UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

# FORM 20-F

(Mark One)

|[  ] | Registration statement pursuant to Section 12(b) or 12(g) of the Securities
Exchange Act of 1934
|---- | ------------------------------------------------------------------------------------------------

or

|[X] | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ------------------------------------------------------------------------------------

| | For
the fiscal year ended   December 31, 2002
| | ---------------------------------------------

or

| | Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| | ----------------------------------------------------------------------------------------

| | For
the transition period from _________________ to __________________
| | ----------------------------------------------------------------------

Commission file number  0-29500

ARGOSY MINERALS INC. (Exact name of registrant as specified in its charter)

Yukon Territory, Canada 
(Jurisdiction of incorporation or organization)

20607 Logan Avenue
Langley, BC
Canada V3A 7R3
(Address of principal executive offices)

Securities registered or to be
registered pursuant to Section 12(b) of the Act:

None
(Title of Class)

Securities registered or to be registered
pursuant to Section 12(g) of the Act:

Common Shares, Without Par Value
(Title of Class)

Securities for which there is a
reporting obligation pursuant to Section 15(d) of the Act:

None
(Title of Class)

Indicate the number of outstanding
shares of each of the registrants classes of capital or common stock as of the close
of the period covered by the annual report.

95,969,105 Common Shares

Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X]     No

Indicate by check mark which
financial statement item the registrant has elected to follow.

Item 17  [X]     Item 18

---

i

# Table of Contents

|                                                                                       | 
|-------------------------------------------------------------------------------------- | 
|Part I                                                                                 | 
|
|Item 1 - Identity of Directors, Senior Management and Advisors                         | 
|
|Item 2 - Offer Statistics and Expected Timetable                                       | 
|
|Item 3 - Key Information                                                               | 
|A. Selected Financial Data                                                             | 
|B. Capitalization and Indebtedness                                                     | 
|C. Reasons for the Offer and Use of Proceeds                                           | 
|D. Risk Factors                                                                        | 
|
|Item 4 - Information on the Company                                                    | 
|A. History and Development of the Company                                              | 
|B. Business Overview                                                                   | 
|
|Item 5 - Operating and Financial Review and Prospects                                  | 
|A. Operating Results                                                                   | 
|B. Liquidity and Capital Resources                                                     | 
|C. Research and Development, Patents and Licences, etc                                 | 
|D. Trend information                                                                   | 
|
|Item 6 - Directors, Senior Management and Employees                                    | 
|A. Directors and Senior Management                                                     | 
|B. Compensation                                                                        | 
|C. Board Practices                                                                     | 
|D. Employees                                                                           | 
|E. Share Ownership                                                                     | 
|
|Item 7 - Major Shareholders and Related Party Transactions                             | 
|A. Major shareholders                                                                  | 
|B. Related Party Transactions                                                          | 
|C. Interests of Experts and Counsel                                                    | 
|
|Item 8 - Financial Information                                                         | 
|
|Item 9 - The Offer and Listing                                                         | 
|A. Offer and Listing Details                                                           | 
|B. Plan of Distribution                                                                | 
|C. Markets                                                                             | 
|D. Selling shareholders                                                                | 
|E. Dilution                                                                            | 
|F. Expenses of the Issue                                                               | 
|
|Item 10 - Additional Information                                                       | 
|A. Share Capital                                                                       | 
|B. Memorandum and Articles of Association                                              | 
|C. Material Contracts                                                                  | 
|D. Exchange Controls                                                                   | 
|E. Taxation                                                                            | 
|F. Dividends and Paying Agents                                                         | 
|G. Statement by Experts                                                                | 
|H. Documents on display                                                                | 
|I. Subsidiary Information                                                              | 
|
|Item 11 - Quantitative and Qualitative Disclosures about Market Risk                   | 
|
|Item 12 - Description of Securities other than Equity Securities                       | 
|
|Part II                                                                                | 
|
|Item 13 - Defaults, Dividend Arrearages and Delinquencies                              | 
|
|Item 14 - Material Modifications to the Rights of Security Holders and Use of Proceeds | 
|
|Item 15 - Controls and Procedures                                                      | 
|A. Evaluation of disclosure controls and procedures                                    | 
|B. Changes in internal controls                                                        | 
|
|Item 16 - Reserved                                                                     | 
|
|Part III                                                                               | 
|
|Item 17 - Financial Statements                                                         | 
|
|Item 18 - Financial Statements                                                         | 
|
|Item 19 - Exhibits                                                                     | 
|
|SIGNATURES                                                                             | 
|
|CERTIFICATION                                                                          | 

# SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS

Certain statements in this document
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Some, but not all, forward-looking statements
can be identified by the use of words such as anticipate, believe,
plan, estimate, expect, and intend,
statements that an action or event may, might, could,
should, or will be taken or occur, or other similar expressions.
Such forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the Registrant,
or other future events, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such factors
include, among others, the following risks: the risks associated with the Tripartite
Agreement arbitration, risks associated with project development; the need for additional
financing; operational risks associated with mining and mineral processing; fluctuations
in metal prices; title matters; uncertainties and risks related to carrying on business in
foreign countries; environmental liability claims and insurance; reliance on key
personnel; the potential for conflicts of interest among certain officer, directors or
promoters of the Registrant with certain other projects; the absence of dividends;
currency fluctuations; competition; dilution; the volatility of the Registrants
common share price and volume; and adverse tax consequences to U.S. Shareholders resulting
from the Registrants PFIC status. Additional information concerning these and other
factors that could affect the operations or financial results of the Registrant are
included in this document under Item 3  Risk Factors.

---

ii

# METRIC EQUIVALENTS

For ease of reference, the following
factors for converting metric measurements into imperial equivalents are provided:

|To Convert From Metric | To Imperial | Multiply By       
|---------------------- | ----------- | ------------------
|                      
|hectares               |             | acres             
|                      
|metres                 |             | feet              
|                      
|kilometres             |             | miles             
|                      
|tonnes                 |             | tons (2000 pounds)
|                      

---

1

# Part I

Item 1  Identity of
Directors, Senior Management and Advisors

Not applicable.

Item 2  Offer
Statistics and Expected Timetable

Not applicable.

Item 3  Key
Information

# A.  Selected Financial
Data

The following table summarizes
selected consolidated financial data for the Registrant (stated in Canadian dollars)
prepared in accordance with Canadian Generally Accepted Accounting Principles
(Canadian GAAP). The table also summarizes certain corresponding information
prepared in accordance with United States Generally Accepted Accounting Principles
(U.S. GAAP). The information in the table was extracted or derived from the
more detailed audited consolidated financial statements and related notes included herein
and should be read in conjunction with such financial statements and with the information
appearing under the heading Item 5  Operating and Financial Review and
Prospects. Reference is made to Note 10 of the December 31, 2002 consolidated
financial statements of the Registrant, included herein, for a discussion of the material
differences between Canadian GAAP and US GAAP, and their effects on the Registrants
financial statements.

To date, the Registrant has not
generated any cash flow from operations to fund ongoing operational requirements and cash
commitments. The Registrant has financed its operations principally through the sale of
its equity securities, and reimbursement of prior expenditures. The Registrant currently
has sufficient funds to maintain operations at its current level of activity; in the event
that activities increase or new projects are acquired the Registrants ability to
continue operations will be dependent on its ability to obtain additional financing. For
particulars, see Item 4  Business Overviewand Item 5  Operating and
Financial Review and Prospects  Liquidity and Capital Resources.

|                                     
|-------------------------------------
|
|                                     
|Statement Of Operations And Deficit  
|Operating Revenues                   
|Net Loss for the Period              
|Canadian GAAP                        
|U.S. GAAP                            
|Basic & Diluted Loss per Common Share
|Canadian GAAP                        
|U.S. GAAP                            
|Dividends Declared                   
|                                     
|Balance Sheet                        
|Total Assets                         
|Canadian GAAP                        
|U.S. GAAP                            
|                                     
|Shareholders' Equity                 
|Canadian GAAP                        
|U.S. GAAP                            
|Weighted Average Number of Shares    
|Outstanding                          
|                                     

---

2

In this Annual Report on Form 20-F,
unless otherwise specified, all monetary amounts are expressed in Canadian dollars. The
following table sets out the exchange rate for the conversion of Canadian dollars (CDN$)
into United States dollars (US$) in effect for each of the following periods, and the
average exchange rates (based on the average of the exchange rates on the last day of each
month) and the high and low exchange rates for each of the previous six months:

|                  
|------------------
|
|                  
|
|                  
|Average for Period
|                  

|               
|---------------
|
|               
|
|               
|High for Period
|Low for Period 
|               

Exchange rates are based upon the
noon buying rate in New York City for cable transfers in foreign currencies for customs
purposes by the Federal Reserve Bank of New York. The noon rate of exchange on April 30,
2003 as reported by the United States Federal Reserve Bank of New York for the conversion
of Canadian dollars into United States dollars was 0.6993 (US$1.00 = CDN$1.4300).

Certain figures in this Annual Report
are provided in Australian dollars (A$). The exchange rate between the Canadian dollar and
the Australian dollar is not fixed. The following table sets out the average exchange
rates for the conversion of Australian dollars into US$ in effect for each of the five
most recent fiscal years, based on the average of the exchange rates on the last day of
each month during the period and the high and low exchange rates for each of the previous
six months:

|                  
|------------------
|
|                  
|
|                  
|Average for Period
|                  

|               
|---------------
|
|               
|
|               
|High for Period
|Low for Period 
|               

Exchange rates are based upon the
noon buying rate in New York City for cable transfers in foreign currencies for customs
purposes by the Federal Reserve Bank of New York. The noon rate of exchange on April 30,
2003 as reported by the United States Federal Reserve Bank of New York for the conversion
of Australian dollars into United States dollars was 0.6262(US$1.00 = A$1.5970).

The information set forth in this
Form 20-F is as at April 30, 2003 unless an earlier or later date is indicated.

# B.  Capitalization and
Indebtedness

Not applicable

---

3

# C.  Reasons for the Offer
and Use of Proceeds

Not applicable

# D.  Risk Factors

An investment in the Common Shares of
the Registrant should be considered to be highly speculative due to the nature of the
Registrants business, the present stage of its projects and the risks inherent in
the development, construction, commissioning of metal mines and the processing and the
sale of nickel, cobalt, gold and silver products.

Some of the risks associated with an
investment in the Common Shares of the Registrant include, but are not limited to, the
following:

|i. | Tripartite Agreement Arbitration
|-- | --------------------------------

| | On
August 5, 2002 NN Investment Holdings SA (NNIH) issued a request for
arbitration through the International Court of Arbitration of the International Chamber
of Commerce (ICC) for the return of US$7,166,000 paid to the Registrant
pursuant to the terms of the Tripartite Agreement for the development of the New
Caledonia Nickel Project. In addition, NNIH is claiming US$1,368,222 spent on the project
plus costs. If the Registrant is unsuccessful in defending the claim against it, the loss
will have a material adverse effect on the capital resources available to the Registrant
and the financial performance of the Registrant.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ii. | Development Risks
|--- | -----------------

| | The
Registrant has no operating history in the business of nickel/cobalt mining and
processing or gold mining or diamond mining and has no current production facilities. The
Registrant has not previously financed, constructed and managed an integrated
mine/refinery facility. As such the Registrants ability to meet and maintain
production, timing and cost estimates for any of its projects cannot be assured. The
Registrant must complete feasibility studies for each project before it can determine
whether it should proceed with each project and accordingly, there can be no assurance
that the Registrant will operate profitably, or at all, in the future. There can be no
assurance that the results of such feasibility studies will indicate that the Registrant
should continue development of any of the projects. In the event that the results of such
feasibility studies are positive, there can be no assurance that the Registrant will be
able to successfully finance any of the projects. Technical considerations, delays in
obtaining government approvals, the inability to obtain financing or other factors could
cause delays in developing the projects. Such delays could materially adversely affect
the financial performance of the Registrant.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Continuous
operations tests will be required on the nickel project before the full engineering
parameters of the technology are established for the application of Pressure Acid Leach (PAL)
technology. If these tests demonstrate lower levels of extraction than expected, this
could materially adversely affect the Burundi Nickel Project and the financial
performance of the Registrant. There can be no assurance that the Registrants
testwork will successfully identify all potential problems with the process technology,
and if it does not the Registrants financial performance could be materially
adversely affected. While the process technology that is likely to be employed at the
Kremnica Gold Project is well established, there can be no assurance that the Registrants
implementation of that process technology will be completely successful (or that the
process will prove
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

4

| | appropriate
for the geology of the project site), which could materially adversely affect the
Registrant.
| | ---------------------------------------------------------------------------------------------------------

|iii. | Additional Financing Requirements
|---- | ---------------------------------

| | The
Registrants operations currently do not provide any cash flow. In the past the
Registrant has relied on sales of equity securities to meet its cash requirements. There
can be no assurance that future operations will provide cash flow sufficient to satisfy
operational requirements and cash commitments, or that additional equity financing will
be available on terms acceptable to the Registrant, or at all.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Registrant presently has sufficient financial resources to maintain its current level of
programs for at least the remainder of its fiscal year. Property acquisitions or changes
in the scope of the Registrants operations may require additional funding. The
Registrants operational budget is based in part on estimates provided by
independent contractors. In the past these estimates have proven to be less than amounts
ultimately paid by the Registrant, largely resulting from changes in the project. Failure
of the Registrant to obtain additional financing, if and as required, on a timely basis
could delay some or all of the Registrants projects. The Registrant is subject to a
timetable in the development of the Burundi Nickel Project, which if breached could
result in a termination of the Mining Convention which would materially adversely affect
the Registrants ability to complete the Burundi Nickel Project as defined below
(see Item 4  BusinessOverview  Burundi Nickel Project).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Construction
of any of the projects will require that the Registrant raise substantial project
financing. The Registrant has not previously completed financing of a development project
and a financing of this magnitude will be dependent on a large number of factors beyond
the Registrants control, including the state of financial and equity markets,
interest rates, currency exchange rates between Australia, the U.S., the Slovak Republic
and Burundi, commodity prices for nickel, cobalt, sulphur, gold and silver, energy prices
and other factors. Failure by the Registrant to finance any of the projects could
materially adversely affect the Registrants future financial performance.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|iv. | Operational Risks
|--- | -----------------

| | The
business of mining and processing is generally subject to certain types of risks and
hazards, including fires, power outages, labour disruptions, the inability to obtain
suitable or adequate land, machinery, equipment, or labour, environmental hazards,
industrial accidents, unusual or unexpected rock formations, cave-ins, flooding, finished
product losses, theft, periodic interruptions due to inclement or hazardous weather
conditions and political risk. Such risks could result in damage to, destruction of or
expropriation of mineral properties or production facilities, personal injury,
environmental damage, delays in mining, monetary losses and possible legal liability.
Projects may also be affected by risks of fluctuations in exchange rates and inflation.
No assurance can be given that insurance to cover these risks will be available at
economically feasible premiums. Insurance against environmental risks (including
potential for pollution or other hazards as a result of the disposal of waste products
occurring from production) is not generally available to the Registrant or to other
companies within the industry. To the extent that the Registrant is subject to
environmental liabilities, the payment of such liabilities would reduce or exhaust the
funds available to the Registrant. Should the Registrant be unable to fund fully the cost
of remedying an environmental problem, the Registrant might be
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

5

| | required
to suspend operations or enter into interim compliance measures pending completion of the
required remedy.
| | -------------------------------------------------------------------------------------------------------------------

|v. | Fluctuations in Metals Prices
|-- | -----------------------------

| | The
mining industry in general is intensely competitive and there is no assurance that, even
with commercial quantities of mineral deposits discovered, a profitable market will exist
for the sale of the metals produced. Factors beyond the control of the Registrant may
affect the marketability of any substances discovered. The prices of various metals have
experienced significant movement over short periods of time, and are affected by numerous
factors beyond the control of the Registrant, including international economic and
political trends, expectations of inflation, currency exchange fluctuations, interest
rates and global or regional consumption patterns, speculative activities and increased
production due to improved mining production methods. The supply of and demand for metals
are affected by various factors, including political events, economic conditions and
production costs in major producing regions. There can be no assurance that the price of
any metal will be such that the Registrants properties can be mined at a profit.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Registrant does not currently hedge any of its proposed future production, but may do so
in the future.
| | -----------------------------------------------------------------------------------------------------------

|vi. | Uncertainty of Title
|--- | --------------------

| | Third
parties may dispute the Registrants rights to its mining and other interests. While
the Registrant has investigated title to all its property interests and, to the best of
its knowledge, title to all properties is in good standing, this should not be construed
as a guarantee of title.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Potential
project sites in Burundi and Slovakia may be subject to dispute, prior unregistered
claims, or native land claims and ultimate transfer to the Registrant may be affected by
undetected defects. Such claims or defects could materially adversely affect one or more
of the projects and the Registrants financial performance.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|vii. | Foreign Countries and Regulatory Requirements
|---- | ---------------------------------------------

| | The
current or future operations of the Registrant, including development activities and
commencement of production on its properties, require permits from various foreign,
federal, state and local government authorities and such operations are and will be
governed by existing and possible future laws and regulations governing prospecting,
development, mining, production, exports, taxes, labour standards, occupational health,
waste disposal, toxic substances, land use, environmental protection, mine safety and
other matters. Companies engaged in the development and operation of mines and related
facilities generally experience increased costs and delays in production and other
schedules as a result of the need to comply with applicable laws, regulations and
permits. Permitting for the commencement of mining operations on any of the properties in
which the Registrant has an interest will require further processing by government
agencies, however, the Registrant does not anticipate being in a position to apply for
any of the required permits to commence operations on its properties until the third
quarter of 2004 at the earliest. The Registrants management does not expect that
any of its properties will have progressed to completion of a feasibility study prior to
such time, and the Registrant would not commence operations on any property until a
feasibility study has been prepared on that property.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

6

| | The
Registrant believes it is in substantial compliance with all material laws and
regulations which currently apply to its activities. There can be no assurance, however,
that all permits which the Registrant may require for construction of mining facilities
and conduct of mining operations will be obtainable on reasonable terms or that such laws
and regulations would not have an adverse effect on any mining project which the
Registrant might undertake.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|viii. | Political Risk and Political Risk Insurance
|----- | -------------------------------------------

| | The
Registrant is exposed to political risk as it has projects in areas which may be subject
to unstable political situations. The Registrant has not applied for political risk
insurance through the Canadian Export Development Corporation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Canadian government, through the Export Development Corporation, may provide insurance to
cover unforeseen political risk. In deciding whether to provide insurance coverage, the
Canadian government considers the following factors: whether the Registrants
activities involve economic advantages to Canada, such as the development and
preservation of foreign markets or the securing of sources of raw materials not available
in Canada; whether there are economic advantages to the host country, such as expansion
of employment; whether there is host government approval of the proposed activity; and
the size and nature of the activity; however, as a matter of policy, the Canadian
governments insurance program covers almost any right that a Canadian company may
acquire in a foreign enterprise, including equity, loans, management contracts and
royalty and licensing agreements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Specifically,
the Registrants Burundi Nickel Project is located at Musongati in Burundi in
Central Africa where there has been a recent history of political conflict between the
various tribal groups. These groups are seeking to share political and military power.
Attempts have been made by the international community to broker an agreement which will
allow for an end to the conflict and a peaceful transition of power. The instability
within the country gave rise to a declaration of force majeure by the Registrants
subsidiary in April 2000. Following the implementation of a transitional government in
Burundi in November 2001 as a result of the peace accord signed by most of the parties
and a subsequent improvement in general security, the declaration of force majeure was
lifted on March 28, 2002. Force majeure was re-imposed in August 2002 following a
significant deterioration in security in Burundi. In the event that the political and
security situation does not improve the Registrants ability to proceed with the
Burundi Nickel Project will be materially adversely affected.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ix. | Environmental Factors
|--- | ---------------------

| | While
the Registrant has reviewed the existing environmental legislation of each country in
which it has a project, these assessments are preliminary. The Burundi Nickel Project and
the Kremnica Gold Project are at an earlier stage and hence require substantially more
work. The Burundi Nickel Project and the Kremnica Gold Project will be required to meet
World Bank standards or regulations of the local governments, whichever is more
stringent. Therefore, existing and possible future environmental legislation, regulations
and actions in Burundi and/or the Slovak Republic could cause additional expense, capital
expenditures, restrictions and delays in the Registrants activities undertaken in
connection with the projects. The continued conduct of each of the Registrants
projects depends, to a large extent, on the obtaining and maintaining of environmental
approvals and there is no assurance that such approvals will be granted when requested.
Delays in the granting of
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

