |  |  |  |  | 

17.   SHAREHOLDERS EQUITY

(a)  Shares issued

In May 2002, the Company completed a private placement to finance the Luismin purchase whereby 110 million special warrants were issued at a price of Cdn$1.15 per special warrant for total proceeds of $82,068,000.  Each special warrant entitled the holder to acquire, without further payment, one common share of the Company and one-half of one common share purchase warrant.  Each whole common share purchase warrant entitles the holder to acquire one common share of the Company at a price of Cdn$1.65 per share for a period of five years following the closing.  The special warrants were subsequently converted to shares and share purchase warrants during 2002.

In February 2003, the Company issued and sold 230 million subscription receipts at Cdn$1.45 per subscription receipt by way of a private placement for gross proceeds of $217,952,000 (Cdn$333,500,000) less agents commissions and expenses of $15,934,000.  Each subscription receipt was subsequently converted into one common share and one-quarter of one common share purchase warrant, where one whole share purchase warrant entitles the holder to purchase one common share at a price of Cdn$1.65 before May 30, 2007.  The proceeds from this private placement were used to finance the acquisition of a 25% indirect interest in Alumbrera and 100% of Peak.

In August 2003 the Company issued and sold 47,619,049 units at Cdn$2.10 per unit for gross proceeds of $72,457,000 (Cdn$100,000,000) less agents commissions and expenses of $4,514,000.  Each unit was subsequently converted into one common share and one half of one Series B common share purchase warrant, where one whole share purchase warrant entitles the holder to purchase one common share at a price of Cdn$3.10 before August 25, 2008.

In October 2003, the Company issued and sold 38.1 million units of the Company at Cdn$3.15 per unit for gross proceeds of $89,490,000 (Cdn$120,015,000) less agents commissions and expenses of approximately $5,103,000.  Each unit was subsequently converted into one common share and one half of one Series B common share purchase warrant, where one whole share purchase warrant entitles the holder to purchase one common share at a price of Cdn$3.10 before August 25, 2008.

In October 2003, 11,355,113 of the Companys common shares were issued as further consideration for Luismin (note 4 (d)).

In January 2004, the Company issued 33 million common shares and 21.5 million Series B common share purchase warrants, in part, as payment for the acquisition of the Amapari gold development project in Brazil (note 4 (a)).

(b)  Warrants

A summary of the Companys warrants at December 31, 2004, 2003, and 2002 and the changes for the years ending on those dates is presented below:

| |                                                  | Warrants
Outstanding |  | Weighted Average
Exercise Price (Cdn$) |  | 
| | ------------------------------------------------ | -------------------- |  | -------------------------------------- |  | 
| | At January 1, 2002                               | 3,090,000            |  | $0.91                                  |  | 
| | Issued on exercise of special warrants           | 64,909,997           |  | 1.51                                   |  | 
| | Exercised                                        | (3,450,000)          |  | 0.89                                   |  | 
| | At December 31, 2002                             | 64,549,997           |  | 1.52                                   |  | 
| | Issued in connection with issuance of shares     | 100,359,522          |  | 2.27                                   |  | 
| | Exercised                                        | (9,601,400)          |  | 0.76                                   |  | 
| | At December 31, 2003                             | 155,308,119          |  | 2.05                                   |  | 
| | Issued in connection with acquisition of Amapari | 21,516,000           |  | 3.10                                   |  | 
| | Exercised                                        | (476,336)            |  | 1.85                                   |  | 
| | At December 31, 2004                             | 176,347,783          |  | $2.18                                  |  | 

The following table summarizes information about the warrants outstanding at December 31, 2004:

| | Expiry Date     | Warrants Outstanding |  | Exercise Price (Cdn$) |  | 
| | --------------- | -------------------- |  | --------------------- |  | 
| | May 30, 2007    | 112,051,609          |  | $1.65                 |  | 
| | August 25, 2008 | 64,296,174           |  | 3.10                  |  | 
| |                 | 176,347,783          |  | $2.18                 |  | 

(c)  Share purchase options

The Company has established a share purchase option plan whereby the Companys directors may from time to time grant options to directors, employees or consultants.  The maximum term of any option may be ten years, but generally options are granted for five years or less.  The exercise price of an option is not less than the closing price on the Toronto Stock Exchange on the last trading day preceding the grant date.  At December 31, 2004 there were 627,566 (2003  2,057,566) options available for grant under the plan.

A summary of the Companys options at December 31, 2004, 2003 and 2002 and the changes for the years ending on those dates is presented below:

| |                      | Options
Outstanding | Weighted
Average
Exercise
Price (Cdn$) | 
| | -------------------- | ------------------- | -------------------------------------- | 
| | At January 1, 2002   | 6,118,514           | $0.52                                  | 
| | Granted              | 3,646,000           | 1.16                                   | 
| | Exercised            | (1,355,224)         | 0.53                                   | 
| | Expired              | (20,400)            | 0.29                                   | 
| | Forfeited            | (130,000)           | 1.08                                   | 
| | At December 31, 2002 | 8,258,890           | 0.79                                   | 
| | Granted              | 22,965,000          | 2.20                                   | 
| | Exercised            | (6,620,694)         | 1.09                                   | 
| | Forfeited            | (132,333)           | 1.24                                   | 
| | At December 31, 2003 | 24,470,863          | 2.03                                   | 
| | Granted              | 1,430,000           | 3.77                                   | 
| | Exercised            | (5,074,366)         | 1.27                                   | 
| | At December 31, 2004 | 20,826,497          | $2.34                                  | 

The following table summarizes information about the options outstanding at December 31, 2004:

| | Exercise Prices (Cdn$) | Options
Outstanding
and Exercisable | Weighted
Average
Exercise Price
(Cdn$) | Weighted
Average Remaining
Contractual
Life
| | ---------------------- | ----------------------------------- | -------------------------------------- | -------------------------------------------
| | $0.57                  | 970,000                             | $0.57                                  | 1.4 years                                  
| | $1.15 to $1.92         | 9,791,497                           | 1.50                                   | 2.8 years                                  
| | $3.25 to $3.92         | 10,065,000                          | 3.32                                   | 3.9 years                                  
| |                        | 20,826,497                          | $2.34                                  | 3.3 years                                  

