---

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

FORM 20-F/AAmendment No. 1

(Mark One)

 ̈  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 EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2004

OR

 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-13812

PACIFIC RIM MINING CORP.
  (Exact name of Registrant as specified in its charter)

British Columbia, Canada
  (Jurisdiction of incorporation or organization)

Suite 410 - 625 Howe Street, Vancouver, B.C. V6C 2T6
  (Address of principal executive offices)

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

|Title of each Class              | Name of each exchange on which registered
|-------------------------------- | -----------------------------------------
|Common Shares, Without Par Value | American Stock Exchange                  
|                                 | Toronto Stock Exchange                   

Securities registered or to be registered pursuant to Section
  12(g) of the Act: Common Shares, Without Par Value (Title of Class)

Securities for which there is a reporting obligation pursuant
  to Section 15(d) of the Act: Not Applicable(Title of Class)

Indicate the number of outstanding shares of each of the
  issuer’s classes of capital of common stock as of April 30, 2004: **80,483,994 Common Shares**

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

Indicate by check mark which financial statement item the registrant
  has elected to follow. 
  Item 17 xItem
  18  ̈

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Explanatory Note: PACIFIC RIM MINING CORP. (the “Company”
  or the “Registrant”) is filing this Amendment No. 1 on Form 20-F/A
  to its Form 20-F for the year ended April 30, 2004, which was originally filed
  on August 18, 2004 with the United States Securities and Exchange Commission,
  to include Auditors' Report issued by PricewaterhouseCoopers LLP dated January
  11, 2002, related to the audited statements of loss and cash-flows of Pacific
  Rim Mining Corp. for the year ended December 31, 2001. No other amendments were
  made to the Form 20-F annual report for the year ended April 30, 2004.

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2

PART III

ITEM 17.             FINANCIAL
  STATEMENTS

The Financial Statements were prepared in accordance with
  Canadian GAAP and are presented in U.S. dollars. There are differences between
  United States and Canadian GAAP. A reconciliation of the financial statements
  to United States GAAP is set forth in Note 14 to the Consolidated Financial
  Statements forming part hereof.

The following financial statements and related schedules are included in this
  Item and form part of this Annual Report:

|(a) | Financial Statements for the financial period ended
        April 30, 2004, containing:                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                             
|    | Auditors’ Report of Staley
        & Okada & Partners;                                                                                                                                      
|    | Auditors’ Report of PricewaterhouseCoopers
        LLP;                                                                                                                                     
|    | Consolidated Balance Sheet as
        at April 30, 2004 and April 30,2003;                                                                                                                  
|    | Consolidated Statements of Loss
        for the year ended April 30, 2004, April 30, 2003, four month period ended
        April 30, 2002, and year ended December 31, 2001;                
|    | Consolidated Statements of Shareholders’
        Equity for the year ended April 30, 2004, April 30, 2003, four month period
        ended April 30, 2002, and year ended December 31, 2001;
|    | Consolidated Statements of Cash
        Flow for the year ended April 30, 2004, April 30, 2003, four months ended
        April 30, 2002 and year ended December 31, 2001; and              
|    | Notes to Consolidated Financial
        Statements.                                                                                                                                         

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PACIFIC RIM MINING CORP.

(Formerly Dayton Mining Corporation)

CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2004 and 2003

Expressed in US Funds





F - 1

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|MANAGEMENT’S
      RESPONSIBILITY FOR FINANCIAL REPORTING
|---------------------------------------------------------
|                                                         

To the Shareholders of Pacific
  Rim Mining Corp.:

The accompanying consolidated
  financial statements of the Company were prepared by management in accordance
  with accounting principles generally accepted in Canada, and within the framework
  of the summary of significant accounting policies noted in these consolidated
  financial statements. Management is responsible for all information in the annual
  report. All financial and operating data in the annual report is consistent,
  where appropriate, with that contained in the consolidated financial statements.

A system of internal accounting
  control is maintained in order to provide reasonable assurance that assets are
  safeguarded and that transactions are properly recorded and executed in accordance
  with management’s authorization. This system includes established policies
  and procedures, the selection and training of qualified personnel and an organization
  providing for appropriate delegation of authority and, where possible, segregation
  of responsibilities.

The Board of Directors discharges
  its responsibilities for the consolidated financial statements primarily through
  activities of its Audit Committee composed of three directors, none of whom
  are members of management. This Committee meets with management to assure that
  it is performing its responsibility to maintain financial controls and systems
  and to approve the annual audited consolidated financial statements of the Company.
  The Audit Committee also meets with the independent auditors to discuss the
  scope and the results of their audit and audit report prior to submitting the
  consolidated financial statements to the Board of Directors for approval.