7

| | such
approvals and/or changes in environmental legislation and regulations could materially
adversely affect the Registrants operations and financial performance.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|x. | Infrastructure Issues
|-- | ---------------------

| | The
Burundi Nickel Project will require significant infrastructure upgrades, particularly
relating to transportation (rail, road and neighbouring country harbour) as well as the
provision of additional electrical power. Delays in infrastructure upgrades or the
requirement for the Registrant to finance such upgrades may materially adversely affect
the Registrants financial performance.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xi. | Reliance on Key Personnel
|--- | -------------------------

| | The
Registrant is heavily dependent upon the expertise of certain of its own and its
subsidiaries key officers, such as Peter Lloyd and Cecil Bond. The loss of the
services of one or more of these individuals could have a material adverse effect on the
Registrant. The Registrants ability to recruit and retain highly qualified
management personnel is critical to its success. There can be no assurance that the
Registrant will be successful in attracting and retaining skilled and experienced
management; if it is unable to do so this may materially adversely affect the Registrants
financial performance.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xii. | Conflicts of Interest
|---- | ---------------------

| | Certain
directors, officers or promoters of the Registrant are directors, officers, significant
shareholders or promoters of other publicly listed companies. As a result, potential
conflicts of interest may arise with respect to the exercise by such persons of their
respective duties for the Registrant. In the event that such a conflict of interest
arises at a meeting of the directors of the Registrant, a director who has such a
conflict will abstain from voting for or against the approval of such participation or
such terms. In the appropriate cases, the Registrant will establish a special committee
of independent directors to review a matter in which several directors, or management,
may have a conflict. Other than as indicated, the Registrant has no other procedures or
mechanisms to deal with conflicts of interest.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xiii. | Absence of Dividends
|----- | --------------------

| | The
Registrant has never declared or paid cash dividends on its Common Shares and does not
anticipate doing so in the foreseeable future. There can be no assurance that the
Registrants Board of Directors will ever declare cash dividends, which action is
exclusively within its discretion. Investors cannot expect to receive a dividend on the
Registrants Common Shares in the foreseeable future, if at all.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xiv. | Currency Fluctuation
|---- | --------------------

| | The
Registrant maintains its banking accounts mostly in Australian dollars. The Registrants
office in Canada (using Canadian dollars) and proposed operations in Burundi (using
Burundian francs) and in Slovakia (using Slovak korunas) and the proposed sale of metals
which are priced in U.S. dollars make it subject to foreign currency fluctuations and
such fluctuations may materially affect the Registrants financial position and
results from operations. The Registrant does not currently engage in hedging activities.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xv. | Competition
|--- | -----------

| | The
Registrant competes with other development companies which have similar operations, and
many such competitor companies have operations and financial resources and industry
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

8

| | experience
far greater than those of the Registrant. Nevertheless, the market for the Registrants
potential future production of nickel, cobalt, gold and silver tends to be
commodity-oriented rather than company-oriented. If it successfully reaches commercial
production, the Registrant will still be subject to competition from much larger and
financially stronger competitors and such competition may materially adversely affect the
Registrants financial performance.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xvi. | Dilution
|---- | --------

| | The
Registrant may in the future grant to some or all of its own and its subsidiariesdirectors,
officers, insiders and key employees options to purchase the Registrants Common
Shares as non-cash incentives to those employees. Such options may be granted at exercise
prices equal to market prices at times when the public market is depressed. To the extent
that significant numbers of such options may be granted and exercised, the interests of
then existing shareholders of the Registrant will be subject to additional dilution.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Registrant is currently without a source of revenue and will most likely be required to
issue additional shares to finance its operations and, depending on the outcome of the
feasibility studies, may also issue substantial additional shares to finance the
construction of any or all of its projects.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xvii. | Volatility of Common Share Price and Volume
|----- | -------------------------------------------

| | The
Registrants Common Shares are listed for trading on the Australian Stock Exchange (ASX).
The Registrants listing on the CDNX was voluntarily terminated on October 4, 2001
due to lack of trading volume. Shareholders of the Registrant may still be unable to sell
significant quantities of the Common Shares into the public trading markets without a
significant reduction in the price of the shares, if at all. Furthermore, there can be no
assurance that the Registrant will continue to be able to meet the listing requirements
of the ASX or achieve listing on any other public trading exchange. The market price of
the Common Shares may be affected significantly by factors such as changes in the
Registrants operating results, the completion or delay of a positive feasibility
study, the availability of construction financing, fluctuations in the price of metals,
the interest of investors, traders and others in small exploration stage public companies
such as the Registrant and general market conditions. In recent years the securities
markets in Australia have experienced a high level of price and volume volatility, and
the market price of securities of many companies, particularly small capitalisation
exploration companies similar to the Registrant, have experienced wide fluctuations which
have not necessarily been related to the operating performances, underlying asset values
or future prospects of such companies. There can be no assurance that future fluctuations
in the price of the Registrants shares will not occur.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|xviii. | Adverse
Tax Consequences to U.S. Shareholders Resulting From the           Registrants PFIC
Status
|------ | ---------------------------------------------------------------------------------------------------

| | The
Registrant believes that it qualified as a passive foreign investment company (PFIC)
for the fiscal year ended December 31, 2002 and may qualify as a PFIC in the future with
respect to U.S. Holders of the Registrants Common Shares because the only source of
income is interest, a passive source of income under the PFIC rules.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | See
Item 10 Additional Information  Taxation  United States Federal Income Tax
Consequences for a more detailed discussion of material United States federal income
tax consequences for U.S. shareholders.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

9

Item 4  Information
on the Company

# A.  History and
Development of the Company

Argosy Minerals Inc was incorporated
in the Province of Alberta pursuant to the Business Corporations Act (Alberta) on December
17, 1985, was continued under the Canada Business Corporations Act on September 24, 1987
and was continued pursuant to the Business Corporations Act (Yukon) on June 17,
1997.

The head office and address for
service of the Registrant is 20607 Logan Avenue, Langley, British Columbia, V3A 7R3,
Canada  tel. (604) 530-8436 and its registered and records office in Canada is
located at 3081 Third Avenue, The Drury Building, Whitehorse, Yukon, Y1A 4Z7, Canada
 tel. (867) 668-4405. Its registered office in Australia is Suite 3, Parkview, 23
Richardson Street, South Perth, Western Australia, Australia 6151  tel. (011)
618-9474-4178.

In May 1998, the Registrant revised
the scope of its nickel project to improve the economics of the project by reducing the
anticipated costs associated with transporting ore from New Caledonia to Australia. The
revised scope included a joint venture equity participation in SMTs Nakety
concessions, whereby the Registrant would complete a feasibility study for the mining and
processing of the ore in New Caledonia. A Heads of Agreement was signed, subject to
further negotiation and finalisation, to form a joint venture company that would undertake
the construction of a mine and processing facility to be located in the Nakety region of
New Caledonia. This agreement was superseded by a Tripartite agreement between the
Registrant, SMT and Norilsk, signed in October 2001, under which Norilsk would complete a
Bankable Feasibility Study by December 2004. On August 5, 2002 the Registrant received a
termination notice from Norilsk subsidiary NNIH, terminating its involvement in the New
Caledonia Nickel Project. The termination by NNIH effectively terminated the
Registrants interest in the New Caledonia Nickel Project. In addition NNIH, through
the ICC, issued a request for arbitration for the return of US$7,166,000 paid to the
Corporation as a re-imbursement of expenditures paid on signing of the Tripartite
Agreement plus expenditures of US$1,368,222 and the costs of arbitration. The Corporation
believes the claim is without merit and is vigorously defending the claim. In addition,
the Corporation has filed a counterclaim against NNIH. See Item 4 B1 Information on
Company  Business Overview  New Caledonia Nickel Project.

Effective May 7, 1999 the Registrant
entered into a Plan of Arrangement (the Plan) whereby the Registrant acquired
Argosy Mining Corp (AMC). Pursuant to the Plan, the shareholders of AMC
exchanged their shares for shares of the Registrant on the basis of 5 AMC shares for 3 new
shares of the Registrant, the Registrant changed its name from Calliope Metals Corporation
to Argosy Minerals Inc and changed its year end to December 31 from April 30. As the
shareholders of AMC as a group acquired control of the Registrant the transaction was
accounted for as a reverse takeover.

AMC, a Yukon company, is involved in
mineral exploration and has a gold project in the Slovak Republic and a nickel project in
the Central African Republic of Burundi.

During 1998, AMC purchased an 18.35%
interest in Andover Resources N.L. (Andover), an Australian company and owner
of the Musongati Nickel Project. In March 1999, AMC acquired the 81.65% of Andover not
already owned through the issue of 53,371,808 shares having a value of $6,938,336.

---

10

Principal Capital
Expenditures and Divestitures

The Registrant has financed capital
expenditures on its mineral resource projects from funds available after completion of the
Plan and receipt of funds from Norilsk as follows:

|                             
|-----------------------------
|
|                             
|Burundi Nickel Project       
|                             
|Kremnica Gold Project        
|                             
|New Caledonian Nickel Project
|                             

|1. | The Registrant acquired the Kremnica Gold Project and the Burundi
Nickel Project                during the year ended December 31, 1999 following the
completion of the Plan                whereby AMC became a wholly-owned subsidiary of the
Registrant.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | On August 5, 2002, NNIH terminated its involvement in the New
Caledonia Nickel                project which resulted in the loss of the project.
Consequently, during the year                ended December 31, 2002, the Registrant
wrote off its remaining interest in the                project in the amount of
$2,539,625.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | During the year ended December 31, 2002 the Registrant wrote down
its investment                in the Burundi Nickel Project by $7,973,049 to $nil due to
the ongoing political                and security problems in the country.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Where exploration on its mineral
projects prove unsatisfactory, the Registrant disposes of the project and writes off
expenses and deferred costs associated with that project. No expenditures were written off
over the last 3 years due to unsatisfactory exploration results. In addition, the
Registrant reviews the carrying costs of each of its investments quarterly and writes down
mineral properties and deferred costs associated with projects whose carried costs may not
be recoverable. Mineral properties and deferred costs written down over the last 3 years
due to continued low metals prices, political instability, the loss of the project or the
inability to introduce a joint venture partner or sell the underlying project are as
follows:

|                            
|----------------------------
|
|                            
|Burundi Nickel Project      
|                            
|New Caledonia Nickel Project
|                            
|Kremnica Gold Project       
|                            

Note: No mineral properties or
deferred costs were written down during the years ended December 31, 2000.

Over the next year, the Registrant
proposes to finance the following capital expenditures on its projects:

|                      
|----------------------
|
|                      
|Burundi Nickel Project
|                      
|Kremnica Gold Project 
|                      

|1. | Subsequent to December 31, 2002, the Registrant entered into an agreement for           the sale of
the Kremnica Gold Project. In the event that the sale closes,           proposed
expenditures for 2003 is $25,000.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | The Registrant is seeking new opportunities and subsequent to December 31, 2002           has
entered into agreements over the Albetros Diamond Project in South Africa           and
the Beregove, Kvasove and Muzhievo gold region in Ukraine. Capital
          expenditures, if any, will only be determined for these projects once due
          diligence has been completed.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# B.  Business Overview

The Registrant is a Yukon corporation
involved in the exploration and future development of mineral resources. Its Common Shares
are listed for trading on the ASX under the trading symbol AGY. At December
31, 2002, following the termination of the New Caledonia Nickel Project, the Registrant
had two projects: the Musongati Nickel Project and the Kremnica Gold Project, as defined
below. All of the Registrants projects are located outside of North America and none
are currently in production. The Registrant does not have a source of revenue other than
interest income from cash balances.

To date the Registrant has not earned
any revenues

---

11

1.  New Caledonian Nickel
Project

The New Caledonian Nickel Project was
a proposed joint venture to explore the feasibility of mining and processing lateritic
nickel-cobalt ore to produce nickel and cobalt metal in New Caledonia.

Tripartite Agreement

The Registrant had previously entered
into a Heads of Agreement with SMT to carry out a feasibility study, at the
Registrants risk, for the development of a nickel refinery based upon SMTs
mining concessions at Nakety and at Bogota. The Heads of Agreement also provided for a
joint venture to be established between the Registrant and SMT to develop the project. On
July 25, 2001, the Registrant announced JSC MMC Norilsk Nickel had taken the
positive decision to proceed with the Nakety/Bogota Project in New Caledonia by completing
the bankable feasibility study leading to the joint development with the Registrant and
SMT of the project. A Tripartite Agreement (the Agreement) between NNIH, a
wholly owned subsidiary of the group Norilsk Mining Company (Norilsk), SMT and
the Registrants subsidiary Balzan was signed on October 16, 2001. Under the terms of
the Agreement, Norilsk reimbursed the Registrant 45% of its costs incurred to date, or
US$7.166 million (Cdn$11,307,948). On August 5, 2002 the Registrant received a termination
notice from NNIH, terminating its involvement in the New Caledonia Nickel Project. The
termination by NNIH effectively terminated the Registrants interest in the New
Caledonia Nickel Project. In addition NNIH, through the ICC, issued a request for
arbitration for the return of US$7,166,000 paid to the Registrant as a re-imbursement of
expenditures paid on signing of the Tripartite Agreement plus expenditures of US$1,368,222
and the costs of arbitration. The Registrant has denied all allegations made by NNIH in
its request for arbitration and have instructed their attorneys to vigorously defend
against such claims. The Registrant further reserves its rights to take action against
NNIH and others for the loss and damage suffered as a result of NNIHs actions. Based
on the advice received from its French Counsel, The Registrant is of the view that it has
a strong defence to the claim made by NNIH, which it considers to be without merit.

NNIH had, in accordance with the
terms of the Agreement, agreed to bear a portion of the previously expended costs of the
project in the amount of US$7,166,000 and had undertaken to complete the Bankable
Feasibility Study at the cost of US$15,000,000 (a total of US$22,166,000) in consideration
of which, NNIH would acquire the right to earn a 45% interest in the project.

The wrongful termination of the
Agreement has denied the Registrant the expenditure of US$15,000,000 to carry out the
Bankable Feasibility Study, and deprived the Registrant of its right to fully exploit the
New Caledonia nickel project. As a result the Registrant has lost the opportunity to fully
value its 45% interest in the project. The Registrant has therefore filed a counter claim
for damages for wrongful termination of the Agreement by NNIH and has reserved its right
to claim from NNIH consequential damages.

2.  Burundi Nickel Project
 Musongati

The Burundi Nickel Project is a
proposed venture to mine and process lateritic nickel-cobalt ore to produce nickel and
cobalt metal in Burundi. The Registrant expects that the nickel laterite deposits at
Musongati, identified by previous exploration work conducted between 1972 and 1990 by
other parties, are sufficiently large to support a mining operation with a life exceeding
20 years  see Special Note Regarding Forward-Looking Statements.
Testwork by Universal Oil Products in 1978-79 indicated the ore is amenable to leaching
using the PAL process, followed by counter current decantation and iron precipitation,
prior to the precipitation of an intermediate product which may then be further refined to
produce LME grade nickel and LMB grade cobalt.

---

12

The Burundi Nickel Project is based
on three nickel cobalt laterite deposits. Considerable exploration and engineering work
was completed on the deposits in the period 1972 to 1990. The major deposit known as
Musongati was drilled and evaluated the most. The other two deposits, Waga and Nyabikere
are far less advanced but have potential to supply the project with quantities of
high-grade saprolite ore. The Musongati deposit also has anomalous platinum-group-metal
concentrations, along with indications of sulphide mineralisation underlying the
laterites.

Mining Convention

In 1998, Andover Resources N.L.
(Andover), now a wholly-owned subsidiary of the Registrant, negotiated a
Mining Convention (the Convention) with the Government of Burundi to explore
and develop the Musongati deposits. The Convention was ratified by the Burundian National
Assembly on March 10, 1999, giving the Registrant the exclusive right to develop the
Musongati deposit. The Convention is a comprehensive agreement that awards mineral rights
to the Registrant and sets out a work program and a detailed framework for future
development and operation of a mine. During the initial 3-year exploration period,
geological and engineering studies were to be completed, leading to a full project
feasibility study. The Registrant planned a staged exploration program including scoping
and pre-feasibility studies that would lead to a full feasibility study. The program
included drilling, ore reserve estimations, metallurgical testing, infrastructure studies
and an environmental impact study. Upon completion of the feasibility study and a decision
to proceed, the agreement provides for the awarding of a mining title known as a Mining
Concession. The term of the Mining Concession is 25 years, renewable twice for successive
periods of 10 years. A new Burundian company in which the Burundian government will have
15% interest, will be incorporated to develop and operate the project. Within 30 days of
receipt of project finance for full mine development, the government will be reimbursed
their previous expenditure of US$8.3 million. A 5-year tax holiday will apply to the
project, followed by a 35% income tax rate. Mine equipment, materials and fuels will be
tax and duty exempt. Force majeure and international arbitration provisions normal to the
industry apply.

Technology

Previous metallurgical studies
identified PAL as a suitable process technology for Musongati. These studies provide
initial benchmark results, which will require further testwork to optimise the specific
PAL process plant design.

Project Information

The proposed mine and plant is to be
situated at the Musongati deposit located approximately 120 km east-southeast of
Bujumbura, the capital of Burundi. Burundi is a small country located in Central Africa
and borders the western edge of Tanzania.

|(a) | Land
|--- | ----

| | An
exploration licence covering 171.1 km2 was granted March 18, 1999 for three
years covering the Musongati deposit; the Waga and Nyabikere deposits are reserved for
Andover pending the completion of a feasibility study at Musongati. The Musongati
exploration licence, extended in April 2002 following the withdrawal of the declaration
of force majeure, is valid until April 2004. Due to the deterioration in security
in Burundi, force majeure was re-imposed on August 1, 2002. The Musongati licence area is
sparsely populated due in part to the poor lateritic soil.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

13

|(b) | Transportation
|--- | --------------

| | Burundi
is accessed by roads which are mostly in good condition. A network of trails and roads
crosses the main areas of the licence. During construction and operation, the Burundi
Nickel Project will require the importation of significant quantities of goods not
locally available. As Burundi is a landlocked country, approximately 1100 km from the
Indian Ocean, transportation infrastructure is a key issue to the economics of the
project. Initial investigations have determined both the preferred route, as well as
which consumables will need to imported. The preferred transportation corridor is from
the port of Dar es-Salaam in Tanzania on the east coast of Africa, by the existing
railway to Kigoma, just south of Burundi. From there, a regional road network will be
utilised to truck material north to Musongati. Most of the parts necessary to construct
the plant will have to be imported and transported along this route. The major
consumables once production commences will be fuel, sulphur (for acid) and dolomite (as a
neutralising agent). Fuel and sulphur will be sourced on the world markets and shipped
via the above route, while dolomite will be sourced locally within Burundi and trucked to
Musongati. There can be no assurance that such consumables will be available or
deliverable to the Registrant at prices that would make the Burundi Nickel Project
economically feasible.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Services
|--- | --------

| | Burundi
has access to electricity via hydroelectric facilities in the country and elsewhere in
the region. The existing national electricity grid does not currently have enough
capacity to provide power to the Burundi Nickel Project. The Registrant intends to
generate electricity via fuel-powered generator sets or alternatively to utilise new
sources of electricity. There is potential to generate electricity by steam co-generators
powered by the sulphuric acid plant. A number of independent proposals to create or
expand hydroelectric facilities in the country and in the region, which could be
advantageous to the project, are at the planning stage. There can be no assurance that
sufficient access to electricity will exist in the future or can be created to power the
Burundi Nickel Project.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Tailings
|--- | --------

| | The
process residue (or tailings) that remains after the production of nickel and cobalt will
be safely stored in tailings impoundment areas in the general vicinity of the processing
plant. The Registrant began to identify suitable areas in 1999 which would require
further study as part of the feasibility study.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Environment
|--- | -----------

| | The
Convention specifies a requirement for an environmental impact study as part of the
feasibility study. World Health Organization standards are to be the reference standards
and the Convention allows for a minimum monitoring/maintenance period of two years
following the completion of mining.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Permitting/Approvals
|--- | --------------------

| | The
Convention requires that the government issue Mining Title to the Registrant within three
months of application following the completion of a feasibility study and the decision to
proceed to development of the mine.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Registrant provided to the
government a staged work program and scheduled a costing study to up-date the previous
studies and leading to a full project feasibility study in 2001. Due to regional security
issues delaying this work program, a state of force majeure was declared by the

---

14

Registrant in April 2000, and
subsequently lifted on March 28, 2002. Security deteriorated during 2002 leading to the
re-imposition of force majeure in August, 2002.

Plan of Operations

The Registrants plan of
operations for the Burundi Nickel Project was to develop a PAL plant to produce nickel,
cobalt and possibly copper and by-product platinum group metals (PGMs) from
the nickel laterite deposits at Musongati. The plan was based on previous studies and
involved a feasibility study which would focus on the transportation, logistics and
infrastructure issues, as well as metallurgy and environmental aspects. On April 19, 2000
the Registrants subsidiary Andover declared force majeure due to delays to the
feasibility study caused by security issues in the region. As a result of this
declaration, activities on the project were suspended. Pursuant to the Convention,
Andovers obligations under the Convention were suspended for a period of up to 2
years while the declaration of force majeure was in effect. The declaration of force
majeure was lifted on March 28, 2002 and the rights and obligations pursuant to the
Convention have been extended by the period of force majeure. Due to the deterioration in
security in Burundi, force majeure was re-imposed on August 1, 2002. Pursuant to the
Convention, all obligations under the Convention are suspended for a period of up to two
years while the declaration of force majeure is in effect.

During 2002, the Registrant engaged
the international engineering firm Sinclair Knight Merz (SKM) to conduct a
critical cost review of the Burundi Nickel Project. The study concluded that the project
may prove uneconomic if one were to simply attempt to exploit the nickel laterite orebody.
However, due to the fact that the laterite orebody overlies a large basic/ultrabasic
instrusive complex containing known nickel sulphide and associated PGMs it may provide an
opportunity for a staged development utilizing the PGM potential at Musongati.