Share purchase options with a fair value of $1,755,000 were granted in 2004 (2003 - $467,000; 2002 - $93,000).  The compensation expense of $6,801,000 (2003 - $467,000; 2002 - $199,000) is charged to operations over the vesting period.  Included in 2004 compensation expense is $5,046,000 related to the fair value of share purchase options granted by Silver Wheaton, a public company and subsidiary of the Company, which was determined using an option pricing model assuming no dividends are to be paid, a weighted average volatility of Silver Wheatons share price of 40%, an annual risk free interest rate of 3.0% and expected lives of three years.

The following table summarizes information about options granted during 2004:

| | Date Granted   | Expiry Date    | Share Purchase Options
Granted | Exercise Price (Cdn$) | 
| | -------------- | -------------- | ------------------------------ | --------------------- | 
| | February 2004  | February 2009  | 675,000                        | $3.70                 | 
| | March 2004     | March 2008     | 150,000                        | 3.92                  | 
| | June 2004      | June 2009      | 80,000                         | 3.88                  | 
| | September 2004 | September 2009 | 250,000                        | 3.83                  | 
| | December 2004  | December 2009  | 275,000                        | 3.75                  | 
| |                |                | 1,430,000                      |                       | 

(d)  Earnings per share

The following table sets forth the computation of diluted earnings per share:

| | (in thousands, except per share amounts)    |   | 2004    |  |   | 2003    |  |   | 2002   
| | ------------------------------------------- | - | ------- |  | - | ------- |  | - | -------
| | Earnings available to common shareholders   | $ | 142,121 |  | $ | 57,659  |  | $ | 5,602  
| | Divided by:                                 |   |         |  |   |         |  |   |        
| | Weighted average shares outstanding         |   | 568,442 |  |   | 412,035 |  |   | 137,327
| | Effect of dilutive securities:              |   |         |  |   |         |  |   |        
| | Share purchase options and warrants         |   | 82,774  |  |   | 27,179  |  |   | 5,900  
| | Diluted weighted average shares outstanding |   | 651,216 |  |   | 439,214 |  |   | 143,227
| | Basic earnings per share                    | $ | 0.25    |  | $ | 0.14    |  | $ | 0.04   
| | Diluted earnings per share                  | $ | 0.22    |  | $ | 0.13    |  | $ | 0.04   

The following table identifies the number of share purchase options and warrants excluded from the computation of diluted earnings per share because the exercise prices exceeded the average fair market price of the common shares for the year, and therefore were not dilutive:

| | (in thousands)          |  | 2004 |  |  | 2003   |  |  | 2002  
| | ----------------------- |  | ---- |  |  | ------ |  |  | ------
| | Share purchase options  |  | 480  |  |  | 8,870  |  |  | 3,180 
| | Share purchase warrants |  | -    |  |  | 42,847 |  |  | 55,000

18.   SUPPLEMENTAL CASH FLOW INFORMATION

| | (in thousands)                                                          | Note    |   | 2004     |  |   | 2003      |  |   | 2002    
| | ----------------------------------------------------------------------- | ------- | - | -------- |  | - | --------- |  | - | --------
| | Change in non-cash working capital                                      |         |   |          |  |   |           |  |   |         
| | Accounts receivable                                                     |         | $ | (15,118) |  | $ | 12,235    |  | $ | (516)   
| | Income taxes receivable                                                 |         |   | (2,774)  |  |   | -         |  |   | -       
| | Product inventory and stockpiled ore                                    |         |   | (2,767)  |  |   | (8,220)   |  |   | 501     
| | Supplies inventory                                                      |         |   | (62)     |  |   | (1,524)   |  |   | 130     
| | Accounts payable and accrued liabilities                                |         |   | 8,856    |  |   | 4,282     |  |   | (2,098) 
| | Income taxes payable                                                    |         |   | 44,724   |  |   | 370       |  |   | 38      
| | Other                                                                   |         |   | (10,024) |  |   | (554)     |  |   | (296)   
| |                                                                         |         | $ | 22,835   |  | $ | 6,589     |  | $ | (2,241) 
| |                                                                         |         |   |          |  |   |           |  |   |         
| | Acquisitions, net of cash acquired                                      |         |   |          |  |   |           |  |   |         
| | Amapari                                                                 | 4 (a)   | $ | (25,785) |  | $ | -         |  | $ | -       
| | Los Filos and El Limón gold projects                                    | 4 (b)   |   | -        |  |   | (89,223)  |  |   | -       
| | Alumbrera                                                               | 4 (c)   |   | -        |  |   | (224,356) |  |   | -       
| | Peak                                                                    | 4 (c)   |   | -        |  |   | (34,187)  |  |   | -       
| | Luismin                                                                 | 4 (d)   |   | -        |  |   | -         |  |   | (76,886)
| |                                                                         |         | $ | (25,785) |  | $ | (347,766) |  | $ | (76,886)
| |                                                                         |         |   |          |  |   |           |  |   |         
| | Non-cash financing and investing activities                             |         |   |          |  |   |           |  |   |         
| | Shares and warrants issued on acquisition of Amapari                    | 4 (a)   | $ | 88,545   |  | $ | -         |  | $ | -       
| | Promissory note issued                                                  | 13  (c) |   | -        |  |   | 25,000    |  |   | -       
| | Shares issued on acquisition of Luismin                                 | 4 (d)   |   | -        |  |   | 22,367    |  |   | 6,805   
| | Shares issued on conversion of special warrants                         | 17      |   | -        |  |   | -         |  |   | 85,178  
| | Marketable securities received on sale of property, plant and equipment |         |   | 760      |  |   | 1,263     |  |   | 207     
| | Operating activities included the following cash payments               |         |   |          |  |   |           |  |   |         
| | Interest paid                                                           |         | $ | 5,737    |  | $ | 4,357     |  | $ | 120     
| | Income taxes paid                                                       |         |   | 1,765    |  |   | 489       |  |   | 227     