The consolidated financial
  statements have been audited on behalf of the shareholders by the Company’s
  independent auditors, Staley, Okada & Partners, in accordance with Canadian
  and United States generally accepted auditing standards. The auditors’
  report outlines the scope of their audit and their opinion on the consolidated
  financial statements.

|“F. John Norman”        | “Thomas C.
      Shrake”     
|----------------------- | -----------------------------
|Chief Financial Officer | Chief Executive
      Officer
|                        |                              

F - 2

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|REPORT OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|-------------------------------------------------------------
|                                                             

To the Shareholders of Pacific
  Rim Mining Corp.:

We have audited the accompanying
  consolidated balance sheets of Pacific Rim Mining Corp. (formerly Dayton Mining
  Corporation) as of April 30, 2004 and 2003, and the related consolidated statements
  of loss, shareholders’ equity, and cash flows for the years ended April
  30, 2004 and 2003 and for the four months ended April 30, 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 Canadian Generally Accepted Auditing Standards and with the
  Standards of the Public Company Accounting Oversight Board (United States).
  Those standards require that we plan and perform the audit to obtain reasonable
  assurance about 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. We believe
  that our audits provide a reasonable basis for our opinion.

In our opinion, the financial
  statements referred to above present fairly, in all material respects, the financial
  position of the Company as of April 30, 2004 and 2003, and the results of its
  operations and its cash flows for the years ended April 30, 2004 and 2003 and
  for the four months ended April 30, 2002, in conformity with Canadian generally
  accepted accounting principles.

The figures for the year ended
  December 31, 2001, which are presented for comparative purposes, were audited
  by another firm of Chartered Accountants, who issued an unqualified audit opinion
  dated January 11, 2002.

|Vancouver, B.C. | STALEY, OKADA & PARTNERS
|--------------- | ------------------------
|May 28, 2004    | CHARTERED ACCOUNTANTS   
|                |                         

F - 3

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Independent Auditors’
  Report

To the Shareholders of Pacific
  Rim Mining Corp. (formerly Dayton Mining Corporation)

We have audited the consolidated
  statements of loss and cash flows of Pacific Rim Mining Corp. (formerly Dayton
  Mining Corporation)for the year ended December 31, 2001. 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 audit.

We conducted our audit in accordance
  with generally accepted auditing standards in Canada and in the United States.
  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 results of
  the Company’s operations and its cash flows for the year ended December
  31, 2001 in accordance with generally accepted accounting principles in Canada.

“PricewaterhouseCoopers
  LLP”

Chartered Accountants 
  Vancouver, B.C., Canada 
  January 11, 2002

F - 4

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|Pacific
      Rim Mining Corp.             |  | Statement 1
|------------------------------------------ |  | -----------
|(Formerly Dayton
      Mining Corporation) |  |            
|Consolidated Balance
      Sheets          |  |            
|In thousands of
      U.S. dollars         |  |            

|                                                        |   | As at     |   |   | As at     |  
|------------------------------------------------------- | - | --------- | - | - | --------- | -
|                                                        |   | April 30, |   |   | April 30, |  
|ASSETS                                                  |   | 2004      |   |   | 2003      |  
|                                                        |   |           |   |   |           |  
|Current Assets                                          |   |           |   |   |           |  
|Cash,
      cash equivalents and bullion (Note 1b)      |   |           |   |   |           |  
|Cash and cash equivalents                               | $ | 1,463     |   | $ | 1,107     |  
|Bullion (Note 1b and 4)                                 |   | 1,301     |   |   | 594       |  
|                                                        |   | 2,764     |   |   | 1,701     |  
|Receivables                                             |   | 118       |   |   | 50        |  
|Inventories
      (Note 5)                              |   | 2,930     |   |   | 8,829     |  
|                                                        |   | 5,812     |   |   | 10,580    |  
|Inventories - Long-Term
      Portion(Note 5)           |   | -         |   |   | 2,002     |  
|Property, Plant and Equipment(Note 6)                   |   | 5,102     |   |   | 5,455     |  
|Closure Fund(Note
      8b)                             |   | 3,119     |   |   | 3,410     |  
|                                                        | $ | 14,033    |   | $ | 21,447    |  
|                                                        |   |           |   |   |           |  
|                                                        |   |           |   |   |           |  
|LIABILITIES                                             |   |           |   |   |           |  
|Current Liabilities                                     |   |           |   |   |           |  
|Accounts
      payable and accrued liabilities          | $ | 1,761     |   | $ | 1,228     |  
|Loans
      payable / due to related party (Note 8a)    |   | 828       |   |   | 231       |  
|Accrued
      closure costs - current portion (Note 8c) |   | 190       |   |   | 1,488     |  
|                                                        |   | 2,779     |   |   | 2,947     |  
|Loan Payable to a Related
      Party(Note 8a)          |   | -         |   |   | 1,640     |  
|Accrued Closure Costs(Note
      8c)                    |   | 1,636     |   |   | 1,900     |  
|                                                        |   | 4,415     |   |   | 6,487     |  
|                                                        |   |           |   |   |           |  
|                                                        |   |           |   |   |           |  
|SHAREHOLDERS' EQUITY                                    |   |           |   |   |           |  
|Share Capital- Statement
      3 (Note 9)               |   |           |   |   |           |  
|Authorized:                                             |   |           |   |   |           |  
|1,000,000,000 common shares without par value           |   |           |   |   |           |  
|Issued
      and fully paid:                            |   |           |   |   |           |  
|80,483,994 (2003 - 78,528,594) shares outstanding       |   | 57,690    |   |   | 56,173    |  
|Deficit- Statement
      3                              |   | (48,072   | ) |   | (41,213   | )
|                                                        |   | 9,618     |   |   | 14,960    |  
|                                                        | $ | 14,033    |   | $ | 21,447    |  

