MANHATTAN MINERALS CORP.




                                     RENEWAL
                                     ANNUAL
                                   INFORMATION
                                      FORM
                                      2002










<PAGE>


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 20-F


[ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                                       OR

[X]  ANNUAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  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 No. 0-27350
                         -------

                            Manhattan Minerals Corp.
                            ------------------------
             (Exact name of Registrant as specified in its charter)

                            Manhattan Minerals Corp.
                            ------------------------
                 (Translation of Registrant's name into English)

                            British Columbia, Canada
                            ------------------------
                 (Jurisdiction of incorporation or organisation)

         Suite 350 - 885 Dunsmuir Street, Vancouver, BC, Canada V6C 1N5
         --------------------------------------------------------------

                                 (604) 669-3397
                                 --------------
                    (Address of principal executive offices)

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

               Title of each                      Name of each exchange
                  Class                            on which registered

                   None                                    None
                   ----                                    ----

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

               Title of each                      Name of each exchange
                  Class                            on which registered

         Common Stock, no par value                         None
         --------------------------                         ----


<PAGE>


                                     - 2 -


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  issuer's  classes of
capital  or common  stock as of the close of the  period  covered  by the annual
report:

The number of outstanding common stock is 54,978,495 (as of May 16, 2003).

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 ninety (90) days.

                  Yes  X            No
                      ---              ---

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

                   Item 17  X       Item 18
                           ---              --------


<PAGE>


                                TABLE OF CONTENTS


NOTE REGARDING FORWARD-LOOKING STATEMENTS......................................1
GLOSSARY.......................................................................2
PART I.........................................................................8
------
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS..................8
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE................................8
ITEM 3. KEY INFORMATION........................................................8
        A. Selected Financial Data.............................................8
        B. Capitalisation and Indebtedness.....................................9
        C. Reasons for the Offer and Use of Proceeds..........................10
        D. Risk Factors.......................................................10
ITEM 4. INFORMATION ON THE COMPANY............................................15
        A. History and Development of the Company.............................15
        B. Business Overview..................................................16
        C. Organisational Structure...........................................16
        D. Property, Plant and Equipment......................................17
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS..........................35
        A. Operating Results..................................................35
        B. Liquidity and Capital Resources....................................36
        C. Research and Development, Patents and Licences, Etc................39
        D. Trend Information..................................................39
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES............................40
        A. Directors and Senior Management....................................40
        B. Compensation.......................................................40
        C. Board Practices....................................................44
        D. Employees..........................................................46
        E. Share Ownership....................................................46
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.....................47
        A. Major Shareholders.................................................47
        B. Related Party Transactions.........................................47
        C. Interests of Experts and Counsel...................................48
ITEM 8. FINANCIAL INFORMATION.................................................48
        A. Consolidated Statements and Other Financial Information............48
        B. Significant Change.................................................48
ITEM 9. THE OFFER AND LISTING.................................................49
        A. Offer and Listing Details..........................................49
        B. Plan of Distribution...............................................50
        C. Markets............................................................50
        D. Selling Shareholders...............................................50
        E. Dilution...........................................................50
        F. Expenses of the Issue..............................................50
ITEM 10. ADDITIONAL INFORMATION...............................................50
        A. Share Capital......................................................50
        B. Memorandum and Articles of Association.............................50
        C. Material Contracts.................................................51
        D. Exchange Controls..................................................52
        E. Taxation...........................................................52
        F. Dividends and Paying Agents........................................61
        G. Statement of Experts...............................................61
        H. Documents on Display...............................................61
        I. Subsidiary Information.............................................61


<PAGE>


                                      - 2 -


ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........61
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES...............62
PART II.......................................................................62
-------
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUINCIES......................62
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
         HOLDERS AND USE OF PROCEEDS..........................................62
ITEM 15. CONTROLS AND PROCEDURES..............................................63
        A. Evaluation of Disclosure Controls and Procedures...................63
        B. Changes in Internal Controls.......................................63
ITEM 16. [RESERVED]...........................................................63
PART III......................................................................63
--------
ITEM 17. Financial Statements.................................................63
ITEM 18. Financial Statements.................................................86
ITEM 19. Exhibits.............................................................86
SIGNATURES....................................................................87
SECTION 302 CERTIFICATION.....................................................88
SECTION 906 CERTIFICATION.....................................................90


<PAGE>


                                 NOTE REGARDING
                           FORWARD-LOOKING STATEMENTS

The statements in this annual report that are not based on historical  facts are
called  "forward-looking  statements"  within the  meaning of the United  States
Private  Securities  Litigation Reform Act of 1995. These statements appear in a
number of different  places in this annual report and can be identified by words
such as "estimates",  "projects",  "expects", "intends", "believes", "plans", or
their negatives or other comparable words.  Forward-looking  statements  include
statements regarding the outlook for our future operations, plans and timing for
the  introduction or enhancement of our services and products,  statements about
future  market  conditions,  supply and demand  conditions,  forecasts of future
costs  and   expenditures,   the  outcome  of  legal   proceedings,   and  other
expectations,  intentions  and  plans  that  are not  historical  fact.  You are
cautioned  that any such  forward-looking  statements are not guarantees and may
involve risks and  uncertainties.  Our actual results may differ materially from
those in the forward-looking  statements due to risks facing us or due to actual
facts differing from the assumptions  underlying our predictions.  Some of these
risks and assumptions include:

     o    general  economic  and  business  conditions,   including  changes  in
          interest rates;
     o    prices and other economic conditions;
     o    natural phenomena;
     o    actions by  government  authorities,  including  changes in government
          regulation;
     o    uncertainties  associated  with  legal  proceedings;
     o    changes in the resources market;
     o    future decisions by management in response to changing conditions;
     o    our ability to execute prospective business plans; and
     o    misjudgements in the course of preparing forward-looking statements.

We advise you that these cautionary  remarks expressly qualify in their entirety
all  forward-looking  statements  attributable  to us or  persons  acting on our
behalf.  The  Company  assumes  no  obligation  to  update  its  forward-looking
statements to reflect actual results, changes in assumptions or changes in other
factors affecting such statements.

In this Form 20-F  annual  report,  unless  otherwise  specified,  all  monetary
amounts are expressed in United States dollars. The following table sets out the
exchange  rates,  based on the noon buying  rates in Toronto,  Ontario for cable
transfers  in foreign  currencies,  as  provided  by the Bank of Canada,  and is
believed by the Company to closely  approximate  the rate  certified for customs
purposes by the Federal Reserve Bank in New York, for the conversion of Canadian
dollars  into  United  States  dollars  in  effect  at the end of the  following
periods,  and the average  exchange  rates (based on the average of the exchange
rates on the last day of each month in such periods).

<TABLE>
                                                                   Years Ended December 31,
                                          -------------------------------------------------------------------------
                                              2002            2001           2000           1999           1998
                                          ------------   -------------   -------------   ------------   -----------
<S>                                          <C>             <C>            <C>            <C>            <C>
End of period                                1.5796          1.5928         1.5002         1.4433         1.5333

Average for the period                       1.5699          1.5488         1.4852         1.4858         1.4831
</TABLE>

The  information set forth in this Form 20-F annual report is as at December 31,
2002 unless an earlier or later date is  indicated.  On May 16,  2002,  the noon
rate of  exchange,  as  reported  by the Bank of Canada and is  believed  by the
Company to closely  approximate  the rate certified for customs  purposes by the
Federal  Reserve Bank in New York, for the  conversion of Canadian  dollars into
United States dollars was Cdn.$1.3667 per United States dollar.


<PAGE>


                                      - 2 -


                                    GLOSSARY

"Additional  Agreement"  means the  "Convenio  Adicional  al  Acuerdo  de Bases"
executed between INGEMMET,  Minero Peru and BRGM in May 1981,  consequent to the
Base  Agreement.   The  Additional  Agreement  governed  the  preparation  of  a
feasibility  study and the  ownership,  financing  and  development  of a mining
project on the Tambogrande Concessions.

"Agreements"  means,  collectively,   the  Base  Agreement  and  the  Additional
Agreement.

"anomaly" means a local feature  distinguishable in a geophysical or geochemical
measurement  over a larger area, of which said feature is considered  capable of
being associated with commercially valuable mineral deposits.

"B-5"  means the B-5  deposit,  which is  located on the  Papayo  Joint  Venture
Concessions,  is subject to the terms of the  Company's  option  agreement  with
Cedimin  and is an  early  stage  project  requiring  a  significant  amount  of
additional drilling.

"Base Agreement" means the "Acuerdo de Bases" executed between INGEMMET and BRGM
in  October  1979,   which  governed  the   exploration  and  preparation  of  a
pre-feasibility study on the Tambogrande Concessions by BRGM.

"BRGM"  means the Bureau de  Recherches  Geologiques  et  Minieres  and  certain
wholly- or partially-owned  subsidiary companies known as Compagnie Francaise de
Mines,  BRGM S.A.,  BRGM  Perou  S.A.S.  (formerly  La Source  Compagnie  Minera
S.A.S.), and La Source S.A.

"Canadian GAAP" means Canadian generally accepted accounting principles.

"cash  operating  costs" means gross  operating  costs plus waste  stripping and
metal inventory adjustments, and silver credits.

"Cedimin"  means  Compania de  Exploraciones,  Desarrollo e Inversiones  Mineras
S.A., a wholly-owned subsidiary of the Buenaventura group of Companies.

"Centromin"  means  Empresa  Minera de Centro del Peru S.A.,  formerly  known as
Minero Peru, a Peruvian company, wholly-owned by the Government of Peru.

"CMMP" means Compania Minera Manhattan, S.A.

"Code" means the Internal Revenue Code of 1986, as amended.

"Common Shares" means Common Shares in the capital of the Company.

"Company" means Manhattan Minerals Corp.

"cut-off grade" means the minimum grade of ore used to establish reserves.

"EMTG" means Empresa Minera Tambogrande S.A.

"Environmental  Impact Assessment" or "EIA" means the environmental impact study
regarding  the  Tambogrande  Project  that is being  prepared  by Klohn  Crippen
Consultants Ltd.


<PAGE>


                                     - 3 -


"Feasibility  Study"  means the  feasibility  study  regarding  the  Tambogrande
Project being prepared by AMEC E&C Services Ltd.

"g/t" means grams per metric tonne.

"GPMM" means Grupo Minera Manhattan, S.A. de C.V.

"gross operating costs" means mining,  processing and mine administration  costs
incurred.

"INGEMMET"  means  Instituto  Geologico  Minero y Metalurgico,  an agency of the
Government of Peru.

"IRS" means the Internal Revenue Service.

"Lancones Concessions" means the property adjoining the Tambogrande  Concessions
primarily to the south and  partially to the east and north,  composed of a 100%
interest in 56 concessions  aggregating 50,500 hectares. The concessions include
the two Perla  concessions  of 1,900  hectares in the  aggregate and the two Las
Lomas concessions of 2,000 hectares in the aggregate.

"Manhattan" means the Company together with all of its subsidiaries.

"Mexican Subsidiaries" means, collectively, MMEX, GPMM, MMOP, MMAD and MMAS.

"Mineral  Reserves" or "ore" means the economically  mineable part of a measured
or indicated mineral resource demonstrated by at least a preliminary feasibility
study.  This study must  include  adequate  information  on mining,  processing,
metallurgical, economic and other relevant factors that demonstrate, at the time
of reporting  that  economic  extraction  can be  justified.  A Mineral  Reserve
includes  diluting  materials and  allowances for losses that may occur when the
material is mined.

"mineral  reserve" means that part of a measured or indicated ore resource which
could be economically mined,  demonstrated by at least a preliminary feasibility
study that includes adequate information on mining,  processing,  metallurgical,
economic and other relevant factors that demonstrate,  at the time of reporting,
that economic  extraction can be justified.  A mineral reserve includes diluting
materials and  allowances  for losses that may occur when the material is mined.
Mineral reserves are those parts of ore resources  which,  after the application
of all mining  factors,  result in an estimated  tonnage and grade which, in the
opinion of the  qualified  person(s)  making the  estimates,  is the basis of an
economically  viable  project after taking  account of all relevant  processing,
metallurgical,  economic,  marketing,  legal,  environment,  socio-economic  and
government factor. Mineral reserves are inclusive of diluting material that will
be mined in conjunction with the mineral reserves and delivered to the treatment
plant or equivalent  facility.  The term "mineral  reserve" need not necessarily
signify  that  extraction  facilities  are in  place  or  operative  or that all
governmental  approvals  have been  received.  It does  signify  that  there are
reasonable expectations of such approvals.  Mineral reserves are subdivided into
proven mineral  reserves and probable  mineral  reserves.  Mineral reserves fall
under the following categories:

     "proven mineral reserves"    That part of a measured ore resource that is
                                  the economically mineable part, demonstrated
                                  by at least a preliminary feasibility study
                                  that includes adequate  information on mining,
                                  processing, metallurgical, economic, and other
                                  relevant factors that demonstrate, at the time
                                  of reporting, that economic extraction is
                                  justified.


<PAGE>


                                     - 4 -


     "probable mineral reserves"  That part of an indicated and in some
                                  circumstances a measured ore resource that is
                                  the economically mineable part demonstrated by
                                  at least a preliminary feasibility study that
                                  includes adequate information on mining,
                                  processing, metallurgical, economic, and other
                                  relevant factors that demonstrate, at the time
                                  of reporting, that economic extraction can be
                                  justified.

     The terms "mineral reserve," "proven mineral reserve" and "probable mineral
     reserve"  used in this  report  are  Canadian  mining  terms as  defined in
     accordance  with National  Instrument  43-101 - Standards of Disclosure for
     Mineral Projects under the guidelines set out in the Canadian  Institute of
     Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources
     and Mineral Reserves  Definitions and guidelines adopted by the CIM Council
     on August 20, 2000. In the United States, a mineral reserve is defined as a
     part of a mineral deposit which could be economically and legally extracted
     or produced at the time the mineral reserve determination is made.

     Under United States standards:

          "reserve"   means  that  part  of  a  mineral  deposit  which  can  be
          economically  and  legally  extracted  or  produced at the time of the
          reserve determination.

          "economically,"  as used in the  definition  of reserve,  implies that
          profitable   extraction  or  production   has  been   established   or
          analytically   demonstrated  to  be  viable  and   justifiable   under
          reasonable investment and market assumptions.

          "legally," as used in the  definition of reserve,  does not imply that
          all permits  needed for mining and  processing  have been  obtained or
          that other legal issues have been completely resolved.  However, for a
          reserve to exist,  there  should be a  reasonable  certainty  based on
          applicable laws and regulations that issuance of permits or resolution
          of legal issues can be accomplished in a timely manner.

          "proven  or  measured  reserves"  are  defined as  reserves  which (a)
          quantity is computed from dimensions  revealed in outcrops,  trenches,
          workings or drill holes;  (b) grade and/or  quality are computed  from
          the results of  detailed  sampling  and (c) the sites for  inspection,
          sampling  and  measurement  are spaced so closely  and the  geographic
          character  is so well  defined  that size,  shape,  depth and  mineral
          content of reserves are well established.

          "probable mineral reserves" are defined as reserves for which quantity
          and grade and/or quality are computed from information similar to that
          of proven reserves (under United States standards),  but the sites for
          inspection,  sampling,  and  measurement  are  further  apart  or  are
          otherwise  less  adequately  spaced,  and  the  degree  of  assurance,
          although lower than that for proven mineral  reserves,  is high enough
          to assume  continuity  between  points of  observation.  The degree of
          assurance,  although lower than that for proven mineral  reserves,  is
          high enough to assume continuity between points of observation.

"mineral  resource"  means a  concentration  or  occurrence  of natural,  solid,
inorganic or fossilized organic material in or on the Earth's crust in such form
and quantity and of such a grade or quality that it has reasonable prospects for
economic extraction.  The location,  quantity, grade, geological characteristics
and continuity of a mineral  resource are known,  estimated or interpreted  from
specific  geological  evidence and knowledge.  Mineral  Resources fall under the
following categories:


<PAGE>


                                     - 5 -


     "measured  mineral
     resource"          That part of a mineral resource for which quantity,
                        grade or quality, densities, shape, physical
                        characteristics are so well established that they can be
                        estimated with confidence sufficient to allow the
                        appropriate  application of technical and economic
                        parameters to support production  planning and
                        evaluation of the economic viability of the deposit. The
                        estimate is based on detailed and reliable exploration,
                        sampling and testing information gathered through
                        appropriate techniques from locations such as outcrops,
                        trenches, pits, workings and drill holes that are spaced
                        closely enough to confirm both geological and grade
                        continuity.

     "indicated mineral
     resource"          That part of a mineral resource for which quantity,
                        densities, shape and physical characteristics, can be
                        estimated with a level of confidence sufficient to allow
                        the appropriate application of technical and economic
                        parameters, to support mine planning and evaluation of
                        the economic viability of the deposit. The estimate is
                        based on detailed and reliable exploration and testing
                        information gathered through appropriate techniques from
                        locations such as outcrops, trenches, pits, workings and
                        drill holes that are spaced closely enough for
                        geological and grade continuity to be reasonably
                        assumed.

     "inferred mineral
     resource"          That part of a mineral resource for which quantity and
                        grade or quality can be estimated on the basis of
                        geological evidence and limited sampling and reasonably
                        assumed, but not verified, geological and grade
                        continuity. The estimate is based on limited information
                        and sampling gathered through appropriate techniques
                        from locations such as outcrops, trenches, pits,
                        workings and drill holes.

     The terms  "mineral  resource",  "measured  mineral  resource",  "indicated
     mineral  resource",  "inferred  mineral resource" used in this Registration
     Statement are Canadian  mining terms as defined in accordance with National
     Instrument  43-101 - Standards of Disclosure for Mineral Projects under the
     guidelines set out in the CIM Standards.

     Note to U.S.  Investors.  While the  terms  "mineral  resource,"  "measured
     mineral  resource,"  "indicated  mineral  resource," and "inferred  mineral
     resource" are recognized and required by Canadian regulations, they are not
     defined terms under  standards in the United States.  As such,  information
     contained in this report  concerning  descriptions  of  mineralization  and
     resources  under  Canadian  standards  may  not be  comparable  to  similar
     information  made public by U.S.  companies  subject to the  reporting  and
     disclosure   requirements  of  the  Securities  and  Exchange   Commission.
     "Indicated  mineral  resource" and "inferred mineral resource" have a great
     amount of uncertainty as to their  existence and a great  uncertainty as to
     their economic and legal feasibility. It can not be assumed that all or any
     part of an "indicated mineral resource" or "inferred mineral resource" will
     ever be upgraded  to a higher  category.  Investors  are  cautioned  not to
     assume that any part or all of mineral  deposits in these  categories  will
     ever be converted into reserves.


<PAGE>


                                     - 6 -


"Mineralisation" means material containing minerals of economic interest.

"Minero  Peru"  means  Empresa   Minera  del  Peru  S.A.,  a  Peruvian   company
wholly-owned by the Government of Peru.

"MMAD" means Minera Manhattan Administracion, S.A. de C.V.

"MMAS" means Minera Manhattan Servicios, S.A. de C.V.

"MMB" means Manhattan Minerals (Bermuda) Ltd.

"MMEX" means Minera Manhattan, S.A. de C.V.

"MMH" means Manhattan Minerals (Holdings) Ltd.

"MMOP" means Minera Manhattan Operaciones, S.A. de C.V.

"MMUS" means Manhattan Minerals (US) Ltd.

"MRDI" means MRDI Canada, a division of AMEC E&C Services Limited.

"MSCM" means Manhattan Sechura Compania Minera S.A.

"net smelter return royalty" or "NSR" means a royalty payment made by a producer
of  metals,  usually  to a  previous  property  owner,  based on  gross  mineral
production from the property, less deductions of certain limited costs including
smelting, refining, transportation and insurance costs.

"Option  Agreement" means the "Option Agreement for the Incorporation of a Stock
Company"  and  its  Annex,  the  "Agreement  for  the  Incorporation  of a Stock
Company",  between  Minero Peru and the  Company,  which was executed on May 17,
1999 and governs the ownership,  exploration  and development of the Tambogrande
Concessions.

"Papayo  Joint Venture  Concessions"  means the property  contiguous  and to the
south of the Tambogrande  Concessions composed of seven concessions  aggregating
3,200 hectares.

"Perla  Concessions"  means  the  property  approximately  20  km  west  of  the
Tambogrande Concessions, comprising two concessions aggregating 1,900 ha.

"PFIC" means a passive foreign investment company.

"Reconnaissance"  means  a  general  examination  or  survey  of a  region  with
reference to its main  features,  usually as a  preliminary  to a more  detailed
survey.

"Share  Compensation  Plan" means the Company's share  compensation plan adopted
October 24, 2001.

"strip  ratio"  means  the ratio of the  number of tonnes of waste  that must be
moved for one tonne of ore to be mined.

"Stock Option Plan" means the Company's stock option plan, as amended.


<PAGE>


                                     - 7 -


"Supreme Decree" means a "Decreto  Supremo",  which is the highest hierarchy law
provision issued by the Peruvian  Executive Power, and which has to be signed by
the  President  of Peru  and  one,  some or all of his  Ministers.  The only law
provisions that have a higher  hierarchy are the  Constitution and the laws that
are passed by the Peruvian Congress.

"TG-1" means the TG-1 deposit,  which is a volcanogenic  massive sulfide deposit
containing gold, silver, copper and zinc located on the Tambogrande  Concessions
and  subject  to the  terms of the  Option  Agreement,  and is the only  deposit
included in the Company's EIA and the review by the Government of Peru.

"TG-3" means the TG-3 deposit,  which is similar to the TG-1  deposit,  requires
additional  drilling  before  the  Company  can  determine  if  feasibility  and
environmental  impact  studies are required,  and is located on the  Tambogrande
Concessions, one kilometre south of TG-1.

"Tambogrande Concessions" means, collectively,  the ten mining concessions named
Tambogrande 1 through 10, located in the district of  Tambogrande,  Province and
Department of Piura, Peru.

"Tambogrande  Deposit" means the pyritic  volcanogenic  massive sulphide deposit
contained within the Tambogrande Concessions.

"Tambogrande  Project" means,  collectively,  the Tambogrande  Concessions,  the
Lancones  Concessions  and  the  Papayo  Joint  Venture  Concessions,   and  the
exploration   and  possible  future   development  and   exploitation  of  those
concessions.

"Tax Act" means the Income Tax Act (Canada).

"Technical Report" means the independent Qualified Person's Review and Technical
Report concerning the Tambogrande Project prepared by MRDI.

"total cash costs" means cash operating costs plus mine royalty costs incurred.

"TSE" means the Toronto Stock Exchange located in Toronto, Ontario, Canada.

"Treaty" means the Canada-U.S. Tax Convention, 1980.

"US GAAP" means United States generally accepted accounting principles.

"VMS" means volcanogenic massive sulphide.


<PAGE>


                                     - 8 -


                                     PART I
                                     ------

In this document,  references to "we", "our", "us", the "Company" or "Manhattan"
mean  Manhattan  Mineral Corp.  and its  subsidiaries  unless the context of the
sentence clearly suggests otherwise.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The following  tables set out selected  consolidated  financial data,  which has
been prepared based on Canadian GAAP and US GAAP.

Canadian GAAP

<TABLE>
                                                                 Years ended December 31
                                                    (Expressed in thousands of United States dollars,
                                                           except share and per share amounts)

                                                   2002      2001         2000         1999        1998
                                                     $        $             $            $          $

<S>                                                <C>       <C>          <C>          <C>         <C>
Revenue                                                -         -            -            -           -
Loss before discontinued operations                1,387     2,559        1,435        1,240       1,725
Basic and diluted Loss per share before
     discontinued operations                        0.03      0.06         0.04         0.05        0.07
Net Loss                                           1,387     2,559        4,730       12,538       4,525
Basic and diluted Loss per share after
     discontinued operations                        0.03      0.06         0.13         0.46        0.19
Total Assets                                      62,226    61,437       62,313       57,172      41,561
Long Term Debt                                       391       212            -            -           -
Cash dividend per share                                -         -            -            -           -
Share capital                                    103,696    99,773       99,631       89,373      61,470
Equity component of convertible debt                 235         -            -            -           -
Warrants                                             957         -            -            -           -
Special  warrants                                      -     3,010            -            -           -
Deficit                                           44,319    42,932       40,373       33,643      23,105
</TABLE>


<PAGE>


                                     - 9 -


US GAAP
<TABLE>
                                                                 Years ended December 31
                                                    (Expressed in thousands of United States dollars,
                                                           except share and per share amounts)

                                                   2002      2001         2000         1999        1998
                                                     $        $             $            $          $


<S>                                             <C>        <C>          <C>          <C>         <C>
Revenue                                                        -         -            -            -           -
Loss before discontinued operations               4,864     5,576       17,642       12,533       3,999
Basic and diluted Loss per share before
     discontinued operations                       0.11      0.14         0.48         0.46        1.16
Net Loss                                          4,864     5,576       20,937       22,420       6,135
Basic and diluted Loss per share after
     discontinued operations                       0.11      0.14         0.57         0.82        0.25
Total Assets                                        247     2,944        6,837       17,903      12,174
Long Term Debt                                      241       212            -            -           -
Cash dividend per share                               -         -            -            -           -
Share capital                                   103,835    99,912       99,770       89,512      61,609
Beneficial conversion feature                       376         -            -            -           -
Warrants                                            957         -            -            -           -
Special warrants                                            3,010            -            -           -
Deficit                                         106,428   101,564       95,988       75,051      52,631
</TABLE>

<TABLE>
            Eight Quarters Prior to December 31, 2001 (Canadian GAAP)
 (Expressed in thousands of United States dollars, except share and per share amounts)
                                 Quarters ended
                                            2002                                                 2001
                       Dec 31       Sep 30       June 30      Mar 31         Dec 31       Sep 30       June 30      Mar 31
                          $            $            $           $               $            $            $            $
<S>                     <C>          <C>          <C>          <C>            <C>          <C>          <C>          <C>
Revenue                   -            -            -             -             -            -            -             -
Net loss before          349          292          471         275             591          598          873          497
discontinued
operations
Basic and diluted       0.00         0.01         0.01         0.01           0.01         0.02         0.02         0.01
net loss per share
before
discontinued
operations
Net loss                 349          292          471         275             591          598          873          497
Basic and diluted       0.00         0.01         0.01         0.01           0.01         0.02         0.02         0.01
loss per share
</TABLE>

B. Capitalisation and Indebtedness

Not applicable.