19. RELATED PARTY TRANSACTIONS

In 2001, the Company entered into a financial advisory agreement with Endeavour Financial Corporation (Endeavour), a corporation which until July 2004 had two directors in common.  Under the terms of this agreement, which can be cancelled on 30 days notice, Endeavour provides financial advisory services to the Company and is entitled to a monthly fee of $10,000 and a success fee to be negotiated based on the value of any acquisitions, dispositions and financings.  During 2004, Endeavour was paid consulting and financial advisory fees of $1,658,000 (2003 - $2,288,000; 2002 - $1,512,000), primarily related to services provided in securing the Companys $300 million acquisition facility.  A further fee of $1,125,000 is payable to Endeavour upon the first draw down under this facility.  In addition, Endeavour will receive $5 million for services related to the merger with Goldcorp (note 23).

20. COMMITMENTS

Commitments exist at Luismin, Peak, Alumbrera and Amapari for capital expenditures in 2005 of $59,111,000.  The Company rents premises and leases equipment under operating leases that expire over the next nine years.  Operating lease expense in 2004 was $2,070,000 (2003 - $2,154,000; 2002 - $880,000).  Following is a schedule of future minimum rental and lease payments required:

| | (in thousands)                  |   |       |  |  |  |  |  | 
| | ------------------------------- | - | ----- |  |  |  |  |  | 
| | 2005                            | $ | 2,259 |  |  |  |  |  | 
| | 2006                            |   | 1,296 |  |  |  |  |  | 
| | 2007                            |   | 905   |  |  |  |  |  | 
| | 2008                            |   | 595   |  |  |  |  |  | 
| | 2009                            |   | 525   |  |  |  |  |  | 
| |                                 |   | 5,580 |  |  |  |  |  | 
| | Thereafter                      |   | 1,084 |  |  |  |  |  | 
| | Total minimum payments required | $ | 6,664 |  |  |  |  |  | 

21. SEGMENTED INFORMATION

The Company's reportable operating and geographical segments are summarized in the table below.  Information pertaining to Luismin, Los Filos and El Limón is reported as one segment, being Mexico.

| | Consolidated Statements of Operations |         | 2004      |           |        |               
| | ------------------------------------- | ------- | --------- | --------- | ------ | --------------
| | (in thousands)                        | Mexico  | Australia | Argentina | Brazil | Silver Wheaton
| | Sales                                 | $91,506 | $63,023   | $262,054  | $-     | $10,986       
| | Cost of sales                         | 39,500  | 30,092    | 80,519    | -      | 5,870         
| | Depreciation and depletion            | 9,811   | 7,108     | 30,364    | -      | 797           
| | Royalties                             | -       | 1,995     | 5,343     | -      | -             
| |                                       | 49,311  | 39,195    | 116,226   | -      | 6,667         
| | Earnings from mining operations       | 42,195  | 23,828    | 145,828   | -      | 4,319         
| | General and administrative expenses   | (4,814) | -         | -         | -      | (389)         
| | Interest and finance fees             | (329)   | (158)     | (1,931)   | -      | -             
| | Other (expenses) income               | (1,261) | (999)     | (2,821)   | 268    | (2,165)       
| | Earnings before income taxes          | 35,791  | 22,671    | 141,076   | 268    | 1,765         
| | Income tax (expense) recovery         | 4,086   | (4,282)   | (36,525)  | -      | -             
| | Non-controlling interest              | -       | -         | -         | -      | (707)         
| | Net earnings                          | $39,877 | $18,389   | $104,551  | $268   | $1,058        





| | Consolidated Statements of Operations       | 2003    |           |           |           |          | 
| | ------------------------------------------- | ------- | --------- | --------- | --------- | -------- | 
| | (in thousands)                              | Mexico  | Australia | Argentina | Corporate | Total    | 
| | Sales                                       | $66,251 | $36,475   | $109,907  | $-        | $212,633 | 
| | Cost of sales                               | 34,422  | 24,301    | 33,231    | -         | 91,954   | 
| | Depreciation and depletion                  | 6,242   | 4,254     | 21,897    | -         | 32,393   | 
| | Royalties                                   | 26      | 1,002     | 2,684     | -         | 3,712    | 
| |                                             | 40,690  | 29,557    | 57,812    | -         | 128,059  | 
| | Earnings from mining operations             | 25,561  | 6,918     | 52,095    | -         | 84,574   | 
| | General and administrative expenses         | (4,816) | -         | -         | (4,838)   | (9,654)  | 
| | Interest and finance fees                   | (264)   | (46)      | (1,919)   | (2,089)   | (4,318)  | 
| | Other (expenses) income                     | (1,898) | (112)     | 1,012     | 5,775     | 4,777    | 
| | Equity in earnings of Minera Alumbrera Ltd. | -       | -         | -         | 7,324     | 7,324    | 
| | Earnings before income taxes                | 18,583  | 6,760     | 51,188    | 6,172     | 82,703   | 
| | Income tax expense                          | (7,781) | (1,483)   | (15,356)  | (424)     | (25,044) | 
| | Net earnings                                | $10,802 | $5,277    | $35,832   | $5,748    | $57,659  | 