In order for the Registrant to
complete the current stage of the development of the Burundi Nickel Project there must be
a sustained return to political stability and security following which, it must undertake
various steps, including the following:

|1. | secure a commitment from a financial and/or technical joint venture
partner;
|-- | ----------------------------------------------------------------------------

|2. | establish the PGM potential at Musongati;
|-- | -----------------------------------------

|3. | complete the feasibility study;
|-- | -------------------------------

|4. | obtain any necessary approvals and permits required in order to
operate the                nickel processing facility;
|-- | ----------------------------------------------------------------------------------------------------------------------

|5. | acquire the right to lands on which the nickel and cobalt processing
facility                and associated infrastructure will be constructed; and
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|6. | create a Burundian company to be owned 85% by the Registrant and 15%
by the                government of Burundi.
|-- | -----------------------------------------------------------------------------------------------------------------

Once the Registrant completes these
steps in its current stage of activity, and if the results of the feasibility study are
positive, the second stage in the development of the Burundi Nickel Project which the
Registrant must undertake is to obtain project financing to raise the funds necessary to
be able to acquire the land and construct the processing facilities. The third and final
stage in the development of the Burundi Nickel Project would be the construction and
commissioning of the

---

15

processing facilities. There can be
no assurance that any of the preceding steps will be completed to allow for the Burundi
Nickel Project to move forward.

3.  Kremnica Gold Project

The Kremnica Gold Project is located
in the Slovak Republic, in central Europe west of the town of Kremnica, 145 km
east-northeast of Bratislava. Gold mining at Kremnica started in the 8th century, with
records of production beginning in 1328. Recorded production on the Kremnica Mining
Licence was 1.5 million ounces of gold and 6.7 million ounces of silver up to the
cessation of mining in 1992. Extensive underground exploration on the licence funded by
the Slovak government in 1980-1992 has been supplemented by AMC drilling 79 diamond drill
holes for 12,300 metres. Both datasets have been utilised to estimate mineralisation.
Initial metallurgical studies on the ore have been completed and indicative input costs
tendered or estimated. The Registrant generated a conceptual economic evaluation to
identify operating costs, which were estimated to be in the range of US$173-190 per ounce
of gold (including a credit for by-product silver produced), based on the economic
parameters that prevailed in March 1998. During the year ended December 31, 2001, the
Registrant wrote down its 100% owned investment in the Kremnica Gold Project due to
continued low gold prices and the Registrants difficulty in introducing a joint
venture partner or being able to sell the project. The project was written down by
$7,533,332 to its estimated net recoverable amount of $250,000. During the year ended
December 31, 2002, $90,512 incurred on preparing the property for sale and maintaining the
property was deferred for a carrying value of $340,512.

|(a) | Land
|--- | ----

| | The
Registrant owns the Kremnica Mining Licence, and a surrounding Exploration Licence
totalling 14.56 square kilometres. The licences do not include surface rights. The
Registrant started a process in 1999, in conjunction with local government, to identify
surface ownership in the area and this process continues. There can be no assurances that
surface ownership can be identified on a timely basis or that claims will not arise that
would delay or halt the Kremnica Gold Project.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Transportation
|--- | --------------

| | Access
to the property is provided by paved road from the town of Kremnica. A rail network
passes within 3.7 km of the property. The property also has a network of unpaved access
roads in place. Logistics for the project are not expected to be a significant aspect of
the project, relative to most mining projects.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Services
|--- | --------

| | The
Slovak Republic has established heavy and manufacturing industries. Electricity, fuel and
water are locally available. The Registrant received indicative quotes for the supply of
all required inputs as part of its conceptual economic evaluation of the Kremnica Gold
Project.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Tailings
|--- | --------

| | The
Registrant, with the help of external consultants, identified potential tailings areas
for the safe storage of process residues. Detailed studies are required to determine the
geotechnical suitability of the potential sites and issues of permitting and absentee
landowners require further investigation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

16

|(e) | Environment
|--- | -----------

| | The
Kremnica Mining Licence does not have attached to it any liability for environmental
matters caused by historic mining activity. A proposed new mine must meet World Bank
guidelines for environmental protection or the environmental regulations of Slovakia,
whichever are more strict. The Registrant has had positive discussions with various
local, regional and national authorities in Slovakia regarding environmental protection
as part of the permitting process.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Permitting/Approvals
|--- | --------------------

| | The
Registrant has established an informal framework with various Slovak governmental
authorities for the future permitting of a proposed mine at Kremnica. This process is in
progress and will be an integral part of a feasibility study on the Kremnica Gold
Project.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Based on the projected operating cost
for the mine, the ability of the project to attract finance would be limited at current
prevailing gold prices below US$350 per ounce. The Registrant continues to work with the
Slovak government to determine the level of development assistance available to the
Kremnica Gold Project, including the corporate tax holiday legislation for foreign
investors. There are on-going efforts to attract a joint-venture partner to the project,
primarily to assist in the delineation of additional resources and to provide operating
expertise for a future mine at Kremnica. Subsequent to December 31, 2002, the Registrant
announced that it had entered into an agreement for the sale of the Kremnica Gold Project.

Plan of Operations

The Registrant continues to pursue
avenues to secure a potential joint venture partner or the sale of its Kremnica Gold
Project, and, on March 21, 2003, announced the sale of the Project to Tournigan Gold
Corporation subject to the conclusion of a 90 day due diligence satisfactory to Tournigan.
At the same time, efforts continue on issues that form part of the feasibility study.

In order for the Registrant to
complete the current stage of the development of the Kremnica Gold Project, it would need
to secure a joint venture partner to complete a feasibility study, and complete the
permitting process with the Slovak government. This permitting process includes
discussions on development incentives, as well as further study of land ownership in the
areas required by the project. Once the current stage of development is complete, the
activities in subsequent stages will be guided by the decisions of the joint venture
partners. There can be no assurance that a suitable joint venture partner will be found.

C.  Organizational
Structure

The following chart represents the
inter-corporate relationships between the Registrant and its wholly-owned subsidiaries, as
well as the jurisdiction of incorporation of each of these entities.

---

17

|
|

D.  Property, Plants and
Equipment

The Registrant at December 31, 2002
did not have any plants and equipment, mines or producing properties.

The Registrant owns mineral
properties as part of its business, as described in Item 4  Business
Overview. These include the following:

|                                     
|-------------------------------------
|
|                                     
|Kremnica Gold Project                
|                                     
|Kremnica Mining Licence              
|                                     
|Kremnica Exploration Surround Licence
|                                     
|Burundi Nickel Project               
|                                     
|Musongati Exploration Licence        
|                                     

1.  Burundi Nickel Project
 Musongati

Musongati lies at an elevation of
1700 m, in the tropical highlands of Burundi, about 1000 m above Lake Tanganyika. The
outlying Waga deposit is 30 km west of Musongati and the Nyabikere deposit is 40 km north.

The Musongati laterites are derived
from the weathering of an ultrabasic complex, particularly, serpentinised dunite with a
primary nickel content of about 0.3%. Two types of mineralisation are present in
approximately equal proportions: limonite and saprolite (a less weathered laterite rock
type generally found beneath limonite). Nickel in the limonite mineralisation is tied to
goethite whereas in the saprolite mineralisation it is related to serpentine group and
clay minerals. The typical weathering profile is canga (iron caprock), the limonite zone
(averaging 15 m thick), the saprolite zone (averaging 12 m thick) and ultrabasic bedrock.

---

18

The Musongati nickel/cobalt deposit
is situated within the Musongati Exploration Licence on three adjacent plateaux as a
result of erosion of a single layer of laterite. The plateaux are referred to from west to
east as the Geyuka, Rubara and Buhinda zones, of which Buhinda is the most significant and
best defined. Historical exploration (by diamond drilling) was completed in three stages
from 1975 to 1990, by different parties with different objectives. A total of 237 holes
were drilled at Musongati, while 81 holes were drilled at Waga and Nyabikere. Due to the
large size of the mineralised area, an effort directed to identifying zones with a high
nickel content resulted in a greater focus on the Buhinda Zone.

2.  Kremnica Gold Project

The Kremnica area in the Slovak
Republic has moderate topography, which ranges in elevation from 450 m to about 900 m
above sea level. The Kremnica Gold Project covers a number of specific zones of interest.
The best defined zone is the Sturec Zone, wholly located within the Mining Licence.
Historical mining and modern exploration including diamond drilling has outlined this zone
in some detail. Immediately south of Sturec, also located within the Mining Licence, is
the South Ridge Zone target, identified by geological mapping, chip sampling and the
presence of old workings as well as some limited drilling by Argosy. The South Ridge zone
may extend off the Mining Licence and onto the contiguous Lucky (exploration) Licence. To
the west of Sturec are the Katarina (south) and Volle Henne (north) Zones within the
Mining Licence. Katarina was identified from a large network of old underground workings,
while Volle Henne was identified by old workings and a geochemical soil sampling program.
Directly to the north of Sturec on the Mining Licence lies the Vratislav Zone, defined by
old underground workings, geological mapping and drilling. Previous government exploration
focused on finding mineralization which could be mined from underground and did not
attempt to establish resources capable of being exploited in an open pit. The Wolf Zone,
identified by chip sampling and partially tested by diamond drilling is located North of
the Vratislav Zone. The Horna Ves Zone is located on the Lucky Licence, 2 km south of the
South Ridge Zone, and was identified by geological mapping and rock sampling.

The epithermal gold/silver deposits
of the Slovak Republic are within the Carpathian Arc, a geological feature extending from
the Slovak Republic to Bulgaria. Kremnica is within a region of Miocene age volcanic rocks
with abundant andesitic lava flows and pyroclastic material penetrated by rhyolite dykes.
Deep-seated structures and faults within the pre-Tertiary basement were important in
determining the location of mesothermal mineralizing events, which were overprinted by the
epithermal precious metal mineralisation. This structurally controlled quartz vein
mineralisation was emplaced into the upper parts of the volcanic sequence and is
genetically and spatially related to rhyolite dykes and widespread gold-bearing quartz
veins.

Item 5 Operating
and Financial Review and Prospects

The following discussion of the
financial condition, changes in cash flows and results of operations of the Registrant for
the past three fiscal years should be read in conjunction with the consolidated financial
statements of the Registrant and related notes included therein.

# A.  Operating Results

The Registrants activities are
primarily directed to exploring existing and future mining mineral properties. The
Registrant does not currently have a producing mine or nickel/cobalt processing facility.
Activities over the last three years include the feasibility study for the construction of
a nickel/cobalt processing facility and general exploration to locate and evaluate mineral
properties that have been acquired by the Registrant. Costs incurred for general
exploration that did not

---

19

result in the acquisition of mineral
properties with ongoing exploration or development potential were charged to operations.
Exploration costs relating to the Registrants properties and engineering studies
were capitalized as mineral properties and deferred costs. Should the Registrant abandon a
property or project, the related deferred costs will be charged to operations.
Administrative costs not associated with property exploration or project development were
charged to operations. Costs associated with the evaluation of new opportunities are
charged to operations when incurred. Excess cash is invested by the Registrant in
short-term investments.

The Registrants consolidated
financial statements are in Canadian dollars and are prepared in accordance with Canadian
Generally Accepted Accounting Principles (GAAP), the application of which, in the case of
the Registrant, conforms quantitatively in all material respects for the periods presented
with US GAAP except for the measurement differences referred to in Note 10 to the
financial statements of the Registrant.

The Registrants consolidated
financial statements were prepared on a going-concern basis which assumes that the
Registrant will be able to realize assets and discharge liabilities in the normal course
of business.

From incorporation in December 1985,
the Registrant has been exclusively a natural resource company engaged in the business of
exploration of metals and minerals. At this stage of its development the Registrant has no
producing properties and consequently, has no current operating income or cash flow.

The Registrant has not yet determined
whether its properties contain ore reserves that are economically recoverable. As a
result, the Registrant is considered an exploration stage company.

The recoverability of amounts shown
for mineral properties and deferred costs is dependent upon the discovery of economically
recoverable reserves, completion of positive feasibility studies, confirmation of the
Registrants interest in the underlying mineral claims, the ability of the Registrant
to obtain necessary regulatory and environmental operating permits, the ability of the
Registrant to obtain necessary financing to complete exploration and development and
future profitable production from the disposition thereof.

2002 Fiscal Year

During the year ended December 31,
2002, the Registrant initially progressed the development of the New Caledonia Nickel
Project with its partners NNIH and Societe Des Mines De La Tontouta (SMT). In
August 2002, the Registrant received a termination notice from NNIH regarding its
involvement in the New Caledonia Nickel Project effectively terminating the
Registrants interest in the project. Subsequently on September 13, 2002, NNIH issued
a request for arbitration through the ICC for a return of US$7,166,000 paid to the
registrant plus US$1,368,222 expended on the project plus costs. Consequently the
Registrant wrote off its remaining investment in the New Caledonia Nickel Project of
$2,539,625.

The Registrant initiated a work
program on its Burundi Nickel Project following the lifting of force majeure in March
2002. The work program centred around a re-evaluation of existing drill hole core and data
and included the technical personnel visiting Burundi. Due to security in the country
deteriorating, force majeure was re-imposed in August 2002. The Registrant has continued
to progress the project and commissioned a detailed cost review study completed by the
consulting firm SKM. The costing study concluded that the development of a nickel laterite
mine was not economic given the substantial infrastructure requirements, however the
platinum group metal

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20

(PGM) potential
at Musongati may offer the opportunity to develop the deposit in           stages by
exploiting the PGM potential. A total of $99,267 was spent on the           Burundi
Nickel Project during 2002.

The Registrant continued to pursue
opportunities for the introduction of a joint venture partner or the sale of the Kremnica
Gold Project. In September 2002, the Registrant entered into a conditional sale agreement
with Eurogold Limited for the sale of Kremnica to its subsidiary Explorer SA. Subsequently
in February 2003, Eurogold announced that it had not met the conditions subsequent to the
agreement and the agreement with Eurogold terminated. A total of $90,512 was spent on the
Kremnica Gold Project during 2002.

2001 Fiscal Year

During the year ended December 31,
2001, the Registrant was engaged in extensive discussions with potential joint venture
partners for the New Caledonian Nickel Project, culminating in the signing of an agreement
with Norilsk and SMT in October 2001. This agreement stipulated that Norilsk complete the
bankable feasibility study as part of its requirements to earn an interest in the project
 See Item 4-B-1  Information on the Company  Business Overview 
New Caledonian Nickel Project. The first stage of Norilsks feasibility work was
the Study Definition Phase, which began in October 2001 and was scheduled to be completed
by May 2002. Expenditures by the Registrant during the fiscal year on the New Caledonian
Nickel Project totalled $957,142.

Subsequent to year end at December
31, 2001, the Registrant lifted its declaration of force majeure on the Burundi Nickel
Project, which was declared in April 2000 as a result of the worsening security situation
in the region at that time. Operations were to resume as set out in a revised work program
under discussion with the Burundian government. The Registrant spent $62,850 on the
Burundi Nickel Project during 2001.

During the year ended December 31,
2001, the Registrant continued to digitise data and further define additional exploration
targets on the Kremnica Gold Project, while attempting to introduce a suitable joint
venture partner to the project. A total of $64,694 was spent on the Kremnica Gold Project
during 2001. The Registrant wrote down its investment in the Kremnica Gold Project by
$7,533,332 to $250,000, its estimated net recoverable amount, due to continued low gold
prices and its inability to introduce a suitable joint venture partner or sell the
project.

2000 Fiscal Year

During the year ended December 31,
2000, the Registrant continued its investigation for the development of mining and
processing facilities for the New Caledonian Nickel Project. Due to a decline in the
nickel price in 1998, the Registrant redirected its focus to the development of a refinery
in New Caledonia situated adjacent to the Nakety concessions, rather than the shipment of
Nakety ore to a distant refinery location in Gladstone, Australia. This would eliminate
the high transportation cost and reduce the projected cost of nickel production. As part
of this initiative the Registrant entered into an agreement with SMT, the owner of the
Nakety concessions who is under contract to supply ore to the Registrant, to form a joint
venture company upon the completion of a feasibility study indicating the projects
viability. In July 2000, the Registrant and SMT amended this agreement to include the
Bogota concessions. Pursuant to the agreement with SMT the Registrant secured the rights
to the Nakety and Bogota concessions until June 30, 2001 by which time a joint venture
partner must be introduced to the project to complete a feasibility study or a development
decision must be made (Note that SMT extended the rights as the Registrant was in advanced
negotiations with Norilsk). The Registrant held discussions with local tribal groups in
the Canala region regarding potential tailings disposal and plant location sites. The
expenditure on

---

21

the feasibility study in Gladstone
totalled approximately $12 million and a further $2,497,000 was spent advancing the
project in New Caledonia, $1,022,360 was spent during the fiscal year securing the rights
to the Nakety and Bogota concessions and advancing discussions with potential joint
venture partners, for total expenditure of approximately $14,497,000. In May 2001, the
government of New Caledonia announced significant tax concessions that were awarded to
another company developing a project similar to the Registrants. These concessions
include a 100% tax holiday for the first 15 years of production, followed by 5 years at
50% of the normal tax rate, which is currently 35%. The Registrant began investigations to
determine whether it qualifies for such a tax concession. Should such tax concessions be
made available to the Registrant, there would be significant impact on the potential
future after-tax cash flows and therefore a positive impact on the value of the
Registrants project.

The Registrant declared force majeure
at its Burundi Nickel Project, due to the deteriorating security situation in the region,
delaying progress on a study for the development of a nickel/cobalt mine and processing
facility at Musongati. A total of approximately $113,000 was expended during the year
maintaining the office in Burundi, reflecting the low level of activity due to the
declaration of force majeure. Some consideration of the sulphide nickel and platinum group
metal potential of the project was carried out.

During 2000, activity on the Kremnica
Gold Project focussed on the digitisation of historical and current data, the further
definition of exploration targets and sourcing a development partner as well as ongoing
discussions with parties relating to permitting, environmental and development incentives.
The Registrant spent $227,091 during the year at Kremnica.

Variation in Operating
Results

The Registrant is presently exploring
its properties for sufficient reserves to justify production. None of its properties are
yet in production and consequently, the properties do not produce any revenue. As a result
there is little variation expected in operating results from year to year and little is to
be expected until such time, if any, as a production decision is made on one of its
properties.

The Registrant derives interest
income on its bank deposits and other short-term deposits, which depend on the
Registrants ability to raise funds. Of most significance would be further cash
received from issuance of shares to fund ongoing operations or received from joint venture
partners reimbursing prior expenditures made by the Registrant on its projects.

Through the exploration process,
management periodically reviews results both internally and externally through mining
related professionals. Decisions to abandon, reduce or expand exploration efforts are
based upon many factors including general and specific assessments of mineral deposits,
the likelihood of increasing or decreasing those deposits, land costs, estimates of future
mineral prices, potential extraction methods and costs, the likelihood of positive or
negative changes to the environment, permitting, taxation, labour and capital costs.
Geological and/or economic circumstances render each property unique. Consequently, it is
not possible to have any predetermined hold period.

The dollar amounts shown as deferred
exploration are direct costs of maintaining and exploring properties, including costs of
structures and equipment employed on the properties and allocations of administrative
management salaries based on time spent and directly related to specific properties net of
write-downs provided. These deferred amounts may not accurately reflect present or future
values.

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22

During the year ended December 31,
2002, the Registrant wrote down its 100% owned investment in the Kremnica Gold Property
due to continued low gold prices and the Registrants difficulty in introducing a
joint venture partner or being able to sell the project. The project was written down by
$7,533,332 to its estimated net recoverable amount of $250,000.

No properties were relinquished
during 1999 and 2000 and no properties were written down or written off.

Outlook

Subsequent to December 31, 2002 the
Registrant has entered into agreements for the acquisition of the Albetros Diamond Project
in South Africa and the possible development of the Beregove gold deposits in Ukraine.
These agreements are conditional on the conclusion of due diligence by the Registrant
which will be conducted over the next six months. Expenditures on due diligence and
evaluation of these projects is expected to be approximately $1.5 million.

Administration

Administrative expenses during fiscal
2003 are expected to be similar to those of 2002, however, expenses may increase
significantly should the Registrant acquire new projects which require the use of
technical consultants and necessitate increased travel and additional administrative
support. Expenses for future periods cannot be predicted.

Burundi Nickel Project

The Registrant was involved in
investigations into the Burundi Nickel Project, which involved a scoping study on the
construction of an integrated mine and PAL processing refinery to be sited in Musongati in
Burundi. Studies were focused on important transportation and infrastructure issues. The
Registrant declared force majeure in April 2000 due to the deteriorating security
situation in the region, however, the Registrant was able to lift its declaration of force
majeure on March 28, 2002 due to the improving security climate. The Registrant revised
the schedule of the exploration program for review by the Ministry for Energy & Mines
in Burundi as a first step in re-activating the project. The revised program includes a
program to explore the potential for sulphide mineralisation to exist at Musongati as well
as a resumption of the program to investigate the possibilities for an integrated nickel
laterite mine and PAL processing refinery. A detailed costing study completed by the
engineering firm Sinclair Knight Mertz concluded that a nickel processing facility was
uneconomic due to infrastructure requirements. However a staged development using the PGM
potential at Musongati is to be investigated following the lifting of force majeure
re-imposed on August 1, 2002, due to security conditions once again deteriorating. See
Item 4-B-2  Information on the Company  Business Overview  Burundi
Nickel Project.