<PAGE>


                                     - 10 -


C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

An  investment  in  Manhattan's  Common  Shares  is  subject  to the  risks  and
uncertainties inherent in Manhattan's business. Any investor should consider the
following factors, as well as other information set forth in this annual report,
in connection  with an investment in Manhattan's  Common  Shares.  If any of the
risks described  below occur,  Manhattan's  business,  results of operations and
financial  condition could be adversely  affected.  In such cases,  the price of
Manhattan's Common Shares could decline, and investors could lose all or part of
their investment.

Tambogrande Concessions

Any  non-compliance  by Manhattan with the terms of the Option  Agreement  could
affect  its  ability  to  exercise  the  option  and  earn its  interest  in the
Tambogrande Concessions within the option period, which has been extended to May
31, 2004. The extension  terms include  meeting the  pre-qualifying  conditions,
delivery of the  Environmental  Impact  Assessment and delivery of a feasibility
study and a financing  plan.  In order to deliver such studies,  Manhattan  will
require  further  financing,  which cannot be assured at this time. In addition,
Manhattan must also meet the following two qualifications pursuant to the Option
Agreement  in order to exercise  the option by  December 1, 2003 (i)  Manhattan,
directly or in association with another  company,  must operate a mining complex
with an average  treatment  capacity  of 10,000  tones of ore per day;  and (ii)
Manhattan  must have net  assets of at least  $100  million.  In the event  that
Manhattan is required to comply with the qualification  requiring it to have net
assets of $100 million  December 1, 2003 by issuing Common Shares at the current
share price, significant dilution would occur.

A part of the Tambogrande  Deposit  underlies the town of  Tambogrande.  Current
Peruvian  legislation  provides that any mining methods used will not physically
affect the town nor harm its citizens, and that the tailings will not affect the
agricultural areas surrounding the town. See "Properties - Tambogrande Project -
Location  and  Access"  and  "Properties  -  Tambogrande  Project  - Claims  and
Ownership".  In addition,  under the Option Agreement,  Manhattan is required to
guarantee that it will observe those same  conditions.  The  implications of the
location of the town of Tambogrande in relation to the  Tambogrande  Deposit for
the  exploration,  development and  exploitation of the Tambogrande  Concessions
cannot be completely assessed at this time. The Company has been working closely
with  community  leaders  to  establish  a  co-operative,   mutually  beneficial
relationship  with the area  residents  in an effort to ensure that  impacts are
minimised.  As part of the ongoing work  program,  the Company will  continue to
undertake socio-economic studies and initiatives to manage this factor.

Political  instability  in Peru may negatively  affect the Company's  ability to
continue operations there

Manhattan is subject to risks normally  associated  with the exploration for and
development of mineral  properties in Peru,  which include,  but are not limited
to, possible  political or economic  instability and government actions that may
adversely affect the operations of Manhattan.

On February 27 and 28, 2001, the Company's  exploration  camp and  demonstration
housing units located in Tambogrande  was  extensively  damaged during a protest
march,  instigated by a small group of politically motivated persons. The damage
was  estimated  at  $1,003,000  of which the  Company  obtained  $680,000  in an
insurance  settlement.  All technical data was  duplicated  off-site as a normal
precaution


<PAGE>


                                     - 11 -


and,  therefore,  there was no loss of  continuity  for  completion  of the TG-1
Feasibility Study and Environmental  Impact Assessment.  Although drill core was
lost, it was fully logged and  photographed,  and samples are retained off site.
Work continues on the Tambogrande  Project and the Company expects to be able to
complete its environmental permitting commitments within the time frame accorded
under the Option Agreement.

To ensure the security of drill core from any future drilling program, Manhattan
intends to centre the work in the city of Piura,  in northern Peru,  rather than
in the town of Tambogrande. In addition, Manhattan will continue to maintain all
the  assay  original  sample  intervals  for the drill  core in secure  premises
located in the City of Vancouver, British Columbia, Canada. Although the Company
is actively  involved in a process to address  the social and  political  issues
which  appear to have given rise to the protests in February  2001,  there is no
assurance  that this process will be successful  and there is no assurance  that
the Company  will not be subject to further  political  or economic  instability
and/or government actions that may adversely affect its operations.

It is impossible to ensure that the current exploration  programs of the Company
will result in profitable commercial mining operations

The successful  exploration and development of mineral properties is speculative
and subject to a number of  uncertainties  which even a  combination  of careful
evaluation,  experience and knowledge may not  eliminate.  There is no certainty
that the  expenditures  made or to be made by the Company in the exploration and
development of its mineral  properties or properties in which it has an interest
will result in the discovery of mineralised materials in commercial  quantities.
Most  exploration  projects  do not  result  in the  discovery  of  commercially
mineable  deposits.  While  discovery of a base metal or precious  metal bearing
structure may result in substantial  rewards,  few properties  that are explored
are ultimately developed into producing mines. Major expenses may be required to
establish  Mineral  Reserves by drilling and to construct  mining and processing
facilities at a site.  It is  impossible to ensure that the current  exploration
programs of the Company will result in profitable commercial mining operations.

The Company's  operations  are subject to all of the hazards and risks  normally
incident to mineral  exploration,  mine development and operation,  any of which
could  result in damage to life or property,  environmental  damage and possible
legal liability for any or all damage.  The Company's  activities may be subject
to prolonged  disruptions due to weather conditions depending on the location of
operations  in which the  Company  has  interests.  Hazards  such as  unusual or
unexpected formations, pressures or other conditions may also be encountered.

Fluctuations in mineral prices could adversely affect the Company's operations

The  marketability  of Mineral  Resources  may be affected  by numerous  factors
beyond the control of the Company.  The price of precious  metals may experience
volatile and  significant  price  movements  over short periods of time,  and is
affected  by  numerous  factors  beyond the  control of the  Company,  including
international economic and political trends,  expectations concerning inflation,
currency exchange  fluctuations,  interest rates, global or regional consumption
patterns  and  speculative  activities,  and  increased  production  due  to new
discoveries and improved mining and exploration methods.

Increased  competition  in the  minerals  industry  could  adversely  affect the
Company

The minerals  industry is intensely  competitive  and the Company  competes with
other companies that have greater financial, human and technical resources.


<PAGE>


                                     - 12 -


Failure to obtain additional financing on a timely basis could cause the Company
to forfeit its interest in its properties

The Company presently has sufficient financial resources to undertake all of its
currently planned environmental impact studies and feasibility studies. However,
there can be no  assurance  that the Company  will be  successful  in  obtaining
additional  required  funding in order to  conduct  additional  exploration,  if
warranted,  on  the  Company's  exploration  properties  or to  develop  Mineral
Resources  on such  properties,  if  commercially  mineable  quantities  of such
Mineral Resources are located thereon. Failure to obtain additional financing on
a timely  basis  could  cause  the  Company  to  forfeit  its  interest  in such
properties.

Amendments to current  environmental and other regulatory laws,  regulations and
permits governing operations and activities of mineral exploration companies, or
more stringent interpretation, implementation or enforcement thereof, could have
a material adverse impact on the Company

The  current  or  future  operations  of  the  Company,   including  development
activities and, if warranted,  commencement of production on properties in which
it has an interest,  require permits from various governmental authorities,  and
such  operations  are and will be  governed  by laws and  regulations  governing
prospecting,  development, mining, production, exports, taxes, labour standards,
occupational  health and safety,  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  existing  and  future  laws,
regulations and permits.  The Company  believes it is in substantial  compliance
with all material laws and  regulations  that currently apply to its activities.
However,  there can be no  assurance  that all  permits  which the  Company  may
require for the conduct of mineral exploration  operations will be obtainable or
can be maintained on reasonable  terms or that such laws and  regulations  would
not have an adverse effect on any mineral  exploration project which the Company
might undertake.

Failure to comply with applicable laws, regulations and permitting  requirements
may  result  in  enforcement  actions  thereunder,  including  orders  issued by
regulatory or judicial  authorities causing operations to cease or be curtailed,
and such enforcement  actions may include corrective  measures requiring capital
expenditures,  installation of additional equipment or remedial actions. Parties
engaged in mineral  exploration  operations may be required to compensate  those
suffering  loss or damage by reason  of such  activities  and may have  civil or
criminal  fines or  penalties  imposed  for  violations  of  applicable  laws or
regulations.

The potential  costs which could be associated  with any liabilities not covered
by insurance or in excess of insurance coverage may cause substantial delays and
require significant capital outlays, adversely affecting the Company's financial
position

The nature of the risks the  Company  faces in the conduct of its  business  and
operations are such that liabilities could exceed policy limits in any insurance
policy  or could be  excluded  from  coverage  under an  insurance  policy.  The
potential  costs which could be associated  with any  liabilities not covered by
insurance or in excess of insurance  coverage or compliance with applicable laws
and regulations may cause  substantial  delays and require  significant  capital
outlays, adversely affecting the Company's financial position.


<PAGE>


                                     - 13 -


Operating and Environmental Hazards and Risks

Mineral  exploration  involves many risks,  which a combination  of  experience,
knowledge,  and careful  evaluation  may not be able to overcome.  Operations in
which  Manhattan  has a direct or indirect  interest  will be subject to all the
hazards and risks normally incidental to exploration, development and production
of gold and other metals, any of which could result in work stoppages, damage to
property,  and  possible  environmental  damage.  Although  Manhattan  maintains
liability  insurance  in an amount it  considers  adequate,  the nature of these
risks is such that liabilities  might exceed policy limits,  the liabilities and
hazards might not be insurable,  or Manhattan  might not elect to insure against
such  liabilities  due to high premium  costs or other  reasons,  in which event
Manhattan  could incur  significant  costs that could have a materially  adverse
effect upon its financial condition.

All phases of Manhattan's operations are subject to environmental  regulation in
the various  jurisdictions  in which it operates.  Environmental  legislation is
evolving in a manner  that will  require  stricter  standards  and  enforcement,
increased fines and penalties for non-compliance,  more stringent  environmental
assessments of proposed projects,  and a heightened degree of responsibility for
companies and their  officers,  directors and  employees.  There is no assurance
that any future changes in  environmental  regulations will not adversely affect
Manhattan's operations.

There  is no  assurance  at  this  time  that  the  geologic  resources  in  the
Tambogrande  Project  will be  economically  viable for  treatment  nor that the
Company will have the financial resources available to it to develop the mine

The Tambogrande  Project is in the  environmental  permitting  stage. The Option
Agreement entered into between the Company and Centromin  (formerly Minero Peru)
relating to the Tambogrande  Concessions contains certain conditions relating to
operating and financial  size that have not yet been met by the Company.  In the
event these  conditions  are not met by December 1, 2003, the option will expire
unexercised.

Measurement Uncertainty

The Company has invested a total of  $59,893,000 in its  Tambogrande  and Papayo
property  interests.  In order to  maintain  those  property  interests  in good
standing,  the Company is required to meet certain  financial and  non-financial
obligations by the following dates:

o    Tambogrande  concessions  -  December  1,  2003  (for   pre-qualifications)
                               -  May 31, 2004 (for exercise of agreement)
o    Papayo concessions - January 15, 2004

In the event that the Company does not fulfill its financial  and  non-financial
obligations  by the due dates,  the Company's  property  interests may be deemed
impaired,  necessitating a writedown of up to $59,893,000, which amount would be
charged to the statement of operations.

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 Company 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 Company, including


<PAGE>


                                     - 14 -


international economic and political trends, expectations of inflation, currency
exchange  fluctuations,  interests  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 Company properties can be mined at a profit.

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

Uncertainty of Title

Third  parties  may  dispute  the  Company's  rights  to its  mining  and  other
interests.  While  the  Company  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 may be subject to dispute, prior unregistered claims, or
native  land  claims and  ultimate  transfer  to the  Company may be affected by
undetected defects. Such claims or defects could materially adversely affect one
or more of the projects and the Company's financial performance.

Conflicts of Interest

Certain directors, officers or promoters of the Company 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 Company.  In the event that
such a conflict of interest arises at a meeting of the directors of the Company,
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
Company 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 Company has no other  procedures  or mechanisms to deal
with conflicts of interest.

Absence of Dividends

The Company 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  Company'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 Company's  Common Shares in the  foreseeable
future, if at all.

Dilution

The  Company  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 Company'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 the then existing
shareholders of the Company may be subject to additional dilution.

The  Company is  currently  without a source of revenue  and will most likely be
required to issue  additional  securities to finance its operations and may also
issue substantial additional securities to finance the development of any or all
of its projects.


<PAGE>


                                     - 15 -


Volatility of Common Share Price and Volume

The  Company's  Common  Shares  are  listed for  trading  in the  Toronto  Stock
Exchange.  Shareholders  of  the  Company  may 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. The market price of
the Common  Shares may be affected  significantly  by factors such as changes in
the Company's operating results, the availability of financings, fluctuations in
the price of metals,  the  interest  of  investors,  traders and others in small
exploration  stage  public  companies  such as the Company  and  general  market
conditions. In recent years the securities markets 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 Company,  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 Company's shares will not occur.

Adverse Tax Consequences to U.S. Shareholders  Resulting From the Company's PFIC
Status

The  Company  believes  that it is  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 Company'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.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

The Company was  incorporated as a British Columbia company on November 18, 1985
under the name Riggins  Resources Ltd. The Company changed its name from Riggins
Resources Ltd. to Manhattan Minerals Corp. on June 1, 1990.

The Company's head office and registered and records office is situated at Suite
350-885  Dunsmuir  Street,  Vancouver,  BC, V6C 1N5.  The Company is a reporting
issuer in each of the  Provinces  of British  Columbia,  Alberta,  Manitoba  and
Ontario.  The Common  Shares have been listed on the TSE since July 13, 1994 and
were listed on the Vancouver  Stock  Exchange from June 13, 1988 to February 28,
1997. The Company  voluntarily  de-listed  from the Vancouver  Stock Exchange on
February 28, 1997.

The principal  expenditures  of the Company are related to its mineral  property
concessions  located in Peru.  During the years end December 31, 2002,  2001 and
2000 capital  expenditures on these  concessions were $3,454,000  (approximately
35% in Canada and 65% in Peru), $4,073,000  (approximately 22% in Canada and 78%
in  Peru)  and  $16,429,000  (approximately  19% in  Canada  and  81%  in  Peru)
respectively.  The 2002 and 2001  expenditures  related to the completion of the
EIA and  Feasibility  study on the TG-1  deposit,  and Peru  based  general  and
administrative expenditures,  while in 2000 expenditures were mostly for in fill
and   exploration   drilling,   and  Peru  based   general  and   administrative
expenditures.


<PAGE>


                                     - 16 -


In 2000 the  Company  adopted a plan to dispose of its  Mexican  operations.  On
March 12, 2001 the Company  sold its  Mexican  operations  to a group of Mexican
investors  for a nominal  payment and a sliding  scale  royalty  from any future
production of the Moris Mine.

The Company  relies  principally  on equity  financing  to fund its projects and
expenditures.

B. Business Overview

Manhattan is engaged in the acquisition,  exploration and future  development of
natural  resource  properties.  Manhattan's  primary focus is in northern  Peru,
where its principal  mineral  properties  are located.  Manhattan  commenced the
acquisition of its interest in the Tambogrande  Project in 1993, has carried out
exploration  drill  programs  in 1999  and  2000,  has an  Environmental  Impact
Assessment  (EIA)  in the  review  process  and  has  completed  a  final  draft
Feasibility Study on the TG-1 deposit.  The Feasibility Study is currently under
final review pending any amendments based on results of the Environmental Impact
Assessment  review  underway  in Peru.  The review of the  Environmental  Impact
Assessment by the Government of Peru is subject to Ministerial Resolutions. This
review  includes an analysis of all  information  supplied by the Company to the
regulators.  From  the  date  of  delivery  of the  EIA to the  Government,  the
Government  has 120 days to conduct  its review,  organize  and hold a series of
community  participation  workshops and public audiences for public comments and
present the Company with its  comments.  The Company then has 90 days to respond
formally to all comments.  There are then two comment  resolution  periods which
can last for  between  10 and 30 days  each.  Intermittent  delays in the review
period may occur at the request and  agreement of both  parties.  Although  this
process is governed by law, it can and has been  influenced  by changes  through
Ministerial Resolutions.

In the years  ended  December  31,  2002 and 2001,  the Company did not have any
active operations that generated revenues. The Mexican operations had incidental
gold  revenue in 2000 of  $12,000  related to the  revaluation  of its  precious
metals receivables.

After initial  exploration  in Canada and the United States up to mid-1992,  the
Company decided to consider  opportunities  in Latin America.  By late 1992, the
Company began  exploring in Mexico.  In early 1993, the Company began  acquiring
mineral properties in Mexico,  including the Moris Mine,  located  approximately
350  kilometres  south of the United  States  border in the state of  Chihuahua,
which commenced production in 1996. Due to a severe drought in the region during
1999 and the low price of gold,  mining  operations  at the Moris Mine ceased in
April  1999,  and the  mine was  placed  on care and  maintenance.  The  Company
concluded  that the Moris Mine was a non-core  asset and wrote down the value of
the  asset  by $8.0  million  in  fiscal  1999 to a net  carrying  value of $0.4
million.  This operation and all of the Company's Mexican Subsidiaries were sold
to Mexican investors on March 12, 2001.

C. Organisational Structure

As at December 31, 2002, the Company had five wholly owned subsidiaries, namely,
MMB, MMH, both of which are companies  incorporated in Bermuda, MMUS, an Arizona
corporation, and CMMP and MSCM, both of which are Peruvian corporations.


<PAGE>


                                     - 17 -


D. Property, Plant and Equipment

Tambogrande Project

(a) Introduction

The Company holds interests in the  Tambogrande  Project located in the district
of  Tambogrande,  in the  Department  of Piura in northern  Peru.  The  regional
capital,  Piura,  is 40 km  southwest,  and Lima lies  about  865 km south.  The
project area is 50 km south of the Ecuadorian  border. The Project covers 70,100
ha.  and  comprises  73  mining  concessions.   These  are  divided  into  three
sub-projects:  the  Tambogrande  Concessions,  the Lancones  Concessions and the
Papayo Joint Venture Concessions. Three deposits occur within the project: TG-1,
TG-3 and B-5.  Estimated  Mineral Resources exist for TG-1 and TG-3, and Mineral
Reserves have been calculated for TG-1.

A final draft  Feasibility  Study on the TG-1 deposit located on the Tambogrande
Concessions was completed  September  2002. The  Feasibility  Study is currently
under final review pending any amendments based on results of the  Environmental
Impact Assessment review underway in Peru.

The following diagrams illustrate the location of the Tambogrande Project:

Country Location Map

                                [GRAPHIC OMITTED]


<PAGE>


                                     - 18 -


Departmental Location Map

                                [GRAPHIC OMITTED]

The  Company  commissioned  MRDI to  provide  for  the  Tambogrande  Project  an
independent  Qualified  Person's  Review  and  Technical  Report,  as defined in
National   Instrument   43-101  ("NI   43-101")  of  the   Canadian   Securities
Administrators,  Standards of Disclosure for Mineral Projects, and in compliance
with Form  43-101F1  (the  "Technical  Report").  This report was  completed  in
October 2001 and is summarised herein.

The Company is incorporated  under the laws of British  Columbia in Canada.  The
mineral reserves and resources described in this Annual Report are estimates and
have been prepared in compliance  with NI 43-101.  The definitions of proven and
probable  reserves used in NI 43-101 differ from the definitions in SEC Industry
Guide  7.  In  addition,  the  terms  "mineral  resources",   "measured  mineral
resource",  "indicated  mineral  resource" and "inferred  mineral  resource" are
defined in and required to be disclosed by NI 43-101;  however,  these terms are
not defined  terms under SEC Industry  Guide 7 and normally are not permitted to
be used in reports and registration  statements filed with the SEC. Accordingly,
information  contained  in this Annual  Report  containing  descriptions  of the
Company's  mineral  deposits may not be comparable to similar  information  made
public by U.S.  companies  subject to the reporting and disclosure  requirements
under the United States federal  securities  laws and the rules and  regulations
thereunder.

(b) Summary

The  deposits  in the  Tambogrande  Project  are  pyritic  volcanogenic  massive
sulphide  deposits.   These  mid-Cretaceous  deposits  lie  proximal  to  dacite
extrusive  rocks,  overlying  mafic volcanic  rocks.  They are graben hosted and
typically  mineralogically zoned. The deposits are composed of a central pyritic
core,


<PAGE>


                                     - 19 -


flanking  sphalerite/chalcopyrite/pyrite  zone, and a basal  chalcopyrite/pyrite
zone.  In addition,  the TG-1  deposit  contains a late stage  supergene  copper
enriched  massive  sulphide zone at the top and margins of the  sulphides.  TG-1
also contains a late stage auriferous  exhalative baritic unit that overlies the
sulphides and comprises the oxide ore zone at TG-1.

The mineralisation of the Tambogrande  Project is classified as Mineral Resource
and Mineral  Reserves for the TG-1 deposit and as Mineral  Resource for the TG-3
deposit.

During the 2000  calendar  year,  studies  were  undertaken  on the  Tambogrande
Project in order to provide  information  to  complete an  environmental  impact
study and a feasibility  study.  These  studies  concern  Mineral  Resources and
Mineral Reserves,  mine development plans, processing options,  hydrology,  mine
waste  management,  environmental  baseline  conditions,   infrastructure,  town
relocation,  socio-economic  conditions and environmental  management  planning.
Data  collection  continues  and the  studies  are  expected  to be  complete by
mid-2002.  Significant efforts were made on community relations and consultation
programs  regarding  the impacts and benefits of mine  development  on the local
area.

The  studies  focus on the initial  development  of the TG-1  deposit.  The TG-1
deposit has been envisioned as a conventional  truck/shovel  open pit operation.
The operation  has been forecast to initially  produce at a rate of 7,500 tonnes
per day mill feed from the oxide gold/silver deposit followed by an expansion to
up to 20,000 tonnes per day from the copper/zinc/gold/silver sulphide deposit.

(c) Location, Access and Physiography

The  Tambogrande  Project is located in the coastal  plain  province of northern
Peru in the Department of Piura. Topography in the area is relatively flat, with
elevations  ranging  from 70 m to 150 m above sea  level.  A few small  hills of
volcanic or plutonic rocks are present,  emergent from the  flat-lying  tertiary
marine sediments and the quaternary eolian sands.  South of the Piura River, the
area has low sandy hills and typical desert flora.  The TG-1 deposit lies on the
northern margin of the Piura River, which flows westerly into the Pacific Ocean.
Much of the project area is under  cultivation,  irrigated by a system of canals
from reservoirs to the north.

The project is well served by paved  highways and secondary  roads.  The port of
Paita lies approximately 110 km west of the area. The Ecuadorian border is about
50 km to the north.

The climate reflects its proximity to the equator (5(degree) South latitude) and
the Pacific Ocean (90km). The area is warm and dry with abundant sunshine. A hot
and humid season occurs from January to March,  and the dry season is from April
to  December.  Temperatures  during  the dry  season  may rise to 35(0) C in the
daytime and are typically accompanied by cool desert nights. The area is subject
to El Nino events resulting in extremely high rainfall.

Current  administrative  facilities  consist of offices  for  communication  and
engineering functions in Piura, which receives daily commercial air service from
Lima.

(d) Claims and Ownership

Manhattan's  land  position  covers three  concession  blocks:  the  Tambogrande
Concessions,  the Lancones Concessions and the Papayo Joint Venture Concessions.
The Tambogrande  Concessions consist of 10,000 ha. Manhattan has been granted an
option to earn a 75% interest in these  concessions.  The remaining 25% interest
will be held by Centromin. The Lancones Concessions, the largest group, occupies
50,500 ha. Manhattan owns a 100% interest in these  concessions.  In March 2000,
Manhattan acquired 1,900 ha.


<PAGE>


                                     - 20 -


in two concessions called the Perla  Concessions.  These lie about 20 km west of
the Tambogrande Concessions and are commonly referred to as part of the Lancones
Concessions.  The third block is the Papayo  Joint  Venture  Concessions,  which
cover 3,200 ha.  Manhattan  has been granted an option to earn a 51% interest in
these  lands from  Cedimin,  a wholly  owned  subsidiary  of  Compania  de Minas
Buenaventura S.A.

Tambogrande Concessions

Centromin  (formerly  Minero Peru) is the  registered  owner of the  Tambogrande
Concessions.  The Concessions were transferred to Minero Peru from the Temporary
Regional Administrative Council of Piura on March 1, 1999.

BRGM,  pursuant to various Peruvian  government  decrees and agreements,  and in
particular the Base Agreement and the Additional Agreement, executed in 1979 and
1981, respectively, pursued the acquisition,  exploration and development of the
Tambogrande  Concessions.  These  agreements gave BRGM an initial 75% beneficial
interest in the  Tambogrande  Concessions,  subject to certain  exploration  and
financing conditions.

On  October  14,  1993,  BRGM  entered  into a letter of intent  with  Manhattan
pursuant to which BRGM granted Manhattan the option to acquire a 52.5% aggregate
interest (70% of BRGM's interest) in the Tambogrande Concessions.

On July 30, 1996, BRGM and Manhattan entered into an agreement, as modified by a
letter of amendment  dated  February 11, 1997,  that exercised the option in the
letter of intent and set out the rights and obligations  regarding the transfer,
exploration and development of the Tambogrande  Concessions.  On March 12, 1997,
Manhattan   purchased  the  balance  of  BRGM's   interest  in  the  Tambogrande
Concessions  for  $23  million,  which  increased  Manhattan's  interest  in the
concessions  from 52.5% to 75%. On April 8, 1997,  BRGM  conveyed its entire 75%
interest in the Tambogrande Concessions arising under the Base Agreement and the
Additional Agreement to the Company. The transfer of the interest to the Company
was subject to the approval of the Government of Peru, which was obtained.

As the Tambogrande  Concessions lie within the  50-kilometre  frontier zone with
Ecuador, the Company was required to obtain prior Supreme Decree approval to own
an interest in the  Tambogrande  Concessions.  This frontier zone Supreme Decree
was published on May 7, 1999.

On May  15,  1999,  the  Supreme  Decree  approving  the  Option  Agreement  was
published, and on May 17, 1999, the Company and Centromin (formerly Minero Peru)
executed  the  Option  Agreement,  which  replaced  the Base  Agreement  and the
Additional Agreement.