| | Consolidated Statements of Operations | 2002    |           |         |  |  |  | 
| | ------------------------------------- | ------- | --------- | ------- |  |  |  | 
| | (in thousands)                        | Mexico  | Corporate | Total   |  |  |  | 
| | Sales                                 | $34,693 | $-        | $34,693 |  |  |  | 
| | Cost of sales                         | 19,355  | -         | 19,355  |  |  |  | 
| | Depreciation and depletion            | 3,028   | -         | 3,028   |  |  |  | 
| | Royalties                             | 28      | -         | 28      |  |  |  | 
| |                                       | 22,411  | -         | 22,411  |  |  |  | 
| | Earnings from mining operations       | 12,282  | -         | 12,282  |  |  |  | 
| | General and administrative expenses   | (3,899) | (2,430)   | (6,329) |  |  |  | 
| | Interest and finance fees             | (82)    | (405)     | (487)   |  |  |  | 
| | Other (expenses) income               | (700)   | 3,289     | 2,589   |  |  |  | 
| | Earnings before income taxes          | 7,601   | 454       | 8,055   |  |  |  | 
| | Income tax (expense) recovery         | (2,611) | 158       | (2,453) |  |  |  | 
| | Net earnings                          | $4,990  | $612      | $5,602  |  |  |  | 





| | Consolidated Balance Sheets   |          |           |           | 2004     |                |           |            | 
| | ----------------------------- | -------- | --------- | --------- | -------- | -------------- | --------- | ---------- | 
| | (in thousands)                | Mexico   | Australia | Argentina | Brazil   | Silver Wheaton | Corporate | Total      | 
| | Cash and cash equivalents     | $24,631  | $901      | $31,974   | $1,498   | $19,989        | $82,138   | $161,131   | 
| | Other current assets          | 12,918   | 17,925    | 58,346    | 80       | 690            | 3,503     | 93,462     | 
| | Property, plant and equipment | 317,641  | 39,641    | 228,761   | 168,521  | -              | 272       | 754,836    | 
| | Other non-current assets      | 3,697    | 6,459     | 59,512    | 19       | 77,763         | 17,406    | 164,856    | 
| |                               | $358,887 | $64,926   | $378,593  | $170,118 | $98,442        | $103,319  | $1,174,285 | 
| | Current liabilities           | $14,921  | $5,997    | $62,931   | $592     | $1,521         | $3,148    | $89,110    | 
| | Other non-current liabilities | 94,170   | 6,333     | 59,624    | -        | -              | 76,364    | 236,491    | 
| | Inter-company balances        | 194,127  | 28,930    | 108,331   | 169,258  | 41,342         | (541,988) | -          | 
| | Non-controlling interest      | -        | -         | -         | -        | 54,521         | -         | 54,521     | 
| | Shareholders equity          | 55,669   | 23,666    | 147,707   | 268      | 1,058          | 565,795   | 794,163    | 
| |                               | $358,887 | $64,926   | $378,593  | $170,118 | $98,442        | $103,319  | $1,174,285 | 
| | Capital asset expenditures    | $34,082  | $11,733   | $8,068    | $36,623  | $-             | $140      | $90,646    | 





| | Consolidated Balance Sheets                   |          |           | 2003      |           |          |  | 
| | --------------------------------------------- | -------- | --------- | --------- | --------- | -------- |  | 
| | (in thousands)                                | Mexico   | Australia | Argentina | Corporate | Total    |  | 
| | Cash and cash equivalents                     | $7,762   | $521      | $56,054   | $87,541   | $151,878 |  | 
| | Other current assets                          | 9,520    | 5,666     | 56,420    | 1,296     | 72,902   |  | 
| | Property, plant and equipment                 | 293,370  | 39,144    | 251,057   | 340       | 583,911  |  | 
| | Other non-current assets                      | 4,619    | 6,098     | 59,170    | 12,427    | 82,314   |  | 
| |                                               | $315,271 | $51,429   | $422,701  | $101,604  | $891,005 |  | 
| | Current liabilities other than long-term debt | $10,932  | $5,418    | $18,345   | $1,601    | $36,296  |  | 
| | Long-term debt                                | -        | -         | 57,980    | 64,443    | 122,423  |  | 
| | Other non-current liabilities                 | 99,240   | 7,767     | 67,847    | 1,314     | 176,168  |  | 
| | Inter-company balances                        | 189,307  | 32,967    | 235,373   | (457,647) | -        |  | 
| | Shareholders equity                          | 15,792   | 5,277     | 43,156    | 491,893   | 556,118  |  | 
| |                                               | $315,271 | $51,429   | $422,701  | $101,604  | $891,005 |  | 
| | Capital asset expenditures                    | $15,780  | $9,653    | $3,411    | $166      | $29,010  |  | 

22.

DIFFERENCES IN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BETWEEN CANADA AND THE UNITED STATES

These financial statements are prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP).  The differences between Canadian GAAP and accounting principles generally accepted in the United States (US GAAP) as they relate to these financial statements are summarized below:

| | Consolidated Statements of Operations      | 2004
| | ------------------------------------------ | ----
| | (in thousands, except per share amounts)   |     
| | Sales                                      | $   
| | Cost of sales                              |     
| | Depreciation and depletion                 |     
| | Royalties                                  |     
| | General and administrative expenses        |     
| | Other expense                              |     
| |                                            |     
| | Earnings from operations                   |     
| | Interest and finance fees                  |     
| | Gain on derivative instruments             |     
| | Equity in earnings of Minera Alumbrera Ltd |     
| | Earnings before income taxes               |     
| | Income tax (expense) recovery              |     
| | Non-controlling interest                   |     
| | Net earnings                               | $   
| | Other comprehensive income                 |     
| | Marketable securities                      |     
| | Comprehensive income                       | $   
| |                                            |     
| | Earnings per share  basic                 | $   
| | Earnings per share  diluted               | $   











