Alberta Star Development Corp.
                         (An Exploration Stage Company)


                              Financial Statements
                         (Expressed in Canadian Dollars)
                                November 30, 2002

<PAGE>


JAMES STAFFORD
------------------------------------------------------------------------------
                                             James Stafford
                                             Chartered Accountants
                                             Suite 300-555 West Georgia Street
                                             Vancouver, British Columbia
                                             Canada V6B 1Z6
                                             Telephone+1(604)669 0711
                                             Facsimile+1(604)669 0754


                                AUDITORS' REPORT

To the Shareholders' of
Alberta Star Development Corp.


We have audited the balance sheets  of  Alberta  Star  Development  Corp.  (an
exploration  stage  company)  as  at  November 30, 2002,  and  2001,  and  the
statements of operations and deficit, cash flows, and changes in shareholders'
equity for the years ended November 30, 2002, 2001, and 2000.  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  audit  in  accordance  with  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 financial statements present  fairly,  in  all  material
respects, the financial position of the Company as at  November 30, 2002,  and
2001, and the statements of operations and deficit, cash flows, and changes in
shareholders' equity for the years ended November 30, 2002, 2001, and 2000  in
accordance with generally accepted accounting principles.

                                                          "James Stafford"
Vancouver, Canada                                     Chartered Accountants
January 14, 2003


                           COMMENTS FOR U.S. READERS
In the United States, reporting standards for auditors require the addition of
an explanatory paragraph, following the  opinion  paragraph,  when  there  are
substantial uncertainties about the company's ability to continue as  a  going
concern, as referred to in Note 1 to the financial statements.  Our report  to
the shareholders  dated  January 14, 2003  is  expressed  in  accordance  with
Canadian standards which  do  not  permit  a  reference  to  such  events  and
conditions in  the  auditors'  report  when  these  are  adequately  disclosed
financial statements.

                                                          "James Stafford"
Vancouver, Canada                                     Chartered Accountants
January 14, 2003

<PAGE>


Alberta Star Development Corp.
(An Exploration Stage Company)
Statements of Operations and Deficit
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>
==============================================================================
             2002           2001
------------------------------------------------------------------------------
<S>                                                <C>           <C>

ASSETS

Current
   Cash and cash equivalents                       $   161,408    $          -
   Accounts receivable                                   5,892          18,144
                                                   -----------    ------------
                                                       167,300          18,144

Plant and equipment (Note 4)                            17,109           2,221
                                                   -----------    ------------
                                                   $   184,409    $     20,365
==============================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
   Bank indebtedness                               $         -    $      2,872
   Accounts payable and accrued liabilities             39,687          27,974
   Due to related parties (Note 10)                     71,688               -
                                                   -----------    ------------
                                                       111,375          30,846
                                                   -----------    ------------
Shareholders' equity
   Capital stock (Note 8)
      Authorized
         Unlimited number of preferred shares
         Unlimited number of voting common shares
      Issued and outstanding
         2002 - 9,826,169 common shares
         2001 - 4,256,169 common shares              2,154,927       1,462,502
   Deficit, accumulated during the exploration
   stage                                            (2,081,893)     (1,472,983)
                                                    ----------      ----------
                                                        73,034         (10,481)
                                                    ----------      ----------
                                                   $   184,409    $     20,365
==============================================================================
</TABLE>

Nature and Continuance of Operations (Note 1)

Contingency (Note 12)

Commitment (Note 17)

On behalf of the Board:

"Tim Coupland"    Director             "Lenic Rodriguez"   Director
---------------                        -----------------


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

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>
==============================================================================================
                                           Cumulative
                                         amounts from       For the      For the      For the
                                         inception to    year ended   year ended   year ended
                                          November 30,  November 30, November 30, November 30,
                                                 2002          2002         2001         2000
----------------------------------------------------------------------------------------------
<S>                                      <C>           <C>          <C>          <C>

EXPENSES
  Amortization                                  4,524         3,680          618          226
  Automotive                                   15,391         3,522       11,869            -
  Consulting fees (Note 10)                   231,446       169,945       55,201            -
  Interest and bank charges                     2,889           970        1,450          418
  Management fees (Note 10)                   181,110        64,100       57,010       60,000
  Meals and entertainment                      24,578        10,792       11,778        2,008
  Mineral property (Note 5)                   316,392       255,171       60,221        1,000
  Mineral property acquisition costs          100,000             -      100,000            -
  Office and miscellaneous                     53,606         6,757        8,627        4,775
  Professional fees                           211,351        90,987       36,314       51,347
  Regulatory fees                              22,297         6,153        8,780        4,704
  Rent and utilities                           36,645        12,459        9,120        5,159
  Secretarial (Note 10)                        75,950        43,050       26,950        5,950
  Transfer fees and shareholder information    95,049        18,276       13,998        5,060
  Travel                                       14,216         4,480        4,446        2,347
                                           ----------     ---------    ---------    ---------
Loss before other items                    (1,385,444)     (690,342)    (406,382)    (142,994)
                                           ----------     ---------    ---------    ---------
OTHER ITEMS
  Interest income                               4,424           496        2,432          207
   Recovery of mineral property costs         25,9362         5,936            -            -
   Sale of mineral property interest           55,000        55,000            -            -
   Write-off of mineral properties
     and related costs                       (220,552)            -            -       (1,000)
                                           ----------     ---------    ---------    ---------
                                             (135,192)       81,432        2,432         (793)
                                           ----------     ---------    ---------    ---------

Net loss for the year                      (1,520,636)     (608,910)    (403,950)    (143,787)

Deficit, accumulated during the
   exploration stage, beginning of year             -    (1,472,983)    (507,776)    (363,989)
Adjustment for change in accounting
   policy (Note 2)                           (561,257)            -     (561,257)           -
                                            ---------     ---------    ---------    ---------
Deficit, accumulated during the
   exploration stage, end of year         $(2,081,893)  $(2,081,893) $(1,472,983)  $ (507,776)
=============================================================================================