The Option Agreement  governs the ownership,  exploration and development of the
Tambogrande Concessions and includes the following provisions:

     o    Centromin  granted  Manhattan a three-year option period. On April 11,
          2001,  the term of the Option  Agreement  was extended for a period of
          one  year  to May  31,  2003;  there  were  no  other  changes  to the
          provisions  of the Option  Agreement.  On April 9, 2003, as the EIA is
          currently  under review by the Peruvian  Ministry of Energy and Mines,
          Centromin granted a further one year extension for the exercise of the
          option  until May 31,  2004.  Under the  terms of the  extension,  the
          Government of Peru requested that the qualifying


<PAGE>


                                     - 21 -


          conditions  be met by  December  1,  2003.  Other  terms of the Option
          Agreement remain unchanged.

     o    In addition,  under the terms of the most recent extension,  Manhattan
          is required  to meet two  qualifying  conditions  by December 1, 2003,
          prior to exercising  the option:  (i) it must operate a mining complex
          with an average treatment  capacity of 10,000 tonnes per day, and (ii)
          it must  have net  assets  of at least  $100  million.  Manhattan  may
          qualify  directly  or  through a  company  that may own,  directly  or
          indirectly,   a  25%  interest  in  Manhattan  or  any  subsidiary  of
          Manhattan.

     o    In the event that the option is  exercised,  Manhattan  and  Centromin
          will  incorporate a mining company,  EMTG,  which will be owned 75% by
          Manhattan  and  25%  by  Centromin.  EMTG  will  acquire  100%  of the
          Tambogrande  Concessions  from  Centromin and will develop and operate
          the mining project.

     o    Manhattan  will  commit to  developing  the mine  within four years of
          exercising the option.  In the event that the mine is developed within
          the four-year  period for less than the amount committed (as specified
          in the agreement),  no penalty will be payable.  In the event that the
          mine is not  developed  within the four  years,  Manhattan  will pay a
          penalty of 30% of the difference  between the amount committed and any
          lesser amount  actually spent on the development of the mining project
          during that period.

     o    Manhattan  will  arrange the debt  financing  required by EMTG for the
          development of the mining project,  including  Centromin's  share, and
          will contribute the entire equity financing required by EMTG.

     o    Centromin will retain a  copper-price-based  sliding scale net smelter
          return royalty  interest in the Tambogrande  Concessions  ranging from
          zero at $0.60/lb. to 5% at $1.20/lb.

     o    Manhattan  will  guarantee that the mining methods to be used will not
          physically  affect  the town of  Tambogrande  or cause  damage  to its
          population. In addition, the tailing deposits will be located in areas
          that will not affect the surrounding agricultural areas.

On April 11, 2001, the Government of Peru granted Manhattan a one-year extension
to  the  Option  Agreement,  which  extended  the  time  for  completion  of the
commitments under the Option Agreement by Manhattan from May 31, 2002 to May 31,
2003.

On April 9, 2003, as the EIA is currently under review by the Peruvian  Ministry
of Energy and Mines,  Centromin  granted a further  one year  extension  for the
exercise of the option until May 31, 2004. The extension requires the Company to
meet the pre-qualifications of the Option Agreement by December 1, 2003.

Lancones Concessions

Manhattan  has a 100%  interest in the  Lancones  Concessions  that  comprise 56
concessions aggregating 50,500 ha. The majority of the concessions were acquired
by staking in 1996. The Lancones Concessions adjoin the Tambogrande  Concessions
to the south  and north and  partially  to the east.  In March  2000,  Manhattan
acquired 1,900 ha in two concessions called the Perla Concessions. These lie


<PAGE>


                                     - 22 -


about 20 km west of the Tambogrande  Concessions and are included as part of the
Lancones Concessions.

Papayo Joint Venture Concessions

Manhattan  was granted an option by Cedimin in November  1997 to acquire up to a
100%  interest in  Cedimin's  Papayo  property.  The  property  comprises  seven
concessions  aggregating  3,200 ha and  lies  contiguously  to the  south of the
Tambogrande Concessions

In June  2001,  Cedimin  granted  a 15 month  extension  to  Manhattan's  option
agreement.  The new term  extends the time period for  exercising  the option to
January  15,  2004.  The  Company  can earn a 51%  interest  in the  property by
spending  $4,950,000 in exploration  expenditures  and making a one-time $50,000
payment to exercise the option that expires on January 15, 2004. In addition, it
must make payments  aggregating $300,000 to Cedimin ($250,000 paid) prior to the
exercise of the option. If Cedimin elects not to proceed, the Company may earn a
further 29% interest in the property by funding  Cedimin's 49% cost share of the
next  $10,000,000  property  expenditures.  Subsequently,  it  may  acquire  the
remaining balance of 20% for consideration of $5,000,000.

(e) History

The  Tambogrande  area was  first  known in the  mining  community  for its iron
occurrences,  and it was not until 1977 that geochemically anomalous base metals
were discovered through an exploration program run by BRGM with the co-operation
of  Instituto  Geologico  Minero  y  Metalurgico  ("INGEMMET").   Self-potential
geophysical  surveys  conducted in 1978  indicated  the  presence of  conductive
anomalies  and two drill holes  established  the presence of a massive  sulphide
body with pyrite,  chalcopyrite and sphalerite.  In 1979, the Base Agreement was
signed  between  INGEMMET  and  BRGM  to  explore  the  project  and  prepare  a
pre-Feasibility Study.

During 1979 and 1980, BRGM carried out a gravity survey, an induced polarization
survey,  a drilling  program,  geostatistical  studies and a  technical-economic
pre-feasibility  study.  In 1981,  the  Additional  Agreement was signed between
INGEMMET,   Minero  Peru  (Centromin's   predecessor)  and  BRGM  to  prepare  a
Feasibility Study and to finance and develop the project. However, no subsequent
work was  undertaken  at such time because of legal,  political  and  investment
conditions in Peru.

As there is little or no exposed sulphide mineralisation on the property, it was
necessary  to use  indirect  methods for  exploration.  The  self-potential  and
induced  polarization  geophysical  methods  initially  utilised  on the project
proved  unsatisfactory for defining anomalies of significance  partially because
of the conductive overburden.  Gravity methods were tested and proved to be very
successful.  The TG-1 anomaly,  a 700-m by 350-m gravity  anomaly that partially
underlies the town of Tambogrande,  was used as the basis for conducting a small
drill program, resulting in the discovery of the Tambogrande Deposit.

Preliminary  metallurgical  testing  was  undertaken  by BRGM in 1978.  Polished
section studies showed that pyrite is the most abundant  mineral.  Pyrite occurs
as fine-grained, polycrystalline masses or as automorphic crystals. Chalcopyrite
occurs  both  within  pyrite  grains  and  intergranularly.  It also  occurs  as
exsolution  blebs in  sphalerite.  Small  amounts  of galena,  tetrahedrite  and
covellite are also present.  The preliminary  flotation tests showed that copper
and zinc concentrates  could be reasonably  produced.  Additional  metallurgical
tests were done by BRGM in 1980.  These  tests  suggested  that  finer  grinding
(about  20 um)  would  be  necessary  for  good  recovery  of  metal  values  by
differential flotation.

Ground gravity surveys in 1977 and 1988 by BRGM delineated 55 gravity anomalies.


<PAGE>


                                     - 23 -


Geophysical  work  completed by Manhattan in January 1997 consisted of 11,000 km
of fixed-wing airborne magnetic and radiometric surveys.

(f) Regional Geology

The   Tambogrande   massive   sulphide   district   in   northern   Peru  formed
contemporaneously  with a pre-Albian  (Mid-Cretaceous)  marine rift known as the
Lancones Basin. Mafic and less common silicic volcanic and volcaniclastic  rocks
of the Ereo and La Bocana formations  filled the basin.  These rocks are exposed
in a 40-km wide by 80-km long northeasterly plunging anticline located along the
southeastern  side  of the  basin.  The  southwestward  extent  of the  volcanic
sequence is not known  because  tertiary  continental  sedimentary  rocks of the
Sechura Basin cover the Lancones Basin.

The Ereo  Formation  consists  of at least 500 m of  basalt  pillow  lava  flows
intercalated with hyaloclastic  breccias,  minor dacite flows and tuff beds, and
lesser volcaniclastic strata.  Intruding mafic dykes are common. The base of the
Ereo  Formation  has not been  observed.  The Ereo  Formation  is  unconformably
overlain by 250 m of Upper Albian  agglomeratic  andesite and dacite interbedded
with  calcareous  arenite,  limestone,  greywacke  and  tuff  of the  La  Bocana
Formation.  Numerous base metal and barite  occurrences are also found in the La
Bocana  Formation.   Approximately  1,500  m  of  the  Lancones  Formation  lies
conformably  on the La  Bocana  Formation  on the east and  west  flanks  of the
anticline, but is absent along the anticlinal crest. On the eastern flank of the
anticline, the Lancones Formation is composed primarily of andesitic pyroclastic
rocks, whereas the western flank is composed of andesitic  pyroclastic rocks and
interbedded  calcareous  arenite and greywacke  layers.  The basin extends north
into Ecuador where  volcanism,  coeval with Lancones Basin basal  sequences,  is
represented  by  andesitic  flows and  volcaniclastic  rocks of the  Celica  and
Macuchi  formations.  These rocks also  contain  volcanogenic  massive  sulphide
occurrences.

The depocentre of the Lancones Basin shifted  westward in Cenomanian  time, with
deposition of the Copa Sombrero Formation consisting of flysch successions up to
3,700 m thick.  The formation is represented in the lower units by debris flows,
turbiditic   sandstone  and  breccias  intruded  by  igneous  sills  and  dykes.
Up-section  the  stratigraphic  sequence  changes  to a finer  turbidite  facies
consisting of rhythmically interbedded black shale and greywacke sandstone.

By  Mid-Cretaceous,   Tethyan  spreading  waned,  ending  northeast  extensional
tectonism  and further  development  of the Lancones  Basin.  Pacific  spreading
centres  became active;  resulting in east and  northeasterly  directed  oblique
subduction along the western margin of South America. This event is reflected in
the Tambogrande region by arcuate  east-west-trending normal faults (down to the
north), which disrupt the Cretaceous host rocks.

Intrusive  stocks within the Lancones  Basin form part of the Upper Mesozoic and
Cenozoic Coastal Batholith that stretches the length of western Peru. Within the
Lancones Basin,  the intrusions are composed  entirely of gabbro and diorite and
are confined to a relatively small area north of the Tambogrande Region. The age
of these intrusions has not been determined,  but chemically they are similar to
the basal  volcanic  series  of the Ereo  Formation  and may be the  subvolcanic
equivalent  of these  volcanic  rocks.  Peripheral to the basic  intrusions  are
granodiorite and monzonite stocks analogous to the Western Peruvian  batholiths.
These are found  around the margin of the basin.  At the end of the  Cretaceous,
the tectonic setting of the northern Andean Cordillera  changed.  As a result, a
thick sequence of tertiary  terrigenous  sediments was deposited on the southern
portion of the  Lancones  Basin and northern  part of the  younger,  continental
Sechura Basin that lies to the south.  The Piura River in the  Tambogrande  area
coincides with the  present-day  northern limit of the  continental  basin.  The


<PAGE>


                                     - 24 -



stratigraphic   sequence  is  characterised  by  intercalated   lutite,   poorly
consolidated  sandy layers,  pebble  conglomerate  cemented with calcite,  white
friable marl, and evaporite.

(g) District Geology

The Tambogrande Deposits are hosted by the lower Mid-Cretaceous basalt-dominated
Ereo Formation.  Most of the understanding of the Ereo volcanic  stratigraphy in
the Tambogrande  district comes from exploration  drill holes.  This unit mainly
comprises  flow breccia units and is overlain and locally  intercalated  with an
intermediate to felsic section consisting of andesite and lesser dacite flow and
fragmental rocks. The dacitic deposits form dome complexes typically  coincident
with  underlying  basaltic  highs.  All massive  sulphides found to date overlie
tuffaceous dacite units within basins flanked by dacitic domes.  Andesitic rocks
overlie the felsic  section as  amygdaloidal  lavas,  flow  breccias  and debris
flows. Basaltic pillow lavas and amygdaloidal flows cap the sequence.

Locally  derived  heterolithic  debris  flow  deposits  are also  present.  They
generally  occur as fan-like  deposits along fault scarps and formed in response
to  graben  development.  At TG-3 a  sulphide  fragment-bearing  variant  occurs
proximal to thick sulphide accumulations.

Several  varieties of intrusive  rocks cut both the volcanic  units and sulphide
deposits.  The  intrusions  probably  occur  as  both  dykes  and  sills.  Mafic
intrusions are more common than felsic or intermediate bodies.

Oblique  secondary and tertiary grabens  dominate the structural  setting of the
district  with  conjugate  fault  sets  developed  during the  formation  of the
northeast-trending  Lancones Basin rift. North-south to southeast chevron-shaped
second-order  basins host the  favourable  stratigraphy  and all known  sulphide
accumulations.  TG-1 fills a double-sided  third-order basin within the confines
of the secondary basin. TG-3 sulphides were deposited in a second-order basin.

(h) Deposit Types

The Tambogrande  Deposits are examples of volcanogenic  massive sulphide ("VMS")
deposits.  These  are  essentially  pyritic  massive  sulphides  with  zones  of
chalcopyrite  and  sphalerite  and are  usually  precious  metal-bearing.  These
deposits  occur  within  tectonically  (growth  fault)  controlled  volcanic  or
volcaniclastic  basins  in  active  volcanic  regions  associated  with  rifting
environments (e.g.,  back-arc or intra-arc areas of an island arc system).  Host
rocks are typically  mafic to intermediate  volcanic rocks,  felsic volcanic and
volcaniclastic units, subaqueous fine- to coarse-grained epiclastic deposits and
fine-grained  marine  sedimentary  rocks (shales,  mudstones,  and  siltstones).
Commonly  the  deposits  are  capped by an  exhalative  layer  (iron  formation,
sulphate  - barite,  anhydrite,  and  chert).  The  deposit  form is  massive to
lensoidal and variable layered.

Principal  sulphide  minerals are pyrite,  sphalerite,  chalcopyrite and galena.
Common non-sulphide  minerals are quartz,  barite, and carbonate.  Mineralogical
zoning is a characteristic of these deposits,  with cores of pyrite, basal zones
of  chalcopyrite-rich  sulphides  and  marginal  sphalerite/chalcopyrite-bearing
sulphides.  Some  deposits  may  contain an upper zone of  late-stage  supergene
copper enrichment.

Alteration is common and is generally  adjacent and below the sulphide deposits,
focussed around feeder structures. Stockwork sulphide mineralisation is commonly
associated with these feeder systems.

The genetic model for the  Tambogrande  Deposits  consists of basins formed in a
rifted marine continental margin. The basins are secondary grabens characterised
by mafic volcanic horsts,  felsic volcanic domes,


<PAGE>


                                     - 25 -


flanking volcanic breccias,  conglomerates  adjacent to syn-volcanic  faults and
overlying  heterolithic  debris  flows.  Some of the deposits  have a late-stage
auriferous  sulphate  (barite)  cap.  Negligible   post-mineral   tectonism  and
magmatism  have  occurred,   preserving   original  volcanic  and  mineralogical
textures.

(i) Exploration

Manhattan's exploration program focussed on the systematic evaluation of gravity
anomalies.   These  anomalies  can  represent  massive  sulphide  deposits,  and
Manhattan  differentiated,  analysed and prioritised  their potential value as a
target for exploration drilling by using three-dimensional modelling techniques.
Since 1996,  Manhattan has completed numerous gravity surveys at regional (500 m
and 250 m separations) and detailed (50m to 100 m separations) levels.

In addition to gravity surveys,  airborne magnetic and electro-magnetic  (EM-37)
surveys were also instituted.  The magnetic  surveys,  made at 200 m and locally
100 m separations, were useful in revealing areas underlain by magnetic footwall
basaltic strata, which delineate regional structures.

Electro-magnetic work has been confined to the TG-3 area.

During 2000, 41,800 m of diamond drilling was completed in 262 holes.  Three new
anomalies  were  tested.  Including  the TG-1  deposit,  a total of nine gravity
anomalies have been drilled since the start of the project. Of these nine, three
are large,  massive-sulphide  deposit discoveries,  three have sulphides present
and need follow-up  work,  two have no sulphides but still need follow-up  work,
and only one has been eliminated. In addition,  another 19 anomalies have yet to
be tested, and almost one-third of the Tambogrande property remains unexplored.

Manhattan's  exploration  program in 2000 focussed primarily on in-fill drilling
of the TG-1 deposit and drilling at the B-5 deposit. Exploration spending during
2000 was $7.9 million.  Since 1999, Manhattan has invested more than $25 million
(inclusive  of  administrative  costs) in  exploration  and  development  in the
Tambogrande region.

(j) TG-1 Deposit

The TG-1 deposit is primarily  underlain and flanked by porphyritic dactic rocks
with minor  intercalated  basalt  and  andesite.  Portions  of the  deposit  are
underlain  and flanked by  amygdaloidal  basalt.  Heterolithic  debris flows and
conglomerates  form  fan-like  deposits  that are  proximal to and  underlie the
sulphide deposits.  Intercalated  volcanics include  amygdaloidal  basalt flows,
primarily  in  the  southern  portion  of  the  deposit,   and  numerous  felsic
pyroclastic units in the north to north-central part of the deposit. Sedimentary
deposits  occur  distally  to the  south of TG-1 and  comprise  1-m to 3-m thick
lutite layers that contain bedded  sulphides.  These units are intercalated with
amygdaloidal andesite and basalt flows.

The TG-1 deposit is hosted within a complex graben setting created from primary,
secondary and tertiary structures.  The main structural control is a north-south
trending  secondary  graben  approximately  1 km  wide.  Northwesterly  trending
secondary  structures  created  a  tertiary  rift  approximately  300 m to 400 m
across. It is this latter feature that hosts the sulphide deposit. The thickness
of this sub-basin,  and consequently the sulphide thickness, was controlled by a
set of northeast-trending cross faults that formed a complex stair-step floor to
the  sub-basin.  While the  sulphide  deposit is  apparently  restricted  to the
tertiary  northwest-trending  rift,  the  overlying  hypogene  oxides  have been
demonstrated to extend beyond the confines of the basin.


<PAGE>


                                     - 26 -


The TG-1 deposit contains an oxidised cap that forms a continuous unit overlying
(and extending  beyond) the TG-1 sulphide body. Parts of it crop out in the town
of  Tambogrande,  where it forms the impressive  gossan hill and several smaller
outcrops,  and in a new  exposure  caused by recent  flooding of the Piura River
along the west side of the deposit. In most areas, however, it is overlain by an
average of 15 m of unconsolidated  sand and gravel.  This oxide zone is complex.
It appears to be a mix of late-stage iron and barite-rich  exhalative  units and
rhyolite tuff. The cap likely  represents the last phase of exhalative  activity
in the formation of the TG-1 deposit.

Alteration styles recognised at TG-1 are quartz/epidote zones in distal footwall
and lateral rocks and  sericite/quartz/lesser  chloritic  zones  associated with
footwall  stockwork zones.  Intermediate to felsic units internal to the deposit
have  undergone  a  strong  acidic   destruction,   resulting  in  vuggy  silica
alteration.  A  pronounced  wedge-like  zone of argillic  to silicic  alteration
occurs along the eastern and northeastern flanks of the sulphide deposit.  Whole
rock data  reveal  significant  sodium  depletion,  and  silica  enrichment  has
occurred in both footwall and intercalated volcanic units.

Late  supergene  weathering  has  affected  the  deposit.  This  has  led to the
development of a saprolitic  clay-rich  gossan,  which  typically caps the oxide
stratigraphy at TG-1. Supergene weathering may or may not be responsible for the
creation of the  ferruginous  siliceous  rocks and other units commonly  present
between the baritic unit and the capping clay-rich gossan.

(k) TG-3 Deposit

The oldest units  drilled in the TG-3 area are basaltic  flows.  These rocks are
overlain by  amygdaloidal  andesite and cut and overlain by  porphyritic  dacite
intrusive and extrusive  rocks.  The sulphides are  associated  with the dacitic
units.  Sulphides were deposited  simultaneously  with dacite dome  construction
within marginal basins and on the flanks of the domes.  Periods of quiescence in
dome building allowed for sulphide deposition to extend laterally,  resulting in
the stacked  mushroom shape in the south part of the TG-3 deposit.  The sulphide
accumulations were forced to grow vertically and reached significant thicknesses
(over 300 m). The end of TG-3  hydrothermal  deposition  was marked by andesitic
volcanism  that  deposited a sequence of lava and debris flow  deposits.  Basalt
flows cap the section.

Thin  lutite  units  with  banded  sulphides  are  present  in the  hanging-wall
stratigraphy  at TG-3.  These beds may correlate with those seen in holes to the
south of TG-1. If so, they would suggest that TG-3 is older than TG-1.

The structural  setting at TG-3 is less well  understood than that at TG-1. TG-3
appears  to  have  developed  in a less  confined  setting,  controlled  more by
competition  for space with  eruptive  rocks and debris flows than by rift-basin
walls.

Alteration  at TG-3  includes  extensive  quartz-epidote  alteration  of  distal
footwall,  lateral and hanging-wall rocks. The footwall proximal to the sulphide
deposit  comprises  stockwork-related  sericitic  and chloritic  alteration  and
widespread  silicification.  Rocks at TG-3 have not been significantly subjected
to oxidation as seen at TG-1.

(l) B-5 Deposit

The  B-5  deposit  is a very  large-zoned  sulphide  mound  that  appears  to be
relatively undisturbed  tectonically or metamorphically.  The sulphides lie in a
northwesterly  oriented  basin  developed  in  basalt.  At this  early  stage of
drilling, it is difficult to define the dimensions of the sulphide mound, but it
appears to be 500 m long in the  northwest  dimension  and 400 m wide east west.
The thickest massive sulphide


<PAGE>


                                     - 27 -


intersection occurred in Hole B-5-005 at the southern end of the anomaly,  where
240 m were cut. Hole B-5-014 also intersected 240 m of massive  sulphides in the
east  central  portion  of the  anomaly.  The  lower  part of this  intersection
contained a stockwork copper zone in part replacing volcanic rocks.

Geologically  the B-5  deposit  occurs in a  Cretaceous  stratigraphic  sequence
similar to those of TG-1 and TG-3. Basalt footwall rocks are cut and overlain by
multistage dacite domes with franking massive sulphides.  Hanging-wall lithology
is  basalt.  Approximately  380 m to 400 m of recent  eolian  sand and  tertiary
volcanoclasitc  rocks cover the Cretaceous section.  One difference noted at B-5
is that sulphides lie directly on basaltic  footwall rocks and not on dacite, as
is seen at TG-1 and TG-3.  The dacite domal rocks at B-5 flank the sulphides but
do not appear to underlie them.

The  sulphide  mound  at B-5  is  zoned  with a  barren  pyrite  core,  flanking
copper-zinc-silver-gold  mineralisation  and basal copper  replacement.  Pyrite,
chalcopyrite  and  sphalerite  are the  dominant  sulphide  minerals  within the
massive sulphide pile. Minor galena is also present. The host to silver has been
identified as  tetrahedrite.  Although their  distribution  and quantity are not
well understood,  the secondary copper mineral covellite and chalcocite are also
present. Principal gangue minerals are calcite and barite.

Basal copper stockwork replacement at B-5 has affected the footwall rocks and to
a lesser extent the lower  portions of the sulphide pile, as is seen at TG-1 and
TG-3. Intense pyrite and chalcopyrite replacement has created virtually complete
massive  sulphide  replacement  of footwall  rocks within parts of the stockwork
zone. From the limited data  available,  the intense  replacement  appears to be
structurally  controlled,  most  prominently  northwesterly  but  perhaps  along
several other orientations as well.

Alteration styles are similar to the other Tambogrande Deposit.  Footwall patchy
quartz-epidote  alteration  lies  distal  to  the  sulphides.  B-5  has a  large
stockwork  zone directly  underlying  the sulphide  pile.  The stockwork zone is
characterised by  fracture-controlled to pervasive  quartz-sericite  alteration.
Silicification  is also  common in footwall  rocks.  Dark  chlorite  has limited
extent  in  the  stockwork  zone  but  is  commonly   associated   with  intense
chalcopyrite replacement.

A stratiform  gold deposit  similar in geometry but  different in  mineralogy to
TG-1  partially  overlies the  sulphides  at B-5.  Main  components  of the gold
deposit are  calcite,  quartz and  unidentified  clay (with  optical  properties
similar  to  biotite  or  chlorite),   black  fetid  mud,  ankerite,   siderite,
pyrrhotite,  spheroidal  or  botryioidal  pyrite  (clearly  different  than  the
underlying  crystalline  pyrite associated with the massive sulphide) and lesser
hematite and limonite. The zone has been intersected in only a few holes to date
and averages about 5 m in thickness.

(m) Mineralization

TG-1 and TG-3 Sulphide Deposits

The TG-1 and TG-3 massive sulphide  deposits consist of 85% to 99% pyrite, up to
15%  barite,  on average 5%  combined  chalcopyrite  and  sphalerite,  and small
amounts of quartz and calcite.  Sulphide  minerals  are found in zones,  and the
patterns  are similar in both  deposits.  In  general,  the  deposits  contain a
base-metal-poor  pyrite  zone,  a  chalcopyrite-rich  zone (called Type 3) and a
chalcopyrite-sphalerite  zone  (called  Type 2). The pyrite zone is found in the
core of the  deposits  and at the top part of  sulphides  at TG-1,  whereas  the
chalcopyrite   zone  occurs  along  the  base  and  margins  of  the   deposits.
Disseminated  magnetite is a significant  constituent  of the  chalcopyrite-rich
basal zone. The  chalcopyrite-sphalerite  zone is distributed  around the pyrite
core above the basal  chalcopyrite and extends to the margins of the deposits on
all sides.  This mineral  zone  contains  the major  portion of the  sulpho-salt
mineralogy,


<PAGE>


                                     - 28 -


principally as tennantite.  A fourth  mineralogical zone containing  chalcocite,
digenite,  covelite and pyrite is present at TG-1 (called Type 1). It lies above
the chalcopyrite-sphalerite zone and below the capping pyrite.

Gangue mineralogy consists of barite, calcite and minor quartz. These occur as a
matrix interstitial to pyrite grains and makes up to 20% of the rock. With depth
at TG-3,  calcite  becomes more  abundant and  eventually  dominant  with depth,
whereas at TG-1 the matrix shifts from barite to quartz dominant with depth.

The sulphides at TG-1 and TG-3 exhibit a variety of textures,  although  massive
crystalline sulphides are most common. Coarse-grained massive sulphides can have
up to 5% pore space,  probably  formerly filled by a sulphate  (anhydrite).  The
second most common  texture  within the  sulphides is a  distinctive  brecciated
type.  Generally rounded sulphide fragments supported within a matrix of smaller
sulphide  fragments  and  barite  cause this  texture.  Fragments  within  these
breccias can contain pyrite, chalcopyrite and sphalerite.