| | Consolidated Statements of Operations      | 2003
| | ------------------------------------------ | ----
| | (in thousands, except per share amounts)   |     
| | Sales                                      | $   
| | Cost of sales                              |     
| | Depreciation and depletion                 |     
| | Royalties and reclamation                  |     
| | General and administrative expenses        |     
| | Other income                               |     
| |                                            |     
| | Earnings from operations                   |     
| | Interest and finance fees                  |     
| | Loss on derivative instruments             |     
| | Equity in earnings of Minera Alumbrera Ltd |     
| | Earnings before income taxes               |     
| | Income tax (expense) recovery              |     
| | Net earnings                               | $   
| | Other comprehensive income                 |     
| | Marketable securities                      |     
| | Comprehensive income                       | $   
| |                                            |     
| | Earnings per share  basic                 | $   
| | Earnings per share  diluted               | $   



| | Consolidated Statements of Operations    | 2002
| | ---------------------------------------- | ----
| | (in thousands, except per share amounts) |     
| | Sales                                    | $   
| | Cost of sales                            |     
| | Depreciation and depletion               |     
| | Royalties and reclamation                |     
| | General and administrative expenses      |     
| | Other income                             |     
| |                                          |     
| | Earnings from operations                 |     
| | Interest and finance fees                |     
| | Earnings before income taxes             |     
| | Income tax expense                       |     
| | Net earnings                             | $   
| | Other comprehensive income               |     
| | Marketable securities                    |     
| | Comprehensive income                     | $   
| |                                          |     
| | Earnings per share  basic               | $   
| | Earnings per share  diluted             | $   





| | Consolidated Balance Sheets                | 2004
| | ------------------------------------------ | ----
| | (in thousands)                             |     
| | Assets                                     |     
| | Current                                    |     
| | Cash and cash equivalents                  | $   
| | Accounts receivable (net of $73 allowance) |     
| | Other current assets                       |     
| |                                            |     
| | Property, plant and equipment              |     
| | Investment in Minera Alumbrera Ltd         |     
| | Other non-current assets                   |     
| |                                            | $   
| | Liabilities                                |     
| | Current                                    | $   
| | Non-current liabilities                    |     
| |                                            |     
| | Non-controlling interest                   |     
| | Shareholders equity                       |     
| |                                            | $   



| | Consolidated Balance Sheets                   | 2003
| | --------------------------------------------- | ----
| | (in thousands)                                |     
| | Assets                                        |     
| | Cash and cash equivalents                     | $   
| | Accounts receivable (net of $73 allowance)    |     
| | Other current assets                          |     
| |                                               |     
| | Property, plant and equipment                 |     
| | Investment in Minera Alumbrera Ltd            |     
| | Other non-current assets                      |     
| |                                               | $   
| | Liabilities                                   |     
| | Current                                       |     
| | Current liabilities other than long-term debt | $   
| | Current portion of long-term debt             |     
| |                                               |     
| | Long-term debt                                |     
| | Other non-current liabilities                 |     
| |                                               |     
| | Shareholders equity                          |     
| |                                               | $   







|(dollars, shares and warrants in thousands)                       | Common Shares | Special Warrants | Share Purchase Warrants | Share Purchase Options Amount | Con-tributed Surplus | Compre-hensive Income | Retained Earnings (Deficit) | Total
|----------------------------------------------------------------- | ------------- | ---------------- | ----------------------- | ----------------------------- | -------------------- | --------------------- | --------------------------- | -----
|Shares                                                            | Amount        | Warrants         | Amount                  | Warrants                      | Amount              
|At January 1, 2002                                                | 56,601        | $28,990          | 9,910                   | $3,201                        | 3,090                | $398                  | $406                        | $704 
|Special warrants issued                                           | -             | -                | 110,000                 | 82,068                        | -                    | -                     | -                           | -    
|Special warrants exercised                                        | 119,910       | 66,246           | (119,910)               | (85,269)                      | 64,910               | 19,023                | -                           | -    
|Stock purchase options exercised                                  | 1,355         | 411              | -                       | -                             | -                    | -                     | -                           | -    
|Warrants exercised                                                | 3,450         | 2,454            | -                       | -                             | (3,450)              | (444)                 | -                           | -    
|Shares issued on acquisition of Luismin                           | 9,084         | 6,805            | -                       | -                             | -                    | -                     | -                           | -    
|Share issue costs                                                 | -             | (5,251)          | -                       | -                             | -                    | -                     | -                           | -    
|Fair value of share purchase options issued                       | -             | -                | -                       | -                             | -                    | -                     | 93                          | -    
|Marketable securities                                             | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|Net earnings                                                      | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|At December 31, 2002                                              | 190,400       | 99,655           | -                       | -                             | 64,550               | 18,977                | 499                         | 704  
|Share purchase options exercised                                  | 6,621         | 5,431            | -                       | -                             | -                    | -                     | -                           | -    
|Warrants exercised                                                | 9,602         | 6,542            | -                       | -                             | (9,602)              | (1,350)               | -                           | -    
|Shares issued                                                     | 327,074       | 357,896          | -                       | -                             | 100,360              | 44,370                | -                           | -    
|Share issue costs, net of tax                                     | -             | (22,951)         | -                       | -                             | -                    | -                     | -                           | -    
|Fair value of share purchase options issued                       | -             | -                | -                       | -                             | -                    | -                     | 467                         | -    
|Marketable securities                                             | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|Net earnings                                                      | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|At December 31, 2003                                              | 533,697       | 446,573          | -                       | -                             | 155,308              | 61,997                | 966                         | 704  
|Share purchase options exercised                                  | 5,074         | 5,098            | -                       | -                             | -                    | -                     | -                           | -    
|Warrants exercised                                                | 476           | 862              | -                       | -                             | (476)                | (190)                 | -                           | -    
|Shares and warrants issued on acquisition of Amapari (note 4 (a)) | 33,000        | 71,885           | -                       | -                             | 21,516               | 16,660                | -                           | -    
|Share issue costs, net of tax                                     | -             | (146)            | -                       | -                             | -                    | -                     | -                           | -    
|Fair value of share purchase options issued                       | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|Marketable securities                                             | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|Net earnings                                                      | -             | -                | -                       | -                             | -                    | -                     | -                           | -    
|At December 31, 2004                                              | 572,247       | $524,272         | -                       | $-                            | 176,348              | $78,467               | $966                        | $704 