Kremnica Gold Project

The Registrant has continued to
maintain the Kremnica Gold Project, while awaiting a higher gold price. Discussions have
been held with potential joint venture partners, while investigations into land ownership
as well as regional exploration targets continue at a low level. Subsequent to December
31, 2002 the Registrant announced the sale of the Kremnica Gold Project to Tournigan Gold
Corporation subject to the completion of the due diligence by Tournigan Gold Corporation.
See Item 4-B-3  Information on the Company  Business Overview 
Kremnica Gold Project.

Summary and Analysis of
Financial Operations

Comparison of Fiscal 2002
to 2001

The Registrant incurred a loss of
$11,079,339 for the year ended December 31, 2002 compared to a loss of $9,188,012 for the
year ended December 31, 2001. The increased loss was mostly

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23

attributable to the increased write
off of mineral properties and deferred costs of $2,979,342, the increased foreign exchange
gain of $896,790, the increase in interest received of $334,836 offset by increases in
legal costs of $118,864 and salaries and benefits of $139,485.

Interest income of $411,203 for the
year ended December 31, 2002, increased from $76,367 for 2001 as a result of increased
cash balances following the receipt of US$7,166,000 (approximately $11,300,000) received
from NNIH on October 31, 2001, following the signing of the Agreement.

During the year ended December 31,
2002, cash required for operating activities amounted to $1,571,518 compared to $1,345,292
for the year ended December 31, 2001. The increase in cash required for operations
resulted mainly from a decrease in accounts payable of $193,621, increased legal costs
associated with the review of new projects and arbitration proceedings; a decline in
salary costs deferred as personnel reviewed new projects, compared to time allocated to
current projects, offset by a rise in interest received on increased cash holdings.

During 2002 administrative expenses
were $1,877,712 compared to $1,734,101 for the year ended December 31, 2001. The increase
was mainly attributable to the lower level of expenditure on the Registrants
projects due to the introduction of NNIH to the New Caledonia Nickel Project in October,
2001 and NNIH assuming responsibility for most of the expenditures related to the project,
thereby reducing the amount of salaries and benefits deferred to the project together with
an increase in legal fees of $118,864 due to legal review of new project opportunities and
the arbitration proceedings initiated by NNIH, an increase in salaries and benefits of
$139,485 due to more time spent on evaluating new projects and the resultant decline in
amounts deferred to projects together with salary increases in November, 2001, a decline
in management fees of $59,102 due to the reduction in number of persons providing services
offset by increased rates paid for management fees, increase in travel of $41,422 related
to joint venture meetings with NNIH, arbitration proceedings and new project evaluation.
Increased costs were offset by a rise in interest received of $334,836 due to increased
cash holdings as well as a decline in rent of $39,136 due to lower rentals and costs
associated with both the Canadian and Australian offices.

Foreign exchange gains resulted from
the Corporation holding most of its cash balances in Australian dollars and the
strengthening of the Australian dollar against the Canadian dollar by approximately 9%
over the year.

Following the termination of the
Agreement by NNIH, the Corporations interest in the New Caledonia Nickel Project
terminated and the Registrant wrote off its investment of $2,539,625 in the project, in
addition, the Registrant wrote off its Burundi Nickel Project, totalling $7,973,049, due
to the ongoing political instability in the country and the failure of nickel laterite
projects around the world.

During the year ended December 31,
2002, expenditures on mineral properties totalled $240,441 compared to $1,084,686 on
mineral properties in 2001, a decrease of $844,245. Expenditures decreased from $957,142
on the New Caledonian Nickel Project in 2001 to $50,662 in 2002 due to the introduction of
NNIH who paid for the holding costs of the New Caledonian Nickel project from October 16,
2001 until the project terminated and was written off in August, 2002. Expenditures on the
Kremnica Gold Project amounted to $90,512 in 2002 and expenditures on the Burundi Nickel
Project increased from $62,850 in 2001 to $99,267 in 2002 due to increased activity prior
to the re-imposition of the force majeure in August, 2002.

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24

At December 31, 2002, the Registrant
has capitalized $340,512 on its Kremnica Gold Property.

Comparison of Fiscal 2001
to 2000

During the year ended December 31,
2001, cash required for operating activities amounted to $1,345,292 compared to $1,060,966
for the year ended December 31, 2000. The increase in cash required for operations
resulted mainly from an increase in activities to introduce a joint venture partner to the
New Caledonian Nickel Project as well as new project assessment.

The Registrant incurred a loss of
$9,188,012 for the year ended December 31, 2001 compared to a loss of $1,055,049 for the
year ended December 31, 2000. The increased loss was mostly attributable to the write off
of mineral properties and deferred costs of $7,533,332 for the year ended December 31,
2001 compared to $nil for the year ended December 31, 2000.

Interest income of $76,367 for the
year ended December 31, 2001 declined from $143,773 for 2000 as a result of lower average
cash balances and lower interest rates. Cash of $11,307,948 was received on October 30,
2001 following the signing of the Agreement between NNIH, SMT and the Registrant.

During 2001, administrative expenses
were $1,731,047 compared to $1,198,822 for the year ended December 31, 2000. The increase
was attributable to the higher level of activity resulting from the negotiation and
subsequent introduction of a joint venture partner on the New Caledonian Nickel Project,
coupled with an increase in new project assessment. The increase in costs arose mainly
from an increase of accounting and audit fees of $45,582, legal fees of $60,674,
management and consulting fees of $70,956, project assessment of $178,086, salaries and
benefits of $68,621, and travel of $118,117.

Expenditures on office expenses and
rent declined $15,212 and $17,509, respectively, due to a reduction in office space and
staff, while shareholder communications expenses increased $28,231 due to additional
shareholder mail-outs resulting from the successful introduction of a joint venture
partner.

No mineral properties were
relinquished during the year ended December 31, 2001, however, the Registrant wrote down
its investment in the Kremnica Gold Property by $7,533,332 to $250,000 due to continued
low gold prices and the Registrants difficulty in introducing a joint venture
partner or being able to sell the project. With the introduction of a joint venture
partner to the New Caledonian Nickel project, the Registrant received $11,307,948 as
re-imbursement of prior expenditures, reducing the value of carried deferred costs and
mineral properties for the New Caledonian Nickel project.

During the year ended December 31,
2001, expenditures on mineral properties totalled $1,084,686 compared to $1,362,866 on
mineral properties in 2000, a decrease of $278,180. Expenditures decreased from $1,022,360
on the New Caledonian Nickel Project in 2000 to $957,142 in 2001 due to the successful
introduction of joint venture partner, Norilsk, who has paid for the holding costs of the
New Caledonian Nickel project from October 16, 2001 which represents a saving of
approximately $250,000. Expenditures declined on the Kremnica Gold Project from $227,091
in 2000 to $64,694 in 2001 as a result of the Registrant further reducing expenditures due
to continued low gold prices. Expenditures on the Burundi Nickel Project declined from
$113,415 in 2000 to $62,850 in 2001 due to the continuation of the declaration of force
majeure made in April 2000.

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25

At December 31, 2001, the Registrant
has capitalized $250,000 on its Kremnica Gold Property, $7,873,782 on its Burundi Nickel
Project and $2,488,963 on its New Caledonian Nickel Project.

# B.  Liquidity and Capital
Resources

The Registrants primary source
of funds since incorporation has been the issuance of common shares pursuant to various
public and private financings and reimbursement of prior expenditures. The Registrant has
had no revenue from mining operations to date and does not anticipate mining revenues in
the foreseeable future.

The Registrants cash balances
at December 31, 2002 totalled $9,780,175 compared to $11,097,233 at December 31, 2001.
Aside from such cash, the Registrant has no material unused sources of liquid assets. In
addition, the Registrant has $157,960 in restricted cash which has been provided as
security for a performance bond provided by the Registrants bankers to the
Government of Burundi. The issuance of capital stock resulting from the exercise of stock
options contributed $39,376 and $46,511 to cash resources during 2000 and 2001. During the
year ended December 31, 2002, no cash was raised on the issuance of capital stock.

The Registrant does not have any
loans or bank debt and there are no restrictions on the use of its cash resources except
for the restricted cash of $157,960 which has been provided as security.

The Registrant and its subsidiaries
have expenditure commitments as at December 31, 2002 for lease payments that expire on
December 9, 2005, for office premises which require rental payments of approximately
$3,410 per month until December 31, 2003 and $2,250 per month thereafter.

At December 31, 2002 the Registrant
had met all its expenditure requirements under the various property agreements it holds or
has interests in. seeItem 4 D  Property, Plant and Equipment.

In addition, the Registrant
anticipates spending approximately $1,500,000 during 2003 for administrative and other
operating expenditures at its head office in Langley, British Columbia, at its Australian
offices in Perth, Australia and at its Slovak operating subsidiarys office in the
Slovak Republic.

The Registrant may decide to acquire
new properties, at which time the Registrant may require additional equity
financing. Any such decision will be based on the results of ongoing exploration
programs and the response of equity markets to the Registrants properties and
business plan.

The Registrant believes it has
sufficient cash resources to fund its operations for at least the next twelve months. The
Registrant does not have any source of funds other than from the issuance of capital stock
and the exercise of options, and the possible joint venture or sale of its mineral
properties. While the Registrant has been successful in the past in raising the necessary
funds for the exploration of its mineral properties there is no assurance that funding
will be available on terms acceptable to the Registrant or at all. If such funds cannot be
secured, the Registrant will be forced to curtail its exploration efforts to a level for
which funding can be secured or relinquish certain of its properties or allow its interest
to be diluted pursuant to the terms of the respective joint venture agreements.

C.    
          Research and Development, Patents and Licences, etc.
Not applicable.

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26

# D.  Trend information

None of the Registrants assets
are currently in production or generate revenue.

Item 6  Directors,
Senior Management and Employees

# A.  Directors and Senior
Management

The following provides a description
of the backgrounds of the directors and officers of the Registrant.

Peter H. Lloyd, age
53. Chief Executive Officer of the Registrant from March 1998 to date; Director of the
Registrant from August 1996 to November 1996 and September 1997 to date; Chairman of AMC
from April 1993 to March 1998; Director of Odelon Pty Ltd from 1998 to date; Director of
Peel Rise Pty Ltd from 1988 to date; Director of Emmerson Holdings Pty Ltd from 1988 to
date; Director of Wedgefield Holdings Pty Ltd from 1988 to date; Director of Peninsular
Services Pty Ltd from January 2000 to date; Director of Java Black Pty Ltd from June 1995
to date. It is expected that 80% of Mr. Lloyds time will be devoted to the
Registrant.

Cecil R. Bond, age 46.
Corporate Secretary and Chief Financial Officer of the Registrant from April 1998 to date
and a director of the Registrant from March 1997 to date; Chief Financial Officer and
Corporate Secretary of AMC from August 1998 to date; Director of AMC from November 1999 to
date; Manager with Coopers & Lybrand, Vancouver, Chartered Accountants, January 1995
to September 1996; previously businessman and investor in various private companies in
South Africa. Mr. Bond is a Chartered Accountant and obtained a Bachelor of Commerce
from the University of Cape Town in 1981. It is expected that Mr. Bond will devote
approximately 90% of his time to the Registrant.

David A.
Henstridge, age 55. Non-executive Chairman of the Registrant from November
2001 to date; Director of the Registrant from March 1999 to date; Director of AMC from
October 1995 to May 1999; President and Director of Peruvian Gold Limited from 1993 to
January 2001, President and Director of Tumi Resources Limited from January 2000 to date.

John Nicholls,
age 50. Director of the Registrant from November 2002 to date. Accounting Public Practice
Principal (CPA) since 1990 specialising in tax / business consultancy and provision of
Company Secretarial services. Previously Company Secretary / Chief Finance Officer for
Allwood Ltd. and McLean Bros. & Rigg Ltd. and Finance Controller for CSR Ltd Refined
Products Division, NSW, 1980  1987.

John Maloney,
age 64. Director of the Registrant from April 2003 to date. Secretary of Wesley College
Endowment Fund Association Inc since 1982; Director of Old Wesley Collegians Association
since 1995; Director of Cybertop Pty Ltd since 1998, Bursar of Wesley College from 1968 to
1993.

There are no other arrangements or
understandings pursuant to any director or executive officer was selected as a director of
executive officer. There are no family relationships between any two or more directors or
executive officers.

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27

# B.  Compensation

The aggregate amount of compensation
paid by the Registrant and its subsidiaries during the Registrants most recent
fiscal year, directly and indirectly, to all officers and directors in their capacity as
such totalled $482,389.

The Registrant paid a total of
$24,982 in directors fees during the year ended December 31, 2002. Each
non-executive Director is paid A$25,000 per year.

Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of the board of directors. The board of directors
may award special remuneration to any director undertaking any special services on behalf
of the Registrant other than services ordinarily required of a director. Other than as
indicated above or in Item 6 C  Board Practices, no director received any
compensation for his or her services as a director, including committee participation
and/or special assignments.

The following table sets out a
summary of compensation paid to the executive officers (the Executive
Officers) of the Registrant during the year ended December 31, 2002.

|                         | Annual
Remuneration | Long Term Remuneration | 
|------------------------ | ------------------- | ---------------------- | 
|                        
|
|                        
|
|                        
|Peter H. Lloyd           |                     | Nil                    | 
|CEO and
Director         |                    
|                        
|Cecil R. Bond            |                     | Nil                    | 
|Chief
Financial Officer, |                    
|Corporate
Secretary      |                    
|and
Director             |                    
|                        

|(1) | The
term restricted shares as it is used in this table means shares
               granted or awarded as compensation, other than incentive stock options,
which                may be subject to vesting conditions based on performance, lapse of
time or                continued service with the Registrant or its subsidiary. There are
no restricted                shares issued by the Registrant within this meaning.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
exchange rate for Australian $ to Canadian $ at April 30, 2003 was 0.6262.
|--- | ------------------------------------------------------------------------------

|(3) | The
options granted to the executive officers at A$0.35 per share were approved
               by shareholders on May 23, 2002. (4) Compensation is payable
pursuant                to management contracts with Peninsular Services Pty Ltd and C.R.
Bond                respectively, See (Item 6 C  - Directors, Senior Management and
Employees - Board Practices)
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Registrant does not provide for
pension, retirement or similar benefits for directors or officers and has not accrued for
any such benefits.

Stock options to purchase securities
from the Registrant are granted to directors, officers and employees of the Registrant
pursuant to Incentive Option Agreements on terms and conditions acceptable to the
regulatory authorities in Australia, notably the ASX. Stock options granted to directors
of the Registrant must be approved by the Registrants shareholders.

No option granted under the option
program is transferable by the optionee other than by will or the laws of descent and
distribution, and each stock option is exercisable during the lifetime of the optionee
only by such optionee. Options to directors expire up to 6 months following the
termination of service of the optionee, while options to employees expire up to 30 days
following termination of service.

---

28

The exercise prices for all currently
outstanding stock options were determined in accordance with the ASX guidelines and with
the minimum exercise price reflecting the average closing price of the Registrants
common stock for the five trading days on the ASX immediately preceding the day on which
the grant of the stock options was announced, but not including a closing price that
occurred earlier than the trading day following the day on which any material change was
announced.

The following table sets forth the
stock options outstanding at April 30, 2003 to directors and officers of the Registrant
and any of its subsidiaries. No director or officer holds any warrants or other
convertible securities.

|                                                    
|----------------------------------------------------
|
|                                                    
|Peter H. Lloyd,  President,  Chief Executive Officer
|and a director of the Registrant                    
|                                                    
|Cecil R. Bond,  Chief Financial  Officer,  Corporate
|Secretary and a director of the Registrant          
|                                                    
|David A. Henstridge, a director of the Registrant   
|                                                    
|John Nicholls, a director of the Registrant         
|                                                    
|John Maloney, a director of the Registrant          
|                                                    

In total, directors and officers and
employees hold options that are exercisable into 4,140,000 Common Shares.

The terms and conditions of options
which are issued from time to time upon shareholder approval are as follows:

|1. |  | The options may be exercised in a specific period.
|-- |  | --------------------------------------------------

|2. |  | Directors
Options remain exercisable for up to 6 months after the date           the Optionee
ceases to be a director or officer of the Registrant.           Employees Options
remain exercisable for up to 30 days after the date the           Optionee ceases to be
an employee of the Registrant.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | The
options are non-transferable.
|-- |  | ---------------------------------

|4. |  | The
exercise price for the options shall be set by the Registrant and approved           by
shareholders.
|-- |  | ---------------------------------------------------------------------------------------------------------

|5. |  | The
Registrant will not make application to ASX for official           quotation of the
options.
|-- |  | ------------------------------------------------------------------------------------------------

|6. |  | The
Registrant will make application to ASX for the           quotation of the shares
allotted and issued upon the exercise of an option within 10 business days after
allotment and issue of those shares.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. |  | All
shares issued upon exercise of the options will rank pari passu in all           respects
with the Registrants then existing shares.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------

|8. |  | There
is no participating rights or entitlements inherent in the options and           holders
will not be entitled to participate in new issues of capital offered to
          shareholders during the currency of the options. However, the Registrant will
          send a notice to each holder of options at least 9 business days before the
          relevant record date. This will give option holders the opportunity to exercise
          their options prior to the date for determining entitlements to participate in
          any such issue.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. |  | If
the Registrant makes a bonus issue of shares pro-rata to existing           shareholders
(other than an issue in lieu in satisfaction of dividends or by way           of dividend
investment) and no share has been allotted in respect of an option           before the
books closing date for determining entitlements to the bonus issue,           then the
number of shares over which the option is exerciseable shall be           increased by
the number of shares which the option
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

29

| |  | holder would
have received if the option holder had exercised the option prior to the books closing
date.
| |  | ---------------------------------------------------------------------------------------------------------

|10. |  | If
there is a  pro-rata  issue  (except a bonus  issue) to holders of  shares,  the
 exercise  price of an option may be reduced in accordance with the formula provided for
in ASX Listing Rule 6.22.2.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. |  | In
the event of any reorganization of the issued capital of the Registrant on           or
prior to the expiry of the options, the rights of an option holder will be
          changed to the extent necessary to comply with the applicable ASX Listing Rules
          in force at the time of the reorganization.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# C.  Board Practices

Members of the Board of Directors of
the Registrant (the Board) have served in their respective capacities since
their election and/or appointment and will serve until the next annual general meeting of
shareholders or until a successor is duly elected, unless the office is vacated in
accordance with the articles and bylaws of the Registrant. The executive officers of the
Registrant serve at the pleasure of the board of directors.

Effective January 1, 2000, pursuant
to an agreement between Peninsular Services Pty Ltd (Peninsular), a
corporation controlled by Peter H. Lloyd, and the Registrant, Peninsular provides
management and consulting services of Mr. Peter H. Lloyd, for consideration of A$200,000
per year. Effective November 1, 2001, the consideration payable was increased to A$250,000
per year. In addition, Peninsular provided personnel and secretarial services which
amounted to a consideration of approximately A$531,000 for the year and will also supply
the services of additional consultants at the request of the Registrant.

Pursuant to an agreement dated
September 1, 1996, last amended effective April 8, 1998, between the Registrant and C.R.
Bond (CRBC), CRBC provides financial and corporate management services to the
Registrant in consideration of $75,000 per year. The agreement may be terminated by either
party with 60 days notice in writing. In addition, Mr. Bond is paid $52,680 per year
pursuant to an agreement dated September 1, 1996, last amended effective September 22,
1998, between Argosy Mining Corp.(AMC) and CRBC for services provided to AMC.
Effective November 1, 2001, the fees payable to CRBC by the Registrant and its
subsidiaries were set at A$175,000 per year. Mr. Bond devotes approximately 90% of his
time to the Registrant

Audit Committee

In accordance with the Business
Corporations Act (Yukon), the Registrant is required to have an audit committee. The
Registrants current audit committee consists of:

|                   
|-------------------
|
|                   
|Peter H. Lloyd     
|David A. Henstridge
|John Nicholls      
|                   

The audit committee meets with the
Registrants independent accountants and management periodically to review the scope
and results of the annual audit and to review the Registrants financial statements
and related reporting matters prior to the submission of the financial statements to the
Board.

---

30

Remuneration Committee

The Registrant does not have a
separate remuneration committee. The full Board reviews the terms and conditions of
employment and remuneration levels for employees.

# D.  Employees

The following table sets forth the
number of direct and indirect employees of the Registrant and all of its subsidiaries at
December 31 for each of the indicated periods.

|    
|----
|
|    
|2000
|    
|2001
|    
|2002
|    

The decrease of employees in 2001
from 2000 was due to the closing of the Burundi office due to declaration of force
majuere, and a reduction of activities in the Slovak Republic and Canada. All personnel
are involved in management and administrative functions.

None of the Registrants
employees are members of a labour union.