APPROVED BY THE BOARD OF DIRECTORS:

"David K. Fagin", Director

"Thomas C. Shrake", Director

- See Accompanying Notes -

F-5

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|Pacific
      Rim Mining Corp.                                   |  | Statement 2
|---------------------------------------------------------------- |  | -----------
|Consolidated Statements
      of Loss                            |  |            
|In thousands of
      U.S. dollars, except for per share amounts |  |            

|                                               |   | Year      |   |   | Year      |   |   | Four Months |   |   | Year         |  
|---------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | - | - | ------------ | -
|                                               |   | Ended     |   |   | Ended     |   |   | Ended       |   |   | Ended        |  
|                                               |   | April 30, |   |   | April 30, |   |   | April 30,   |   |   | December 31, |  
|                                               |   | 2004      |   |   | 2003      |   |   | 2002        |   |   | 2001         |  
|Revenue                                        |   |           |   |   |           |   |   |             |   |   |              |  
|Sales                                          | $ | 12,140    |   | $ | 12,509    |   | $ | 5,303       |   | $ | 14,913       |  
|                                               |   |           |   |   |           |   |   |             |   |   |              |  
|Cost of Sales                                  |   |           |   |   |           |   |   |             |   |   |              |  
|Operating
      costs                          |   | 11,903    |   |   | 8,999     |   |   | 4,454       |   |   | 13,545       |  
|Depreciation,
      depletion and amortization |   | 1,295     |   |   | 3,092     |   |   | 1,196       |   |   | 2,980        |  
|Write-down
      of mining interest (Note 7b)  |   | -         |   |   | 1,262     |   |   | -           |   |   | -            |  
|                                               |   | 13,198    |   |   | 13,353    |   |   | 5,650       |   |   | 16,525       |  
|Mine Operating (Loss)                          |   | (1,058    | ) |   | (844      | ) |   | (347        | ) |   | (1,612       | )
|                                               |   |           |   |   |           |   |   |             |   |   |              |  
|Expenses (Income)                              |   |           |   |   |           |   |   |             |   |   |              |  
|Exploration                                    |   |           |   |   |           |   |   |             |   |   |              |  
|- direct                                       |   | 5,144     |   |   | 3,346     |   |   | 250         |   |   | 700          |  
|- stock-based compensation (Note 9)            |   | 20        |   |   | -         |   |   | -           |   |   | -            |  
|General
      and administrative               |   |           |   |   |           |   |   |             |   |   |              |  
|- direct                                       |   | 878       |   |   | 937       |   |   | 437         |   |   | 1,131        |  
|- stock-based compensation (Note
      9)      |   | 316       |   |   | -         |   |   | -           |   |   | -            |  
|Write-down
      of marketable securities      |   | -         |   |   | 275       |   |   | -           |   |   | 70           |  
|Interest
      expense                         |   | 47        |   |   | 78        |   |   | 28          |   |   | 15           |  
|Amalgamation
      costs                       |   | -         |   |   | -         |   |   | 683         |   |   | -            |  
|Foreign
      exchange                         |   | 26        |   |   | (28       | ) |   | (29         | ) |   | 66           |  
|Interest
      income                          |   | (182      | ) |   | (175      | ) |   | (62         | ) |   | (122         | )
|Gain
      on sale of mineral properties       |   | -         |   |   | (922      | ) |   | -           |   |   | -            |  
|Gain
      on sale of marketable securities    |   | -         |   |   | (1,047    | ) |   | (59         | ) |   | (11          | )
|                                               |   | 6,249     |   |   | 2,464     |   |   | 1,248       |   |   | 1,849        |  
|Loss Before Unusual Item                       |   | (7,307    | ) |   | (3,308    | ) |   | (1,595      | ) |   | (3,461       | )
|                                               |   |           |   |   |           |   |   |             |   |   |              |  
|Recovery (Write Off) of
      Investment In    |   |           |   |   |           |   |   |             |   |   |              |  
|Andacollo
      Mine(Note 1c)                  |   | 448       |   |   | 508       |   |   | (6          | ) |   | 90           |  
|                                               |   |           |   |   |           |   |   |             |   |   |              |  
|Loss for the Period                            | $ | (6,859    | ) | $ | (2,800    | ) | $ | (1,601      | ) | $ | (3,371       | )
|                                               |   |           |   |   |           |   |   |             |   |   |              |  
|Loss Per Share - Basic and Diluted             | $ | (0.09     | ) | $ | (0.04     | ) | $ | (0.03       | ) | $ | (0.11        | )