| | (in thousands)                                             |   | 2004      |  |   | 2003      |  |   | 2002    
| | ---------------------------------------------------------- | - | --------- |  | - | --------- |  | - | --------
| | Consolidated Statements of Cash Flows                      |   |           |  |   |           |  |   |         
| | Operating activities                                       |   |           |  |   |           |  |   |         
| | Operating activities under Canadian GAAP                   | $ | 207,814   |  | $ | 126,678   |  | $ | 4,361   
| | Alumbrera equity adjustment (a)                            |   | (33,128)  |  |   | (57,801)  |  |   | -       
| | Operating activities under US GAAP                         | $ | 174,686   |  | $ | 68,877    |  | $ | 4,361   
| | Financing activities                                       |   |           |  |   |           |  |   |         
| | Financing activities under Canadian GAAP                   | $ | (42,401)  |  | $ | 375,024   |  | $ | 79,238  
| | Alumbrera equity adjustment (a)                            |   | 57,980    |  |   | 19,362    |  |   | -       
| | Financing activities under US GAAP                         | $ | 15,579    |  | $ | 394,386   |  | $ | 79,238  
| | Investing activities                                       |   |           |  |   |           |  |   |         
| | Investing activities under Canadian GAAP                   | $ | (156,160) |  | $ | (372,760) |  | $ | (62,398)
| | Alumbrera equity adjustment (a)                            |   | (772)     |  |   | (17,615)  |  |   | -       
| | Investing activities under US GAAP                         | $ | (156,932) |  | $ | (390,375) |  | $ | (62,398)
| | Increase in cash and cash equivalents under US GAAP        | $ | 33,333    |  | $ | 72,888    |  | $ | 21,201  
| | Cash and cash equivalents, beginning of year under US GAAP |   | 95,824    |  |   | 22,936    |  |   | 1,735   
| | Cash and cash equivalents, end of year under US GAAP       | $ | 129,157   |  | $ | 95,824    |  | $ | 22,936  

(a)

Joint Venture

Under Canadian GAAP, the Company has accounted for its joint venture interest in Alumbrera on a proportionate consolidation basis.  Under US GAAP, the Company is required to equity account for its investment in Alumbrera and record in earnings its proportionate share of Alumbrera net income in accordance with US GAAP.

(b)

Marketable securities

Marketable securities are carried at the lower of cost and market value under Canadian GAAP.  Under Statement of Financial Accounting Standards (SFAS) 115, portfolio investments classified as available-for-sale securities are recorded at market value.  The resulting gains or losses are included in the determination of other comprehensive income.

(c)

Depreciation and depletion

Under Canadian GAAP, depletion expense is calculated in reference to proven and probable reserves and a portion of resources, whereas under US GAAP, depletion expense is calculated in reference to proven and probable reserves only.

(d)

Income taxes

Under Canadian GAAP, future income taxes are calculated based on enacted or substantively enacted tax rates applicable to future years.  Under US GAAP, only enacted rates are used in the calculation of future income taxes.  This difference in GAAP did not result in a difference in the financial position, results of operations or cash flows of the Company for the years ended December 31, 2004, 2003 and 2002.

US GAAP adjustments have been tax affected based on enacted statutory tax rates applicable to the relevant jurisdiction.

(e)

Accounting for derivative instruments and hedging activities

SFAS 133, Accounting for Derivative Instruments and Hedging Activities, is effective for all fiscal years beginning after June 15, 2000 and standardizes the accounting for derivative instruments.  The Company has chosen, for US GAAP purposes, to mark its foreign exchange, gold and interest rate derivative contracts to market.  The Companys put options on future gold production have been excluded from the mark-to-market calculation as it expects to deliver into these contracts in the normal course of business.



(f)

Share purchase warrants

The Company, from time to time, issues special warrants or units which are normally comprised of a common share and either a whole or portion of a share purchase warrant.  The special warrant is issued at the current market value of the common share and the share purchase warrant is exercisable at or higher than market value.  Under Canadian GAAP the proceeds of the special warrant are allocated to the common share with no value being assigned to the share purchase warrant.  Under US GAAP the gross proceeds would be allocated between the shares and warrants based on the relative fair value of the special warrant components at the date the Company has a contractual liability to issue the special warrants.

Prior to 2001, the Company issued share purchase warrants in connection with the acquisition of a mineral property and the issuance of debt.  Under Canadian GAAP, no values were assigned to these purchase warrants.  Under US GAAP, these warrants would be recorded at their fair values and be recorded as additional paid in capital at the date of issuance.

(g)

Stock-based compensation

For Canadian GAAP purposes the Company adopted the amended recommendations of the CICA Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments effective January 1, 2004.  Under the amended standards of this Section, the fair value of all stock-based awards granted are estimated using the Black-Scholes model and are recorded in operations over their vesting periods.  The compensation cost related to share purchase options granted after January 1, 2004 is recorded in operations.  Previously, the Company provided note disclosure of pro forma net earnings and pro forma earnings per share as if the fair value based method had been used to account for share purchase options granted to employees, directors and officers after January 1, 2002.  The amended recommendations have been applied retroactively for Canadian GAAP purposes from January 1, 2002 without restatement of prior periods.

For US GAAP purposes the Company accounts for stock-based compensation to employees and directors under Accounting Principles Board Opinion ("APB") 25, "Accounting for Stock Issued to Employees", using the intrinsic value based method whereby compensation expense is recorded for the excess, if any, of the quoted market price at the date granted over the exercise price.  No compensation cost has been recorded in 2004, 2003 and 2002, respectively, under this method.