# E.  Share Ownership

The following table sets forth, as of
April 30, 2003, the number of the Registrants Common Shares beneficially owned by
the directors and members of senior management of the Registrant, individually, and the
percentage ownership of the outstanding Common Shares represented by such shares. The
security holders listed below are deemed to be the beneficial owners of Common Shares
underlying options and warrants which are exercisable within 60 days from the above date.

|                            
|----------------------------
|
|                            
|PETER H. LLOYD(1)           
|Applecross, WA              
|Australia                   
|Chief Executive Officer,    
|President & Director        
|                            
|CECIL R. BOND               
|Langley, British Columbia   
|Canada                      
|Corporate Secretary, Chief  
|Financial Officer & Director
|                            
|                            
|                            
|                            
|                            
|                            
|DAVID A. HENSTRIDGE(1)      
|East Malvern, Victoria      
|Australia                   
|Director                    
|                            

---

31

|                        
|------------------------
|
|                        
|JOHN NICHOLLS (1)       
|Perth, Western Australia
|Director                
|                        
|                        
|                        
|                        
|                        
|JOHN MALONEY (2)        
|Perth, Western Australia
|Director                
|                        
|                        
|                        

|(1) | Member
of audit committee.
|--- | --------------------------

|(2) | John
Maloney was appointed to the board on April 8, 2003
|--- | --------------------------------------------------------

|(*) | The directors
have provided the information as to residence, principal                occupation and
number of common shares beneficially owned themselves.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(**) | Indicates
less than one (1) %
|---- | -----------------------------

Stock options to purchase securities
from the Registrant are granted to directors, officers and employees of the Registrant
pursuant to Incentive Option Agreements on terms and conditions acceptable to the
regulatory authorities in Australia, notably the ASX. Stock options granted to directors
of the Registrant must be approved by the Registrants shareholders.

No option granted under the option
program is transferable by the optionee other than by will or the laws of descent and
distribution, and each stock option is exercisable during the lifetime of the optionee
only by such optionee. Options to directors expire up to 6 months following the
termination of service of the optionee, while options to employees expire up to 30 days
following termination of service.

The exercise prices for all currently
outstanding stock options were determined in accordance with the ASX guidelines and with
the minimum exercise price reflecting the average closing price of the Registrants
common stock for the five trading days on the ASX immediately preceding the day on which
the grant of the stock options was announced, but not including a closing price that
occurred earlier than the trading day following the day on which any material change was
announced.

The following table sets forth the
stock options outstanding at April 30, 2003 to directors and officers of the Registrant
and any of its subsidiaries. No director or officer holds any warrants or other
convertible securities.

|                                                    
|----------------------------------------------------
|
|                                                    
|Peter H. Lloyd,  President,  Chief Executive Officer
|and a director of the Registrant                    
|                                                    
|Cecil R. Bond,  Chief Financial  Officer,  Corporate
|Secretary and a director of the Registrant          
|                                                    
|David A. Henstridge, a director of the Registrant   
|                                                    
|John Nicholls, a director of the Registrant         
|                                                    
|John Maloney, a director of the Registrant          
|                                                    

---

32

Item 7  Major
Shareholders and Related Party Transactions

# A.  Major shareholders

No beneficial owners of 5% or more of
the Common Shares are known to the Registrant except for Mr. Lloyd as disclosed above
under Item 6E  Share Ownership. Mr Lloyds voting rights do not differ
in any way from those of the Registrants other shareholders.

At April 30, 2003 there were 158
record holders of the Registrants Common Shares resident in the United States,
holding 6,404,713 Common Shares. This number represents approximately 6.7% of the total
issued and outstanding Common Shares of the Registrant at such date.

The Registrant is a publicly owned
corporation, the Common Shares of which are owned by Canadian residents, Australian
residents, United States residents, and residents of other countries. To the extent known
to the Registrant, it is not directly owned or controlled by another corporation, any
foreign government or any other natural or legal person(s) severally or jointly. The
Registrant is not aware of any arrangement, the operation of which may result in a change
of control of the Registrant.

# B.  Related Party
Transactions

See Item 6C  Directors,
Senior Management and Employees  Board Practices for further information.

Other than as disclosed here and in
Item 6C, there have been no material transactions in the past three fiscal years,
and there are no presently proposed transactions, to which the Registrant or any of its
subsidiaries was or is to be a party, in which any director, officer or significant
shareholder of the Registrant or its subsidiaries, or any relative or spouse of any of the
foregoing persons or any relative of such spouse who has the same home as such person, had
or is to have a direct or indirect material interest.

Management believes the transactions
referenced above were on terms at least as favourable to the Registrant as the Registrant
could have obtained from unaffiliated parties.

# C.  Interests of Experts
and Counsel

Not applicable

Item 8 Financial
Information

See Item 17 
Financial Statements.

Legal Proceedings

With the exception of the pending
NNIH arbitration, there is no other pending, threatened or recently concluded legal or
arbitration proceedings, including those relating to bankruptcy, receivership or similar
proceedings that involve any third party, which may have, or have had in the recent past,
significant affects on the Companys financial position or profitability. This
includes governmental proceedings pending or known to be contemplated.

---

33

Dividend Policy

The Company has not declared any
dividend to date and has no present intention to declare any such dividend in the
foreseeable future

Item 9  The Offer
and Listing

# A.  Offer and Listing
Details

Stock Price History

In recent years, securities markets
in Canada and Australia have experienced a high level of price and volume volatility, and
the market price of many resource and resource related companies, have experienced wide
fluctuations in price which have not necessarily been related to operating performance or
underlying asset values or prospects of such companies. There can be no assurance that
fluctuations in the Registrants share price and volume will not occur.

The following table sets out the high
and low market prices and the volume of the Common Shares traded on the CDNX for the last
5 years to October 4, 2001 (when the Registrant delisted its shares from the CDNX) and on
the ASX from June 6, 1997, the date of listing on the ASX, to April 30, 2003:

|                  
|------------------
|
|                  
|1998              
|                  
|1999              
|                  
|2000              
|                  
|2001              
|                  
|2002              
|                  
|March 31, 2001    
|                  
|June 30, 2001     
|                  
|September 30, 2001
|                  
|December 31, 2001 
|                  
|March 31, 2002    
|                  
|June 30, 2002     
|                  
|September 30, 2002
|                  
|December 31, 2002 
|                  
|March 31, 2003    
|                  
|October 31, 2002  
|                  
|November 30, 2002 
|                  
|December 31, 2002 
|                  
|January 31, 2003  
|                  
|February 28, 2003 
|                  
|March 31, 2003    
|                  
|April 30, 2003    
|                  

# B.  Plan of Distribution

Not applicable

# C.  Markets

The principal trading market for the
Registrants Common Shares is the ASX. Effective June 6, 1997, the
Registrants Common Shares commenced trading on the ASX under the trading symbol
CIO. The Registrants Common Shares have traded on the CDNX since 1996
under the symbol CYO. Effective May 7, 1999 the Registrants Common
Shares trade on the CDNX and the ASX

---

34

under the symbol AGY. On
October 4, 2001 the Registrant delisted its shares from the CDNX due to a lack of trading
volume. Management of the Registrant is not aware of any trading market for its Common
Shares in the United States.

# D.  Selling shareholders.

Not applicable

# E.  Dilution

Not applicable

# F.  Expenses of the Issue

Not applicable

Item 10  Additional
Information

# A.  Share Capital

Not applicable

# B.  Memorandum and
Articles of Association

Objects and Purposes of
the Company

The Articles of the Registrant
restricts it from carrying on the business of a railway, steamship, air transport, canal,
telegraph, telephone or irrigation corporation.

Directors Powers

Section 2.1 of the By-laws gives
directors a broad discretion to manage the affairs of the Registrant. The directors may,
from time to time on behalf of the Registrant, borrow money in such manner and amount, on
such security, from such sources and upon such terms and conditions as they think fit, and
may authorize the guaranteeing of any obligations of any other person. Furthermore, the
directors may issue bonds, debentures and other debt obligations outright or as security
for any liability or obligation of the Registrant or other person. Finally, the directors
may mortgage, charge, whether by way of specific or floating charge, or give other
security on the undertaking, or on the whole or any part of the property and assets of the
Registrant.

Section 2.2 of the By-laws provides
that the quorum necessary for the transaction of the business of the directors shall be a
simple majority of directors.

Section 2.3 of the By-Laws authorizes
the Board of Directors to appoint one or more additional directors between annual general
meetings.

Section 2.14 of the By-laws provides
that the remuneration of the directors may be determined from time to time by the
directors. There are no restrictions in the By-laws upon the directors power to vote
compensation to themselves or any members of their body.

Section 2.17 of the By-laws of the
Registrant (the By-laws) provides that a director who is a party to a material
contract or a proposed material contract with the Registrant or who is the

---

35

director or an officer of or has a
material interest in any person who is a party to a material contract, or a proposed
material contract with the Registrant, shall disclose in writing to the Registrant or
request to have entered in the minutes of meetings of directors, the nature and extent of
his interest. All such disclosures shall be made at the time required by the applicable
provisions of the Yukon Business Corporations Act (the Act) and directors
shall refrain from voting in respect of the material contract or proposed material
contract if and when prohibited by the Act. Subject to the Act, a director who is
prohibited by the Act from voting on a material contract or proposed material contract
will be counted in determining whether a quorum is present for the purpose of the
resolution.

The directors of the corporation have
the authority under the By-Laws to provide financial assistance by means of loan guarantee
or otherwise on account of expenditures incurred on behalf of the corporation, to a
wholly-owned subsidiary and to employees to assist with living accommodations or share
purchase plans unless the corporation does not have the funds.

The directors have the authority
under the By-Laws to appoint officers to serve at the pleasure of the Board. The powers of
the directors set forth in the By-laws and Articles can be varied by amending the By-laws
and/or Articles. Section 175 and 179 of the Act provides that a corporation may amend its
Articles by filing with the registrar of corporations articles of amendment approved by
shareholders by special resolution. A special resolution means a resolution passed by a
majority of not less than two thirds of the votes cast by those members of a corporation
who, being entitled to do so, vote in person or by proxy at an annual or special meeting
of the corporation.

Qualifications of
Directors

There is no provision in the By-laws
or Articles imposing a requirement for retirement or non-retirement of directors under an
age limit requirement.

There is no requirement for directors
to hold a share in the capital of the Registrant as qualification for his office. Section
106 of the Act provides that no person is qualified to act as a director if that person
is:

|(a) |  | under
the age of 19 years;
|--- |  | --------------------------

|(b) |  | found
to be incapable of managing the           persons own affairs by reason of mental
infirmity;
|--- |  | ---------------------------------------------------------------------------------------------------

|(c) |  | not
an individual;           or
|--- |  | -------------------------------

|(d) |  | a
person who has the status of bankrupt.
|--- |  | ----------------------------------------

Section 102 of the Act provides that
every corporation must have at least one director, and a distributing corporation must
have not less than three directors, at least two of whom are not officers or employees of
the corporation or its affiliates.

Section 2.6 of the By-laws provides
for the election and removal of a director. The office of a director shall be vacated if
the director (i) dies or resigns his or her office by notice in writing delivered to the
registered office of the Registrant; or (iii) ceases to be qualified to act as a director
pursuant to the Act. Section 110 of the Act provides that the shareholders may by ordinary
resolution at a special meeting remove any director before the expiration of his period of
office, and may by an ordinary resolution appoint another person in his or her stead.

---

36

Share Rights

All of the authorized shares of
common stock of the Registrant are of the same class and, once issued, rank equally as to
dividends, voting powers, and participation in assets, surpluses and profits and in all
other respects, on liquidation, dissolution or winding up of the Registrant, whether
voluntary or involuntary, or any other distribution of the assets of the Registrant among
its shareholders for the purpose of winding up its affairs after the Registrant has paid
out its liabilities. There are no time limits on dividend entitlement. The issued common
shares are not subject to call or assessment rights or any pre-emptive or conversion
rights. The holders of Shares are entitled to one vote for each Share on all matters to be
voted on by the shareholders. There are no provisions for redemption, purchase for
cancellation, surrender or purchase funds.

Changing the rights of shareholders,
where such rights are attached to an issued class or series of shares requires amending
the Articles as described in sections 175-179 of the Act and must be enacted via
shareholder consent by special resolution, defined as requiring a two-thirds majority .

Meetings

The Act provides that the Registrant
must hold an annual general meeting within 18 months of incorporation or amalgamation and
not more than 15 months after the last annual general meeting was held. The Registrant
must give to its shareholders entitled to receive notice of a general meeting not less
than 21 days and not more than 50 days notice of any general meeting of the
Registrant, but those shareholders may waive or reduce the period of notice for a
particular meeting by unanimous consent in writing. Section 151 of the Act require the
directors of a reporting corporation to provide concurrently with notice of a general
meeting a form of proxy for use by every shareholder entitled to vote at such meeting. Not
less than 21 days before each annual general meeting of its shareholders the directors of
the Registrant must place comparative financial statements, made up to a date not more
than 6 months before the annual general meeting, and the report of the auditor to the
shareholders.

The Act provides that one or more
shareholders of a corporation holding not less than 5% of the issued voting shares of the
corporation may requisition the directors to call and hold a general meeting.

Two persons present in person and
entitled to vote at the meeting will constitute a quorum for a general meeting.

Persons entitled to attend a meeting
of shareholders shall be those entitled to vote thereat, the auditor, if any, of the
Registrant and others who although not entitled to vote are entitled or required under the
provisions of the Act or By-laws of the Registrant to be present at the meeting. Any other
person may be admitted only on the invitation of the chairman of the meeting or with the
consent of the meeting.

Every shareholder, including a
corporate shareholder, entitled to vote at meetings of shareholders may by instrument in
writing appoint a proxy, who need not be a shareholder, to attend and act at the meeting
in the manner and to the extent authorized by the proxy and with the authority conferred
by the proxy.

All questions at meetings of
shareholders shall be decided by the majority of the votes cast in favour. Any question at
a meeting of shareholders shall be decided by show of hands unless a ballot thereon is
requested. If a poll is required by the chairman of the meeting or is duly demanded by a
shareholder, a poll upon the question shall be taken in the manner the chairman of

---

37

the  meeting  directs.  In the case
of an equality of votes,  the  chairman of the meeting  will not be entitled to a second
or casting vote.

Limitations on Ownership
of Securities

Except for as described in Item 10
D  Additional Information  Exchange Controls, there are no limitations on
the right to own securities, imposed by foreign law or by the charter or other constituent
document of the Registrant.

Change in Control of
Corporation

No provision of the Registrants
articles of association, charter or bylaws would have the effect of delaying, deferring,
or preventing a change in control of the Registrant, and operate only with respect to a
merger, acquisition or corporate restructuring of the Registrant or any of its
subsidiaries.

Ownership Threshold

There are no bylaw provisions
governing the ownership threshold above which shareholder ownership must be disclosed.
Upon reaching 10% of the issued capital, a shareholder is required to make disclosure of
further acquisitions under the Securities Act.

Conditions Governing
Changes in Capital

There are no conditions imposed by
the By-laws or Articles of the Registrant regarding changes in the capital that are more
stringent than is required by law.

# C.  Material Contracts

|                                                            
|------------------------------------------------------------
|
|                                                            
|Tripartite Agreement between the Registrant, Norilsk and SMT
|                                                            
|Plan of Arrangement with Argosy Mining Corp.                
|                                                            
|Management Agreement with Peninsular Services Pty Ltd       
|                                                            
|Management Agreement with C.R. Bond                         
|                                                            

Tripartite Agreement

Under the Tripartite Agreement signed
October 16, 2001 between the Registrant, Norilsk and SMT, Norilsk is required to fund and
complete a bankable feasibility study on the New Caledonian Nickel Project. Norilsk
refunded an agreed portion of the Registrants costs of the New Caledonian Nickel
Project which totalled US$7.166 million. Upon completion of the bankable feasibility
study, Norilsk will hold 45% of the New Caledonian Nickel Project, the registrant will
hold 45% and SMT will hold 10%. Norilsk has the option to increase its holdings at that
time to 70% by paying the Registrant US$17.5 million and providing funding guarantees.
Norilsk can then purchase the Registrants remaining 20% for consideration of US$12.5
million plus an agreed 20% of the Net Present Value of the New Caledonian Nickel Project.

Plan of Arrangement

Under a plan of arrangement between
the Registrant and Argosy Mining Corp to combine assets, which was completed on May 10,
1999, the Registrant acquired all outstanding shares of Argosy Mining Corp by the exchange
of 3 common shares of the Registrant for every 5 common shares of Argosy Mining Corp. This
resulted in Argosy Mining Corp becoming a wholly-owned subsidiary of the Registrant.

---

38

Management Agreement with
Peninsular Services Pty Ltd

Effective January 1,2000, pursuant to
an agreement between Peninsular Services Pty Ltd (Peninsular), a corporation
controlled by Peter H. Lloyd, and the Registrant, Peninsular provides management and
consulting services of Mr. Peter H. Lloyd, for consideration of A$200,000 per year.
Effective November 1, 2001 the consideration payable was increased to A$250,000 per year.
In addition, Peninsular provided office facilities, personnel and secretarial services
which amounted to a consideration of approximately A$531,000 for the year and will also
supply the services of additional consultants at the request of the Registrant. Effective
January 1, 2002, Peninsular will no longer provide office facilities and will only provide
personnel, secretarial services and consultants. These services are provided to the
Registrant by Peninsular and currently amounts to approximately A$408,000 per year.

Management Agreement with
C.R. Bond

Pursuant to an agreement dated
September 1, 1996, last amended effective April 8, 1998, between the Registrant and C.R.
Bond (CRBC), CRBC provides financial and corporate management services to the
Corporation in consideration of $75,000 per year. The agreement may be terminated by
either party with 60 days notice in writing. In addition, Mr. Bond is paid $52,680 per
year pursuant to an agreement dated September 1, 1996, last amended effective September
22, 1998, between Argosy Mining Corp.(AMC) and CRBC for services provided to
AMC. Effective November 1, 2001 the fees payable to CRBC by the Registrant and its
subsidiaries were set at A$175,000 per year.

Principals Escrow
Shares

As a condition of the approval by the
CDNX of the acquisition of Andover by AMC, certain shareholders of Andover were required
to deposit a total of 3,563,280 Andover shares into escrow. Pursuant to the acquisition of
Andover, AMC issued 4 new AMC shares for each Andover share held, resulting in 14,253,120
AMC shares being held in escrow (the Escrow Shares). The Escrow Shares are
eligible for release on the basis of 1/7th being released on the date of issue,
being March 9, 1999 and a further 1/7th on the annual anniversary of such
issue. At March 31, 1999, 2,036,160 of the Escrow Shares had been released from escrow
leaving a total of 12,216,960 AMC shares subject to escrow, which, pursuant to the Plan,
were exchanged for 7,330,177 shares in the Registrant and are subject to release on the
same basis. As of April 30, 2003 a total of 1,810,061 shares in the Registrant were
subject to escrow.

# D.  Exchange Controls

There are no governmental laws,
decrees or regulations in Canada relating to restrictions on the export or import of
capital, or affecting the remittance of interest, dividends or other payments to
non-resident holders of the Registrants Common Shares. Any remittances of dividends
to United States residents are, however, subject to a 15% withholding tax (5% if the
shareholder is a corporation owning at least 10% of the outstanding Common Shares of the
Registrant) pursuant to Article X of the reciprocal tax treaty between Canada and the
United States. See Item 10 E  Taxation.

Except as provided in the
Investment Canada Act(ICA), there are no limitations under the laws of
Canada, the Province of British Columbia or in the charter or any other constituent
documents of the Registrant on the right of foreigners to hold or vote the Common Shares
of the Registrant.

The ICA,which became
effective on June 30, 1985, requires a non-Canadian making an investment to acquire
control, directly or indirectly, of a Canadian business, to file a notification or

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39

an application for review with
Investment Canada. An application for review must be filed if the investor is not a
citizen or resident of a World Trade Organization member country, and the investment is
over $50,000,000 or, if the investor is a citizen or resident of a World Trade
Organization member country and the investment is over $223,000,000. For all acquisitions
of a Canadian business which do not meet the threshold criteria for filing an application
for review, the ICA requires the investor to file a notification.

The provisions of the ICA are
complex, and the above is a limited summary of the main provisions of the ICA. Any
non-Canadian citizen contemplating an investment to acquire control of the Registrant
should consult professional advisors as to whether and how the ICA might apply.

For purposes of the ICA, direct
acquisition of control means a purchase of the voting interests of a corporation,
partnership, joint venture or trust carrying on a Canadian business, or any purchase of
all or substantially all of the assets used in carrying on a Canadian business. An
indirect acquisition of control means a purchase of the voting interest of a corporation,
partnership, joint venture or trust, whether a Canadian or foreign entity, which controls
a corporation, partnership, joint venture or trust company carrying on a Canadian business
in Canada.

# E.  Taxation

Canadian Federal Income
Tax Consequences

The following is a summary of the
material Canadian federal income tax considerations generally applicable to U.S. holders
of the Registrants Common Shares.

The tax consequences to any
particular holder of Common Shares will vary according to the status of that shareholder
as either an individual, trust, corporation or member of a partnership, the jurisdiction
in which the shareholder is subject to taxation, the place of residence of the shareholder
and, generally, the shareholders particular circumstances.

This summary is applicable to only
those shareholders who are resident in the United States, have never been resident in
Canada, deal at arms length with the Registrant, hold their Common Shares as capital
property, and who will not use or hold the Common Shares in carrying on business in
Canada. Special rules not discussed in this summary may apply to a U.S. shareholder that
is an issuer carrying on business in Canada and elsewhere.

This summary is based upon the
provisions of the Income Tax Act of Canada and the regulations thereunder
(collectively, either the TaxAct or ITA), the
Canada-United States Tax Convention current at the date of this Annual Report(the TaxConvention), and the current administrative practices of
the Canada Customs and Revenue Agency. This summary does not take into account provincial
income tax consequences.