TG-1 Oxide Deposit

Immediately  overlying the massive sulphides and typically in sharp contact is a
thin (up to 2 m thick) unit composed of cherty or vuggy silica  (exhalative)  or
unlithified  silica  sand.  The  zone is  called  the  transitional  zone and is
silver-rich,  commonly containing in excess of 1,000 g/t of silver. Petrographic
work has shown the presence of abundant native silver,  argentite as well as the
silver-mercury amalgam.

Overlying the Transitional  zone is the Oxide zone - a complex  intercalation of
felsic  volcaniclastic  material and barite sandstone and goethite-rich  gossan.
The barite sandstone ranges up to 15 m in thickness and is commonly friable. The
gossan overlies the barite  sandstone.  The gold  mineralisation is found in the
barite  sandstone  and the  goethite-rich  gossan,  especially  where  barite is
present.  Petrographic  study  reveals  that  gold  is  associated  with  and is
typically encapsulated in barite grains.

B-5 Deposit

The limited data that we have  indicates that the B-5 massive  sulphide  deposit
displays  the same  sulphide  mineral  zoning as TG-1 and TG-3.  The B-5 deposit
contains a  base-metal-poor  pyrite core, a basal  chalcopyrite-rich  zone and a
lateral  chalcopyrite-sphalerite  zone. The central top portion of the sulphides
contains an overlying  gold-silver zone. This zone spatially  resembles the gold
zone  overlying the TG-1  sulphides and comprises  botryioidal  pyrite,  calcite
aggregates and massive sulphide clasts in a black  carbonaceous  mud matrix.  It
contains barite but in much less concentration than at TG-1.

(n) Mineral Resources and Mineral Reserve Estimates

The  Mineral  Resource  and  Mineral  Reserve  estimates  for the  TG-1 and TG-3
deposits  were  calculated by MRDI in 1999 and 2000.  The Mineral  Resources and
Mineral  Reserves  for the  Tambogrande  Project  as at  December  31,  2000 are
calculated  in  accordance  with Canadian  Securities  Administrators'  National
Instrument   43-101,   Standards  of  Disclosure  for  Mineral   Projects.   The
mineralisation  is  classified as Mineral  Resource and Mineral  Reserve for the
TG-1 deposit and as Mineral Resource for the TG-3 deposit.

The Qualified  Person for MRDI is Stephen Juras,  PhD., and P.Geo.  Neither MRDI
nor Mr.  Juras have any  relationship  with the  Company,  its  officers  or its
directors. The estimates were made from three-dimensional block models utilising
commercial mine planning software (Gemcom(R) and MineSite(R)).


<PAGE>


                                     - 29 -


All calculations are based on the following metal prices:

        ---------------------------------------------------
        Metal                                Price
                                              ($)
        ---------------------------------------------------
        Gold                                 300 /oz
        Silver                              5.00 /oz
        Copper                              0.90 /lb
        Zinc                                0.55 /lb
        ---------------------------------------------------

(o) Mineral Resource and Mineral Reserve Summary

<TABLE>
-----------------------------------------------------------------------------------------------------------
                                                                                   Grade
                                                                   Copper      Zinc      Gold     Silver
                                                      Tonnes         (%)        (%)     (g/t)      (g/t)
===========================================================================================================
<S>                                                  <C>             <C>        <C>      <C>        <C>
TG-1 Gold Deposit
Mineral Resources
Indicated Mineral Resources (1)                       8,081,000       -          -       3.7        70
Inferred Mineral Resources                              669,000       -          -       3.7        75
Mineral Reserves                                                      -          -
Probable Mineral Reserves (2)                         8,056,000       -          -       3.5        67
----------------------------------------------------------------------------------------------------------
TG-1 Sulphide Deposit
Mineral Resources
Indicated Mineral Resources (3)
Type 1                                               14,500,000      2.2        0.2      0.6        29
Type 2                                               23,400,000      1.0        2.1      0.7        36
Type 3                                               11,200,000      2.1        0.2      0.3        16
Stockwork                                             1,400,000      1.6         -        -          -
Total Indicated Mineral Resources                    50,500,000      1.6        1.1      0.6        28
Inferred Mineral Resources
Type 1                                                1,200,000      2.0        0.4      0.6        30
Type 2                                                2,500,000      1.0        2.2      0.6        32
Type 3                                                1,600,000      1.7        0.3      0.3        13
Stockwork                                               200,000      1.3         -        -          -
Total Inferred Mineral Resources                      5,500,000      1.4        1.1      0.5        25
----------------------------------------------------------------------------------------------------------
Mineral Reserves
----------------------------------------------------------------------------------------------------------
Probable Mineral Reserves (4)
----------------------------------------------------------------------------------------------------------
Type 1                                               15,100,000      2.1        0.1      0.6        26
----------------------------------------------------------------------------------------------------------
Type 2                                               21,600,000      1.1        2.1      0.7        34
----------------------------------------------------------------------------------------------------------
Type 3                                               11,100,000      1.8        0.1      0.3        13
----------------------------------------------------------------------------------------------------------
Stockwork                                             1,400,000      1.3         -        -          -
----------------------------------------------------------------------------------------------------------
Total Probable Mineral Reserves                      49,200,000      1.6        1.0      0.6        26
----------------------------------------------------------------------------------------------------------
TG-3 Sulphide Deposit
Inferred Mineral Resources (5)                       82,000,000      1.0        1.4      0.8        25
----------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


                                     - 30 -


     Notes:

     (1)  The Mineral  Resource was  calculated  based on a cut-off grade of 1.0
          g/t gold. High values were cut to 40-g/t gold and 4,000 g/t silver.

     (2)  The Mineral  Reserve was  calculated on a net smelter  return  ("NSR")
          cut-off  of  $8.53,   which   covers   processing,   and  general  and
          administrative  costs.  The Mineral Reserves  incorporate  95,000 t of
          external  dilution taken at zero grade. The open pit design shows that
          the deposit can be mined at a strip ratio of 1.9:1 (waste:  ore).  The
          Mineral Reserves are contained within the Mineral Resources.

     (3)  The Mineral  Resource was calculated using a cut-off grade of 0.75% Cu
          Equivalent. High assays have been cut to 9.0% copper and 8.0% zinc.

     (4)  The Mineral  Reserve was calculated on variable NSR cut-offs (Type 1 =
          $4.75,  Type 2 = $5.97,  Type 3 and  Stockwork = $4.60),  which covers
          processing, and general and administrative costs. The Mineral Reserves
          incorporate  200,000 t of external  dilution and 400,000 t of internal
          dike  dilution,  both taken at zero grade.  The open pit design  shows
          that the deposit can be mined at a strip ratio of 1.2:1 (waste:  ore).
          The Mineral Reserves are contained within the Mineral Resources.

     (5)  The Mineral  Resource  was  calculated  using a cut-off  grade of 0.5%
          copper equivalent. No cutting factor was applied.

(p) Mineral Processing and Metallurgical Testing

The oxide and sulphide  metallurgy of the various TG-1 ore types was assessed in
two main phases of test work, under the supervision of MRDI personnel. This test
work was conducted at a variety of laboratories  including  Lakefield  Research,
Process  Research  Associates,  G&T  Metallurgical  Services,  Advanced  Mineral
Technology Laboratory and MinnovEx Inc.

Mineralogical  analysis  and  cyanidation  leach test work was  conducted on the
oxide ore types.  Projections of gold and silver leach recoveries from the oxide
and  transition  ores are based on test results from two  laboratory  batch test
programs.  This has  allowed  a  reasonable  estimate  to be made of the  likely
metallurgical  performance and reagent  consumption's using the selected cyanide
leach feasibility flow sheets.

The flow sheet for oxide ore includes the following basic criteria: SAG and ball
milling  will be used to grind the ore to 80% passing 40 um; the milled  product
will be  thickened  and  subjected  to  conventional  leaching in  cyanide;  the
pregnant  solution will then be separated from the barren tailings using counter
current  decantation;  cyanide  destruction  on the  tailing  stream,  using the
SO2/air  technique,  will also be  incorporated  into the flow  sheet;  pregnant
solution  will be  clarified  and  de-aerated  in a  conventional  Merrill-Crowe
circuit and the precious metals  recovered from solution by zinc  precipitation;
and the precious metal sludge will be upgraded to produce a  gold/silver-bearing
dore for shipment to a refinery.

Projections of gold and silver leach  recoveries from the TG-1 oxide ore are 90%
and 61.8% respectively.

The TG-1 sulphide ores are volcanogenic  massive sulphides  containing more than
80% sulphide minerals.  All the ores contain pyrite as the primary  constituent.
There are three sulphide ore types:

     1.   Type 1 contains  on average  2.1%  copper  (80% of which is  secondary
          copper mineral chalcocite and covellite).

     2.   Type 2 contains on average 1.1% copper (90% as chalcopyrite)  and 2.1%
          zinc (as sphalerite).


<PAGE>


                                     - 31 -


     3.   Type 3 contains on average 1.8% copper (as chalcopyrite).

Modal  analysis  and  open-circuit  and  locked-cycle  flotation  test work were
conducted on the three types of sulphide ore. Copper and zinc  concentrates will
be produced by flotation.  All ore types are  fine-grained,  requiring a primary
grind of 80% passing 45 um to achieve adequate liberation for rougher flotation.

Two parallel  lines of grinding  and copper  flotation  will be  utilised.  This
configuration  is consistent with the TG-1 mining sequence and the production of
Type  1  ore,  which  requires  separate   processing  to  optimise  its  copper
metallurgy.  A single  mill line will also be  equipped  with a zinc  circuit to
process  Type 2 ore.  When  Type 3 ore is  processed  the zinc  circuit  will be
by-passed.

The TG-1 sulphide  recoveries and concentrate grades used in the Mineral Reserve
estimate are as follows,  followed by the projected  recoveries and  concentrate
grades based on work subsequent to the Mineral Reserve  Classification Report of
September 2000:

 Mineral Reserve Classification Recoveries and Concentrate Grades, Sulphide Ore

--------------------------------------------------------------------------------
                          Copper (%)                            Zinc (%)
                ----------------------------        ----------------------------
                                Concentrate                          Concentrate
   Ore Type      Recovery          Grade             Recovery           Grade
================================================================================
    Type 1          60              24                   -                -
    Type 2          62              24                  74               52
    Type 3          87              27                   -                -
--------------------------------------------------------------------------------

            Projected Recoveries and Concentrate Grades, Sulphide Ore

--------------------------------------------------------------------------------
                          Copper (%)                            Zinc (%)
                ----------------------------        ----------------------------
                                Concentrate                          Concentrate
   Ore Type      Recovery          Grade             Recovery           Grade
================================================================================
    Type 1          73              24                   -                -
    Type 2          71              26                  76               52
    Type 3          87              27                   -                -
--------------------------------------------------------------------------------

The projected  improvement  in Type 1 and Type 2 metallurgy is based on a second
phase of  metallurgical  test work carried out after the September  2000 Mineral
Reserve  Classification  Progress  Report.  The  new  projections  appear  to be
reasonable  and consistent  with the test work.  Key to the improved  metallurgy
during the period  September  2000 to December 2000 was the use of fresh samples
and a modified  flow  sheet  procedure.  Despite  these  improvements,  there is
evidence that the potential of these ores has not yet been fully optimised.

In December  2000,  sulphide  metallurgy  projections  were  updated  because of
improvements  established  in a second  phase  of  flotation  studies  conducted
between  September  and December  2000.  Using  freshly  prepared  samples and a
simplified flow sheet procedure,  copper metallurgy and recoveries  improved.  A
preliminary feasibility sulphide flotation flow sheet was also established.


<PAGE>


                                     - 32 -


To verify these new metallurgical  projections and develop the final Feasibility
Study concentrate recovery and grades,  additional feasibility sampling and flow
sheet confirmation test work was recommended. This work program was initiated in
January 2001 and was halted  following the temporary  suspension of  feasibility
work.  Recently,  Lakefield  Research  undertook  an  analysis of the quality of
stored samples.  This study indicated that the samples have oxidised in storage,
and it will be necessary to conduct a further  sampling  campaign if  additional
metallurgical testing is necessary.

(q) Mineral Resource Update

Manhattan  commissioned Roscoe Postle Associates Inc. to review and estimate the
Mineral  Resources  for the TG-1  gold/silver  and  base  metals  deposits.  The
estimates are based on diamond drilling programs  completed between May 1999 and
May 2000.

The review was in part based on  recommendations  from AMEC E&C  Services  Ltd.,
following  completion of the Mineral Resource  estimate for the  pre-feasibility
study in 2000.  The  review  includes  revisions  to the  interpretation  of the
deposits,  a complete  data check,  a detailed  confirmation  of volumes,  and a
further  refinement  of  statistical  and  modelling  techniques.   The  Mineral
Resources  are reported  according  to the  standards as defined by the Canadian
Institute of Mining, Metallurgy and Petroleum.

TG-1 Base Metal Deposit - Mineral Resources:

<TABLE>
---------------------------------------------------------------------------------------------------------
|   Ore Type  |               Indicated                    |                Inferred                    |
|             |-----------------------------------------------------------------------------------------|
|             |  Tonnes   |   Cu  |   Zn  |   Au  |   Ag   |  Tonnes   |   Cu   |  Zn  |   Au  |   Ag   |
|             |-----------|-------|-------|-------|--------|-----------|--------|------|-------|--------|
|             |  (000's)  |   %   |   %   |  g/t  |  g/t   |  (000's)  |   %    |  %   |  g/t  |  g/t   |
|-------------|-----------|-------|-------|-------|--------|-----------|--------|------|-------|--------|
<S>              <C>         <C>     <C>     <C>      <C>       <C>       <C>     <C>     <C>      <C>
|Type 1       |  15,369   |  2.2  |  0.1  |  0.6  |   25   |    846    |  2.1   | 0.1  |  0.6  |   20   |
|-------------|-----------|-------|-------|-------|--------|-----------|--------|------|-------|--------|
|Type 2       |  25,458   |  0.9  |  2.2  |  0.7  |   33   |   1,078   |  1.0   | 2.4  |  0.5  |   27   |
|-------------|-----------|-------|-------|-------|--------|-----------|--------|------|-------|--------|
|Type 3       |  12,784   |  2.1  |  0.1  |  0.4  |   16   |    787    |  1.9   | 0.1  |  0.3  |   13   |
|-------------|-----------|-------|-------|-------|--------|-----------|--------|------|-------|--------|
|Stockwork    |  2,545    |  1.3  |  0.1  |  0.1  |   5    |    584    |  1.3   | 0.1  |  0.1  |   5    |
|=============|===========|=======|=======|=======|========|===========|========|======|=======|========|
|     TOTAL   |  56,156   |  1.6  |  1.0  |  0.5  |   26   |   3,295   |  1.5   | 0.8  |  0.4  |   18   |
---------------------------------------------------------------------------------------------------------
</TABLE>

Cutoff Grade: 0.75% Cu equivalent (Cu Eq = Cu % + 0.61Zn%).  Ore types: Type 1 -
chalcocite,  covellite, minor chalcopyrite;  Type 2 - chalcopyrite,  sphalerite;
Type 3 - chalcopyrite, Stockwork - chalcopyrite.

The  sulphide  model  indicates an overall  increase in contained  copper of +5%
including a significant  increase in the Indicated  Resource (+9%).  This is the
result of refining the geologic interpretation and interpolation parameters. The
movement of material from the Inferred to the  Indicated  category in particular
reflects  the  excellent  continuity  shown in the data.  Total  contained  zinc
remains largely unchanged (-1%).


<PAGE>


                                     - 33 -


TG-1 Gold/Silver Deposit - Mineral Resources:

<TABLE>
----------------------------------------------------------------------------------------------------
|    Zone    |           Indicated           |          Inferred          |     Contained Ounces   |
|------------|-------------------------------|-----------------------------------------------------|
|            |   Tonnes   |  Gold  |  Silver | Tonnes  |  Gold  |  Silver |   Gold    |    Silver  |
|------------|-------------------------------|-----------------------------------------------------|
|            |   (000's)  |   g/t  |   g/t   | (000's) |  g/t   |   g/t   |           |            |
<S>               <C>        <C>        <C>      <C>      <C>       <C>      <C>         <C>
|Oxide       |    7,336   |  3.1   |    29   |   647   |  2.8   |   26    |  793,600  |  7,381,500 |
|------------|-------------------------------|-----------------------------------------------------|
|Transition  |     628    |  8.6   |    443  |   78    |  9.0   |   365   |  195,400  |  9,860,900 |
|==================================================================================================|
|TOTAL       |    7,964   |  3.6   |    62   |   725   |  3.4   |   62    |  989,000  |  17,242,400|
----------------------------------------------------------------------------------------------------
</TABLE>

Cutoff Grade: 1.0 g/t Au  Cutting Level: Oxide         20 g/t Au    150 g/t Ag
                                         Transition    50 g/t Au    2,000 g/t Ag

The net difference in the oxide resource is a minor decrease in total  contained
gold (-4%), due to adjustments to total volumes,  interpolation techniques,  and
revised cutting factors. Of the 4% decline, 1% is due to lower volume, and 3% is
due to the use of a more conservative approach to intervals where drill core was
not recovered.

(r) Environmental Impact Assessment (EIA)

In December 2002 the Company submitted its Environmental Impact Assessment (EIA)
for the Tambogrande  Project.  Klohn Crippen  Consultants  prepared this report,
with  support  from a number  of  International  and  Peruvian  consultants  and
contractors.

The EIA is  currently  being  reviewed  formally  by the  Peruvian  Government's
Ministry  of Energy  and Mines  (MEM).  The review of the  Environmental  Impact
Assessment by the Government of Peru is subject to Ministerial Resolutions. This
review  includes an analysis of all  information  supplied by the Company to the
regulators.  From  the  date  of  delivery  of the  EIA to the  Government,  the
Government  has 120 days to conduct  its review,  organize  and hold a series of
community  participation  workshops and public audiences for public comments and
present the Company with its  comments.  The Company then has 90 days to respond
formally to all comments.  There are then two comment  resolution  periods which
can last for  between  10 and 30 days  each.  Intermittent  delays in the review
period may occur at the request and  agreement of both  parties.  Although  this
process is governed by law, it can and has been  influenced  by changes  through
Ministerial Resolutions.

Manhattan has been  collecting  environmental  and social  baseline  information
continuously  since late 1999,  and  continues  to do so in order to maintain an
accurate and comprehensive  database.  Key  environmental  issues that have been
examined at length in the EIA  include  protection  of surface  and  groundwater
regimes,  protection of the adjacent  agricultural  area, and management of dust
and noise from  operations.  Tailings  dam design and  measures to control  acid
generation potential of the waste rock, exceed industry norms.

The potential  impacts to the local community and the nearby  agricultural  area
are a major  component  of the EIA. As a baseline,  the  Company,  working  with
national and international consultants,  has undertaken numerous specific social
and economic  studies,  including  workshops and focus groups in the Tambogrande
area. This information has contributed to understanding  the current  conditions
and proposing  mitigation  measures for potential  impacts. A framework has been
developed  for a  resettlement  plan  for the  affected  people  in the  town of
Tambogrande,  along with concepts for assisting the agricultural  areas to fully
develop their potential.


<PAGE>


                                     - 34 -


A key  ingredient  to the  community  development  plan  is to  demonstrate  the
positive  socio-economic  benefits  that  will  be  derived  from  the  Project.
Manhattan's  investment can be used to drive an economic  resurgence in the area
and in particular the  agricultural  industry.  Together with Government and the
community,  Manhattan has the opportunity to provide the spark that will see the
San Lorenzo region regain its position as a prime agricultural producer.

(s) Feasibility Study

The final draft Feasibility Study for the Tambogrande TG-1 deposit was completed
in September  2002.  The work has been carried out by AMEC E&C Services  Limited
(AMEC).  Klohn Crippen Consultants Ltd. also had input into the study. The Study
is currently  under final review pending any amendments  based on results of the
Environmental Impact Assessment review underway in Peru.

The Feasibility  Study,  along with a financing plan (for Project  development),
are key  requirements  for the exercise of the Option  Agreement  with Centromin
(formerly Minero Peru), an operating company owned by the Government of Peru.

Initial  development of the oxide gold/silver  deposit will be at a process rate
of 7,500 tonnes of ore per day,  followed by an  expansion to 20,000  tonnes per
day as the  underlying  base  metal  deposit  is brought  into  production.  The
Feasibility Study includes an evaluation of mineral resources and reserves; mine
development  plans,  processing  options  hydrology,  tailings  and  waste  rock
disposal,  transportation, and resettlement. Gold and silver recoveries from the
oxide deposit, using whole ore leach and Merrill-Crowe recovery are estimated at
90% and 62% respectively.

The TG-1 copper sulphide deposit  includes three distinct ore types.  Type 1 ore
is comprised of minerals  such as  chalcocite  and  covellite,  as well as minor
chalcopyrite. Type 2 ore comprises chalcopyrite and sphalerite and Type 3 ore is
comprised  of  chalcopyrite.  The  different  mineralization  of each  ore  type
requires slightly different  applications of conventional  flotation techniques.
Metallurgical  testing indicates that recovery of copper from Type 1 ore is 75%,
Type 2 is 70% and Type 3 is 88%,  in  concentrates  ranging  in grade from 23 to
27%. Type 2 zinc recovery is 76% at a concentrate grade of 50%.

Mining  of the TG-1  deposit  will be  carried  out with  conventional  open pit
shovel-truck  methods.  The  oxide  gold/silver  deposit  will  be  mined  first
utilizing a contractor  because of the need for flexibility and somewhat smaller
equipment  than that  required  later in the mine's  life.  Production  from the
gold/silver  deposit will  continue for  approximately  3.5 years.  In the final
stages of gold and  silver  mining,  the base  metal  sulphide  deposit  will be
uncovered  and  production  will begin using a second  grinding line (10,000 tpd
capacity), feeding a copper flotation circuit. When the TG-1 gold/silver deposit
is  finally  exhausted,  that  grinding  line  will  be  converted  to  sulphide
production,  and full production from the sulphide deposit, of 20,000 tonnes per
day, will occur.

During the gold/silver  phase,  260,000 ounces of gold and 3.2 million ounces of
silver will be produced annually.  On average, over the nine years of production
from  the  sulphide  deposit,  more  than  400,000  tonnes  of  copper  and zinc
concentrates  will  be  produced  annually.   This  equates  to  average  annual
production of 190 million  pounds of copper,  and 90 million pounds of zinc. The
Project,  being located in the coastal area of northern Peru,  enjoys  excellent
existing  infrastructure  including power,  transportation  and port access. The
mine is located at approximately 100 meters elevation, in stark contrast to many
new projects located in remote high altitude locations. Key environmental issues
that have been  examined at length in the EIA include  protection of surface and
groundwater  regimes,   protection  of  the  adjacent   agricultural  area,  and
management of dust and noise from  operations.  Tailings dam design and measures
to control acid generation potential of the waste rock, exceed industry norms.


<PAGE>


                                     - 35 -


Mexico

On  March  12,  2001,  the  Company  sold  all of  the  shares  of  the  Mexican
Subsidiaries to a group of arms-length  Mexican  investors.  At the time of this
sale,  operations  at the Moris Mine had ceased and the property had been placed
on care and  maintenance.  The Company had  concluded  that the Moris Mine was a
non-core  asset and wrote down the value of the asset by $8.0  million in fiscal
1999 to a net carrying value of $0.4 million.  The sale  transferred all Mexican
assets and liabilities of the Company, including any liabilities associated with
existing lawsuits,  to the Mexican  investors.  Proceeds from the sale include a
nominal payment and a sliding scale royalty from any future  production from the
Moris  Mine.  The  investors  have the  right to buy back the  royalty  from the
Company at any time for a price of $50,000.

At the time of the sale,  MMOP was  involved  in legal  proceedings  relating to
certain mining concessions and MMEX was involved in legal proceedings  initiated
by  a  former  mining  contractor  for  the  cancellation  of  a  contract.  Any
liabilities  that may result from these  proceedings  have been  conveyed to the
Mexican  investors as a result of their acquisition of the shares of the Mexican
Subsidiaries.  The Company has  covenanted to pay legal expenses of MMEX up to a
maximum amount of $235,000 in the event of certain  contingencies.  In exchange,
MMEX has agreed to  indemnify  the Company for such legal  expenses in the event
that  a  court-ordered   resolution  or  negotiated  settlement  of  such  legal
proceedings  results in  proceeds  being paid to MMEX or the  purchasers  of the
Mexican Subsidiaries.  For a discussion of the effect of this disposition on the
results  of  operations,  see Note 8 to the  consolidated  financial  statements
included herein.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This  discussion and analysis  should be read in conjunction  with the Company's
consolidated  financial  statements.  The  Company's  reporting  currency is the
United States dollar.  All amounts in this  discussion  and in the  consolidated
financial  statements are expressed in United States dollars,  unless identified
otherwise.

A. Operating Results

Summary of Financial Results

Manhattan recorded a loss in 2002, before results from discontinued  operations,
of  $1,387,000  ($0.03 per share)  compared to a loss of  $2,559,000  ($0.06 per
share) in 2001 and a loss of  $1,435,000  ($0.04  per  share) in 2000.  The loss
including  results from  discontinued  operations for 2002 was $1,387,000 ($0.03
per share),  $2,559,000  ($0.06 per share) in 2001,  and  $4,730,000  ($0.13 per
share) in 2000. Manhattan adopted a plan to dispose of its Mexican operations in
2000 that included the sale of all its Mexican  Subsidiaries,  and reported this
business   segment  as  discontinued   operations.   The  sale  of  the  Mexican
Subsidiaries was completed on March 12, 2001.

In the years  ended  December  31,  2002 and 2001 the  Company  did not have any
active operations that generated revenues. The Mexican operations had incidental
gold  revenue in 2000 of  $12,000  related to the  revaluation  of its  precious
metals receivables.

Expenses and Other Income

Expenses net of other income and expenses for 2002 were $1,387,000,  compared to
$2,559,000 for 2001, and $1,435,000 in 2000. The decrease in costs for 2002 over
2001  was due  primarily  to the  accrual  of head  office  severance  costs  of
$773,000, the write down of the Tambogrande Project of $371,000 in 2001,


<PAGE>


                                     - 36 -


and, to a lesser extent,  the effects of the 2002  insurance  claim recovery and
foreign  exchange  gains.  In 2002,  Manhattan  settled its insurance  claim and
recovered  $48,000 more in insurance  proceeds than was previously  anticipated.
The write  down of the  Tambogrande  Project  of  $371,000  in 2001 was based on
preliminary  settlement figures provided by the insurance adjusters and reflects
the  difference  between the estimated  damage to the  Tambogrande  site and the
corresponding  estimated  insurance  proceeds  receivable.  The increase in 2001
costs over costs in 2000 was due  primarily  to the  accrual and payment of head
office severance costs of $773,000, the write down of the Tambogrande Project of
$371,000 and to a lesser extent,  lower  interest  income,  partially  offset by
lower foreign exchange losses in 2001.