SFAS 123, "Accounting for Stock-Based Compensation", requires the use of the fair value based method of accounting for stock options.  Under this method, compensation cost is measured at the grant date based on the fair value of the options granted and is recognized over the vesting period. SFAS 123, however, allows the Company to continue to measure the compensation expense of employees in accordance with APB 25.  The Company has adopted the disclosure-only provisions of SFAS 123.

The following pro forma financial information presents the net earnings for the years ended December 31 and the earnings per share had the Company adopted SFAS 123 for all stock options issued to directors, officers and employees.

| | (in thousands)                                                                      |  |   | 2004    |  |   | 2003     |  |   | 2002 
| | ----------------------------------------------------------------------------------- |  | - | ------- |  | - | -------- |  | - | -----
| | Net earnings for the period under US GAAP                                           |  | $ | 145,760 |  | $ | 52,053   |  | $ | 4,809
| | Additional stock-based compensation expense, net of non-controlling interest effect |  |   | (5,520) |  |   | (15,925) |  |   | (923)
| | Pro forma net earnings                                                              |  | $ | 140,240 |  | $ | 36,128   |  | $ | 3,886
| | Pro forma basic earnings per share                                                  |  | $ | 0.25    |  | $ | 0.09     |  | $ | 0.03 
| | Pro forma diluted earnings per share                                                |  | $ | 0.22    |  | $ | 0.08     |  | $ | 0.03 

(h)

Financial statement presentation

For US GAAP purposes, the measure Earnings from mining operations is not a recognized term and would therefore not be presented.  Instead, Earnings from operations has been calculated as net earnings, before interest and finance fees, derivative instruments, equity in earnings of Minera Alumbrera Ltd and income taxes.

(i)

Foreign currency translation

Under Canadian GAAP, as a result of the Companys adoption of the US dollar as its functional currency, the Companys consolidated financial statements for the year ended December 31, 2001, have been translated from Canadian dollars into US dollars at a rate of $1 to $1.5935.

Under US GAAP, this change in the functional currency would require a restatement of the Companys financial statements whereby monetary assets and liabilities of the Company would be translated into US dollars at the exchange rate in effect at the balance sheet date and non-monetary assets, liabilities and share capital at the exchange rates in effect at the time of acquisition or issue.  Revenues, expenses and financing and investing activities would be translated at rates approximating exchange rates in effect at the time of the transactions.

Under Canadian GAAP, the Companys foreign currency denominated subsidiaries were translated into Canadian dollars whereby monetary items were translated at the rate of exchange in effect at the balance sheet date and non-monetary items were translated at historical exchange rates.  The resulting Canadian dollar denominated subsidiary statements were translated into US dollars at a rate of $1 to $1.5935.  Under US GAAP, the Companys foreign currency denominated subsidiaries would be translated using the method whereby assets and liabilities would be translated at foreign exchange rates in effect at the balance sheet date and revenues and expenses would be translated at average foreign exchange rates in effect during the period.  Adjustments arising from the translation of the Companys foreign currency denominated subsidiaries would be deferred and recorded under a separate component of Shareholders Equity.  The Company has recorded an amount of $1,848,000 in Other Comprehensive Income.

(j)

Pro forma information on business combinations

Under US GAAP, SFAS 141 requires disclosure of certain pro forma information when a business combination is effected.  The following table presents the unaudited pro forma results of operations for informational purposes, assuming that the Company had acquired Amapari at the beginning of 2003, Alumbrera and Peak at the beginning of 2002, and Luismin at the beginning of 2001.  Pro forma earnings for 2004 are not presented as there is no material impact of the January 9, 2004, Amapari acquisition.

| | (in thousands)                       |  |   | 2003    |  |   | 2002  
| | ------------------------------------ |  | - | ------- |  | - | ------
| | Sales                                |  | $ | 110,413 |  | $ | 99,540
| | Net earnings                         |  |   | 75,149  |  |   | 25,181
| | Pro forma basic earnings per share   |  | $ | 0.17    |  | $ | 0.07  
| | Pro forma diluted earnings per share |  | $ | 0.16    |  | $ | 0.07  

The pro forma results of operations give effect to certain adjustments including the increase in depletion, depreciation and amortization resulting from adjustments to asset carrying values on the acquisitions of Alumbrera, Peak and Luismin.  The pro forma basic and diluted earnings per share have been calculated assuming the special warrants and common shares issued in connection with the acquisitions of Amapari, Alumbrera/Peak, and Luismin were issued at the beginning of 2003, 2002 and 2001 respectively.  This information may not be necessarily indicative of the future combined results of operations of the Company.

(k)

Recently released accounting standards

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS 153 which deals with the accounting for the exchanges of non-monetary assets and is an amendment of APB 29.  SFAS 153 eliminates the exception from using fair market value for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance, as defined.  This Standard is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  The Company does not believe that the application of SFAS 153 will have an impact on the consolidated financial statements, under US GAAP.

In December 2004, the FASB issued SFAS 123 (R), Share-Based Payment, which establishes accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services.  This Statement focuses primarily on accounting for transactions with employees, and carries forward without change, prior guidance for share-based payments for transactions with non-employees.  It eliminates the intrinsic value measurement objective in APB 25 and generally requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant.  The Standard requires the fair value on the grant date to be estimated using either an option-pricing model which is consistent with the terms of the award or a market observed price, if such a price exists.  Such cost must be recognized over the period during which an employee is required to provide service in exchange for the award.  The Standard also requires the Company to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur.  The Company is required to apply SFAS 123 (R) to all awards granted, modified or settled in the first reporting period under US GAAP after June 15, 2005.  The Company is determining the effect that this Standard would have on the financial position or results of operations in the future.

In November 2004, the FASB issued SFAS 151 which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material as they relate to inventory costing and requires these items to be recognized as current period expenses.  Additionally, the allocation of fixed production overheads to the cost of inventory should be based on the normal capacity of the production facilities.  The Standard is effective for inventory costs incurred during fiscal years beginning after June 15, 2005.  The Company does not believe that the application of FAS 151 will have an impact on the consolidated financial statements under US GAAP.