Basic loss per share (Note 3)                           $     (0.10) $     (0.12)  $    (0.01)
=============================================================================================
</TABLE>

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

<PAGE>


Alberta Star Development Corp.
(An Exploration Stage Company)
Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>
========================================================================================================
                                                     Cumulative
                                                   amounts from       For the      For the      For the
                                                   inception to    year ended   year ended   year ended
                                                    November 30,  November 30, November 30, November 30,
                                                           2002          2002         2001         2000
--------------------------------------------------------------------------------------------------------
<S>                                                <C>           <C>          <C>          <C>

Cash flows from operating activities
Loss for the year                                   $(1,520,636)  $  (608,910) $  (403,950) $  (143,787)
   Adjustments to reconcile income to
   net cash used in operation activities:
       Amortization                                       4,524         3,680          618          226
       Write-off of mineral properties                        -             -            -        1,000
                                                    -----------   -----------  -----------  -----------
                                                     (1,516,112)     (605,230)    (403,332)    (142,561)

Changes in other operating assets and liabilities:
   (Increase) decrease in accounts receivable            (5,892)       12,252       (5,919)      (4,904)
    Increase (decrease) in accounts payable              39,687        11,713      (68,404)      35,095
    Increase (decrease) in due to related parties        71,688        71,688            -            -
                                                    -----------   -----------  -----------  -----------
                                                     (1,410,629)     (509,577)    (477,655)    (112,370)
                                                    -----------   -----------  -----------  -----------

Cash flows from investing activities
    Purchase of plant and equipment                     (21,633)      (18,568)      (1,556)      (1,509)
    Mineral exploration costs                                 -             -            -          900
                                                    -----------   -----------  -----------  -----------
                                                        (21,633)      (18,568)      (1,556)        (609)
                                                    -----------   -----------  -----------  -----------
Cash flows from financing activities
    Capital stock issued for cash                     2,252,718       745,800      395,000      200,000
    Change in accounting policy                        (561,257)            -            -            -
    Share issuance costs                                (97,791)      (53,375)      (2,306)      (3,977)
                                                    -----------   -----------  -----------  -----------
                                                      1,593,670       692,425      392,694      196,023
                                                    -----------   -----------  -----------  -----------
Increase (decrease) in cash and
   cash equivalents                                     161,408       164,280      (86,517)      83,044

Cash and cash equivalents, beginning of year                  -        (2,872)      83,645          601
                                                    -----------   -----------  -----------  -----------

Cash and cash equivalents, end of year              $   161,408   $   161,408  $    (2,872) $    83,645
========================================================================================================
</TABLE>

Supplemental Disclosures with Respect to Cash Flows (Note 15)


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


<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)


<TABLE>
<CAPTION>
=======================================================================================================
                                                                                   Deficit
                                                                               accumulated
                                                         Number                 during the
                                                      of shares                exploration
                                                         issued        Amount        stage        Total
-------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>           <C>          <C>

Balance at September 6, 1996                                  -   $         -  $         -   $        -
   Shares issued for cash                             7,800,000       490,000            -      490,000
   Share issuance costs                                       -       (59,613)           -      (59,613)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 1997                          7,800,000       430,387            -      430,387
   Shares issued for cash                               230,000        24,614            -       24,614
   Shares issued for mineral properties               4,000,000       317,000            -      317,000
   Share issuance costs                                       -        (6,484)           -       (6,484)
   Net loss for the year                                      -             -      (72,773)     (72,773)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 1998                         12,030,000       765,517      (72,773)     692,744
   Shares issued for cash                               415,000        41,500            -       41,500
   Share issuance costs                                       -          (150)           -         (150)
   Net loss for the year                                      -             -     (291,216)    (291,216)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 1999                         12,445,000       806,867     (363,989)     442,878
   Shares issued for cash                             2,000,000       200,000            -      200,000
   Shares issued for settlement of debt                 669,180        66,918            -       66,918
   Share issuance costs                                       -        (3,977)           -       (3,977)
   Net loss for the year                                      -             -     (143,787)    (143,787)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 2000                         15,114,180     1,069,808     (507,776)     562,032
   Shares issued for cash                             3,000,000       300,000            -      300,000
   Share consolidation 5:1                          (14,491,344)            -            -            -
   Shares issued for cash                               633,333        95,000            -       95,000
   Share issuance costs                                       -        (2,306)           -       (2,306)
   Adjustment for change in
      accounting policy (Note 2)                              -             -     (561,257)    (561,257)
Net loss for the year--(403,950)(403,950)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 2001                          4,256,169     1,462,502   (1,472,983)     (10,481)
   Shares issued for cash                             5,570,000       745,800            -      745,800
   Share issuance costs                                       -       (53,375)           -      (53,375)
   Net loss for the year                                      -             -     (608,910)    (608,910)
                                                     ----------   -----------   ----------   ----------

Balance at November 30, 2002                          9,826,169   $ 2,154,927  $(2,081,893)  $   73,034
=======================================================================================================
</TABLE>

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

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================


1.       Nature and Continuance of Operations

         Alberta Star Development Corp. (the "Company") was incorporated under
         the laws of the province of Alberta on September 6, 1996  and  is  in
         the exploration stage.

         The Company is in the business of  acquiring  and  exploring  mineral
         properties.  The recoverability of  the  amounts  shown  for  mineral
         property and related deferred costs is dependent upon  the  existence
         of economically recoverable reserves, the ability of the  Company  to
         complete the development of the properties and upon future profitable
         production.

         The Company's financial statements at November 30, 2002 and  for  the
         year then ended have been prepared on a going  concern  basis,  which
         contemplates  the   realization  of  assets  and  the  settlement  of
         liabilities and commitments in the normal course  of  business.   The
         Company has a loss of $608,910 for the year  ended  November 30, 2002
         (2001 -  $403,950,  2000 - $143,787),  and  has  working  capital  of
         $55,925 at November 30, 2002 (working capital deficit of $12,702 at
         November 30, 2001).