Critical Accounting Policies

The Company's  consolidated financial statements are prepared in accordance with
Canadian generally accepted accounting  principles as described in note 3 to the
consolidated  financial  statements.  The preparation of financial statements in
conformity  with Canadian  generally  accepted  accounting  principles  requires
management to make estimates and  assumptions.  These  estimates and assumptions
affect the reported  amounts of assets and  liabilities,  and the  disclosure of
contingent assets and liabilities,  at the date of the financial statements, and
revenues and expenses for the periods  reported.  Actual results may differ from
those estimates.

In addition,  exploration and development properties are recorded at cost, which
includes  acquisition,  exploration and development  costs,  financing  charges,
interest,  and  attributed  direct  general and  administrative  support  costs.
Properties determined to be impaired, sold, abandoned or assessed not to contain
economic reserves,  are written down. Carrying values do not necessarily reflect
present  or  future  values.  The  recoverability  of those  carrying  values is
dependent upon the Company obtaining  financing for exploration and development,
establishing mineral reserves, and implementing profitable operations.

The application of accounting principles generally accepted in the United States
does not have a significant  impact on the results of  operations  and financial
position  except  as  described  in  note  13  to  the  consolidated   financial
statements.

B. Liquidity and Capital Resources

Working Capital

At December 31, 2002,  the Company had a negative  working  capital  position of
$1,035,000  (2001: a positive  position of $1,569,000),  including cash and cash
equivalents of $71,000 (2001: $2,079,000). On May 16, 2003, the Company closed a
private  placement  financing  with net  proceeds  of  $2,896,000.  The  Company
believes that it has sufficient  capital to maintain its operations and meet its
business objectives in 2003.

The Company does not have  sufficient  cash available to fund its operations for
the entire  calendar  year of 2004.  There can be no assurance  that the Company
will be able to raise  additional  funds or that such funds will be available to
the Company on terms  acceptable  to it or at all. If  additional  funds are not
raised  by the  Company,  it would  result  in  significant  curtailment  of its
operations and would adversely affect its financial condition.

Operating Cash Flow

In 2002 Manhattan used $803,000 ($0.02 per common share) in operations  compared
to  $1,358,000  ($0.03 per common  share)  used in  operations  during  2001 and
$3,154,000 ($0.09 per common share) used


<PAGE>


                                     - 37 -


in 2000. The negative cash flow for 2002 and 2001 primarily reflects head office
administration  costs,  including  severance costs,  while for 2000 the negative
cash flows  primarily  reflect the holding costs  associated with the Moris Mine
while it was being held on a care and maintenance basis.

Financing Activities

On May 16, 2003, the Company issued 6,130,814  units,  each unit composed of one
Common Share and one-half of one Common Share purchase  warrant for net proceeds
of $2,896,000.  In connection with the financing,  the Company paid a commission
of cash in the amount of 7% of the gross  proceeds of the  financing and 401,464
broker warrants, each broker warrant entitling the holder to purchase one Common
Share at a price of C$0.70 per share.  Proceeds from this financing will be used
to fund ongoing work on the Tambogrande Project, drilling of exploration targets
and for working capital purposes.

In October  2002,  the Company  issued 2,364  units,  each unit  comprising  one
C$1,000 principal convertible promissory note and 1,960 share purchase warrants,
for total gross proceeds of US$1,504,000  (C$2,364,000).  The convertible  notes
have been split between  their debt and equity  components,  and in addition,  a
portion of the proceeds  from the units has been  allocated to the fair value of
the share  purchase  warrants  granted.  Funds  were  utilized  to  advance  the
Environmental  Impact  Assessment  (EIA), the Feasibility  Study and for general
administrative purposes.

In August 2002,  2,922,500 previously issued common share purchase warrants were
re-priced from C$1.25 to C$0.67 per warrant if exercised on or before  September
18, 2002 and from C$1.50 to C$1.00 per warrant if exercised  after September 18,
2002 and before September 18, 2003. Subsequently, an aggregate of 780,900 common
share  purchase  warrants were exercised at a price of C$0.67 for 780,900 Common
Shares and gross  proceeds  of  $334,000.  In May 2002,  30,000  employee  stock
options were exercised for proceeds of US$16,000.

In 2001,  gross proceeds of US$ 3,355,000  (C$5,260,500)  were received from the
special  warrant  financing  of  5,845,000  warrants  at a price of  C$0.90  per
warrant.  The Common Shares  underlying the special  warrants were qualified for
distribution on January 11, 2002. In connection with the financing,  the Company
paid a commission  of (i) cash in the amount of 6% of the gross  proceeds of the
financing  and (ii)  300,910  special  warrants,  each  entitling  the holder to
purchase a Common Share at a price of C$0.90.  Proceeds from this financing were
used for the EIA, Feasibility Study,  community and public relations and general
administrative purposes.

In 2000, the Company closed a private placement of 4,704,917 special warrants at
a price of C$3.25  per  special  warrant  for gross  proceeds  of  US$10,409,000
(C$15,291,000).  The Company paid  commissions of 124,089 special  warrants at a
deemed price of C$3.25 per warrant.  Each special  warrant was exercisable at no
additional  cost for one Common Share.  Proceeds  from the  financing  were used
primarily to fund exploration,  community  relations efforts for the Tambogrande
Project, and general and administrative costs.

Investing Activities

Investing  activities  during 2002, 2001 and 2000 centered on the advancement of
the  Tambogrande   Project,   with  $3,454,000,   $4,073,000,   and  $16,429,000
respectively  spent each year in completing the EIA and the  Feasibility  Study,
and on  community  relations  and general  administrative  activities,  with the
majority  of the 2000  expenditures  being  spent  on  in-fill  and  exploration
drilling. No in-fill or exploration drilling occurred during 2002 and 2001.


<PAGE>


                                     - 38 -


In the first quarter of 2002, the Company  successfully  negotiated and received
the final  proceeds of $480,000 from its insurance  claim,  regarding the damage
sustained on the Company's  exploration camp and demonstration  housing units in
Tambogrande  in  February  of 2001.  The final  settlement  net of  expenses  of
$680,000  (installment  of $214,000  received in 2001) was $48,000 more than the
amount previously anticipated and recorded of $632,000 at December 31, 2001.

Risks and Uncertainties

The Company is considered a junior exploration company. Its primary focus is the
exploration and future  development of gold and base metal mineral properties in
Peru. The Company intends to bring its properties to production, structure joint
ventures with others;  option or lease properties to third parties, or sell them
out-right.  The Company's success depends on a number of factors,  many of which
are beyond its control.

Typical  risk  factors  include  metal  price  fluctuations  and  operating  and
environmental  hazards  encountered  in the  mining  business,  competition  for
properties,  dependence on key  personnel,  potential  liabilities  in excess of
insurance  policy  limits  and  coverage,  and  available  funds may also  limit
opportunities.

Future  government,  political,  legal or  regulatory  changes  could affect any
aspect of the  Company's  business,  including,  among  other  things:  title to
properties and assets,  environmental protection requirements,  labor relations,
taxation,  currency  convertibility,  repatriation  of profits or  capital,  the
ability to import  necessary  materials  or  services,  or the ability to export
produced materials.

The Company does not  currently  have any foreign  currency or  commercial  risk
hedges in place.  Nor does it maintain  political  risk  insurance.  The Company
monitors  the  currencies  of  Canada,  the  United  States,  and Peru,  and the
political and  commercial  environments  in Peru, and will implement risk hedges
when it deems  advisable.  The  company  has a policy  of  retaining  it's  cash
reserves  approximately 50% in United States dollar accounts and 50% in Canadian
dollar accounts.

There is no assurance at this time that the Company's geologic resources will be
economically  viable for  treatment nor that the Company will have the financial
resources available to it to develop the mine. The option agreement entered into
between the Company and Centromin  Peru  (formerly  Minero Peru) relating to the
Tambogrande  Concessions  contains certain conditions  relating to operating and
financial size that have not yet been met by the Company.

On February 27 and 28, 2001 the  Company's  exploration  camp and  demonstration
housing units located in Tambogrande  was  extensively  damaged during a protest
march,  instigated by a small group of politically motivated persons. The damage
was  estimated  at  $1,003,000  of which the  company  obtained  $680,000  in an
insurance  settlement.  All technical  data was  duplicated off site as a normal
precaution and, therefore, there was no loss of continuity for completion of the
TG-1 feasibility study and environmental impact assessment.  Although drill core
was lost,  it was fully  logged and  photographed,  and samples are retained off
site.

Work continues on the Project and the Company expects to be able to complete its
environmental  permitting  commitments  within the time frame accorded under the
option agreement.

At December  31, 2002,  the Company had a commitment  to spend a minimum of $2.1
million by  January  15,  2004,  to comply  with the terms of the  Papayo  joint
venture agreement.


<PAGE>


                                     - 39 -


The Option  Agreement with Centromin  (formerly  Minero Peru) on the Tambogrande
concession does not have a specific  capital  commitment at this date,  however,
the Company must comply with several  pre-qualifying  conditions  as detailed in
item 4.D.(d),  one of which is to have a financing  plan in place by December 1,
2003.

In addition,  the Company has the  responsibility  to maintain  its  Tambogrande
Concessions  (10,000  hectares)  and Papayo  Joint  Venture  Concessions  (3,200
hectares)  in good  standing  by paying by June 30 of each year  concession  fee
rights of $3 per hectare.  Yearly Tambogrande  Concession fees are $30,000,  and
Papayo  Joint  Venture  concession  fees are  $9,600.  In the case of the Papayo
Concessions,  as the Concessions have been registered for more than seven years,
possible penalties of $6 per hectare could apply if the Company does not conduct
yearly  minimum  exploration  work  programs  totalling  10 times the  potential
penalty. In the case of the Papayo  Concessions,  the minimum work program would
be $192,000.

C. Research and Development, Patents and Licences, Etc.

Not applicable.  See Item 4, Information on the Company, D. Property,  Plant and
Equipment, for a review of the Company's exploration activities.

D. Trend Information

Outlook

Manhattan's lead consultant,  Klohn Crippen,  has completed the EIA. The EIA was
submitted to the  Government  of Peru in December  2002 and is  currently  going
through the EIA review process which is governed by Ministerial resolutions. The
Company has and will  continue to engage the  Tambogrande  community to obtain a
broad-based  social  consensus  in support of the  development  of the  Project.
Manhattan has publicly stated that the Company will not develop the TG-1 project
without a social  consensus.  Manhattan is continuing  its support of the formal
process of dialogue  chaired by the Peruvian  Ombudsman's  office that  includes
representatives  of the central and local  governments,  community  and business
leaders and other  stakeholders.  Manhattan is developing  alliances with highly
credible international  organizations with particular expertise in social issues
to ensure a knowledgeable and experienced Project team and to increase the level
of international transparency.

The Company's  business goals are to meet all of the  requirements of the Option
Agreement  with the  Government of Peru on the  Tambogrande  concessions  during
2003,  to obtain a social  consensus in favour of the project,  and to engage in
exploration on its existing land concessions. Upon conclusion of these first two
goals, the Company plans to have in place sufficient project development finance
and/or a joint venture partner to ensure capital adequacy for mine  development.
It is anticipated,  based on the draft Feasibility  Study, that upon exercise of
the Option  Agreement,  the Company  will  require at least 12 months of time to
complete the  neighborhood  resettlement,  and an  additional 18 months for mine
construction prior to production and revenue generation.  Risks include, but are
not limited to, the process of social  consensus in favour of mine  development,
access to capital markets,  and commodity price  fluctuations.  On May 16, 2003,
the  Company  closed  a  private  placement   financing  with  net  proceeds  of
$2,896,000.  The Company  believes  that it has  sufficient  capital to meet its
business objectives in 2003. The Company does not have sufficient cash available
to fund its  operations  for the entire  calendar year of 2004. The Company will
monitor its  financial  position  during 2003 in  consideration  of its plans to
complete the environmental  permitting process on the Tambogrande  Project.  The
operating cost reduction program  instituted in 2001 will continue through 2003.
The Company  intends to continue to access the capital markets and/or may seek a
strategic partner for the possible joint venturing of mineral concessions


<PAGE>


                                     - 40 -


to fund ongoing operations. There is no assurance that additional financing will
be  available  on terms  acceptable  to  Manhattan  or at all.  The Company will
continue to investigate  potential  exploration and co-development joint venture
partners  from the  mining  industry,  and the  company  intends  to  engage  in
exploration  activities on its land concessions in Peru assuming that it is able
to obtain partial or full funding for such  exploration  activities  through the
capital  markets.  If additional  funds are not raised by the Company,  it would
result in a significant curtailment of its operations and would adversely affect
its financial condition.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The names of the directors and executive  officers of the Company as at December
31, 2002 and all positions  and offices held with the Company,  as well as their
term of office are as follows:

<TABLE>
Name                          Principal Occupation         Served as           Served as       Other Office Held with
                                                         Director since      Officer since          the Company
----------------------------------------------------------------------------------------------------------------------
<S>                         <C>                               <C>                <C>          <C>
Lawrence M. Glaser          Chief Executive Officer           2001               2001         President
                            and President of the
                            Company

John Clarke                 President and Chief               2001                N/A         None
                            Executive Officer of
                            Nevsun Resources Ltd.

Craig A. Roberts            Vice-President Corporate          2001               2001         Corporate Secretary
                            Finance, Pacific
                            International Securities
                            Inc.,

Richard D. Allan            Vice President,                   2001               1998         Vice-President,
                            Engineering, of the                                               Engineering
                            Company
</TABLE>

The term of office of  directors  and  executive  officers is one year,  and the
current term expires June 19, 2003.  The directors  are elected  annually at the
Company's Annual General Meeting and, subsequent to their election, they appoint
the executive officers for the ensuing year.  Management generally nominates the
directors and executive officers.

There are no arrangements or understandings with major  shareholders,  customers
or others,  pursuant  to which any person  referred  to above was  selected as a
director or member of senior management.

B. Compensation

The following table sets forth a summary of the total  compensation  paid to, or
earned by, the  Company's  senior  management  and  directors for the year ended
December 31, 2002.


<PAGE>


                                     - 41 -


<TABLE>
     -----------------------------------------------------------------------------------------------------------------------------
     |                       |        |      Annual Compensation           |      Long Term Compensation       |                 |
     |                       |        |                                    |-----------------------------------|                 |
     |                       |        |                                    |         Awards        |  Payouts  |                 |
     |                       |---------------------------------------------------------------------------------------------------|
     |                       |        |            |           |           | Securities |          |           |                 |
     |                       |        |            |           | Other     |   Under    |Restricted|           |                 |
     |                       |        |            |           | Annual    |  Options/  |Shares Or |           |                 |
     |                       |        |            |           |Compensa   |   SARs     |  Share   |  LTIP     |   All Other     |
     |      Name and         |        |   Salary   | Bonuses   |  tion     |  Granted   |  Units   | Payouts   |  Compensation   |
     |  Principal Position   |  Year  |    (C$)    |   (C$)    |  (C$)     |    (#)     |  (C$)    |  (C$)     |      (C$)       |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
<S>                             <C>      <C>         <C>         <C>         <C>             <C>        <C>        <C>
     |Lawrence M. Glaser (1) |  2002  |  157,030(2)| 54,960(3) | 58,886(4) | 275,000(5) |    0     |    0      |   117,772(6)    |
     |Chairman, President,   |        |            |           |           |            |          |           |                 |
     |CEO                    |        |            |           |           |            |          |           |                 |
     |                       |        |            |           |           |            |          |           |                 |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
     |Peter F. Tegart (7)    |  2002  |   58,129   |      0    | 20,000    |       0    |    0     |    0      |   135,000(8)    |
     |Managing Director      |        |            |           |           |            |          |           |                 |
     |                       |        |            |           |           |            |          |           |                 |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
     |Richard D. Allan (9)   |  2002  |  137,284   | 15,000(10)| 34,976(11)| 250,000(12)|    0     |    0      |         0       |
     |Vice-President         |        |            |           |           |            |          |           |                 |
     |                       |        |            |           |           |            |          |           |                 |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
     |Charles Smith (13)     |  2002  |  129,850   |      0    |      0    | 300,000(14)|    0     |    0      |    86,250(15)   |
     |Chief Executive Officer|        |            |           |           |            |          |           |                 |
     |                       |        |            |           |           |            |          |           |                 |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
     |John A. Clarke         |  2002  |        0   |      0    |      0    | 175,000(16)|    0     |    0      |    10,750(17)   |
     |Director               |        |            |           |           |            |          |           |                 |
     |                       |        |            |           |           |            |          |           |                 |
     |-----------------------|--------|------------|-----------|-----------|------------|----------|-----------|-----------------|
     |Craig A. Roberts       |  2002  |        0   |      0    |      0    | 100,000(18)|    0     |    0      |    15,250(19)   |
     |Director               |        |            |           |           |            |          |           |                 |
     -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:

(1)  Dr. Glaser's employment commenced on June 19, 2001.
(2)  Dr.  Glaser's base salary is US$175,000 per year. Dr. Glaser has elected to
     receive  US$100,000  in cash,  and his  remaining  compensation  is paid in
     shares  of the  Company  on a  quarterly  basis  from  the  employee  share
     compensation  plan,  valued  at the then  market  price of the  stock.  The
     average US$/C$ exchange rate for 2002 was 1.5703. During 2002, Dr. Glaser's
     base salary was reduced from  US$175,000  to  US$100,000  for the period of
     April 1, 2002  through  September  31, 2002 during  which time Mr.  Charles
     Smith was President of the Company.
(3)  Dr. Glaser was paid a 20% year end performance  bonus of US$35,000,  all of
     which  was  paid  in  shares  of  the  Company  from  the  employee   share
     compensation plan. Dr. Glaser was issued 99,354 shares valued at the market
     price of the stock of C$0.55 per share.
(4)  Dr. Glaser was granted  53,225 shares at a market value of C$0.55 per share
     from the  employee  compensation  plan as the equity  component of his base
     compensation, equivalent to US$37,500.
(5)  On March 26, 2002,  Dr. Glaser was granted  100,000  options at an exercise
     price of C$1.10 with vesting terms  conditional  on certain  business goals
     being reached. Those goals have not as yet been reached, and Dr. Glaser has
     not vested any interest in these options. These options expire on March 26,
     2007.
(6)  Dr.  Glaser  was paid a bonus of  US$75,000  with the  issuance  of 125,932
     shares  valued at the  market  price of C$1.10 per share for work which was
     completed during the 2001 year, but which did not demonstrate  benefits for
     the Company's business  operations until the 2002 year. Dr. Glaser received
     no bonus during 2001.
(7)  Mr. Tegart's employment ceased on May 16, 2002.
(8)  Mr.  Tegart  received a C$20,000  bonus paid with  18,182  shares  from the
     employee  share  compensation  plan valued at a market  price of C$1.10 per
     share. Subsequent to Mr. Tegart's departure from the Company, he was paid a
     consulting fee of C$135,000 for exploration work on the Company's assets in
     Peru.
(9)  Mr. Allan's  employment ceased on February 28, 2003. (10) Mr. Allan's bonus
     was paid in cash.
(11) Mr.  Allan  was paid a  year-end  performance  bonus of  C$15,000  with the
     issuance of 27,275 shares from the employee share compensation plan, valued
     per share at the market price of C$0.51. He was paid an additional bonus of
     C$19,975  with the  issuance  of  42,500  shares  from the  employee  share
     compensation  plan,  valued  per share at the market  price of  C$0.47,  as
     performance bonus for successful  completion of the final draft Feasibility
     Study and EIA.


<PAGE>


                                     - 42 -


(12) Mr. Allan was granted  150,000  options at an exercise price of C$1.10 with
     two vesting conditions based upon future events. Half of these options have
     vested, and have been cancelled.  The remaining options expire February 27,
     2004.
(13) Mr.  Smith's  employment  commenced  on  April 1,  2002 and his  employment
     terminated on September 31, 2002.
(14) Mr. Smith was granted  300,000  options with an exercise price of C$1.10 on
     the commencement of his employment. 200,000 of these options were cancelled
     with his  termination  of  employment.  The  remaining  options  expire  on
     September 30, 2003.
(15) Mr.  Smith was granted a signing  bonus of 86,250  shares from the employee
     share compensation plan at a market value of C$1.15 per share.
(16) Upon  joining the board on May 16,  2002,  Mr.  Clarke was granted  150,000
     options with an exercise price of C$1.15,  which expire on May 16, 2007. On
     September 18, 2002,  Mr. Clarke was granted 25,000 options with an exercise
     price of C$0.47,  which expire on September 18, 2007.  Half of all of these
     options vested upon being granted, the other half vest one year after being
     granted.
(17) Mr. Clarke was paid cash of C$10,750,  consisting of a retainer to serve on
     the board of directors of C$2,500, C$5,250 for attending board meetings and
     C$3,000 for attending meetings of the Audit and Compensation Committees.
(18) Upon  joining the board on May 16,  2002,  Mr.  Roberts was granted  75,000
     options with an exercise price of C$1.15,  which expire on May 16, 2007. On
     September 18, 2002, Mr. Roberts was granted 25,000 options with an exercise
     price of C$0.47,  which expire on September 18, 2007.  Half of all of these
     options vested upon being granted, the other half vest one year after being
     granted.
(19) Mr. Roberts was paid cash of C$15,250, consisting of a retainer to serve on
     the  board  of  directors  of  C$5,000,  C$2,000  as a  retainer  to sit on
     committees of the board,  C$4,500 for attending  board meetings and C$3,750
     for attending meetings of the Audit and Compensation Committees.

In 2002,  options  to  purchase  1,025,000  Common  Shares  were  granted to the
incumbent and former officers and directors of the Company, as set out below:

------------------------------------------------------------------------------
|     Optionee       |  Number Options   |    Exercise Price   |  Expiry Date |
|====================|===================|=====================|==============|
|                    |                   |                     |              |
|--------------------|-------------------|---------------------|--------------|
|                    |                   |                     |              |
|--------------------|-------------------|---------------------|--------------|
|P.Tegart (1)        |      85,000       |        $2.60        |   09-Mar-03  |
|--------------------|-------------------|---------------------|--------------|
|A. Carstensen (2)   |      70,000       |        $2.95        |   23-Mar-03  |
|--------------------|-------------------|---------------------|--------------|
|R. Allan            |      100,000      |        $2.45        |   14-Oct-03  |
|--------------------|-------------------|---------------------|--------------|
|A. Carstensen (2)   |      30,000       |        $2.75        |   15-Jan-04  |
|--------------------|-------------------|---------------------|--------------|
|B. Lock             |      25,000       |        $2.75        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|P.Tegart (1)        |      35,000       |        $2.75        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|                    |                   |                     |              |
|--------------------|-------------------|---------------------|--------------|
|R. Allan            |      30,000       |        $3.65        |   10-May-05  |
|--------------------|-------------------|---------------------|--------------|
|B. Lock             |      50,000       |        $3.65        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|P. Tegart (1)       |      75,000       |        $3.65        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|A. Carstensen (2)   |      40,000       |        $3.65        |   10-May-05  |
|--------------------|-------------------|---------------------|--------------|
|                    |                   |                     |              |
|--------------------|-------------------|---------------------|--------------|
|L. Glaser           |      100,000      |        $1.10        |   26-Mar-07  |
|--------------------|-------------------|---------------------|--------------|
|R. Allan            |      150,000      |        $1.10        |   26-Mar-07  |
|--------------------|-------------------|---------------------|--------------|
|C. Smith (3)        |      100,000      |        $1.10        |   30-Sep-03  |
|--------------------|-------------------|---------------------|--------------|


<PAGE>


                                     - 43 -


------------------------------------------------------------------------------
|     Optionee       |  Number Options   |    Exercise Price   |  Expiry Date |
|====================|===================|=====================|==============|
|R. Allan            |      100,000      |        $1.15        |   16-May-07  |
|--------------------|-------------------|---------------------|--------------|
|J. Clarke           |      150,000      |        $1.15        |   16-May-07  |
|--------------------|-------------------|---------------------|--------------|
|C. Roberts          |      75,000       |        $1.15        |   16-May-07  |
|--------------------|-------------------|---------------------|--------------|
|                    |                   |                     |              |
|--------------------|-------------------|---------------------|--------------|
|B. Lock             |      75,000       |        $0.91        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|P. Tegart (1)       |      125,000      |        $0.91        |   16-May-03  |
|--------------------|-------------------|---------------------|--------------|
|R. Allan            |      100,000      |        $0.91        |   18-Jun-06  |
|--------------------|-------------------|---------------------|--------------|
|A. Carstensen (2)   |      75,000       |        $0.91        |   18-Jun-06  |
|--------------------|-------------------|---------------------|--------------|
|L. Glaser           |      200,000      |        $0.91        |   18-Jun-06  |
|--------------------|-------------------|---------------------|--------------|
|C. Roberts          |      150,000      |        $0.91        |   18-Jun-06  |
|--------------------|-------------------|---------------------|--------------|
|L. Glaser           |      75,000       |        $0.71        |   09-Nov-06  |
|--------------------|-------------------|---------------------|--------------|
|L. Glaser           |      100,000      |        $0.47        |   18-Sep-07  |
|--------------------|-------------------|---------------------|--------------|
|C. Roberts          |      25,000       |        $0.47        |   18-Sep-07  |
|--------------------|-------------------|---------------------|--------------|
|J. Clarke           |      25,000       |        $0.47        |   18-Sep-07  |
|--------------------|-------------------|---------------------|--------------|
|L. Glaser           |      75,000       |        $0.55        |   17-Dec-07  |
|--------------------|-------------------|---------------------|--------------|
|                    |                   |                     |              |
|====================|===================|=====================|==============|
|Total               |     1,025,000     |                     |              |
===============================================================================

Stock Option Plan

The purposes of stock option plan,  as amended (the "Stock Option  Plan"),  are:
(i) to provide an increased  incentive for the Company's directors and employees
to  contribute  to the future  success and  prosperity  of the Company;  (ii) to
retain,  attract and motivate the qualified  managers that the Company requires;
and (iii) to provide a long-term-incentive  element in overall compensation.  It
is generally  recognised  that a stock option plan such as the Company's aids in
retaining and encouraging employees and directors of exceptional ability because
of the  opportunity  offered  them to  acquire  a  proprietary  interest  in the
Company.  Under the Stock  Option  Plan,  selected  directors,  officers and key
employees of, and other persons  providing  ongoing services to, the Company and
its  affiliates  shall be  eligible  to be  granted  options  to  acquire in the
aggregate a maximum of  5,929,000  Common  Shares.  Options will be eligible for
exercise for a period of up to five years from the date they are issued and will
be issued based on the closing  price of the Common  Shares on the Toronto Stock
Exchange on the day prior to issuance.