During 2004, the Emerging Issues Task Force (EITF) formed a committee (Committee) to evaluate certain mining industry accounting issues, including issues arising from the application of SFAS 141, Business Combinations to business combinations within the mining industry and the capitalization of costs after the commencement of production, including deferred stripping.

In March 2004, the EITF reached a consensus, based upon the Committees deliberations and ratified by the FASB, that mineral interests conveyed by leases should be considered tangible assets. On April 30, 2004, the FASB issued a FASB Staff Position (FSP) amending SFAS 141 and SFAS 142 to provide that certain mineral use rights are considered tangible assets and that mineral use rights should be accounted for based on their substance. The FSP is effective for the first reporting period beginning after April 29, 2004, with early adoption permitted.  The Company does not expect that the adoption of this statement will have a material effect on the Companys financial position or results of operations.

During 2004, deliberations began on EITF 04-6, Accounting for Stripping Costs Incurred during Production in the Mining Industry. In the mining industry, companies may be required to remove overburden and other mine waste materials to access mineral deposits. The costs of removing overburden and waste materials are often referred to as "stripping costs." During the development of a mine (before production begins), it is generally accepted in practice that stripping costs are capitalized as part of the depreciable cost of building, developing, and constructing the mine. Those capitalized costs are typically amortized over the productive life of the mine using the units-of-production method. A mining company may continue to remove overburden and waste materials, and therefore incur stripping costs, during the production phase of the mine. Questions have been raised about the appropriate accounting for stripping costs incurred during the production phase, and diversity in practice exists. In response to these questions, the EITF has undertaken a project to develop an Abstract to address the questions and clarify the appropriate accounting treatment for stripping costs under US GAAP. The EITF is in the process of deliberating these questions and upon completion of their deliberations they will issue EITF 04-6, which will represent an authorative US GAAP pronouncement for stripping costs.  EITF 04-6 is expected to be approved and issued in 2005 following which the Company will evaluate the impact the adoption of this statement will have on its consolidated financial position or results of operation.

During 2004, EITF 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, was issued.  In general, this statement establishes guidance to be used in determining when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss.  The Company does not expect that the adoption of EITF 03-1 will have a material effect on the Companys financial position or results of operations.

In May 2003, the FASB issued SFAS 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equities.  This Standard requires certain financial instruments that were accounted for as equity under previous guidance to now be accounted for as liability.  It applies to mandatory redeemable stock and certain financial instruments that require or may require settlement by transferring cash or other assets.  SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The Company has not issued any financial instruments that fall under the scope of SFAS 150 and does not expect that the adoption of this statement will have a material impact on the Companys financial position or results of operations.

In April 2003, SFAS 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, was issued.  In general, this statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133.  This statement is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003.  The Company is in the process of evaluating the impact the adoption of SFAS 149 will have on its consolidated financial position or results of operations.

In January 2003, the FASB issued FASB Interpretation Number ("FIN") 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin 51.  FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.  FIN 46 is effective for all new variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003.  It is not expected that the adoption of FIN 46 will have a material effect on the Companys financial position or results of operations.

23. SUBSEQUENT EVENTS

On December 6, 2004, the Company announced it had reached an agreement in principle to combine with Goldcorp through a share exchange take-over bid whereby Goldcorp would offer one common share of Goldcorp for every four common shares of Wheaton.

On February 10, 2005, Goldcorp shareholders approved the combination and on February 14, 2005, approximately 69% of Wheaton common shares were tendered to the Goldcorp offer.  As a result, effective February 15, 2005, Goldcorp will consolidate the operations of Wheaton.  The transaction will be accounted for using the purchase method with Goldcorp being identified as the acquirer.  The remaining shares of Wheaton not yet tendered will be acquired by Goldcorp by way of a plan of arrangement which is expected to conclude in mid-April, 2005.  As a result, Wheaton will cease to be a public company and its results will be consolidated 100% by Goldcorp.





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|CANADA  HEAD OFFICE
Wheaton River Minerals Ltd.
Waterfront Centre
Suite 1560 - 200 Burrard Street
Vancouver, BC V6C 3L6
Telephone:
(604) 696-3000
Fax:
(604) 696-3001
Website:
www.wheatonriver.com
AUSTRALIA OFFICE
Wheaton Minerals Asia Pacific Pty Ltd.
Suite 1002, Level 10
Gold Fields House
1 Alfred Street
Sydney, NSW
Australia 2000
Telephone:
61 (2) 9252-1220
Fax:
61 (2) 9252-1221
MEXICO OFFICE
Luismin SA de CV
Arquimedes #130  8th Floor, Polanco
11560 Mexico, DF Mexico
Telephone:
52 (55) 9138-4000
Fax:
52 (55) 5280-7636
STOCK EXCHANGE LISTING
Toronto Stock Exchange:
WRM
American Stock Exchange:
WHT
TRANSFER AGENT
CIBC Mellon Trust Company
1600  1066 West Hastings Street
Vancouver, BC V6E 3X1
Toll-free in Canada and the United States:
(800) 387-0825
Outside of Canada and the United States:
(416) 643-5500
Email: inquiries@cibcmellon.com
AUDITORS
Deloitte & Touche LLP
Vancouver, BC
INVESTOR RELATIONS
Julia Hasiwar
Director, Investor Relations
Toll free: (800) 567-6223
Email: ir@wheatonriver.com | DIRECTORS
John Bell
Lawrence Bell
Douglas Holtby
Eduardo Luna
Ian McDonald
Antonio Madero
Ian Telfer
OFFICERS
Ian Telfer
Chairman and Chief Executive Officer
Russell Barwick
Executive Vice-President & Chief Operating Officer
Peter Barnes
Executive Vice-President & Chief Financial Officer
Eduardo Luna
Executive Vice-President & President, Luismin SA de CV
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