This summary is not exhaustive of all
possible income tax consequences. It is not intended as legal or tax advice to any
particular shareholder and should not be so construed. Each shareholder should consult his
or her own tax advisor with respect to the income tax consequences applicable in that
shareholders own particular circumstances.

| | Dividends
| | ---------

In the case of any dividends paid to
non-resident shareholders of the Registrant, the Canadian tax is withheld by the
Registrant, which remits only the net amount to the shareholder. By virtue of

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40

Article X of the Tax
Convention, the rate of tax on dividends paid to the U.S. resident shareholders is
generally limited to 15% of the gross dividend (or 5% in the case of certain corporate
shareholders owning at least 10% of the Registrants voting shares). In the absence
of the treaty provisions, the rate of Canadian withholding tax imposed on non-resident
shareholders is 25% of the gross dividend.

| | Disposition
of Common Shares
| | ----------------------------

A non-resident of Canada is not
subject to tax under the ITA in respect of capital gains realized upon the disposition of
Common Shares listed on a prescribed stock exchange unless the shares represent
taxable Canadian property to the shareholder. A Common Share of the Registrant
will be deemed taxable Canadian property to a non-resident shareholder if, at any time
during the five years preceding the disposition, the non-resident shareholder, persons
with whom the non-resident shareholder did not deal at arms length, or the
non-resident shareholder and persons with whom he/she did not deal at arms length,
owned 25% or more of the issued Common Shares of the Registrant. In the case of a
non-resident holder to whom Common Shares of the Registrant represent taxable
Canadian property and who is a U.S. resident, generally no Canadian tax is payable
on a capital gain realized on such shares by reason of the Tax Convention unless the value
of such shares is derived principally from real property located in Canada or the U.S.
shareholder previously held the shares while resident in Canada.

If a non-resident shareholder
disposes of the Registrants Common Shares to another Canadian corporation which
deals or is deemed to deal on a non-arms length basis with that shareholder and
which, immediately after the disposition, is connected with the Registrant (i.e., holds
10% or more of the voting rights and market value of the Registrants Common Shares),
the amount by which the fair market value of any consideration (other than shares of the
purchasing corporation) exceeds the paid-up capital for the Common Shares sold will be
deemed to be taxable as a dividend paid by the purchasing corporation and subject to
withholding taxes as described above.

Where a shareholder disposes of
Common Shares to the Registrant (unless the Registrant acquired the shares in the open
market in like manner to any member of the public) the result will be a deemed dividend to
the U.S. shareholder equal to the amount by which the consideration paid by the Registrant
exceeds the paid-up capital of the Common Shares. The amount of such dividend will be
subject to withholding tax as previously described.

Material Australian
Income Tax Consequences

Management of the Registrant believes
that the following general summary fairly describes the principal Australian income tax
consequences applicable to a holder of Common Shares of the Registrant who is a resident
of the United States and who is not a resident of Australia and who does not use or hold,
and is not deemed to use or hold, his Common Shares of the Registrant in connection with
carrying on a business in Australia (a non-resident shareholder).

This summary is based upon the
current provisions of the Income Tax Assessment Acts 1936 and 1997 (Australia) (the
ITAA), the regulations thereunder (the Regulations), the current
publicly announced administrative and assessing policies of the Australian Taxation
Office, and all specific proposals (the Tax Proposals) to amend the ITAA and
Regulations announced by the Treasurer (Australia) prior to the date hereof. This
description is not exhaustive of all possible Australian federal income tax consequences
and, except for the Tax Proposals, does not take into account or anticipate any changes in
law, whether by legislative, governmental or judicial action, nor does it take into
account provincial or foreign tax considerations which may differ significantly from those
discussed herein. The holders and prospective holders of Common Shares of the Registrant

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41

should consult with their own tax
advisors about the federal, provincial and foreign tax consequences of purchasing, owning
and disposing of Common Shares of the Registrant in light of their particular tax
circumstances.

| | Dividends
| | ---------

Dividends received by the Registrant
from its Australian subsidiary which are paid from after tax retained income
(franked dividends) are not subject to Australian withholding tax. For the
purposes of Australian withholding tax a franked dividend is defined as a dividend that
has been franked in accordance with section 160AQF of the ITAA, i.e. a dividend paid out
of profits which have borne Australian company tax in accordance with section 160AQF of
the ITAA. Unfranked dividends paid by the Australian subsidiary to the Registrant will be
subject to a withholding tax in Australia. Where the Registrant is a US resident
corporation with at least a 10% shareholding, the withholding rate will reduce to 5% for
dividends derived on or after 13 July 2003 (in terms of the entering into force on 12 May
2003 of the protocol to amend the Double Tax Agreement between Australia and the US).

| | Disposal
of shares
| | ------------------

A non-resident of Australia will only
be subject to Australian capital gains tax on the disposal of an asset if it has the
necessary connection with Australia. As the Registrant is not an Australian
resident public company, as defined by the ITAA, there will not be this necessary
connection and the non-resident shareholders of the Registrant will not be subject to
Australian capital gains tax on the disposal of their Common Shares in the Registrant.

An exception is noted where a
non-resident realizes a profit or gain which represents income attributable to a business
of the shareholder carried on in Australia through a permanent establishment
as defined in the Australia/US Double Tax Agreement. In this instance, a non-resident of
Australia may be subject to tax in respect of that profit or gain.

| | 2003
Federal Budget
| | -------------------

The Federal Budget delivered May 13,
2003 proposes significant reforms in the area of international taxation. None of the
proposals are considered relevant to the thrust of this filing.

U.S. Federal Income Tax
Consequences

The following is a general discussion
of certain possible U.S. federal income tax consequences, under current law, generally
applicable to a U.S. Holder (as hereinafter defined) of common shares of the Registrant.
This discussion is of a general nature only and does not take into account the particular
facts and circumstances, with respect to U.S. federal income tax issues, of any particular
U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax
consequences. (See Taxation  Canadian Federal Income Tax Consequences
above).

The following discussion is based
upon the sections of the Internal Revenue Code of 1986, as amended (the Code),
Treasury Regulations, published Internal Revenue Service (IRS) rulings,
published administrative positions of the IRS and court decisions that are currently
applicable, any or all of which could be materially and adversely changed, possibly on a
retroactive basis, at any time and which are subject to differing interpretations. This
discussion does not consider the potential effects, both adverse and beneficial, of any
proposed legislation which, if enacted, could be applied, possibly on a retroactive basis,
at any time.

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42

This discussion is for general
information only and it is not intended to be, nor should it be construed to be, legal or
tax advice to any U.S. Holder or prospective U.S. Holder of common shares of the
Registrant, and no opinion or representation with respect to the U.S. federal income tax
consequences to any such U.S. Holder or prospective U.S. Holder is made. Accordingly, U.S.
Holders and prospective U.S. Holders of common shares of the Registrant should consult
their own financial advisor, legal counsel or accountant regarding the U.S. federal,
state, local and foreign tax consequences of purchasing, owning and disposing of common
shares of the Registrant.

| | U.S.
Holders
| | ------------

As used herein, a U.S.
Holder means a holder of common shares of the Registrant who is (i) a citizen or
individual resident of the U.S., (ii) a corporation created or organized in or under the
laws of the U.S. or of any political subdivision thereof, (iii) an estate whose income is
taxable in the U.S. irrespective of source or (iv) a trust subject to the primary
supervision of a court within the U.S. and control of a U.S. fiduciary as described in
Section 7701(a)(30) of the Code. If a partnership or other pass-through entity
treated as a partnership for U.S. federal income tax purposes holds common shares of the
Registrant, the U.S. federal income tax treatment of the partners or owners of such
partnership or other pass-through entity generally will depend on the status of such
partners or owners and the activities of such partnership or pass-through entity.

| | Persons
Not Covered
| | -------------------

This summary does not address the
U.S. federal income tax consequences to persons (including persons who are U.S. Holders)
subject to special provisions of U.S. federal income tax law, including (i) persons who
are tax-exempt organizations, qualified retirement plans, individual retirement accounts
and other tax-deferred accounts, financial institutions, insurance companies, real estate
investment trusts, regulated investment companies, or brokers, dealers or traders in
securities, (ii) persons who have a functional currency other than the U.S.
dollar, (iii) persons subject to the alternative minimum tax, (xi) persons who own their
common shares of the Registrant as part of a straddle, hedging, conversion transaction,
constructive sale or other arrangement involving more than one position, (iv) persons who
acquired their common shares of the Registrant through the exercise of employee stock
options or otherwise as compensation for services, (v) persons that own an interest in an
entity that owns common shares of the Registrant, (vi) persons who own, exercise or
dispose of any options, warrants or other rights to acquire common shares of the
Registrant, (vii) persons who are partners or owners of partnerships or other pass-through
entities or (viii) persons who own their common shares of the Registrant other than as a
capital asset within the meaning of Section 1221 of the Code.

| | Distribution
on Common Shares of the Registrant
| | -----------------------------------------------

U.S. Holders
receiving distributions (including constructive distributions) with           respect to
common shares of the Registrant are required to include in gross           income for
U.S. federal income tax purposes the gross amount of such           distributions, equal
to the U.S. dollar value of such distributions on the date           of receipt (based on
the exchange rate on such date), to the extent that the           Registrant has current
or accumulated earnings and profits, without reduction           for any Canadian income
tax withheld from such distributions. Such Canadian tax           withheld may be
credited, subject to certain limitations, against the U.S.           Holders U.S.
federal income tax liability or, alternatively, may be           deducted in computing
the U.S. Holders U.S. federal taxable income by           those who itemize
deductions. (See more detailed discussion at Foreign Tax           Credit below).
To the extent that distributions from the Registrant exceed           current or
accumulated earnings and profits of the Registrant, such           distributions will be
treated first as a return of capital, to the extent of the           U.S. Holders
adjusted basis in the common shares, and thereafter as gain           from the sale or
exchange of

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43

the common shares of the Registrant.
 (See more detailed discussion at "Disposition of Common Shares of the Registrant" below)

In the case of foreign currency
received as a distribution that is not converted by the recipient into U.S. dollars on the
date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its
U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a
subsequent sale or other disposition of the foreign currency, including the exchange for
U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain
does not exceed $200 will not recognize that gain, to the extent that there are no
expenses associated with the transaction that meet the requirements for deductibility as a
trade or business expense (other than travel expenses in connection with a business trip)
or as an expense for the production of income.

Dividends paid on the common shares
of the Registrant generally will not be eligible for the dividends received
deduction allowed to corporate shareholders receiving dividends from certain U.S.
corporations. Under certain circumstances, a U.S. Holder that is a corporation and that
owns shares representing at least 10%of the total voting power and the total value of the
Registrants outstanding shares may be entitled to a 70% deduction of the U.S.
source portion of dividends received from the Registrant (unless the Registrant
qualifies as a Foreign Personal Holding Company or a Passive Foreign
Investment Company as defined below). The availability of the dividends received
deduction is subject to several complex limitations which are beyond the scope of this
discussion, and U.S. Holders of common shares of the Registrant should consult their own
financial advisor, legal counsel or accountant regarding the dividends received deduction.

Certain information reporting and
backup withholding rules may apply with respect to certain payments related to the
Registrants common shares. In particular, a payor or middleman within the U.S., or
in certain cases outside the U.S., will be required to withhold 30% (which rate is
scheduled for periodic adjustment) of any payments to a U.S. Holder of the
Registrants common shares of dividends on, or proceeds from the sale of, such common
shares within the U.S., if a U.S. Holder fails to furnish its correct taxpayer
identification number or otherwise fails to comply with, or establish an exemption from,
the backup withholding tax requirements. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holders U.S. federal income tax liability, provided the required information is
furnished to the IRS.

| | Foreign
Tax Credit
| | ------------------

A U.S. Holder who pays (or has
withheld from distributions) Canadian or other foreign income tax with respect to the
ownership of common shares of the Registrant may be entitled, at the option of the U.S.
Holder, to either receive a deduction or a tax credit for U.S. federal income tax purposes
with respect to such foreign tax paid or withheld. Generally, it will be more advantageous
to claim a credit because a credit reduces U.S. federal income taxes on a
dollar-for-dollar basis, while a deduction merely reduces the taxpayers income
subject to U.S. federal income tax. This election is made on a year-by-year basis and
applies to all foreign taxes paid by (or withheld from distributions to) the U.S. Holder
during that year.

There are significant and complex
limitations that apply to the foreign tax credit, among which is the general limitation
that the credit cannot exceed the proportionate share of the U.S. Holders U.S.
income tax liability that the U.S. Holders foreign source income bears
to his or its worldwide taxable income. In applying this limitation, the various items of
income and deduction must be classified as either foreign source or U.S.
source. Complex rules govern this classification process. In addition, this
limitation is calculated separately with respect to specific

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44

classes of income such as
passive income, high withholding tax interest, financial
services income, shipping income, and certain other classifications of
income. Dividends distributed by the Registrant will generally constitute foreign
source income, and will be classified as passive income or, in the case
of certain U.S. Holders, financial services income for these purposes.

In addition, U.S. Holders that are
corporations and that own 10% or more of the voting stock of the Registrant may be
entitled to an indirect foreign tax credit under Section 902 of the Code with
respect to the payment of dividends by the Registrant under certain circumstances and
subject to complex rules and limitations.The availability of the foreign tax
credit and the application of the limitations with respect to the foreign tax credit are
fact specific, and each U.S. Holder of common shares of the Registrant should consult
their own financial advisor, legal counsel or accountant regarding the foreign tax credit
rules.

| | Disposition
of Common Shares of the Registrant
| | ----------------------------------------------

A U.S. Holder will recognize gain or
loss upon the sale or other taxable disposition of common shares of the Registrant equal
to the difference, if any, between (i) the amount of cash plus the fair market value
of any property received, and (ii) the shareholders tax basis in the common
shares of the Registrant. This gain or loss will be capital gain or loss if the common
shares are a capital asset in the hands of the U.S. Holder, which will be long-term
capital gain or loss if the common shares of the Registrant are held for more than one
year.

Preferential tax rates apply to
long-term capital gains of U.S. Holders that are individuals, estates or trusts. If the
common shares of the Registrant are held for more than five years, a lower long-term
capital gains tax rate may apply. There are currently no preferential tax rates for
long-term capital gains for a U.S. Holder that is a corporation (other than a corporation
subject to Subchapter S of the Code). Deductions for net capital losses are subject to
significant limitations. For U.S. Holders that are not corporations, any unused portion of
such net capital loss may be carried over to be used in later tax years until such net
capital loss is thereby exhausted. For U.S. Holders that are corporations (other than
corporations subject to Subchapter S of the Code), an unused net capital loss may be
carried back three years and carried forward five years from the loss year to be offset
against capital gains until such net capital loss is thereby exhausted.

| | Other
Considerations for U.S. Holders
| | -------------------------------------

In the following circumstances, the
above sections of this discussion may not describe the U.S. federal income tax
consequences to U.S. Holders resulting from the ownership and disposition of common shares
of the Registrant:

| | Foreign
Personal Holding Company
| | --------------------------------

If at any time during a taxable year
(i) more than 50% of the total voting power or the total value of the Registrants
outstanding shares is owned, directly or indirectly, by five or fewer individuals who are
citizens or residents of the U.S. and (ii) 60% (or 50% in certain cases) or more of the
Registrants gross income for such year is foreign personal holding company
income as defined in Section 553 of the Code (e.g., dividends, interest, royalties,
certain gains from the sale of stock and securities, and certain gains from commodities
transactions), the Registrant may be treated as a Foreign Personal Holding
Company (FPHC) In that event, U.S. Holders of common shares of the
Registrant would be required to include in gross income for such year their allocable
portions of such foreign personal holding company income to the extent the
Registrant does not actually distribute such income.

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45

The Registrant does not believe that
it currently qualifies as a FPHC. However, there can be no assurance that the Registrant
will not be considered a FPHC for the current or any future taxable year.

| | Foreign
Investment Company
| | --------------------------

If (i) 50% or more of the total
voting power or the total value of the Registrants outstanding shares is owned,
directly or indirectly, by citizens or residents of the U.S., U.S. partnerships or
corporations, or U.S. estates or trusts (as defined by the Code Section 7701(a)(30)), and
(ii) the Registrant is found to be engaged primarily in the business of investing,
reinvesting, or trading in securities, commodities, or any interest therein, the
Registrant may be treated as a Foreign Investment Company (FIC) as
defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S.
Holder selling or exchanging common shares of the Registrant to be treated as ordinary
income rather than capital gain.

The Registrant does not believe that
it currently qualifies as a FIC. However, there can be no assurance that the Registrant
will not be considered a FIC for the current or any future taxable year.

| | Controlled
Foreign Corporation
| | ------------------------------

If more than 50% of the total voting
power or the total value of the Registrants outstanding shares is owned, directly or
indirectly, by citizens or residents of the U.S., U.S. partnerships or corporations, or
U.S. estates or trusts (as defined by the Code Section 7701(a)(30)), each of which own,
directly or indirectly, 10% or more of the total voting power of the Registrants
outstanding shares (each a 10% Shareholder), the Registrant could be treated
as a Controlled Foreign Corporation (CFC) under Section 957 of the
Code.

The classification of the Registrant
as a CFC would have many complex implications, including that 10% Shareholders of the
Registrant would generally (i) be treated as having received a current distribution of the
Registrants Subpart F income and (ii) would also be subject to
current U.S. federal income tax on their pro rata shares of the Registrants earnings
invested in U.S. property. The foreign tax credit may reduce the U.S. federal
income tax on these amounts for such 10% Shareholders (See more detailed discussion at
Foreign Tax Credit above). In addition, under Section 1248 of the Code, gain
from the sale or other taxable disposition of common shares of the Registrant by a U.S.
Holder that is or was a 10% Shareholder at any time during the five-year period ending
with the date of sale is treated as ordinary income to the extent of earnings and profits
of the Registrant attributable to the common shares sold or exchanged.

If the Registrant is classified as
both a Passive Foreign Investment Company as described below and a CFC, the Registrant
generally will not be treated as a Passive Foreign Investment Company with respect to 10%
Shareholders. This rule generally will be effective for taxable years of 10% Shareholders
beginning after 1997 and for taxable years of the Registrant ending with or within such
taxable years of 10% Shareholders.

The Registrant does not believe that
it currently qualifies as a CFC. However, there can be no assurance that the Registrant
will not be considered a CFC for the current or any future taxable year.

| | Passive
Foreign Investment Company
| | ----------------------------------

Certain U.S. income tax legislation
contains rules governing Passive Foreign Investment Companies
(PFIC) which can have significant tax effects on U.S. Holders of foreign
corporations. Section 1297 of the Code defines a PFIC as a corporation that is not formed
in the

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46

U.S.    
          and, for any taxable year, either (i) 75% or more of its gross income is
          passive income or (ii) the average percentage, by fair market value
          (or, if the corporation is not publicly traded and either is a controlled
          foreign corporation or makes an election, by adjusted tax basis), of its assets
          that produce or are held for the production of passive income is 50%
          or more. Passive income includes, for example, dividends, interest,
          certain rents and royalties, certain gains from the sale of stock and
          securities, and certain gains from commodities transactions. However, gains
          resulting from commodities transactions are generally excluded from the
          definition of passive income if substantially all of a
          merchants, producers or handlers business is as an active
          merchant, producer or handler of such commodities.

For purposes of the PFIC income test
and the assets test, if a foreign corporation owns (directly or indirectly) at least 25%
by value of the stock of another corporation, such foreign corporation shall be treated as
if it (a) held a proportionate share of the assets of such other corporation, and (b)
received directly its proportionate share of the income of such other corporation. Also,
for purposes of such PFIC tests, passive income does not include any interest, dividends,
rents or royalties that are received or accrued from a related person to the
extent such amount is properly allocable to the income of such related person which is not
passive income. For these purposes, a person is related with respect to a foreign
corporation if such person controls the foreign corporation or is controlled
by the foreign corporation or by the same persons that control the foreign corporation.
For these purposes, control means ownership, directly or indirectly, of stock
possessing more than 50% of the total voting power of all classes of stock entitled to
vote or of the total value of stock of a corporation.

The Registrant believes that it
qualified as a PFIC for the fiscal year ended December 31, 2002, may have qualified as a
PFIC in prior years and may qualify as a PFIC in subsequent years. There can be no
assurance that the Registrants determination concerning its PFIC status will not be
challenged or that it will be able to satisfy record keeping requirements that will be
imposed on a qualified electing fund (QEF).

A U.S. Holder who holds stock in a
foreign corporation during any year in which such corporation qualifies as a PFIC is
subject to U.S. federal income taxation under one of three alternative tax regimes at the
election of each such U.S. Holder. The following is a discussion of such three alternative
tax regimes applied to such U.S. Holders of the Registrant. In addition, special rules
apply if a foreign corporation qualifies as both a PFIC and a controlled foreign
corporation (as defined below) and a U.S. Holder owns, actually or constructively,
10 % or more of the total combined voting power of all classes of stock entitled to vote
of such foreign corporation (See more detailed discussion at Controlled Foreign
Corporation below).

| | QEF
Election
| | ------------

A U.S. Holder who elects in a timely
manner to treat the Registrant as a QEF (an Electing U.S. Holder) will be
subject, under Section 1293 of the Code, to current U.S. federal income tax for any
taxable year in which the Registrant qualifies as a PFIC on his pro rata share of the
Registrants (i) net capital gain (the excess of net long-term capital
gain over net short-term capital loss), which will be taxed as long-term capital gain to
the Electing U.S. Holder and (ii) ordinary earnings (the excess of earnings
and profits over net capital gain), which will be taxed as ordinary income to the Electing
U.S. Holder, in each case, for the shareholders taxable year in which (or with
which) the Registrants taxable year ends, regardless of whether such amounts are
actually distributed.