         Management cannot provide assurance that the Company will  ultimately
         achieve profitable operations or become cash flow positive, or  raise
         additional debt and/or equity capital.  However, based on  its  prior
         demonstrated ability to raise capital, management believes  that  the
         Company's capital resources should be adequate to continue  operating
         and maintain its business strategy during fiscal 2003.   However,  if
         the Company is unable to raise additional capital in the near future,
         due to the Company's liquidity problems, management expects that  the
         Company will need  to  curtail  operations,  liquidate  assets,  seek
         additional capital  on  less  favorable  terms  and/or  pursue  other
         remedial measures.  These financial statements  do  not  include  any
         adjustments related  to  the  recoverability  and  classification  of
         assets or the amounts and classification of liabilities that might be
         necessary should the Company be unable to continue as a going concern.

2.       Changes in Accounting Policies

i.       The Canadian Institute of Chartered Accountants  (the "CICA")  issued
         new accounting recommendations for the presentation and disclosure of
         basic and diluted earnings per share. Effective January 1, 2001,  the
         Company adopted these new recommendations on a retroactive basis. The
         most significant change under the new recommendations is the  use  of
         the  "treasury  stock  method " instead  of  the "  imputed  earnings
         approach" in computing diluted earnings per  share.  The  retroactive
         impacts of adopting the new  recommendations  for  the   years  ended
         November 30, 2002, 2001 and 2000 had no impacts on earnings per share.


<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================


ii.      The CICA  issued  Accounting  Guideline  No. 11,  which  covers   the
         Company's exploration  activities.  In  the  past,  the  Company  has
         capitalized certain exploration costs both on  the  Longtom  Property
         and the Harrison Lake Property that were not covered  by  feasibility
         studies,  whereas under  the  new  guideline  the  Company  would  be
         required to expense these amounts in  the  year  incurred.  Effective
         January 1, 2001, the Company adopted these new recommendations  on  a
         retroactive basis, but  has  not  restated   prior  year  comparative
         financial  statements.  The  impact  as  at  January 1, 2001  of  the
         adoption of these new recommendations is to reduce mineral properties
         by  $561,257   and  to   increase  deficit,  accumulated  during  the
         exploration stage by $561,257.

3.       Significant Accounting Policies

         Cash and cash equivalents

         Cash and cash equivalents  include  highly  liquid  investments  with
         original maturities of three months or less.

         Plant and equipment

         Plant and equipment are recorded at cost and are amortized over their
         estimated useful lives at the following annual rates:

         Computer equipment         30%       declining balance
         Website graphics       3 years       straight line

         Foreign exchange

         Transaction amounts denominated in foreign currencies are  translated
         into functional currency at exchange rates prevailing at  transaction
         dates.

         Mineral properties and deferred exploration costs

         Mineral exploration costs are expensed as incurred. When it has  been
         determined that a mineral property can be economically developed as a
         result of establishing proven and probable reserves,  costs  incurred
         prospectively to develop the property are capitalized as incurred and
         are depreciated using the unit-of-production depreciation method over
         the estimated life of the ore  body  based  on  proven  and  probable
         reserves.

         Major development costs incurred after the commencement of production,
         are capitalized as incurred and are depreciated  using  the  unit-of-
         production method based on proven and probable reserves.

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         Ongoing development expenditures to maintain production  are  charged
         to operations as incurred.

         Mineral property and deferred exploration costs are currently charged
         to operations as incurred since the Company has not met the  criteria
         for deferral of development costs under Canadian  generally  accepted
         accounting principles (Note 2).

         Marketable securities

         Marketable securities are carried at the  lower of  cost  and  market
         value.

         Reclamation costs

         The Company's policy for recording reclamation costs is to  record  a
         liability for the estimated costs to reclaim mined land by  recording
         charges to production costs for each tonne of ore mined over the life
         of the mine.  The amount charged is based on management's  estimation
         of reclamation costs  to  be  incurred.   The  accrued  liability  is
         reduced as reclamation expenditures are made.   Expenditures  related
         to reclamation work that is performed  concurrently  with  mining  is
         charged to operations at that time.

         Basic loss per share

         Loss per share is calculated using the  weighted  average  number  of
         common shares outstanding during  the  year.   For  the  years  ended
         November 30, 2002, 2001 and  2000,  the  weighted  average  number of
         common shares outstanding was 6,074,336, 3,562,607, and 13,102,809
         respectively.

         In accordance with the  revised  recommendations  of  the  CICA,  the
         Company changed from the imputed earnings approach  to  the  treasury
         stock method, to compute the dilutive effect of the options, warrants,
         and similar instruments on diluted loss per share. Under this method,
         the dilutive effect on earnings per share is recognized on the use of
         the proceeds that could be obtained  upon  exercise  of  options  and
         warrants.  It assumes that the proceeds would  be  used  to  purchase
         common shares at the average market price during the period. The  new
         standard has been applied on a retroactive basis and has no  material
         impact on the amounts presented.

         Fully diluted earnings per share consider the dilutive impact of  the
         conversion of outstanding stock options and warrants as if the events
         had occurred at the beginning of  the  year.   For  the  years  ended
         November 30, 2002, 2001 and 2000, this calculation proved to be anti-
         dilutive.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         Income taxes

         The Company follows the liability method  of  accounting  for  future
         income taxes, under which future income tax  assets  and  liabilities
         are determined based on the differences  between  the  tax  basis  of
         assets and liabilities and those reported in the financial statements.
         The future tax assets or liabilities are  calculated  using  the  tax
         rates for the periods in which the differences  are  expected  to  be
         settled.  Future tax assets are recognized to the  extent  that  they
         are considered more likely than not to be realized.

         Use of estimates

         Management is required to make estimates and assumptions that  affect
         the reported amounts of assets  and  liabilities  and  disclosure  of
         contingent assets and  liabilities  at  the  date  of  the  financial
         statements and the reported amounts of  revenue and  expenses  during
         the reported period. Actual results could differ from  the  estimates.