Share Compensation Plan

On October 24, 2001, the Company  adopted the Share  Compensation  Plan to allow
the Company to issue up to an aggregate of  2,000,000  Common  Shares to certain
executive  officers,  employees and/or directors,  from time to time, in lieu of
cash salary and bonus payments.  Shareholder  approval of the Share Compensation
Plan was obtained at the Company's Annual General and Extraordinary Meeting held
on June 19,  2001.  Regulatory  approval  was  received  from the Toronto  Stock
Exchange on December 5, 2001. To date,  there has been an aggregate of 1,616,331
Common  Shares  issued  pursuant to the Share  Compensation  Plan to  employees,
directors and officers of the Company.


<PAGE>


                                     - 44 -


Other Incentive Plans

The Company has no other incentive plans,  and no cash or non-cash  compensation
was paid or  distributed to executive  officers  under any other  incentive plan
during the most recently completed financial year.

Compensation Committee

In 1996, the Company  appointed a Compensation  Committee,  which is responsible
for succession planning,  matters of compensation to executive officers, and the
review of options and shares  granted  under the Stock Option Plan and the Share
Compensation Plan.

C. Board Practices

The Company's board of directors (the "Board") currently  comprises four persons
including  three  directors who are not officers or employees of the Company and
are  unrelated  to  management.  Lawrence M.  Glaser,  the  President  and Chief
Executive  Officer of the Company,  is the management  member of the Board.  The
majority of the Board are "unrelated directors",  as that term is defined in the
Company Manual of the Toronto Stock Exchange.

The Board is empowered by the Company's  incorporating  documents and by-laws to
manage or supervise  the  management of the affairs and business of the Company.
The Board is not involved in the day-to-day activities of the Company. The Board
performs its functions  through quarterly and special meetings and has delegated
certain of its responsibilities to committees of the Board.

The  members of the Board were  elected at the  Company's  2002  Annual  General
Meeting of  Shareholders.  The term of office of each of the  current  directors
will expire at the conclusion of the Company's  2003 Annual  General  Meeting of
Shareholders on May 30, 2003.

Board of Directors

The Board has assumed general  responsibility for the development and monitoring
of corporate governance issues.

The  Board  is  actively  involved  in  establishing  corporate  strategies  and
monitoring  the  achievement   thereof,   including  the   optimization  of  the
performance  of the Company's  current  operations and  acquisitions.  The Board
monitors the performance of current  operations,  holding  quarterly and special
meetings and reviews and  approves the annual  operating  and  financial  budget
presented by management. Consideration and approval of material acquisitions and
dispositions  is  carried  out  by  the  full  Board.  Outside  consultants  and
professionals are engaged and report to the Board as required.

The Company maintains structures and procedures to ensure that the Board is able
to function  independently  of management.  Aside from maintaining a majority of
independent members on the Board, the Board is able to call and conduct meetings
without members of management, and it is able to meet without management present
during  regularly  scheduled  meetings.  The Board also  maintains  an executive
search  committee  of  which  a  majority  of the  members  are not  members  of
management.  Although  at this time the  Chairman  of the Board is also the sole
member of  management  on the Board,  it is the intent of the Board to  separate
these positions through the work of the Executive Search Committee.


<PAGE>


                                     - 45 -


The Board has  identified  the  principal  risks  associated  with the Company's
business.  These risks, and the steps taken to minimize such risks, are reviewed
on an ongoing basis at the regularly scheduled quarterly meetings of the Board.

The Board has delegated responsibility for communication with the public and the
Company's shareholders to its President,  and to the General Manager of Peruvian
Operations.   Procedures  are  in  place  to  ensure  timely   dissemination  of
information about the Company. Any significant  shareholder concerns that may be
communicated to the above persons are communicated to the Board at its regularly
scheduled quarterly meetings.

A program for succession of management and training has not been adopted.  Given
the availability of trained personnel in the international  mining community and
the size of the Company, this trained pool of personnel will be accessed to fill
vacancies as required.

The  Company  is a  junior  company  that  is  still  in the  growth  stage  and
accordingly, a variety of technical, legal and financial experience at the Board
level is important.  When it is determined that additional expertise is required
on the Board,  a number of candidates are considered and the full Board assesses
proposed nominees. The decision to nominate or appoint an additional director is
taken by the Board as a whole. The Executive Search Committee is responsible for
reviewing candidates to the Board of Directors, and all officers of the Company.
This committee makes recommendations to the full Board of Directors. Unsolicited
candidate  recommendations  made from  outside  the  company to  management  are
initially referred to the Executive search Committee for review.

The performance of the management team is reviewed  annually by the Compensation
Committee  in the context of the  Company's  success in meeting its  objectives,
which are established as part of the review and approval of the annual operating
and financial  budget.  In addition,  the  Compensation  Committee  periodically
reviews the compensation paid to members of the Board and makes  recommendations
to the Board regarding the compensation of the directors.

At this time, the Company does not have an established mechanism or system which
enables an  individual  director to engage an outside  advisor at the expense of
the Company in appropriate  circumstances,  or for this engagement to be subject
to the  approval  of a committee  of the Board.  No such  mechanism  is in place
because  of the small  size of the Board,  and the  ability  of the  independent
directors  to  meet  at  any  time  independent  of  management.  The  Board  is
considering the creation of such a mechanism.

Committees of the Board of Directors

Compensation Committee
----------------------

The  Compensation  Committee  of the  Board  is  currently  comprised  of  three
unrelated directors,  who are Craig A. Roberts, John A. Clarke and Peter Tegart,
and one related director, who is Lawrence M. Glaser,  Chairman of the Committee.
The Compensation Committee is responsible for succession planning, the level and
form of compensation to senior officers and directors, and the review of options
granted  under the Stock  Option Plan and Common  Shares  issued under the Share
Compensation Plan.

Audit Committee
---------------

The Audit  Committee  of the Board is  currently  comprised  of three  unrelated
directors, Craig A. Roberts, Chairman of the Committee, John A. Clarke and Peter
Tegart. The Audit Committee oversees the


<PAGE>


                                     - 46 -


Company's  financial  reporting  process and internal controls and consults with
management  and the  Company's  independent  auditors on matters  related to the
annual audit, accounting principles and the audit procedures being applied.

Environmental Committee
-----------------------

The Environmental  Committee currently consists of four members, three unrelated
directors, Craig A. Roberts, John A. Clarke and Peter F. Tegart, and one related
director,  Lawrence M. Glaser. The Board has adopted an environmental  policy in
accordance with the  recommendations of the Mining Association of Canada,  which
is monitored by the Environmental  Committee. The Chief Executive Officer of the
Company,  on behalf of the  Environmental  Committee,  reports to the Board on a
quarterly  basis,  which  enables  the Board to  monitor  the  effectiveness  of
compliance with the environmental policy.

Search Committee
----------------

A Search Committee of the Board consisting of two independent  directors,  Craig
A. Roberts and John A. Clarke, and one related director, Lawrence M. Glaser, has
been established to search for suitable candidates to be nominated to the Board.

D. Employees

At year end 2002, the Company had approximately 20 employees, three in Vancouver
and  seventeen  in Peru.  The  employees  in  Vancouver  consisted of one senior
management and two administrative personnel. The Peru employees consisted of one
senior  management,  two financial  personnel,  two lawyers,  six administrative
staff,  three technical  personnel,  with the remainder  involved with community
relations.

In 2001, the Company had  approximately 30 employees,  10 in Vancouver and 20 in
Peru.  The Vancouver  employees  consisted of four senior  management  and three
administrative  personnel,  two technical  personnel and one investors relations
manager.  The  employees  in Peru  consisted  of two  senior  management,  three
financial  personnel,  one lawyer,  four  administrative  staff, three technical
personnel, with the remainder involved with community relations.

In 2000, the Company had approximately 50 employees, 14 in Vancouver, 21 located
in Peru and 15 in Mexico.  The  Vancouver  employees  consisted  of five  senior
management and two  administrative  personnel,  two financial,  three  technical
personnel,  and two investors relations personnel.  The Peru employees consisted
of  two  senior  management,   three  financial  personnel,   one  lawyer,  four
administrative  staff,  four technical  personnel,  and the remainder  personnel
involved with  community  relations.  The  employees in Mexico  consisted of two
managers, two financial personnel,  two administrative  personnel, and nine care
and maintenance and security personnel.

All employees are non-unionized.

E. Share Ownership

As of May 16,  2003,  the  incumbent  directors  and  senior  management  of the
Company, and the former directors and members of senior management who were with
the Company in 2002, held the following Common Shares in the Company:


<PAGE>


                                     - 47 -


        ---------------------------------------------------------
        |                Name        |        Common Shares     |
        |                            |     Beneficially Owned   |
        |                            |        or Controlled     |
        |----------------------------| -------------------------|
        | Lawrence M. Glaser         |           583,646        |
        |----------------------------| -------------------------|
        | John Clarke                |            26,316        |
        |----------------------------| -------------------------|
        | Craig A. Roberts           |           105,095        |
        |----------------------------| -------------------------|
        | Richard D. Allan           |            37,275        |
        |----------------------------| -------------------------|
        | Peter F. Tegart            |           355,650        |
        |----------------------------| -------------------------|
        | Charles Smith              |            86,250        |
        ---------------------------------------------------------

Except  for Dr.  Glaser,  who owns 1.1% of the  issued  and  outstanding  Common
Shares,  each of the directors and members of senior  management owned less than
one percent of the issued and outstanding Common Shares as of May 16, 2003.

Please see Item 6.B. -  Compensation,  for option  information  relating  to the
Company's directors and officers.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

To the  best of the  knowledge  of the  directors  and  senior  officers  of the
Company,  the following is the only shareholder of the Company that beneficially
owns,  directly or indirectly,  or exercises  control over, shares carrying more
than 5% of the outstanding voting rights attached to the Company's Common Shares
as at May 16, 2003.

     ------------------------------------------------------------------
     | Shareholder            |   Number of    |      Percentage of   |
     |                        |   Shares       |   Outstanding Shares |
     |------------------------|----------------|----------------------|
     | Dundee Precious Metals |   4,528,286    |           8.2%       |
     ------------------------------------------------------------------

As at May 15,  2003,  there were 114 holders of record of the  Company's  Common
Shares  of  which  72 were  U.S.  residents  owning  13,383,048  (27.4%)  of the
Company's outstanding shares.

To the extent known to the Company,  it is not directly or  indirectly  owned or
controlled by another corporation(s),  by any foreign government or by any other
natural or legal person(s). There are no arrangements, known to the Company, the
operation of which may at a subsequent date result in a change of control of the
Company.

B. Related Party Transactions

None of the  directors  or senior  officers of the  Company,  or  associates  or
affiliates of the foregoing persons, is indebted to the Company.


<PAGE>


                                     - 48 -


C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See Item 17, Financial Statements.

Legal Proceedings

Manhattan is not the subject of any legal  proceedings  material to Manhattan to
which  Manhattan is a party or to which any of its  properties is subject and no
such proceedings are known to be contemplated.

Dividend Policy

Since its incorporation,  Manhattan has not declared or paid, and has no present
intention to declare or to pay in the  foreseeable  future,  any cash  dividends
with respect to its Common Shares.  Earnings will be retained to finance further
growth and  development of the business of Manhattan.  However,  if the Board of
Directors declares dividends,  all Common Shares will participate equally in the
dividends, and, in the event of liquidation, in the net assets, of Manhattan.

B. Significant Change

In April 2002,  Manhattan received the final insurance proceeds in settlement of
its claim for the Company's  exploration  camp and  demonstration  housing units
that were extensively damaged in February 2001 during a protest march instigated
by a small group of politically motivated persons. The total settlement,  net of
expenses, of $680,000,  was $48,000 more than the amount previously  anticipated
and  recorded of $632,000 at December  31, 2001 which was  recorded as a gain in
2002. In 2001,  the Company wrote down the value of the  Tambogrande  project by
$1,003,000 and recorded the  preliminary  settlement  proposal of $632,000.  The
resulting net charge of $371,000 was reflected as a writedown of the Tambogrande
project to the statement of operations.

Work has advanced  significantly on the Tambogrande  project since the incident.
In December  2002,  the  Environmental  Impact  Assessment  (EIA) was officially
presented  to the  Peruvian  government  and the final draft of the  Feasibility
Study was completed. Manhattan is currently evaluating the re-establishment of a
field office in Tambogrande to facilitate  community  interaction during the EIA
public presentation and review process.

On April 9, 2003, as the EIA is currently under review by the Peruvian  Ministry
of Energy and Mines,  Centromin  granted a further  one year  extension  for the
exercise of the option until May 31, 2004. The extension requires the Company to
meet the pre-qualifications of the Option Agreement by December 1, 2003.

On May 16, 2003, the Company issued 6,130,814  units,  each unit composed of one
Common Share and one-half of one Common Share  purchase  warrant for total gross
proceeds of $2,896,000.  In connection  with the  financing,  the Company paid a
commission  of cash in the amount of 7% of the gross  proceeds of the  financing
and  401,464  broker  warrants,  each  broker  warrant  entitling  the holder to
purchase one


<PAGE>


                                     - 49 -


Common Share at a price of C$0.70 per share.  Proceeds from this  financing will
be used to fund ongoing work on the Tambogrande Project, drilling of exploration
targets and for working capital purposes.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

The  following  tables set forth the  closing  high and low  prices in  Canadian
dollars on The Toronto Stock  Exchange for each of the periods  indicated  below
for the Company's Common Shares:

Month/Year                                              High               Low
----------                                              (C$)               (C$)
                                                        -----------------------

Past Six Months
April 2003.............................................  0.77               0.60
March 2003.............................................  0.97               0.67
February 2003..........................................  1.10               0.92
January 2003...........................................  1.14               0.77
December 2002..........................................  1.04               0.36
November 2002..........................................  0.47               0.34

Two Most Recent Financial Years (Quarterly)
2003     First Quarter.................................  1.14               0.67

2002     Fourth Quarter................................  1.04               0.32
         Third Quarter.................................  1.05               0.47
         Second Quarter................................  1.81               0.92
         First Quarter.................................  1.34               0.68

2001     Fourth Quarter................................  0.90               0.45
         Third Quarter.................................  1.19               0.71
         Second Quarter................................  1.36               0.57
         First Quarter.................................  2.01               0.70

2000     Fourth Quarter................................  3.20               1.55
         Third Quarter.................................  4.95               2.30
         Second Quarter................................  4.35               3.00
         First Quarter.................................  5.95               3.75

Five Most Recent Financial Years
2002        ...........................................  1.81               0.32
2001        ...........................................  2.01               0.45
2000        ...........................................  5.95               1.55
1999        ...........................................  4.55               1.45
1998        ...........................................  8.50               2.35

On May 16,  2003,  the  closing  sale price of the Common  Shares on the TSE was
C$0.68.


<PAGE>


                                     - 50 -


B. Plan of Distribution

Not applicable.

C. Markets

The  Company's  Common  Shares are  presently  being traded on the Toronto Stock
Exchange in Canada. The Company currently has no direct means for trading in the
United States.

The Company  voluntarily  de-listed its shares from the Vancouver Stock Exchange
after the close of trading on February 28, 1997.

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

Directors

A  director  is  not  required  to  hold  Common  Shares  of  the  Company  as a
qualification to be a director.

The Company's  Articles  provide that,  subject to the provisions of an ordinary
resolution, the directors themselves as such may from time to time determine the
remuneration of the directors.

The Articles  state that a director shall not vote in respect of any contract or
transaction with the Company in which he is interested, but he may be counted in
the quorum present at the meeting at which such vote is taken.

The Articles state that,  subject to any  restrictions  (of which there are none
currently)  which may from time to time be included in the Company's  Memorandum
or Articles,  the  directors  may in their  discretion  authorize the Company to
borrow any sum of money and may raise and secure  the  repayment  of such sum in
such manner and upon such terms and conditions,  in all respects,  as they think
fit.


<PAGE>


                                     - 51 -


Annual General Meeting

The Company must hold an annual general  meeting at least once in every calendar
year and not more than 13 months  after  the date that the last  annual  general
meeting was held.  Notices of meetings are sent out to holders of Common  Shares
not less than 21 days before the date of such meeting.

Limitations on Foreign Ownership

There  are no  limitations  in the  Articles  of the  Company  of the  right  of
foreigners to hold or vote the Common Shares of the Company.

Limitations on the Right to Own Securities

The Company's  Articles do not provide for any  limitations on the rights to own
securities.

Shareholder Ownership Disclosure

The  Company's  Articles do not contain any  provision  governing  the ownership
threshold by which shareholder ownership must be disclosed.

C. Material Contracts

Tambogrande Option Agreement

On May 17, 1999 the Company  entered  into an Option  Agreement  with  Centromin
(formerly  Minero Peru) under which  Manhattan  acquired an option to earn a 75%
interest in the Tambogrande  Concessions by completing a feasibility study and a
financing  plan, with the option to elect to proceed with the development of the
Concessions.  The Company is required to meet two qualifying conditions prior to
exercising  the  option:  the  Company  must  operate a mine that has an average
treatment capacity of 10,000 tonnes per day and the Company must have net assets
of at least $100 million.  The Company may qualify directly or through a company
that may own,  directly  or  indirectly,  a 25%  interest  in the Company or any
subsidiary of the Company.  In the event that the Company  exercises the option,
the Company and Centromin will incorporate a mining company, EMTG, which will be
owned 75% by the Company and 25% by  Centromin.  EMTG will  acquire  100% of the
Tambogrande  Concessions  and will develop and operate the project.  The Company
will be  required  to  arrange  the  debt  financing  required  by EMTG  for the
development of the project, including Centromin's share, and will contribute the
entire equity financing required by EMTG.

The Company has agreed  that the mining  methods to be used will not  physically
affect the town of Tambogrande, nor cause damage to its population. In addition,
the  tailings  should be located  in areas that will not affect the  surrounding
agricultural areas.

The Company will commit to  developing  the mine within four years of exercising
the option.  In the event that the mine is developed within the four-year period
for less than the committed  amount (as specified in the agreement),  no penalty
will be payable.  In the event that the mine is not developed within four years.
Manhattan  will  pay a  penalty  of 30% of the  difference  between  the  amount
committed and any lesser amount  actually spent on the development of the mining
project during that period.

Centromin  will retain a  copper-price-based  sliding scale net smelter  royalty
interest in the project  ranging from zero at $0.60 per pound to 5% at $1.20 per
pound.


<PAGE>


                                     - 52 -


On April 11,  2001,  the term of the option  agreement  between  the Company and
Centromin  was extended  for a period of one year to May 31, 2003.  There are no
other changes to the terms of the Option Agreement. On April 9, 2003, as the EIA
is  currently  under  review  by the  Peruvian  Ministry  of Energy  and  Mines,
Centromin  granted a further one year  extension  for the exercise of the option
until May 31, 2004. Under the terms of the extension, the Government of Peru has
requested that the qualifying conditions be met by December 1, 2003. Other terms
of the option agreement remain unchanged. Papayo Option Agreement

On February 17, 1998, the Company entered into an Option  Agreement with Cedimin
with  respect to the Papayo Joint  Venture  Concessions.  In June 2001,  Cedimin
granted a 15-month  extension to the Option Agreement.  The new term extends the
time period for  exercising the option to January 15, 2004. The Company can earn
a 51% interest in the Papayo  Concessions by spending  $4,950,000 in exploration
expenditures  and making a one-time  $50,000 payment to exercise the option.  In
addition,  the Company must make  payments  aggregating  $300,000 to Cedimin (of
which $250,000 has been paid  already),  subject to payment in full prior to the
exercise of the option. If Cedimin elects not to proceed, the Company may earn a
further 29% of the property by funding  Cedimin's 49% cost share of the next $10
million property expenditures. Subsequently, the Company may acquire the balance
of 20% of the property for consideration of $5 million.

D. Exchange Controls

There  are  currently  no  governmental  laws,  decrees,  regulations  or  other
legislation of Canada, which affects the import or export of capital,  including
the  availability  of cash and cash  equivalents  for use by the Company.  For a
general discussion of the remittance of dividends, interest or other payments to
non-resident holders of the Common Shares. See "E. Taxation".

E. Taxation

Canadian Income Tax Considerations

The  following   summarises   the   principal   Canadian   federal   income  tax
considerations  applicable to the holding and  disposition of Common Shares by a
holder of one or more Common Shares (the "Holder") who is resident in the United
States of America and holds the Common Shares solely as a capital property. This
summary is based on the current  provisions  of the Income Tax Act (Canada) (the
"Tax  Act"),  the  regulations  thereunder  and  all  amendments  to the Tax Act
publicly  proposed by the  government  of Canada to the date hereof,  and on the
current provisions of the Canada-U.S.  Tax Convention,  1980 (the "Treaty").  It
has been assumed that all currently  proposed  amendments to the Tax Act will be
enacted as proposed  and there is no other  relevant  change in  governing  law,
although no assurance can be given in these respects.

Every Holder is liable to pay a Canadian  withholding tax on every dividend that
is or is deemed to be paid or  credited  to the  Holder on the  Holder's  Common
Shares.  Under the Treaty,  the rate of  withholding  tax is, if the Holder is a
company  that  owns  at  least  5% of  the  voting  stock  of  the  Company  and
beneficially  owns the  dividend,  10%,  and in any other case 15%, of the gross
amount of the dividend.

Pursuant to the Tax Act, a Holder will not be subject to Canadian  capital gains
tax on any capital  gain  realised on actual or deemed  disposition  of a Common
Share,  including a deemed disposition on death, provided either that the Holder
did not hold the  Common  Share as a  capital  property  used in  carrying  on a
business in Canada,  or that  neither the Holder or persons with whom the Holder
did not deal at arm's


<PAGE>


                                     - 53 -


length alone or together  owned 25% or more of the issued shares of any class of
the Company at any time in the five years immediately preceding the disposition.

Subject to certain  limited  exceptions,  a Holder who otherwise would be liable
for Canadian capital gains tax in consequence of an actual or deemed disposition
of a Common Share will generally be relieved by the Treaty from such liability.

Except as provided in the Investment  Canada Act, there are no limitations under
the laws of Canada,  the Province of British  Columbia or in the  Memorandum and
Articles  or any other  constituent  documents  of the  Company  on the right of
foreigners to hold or vote the Common Shares of the Company.

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 Company.  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  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.

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  Company,  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 Company  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 Company.

U.S. Holders

As used herein,  a "U.S.  Holder" means a holder of common shares of the Company
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  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
Company, 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.


<PAGE>


                                     - 54 -


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  Company  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 Company  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 Company,  (vi) persons who own, exercise or dispose of
any options,  warrants or other rights to acquire  common shares of the Company,
(vii) persons who are partners or owners of partnerships  or other  pass-through
entities or (viii) persons who own their common shares of the Company other than
as a capital asset within the meaning of Section 1221 of the Code.

Distribution on Common Shares of the Company

U.S. Holders receiving distributions (including constructive distributions) with
respect to common  shares of the Company 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 Company 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  Company  exceed  current or  accumulated  earnings  and
profits of the Company,  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 the common  shares of the
Company.  (See more detailed  discussion at "Disposition of Common Shares of the
Company" 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  Company  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
Company's  outstanding  shares may be entitled to a 70%  deduction  of the "U.S.
source"  portion of  dividends  received  from the  Company  (unless the Company
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


<PAGE>


                                     - 55 -


to several complex  limitations  which are beyond the scope of this  discussion,
and U.S.  Holders  of common  shares of the  Company  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  Company'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 Company'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. U.S.  Holders should consult their own financial  advisor,
legal  counsel or  accountant  regarding  the  information  reporting and backup
withholding rules applicable to the Company's common shares.

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 Company
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 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
Company  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 Company may be entitled to an "indirect"  foreign tax credit
under  Section 902 of the Code with  respect to the payment of  dividends by the
Company   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  Company  should  consult  their own
financial advisor,  legal counsel or accountant regarding the foreign tax credit
rules.

Disposition of Common Shares of the Company

A U.S.  Holder  will  recognize  gain or loss  upon the  sale or  other  taxable
disposition  of common  shares of the Company 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
Company. This


<PAGE>


                                     - 56 -


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 Company 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 Company 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 Company:

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  Company'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  Company'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  Company  may be  treated  as a  "Foreign  Personal  Holding
Company"  ("FPHC") In that event,  U.S.  Holders of common shares of the Company
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
Company does not actually distribute such income.

The Company  does not believe that it  currently  qualifies as a FPHC.  However,
there can be no assurance that the Company 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 Company'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 Company is found to be
engaged  primarily  in the  business of  investing,  reinvesting,  or trading in
securities,  commodities, or any interest therein, the Company 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  Company to be  treated as  ordinary  income  rather  than
capital gain.

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


<PAGE>


                                     - 57 -


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

If more than 50% of the total voting  power or the total value of the  Company'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 Company's  outstanding
shares (each a "10% Shareholder"), the Company could be treated as a "Controlled
Foreign Corporation" ("CFC") under Section 957 of the Code.

The  classification  of the Company as a CFC would effect many complex  results,
including that 10% Shareholders of the Company would generally (i) be treated as
having received a current  distribution of the Company's  "Subpart F income" and
(ii) would also be subject to current U.S.  federal income tax on their pro rata
shares of the Company'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 Company by a U.S.  Holder that is or was a
10% Shareholder at any time during the five-year  period ending with the sale is
treated as ordinary  income to the extent of earnings and profits of the Company
attributable to the common shares sold or exchanged.

If the Company is classified  as both a Passive  Foreign  Investment  Company as
described  below and a CFC,  the  Company  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  Company  ending  with or within  such
taxable years of 10% Shareholders.

The Company  does not believe that it  currently  qualifies  as a CFC.  However,
there can be no assurance  that the Company will not be considered a CFC for the
current or any future taxable year. The CFC rules are very complicated, and U.S.
Holders should consult their own financial advisor,  legal counsel or accountant
regarding the CFC rules and how these rules may impact their U.S. federal income
tax situation.