The effective QEF election also
allows the Electing U.S. Holder to (i) generally treat any gain realized on the
disposition of his Registrant common shares (or deemed to be realized on the

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47

pledge of his shares) as capital
gain; (ii) treat his share of the Registrants net capital gain, if any, as
long-term capital gain instead of ordinary income; and (iii) either avoid interest
charges resulting from PFIC status altogether, or make an annual election, subject to
certain limitations, to defer payment of current taxes on his share of the
Registrants annual realized net capital gain and ordinary earnings subject, however,
to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest
charge would be treated as personal interest that is not deductible.

The procedure a U.S. Holder must
comply with in making an effective QEF election, and the U.S. federal income tax
consequences of the QEF election, will depend on whether the year of the election is the
first year in the U.S. Holders holding period in which the Registrant is a PFIC. If
the U.S. Holder makes a QEF election in such first year, i.e., a timely QEF election, then
the U.S. Holder may make the QEF election by simply filing the appropriate QEF election
documents at the time the U.S. Holder files his tax return for such first year. However,
if the Registrant qualified as a PFIC in a prior year, then in addition to filing the QEF
election documents, the U.S. Holder must elect to recognize (i) under the rules of Section
1291 of the Code (discussed herein), any gain that he would otherwise recognize if the
U.S. Holder sold his stock on the qualification date or (ii) if the Registrant is a
controlled foreign corporation, the U.S. Holders pro rata share of the
Registrants post-1986 earnings and profits as of the qualification date. The
qualification date is the first day of the Registrants first tax year in which the
Registrant qualified as a QEF with respect to such U.S. Holder. The elections to recognize
such gain or earnings and profits can only be made if such U.S. Holders holding
period for the common shares of the Registrant includes the qualification date. By
electing to recognize such gain or earnings and profits, the U.S. Holder will be deemed to
have made a timely QEF election. A U.S. Holder who made elections to recognize gain or
earnings and profits after May 1, 1992 and before January 27, 1997 may, under
certain circumstances, elect to change such U.S. Holders qualification date to the
first day of the first QEF year. U.S. Holders are urged to consult a tax advisor regarding
the availability of and procedure for electing to recognize gain or earnings and profits
under the foregoing rules. In addition to the above rules, under very limited
circumstances, a U.S. Holder may make a retroactive QEF election if such U.S. Holder
failed to file the QEF election documents in a timely manner.

A QEF election, once made with
respect to the Registrant, applies to the tax year for which it was made and to all
subsequent tax years, unless the election is invalidated or terminated, or the IRS
consents to revocation of the election. If a QEF election is made by a U.S. Holder and the
Registrant ceases to qualify as a PFIC in a subsequent tax year, the QEF election will
remain in effect, although not applicable, during those tax years in which the Registrant
does not qualify as a PFIC. Therefore, if the Registrant again qualifies as a PFIC in a
subsequent tax year, the QEF election will be effective and the U.S. Holder will be
subject to the rules described above for Electing U.S. Holders in such tax year and any
subsequent tax years in which the Registrant qualifies as a PFIC. In addition, the QEF
election remains in effect, although not applicable, with respect to an Electing U.S.
Holder even after such U.S. Holder disposes of all of his or its direct and indirect
interest in the shares of the Registrant. Therefore, if such U.S. Holder reacquires an
interest in the Registrant, that U.S. Holder will be subject to the rules described above
for Electing U.S. Holders for each tax year in which the Registrant qualifies as a PFIC.

| | Section
1291 Rules
| | ------------------

If a U.S. Holder does not make a
timely QEF election during a year in which it holds (or is deemed to have held) the common
shares in question and the Registrant is a PFIC (a Non-Electing U.S. Holder),
then special taxation rules under Section 1291 of the Code will apply to (i) gains
realized on the disposition (or deemed to be realized by reasons of a pledge) of his
Registrant common shares and (ii) certain excess distributions
(generally, distributions received in the current

---

48

taxable year that are in excess of
125% of the average distributions received during the three preceding years or, if
shorter, the U.S. Holders holding period) by the Registrant.

A Non-Electing U.S. Holder generally
would be required to pro rate all gains realized on the disposition of his Registrant
common shares and all excess distributions on his Registrant common shares over the entire
holding period for the common shares. All gains or excess distributions allocated to prior
years of the U.S. Holder (other than years prior to the first taxable year of the
Registrant during such U.S. Holders holding period and beginning after
January 1, 1987 for which it was a PFIC) would be taxed at the highest tax rate for
each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also
would be liable for interest on the foregoing tax liability for each such prior year
calculated as if such liability had been due with respect to each such prior year. A
Non-Electing U.S. Holder that is not a corporation must treat this interest charge as
personal interest which, as discussed above, is wholly nondeductible. The
balance of the gain or the excess distribution will be treated as ordinary income in the
year of the disposition or distribution, and no interest charge will be incurred with
respect to such balance.

If the Registrant is a PFIC for any
taxable year during which a Non-Electing U.S. Holder holds Registrant common shares, then
the Registrant will continue to be treated as a PFIC with respect to such Registrant
common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder
may terminate this deemed PFIC status by electing to recognize gain (which will be taxed
under the rules discussed above for Non-Electing U.S. Holders) as if such Registrant
common shares had been sold on the last day of the last taxable year for which it was a
PFIC.

| | Mark-to-Market
Election
| | -----------------------

Effective for tax years of U.S.
Holders beginning after December 31, 1997, U.S. Holders who hold, actually or
constructively, marketable stock (as specifically defined in the Treasury Regulations) of
a foreign corporation that qualifies as a PFIC may annually elect to mark such stock to
the market (a mark-to-market election). If such an election is made, such U.S.
Holder will generally not be subject to the special taxation rules of Section 1291
discussed above. However, if the mark-to-market election is made by a Non-Electing U.S.
Holder after the beginning of the holding period for the PFIC stock, then the Section 1291
rules will apply to certain dispositions of, distributions on and other amounts taxable
with respect to the Registrant common shares. A U.S. Holder who makes the mark-to market
election will include in income for the taxable year for which the election was made an
amount equal to the excess, if any, of the fair market value of the common shares of the
Registrant as of the close of such tax year over such U.S. Holders adjusted basis in
such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of
(i) the excess, if any, of such U.S. Holders adjusted tax basis in the common
shares over the fair market value of such shares as of the close of the tax year, or
(ii) the excess, if any, of (A) the mark-to-market gains for the common shares
in the Registrant included by such U.S. Holder for prior tax years, including any amount
which would have been included for any prior tax year but for the Section 1291 interest on
tax deferral rules discussed above with respect to Non-Electing U.S. Holders, over
(B) the mark-to-market losses for shares that were allowed as deductions for prior
tax years. A U.S. Holders adjusted tax basis in the common shares of the Registrant
will be adjusted to reflect the amount included in or deducted from income as a result of
a mark-to-market election. A mark-to-market election applies to the taxable year in which
the election is made and to each subsequent taxable year, unless the Registrant common
shares cease to be marketable, as specifically defined, or the IRS consents to revocation
of the election. Because the IRS has not established procedures for making a
mark-to-market election, U.S. Holders should consult their tax advisor regarding the
manner of making such an election.

---

49

| | Other
PFIC Rules
| | ----------------

Under Section 1291(f) of the Code,
the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions,
would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that
are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate
reorganizations, and transfers at death. Generally, in such cases the basis of the
Registrant common shares in the hands of the transferee and the basis of any property
received in the exchange for those common shares would be increased by the amount of gain
recognized. However, the specific U.S. federal income tax consequences to the U.S. Holder
and the transferee may vary based on the manner in which the common shares are
transferred.

Certain special, generally adverse,
rules will apply with respect to Registrant common shares while the Registrant is a PFIC
whether or not it is treated as a QEF. For example under Section 1298(b)(6) of the Code, a
U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will,
except as may be provided in regulations, be treated as having made a taxable disposition
of such shares.

# F.  Dividends and Paying
Agents

Not applicable

# G.  Statement by Experts

Not applicable

# H.  Documents on display

The Registrants documents can
be viewed at its North American office, located at 20607 Logan Avenue, Langley, BC,
Canada. The Registrant is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and it files reports, registration statements and other
information with the Securities and Exchange Commission (the SEC). The
Registrants reports, registration statements and other information can be inspected
on the SECs website at www.sec.gov and such information can also be inspected. and
copies ordered at the public reference facilities maintained by the SEC at the following
locations:

---

|Judiciary Plaza
Room 1024
Washington, DC 20549 | 500 West Madison
Suite 1400
Chicago, IL 60661
|---------------------------------------------- | ---------------------------------------------

---

# I.  Subsidiary Information

Not applicable

Item 11 
Quantitative and Qualitative Disclosures about Market Risk

The Registrant has not entered into
any activities in derivative financial instruments, other financial instruments, or
derivative commodity instruments. The Registrants financial assets in the form of
cash and cash equivalents are held in short term interest-bearing deposits at institutions
with high credit quality ratings. Non-material amounts of foreign currency may be held
from time to time for the payment of operating expenses. As the Registrant is engaged in
exploring mineral properties which, if successful, will produce commodities, it can be
seen to be exposed indirectly to commodity risk. Such exposure cannot be accurately
estimated by quantitative means although the risk would increase as the possibility of
project success increased. Industry practice dictates

---

50

that attempts to hedge commodity risk
not begin until at least there are funding agreements in place supported by a bankable
feasibility study. The Registrant has in the past and may in the future finance its
activities by the sale of equity and/or debt instruments. This is also an indirect
exposure to equity and/or interest-rate risk, which cannot be accurately estimated by
quantitative means.

Item 12  Description of
Securities other than Equity Securities
Not applicable.

# Part II

Item 13  Defaults,
Dividend Arrearages and Delinquencies

Not applicable.

Item 14  Material
Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.

Item 15  Controls and
Procedures

# A.  Evaluation of
disclosure controls and procedures.

Under the supervision and with the
participation of the Companys management, including the Companys Chief
Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of
the design and operation of its disclosure controls and procedures (as defined in Rule
13a-14(c)under the Securities Exchange Act of 1934, as amended) as
of a date (the Evaluation Date) within 90 days prior to the filing date of
this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the Evaluation Date, the Companys disclosure controls
and procedures were effective in timely alerting them to the material information relating
to the Company (or the Companys consolidated subsidiaries) required to be included
in the Companys periodic SEC filings.

# B.  Changes in internal
controls.

There were no significant changes
made in the Companys internal controls or, to the Companys knowledge, in other
factors that could significantly affect these controls subsequent to the date of their
evaluation.

Item 16  Reserved

# Part III

Item 17  Financial
Statements

These financial statements were
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP) and are expressed in Canadian dollars. Such financial statements have
been reconciled to United States Generally Accepted Accounting Principles for measurement
differences between Canadian and United States GAAP (see Note 10 therein). For a history
of exchange rates in effect for Canadian dollars as against U.S. dollars, see Item 3
 Key Information  Selected Financial Data.

---

51

# Argosy Minerals Inc. 
(an Exploration stage company) 

CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended
December 31, 2002, 2001 and 2000

# MANAGEMENTS
RESPONSIBILITY FOR FINANCIAL REPORTING

The consolidated financial statements
and the information contained in the annual report have been prepared by the management of
the Corporation. The financial statements have been prepared in accordance with Canadian
generally accepted accounting principles and, where appropriate, reflect managements
best estimates based on currently available information. A system of internal accounting
control is maintained to provide reasonable assurance that financial information is
accurate and reliable.

The Corporations independent
auditors, PricewaterhouseCoopers LLP, who have been appointed by the shareholders, conduct
an audit in accordance with generally accepted auditing standards in Canada and the US to
allow them to express an opinion on the financial statements.

The Audit Committee of the Board of
Directors meets periodically with management and the independent auditors to review the
scope and result of the annual audit, and to review the financial statements and related
reporting matters prior to submission to the Board.

|Chief Executive Officer
Perth Australia | Chief Financial Officer
Langley, BC
|--------------------------------------- | -----------------------------------

7 March 2003

---

52

REPORT OF INDEPENDENT
ACCOUNTANTS 
To the Shareholders of Argosy Minerals Inc

We have audited the consolidated
balance sheets of Argosy Minerals Inc as at December 31, 2002 and 2001 and the
consolidated statements of operations and deficit and cash flows for the years ended
December 31, 2002, 2001 and 2000. These financial statements are the responsibility of the
Corporation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 and US 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 Corporation as at December 31, 2002 and 2001 and the results of its operations and its
cash flows for the years ended December 31, 2002, 2001 and 2000 in accordance with
Canadian generally accepted accounting principles.

Chartered Accountants
Vancouver, Canada 7 March 2003

---

53

Argosy Minerals Inc 
(an Exploration stage company) 
CONSOLIDATED BALANCE SHEETS 
As At December 31, 2002 and 2001
(Expressed in Canadian Dollars)

|                                                      |        
|----------------------------------------------------- | -------
|
|                                                      |        
|ASSETS                                                |        
|                                                      |        
|Current Assets                                        |        
|Cash and cash equivalents                             |        
|Accounts receivable and prepaids                      |        
|Marketable Securities (fair market value)             |        
|                                                      |        
|                                                      |        
|                                                      |        
|Restricted Cash                                       | Note 3a
|                                                      |        
|Mineral Properties and Deferred Costs                 | Note 3 
|                                                      |        
|Property Plant and Equipment                          |        
|                                                      |        
|                                                      |        
|                                                      |        
|LIABILITIES                                           |        
|                                                      |        
|Current Liabilities                                   |        
|Accounts payable and accrued liabilities              |        
|                                                      |        
|SHAREHOLDERS' EQUITY                                  |        
|                                                      |        
|Capital Stock                                         | Note 4 
|Authorised - unlimited                                |        
|Issued - 95,969,105 common shares  (2001: 95,969,105) |        
|                                                      |        
|                                                      |        
|Deficit                                               |        
|                                                      |        
|                                                      |        
|                                                      |        
|                                                      |        
|                                                      |        
|Request for arbitration                               | Note 9 

APPROVED BY THE DIRECTORS

|Peter H. Lloyd, Director | Cecil R. Bond, Director
|------------------------ | -----------------------

---

54

Argosy Minerals Inc 
(an Exploration stage company) 
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
For the Years Ended December 31, 2002, 2001 and 2000
(Expressed in Canadian Dollars)

|                                     
|-------------------------------------
|
|                                     
|Income                               
|Interest                             
|                                     
|Expenses                             
|Accounting and audit                 
|Bank charges                         
|Capital taxes                        
|Depreciation                         
|Directors' fees                      
|Foreign exchange (gain)/loss         
|Insurance                            
|Legal                                
|Loss on marketable securities        
|Management and consulting fees       
|Office                               
|Project assessment                   
|Rent                                 
|Salaries and benefits                
|Shareholder communications           
|Telecommunications                   
|Transfer agent and stock exchange    
|Travel                               
|Write-off of mineral properties      
|and deferred costs                   
|                                     
|                                     
|                                     
|Loss for the Year                    
|Deficit - Beginning of Year          
|                                     
|Deficit - End of Year                
|                                     
|Basic & Diluted Loss per Common Share
|                                     
|Weighted Average Number of           
|Common Shares Outstanding            
|                                     

---

55

Argosy Minerals Inc 
(an Exploration stage company) 
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2002, 2001 and 2000
(Expressed in Canadian Dollars)

|                                           
|-------------------------------------------
|
|                                           
|Cash Provided from (Used for)              
|                                           
|Operating Activities                       
|Loss for the year                          
|Adjustments for:                           
|Depreciation                               
|Foreign exchange (gain)/loss               
|Loss on marketable securities              
|Write-off of mineral properties            
|and deferred costs                         
|                                           
|                                           
|                                           
|Changes in Non-cash Working Capital        
|(Increase)/Decrease in accounts receivable 
|and prepaids                               
|Increase/(Decrease) in accounts payable    
|and accrued liabilities                    
|                                           
|Cash Flows from Operating Activities       
|                                           
|Financing Activities                       
|Issue of capital stock                     
|                                           
|Cash Flows from Financing Activities       
|                                           
|Investing Activities                       
|Mineral properties and deferred costs      
|Re-imbursement of deferred costs - Nakety  
|Acquisition of Marketable Securities       
|Acquisition of Indian Ocean - cash acquired
|Purchase of property, plant & equipment    
|Restricted cash                            
|                                           
|Cash Flows from Investing Activities       
|                                           
|Foreign Exchange Gain/(Loss) on cash       
|held in Foreign Currency                   
|                                           
|(Decrease)/Increase in Cash and Cash       
|Equivalents                                
|                                           
|Cash and Cash Equivalents -                
|Beginning of Year                          
|                                           
|Cash and Cash Equivalents -                
|End of Year                                
|                                           

---

56

1.   Nature Of Operations

The Corporation is in the process of
exploring its mineral properties and investigating other possible property acquisitions.
The Corporation is involved in studies for the development of a nickel/cobalt processing
facility at Musongati in the Republic of Burundi and in gold exploration in the Slovak
Republic. In August 2002 the Corporations subsidiary, Andover Resources N.L.,
declared force majeure and curtailed its activities in Burundi as a result of the
deterioration of the security situation in Burundi. See Note 3(a).

On August 5, 2002, the Corporation
received a notice of termination from NN Invest Holdings SA (NNIH), a
subsidiary of Norilsk Mining Company (Norilsk) terminating the Tripartite
Agreement (the Agreement) between NNIH, Societe des Mines de la Tontouta
(SMT) and the Corporation for the development of the New Caledonia Nickel
Project. See Note 3(c). On September 13, 2002, the Corporation and its subsidiary Balzan
received a request for arbitration by NNIH from the International Court of Arbitration of
the International Chamber of Commerce (IC). The request for arbitration seeks
to recover US$7,166,000 paid to Balzan plus an additional US$1,368,222 expended on the
project. See Note 9.

As yet, it has not been determined if
the Corporations mineral properties contain ore reserves that are economically
recoverable and whether the processing facilities are economically viable. The
recoverability of the amounts shown for mineral properties and deferred costs is dependent
on the existence of economically recoverable reserves, the ability of the Corporation to
obtain necessary financing to complete the development and future profitable production or
proceeds from disposition of the mineral properties. The amounts shown as mineral
properties and deferred costs represent costs to date, less amounts recovered or written
off, and do not necessarily represent present or future values.

2.   Significant Accounting
Policies

# Principles of Consolidation

The consolidated financial statements
include the accounts of the Corporation and its wholly owned subsidiaries:

|Company Name                                      | Country
|------------------------------------------------- | -------
|                                                 
|Argosy Mining Corp. ("Argosy")                    |        
|Calliope Metals (Holdings) Ltd.                   |        
|Calliope Metals Pty Ltd. ("Calliope Metals")      |        
|Andover Resources N.L. ("Andover")                |        
|Kremnica Gold a.s                                 |        
|Liberex Limited                                   |        
|Liberex Mining B.V                                |        
|Melling Investments Limited ("Melling")           |        
|Balzan Investments Limited ("Balzan")             |        
|Indian Ocean Exploration Limited ("Indian Ocean") |        

# Financial Statement
Presentation

These consolidated financial
statements have been prepared in accordance with Canadian generally accepted accounting
principles (GAAP). The material measurement differences between Canadian and
United States GAAP relating to measurement are explained in Note 10, along with their
effect on the Companys consolidated statements of operations and consolidated
balance sheets. Certain additional disclosures as required under US GAAP have not been
provided as permitted by the SEC.

# 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

---

57

contingent assets and liabilities at
the date of the financial statements and the reported amount of income and expenses during
the period. Significant areas where managements judgement is applied are mineral
property valuations and contingent liabilities. Actual results may differ from those
estimates.

# Cash and Cash Equivalents

Cash and cash equivalents include
cash and short-term deposits maturing within 90 days of the original date of acquisition.
In order to limit its exposure, the Corporation deposits its funds with major Canadian,
Australian and UK banks. A substantial portion of the cash balances are held in Australian
and U.S. dollars; accordingly, the Corporation has exposure to fluctuations in currency
exchange rates.

# Marketable Securities

Marketable securities are carried at
the lower of cost and quoted market value and consist of shares in a public company quoted
on the Australian Stock Exchange.

# Property, Plant &
Equipment

Depreciation is provided on property,
plant & equipment using the straight line method over the estimated useful lives of
the assets.

# Mineral Properties and
Deferred Costs

The costs of acquiring mineral
properties, and related exploration and development costs, are deferred until the property
to which they relate is placed into production, sold or abandoned. Deferred costs will be
amortized over the estimated useful life of the ore body following commencement of
production, or written off if the property is sold or abandoned.

The Corporation will reduce the
carrying value of mineral properties and deferred costs by any amount received from the
introduction of a joint venture partner.

Managements estimate of
carrying values is subject to risks and uncertainties affecting the recoverability of the
Corporations investment in mineral properties. Although management has made its best
estimate of these factors based on current conditions, it is possible that changes could
occur in the near term which could adversely affect managements estimate of the
recoverability of mineral properties and deferred costs and the need for asset impairment
write-downs.