         Financial instruments

         Financial instruments are initially recorded at historical costs.  If
         subsequent circumstances indicate that a decline in fair value  of  a
         financial instrument is other than temporary, the financial asset  is
         written-down to its fair value.

         Values

         The amounts shown for mineral properties and for deferred exploration
         costs represent costs to  date,  and  do  not  necessarily  represent
         present or future values, as they are  entirely  dependent  upon  the
         economic recovery of future reserves.

4.       Plant and Equipment

         <TABLE>
         <CAPTION>
         ===============================================================================
                                           Accumulated           Net Book Value
                                Cost      amortization        2002           2001
         -------------------------------------------------------------------------------
         <S>                   <C>            <C>            <C>            <C>

         Computer equipment     $  4,265       $  1,498       $  2,767       $  2,221
         Website graphics         17,210          2,868         14,342              -
                                --------       --------       --------       --------

                                $ 21,475       $  4,366       $1 7,109       $  2,221
         ===============================================================================
         </TABLE>
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

5.       Mineral Properties

         Longtom Property, Northwest Territories

         The Company holds a 50% undivided interest in  the  Longtom  Property
         located  about  350  kilometers  northwest  of  Yellowknife,  in  the
         Northwest Territories, Canada.  The Longtom  Property  is  registered
         100% in the name of the Company and the Company  is the  operator  of
         the Property.  The Company's 50% interest in the Longtom Property  is
         subject to a 2% net smelter royalty.

         The Company has the right to acquire the remaining  50%  interest  in
         the Longtom Property (the "Longtom Option") for $315,000, payable 50%
         in cash and 50% in common shares of the Company. The deemed price  of
         the Company's shares issued on the exercise  of  the  Longtom  Option
         would be the average TSX Venture Exchange closing market price of its
         common shares on the five trading days immediately proceeding and the
         five trading days immediately following the date that the  option  is
         exercised.  The Company is compelled to exercise the  Longtom  Option
         within  90  days   from  the  date  it  has  incurred  $5,000,000  in
         exploration expenditures on the Longtom Property.

         The Company has the right  to enter  into  joint  venture  or  option
         agreements related to the Longtom Property with third  parties  prior
         to the exercise of the Longtom Option.

         During the year  ended  November 30, 2002,  the  Company  sold  a  5%
         interest in three mineral claims in the  Longtom  Property  for  cash
         proceeds of $55,000.

         Harrison Lake Property, British Columbia

         During the year ended November 30, 2001, the Company  acquired  three
         mineral claims (the "Harrison Lake  Property")  located  in  the  New
         Westminster Mining Division, British Columbia, for cash  proceeds  of
         $100,000. This amount has been expensed as incurred (Note 3).

         On February 15, 2002, the Company  entered  into  an  agreement  with
         Candorado Operating Company Ltd. ("Candorado") to sell  the  Harrison
         Lake Property for proceeds of 200,000  common  shares  of  Candorado.
         These common shares were  received  subsequent  to  November 30, 2002
         (Note 13).

         Lagarde Farmout Agreement

         During the year ended November 30, 2001, the Company entered into  an
         agreement to participate in the Lagarde Project  Drill  Program  (the
         "Lagarde  Property").  Under   the   agreement,   the   Company  paid
         exploration expenditures of $56,415 for drilling in return  for  a 5%
         participating interest in the Lagarde Property. The drilling  program
         was completed and the Company has now abandoned its  interest.  These
         amounts have been expensed as incurred (Note 3).

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================


         Mineral property expense consists of:
         <TABLE>
         <CAPTION>
         -----------------------------------------------------------------------------------------------
	                                             Cumulative
                                                   amounts from       For the      For the      For the
                                                   inception to    year ended   year ended   year ended
                                                    November 30,  November 30, November 30, November 30,
                                                           2002          2002         2001         2000
         -----------------------------------------------------------------------------------------------
         <S>                                       <C>           <C>          <C>          <C>

          Equipment rental and expense	            $    43,285   $    34,260  $     9,025  $         -
          Consulting fees                                34,907        28,533        6,374            -
          Geology and engineering                        93,889        79,004       13,885        1,000
          Field expenses                                 34,505        25,269        9,236            -
          Travel                                         81,428        65,880       15,548            -
          Wages                                          27,990        21,837        6,153            -
          Drilling                                          388           388            -            -
                                                    -----------   -----------  -----------  -----------
	                                            $   316,392   $   255,171  $    60,221  $     1,000
          ==============================================================================================
          </TABLE>

6.        Title to Mineral Properties

          Title to mineral properties involves certain inherent risks due  to
          the difficulties of determining the validity of certain  claims  as
          well as the potential for  problems  arising  from  the  frequently
          ambiguous  conveyancing  history characteristics  of  many   mining
          properties.  The Company has  investigated  title  to  its  mineral
          property and, to the best of its knowledge; title to  its  property
          is in good standing.

7.        Reclamation Provision

          Costs relating  to  ongoing  site  restoration  are  expensed  when
          incurred.  The  Company's  estimate  of  its  ultimate  reclamation
          ability may vary from current estimates due to possible changes  in
          laws, regulations and changes in costs estimated.  The Company will
          accrue additional liabilities for further reclamation costs as  and
          when evidence becomes available  indicating  that  its  reclamation
          liability has changed.

8.        Capital Stock

          Authorized capital stock consists of an unlimited number of  voting
          common  shares.  Authorized  capital  stock  also  consists  of  an
          unlimited number of preferred shares, to be issued in series,  with
          the  directors  being  authorized  to  determine  the  designation,
          rights, privileges, restrictions and conditions attached to all  of
          the preferred shares.