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 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


<PAGE>


                                     - 58 -


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  Company  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  Company'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 Company. 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  Company 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  Company
qualifies  as a PFIC on his pro rata  share of the  Company'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 Company'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 Company  common  shares (or
deemed to be realized on the pledge of his shares) as capital  gain;  (ii) treat
his share of the Company'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  Company'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 Company 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 Company 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


<PAGE>


                                     - 59 -


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
Company is a controlled foreign corporation, the U.S. Holder's pro rata share of
the Company's  post-1986 earnings and profits as of the qualification  date. The
qualification date is the first day of the Company's first tax year in which the
Company  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  Company  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 Company,  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 Company  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 Company does not qualify as
a PFIC. Therefore,  if the Company 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 Company 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 Company.  Therefore,  if such
U.S.  Holder  reacquires  an interest in the Company,  that U.S.  Holder will be
subject to the rules described above for Electing U.S. Holders for each tax year
in which the Company 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 Company
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 Company  common  shares and
(ii) certain "excess  distributions"  (generally,  distributions received in the
current  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 Company.

A Non-Electing  U.S.  Holder  generally  would be required to pro rate all gains
realized  on the  disposition  of his  Company  common  shares  and  all  excess
distributions  on his Company  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 Company
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.


<PAGE>


                                     - 60 -


If the Company is a PFIC for any taxable year during which a  Non-Electing  U.S.
Holder holds Company common shares, then the Company will continue to be treated
as a PFIC with respect to such Company  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 Company 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 Company 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 Company 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 Company  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
Company  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 Company  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.

     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 Company 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 Company
common shares while the Company 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.


<PAGE>


                                     - 61 -


The PFIC rules are very  complicated,  and U.S. Holders should consult their own
financial  advisor,  legal  counsel  or  accountant  regarding  the PFIC  rules,
including  the  advisability  of and  procedure  for making a QEF  election or a
mark-to-mark  election, and how these rules may impact their U.S. federal income
tax situation.

F. Dividends and Paying Agents

Not applicable.

G. Statement of Experts

Not applicable.

H. Documents on Display

All documents  referred to in this Form 20-F are available for inspection at the
office of the Company, listed below, during normal office hours.

         Manhattan Minerals Corp.
         Suite 350 - 885 Dunsmuir Street
         Vancouver
         British Columbia
         V6C 1N5

The  Company 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 Company's  reports,  registration  statements and other  information  can be
inspected  on the SEC's  website at  www.sec.gov,  and such  information  can be
inspected and copies ordered at the public  reference  facilities  maintained by
the SEC at the following locations:

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

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are  exposed  to market  risk from  changes  in  foreign  currency  exchange,
although the exposure is not considered  sufficient to have a material effect on
our results of operations and financial condition. We manage these risks through
internal risk management policies that are administered by management.

We are exposed to foreign currency exchange rate risk. Our reporting currency is
the U.S. dollar.  We hold financial  instruments  primarily  denominated in U.S.
dollars or Canadian  dollars.  A depreciation of the Canadian dollar against the
United  States dollar will  decrease the fair value and an  appreciation  of the
Canadian  dollar  against the U.S.  dollar will  increase the fair value of such
financial  instruments.  Our  financial  instruments  that may be  sensitive  to
foreign currency exchange rate fluctuations are held in the


<PAGE>


                                     - 62 -


form of deposits.  As at December  31,  2002,  C$42,708 was held on deposit with
Canadian chartered banks.

The Company has no publicly or privately traded securities or market instruments
aside from its own equity and convertible  debentures.  The only publicly traded
securities  are the Common  Shares of the  Company,  which  trade on the Toronto
Stock  Exchange.  The  Company  has no  debt  instruments  subject  to  interest
payments,  sales  contracts,   swaps,  derivatives,  or  forward  agreements  or
contracts, or inventory.

The Company has no currency or  commodity  contracts,  and the Company  does not
trade in such  instruments.  The Company is exposed to foreign  exchange risk on
its  cash  reserves  held in bank  accounts.  The  Company  manages  the risk by
maintaining an established  policy of retaining cash reserves in US$ and C$ in a
ratio equal to its  anticipated  annual  expenses.  This  mitigates the possible
effect of currency  fluctuations upon established operating targets. The Company
does not take positions on foreign exchange or interest rate movements.

The Company  mitigates  foreign  exchange risk in its operating  area of Peru by
never holding more than one month of anticipated expenditures in the currency of
Peru.  As the Company has no cash flow or revenue from  operations,  the Company
does not have currency or other market exposure to operating activity.

In the most recent  financial year 2002, the Company reported a foreign exchange
gain of $12,000,  which is not material to the  operations  of the Company.  The
Company is subject to  fluctuations  of market  interest rates only for its cash
reserves.  The  Company  has no debt  instruments  which are subject to interest
payments.  In the  financial  year 2002,  the Company had an interest  income of
$14,000, which is not material to the operations of the Company.

The Company  periodically  accesses the capital markets with the issuance of new
shares to fund operating expenses, and the Company does not maintain significant
cash  reserves  over  periods  of time  that  could be  materially  affected  by
fluctuations in interest rates or foreign exchange rates.

The Company has non-interest  bearing convertible  debentures  outstanding.  The
conversion terms for the holders of the convertible debentures,  as described in
Item 5.B.,  Liquidity and Capital Resources,  are influenced by the value of the
Company's Common Shares on the Toronto Stock Exchange.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

                                    PART II
                                    -------

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUINCIES

Not applicable.

ITEM 14.  MATERIAL  MODIFICATIONS  TO THE RIGHTS OF SECURITY  HOLDERS AND USE OF
PROCEEDS

In August 2002,  2,922,500 previously issued common share purchase warrants were
re-priced from C$1.25 to C$0.67 per warrant if exercised on or before  September
18, 2002 and from C$1.50 to C$1.00 per warrant if exercised  after September 18,
2002 and before September 18, 2003. Subsequently, an


<PAGE>


                                     - 63 -


aggregate of 780,900 common share purchase warrants were exercised at a price of
C$0.67 for 780,900 Common Shares and gross proceeds of $334,000.

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,  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  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]

Not applicable.

                                    PART III
                                    --------

ITEM 17. Financial Statements


Manhattan Minerals Corp.

Consolidated Financial Statements
December 31, 2002, 2001 and 2000
(expressed in thousands of United States dollars)


<PAGE>


                                     - 64 -


Auditors' Report

To the Shareholders of
Manhattan Minerals Corp.

We have audited the consolidated  balance sheets of Manhattan  Minerals Corp. as
at December 31, 2002 and 2001 and the consolidated  statements of operations and
deficit  and cash  flows for each of the years in the  three-year  period  ended
December 31, 2002.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2002
and 2001 and the results of its  operations and cash flows for each of the years
in the three-year  period ended  December 31, 2002, in accordance  with Canadian
generally accepted  accounting  principles.  As required by the British Columbia
Company  Act,  we  report  that,  in our  opinion,  these  principles  have been
consistently applied.



Chartered Accountants
Vancouver, B.C., Canada
March 3, 2003 (except for note 4, which is as at April 9, 2003)

Comments by Auditors for U.S. Readers on Canada-U.S. Reporting Conflict

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as described in note
1 to the financial statements. Our report to the shareholders dated March 3,
2003 is expressed in accordance with Canadian reporting standards which do not
permit a reference to such considerations in the auditors' report when they are
adequately disclosed in the financial statements.



Chartered Accountants
Vancouver, B.C., Canada
March 3, 2003 (except for note 4, which is as at April 9, 2003)


<PAGE>


                                     - 65 -


Manhattan Minerals Corp.
Consolidated Balance Sheets
As at December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(expressed in thousands of United States dollars)


                                                              2002         2001
                                                                 $            $

Assets

Current assets
Cash and cash equivalents                                        71       2,079
Accounts receivable                                              32         694
Prepaid expenses and deposits                                   128         170
                                                          ----------------------

                                                                231       2,943
Exploration and project expenditures (notes 2 and 4)         61,979      58,493
Property, plant and equipment (note 5)                           16           1
                                                          ----------------------

                                                             62,226      61,437
                                                          ======================

Liabilities

Current liabilities
Accounts payable and accrued liabilities (note 6)             1,266       1,374
Convertible promissory notes (note 7)                           363           -
Severance costs                                                  28         212
                                                          ----------------------

                                                              1,657       1,586
                                                          ----------------------

Shareholders' Equity

Capital stock (note 9)                                      103,696      99,773
Special warrants                                                  -       3,010
Equity component of convertible promissory notes (note 7)       235           -
Warrants (note 7)                                               957           -
Deficit                                                     (44,319)    (42,932)
                                                          ----------------------
                                                             60,569      59,851
                                                          ----------------------
                                                             62,226      61,437
                                                          ======================

Going concern and nature of operations (note 1)

Measurement uncertainty (note 1)


Approved by the Board of Directors



________________________ Director       ______________________ Director

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


<PAGE>


                                     - 66 -


Manhattan Minerals Corp.
Consolidated Statements of Operations and Deficit
For the years ended December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(expressed  in thousands of United  States  dollars,  except share and per share
amounts)


<TABLE>
                                                                2002            2001          2000
                                                                   $               $             $

<S>                                                            <C>             <C>           <C>
Expenses
Corporate general and administrative                           1,357           1,387         1,535
Severance costs (note 6)                                          53             773             -
(Recovery) writedown of Tambogrande project (note 2)             (48)            371             -
                                                         --------------------------------------------
                                                               1,362           2,531         1,535
                                                         --------------------------------------------

Other income (expenses)
Foreign exchange                                                  12            (121)         (322)
Interest income                                                   14              93           422
Financing (note 7)                                               (51)              -             -
                                                         --------------------------------------------
                                                                 (25)            (28)          100
                                                         --------------------------------------------

Loss before discontinued operations                            1,387           2,559         1,435
Loss from discontinued operations (note 8)                         -               -         3,295
                                                         --------------------------------------------
Loss for the year                                              1,387           2,559         4,730
Deficit - Beginning of year                                   42,932          40,373        35,643
                                                         --------------------------------------------
Deficit - End of year                                         44,319          42,932        40,373
                                                         ============================================

Basic and diluted loss per common share before
   discontinued operations                                      0.03            0.06          0.04

Basic and diluted loss per common share after
   discontinued operations                                      0.03            0.06          0.13

Weighted average number of
   common shares outstanding                              46,098,219      39,527,472    36,839,372
</TABLE>


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


<PAGE>


                                     - 67 -


Manhattan Minerals Corp.
Consolidated Statements of Cash Flows
For the years ended December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(expressed in thousands of United States dollars)


<TABLE>
                                                             2002        2001          2000
                                                                $           $             $

<S>                                                        <C>         <C>           <C>
Cash flows from operating activities
Loss for the year                                          (1,387)     (2,559)       (4,730)
Writedown of Tambogrande project                                -         371             -
Amortization and depreciation                                  22          58            76
Foreign exchange (gain) loss                                  (14)        134           372
Financing (note 7)                                             51           -             -
Compensation and consulting fees                              343         142             -
Discontinued operations                                         -           -         1,356
Net changes in non-cash working capital (note 12)             366         284          (228)
Severance costs                                              (184)        212             -
                                                       ---------------------------------------
                                                             (803)     (1,358)       (3,154)
                                                       ---------------------------------------

Cash flows from financing activities
Proceeds from exercise of options                              16           -           472
Proceeds from exercise of warrants                            334           -             -
Special warrant net proceeds                                    -       3,355        10,409
Share issue costs                                               -        (345)         (623)
Convertible debt and warrants                               1,504           -             -
                                                       ---------------------------------------
                                                            1,854       3,010        10,258
                                                       ---------------------------------------

Cash flows from investing activities
Exploration and project expenditures                       (3,454)     (4,073)      (16,429)
Insurance proceeds                                            418         214             -
Other property, plant and equipment                           (37)         (3)          (16)
                                                       ---------------------------------------
                                                           (3,073)     (3,862)      (16,445)
                                                       ---------------------------------------

Foreign exchange gain (loss) on cash held
      in foreign currency                                      14        (134)         (372)
                                                       ---------------------------------------

Net cash and cash equivalents used
      during the year                                      (2,008)     (2,344)       (9,713)

Cash and cash equivalents - Beginning of year               2,079       4,423        14,136
                                                       ---------------------------------------

Cash and cash equivalents - End of year                        71       2,079         4,423
                                                       =======================================
</TABLE>

Supplemental cash flow information (note 12)



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


<PAGE>


                                     - 68 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

1    Going concern and nature of operations

     Manhattan's  (Manhattan or the Company) primary activity is the exploration
     of precious and base metal mineral  properties in Peru. The Company intends
     to bring its  properties  to  production,  structure  joint  ventures  with
     others, option or lease properties to third parties, or sell them outright.
     The  Company  has not  determined  whether  these  properties  contain  ore
     reserves  that are  economically  recoverable.  As a result the  Company is
     considered to be an exploration  stage company.  The  recoverability of the
     amounts  shown  for  mineral  properties  and  related  deferred  costs  is
     dependent upon the existence of economically recoverable reserves, securing
     and maintaining title and beneficial interest in the property,  the ability
     of the Company to obtain  necessary  financing to complete the development,
     and upon future profitable production. The amounts shown as exploration and
     project expenditures represent costs to date, less amounts amortized and/or
     written off, and do not necessarily represent present or future values (see
     note 4).

     The  consolidated  financial  statements  have been  prepared  assuming the
     Company will continue as a going  concern.  The Company  intends to arrange
     additional  external  funding to meet existing  obligations  and to finance
     further  exploration  and  development  work  on  its  mineral  properties.
     However, there is substantial doubt as to the Company's ability to continue
     as a  going  concern  because  of  the  Company's  limited  resources.  The
     financial  statements do not reflect the adjustments to the carrying values
     of assets and  liabilities  that would be  necessary  if the  Company  were
     unable to realize its assets or discharge its obligations in anything other
     than the ordinary  course of  operations.  The Company  periodically  seeks
     financing  to  continue  the  exploration  and  development  of its mineral
     properties.  Although the Company has been  successful  in raising funds to
     date, there can be no assurances that additional  funding will be available
     in the future.

     In 2000, the Company placed all of its Mexican  subsidiaries  for disposal,
     and reported those business  segments as discontinued  operations (see note
     8).

     Measurement uncertainty

     The Company has  invested a total of  $59,893,000  in its  Tambogrande  and
     Papayo property interests. In order to maintain those property interests in
     good  standing,  the  Company is  required to meet  certain  financial  and
     non-financial obligations (see note 4) by the following dates:

     o    Tambogrande concessions - May 31, 2004
     o    Papayo concessions - January 15, 2004

     The Company  currently has  insufficient  liquid  resources to enable it to
     meet its financial  obligations  by the due dates.  Although the Company is
     currently  seeking   additional   funding  to  allow  it  to  complete  its
     obligations,  there can be no assurance that this will occur.  Consequently
     there is significant uncertainty about the Company's ability to recover the
     amounts invested in its Peruvian  properties to date. In the event that the
     Company does not fulfil its financial and non-financial  obligations by the
     due  dates,  the  Company's  property  interests  may be  deemed  impaired,
     necessitating  a writedown  of up to  $59,893,000,  which  amount  would be
     charged to the statement of operations.


<PAGE>


                                     - 69 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

2    Tambogrande project

     In  April  2002,   Manhattan  received  the  final  insurance  proceeds  in
     settlement   of  its  claim  for  the   Company's   exploration   camp  and
     demonstration  housing units that were extensively damaged in February 2001
     during a protest march instigated by a small group of politically motivated
     persons.

     The total settlement,  net of expenses, of $680,000,  was $48,000 more than
     the amount previously  anticipated and recorded of $632,000 at December 31,
     2001 which was recorded as a gain in 2002. In 2001,  the Company wrote down
     the  value of the  Tambogrande  project  by  $1,003,000  and  recorded  the
     preliminary  settlement  proposal of $632,000.  The resulting net charge of
     $371,000 was  reflected as a writedown  of the  Tambogrande  project to the
     statement of operations.

     Work has  advanced  significantly  on the  Tambogrande  project  since  the
     incident.  In  December  2002,  the  Environmental  Impact  Study (EIS) was
     officially  presented to the Peruvian government and the final draft of the
     feasibility  study was  completed.  Manhattan is currently  evaluating  the
     re-establishment  of a field office in Tambogrande to facilitate  community
     interaction during the EIS public presentation and review process.

3    Significant accounting policies

     Accounting principles

     These  consolidated  financial  statements are prepared in accordance  with
     generally accepted accounting principles (GAAP) in Canada. Differences with
     respect to accounting  principles  generally  accepted in the United States
     are disclosed in note 13.

     Principles of consolidation

     The consolidated  financial  statements include the accounts of the Company
     and  its  subsidiaries,  all of  which  are  wholly  owned.  The  principal
     subsidiaries  of  the  Company  are  Compania  Minera  Manhattan  S.A.  and
     Manhattan Sechura Compania Minera S.A.

     Translation of foreign currency

     The Company's  subsidiaries  are integrated  foreign  operations.  Currency
     transactions  and balances are  translated  into the reporting  currency as
     follows:

     a)   Monetary items are  translated at the rates  prevailing at the balance
          sheet date;

     b)   Non-monetary items are translated at historical rates;

     c)   Revenues and expenses are  translated  at the average  rates in effect
          during   applicable   accounting   periods  except   depreciation  and
          amortization which are translated at historical rates;

     d)   Gains and losses on foreign currency  translation  which are reflected
          in operations.


<PAGE>


                                     - 70 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)


     Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions. These estimates and assumptions affect the reported amounts of
     assets  and  liabilities,  and the  disclosure  of  contingent  assets  and
     liabilities,  at the date of the  financial  statements,  and  revenues and
     expenses  for the periods  reported.  Actual  results may differ from those
     estimates.

     Exploration and development properties

     Exploration and development properties are recorded at cost, which includes
     acquisition,   exploration  and  development   costs,   financing  charges,
     interest,  and attributed direct general and administrative  support costs.
     Properties  determined to be impaired,  sold,  abandoned or assessed not to
     contain  economic  reserves,  are  written  down.  Carrying  values  do not
     necessarily  reflect present or future values.  The recoverability of those
     carrying  values is  dependent  upon the Company  obtaining  financing  for
     exploration   and   development,   establishing   mineral   reserves,   and
     implementing profitable operations.

     Property, plant and equipment

     Property, plant and equipment comprise vehicles, computer equipment, office
     furniture,  and  communication  equipment.  Depreciation  is  provided on a
     straight-line basis at a rate of 20% over the estimated useful lives of the
     assets.

     Financial instruments

     The carrying values of cash and cash equivalents,  accounts receivable, and
     accounts payable and accrued liabilities  approximate their fair values due
     to the short term nature of these instruments.

     Loss per common share

     Loss per common share is calculated  using the weighted  average  number of
     common shares  issued and  outstanding  during each year.  Diluted loss per
     common share is  calculated  using the treasury  stock method which assumes
     that stock options are only  exercised when the exercise price is below the
     average  market  price  during the period and that the Company will use any
     proceeds to purchase its common shares at their average market price during
     the period.

     Income taxes

     The Company  uses the  liability  method of  accounting  for future  income
     taxes.  Under this method of tax  allocation,  future income tax assets and
     liabilities are determined  based on the differences  between the financial
     reporting and tax basis of assets and  liabilities  and are measured  using
     the  substantively  enacted  tax rates and laws that are  expected to be in
     effect in the periods in which the future income tax assets or  liabilities
     are expected to be settled or realized.  A valuation  allowance is provided
     to the extent that it is more likely than not that future income tax assets
     will not be realized.


<PAGE>


                                     - 71 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)


     Cash and cash equivalents

     Cash and cash  equivalents  comprise  cash and  short-term  deposits with a
     maturity date of 90 days or less from the date of acquisition.

     Convertible debt instruments

     The equity and liability  components of convertible  debt  instruments  are
     presented  separately in  accordance  with their  substance.  The liability
     component is accented to the amount  payable at maturity by way of a charge
     to  earnings  using the  interest  method.  Detachable  warrants  issued in
     conjunction  with  convertible  debt instruments are recorded at fair value
     using the Black-Scholes  option pricing model, and classified as a separate
     component of shareholders' equity.

     Stock-based compensation

     Effective  January 1, 2002, the Company adopted the requirements of the new
     Canadian  Institute  of  Chartered   Accountants  standard  concerning  the
     accounting for stock-based  compensation.  The Company elected not to adopt
     the fair value method of  accounting  for stock  options.  No  compensation
     expense is recognized if the exercise price of the stock options at date of
     grant is equal to market value.  Grants of stock  options to  non-employees
     and direct awards of stock to employees and non-employees must be accounted
     for  using the fair  value  method of  accounting.  Consideration  paid for
     shares on exercise of share options is credited to capital stock.

4    Exploration and project expenditures

     Project costs at December 31, 2002 and 2001 are summarized in the following
     table:

                                                    2002                  2001
                                                       $                     $

     Tambogande project
     Tambogrande concessions                      57,269                53,865
     Lancones concessions                          2,086                 2,034
     Papayo concessions                            2,624                 2,594
                                             -----------------------------------

                                                  61,979                58,493
                                             -----------------------------------

     Tambogrande project

     Tambogrande concessions

     The Tambogrande Concessions comprise ten mining concessions aggregating 100
     square  kilometres  located in the Province of Piura, in northern Peru. The
     concessions  are  registered  in the name of Empresa  Minera del Centro del
     Peru S.A.  (Centromin Peru - formerly Minero Peru),  which is owned 100% by
     the Government of Peru.


<PAGE>


                                     - 72 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)


     The Company and Centromin  Peru signed an agreement  granting the Company a
     three-year  period to complete a feasibility study and financing plan, with
     an option to elect to proceed with the development of the concessions.  The
     Company is required to meet two qualifying  conditions  prior to exercising
     the option:  the Company must operate a mine that has an average  treatment
     capacity of 10,000  tonnes per day, and it must have net assets of at least
     $100  million.  The Company may qualify  directly or through a company that
     may own,  directly  or  indirectly,  a 25%  interest  in the Company or any
     subsidiary of the Company.

     In the event that the option is exercised,  the Company and Centromin  Peru
     will incorporate a mining company, Empresa Minera Tambo Grande S.A. (EMTG),
     which will be owned 75% by the Company and 25% by Centromin Peru. EMTG will
     acquire 100% of the  Tambogrande  concessions  and will develop and operate
     the project.  The Company will arrange the debt financing  required by EMTG
     for the development of the project,  including  Centromin Peru's share, and
     will contribute the entire equity financing required by EMTG.

     The  Company  has  agreed  that  the  mining  methods  to be used  will not
     physically  affect  the  town  of  Tambogrande,  nor  cause  damage  to its
     population.  In addition, the tailings should be located in areas that will
     not affect the surrounding agricultural areas.

     The  Company  will  commit to  developing  the mine  within  four  years of
     exercising the option.  In the event that the mine is developed  within the
     four-year  period for less than the  committed  amount (as specified in the
     agreement),  no penalty will be payable.  In the event that the mine is not
     developed  within  four years,  Manhattan  will pay a penalty of 30% of the
     difference  between the amount  committed  and any lesser  amount  actually
     spent on the development of the mining project during that period.

     Centromin Peru will retain a  copper-price-based  sliding scale net smelter
     royalty  interest in the project ranging from zero at $0.60 per pound to 5%
     at $1.20 per pound.

     On April 11, 2001, the term of the option agreement between the Company and
     Centromin  Peru was  extended  for a period of one year.  The option on the
     Tambogrande  Concessions  now expires on May 31,  2003.  There are no other
     changes to the terms of the option agreement.  On April 9, 2003, as the EIS
     is currently  under  review by the  Peruvian  Ministry of Energy and Mines,
     Centromin  has granted a further 1 year  extension  for the exercise of the
     option  until May 31,  2004.  Other  terms of the option  agreement  remain
     unchanged.

     Lancones concessions

     The property was acquired  through staking and comprises a 100% interest in
     80 concessions  aggregating  51,500  hectares.  The property  surrounds the
     Tambogrande concessions.


<PAGE>


                                     - 73 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     Papayo concessions

     The  Company has been  granted an option by Buena  Ventura's  wholly  owned
     Peruvian  subsidiary  Compania de  Exploraciones,  Desarrollo e Inversiones
     Mineras S.A. (Cedimin) to acquire an interest in Cedimin's Papayo property.
     The property  comprises seven  concessions  aggregating  3,200 hectares and
     lies  contiguously  to the south of the  Tambogrande  concessions.  In June
     2001, Cedimin granted a 15-month extension to Manhattan's option agreement.
     The new term extends the time period for  exercising  the option to January
     15,  2004.  The Company can earn a 51% interest in the property by spending
     $4,950,000  in  exploration  expenditures  and  making a  one-time  $50,000
     payment to  exercise  the option  which  expires on January  15,  2004.  In
     addition,  it must make payments  aggregating $300,000 to Cedimin ($250,000
     paid),  subject to payment in full prior to the exercise of the option.  If
     Cedimin  elects not to  proceed,  the Company may earn a further 29% of the
     property  by  funding  Cedimin's  49% cost  share  of the next  $10,000,000
     property expenditures.  Subsequently, it may acquire the balance of 20% for
     a consideration of $5,000,000.

5    Property, plant and equipment

     Included in corporate general and  administration  costs is amortization of
     $22,000 (2001 - $58,000; 2000 - $76,000).

                                                          2002             2001
                                                             $                $

      Cost                                                 491              454
      Accumulated amortization                            (475)            (453)
                                                     ---------------------------
                                                            16                1
                                                     ===========================

6    Accounts payable and accrued liabilities

     Accounts payable and accrued liabilities are comprised as follows:

                                                          2002             2001
                                                             $                $

     Due to vendors                                        443              459
     Severance costs (current portion)                     417              378
     Legal fees related to disposition of
        Mexican operations                                 235              235
     Mineral property concession payments                  171              302
                                                     ---------------------------
                                                         1,266            1,374
                                                     ===========================


<PAGE>


                                     - 74 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

7    Convertible promissory notes

     In October 2002, the Company issued 2,364 units,  each unit  comprising one
     CA$1,000 convertible promissory note and 1,964 share purchase warrants, for
     total gross proceeds of $1,504,000  (CA$2,364,000).  The  promissory  notes
     mature  3  years  from  the  issue  date,  are  non-interest   bearing  and
     non-transferable.  Each  share  purchase  warrant  entitles  the  holder to
     purchase  one  common  share of the  Company  at a price of  CA$0.51  up to
     October 16,  2005.  The  Company  may elect to redeem the notes  during the
     first 90-day period for the  principal  amount plus  redemption  premium of
     7.5% of the principal  amount.  The notes are not convertible by the holder
     during the first 90-day  period.  Subsequent to the initial  90-day period,
     the Company may redeem the notes by repaying  the  principal  amount plus a
     redemption  premium of 10% if redeemed by October 16, 2003; 15% if redeemed
     by October 16, 2004 and 20% if redeemed by October 16, 2005.