Although the Corporation has taken
steps to verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Corporations title. Such properties may be subject to prior
undetected agreements or transfers and title may be affected by such defects.

# Options

Mineral property option payments are
made at the discretion of the Corporation and, accordingly, are accounted for when paid.

# Stock Based Compensation

From time to time, the Corporation
grants stock options to employees as described in Note 4(c). No compensation expense is
recognized when stock options are granted to directors and employees, however, pursuant to
CICA 3870 Accounting for Stock Based Compensation, compensation expense of options granted
is disclosed as pro-forma information in Note 4. Any consideration paid by employees on
the exercise of stock options is credited to capital stock.

# Loss per Common Share

Loss per common share is calculated
using the weighted average number of common shares issued and outstanding during each
year. Basic and diluted loss per share are the same as the effect of potential issues of
shares under share option arrangements would be anti-dilutive.

---

58

# Foreign Currency
Translation

The Corporations foreign
subsidiaries are integrated foreign operations. Currency translations into Canadian
dollars are made as follows:

|(i) |  | monetary
assets and liabilities at the rates of exchange prevailing at the
                    balance sheet date;
|--- |  | ------------------------------------------------------------------------------------------------------------------

|(ii) |  | non-monetary
items at rates prevailing when they are                     acquired;
|---- |  | ----------------------------------------------------------------------------------

|(iii) |  | deferred
costs and administration costs at average rates for the                     period.
|----- |  | --------------------------------------------------------------------------------------------

Gains and losses arising on currency
translation are included in the statement of operations.

# Financial Instruments

Cash and cash equivalents, accounts
receivable and accounts payable are valued at their carrying amounts which are reasonable
estimates of fair value due to the relatively short period to maturity of the instruments.

# Income taxes

Income taxes are calculated using the
liability method of accounting. Temporary differences arising from the difference between
the tax basis of an asset or liability and its carrying amount on the consolidated balance
sheet are used to calculate future income tax assets or liabilities. Future income tax
assets or liabilities are calculated using the tax rates anticipated to apply in the
periods that the temporary differences are expected to reverse  see Note 6.

3.   Mineral Properties and
Deferred Costs

|                                      | Mineral properties | Deferred costs | Total
|------------------------------------- | ------------------ | -------------- | -----
|                                      |                   
|December 31, 2002                     |                    |                |      
|Slovak Gold Property - Kremnica       |                    | $   250,000    |      
|                                      |                   
|                                      |                    | $   250,000    |      
|                                      |                   
|December 31, 2001                     |                   
|New Caledonia Nickel Project - Nakety |                    | $2,488,963     |      
|Burundi Nickel Project - Musongati    |                    | 7,190,700      |      
|Slovak Gold Property - Kremnica       |                    | 250,000        |      
|                                      |                   
|                                      |                    | $9,929,663     |      
|                                      |                   

# a)   Burundi Nickel Project

During 1998, Andover entered into a
Protocol agreement with the Republic of Burundi acquiring the exclusive rights to the
Musongati nickel project. On February 11, 1999, a Mining Convention setting out
Andovers rights and obligations for the completion of a feasibility study on the
Musongati nickel project was ratified by the Burundian Parliament. The Mining Convention
requires that Andover complete a feasibility study for the development of a nickel/cobalt
processing facility by the end of 2001 or such later date as may be determined by
extensions granted by the Minister of Mines. On April 19, 2000, Andover declared force
majeure and curtailed its activities in Burundi as a result of the deterioration in
security in the region. Pursuant to the terms of the Mining Convention the declaration of
force majeure may be in place for up to two years during which time Andovers
obligations are interrupted and the completion of the feasibility study

---

59

delayed by the period of force
majeure. Pursuant to the terms of the Mining Convention, Andover was required to post a
performance bond of US$100,000.

On March 28, 2002 the Corporation
announced the withdrawal of the declaration of force majeure and plans to resume its
exploration activities, however security deteriorated ahead of the implementation of an
agreed cease-fire between various political parties and the Corporation re-imposed the
declaration of force majeure in August 2002. The security situation is monitored closely
as the Corporation intends to recommence activities as soon as the situation allows.

At December 31, 2002, the Corporation
wrote off its investment in the project of $7,973,049, to recognize the reduction in value
due to the ongoing political instability in the country and the failure of nickel laterite
projects around the world.

# (b)   Slovak Gold Property

During the year ended December 31,
2001 the Corporation wrote down its 100% owned investment in the Kremnica Gold Property
due to continued low gold prices and the Corporations difficulty in introducing a
joint venture partner or being able to sell the project. The project was written down by
$7,533,332 to its estimated net recoverable amount of $250,000. Costs incurred to maintain
the project during 2002 have been deferred as the Corporation estimates these costs will
be recoverable due to higher gold prices.

# (c)   New Caledonia Nickel
Project  Joint Venture Arrangement

On July 25, 2001, the Corporation
announced JSC MMC Norilsk Nickel had taken the positive decision to proceed
with the Nakety/Bogota Project in New Caledonia by completing a feasibility study leading
to the joint development with Argosy and SMT of the project. The Agreement between NNIH,
SMT and the Corporations subsidiary Balzan was signed on October 16, 2001. Under the
terms of the Agreement, NNIH reimbursed the Corporation 45% of its costs incurred to date,
or US$7,166,000 (C$11,307,948) which was applied to reduce the carrying value of the
project. Thereafter, NNIH had the ability to earn a 45% stake in the project by completing
a feasibility study to international standards over two years.

On August 5, 2002, the Corporation
received a termination notice from NNIH terminating its involvement in the project. The
termination notice effectively terminated the Agreement and the Corporation wrote off its
remaining investment of $2,539,625 in the project. In addition, NNIH issued a request for
arbitration through the IC to recover the funds reimbursed to the Corporation of
US$7,166,000 plus amounts expended on the project amounting to US$1,368,222.

The Corporation is defending the
claim for arbitration, which it believes to be wholly without merit.  See Note 9.

4.   Capital Stock

# (a)   Authorised Capital
Stock

The Corporation is authorised to
issue an unlimited number of common shares without par value.

# (b)   Issued

|                                           | Number of 
Shares | Amount    
|------------------------------------------ | ----------------- | ----------
|                                           |                  
|Total issued - December 31, 1999           |                   | 95,669,105
|Shares issued on exercise of stock options |                   | 150,000   
|                                           |                  
|Total issued - December 31, 2000           |                   | 95,819,105
|Shares issued on exercise of stock options |                   | 150,000   
|                                           |                  
|Total issued - December 31, 2001 and 2002  |                   | 95,969,105
|                                           |                  

---

60

# (c)   Stock Options

The Corporation grants stock options
to employees as determined by the Corporations Board of Directors. Stock options
granted to the directors of the Corporation are granted subject to approval of the
Corporations shareholders.

Pursuant to the adoption of CICA 3870
Accounting for Stock Based Compensation, compensation expense of options granted to
employees and directors, using the fair value method, is disclosed as pro-forma
information.

The assumptions stated below result
in an estimated fair value of the Corporations stock options granted in 2002 of
$0.20 per stock option. This results in a pro-forma compensation expense of $835,000,
which would increase the Corporations loss per share as indicated below:

|                                    |  | December 31, 2002
|----------------------------------- |  | -----------------
|Loss for the Year                   |  | As reported      
|                                    |  | Pro forma        
|Basic Diluted Loss per Common Share |  | As reported      
|                                    |  | Pro forma        

The fair value of stock options used
to calculate compensation expense is estimated using the Black-Scholes Option Pricing
Model with the following assumptions:

| |  |                                
| |  | -------------------------------
| |  | Risk-free interest rate        
| |  | Expected Dividend yield        
| |  | Expected Stock price volatility
| |  | Expected Option life in years  

Option pricing models such as the
Black-Scholes require the input of highly subjective assumptions including expected stock
price volatility. Differences in input assumptions can materially affect the fair value
estimate and therefore the existing models do not necessarily provide a reliable single
measure of the fair value of the Corporations stock options.

The status of stock options granted
to employees and directors as at December 31, 2002 and 2001 and the changes during the
years ended on those dates is presented below:

|                                        | December 31, 2002 | December 31, 2001
|--------------------------------------- | ----------------- | -----------------
|
|                                        |                  
|Options outstanding - Beginning of Year |                   | 3,110,000        
|Exercised                               |                   | --               
|Cancelled/Expired                       |                   | (2,495,000       
|Granted                                 |                   | 4,175,000        
|                                        |                  
|Options outstanding - End of Year       |                   | 4,790,000        
|                                        |                  

---

61

The following table summarizes
information about exercisable and outstanding stock options at December 31, 2002:

|Prices    | Number | Weighted Average
Remaining
Contractual Life | Weighted Average
Exercise
Price
|--------- | ------ | ------------------------------------------- | -------------------------------
|         
|$    0.27 |        | 65,000                                      |                                
|$    0.31 |        | 3,575,000                                   |                                
|$    0.53 |        | 350,000                                     |                                
|$    0.80 |        | 150,000                                     |                                
|$    1.07 |        | 650,000                                     |                                
|         
|$    0.00 |        | 4,790,000                                   |                                
|         

# (d)   Escrow Shares

At December 31, 2002 a total of
3,665,092 (2001: 4,886,787) common shares of the Corporation were subject to escrow and
are eligible for release, based on the passage of time, as follows:

|           | 
|---------- | 
|March 2003 | 
|March 2004 | 
|March 2005 | 

5.   Related Party
Transactions

During the year ended December 31,
2002, $482,389 (2001: $575,156; 2000: $514,750) was paid to five Directors of the
Corporation or its subsidiaries, or to companies controlled by them, for Directors
fees, management consulting services and project management and assessment services. Of
this amount, the Corporation expensed $482,389 (2001: $544,531; 2000: $387,401) and
capitalized $ NIL (2001: $30,625; 2000: $127,349) to deferred costs.

In addition $445,750 (2001:
 $449,236;  2000:  $347,999) was paid to a company controlled by a director for the
provision of office facilities and personnel in Australia.  These services are provided
at cost.

At December 31, 2002,  management
and consulting  expenses payable amounted to $68,445 (2001:  $175,068;  2000: $24,000)
and are included in accounts payable and accrued liabilities.

6.   Income Taxes

A potential future income tax asset
of approximately $2,181,000 arises from the following loss carry forwards:

|                                | 
|------------------------------- | 
|Non capital loss carry forwards | 
|Other deductible tax pools      | 
|                                | 
|                                | 
|                                | 

The non-capital loss carry forwards can
be offset against income for Canadian purposes in future years and expire as follows:

---

62

|      | 
|----- | 
|2003  | 
|2004  | 
|2005  | 
|2006  | 
|2007  | 
|2008  | 
|2009  | 
|      | 
|Total | 
|      | 

The Corporation has reduced the value
of the potential future income tax asset to $Nil through the application of a valuation
allowance of $2,181,000 as the Corporation does not have any current source of income to
which the tax losses can be applied.

The Corporations statutory tax
rate of 35.62% (2001  44.62%) has been reduced to an effective rate of nil% (2001
 nil%) due to losses for which no tax benefit has been recognized.

7.   Segmented Information

|                                    | 2002
|----------------------------------- | ----
|                                    |     
|
|                                    |     
|Current Assets                      |     
|Property, Plant & Equipment         |     
|Mineral Properties & Deferred Costs |     
|Other                               |     
|                                    |     
|                                    |     
|                                    |     

|                                    | 2001
|----------------------------------- | ----
|                                    |     
|
|                                    |     
|                                    |     
|Current Assets                      |     
|Property, Plant & Equipment         |     
|Mineral Properties & Deferred Costs |     
|Other                               |     
|                                    |     
|                                    |     
|                                    |     

The Corporations sole operating
segment is the exploration for mineral resources.

8.   Commitments

The Corporation and its subsidiaries
have entered into leases, expiring December 9, 2005, for office premises which require
rental payments of approximately $3,410 per month until December 31, 2003 and $2,250 per
month thereafter.

---

63

9.   Request for Arbitration

NNIH, through the IC, issued a
request for arbitration for the return of US$7,166,000 paid to the Corporation as a
re-imbursement of expenditures paid on signing of the Tripartite Agreement plus
expenditures of US$1,368,222 and the costs of arbitration. The Corporation believes the
claim is without merit and is vigorously defending the claim. In addition, the Corporation
has filed a counterclaim against NNIH.

10.   Differences between
Canadian and US Generally Accepted Accounting Principles (GAAP)

The Corporations consolidated
financial statements have been prepared in accordance with generally accepted accounting
principles in Canada. The material measurement differences between GAAP in Canada and the
United States that would have had an effect on these financial statements are as follows:

# Balance Sheet

|2002                                                        | 2001
|----------------------------------------------------------- | ----
|                                                            |     
|Mineral Properties and Deferred Costs - under Canadian GAAP |     
|Deferred Costs                                              |     
|                                                            |     
|Mineral Properties - under US GAAP                          |     
|                                                            |     

|2002                                       | 2001
|------------------------------------------ | ----
|                                           |     
|Shareholders' Equity - under Canadian GAAP |     
|Deficit - under Canadian GAAP              |     
|Deficit - under US GAAP                    |     
|                                           |     
|Shareholders' Equity - under US GAAP       |     
|                                           |     

# Statement of Operations
and Deficit

|                                            | 2002 | 2001            | 2000
|------------------------------------------- | ---- | --------------- | ----
|                                            |     
|Loss for the Year - under Canadian GAAP     |      | $ 11,079,339    |     
|Exploration Expenditures and write-downs    |     
|- net of recoveries                         |      | (592,570        | )   
|                                            |     
|Loss for the Year - under US GAAP           |      | $ 10,486,769    |     
|                                            |     
|Basic & diluted loss per common share       |     
|- under US GAAP                             |      | $         (0.11 | )   
|                                            |     
|Deficit - under US GAAP - Beginning of Year |      | $ 23,375,816    |     
|Loss - under US GAAP                        |      | 10,486,769      |     
|                                            |     
|Deficit - under US GAAP - End of Year       |      | $ 33,862,585    |     
|                                            |     

---

64

|(a) | For US GAAP purposes the Corporation expenses exploration expenses when
          incurred. When proven and probable reserves are determined for a property,
          subsequent development costs of the property will be capitalized. The
          capitalized costs of such properties will then be measured, on a periodic basis
          for recoverability of carrying values. Acquisition costs of mineral properties
          are capitalized for US GAAP purposes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | For financial statement disclosure purposes, the Corporation follows the
          recommendation of APB Opinion 25 in accounting for stock options issued to
          employees. This requires the recognition of compensation expenses only when the
          option price is less than the market price on the grant date.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | New Pronouncements
|--- | ------------------

| | Impairment of
Long-Lived Assets
| | -------------------------------

| | The
Accounting Standards Board of the Canadian Institute of Chartered Accountants (CICA) has
issued CICA 3063, Impairment of Long-Lived Assets. This statement establishes
standards for the recognition, measurement and disclosure of the impairment of
non-monetary long-lived assets, including property, plant and equipment, intangible assets
with finite useful lives, deferred pre-operating costs and long-term prepaid assets. The
corporation does not expect that the implementation of this new standard will have a
material impact on its consolidated financial position or results of operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Item 18  Financial
Statements

The Registrant has elected to provide
financial statements pursuant to Item 17.

---

Item 19  Exhibits

|Exhibit No. | Name of Exhibit
|----------- | ---------------
|           
|1.1(1)      |                
|           
|1.2(1)      |                
|           
|1.3(1)      |                
|           
|1.4(1)      |                
|           
|1.5(1)      |                
|           
|1.6(1)      |                
|           
|1.7(1)      |                
|           
|1.8(1)      |                
|           
|1.9(1)      |                
|           
|1.10(1)     |                
|           
|1.11(3)     |                
|           
|1.12        |                
|           
|1.13(1)     |                
|           
|1.14(1)     |                
|           
|1.15(1)     |                
|           
|4.1         |                
|           
|4.2(2)      |                
|           
|4.3(3)      |                
|           
|4.4(3)      |                
|           
|4.5(3)      |                
|           
|4.6(3)      |                
|           
|8.1(1)      |                
|           

|(1) | Incorporated by reference to Form 20-F Amendment No. 2 filed January 8, 1998.
|--- | -----------------------------------------------------------------------------

|(2) | Incorporated by reference to Form 6-K filed April 7, 1999.
|--- | ----------------------------------------------------------

|(3) | Incorporated
by reference to Form 20-F filed June 29
|--- | ----------------------------------------------------

---

# SIGNATURES

The Registrant hereby certifies that
it meets all of the requirements for filing on Form 20-F and has duly caused and
authorized this annual report to be signed on its behalf by the undersigned.

| | ARGOSY MINERALS INC.
| | --------------------

|Dated:  May 20, 2003 | By:  
Cecil R. Bond, Corporate Secretary/CFO/Director
|-------------------- | -----------------------------------------------------

|Dated:  May 20, 2003 | By:  
Peter H. Lloyd, Chief Executive Officer/Director
|-------------------- | ------------------------------------------------------

---

# CERTIFICATION

I,
PETER H. LLOYD, Chief Executive Officer hereby certify that:

1.    
          I have reviewed this annual report on Form 20-F of Argosy Minerals Inc.

2.    
          Based on my knowledge, this annual report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this annual report;

3.    
          Based on my knowledge, the financial statements, and other financial information
          included in this annual report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this annual report;

4.    
          The registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a)       
          designed such disclosure controls and procedures to ensure that material
          information relating to the registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this annual report is being prepared;

(b)       
          evaluated the effectiveness of the registrants disclosure controls and
          procedures as of a date within 90 days prior to the filing date of this annual
          report (the Evaluation Date); and

(c)       
          presented in this annual report our conclusions about the effectiveness of the
          disclosure controls and procedures based on our evaluation as of the Evaluation
          Date;

5.    
          The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation, to the registrants auditors and the audit
          committee of registrants board of directors (or other persons performing
          the equivalent function):

(a)       
          all significant deficiencies in the design or operation of internal controls
          which could adversely affect the registrants ability to record, process,
          summarize and report financial data and have identified for the
          registrants auditors any material weaknesses in internal controls; and

(b)       
          any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrants internal controls; and

6.    
          The registrants other certifying officer and I have indicated in this
          annual report whether there were significant changes in internal controls or in
          other factors that could significantly affect internal controls subsequent to
          the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.

|Dated:  May 20, 2003 | By:  
Peter H. Lloyd, Chief Executive Officer
(Principal Executive Officer)
|-------------------- | ---------------------------------------------------------------------------

---

# CERTIFICATION

I,
CECIL R. BOND, Chief Financial Officer hereby certify that:

1.    
          I have reviewed this annual report on Form 20-F of Argosy Minerals Inc.

2.    
          Based on my knowledge, this annual report does not contain any untrue statement
          of a material fact or omit to state a material fact necessary to make the
          statements made, in light of the circumstances under which such statements were
          made, not misleading with respect to the period covered by this annual report;

3.    
          Based on my knowledge, the financial statements, and other financial information
          included in this annual report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this annual report;

4.    
          The registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a)       
          designed such disclosure controls and procedures to ensure that material
          information relating to the registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this annual report is being prepared;

(b)       
          evaluated the effectiveness of the registrants disclosure controls and
          procedures as of a date within 90 days prior to the filing date of this annual
          report (the Evaluation Date); and

(c)       
          presented in this annual report our conclusions about the effectiveness of the
          disclosure controls and procedures based on our evaluation as of the Evaluation
          Date;

5.    
          The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation, to the registrants auditors and the audit
          committee of registrants board of directors (or other persons performing
          the equivalent function):

(a)       
          all significant deficiencies in the design or operation of internal controls
          which could adversely affect the registrants ability to record, process,
          summarize and report financial data and have identified for the
          registrants auditors any material weaknesses in internal controls; and

(b)       
          any fraud, whether or not material, that involves management or other employees
          who have a significant role in the registrants internal controls; and

6.    
          The registrants other certifying officer and I have indicated in this
          annual report whether there were significant changes in internal controls or in
          other factors that could significantly affect internal controls subsequent to
          the date of our most recent evaluation, including any corrective actions with
          regard to significant deficiencies and material weaknesses.

|Dated:  May 20, 2003 | By:  
Cecil R. Bond, Chief Financial Officer
(Principal Financial Officer)
|-------------------- | --------------------------------------------------------------------------

---

CERTIFICATION PURSUANT
TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report
of Argosy Minerals Inc. (the Company) on Form 20-F for the year ended December
31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the
Report), I, PETER H. LLOYD, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

|(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of
                    the Securities Exchange Act of 1934; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(2) | The information contained in the Report fairly presents, in all material
                    respects, the financial condition and results of operations of the Company.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dated:  May 20, 2003 | By:  
Peter H. Lloyd, Chief Executive Officer
(Principal Executive Officer)
|-------------------- | ---------------------------------------------------------------------------

---

CERTIFICATION PURSUANT
TO
18 U.S.C. §1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report
of Argosy Minerals Inc. (the Company) on Form 20-F for the year ended December
31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the
Report), I., CECIL R. BOND, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

|(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of
                    the Securities Exchange Act of 1934; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(2) | The information contained in the Report fairly presents, in all material
                    respects, the financial condition and results of operations of the Company.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dated:  May 20, 2003 | By:  
Cecil R. Bond, Chief Financial Officer
(Principal Financial Officer)
|-------------------- | --------------------------------------------------------------------------

---