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

          Escrowed shares

          Included  in  capital  stock  are 137,978 common  shares  held  in
          escrow  on a performance  basis   relating  to  the acquisition of
          the  option  to  acquire  an  interest  in  the  Longtom  Property
          (Note 5). These escrowed shares may be released on a  basis of one
          common share for each $1.00 of exploration costs incurred, subject
          to  a maximum  release  of  one-third in each year. These escrowed
          shares  expire  on  March  23,2003  if  not released by that date.
9.        Stock Options and Warrants

          The  following incentive stock options and share purchase warrants
          were outstanding at November 30, 2002:

          <TABLE>
          <CAPTION>
          ============================================================================
                              Number             Exercise
                            of shares            price                    Expiry date
          ----------------------------------------------------------------------------
          <S>               <C>                 <C>                  <C>
          Options            700,000             $ 0.15               October 3, 2004
                              73,282               0.14               January 5, 2006
                             132,334               0.14               October 6, 2006
                             417,000               0.15                  July 3, 2007

          Warrants           233,000               0.19              February 5, 2003
                             122,000               0.19                 March 2, 2003
                           3,500,000               0.15                 April 3, 2003
                           1,500,000               0.14                April 12, 2003
                             633,000               0.20              October 23, 2003
                             250,000               0.10             February 12, 2004
         =============================================================================
         </TABLE>

10.      Related Party Transactions

         During  the year ended  November 30, 2002, the Company entered into
         the following transactions with related parties:

         i.  Paid  or accrued  office  secretarial fees of  $43,050 (2001 -
             $26,950,   2000  - $5,950)  to  an  individual  related  to  a
             director of the Company.
         ii. Paid or accrued consulting fees of $32,500 (2001 - $NIL,2000 -
             $NIL) to a company controlled by a director of the Company.
         iii.Paid  or  accrued management fees of $64,100 (2001 -  $57,010,
             2000  - $60,000) to  a  company  controlled  by  a director of
             the Company.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
=============================================================================

         At  November  30, 2002,  the amount due to related parties includes
         $6,600 (2001 - $NIL)  payable to a director of the Company, $56,488
         (2001 - $NIL) payable to  company controlled  by  a director of the
         Company, and $8,600 (2001 - $NIL) payable to an individual  related
         to a director of the Company.

         The  amounts  charged to the Company for the services provided have
         been determined by negotiation among the parties,  and  in  certain
         cases, are covered by signed agreements.  These  transactions  were
         in  the  normal  course  of  operations  and  were  measured at the
         exchange  value  which  represented  the  amount  of  consideration
         established and agreed to by the related parties.

11.      Income Taxes

         Income tax expense varies from the amount that would be computed by
         applying the combined federal and provincial tax rate of 45%(2001 -
         45.6%, 2000 - 45.6%) to income before taxes as follows:
<TABLE>
<CAPTION>
=================================================================================================
                                        2002                    2001                         2000
-------------------------------------------------------------------------------------------------
<S>                                     <C>                     <C>                        <C>
Loss before income taxes          $   (608,910)          $   (403,950)               $   (143,787)
                                  =============          =============               =============
Expected income taxes (recovery)      (274,010)              (184,201)                    (65,567)

Tax loss benefit not
recognized for book purposes           274,010                184,201                      65,567
                                 --------------          -------------               -------------
Actual income taxes              $           -           $          -                $          -
=================================================================================================
The significant components of the Company's future tax assets are as follows:
=================================================================================================
                                        2002                    2001                         2000
-------------------------------------------------------------------------------------------------

Net operating loss carryforwards $ 1,187,166             $    529,892                $    295,110

Cumulative exploration and
development expenses	           1,225,648                 1,024,577                    864,356
                                 -----------              ------------               ------------
                                   2,412,814                 1,554,489                  1,159,466

Less: valuation allowance         (2,412,814)               (1,554,489)                (1,159,466)
                                 -----------              ------------               ------------
Net future tax assets           $          -             $           -               $          -
=================================================================================================
</TABLE>

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         The Company has non-capital losses of approximately $1,187,166 which
         may be carried forward and applied against  taxable income in future
         years.  These losses expire between 2004 and 2009.

         The Company also has income tax  pools  related  to mineral property
         and  deferred  exploration  expenditures  approximating   $1,225,648
         available to reduce taxable income of future years.

         The potential benefits of the above have not been recognized in the
         financial statements.

12.      Contingency

         The Company has been named a defendant in a lawsuit filed by a former
         supplier for payment of a purported invoice in the amount of $24,000.
         In the opinion of management,  this claim is  without merit  and  the
         Company  will  be  successful in its  defence  of  this claim.   This
         amount  has  been  accrued  in  accounts  payable  in  the  financial
         statements for the year  ended  November 30, 2002.

13.      Subsequent Event

         On December 19, 2002, the Company received the 200,000  common shares
         of Candorado valued at $0.09 per share (Note 5).

14.      United States Generally Accepted Accounting Principles

         These financial statements have  been  prepared  in  accordance  with
         generally accepted accounting principles in Canada ("Canadian GAAP").
         Except as set out below, these financial statements  also  comply, in
         all material aspects, with accounting principles  generally  accepted
         in the United States of America ("United States GAAP")

i.       Stock based compensation

         For  United  States  reporting  purposes,  the  Company  has  adopted
         Statement   of  Financial  Accounting  Standards  ("SFAS")  No.  123,
         "Accounting for Stock Based Compensation."  This  statement  requires
         the Company  to  establish  a  fair  market  value  based  method  of
         accounting for stock based compensation plans.  At its inception, the
         Company adopted SFAS No. 123 in accounting for its stock option plan.
         Canadian  GAAP  does  not  require  the  reporting of any stock based
         compensation expense in the Company's financial statements.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         The Company uses Black Scholes  Option  Pricing  Model  to  determine
         the fair value of employee stock options  at the  issuance  date.  In
         determining the fair value  of  these  employee  stock  options,  the
         following assumptions were used:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                         2002                     2001                         2000
---------------------------------------------------------------------------------------------------
<S>                                       <C>                     <C>                           <C>
Risk free interest rate                  2.97%                    6.61%                       6.61%
Expected life                            3 years                5 years                     3 years
Expected volatility                      71%                      126%                         126%
Expected dividends                       -                         -                              -
---------------------------------------------------------------------------------------------------
</TABLE>

         The application of SFAS No.  123  resulted   in  the   reporting   of
         compensation expenses in   the   amount  of  $97,235,  $116,482,  and
         $18,150 for  the  years  ended   November 30, 2002,  2001,  and  2000
         respectively.