     At any time after the  initial  90-day  period,  the holder may convert the
     notes into common  shares of the Company at a price which is the greater of
     CA$0.40 or the current  market price of the common  shares less the maximum
     allowable   discount  permitted  by  the  Toronto  Stock  Exchange  at  the
     conversion date. The principal amount of the notes is  collateralized  by a
     first security interest against certain of the Company's exploration assets
     in Peru. In accordance with generally accepted accounting  principles,  the
     convertible  notes  have been  split  between  their  liability  and equity
     components.  In addition, a portion of the proceeds from the units has been
     allocated to the fair value of the share  purchase  warrants  granted.  The
     amount  allocated  to the warrants  was  measured  using the  Black-Scholes
     option pricing model,  and was based on a risk free interest rate of 4%, an
     expected life of 3 years,  an expected  volatility of 100%,  and a dividend
     yield rate of nil.

     During the year ended December 31, 2002, an accretion charge of $51,000 was
     charged to operations and is recorded as a financing expense.

8    Discontinued operations

     Effective December 31, 2000, Manhattan adopted a plan to dispose of all its
     Mexican subsidiaries.  As a result of this plan of disposal, the results of
     operations  for  the  Mexican  operations  were  reported  as  discontinued
     operations.

     On March 12, 2001,  the Company sold its Mexican  operations  to a group of
     Mexican investors.  The sale transferred all Mexican assets and liabilities
     of Manhattan,  including any liabilities associated with existing lawsuits,
     to the Mexican investors. Proceeds from the sale included a nominal payment
     and a sliding scale royalty from any future production from the Moris Mine.
     The investors  have the right to buy back the royalty from Manhattan at any
     time for a price of $50,000.

     Included  in the 2000 loss from  discontinued  operations  is the loss from
     Mexican  operations of  $2,248,000.  For 2000, an additional  provision for
     loss on disposal of discontinued  operations of $1,047,000 was recorded for
     a total 2000 loss from discontinued operations of $3,295,000.


<PAGE>


                                     - 75 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

9    Capital stock

     Authorized: 500,000,000 common shares without par value

     Issued

<TABLE>
                                                    2002                          2001                          2000
                               ----------------------------  ----------------------------  -------------------------

                                Number                         Number                         Number
                                of shares         Amount       of shares        Amount        of shares       Amount
                                                       $                             $                             $

<S>                            <C>                <C>         <C>               <C>          <C>             <C>
   Balance - Beginning of
      year                     39,721,508         99,773      39,452,349        99,631       34,386,343      89,373
   Exercise of special
      warrants                  5,845,000          3,355               -             -        4,704,917      10,409
   Exercise of warrants           780,900            334               -             -                -           -
   Commissions and finder's
      fees                              -              -          75,000            74          124,089         275
   Compensation shares          1,422,172            563         194,159            68                -           -
   Exercise of options             30,000             16               -             -          237,000         472
   Share issue costs                    -           (345)              -             -                -        (898)
                               -------------------------------------------------------------------------------------

   Balance - End of year       47,799,580        103,696      39,721,508        99,773       39,452,349      99,631
                               -------------------------------------------------------------------------------------
</TABLE>

     On January 11, 2002,  the Company  qualified a prospectus  for the issue of
     5,845,000  special  warrants  at  CA$0.90  per  special  warrant  for gross
     proceeds of $3,355,000 (CA$5,260,500).  Each special warrant was exercised,
     at no extra cost, into one unit comprising one common share and one half of
     one common share purchase  warrant.  Each common share purchase  warrant is
     exercisable  into one  common  share at a cost of CA$1.25  per share  until
     September 18, 2002 or at a price of CA$1.50 after  September 18, 2002 until
     September   18,  2003.  In  addition,   the  Company   granted  the  Agents
     compensation  special  warrants  entitling  the Agents to acquire,  without
     payment of any  additional  consideration,  350,700  common share  purchase
     warrants  entitling the Agents to subscribe for and purchase 350,700 common
     shares at a price of CA$0.90 per common  share on or before  September  18,
     2003. In connection with the offering,  agents  commissions and other share
     issue costs totalled  $345,000.  During 2002,  the 2,922,500  warrants were
     repriced from CA$1.25 to CA$0.67 if exercised before September 18, 2002 and
     from CA$1.50 to CA$1.00 if exercised  after  September  18, 2002 and before
     September 18, 2003.

     On July 11, 2000, the Company closed a special warrant private placement of
     4,704,917  special  warrants at a price of CA$3.25 per special  warrant for
     gross proceeds of $10,409,000 (CA$15,290,980). The Company paid commissions
     of 124,089 special warrants at a deemed price of CA$3.25 per warrant.  Each
     special  warrant was  exercisable,  at no additional  cost,  for one common
     share.

     Share option plan

     The  Company  has  established  a share  option  plan  whereby the board of
     directors  may from  time to time  grant  options  to  individual  eligible
     directors,  officers,  employees or  consultants.  The aggregate  number of
     shares to be reserved under the plan is 5,929,000 shares.  The maximum term
     of any option will be five years.  The  exercise  price of an option is not
     less than the closing  price on the TSE on the last  trading day  preceding
     the grant date. Share compensation plan


<PAGE>


                                     - 76 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     On October 24, 2001, the Company adopted a share compensation plan to allow
     the  Company to issue up to an  aggregate  of  2,000,000  common  shares to
     certain executive officers,  employees and/or directors, from time to time,
     in lieu of cash salary and bonus payments. An aggregate of 1,616,331 shares
     have been issued under the plan.

     Stock-based compensation

     The Company  follows  the  intrinsic  value  method of  accounting  for the
     granting of stock options.  Under this method,  no compensation  expense is
     recognized if the exercise price of the stock options is at market value at
     date of grant to  employees  and  directors.  Grants  of stock  options  to
     non-employees  and direct  awards of stock to employees  and  non-employees
     must be accounted for using the fair value method of accounting.

     An  aggregate  of  1,640,000  stock  options  were  granted  during 2002 to
     employees and consultants of the Company.

     Had the fair value method of  accounting  been  followed for stock  options
     granted  to  employees  and  directors  at prices of  between  CA$0.47  and
     CA$1.15,  a compensation  expense of $314,000 would have been recognized in
     operations.  Pro forma loss and loss per share  information  as  determined
     under the fair value method is detailed below:

                                                        2002
                                                           $

           Loss for the year
           As reported                                 1,387
           Pro forma                                   1,701

           Basic and diluted loss per share
           As reported                                (0.03)
           Pro forma                                  (0.04)

     The fair values of these options were estimated at the grant date using the
     Black-Scholes  option-pricing model. Fair value estimates ranged from $0.36
     - $0.88 per option, based on a risk free interest rate of 4%, expected life
     of 5 years,  an expected  volatility of 100%,  and a dividend yield rate of
     nil.


<PAGE>


                                     - 77 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     Outstanding options

     Common shares under option are as follows:

<TABLE>
                                                                               Weighted
                                       Number of                                average
                                         options     Exercise price      exercise price   Expiry date
                                                                CA$                 CA$

<S>                                    <C>              <C>                        <C>    <C>
     Balance - December 31, 1999       2,307,000        2.35 - 6.80                3.22   2000 - 2004
     Granted                             970,000        2.41 - 3.80                3.46   2000 - 2005
     Exercised                          (237,000)       2.75 - 3.34                2.91   2000 - 2004
     Cancelled                           (47,500)       3.34 - 3.80                3.71   2000 - 2001
                                   --------------

     Balance - December 31, 2000       2,992,500        2.35 - 6.80                3.32   2001 - 2005
     Granted                           1,270,000        0.71 - 1.90                0.99   2006
     Exercised                                 -                  -                   -   -
     Cancelled                          (772,500)       0.91 - 6.80                3.32   2001 - 2006
                                   --------------

     Balance - December 31, 2001       3,490,000        0.71 - 4.92                2.46   2002 - 2006
     Granted                           1,640,000        0.47 - 1.15                1.00   2007
     Exercised                           (30,000)              0.80                0.80   2002
     Cancelled                        (1,961,667)       0.91 - 4.92                2.75   2002 - 2007
                                   --------------

     Balance - December 31, 2002       3,138,333
                                   ==============
</TABLE>

     Options outstanding and exercisable at December 31, 2002:

<TABLE>
                                                 Options outstanding              Options exercisable
                    ------------------------------------------------ --------------------------------

                                                                             Number
         Range of                      Weighted          Weighted    exercisable at          Weighted
         exercise      Number of        average           average    December 31,             average
           prices        options    expiry date    exercise price              2002    exercise price
              CA$                         years               CA$                                 CA$

<S>   <C>              <C>                  <C>              <C>          <C>                    <C>
      0.47 - 0.91      1,225,000            3.1              0.80         1,150,000              0.82
      1.00 - 1.90      1,133,333            3.7              1.13           369,166              1.21
      2.45 - 2.95        400,000            0.5              2.69           400,000              2.69
             3.65        280,000            1.0              3.65           280,000              3.65
             4.70        100,000            0.8              4.70           100,000              4.70
                    ---------------------------------------------------------------------------------
                       3,138,333            2.7              1.54         2,299,166              1.54
                    =================================================================================
</TABLE>


<PAGE>


                                     - 78 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     Options outstanding and exercisable at December 31, 2001:

<TABLE>
                                                 Options outstanding              Options exercisable
                    ------------------------------------------------ --------------------------------

                                                                             Number
         Range of                      Weighted          Weighted    exercisable at          Weighted
         exercise      Number of        average           average    December 31,             average
           prices        options    expiry date    exercise price              2001    exercise price
              CA$                         years               CA$                                 CA$


<S>   <C>              <C>                  <C>              <C>            <C>                  <C>
      0.71 - 0.91      1,042,500            4.3              0.89           565,000              0.89
      1.06 - 1.90        100,000            3.4              1.73            50,000              1.73
      2.45 - 2.99        325,000            0.8              2.66         1,325,000              2.66
      3.14 - 3.65        692,500            1.7              3.51           692,500              3.51
      4.60 - 4.92        330,000            1.1              4.75           330,000              4.75
                    ---------------------------------------------------------------------------------
                       3,490,000            2.2              2.46         2,962,500              2.74
                    =================================================================================
</TABLE>

     Options outstanding and exercisable at December 31, 2000:

       Range of exercise    Number of        Weighted               Weighted
                                              average                average
                  prices                  expiry date         exercise price
                     CA$      options           years                    CA$

             2.35 - 2.99    1,565,000             2.6                   2.65
             3.14 - 3.95      887,500             4.4                   3.39
             4.25 - 4.92      490,000             3.7                   4.74
                    6.80       50,000             0.8                   6.80
                          --------------------------------------------------

                            2,992,500             3.3                   3.32
                          ==================================================

     Outstanding warrants

     At December 31, 2002,  an aggregate of 8,625,740  warrants are  outstanding
     for the purchase of common  shares as follows:  2,141,600  common shares at
     CA$1.00,  expiring  September  18, 2003,  350,700  common shares at CA$0.90
     expiring  September 18, 2003,  1,500,000  common shares at CA$4.50 expiring
     June 15, 2004,  and for the  purchase of an  aggregate of 4,633,440  common
     shares at CA$0.51  expiring  October 17 and 24, 2005. At December 31, 2002,
     the weighted average exercise price of outstanding  warrants is CA$1.34 and
     the weighted average expiry date remaining is 1.9 years.


<PAGE>


                                     - 79 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

10   Income taxes

     a)   The income taxes shown in operations  differ from the amounts obtained
          by applying statutory rates due to the following:

<TABLE>
                                                        2002         2001          2000

<S>                                                   <C>          <C>           <C>
         Statutory tax rate                           39.62%       44.62%        45.62%

                                                           $            $             $

         Loss for the year                             1,387        2,559         4,730
                                                     ====================================

         Tax recovery                                    550        1,142         2,158
         Losses for which an income tax benefit
               has not been recognized                  (550)      (1,142)       (2,158)
                                                     ------------------------------------
                                                           -            -             -
                                                     ====================================
</TABLE>

     b)   The Company has capital losses of  approximately  $27,889,000  with no
          expiry and non-capital losses of approximately $12,428,000, which will
          expire as follows:

                Expiry date                                   $

                2003                                         663
                2004                                       1,061
                2005                                       1,725
                2006                                       2,096
                2007                                       2,222
                2008 and thereafter                        4,661
                                                       -----------
                                                          12,428
                                                       ===========

     c)   No future income tax asset has been recognized in respect of the above
          and other  amounts.  Significant  components of the  Company's  future
          income tax asset at December 31, 2002 are as follows:

                                                              2002         2001
                                                                 $            $

            Tax losses                                       9,754        9,473
            Tax value of capital assets in excess
                of accounting values                           410          431
            Other deductible temporary differences             179          656
                                                           ---------------------

            Total future income tax assets                  10,343       10,560
            Valuation allowance                            (10,343)     (10,560)
                                                           ---------------------

            Net future income tax assets                         -            -
                                                           =====================


<PAGE>


                                     - 80 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

11   Segmented financial information

     As at  December  31,  2002,  the  Company  operates  in  one  segment,  the
     exploration of the base and precious  metals  Tambogrande  project in Peru.
     Other reconciling  adjustments  comprise general and administrative  costs,
     financing  expenses,  foreign exchange,  interest income,  assets,  capital
     expenditures, and amortization reported by the Canadian head office.

<TABLE>
                                     Tambogrande       Discontinued           Other          Total
                                      project in                        reconciling
                                            Peru         operations     adjustments
                                               $                  $               $              $

<S>                                       <C>                 <C>             <C>           <C>
      December 31, 2002
      (Gain) loss for the year               (48)                 -           1,435          1,387
      Total assets                        62,049                  -             177         62,226
      Capital expenditures                 3,454                  -              37          3,491
      Amortization                             -                  -              22             22

      December 31, 2001
      Loss for the year                      371                  -           2,188          2,559
      Total assets                        59,019                  -           2,418         61,437
      Capital expenditures                 4,073                  -               3          4,076
      Amortization                             -                  -              58             58

      December 31, 2000
      Gold revenue                             -                 12               -             12
      Loss for the year                        -              3,295           1,435          4,730
      Total assets                        55,802              1,909           4,602         62,313
      Capital expenditures                16,429                  -              16         16,445
      Amortization                             -                 18              76             94
</TABLE>


<PAGE>


                                     - 81 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

12   Supplemental cash flow information

<TABLE>
                                                                 2002          2001         2000
                                                                    $             $            $

<S>                                                               <C>             <C>        <C>
      Net changes in non-cash working capital
      Decrease in operating assets
           Accounts receivable                                    244             2          130
           Prepaid expenses and deposits                          141             1           67
      Increase (decrease) in operating liabilities
           Accounts payable and accrued liabilities               (19)          281         (425)
                                                             ------------------------------------

                                                                  366           284         (228)
                                                             ====================================

      Significant non-cash operating, financing and
        investing activities
      Common shares issued to underwriter and finder                -             -          275
      Common shares issued for project expenditures               121             -            -
      Commission and finder's fee                                   -             -         (275)
      Common shares issued for consulting fees                     92            74            -
      Common shares issued for compensation                       350            68            -
      Accretion charge on convertible debt                         51             -            -
      Common shares issued for special warrants                 3,010             -            -
</TABLE>

     Cash and cash equivalents are comprised of the following:

<TABLE>
                                                                 2002          2001         2000
                                                                    $             $            $

<S>                                                                <C>        <C>            <C>
       Cash                                                        71         1,177          250
       Short-term deposits                                          -           902        4,173
                                                             ------------------------------------
                                                                   71         2,079        4,423
                                                             ====================================
</TABLE>

13   Differences   between  Canadian  and  United  States   generally   accepted
     accounting principles

     The consolidated  financial statements of the Company have been prepared in
     accordance  with  accounting   principles   generally  accepted  in  Canada
     (Canadian GAAP),  which differ in certain material respects from accounting
     principles generally accepted in the United States (U.S. GAAP).


<PAGE>


                                     - 82 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     Had  the  Company  prepared  the  consolidated   financial   statements  in
     accordance  with  U.S.  GAAP,  certain  items on the  consolidated  balance
     sheets,  statements of operations and deficit, and statements of cash flows
     would have been reported as follows:

     Consolidated Balance Sheets

<TABLE>
                                                                              2002                                      2001
                                             ----------------------------------------   -------------------------------------
                                                     Canadian                 U.S.             Canadian                 U.S.
                                                         GAAP                 GAAP                 GAAP                 GAAP
                                                            $                    $                    $                    $

<S>                                                   <C>                  <C>                  <C>                  <C>
       Assets
       Current assets                                     231                  231                2,943                2,943
       Exploration and development
            properties (a)(b)                          61,979                    -               58,493                    -
       Property, plant and equipment                       16                   16                    1                    1
                                             --------------------------------------------------------------------------------
                                                       62,226                  247               61,437                2,944
                                             ================================================================================

       Liabilities
       Current liabilities                              1,266                1,266                1,374                1,374
       Long-term liabilities                              391                  241                  212                  212

       Shareholders' Equity
       Share capital and special warrants             103,696              103,835              102,783              102,922
       Equity component of
            convertible debt (b)                          235                    -                    -                    -
       Beneficial conversion feature (b)                    -                  376                    -                    -
       Warrants (b)                                       957                  957                    -                    -
       Deficit (a)(b)                                 (44,319)            (106,428)             (42,932)            (101,564)
                                             --------------------------------------------------------------------------------
                                                       60,569               (1,260)              59,851                1,358
                                             --------------------------------------------------------------------------------
                                                       62,226                  247               61,437                2,944
                                             ================================================================================
</TABLE>


<PAGE>


                                     - 83 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     Consolidated Statements of Operations and Deficit

<TABLE>
                                                                              2002                 2001                 2000
                                                                                 $                    $                    $

<S>                                                                         <C>                  <C>                  <C>
      Loss for the year under Canadian GAAP                                 (1,387)              (2,559)              (4,730)
      Mineral property, exploration and development
           expenditures (a)(b)                                              (3,486)              (3,017)             (16,207)
      Finance expense (b)                                                        9                    -                    -
                                                                  -----------------------------------------------------------
      Loss for the year under U.S. GAAP                                     (4,864)              (5,576)             (20,937)
                                                                  ===========================================================

      Basic and diluted loss per share after discontinued
           operations under Canadian GAAP (c)                                 0.03                (0.06)               (0.13)

      Basic and diluted loss per share under Canadian and U.S.
           GAAP - discontinued operations (c)                                    -                    -                (0.09)

      Basic and diluted loss per share under
           U.S. GAAP (d)                                                      0.11                (0.14)               (0.57)

      Consolidated Statements of Cash Flows
</TABLE>

<TABLE>
                                                                              2002                 2001                 2000
                                                                                 $                    $                    $

<S>                                                                         <C>                  <C>                 <C>
      Operating activities
      Under Canadian GAAP                                                     (803)              (1,358)              (3,154)
      Exploration and development expenditures (a)(b)                       (3,454)              (4,073)             (16,429)
                                                                  -----------------------------------------------------------
      Cash used for operating activities under U.S. GAAP                    (4,257)              (5,431)             (19,583)
                                                                  ===========================================================
      Financing activities
      Under Canadian and U.S. GAAP                                           1,854                3,010               10,258
                                                                  ===========================================================
      Investing activities
      Under Canadian GAAP                                                   (3,073)              (3,862)             (16,445)
      Exploration and development expenditures (a)(b)                        3,454                4,073               16,429
                                                                  -----------------------------------------------------------
      Cash provided by (used for) investing activities under
           U.S. GAAP                                                           381                  211                  (16)
                                                                  ===========================================================
</TABLE>

     a)   Under Canadian GAAP, mineral exploration and development  expenditures
          are recorded at cost.  Properties  considered  to be  impaired,  sold,
          abandoned  or assessed  not to contain  economic  reserves are written
          down. Under U.S. GAAP, all exploration  costs are expensed as incurred
          until the Company has established economically recoverable reserves.


<PAGE>


                                     - 84 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     b)   Under  Canadian   GAAP,   the  liability  and  equity   components  of
          convertible  debt  instruments  are determined  and shown  separately.
          Under U.S. GAAP,  convertible  debt instruments are classified as debt
          with a portion of the proceeds  allocated to equity to the extent that
          the  conversion  price of the debt at the grant  date is less than the
          market price of the common shares at that date.  The value  attributed
          to equity  accretion under U.S. GAAP is recorded by way of a charge to
          earnings using the interest method.  Accretion charges are expensed in
          the statement of operations and deficit.

     Recent accounting pronouncements

     a)   Asset Retirement Obligations

          The FASB has issued SFAS No.  143,  "Accounting  for Asset  Retirement
          Obligations."  This  statement  addresses  financial   accounting  and
          reporting for  obligations  associated with the retirement of tangible
          long-lived  assets  and the  associated  asset  retirement  costs.  It
          requires  that the fair value of a liability  for an asset  retirement
          obligation  be  recognized  in the period in which it is incurred if a
          reasonable  estimate of fair value can be made. The  associated  asset
          retirement costs are capitalized as part of the carrying amount of the
          long-lived  asset. The Company is analyzing the impact of SFAS No. 143
          and will adopt the standard on January 1, 2003.

          The CICA has  approved,  subject to  written  ballot,  a new  Handbook
          section,  "Asset  Retirement  Obligations,"  to  replace  the  current
          guidance on future removal and site restoration  costs included in the
          CICA accounting  standard 3061,  "Property,  Plant and Equipment." The
          standard,  which is  similar  to SFAS  143,  is  effective  for  years
          beginning  on  or  after  January  1,  2004.  The  standard   requires
          recognition  of a  liability  at its  fair  value  for the  obligation
          associated  with the  retirement  of a tangible  long-lived  asset.  A
          corresponding  amount is added to the  carrying  amount of the related
          asset and amortized to expense over the useful life of the asset.  The
          effect of adopting this standard, on January 1, 2004, has not yet been
          determined.

     b)   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  Company  does  not  expect  that the
          implementation of this new standard will have a material impact on its
          consolidated financial position or results of operations.


<PAGE>


                                     - 85 -


Manhattan Minerals Corp.
Notes to Consolidated Financial Statements
December 31, 2002, 2001 and 2000
--------------------------------------------------------------------------------

(all tabular  amounts are expressed in thousands of United States dollars unless
otherwise stated)

     c)   Hedging Transactions

          The CICA has issued Accounting Guideline 13, "Hedging  Relationships,"
          (AcG 13) which will be effective for years  beginning on or after July
          1,  2003.   AcG  13   addresses   the   identification,   designation,
          documentation,  and  effectiveness  of  hedging  transactions  for the
          purposes of applying hedge accounting.  It also establishes conditions
          for applying or discontinuing hedge accounting.  In December 2002, the
          CICA approved,  subject to written ballot,  certain  amendments to AcG
          13. These amendments are expected to be finalized in the first half of
          2003.  Under  the new  guideline,  the  Company  will be  required  to
          document its hedging transactions and explicitly  demonstrate that the
          hedges  are  sufficiently  effective  in  order  to  continue  accrual
          accounting  for  positions  hedged  with  derivatives.  The  effect of
          adopting this guideline has not yet been determined.

     d)   Accounting for Costs Associated with Exit or Disposal Activities

          The FASB has issued SFAS No.  146,  "Accounting  for Costs  Associated
          with Exit or Disposal Activities." Under this standard, exit costs and
          restructuring  liabilities  generally  will be  recognized  only  when
          incurred.  SFAS No. 146 is effective  for exit or disposal  activities
          initiated after December 31, 2002.


<PAGE>


                                     - 86 -


ITEM 18. Financial Statements

Not applicable.

ITEM 19. Exhibits

Exhibit No.     Description
-----------     -----------

1.1(1)          Certificate of Incorporation for the Company dated November 18,
                1985
1.2(1)          Memorandum of the Company dated November 12, 1985
1.3(1)          Certificate of Name Change for the Company dated June 1, 1990
1.4(1)          Special Resolution and Memorandum of the Company dated April 20,
                1990
1.5(1)          Special Resolution of the Company dated April 20, 1990
1.6(1)          Articles of the Company
1.7             Special Resolution and Altered Memorandum of the Company dated
                May 11, 2000
4.2             Tambogrande Option Agreement dated May 17, 1999 between the
                Company and Empresa Minera del Peru S.A.
4.3             Option Extension Agreement dated April 11, 2001 between the
                Company and Empresa Minero de Centro del Peru S.A. (formerly
                Empresa Minera del Peru S.A.)
4.4             Option Extension dated April 9, 2003 from Empresa Minero de
                Centro del Peru S.A.
4.5             Option Agreement dated February 17, 1998 between the Company and
                Compania de Exploraciones, Desarrollo e Inversiones Mineras S.A.
                with respect to the Papayo joint venture concessions
4.6             Early termination of the Agreement of Assignment through
                exploration and purchase of mining rights dated June 5, 2001
                between Compania de Exploraciones, Desarrollo e Inversiones
                Mineras S.A. and Compania Minera Manhattan S.A.
8.1             List of subsidiaries
12.1            Technical Report dated October 2001 with respect to the
                Tambogrande Project


--------
1    Incorporated by reference to the Company's annual report for the year ended
     December 31, 1994 on Form 20-F.


<PAGE>


                                     - 87 -


                                   SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused and  authorized  the  undersigned  to sign this
Annual Report on its behalf.

Dated:  May 20, 2003.

                                    MANHATTAN MINERALS CORP.



                                    /s/   Lawrence M. Glaser
                                    --------------------------------------------
                                    Name: Lawrence M. Glaser
                                    Title: Chief Executive Officer


<PAGE>


                                     - 88 -


                            SECTION 302 CERTIFICATION


I, Lawrence M. Glaser, Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 20-F of Manhattan Minerals Corp.;

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 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


<PAGE>


                                     - 89 -


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not 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.

Date:  May 20, 2003


                                 /s/ Lawrence M. Glaser
                                 -----------------------------------------------
                                 Lawrence M. Glaser
                                 President, Chairman and Chief Executive Officer
                                 (Principal Executive and Principal Financial
                                 Officer)


<PAGE>


                                     - 90 -


                            SECTION 906 CERTIFICATION

                  CERTIFICATION PURSUANT TO 18 U.S.C. ss.1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Manhattan Minerals Corp. (the "Company")
on Form 20-F for the period ended December 31, 2002 as filed with the Securities
and Exchange  Commission on the date hereof,  I, Lawrence M. Glaser,  President,
Chairman  and Chief  Executive  Officer of the Company,  certify  pursuant to 18
U.S.C.  ss.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.

Date: May 20, 2003



                                 /s/ Lawrence M. Glaser
                                 -----------------------------------------------
                                 Lawrence M. Glaser
                                 President, Chairman and Chief Executive Officer
                                 (Principal Executive and Principal Financial
                                 Officer)