         The  following  is  a  summary   of   the  status  of  stock  options
         outstanding at November 30, 2002:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                               Outstanding options                              Exercisable options
---------------------------------------------------------------------------------------------------
                                   Remaining
       Exercise       Number      contractual          Exercise          Number            Exercise
       price         of shares    life (years)          price            of shares            price
---------------------------------------------------------------------------------------------------
       <C>              <C>          <C>                 <C>              <C>                   <C>
   $   0.14           73,282        3.25            $   0.14             73,282            $   0.14
       0.14          132,334        3.75                0.14            132,334                0.14
       0.15          417,000        4.50                0.15            417,000                0.15
       0.15          700,000        1.75                0.15            700,000                0.15
---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         The following is a summary of  the  stock based  compensation plan
         during  the years ended November 30, 2002, 2001, and 2000:
<TABLE>
<CAPTION>
======================================================================================================================
                                                                                                              Weighted
                                                                                                               average
                                                                    Number                                    exercise
                                                                  of shares                                      price
----------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                                          <C>
Outstanding and exercisable at December 1, 1999                    705,000                            $           0.10

      Granted                                                     1,125,000                                       0.10
      Exercised                                                      -                                             -
      Forfeited                                                    (630,000)                                      0.10
                                                                   --------

Outstanding and exercisable at November 30, 2000                  1,200,000                           $           0.10
                                                                   ========                           ================

Weighted average fair value of options granted during the year                                        $          0.033
                                                                                                      ================

Outstanding and exercisable at December 1, 2000                   1,200,000                           $           0.10

      Granted                                                     1,566,418                                       0.14
      Exercised                                                    (550,000)                                      0.10
      Forfeited                                                    (650,000)                                      0.10
      Share consolidation 5:1                                    (1,253,136)                                         -
      Granted                                                       132,334                                       0.14
      Forfeited                                                     (20,000)                                      0.14
                                                                   ---------

Outstanding and exercisable at November 30, 2001                    425,616                            $          0.14
                                                                   =========                           ===============

Weighted average fair value of options granted during the year                                         $         0.101
                                                                                                       ===============

Outstanding and exercisable at December 1, 2001                     425,616                            $          0.14

      Granted                                                     1,117,000                                       0.15
      Exercised                                                    (220,000)                                      0.14
      Forfeited                                                        -                                             -
                                                                  ----------                           ---------------

Outstanding and exercisable at November 30, 2002                  1,322,616                           $           0.15
                                                                  ==========                           ===============

Weighted average fair value of options granted during the year                                         $          0.15
======================================================================================================================
</TABLE>
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

ii.      Earnings (loss) per share

         Under both Canadian and United States GAAP, basic earnings (loss) per
         share  is  computed  by  dividing  the  earnings  (loss)   to  common
         shareholders by the weighted average  number  of  shares  outstanding
         during the year.   For Canadian  reporting  purposes,  fully  diluted
         earnings per share  is  calculated  under  the  assumption  that  any
         convertible notes are converted at the date issued and stock  options
         and warrants exercised at the date of grant.

         For United States reporting purposes, in February 1997, the Financial
         Accounting Standards Board ("FASB") issued  SFAS No.  128,  "Earnings
         per share."  Under SFAS No. 128, diluted earnings  per  share,  takes
         into consideration the weighted average number of shares  outstanding
         during the year  and  potentially  dilutive  common  shares.  For the
         years ended November 30, 2002, 2001, and 2000 this calculation proved
         to be anti-dilutive.

         Under United States GAAP,  the  weighted  average  number  of  common
         shares outstanding excludes any shares that remain in escrow, but may
         be earned out based on the  Company  incurring  a  certain  amount of
         exploration and development expenditures.

         The  weighted  average  number  of  common   shares  outstanding  for
         calculating  basic earnings (loss) per share under United States GAAP
         for the years ended November 30, 2002, 2001, and 2000 were 5,936,358,
         3,396,738, and 11,750,416, respectively.   The calculation of diluted
         earnings  per  share for the years ended November 30, 2002, 2001, and
         2000 proved to be anti-dilutive.

         A reconciliation of the differences between the weighted average
         number of shares used under Canadian and United States GAAP are as
         follows:

<TABLE>
<CAPTION>
===================================================================================================
                                               2002                 2001                     2000
---------------------------------------------------------------------------------------------------
<S>                                             <C>                  <C>                      <C>
Weighted average number of shares under
   Canadian generally accepted
   accounting principles                   6,074,336             3,562,607             13,102,809

Less:
   Capital stock held in escrow
   that may be earned out based
   on exploration expenditures              (137,978)             (165,869)            (1,352,393)

Weighted average number of shares
   under United States generally
   accepted accounting principles          5,936,358             3,396,738             11,750,416

===================================================================================================
</TABLE>
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================


Basic loss per share is computed as follows:

==============================================================================
                                       2002          2001                 2000
------------------------------------------------------------------------------
Numerator:
  Numerator for net loss per share    $  (746,145) $  (520,432)   $  (160,037)
Denominator:
  Weighted average shares outstanding   5,936,358    3,396,738     11,750,416
------------------------------------------------------------------------------

Net loss per share - basis          $    (0.126)   $    (0.153)   $    (0.014)
=============================================================================

iii.     Comprehensive income

         In June 1997, the FASB issued SFAS No. 130  "Reporting  Comprehensive
         Income." SFAS No. 130  establishes standards  for the  reporting  and
         display  of  comprehensive  income   and  its  components  (revenues,
         expenses,  gains, and losses). The purpose of reporting comprehensive
         income is to present a measure of all changes in shareholders' equity
         that result from recognized transactions and other economic events of
         the year, other than transactions with  owners  in  their capacity as
         owners.

iv.      Mineral property and deferred exploration costs

         Under  United  States   GAAP,  exploration and  prospecting costs are
         charged to expense as incurred, as are development costs for projects
         not  yet  determined  by  management  to  be  commercially  feasible.
         Expenditures for mine development are  capitalized when the  property
         is determined to have economically recoverable proven reserves but is
         not yet  producing  at  a  commercial level.    Prior  to  commencing
         commercial production, revenues relating to development ore,  net  of
         mining costs associated with its production, is  offset  against mine
         development costs.     Mine  development  costs  incurred  to  access
         reserves on producing mines are also capitalized.   Capitalization of
         all exploration, development, and acquisition  costs  commences  once
         the Company  identifies  proven  and probable reserves that relate to
         specific properties.

         The  mining  property  is  reviewed for impairment whenever events or
         changes  in  circumstances  indicate  that the carrying amount of the
         assets  may  not  be  recoverable.    If  estimated future cash flows
         expected  to  result  from  the  use  of  the  mining project and its
         eventual disposition are less than the carrying  amount of the mining
         property, an impairment is recognized based upon  the  estimated fair
         value of the mining property.  Fair value generally is based  on  the
         present  value  of  estimated  future  net  cash flows for the mining
         property, calculated using estimates of proven  and  probable  mining
         reserves,  future prices,  operating costs,  capital requirements and
         reclamation costs.

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         The  Company  has no determinable proven or probable mineral property
         reserves at this time.

v.       Accounting  for  impairment  of  long-lived assets and for long-lived
         assets to be disposed of

         For United States reporting purposes, the Company has adopted SFAS No
         121, "Accounting for the Impairment of Long-Lived Assets and for Long
         -Lived Assets to be  Disposed of."   In  the  event  that  facts  and
         circumstances indicate that the carrying amount of an asset  may  not
         be recoverable and an estimate of future and undiscounted  cash flows
         is less than the carrying amount  of the  asset,  an impairment  loss
         will be recognized.

vi.      Marketable securities

         In May  1993,  FASB  issued SFAS  No.  115,  "Accounting  for Certain
         Investments  in  Debt  and Equity Securities," which became effective
         for years beginning afterDecember 31, 1993.   The  statement requires
         that  certain  investments  be  classified into available-for-sale or
         trading securities stated at  fair  market values.    Any  unrealised
         holding gains or losses are to be reported as a separate component of
         shareholders' equity until realized for available-for-sale securities
         and included in earnings  for trading  securities.    Any  marketable
         securities  held by the Company are classified as trading securities.

vii.     Accounting for derivative instruments and hedging activities

         In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
         Instruments and Hedging Activities" which establishes  accounting and
         reporting  standards  for  derivative  instruments  and  for  hedging
         activities.  SFAS No. 133 is  effective for  all  fiscal  quarters of
         fiscal years beginning after June 15, 1999.  In June 1999,  the  FASB
         issued  SFAS No.  137  to defer the effective date of SFAS No. 133 to
         fiscal  quarters  of  fiscal years beginning after June 15, 1999.  In
         June 2000,  the  FASB  issued  SFAS  No.  138, which is a significant
         amendment to SFAS No. 133.  The Company does not anticipate that  the
         adoption  of  the  statement  will  have  a significant impact on its
         financial statements.

viii.    Concentration of credit risk

         The Company  is  exposed  to  credit  losses  in  the  event  of non-
         performance by the counter-parties to the  financial  instruments but
         does not expect any counter-parties to fail to meet their obligations.
         The Company generally does not obtain collateral or other security to
         support financial instruments subject to credit risk but monitors the
         credit standing of counter-parties.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

ix.      Income taxes
         Income taxes are calculated  in  accordance  with  the  provision set
         forth in SFAS No. 109, "Accounting for Income Taxes."  Under SFAS No.
         109  deferred  income  taxes  are  determined  using  an  asset   and
         liabilities approach.  This method gives consideration to the  future
         tax consequences associated with differences  between  the  financial
         accounting  and  tax  basis  of  assets  and  liabilities  and  gives
         immediate effect to changes in income tax laws.

         Temporary differences giving rise to the deferred tax  asset  consist
         primarily of the excess of amortization for accounting purposes  over
         the amount for tax purposes.

         The Company has fully reserved the  tax  benefits  of  these  amounts
         because the likelihood of realization of the tax  benefits  cannot be
         determined.

x.       Canadian flow through shares

         Flow   through  shares  are  typically issued   by  small    Canadian
         Exploration  Stage  Companies.   The  flow  through shares permit the
         investor to claim deductions for tax purposes related to expenditures
         incurred by the issuer. The issuer explicitly  renounces the right to
         claim  these deductions.   The investor's tax basis is reduced by the
         amount of deductions taken.

         Under the Canadian GAAP, when the flow through shares are issued they
         are recorded at their face value. When the entity acquires assets the
         carrying value may exceed the tax basis as a result of the enterprise
         renouncing the deductions to the investors.    The  tax effect of the
         temporary  difference  is  recorded  as a cost of issuing the shares.
         This standard is consistent with the  accounting  previously  adopted
         for United States GAAP purposes by  issuers o f flow through  shares.

         However,  current  practice under SFAS No. 109 directs that when flow
         through shares are issued the proceeds should  be  allocated  between
         the offering of shares and the sale of tax benefits.   The allocation
         is made  based on  the  difference  between  the  quoted price of the
         existing shares and the amount the investor pays for the flow through
         shares. A liability is recognized for this difference.  The liability
         is  reversed  when  tax  benefits  are  renounced  and a deferred tax
         liability is recognized at that time.  Income  tax  expense   is  the
         difference  between the amount of  the deferred tax liability and the
         liability recognized on issuance.

         On  May  28, 2001, the Company issued 350,000 common shares on a flow
         through basis for $0.10 per share on a total proceeds of $35,000. All
         of this amount was renounced to the respective investors  during  the
         year ended November 30, 2002.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

         On October 30, 2001, the  Company issued  566,666 common  shares on a
         flow through basis for $0.15 per share on a total proceeds of $85,000.
         All of this amount was renounced to the respective  investors  during
         the year ended November 30, 2002.

         The impact of the SFAS No. 109 on the attached financial statements at
         November 30, 2002 is to increase deferred  tax liability  by  $54,000
         and to reduce equity by $54,000.

         The impact of the SFAS No. 109 on the attached  financial  statements
         at November 30, 2001 is to increase current  liabilities  by  $14,000
         and to reduce equity by $14,000.

         The  impact  of  the above  differences  between  Canadian and United
         States  GAAP on  the  balance sheet items as reported, is as follows:
<TABLE>
<CAPTION>
====================================================================================================================
                                      2002                                                2001
--------------------------------------------------------------------------------------------------------------------
                                                Balance as per                                        Balance as per
                                                United States                                          United States
                    Balance as                  reporting            Balance as                            reporting
                    Reported     Adjustments    requirements         reported        Adjustments        requirements
--------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>            <C>                  <C>             <C>                    <C>
Current assets    $  167,300    $      -      $  167,300          $   18,144       $       -              $   18,144

Property and
equipment             17,109           -          17,109               2,221               -                   2,221

Allowance for
write-down of
mineral property           -           -               -                   -               -                       -
                  ----------    --------       ----------           ---------       --------              ----------
                  $  184,409    $      -      $  184,409           $  20,365       $       -              $   20,365
                  ==================================================================================================

Current
liabilities       $  111,375    $      -      $  111,375           $  30,846       $  14,000              $   44,846

Long-term
liabilities                -      54,000          54,000                   -               -                       -

Shareholders'
equity                73,034     (54,000)         19,034             (10,481)        (14,000)                (24,481)
                   ---------     --------       --------           ----------       ---------             ----------
                  $  184,409     $     -       $ 184,409           $  20,365        $      -              $   20,365
====================================================================================================================
</TABLE>
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

        The impact of the above differences between Canadian and United States
        GAAP on the loss for the year are as follows:

<TABLE>
<CAPTION>
===================================================================================================================
                         Cumulative amounts
                          from inception to
                           November30, 2002                2002                     2001                      2000
-------------------------------------------------------------------------------------------------------------------
<S>                          <C>                           <C>                      <C>                        <C>

Loss for the year,
as reported                 $   (1,520,636)         $   (608,910)            $   (403,950)                (143,787)

Less:
  Compensation expense on
  granting of stock options       (240,417)              (97,235)                (116,482)                 (18,150)

  Deferred income tax
  expense related to flow
  through shares                   (40,000)              (40,000)                       -                        -

  Amounts written-down for
  mineral property
  acquisitions                    (561,257)                    -                        -                    1,900
                           ----------------        --------------            -------------            -------------
Loss for the year in
accordance with	United
States generally
accepted accounting
principles                  $   (2,362,310)        $    (746,145)            $   (520,432)            $   (160,037)
=====================================================================================================================
Basic loss per share
in accordance with
United States generally
accepted accounting
principles                                         $      (0.126)            $     (0.153)            $     (0.014)
=====================================================================================================================
</TABLE>

<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

        The  impact  of  the  above  differences between Canadian and United
        States  GAAP  on t he statements of cash flows are as follows:
<TABLE>
<CAPTION>
====================================================================================================================
                                                           Operations                Investing             Financing
--------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                     <C>                    <C>
For the year ended November 30, 2002
  Cash flows per Canadian generally
   accepted accounting principles                        $   (509,577)            $   (18,568)           $   692,425

Effect of mineral property expenditures	                        -                        -                       -
                                                         -------------            ------------            -----------
  Cash flows per United States generally
   accepted accounting principles                        $   (509,577)            $   (18,568)           $   692,425
                                                         =============            ============           ============
For the year ended November 30, 2001
 Cash flows per Canadian generally
   accepted accounting principle                         $   (477,655)            $    (1,556)           $   392,694

 Effect of mineral property expenditures                            -                       -                      -
                                                         -------------            ------------           -----------
 Cash flows per United States generally
  accepted accounting principles                         $   (477,655)            $    (1,556)           $   392,694
                                                         =============            ============           ===========

For the year ended November 30, 2000
 Cash flows per Canadian generally
  accepted accounting principles                         $   (112,370)            $      (609)           $   196,023

Effect of mineral property expenditures	                          900                    (900)                     -
                                                         --------------           ------------           -----------
 Cash flows per United States generally
  accepted accounting principles                         $   (111,470)            $    (1,509)           $   196,023
====================================================================================================================
</TABLE>

15.      Supplemental Disclosures with Respect to Cash Flows

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                        Cumulative amounts
                         from inception to
                         November 30, 2002                     2002                     2001                   2000
--------------------------------------------------------------------------------------------------------------------
<S>                           <C>                           <C>                         <C>                    <C>
 Cash paid during
  the year for interest    $    NIL                      $      NIL               $      NIL             $      NIL
====================================================================================================================
Cash paid during the
  year for income taxes    $    NIL                      $      NIL               $      NIL             $      NIL
====================================================================================================================
</TABLE>

16.       Segmented Information

          The Company operates solely in Canada  in  one  reporting  segment,
          mineral production and related activities.
<PAGE>

Alberta Star Development Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Expressed in Canadian Dollars)
November 30, 2002
==============================================================================

17.       Commitment

          The  Company  has  agreed  to i ssue 100,000  common  shares of the
          Company   to   an   agent  as payment  for services related  to  an
          offering of  the Company's common shares.   The  Company  has  also
          agreed to pay  commission  to  the  agent equal to 10% of the gross
          proceeds raised through the offering.

18.       Comparative Figures

          Certain comparative  figures  have  been  adjusted  to  conform  to
          the current year's presentation.