- See Accompanying Notes -

F-6

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|Pacific
      Rim Mining Corp.                        |  | Statement 3
|----------------------------------------------------- |  | -----------
|Consolidated Statements
      of Shareholders' Equity |  |            
|In thousands of
      U.S. dollars                    |  |            

|                                                    | Share Capital  Common Shares |  |   |        |  |   |             |  
|--------------------------------------------------- | ----------------------------- |  | - | ------ |  | - | ----------- | -
|                                                    |                               |  |   |        |  |   | Accumulated |  
|                                                    | Number                        |  |   | Amount |  |   | Deficit     |  
|                                                    |                               |  |   |        |  |   |             |  
|Balance - December 31, 2001                         | 31,123,974                    |  | $ | 53,810 |  | $ | (36,812     | )
|Shares
      issued for amalgamation conversion for |                               |  |   |        |  |   |             |  
|Dayton shareholders (1.76 for 1) (Note 1d)          | 23,654,220                    |  |   | -      |  |   | -           |  
|Shares issued for acquisition of PRMC (Note 1d)     | 23,498,600                    |  |   | 2,287  |  |   | -           |  
|Shares
      issued for cash                        | 132,000                       |  |   | 45     |  |   | -           |  
|Loss
      for the four months ended April 30, 2002 | -                             |  |   | -      |  |   | (1,601      | )
|                                                    |                               |  |   |        |  |   |             |  
|Balance - April 30, 2002                            | 78,408,794                    |  |   | 56,142 |  |   | (38,413     | )
|Shares
      issued for cash                        | 119,800                       |  |   | 31     |  |   |             |  
|Loss
      for the year                             | -                             |  |   | -      |  |   | (2,800      | )
|                                                    |                               |  |   |        |  |   |             |  
|Balance - April 30, 2003                            | 78,528,594                    |  |   | 56,173 |  |   | (41,213     | )
|Shares
      issued for cash  options exercised    | 1,955,400                     |  |   | 1,181  |  |   | -           |  
|Stock option costs - stock-based compensation       | -                             |  |   | 336    |  |   | -           |  
|Loss
      for the year                             | -                             |  |   | -      |  |   | (6,859      | )
|                                                    |                               |  |   |        |  |   |             |  
|Balance  April 30, 2004                            | 80,483,994                    |  | $ | 57,690 |  | $ | (48,072     | )

- See Accompanying Notes -

F-7

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|Pacific
      Rim Mining Corp.              |  | Statement 4
|------------------------------------------- |  | -----------
|Consolidated Statements
      of Cash Flows |  |            
|In thousands of
      U.S. dollars          |  |            

|                                                 |   | Year      |   |   | Year      |   |   | Four Months |   |   | Year         |  
|------------------------------------------------ | - | --------- | - | - | --------- | - | - | ----------- | - | - | ------------ | -
|                                                 |   | Ended     |   |   | Ended     |   |   | Ended       |   |   | Ended        |  
|                                                 |   | April 30, |   |   | April 30, |   |   | April 30,   |   |   | December 31, |  
|                                                 |   | 2004      |   |   | 2003      |   |   | 2002        |   |   | 2001         |  
|Operating Activities                             |   |           |   |   |           |   |   |             |   |   |              |  
|Loss
      for the period                        | $ | (6,859    | ) | $ | (2,800    | ) | $ | (1,601      | ) | $ | (3,371       | )
|Adjustment to reconcile loss to cash flow        |   |           |   |   |           |   |   |             |   |   |              |  
|provided by operations:                          |   |           |   |   |           |   |   |             |   |   |              |  
|Depletion, depreciation and amortization         |   | 800       |   |   | 2,717     |   |   | 1,035       |   |   | 2,980        |  
|Accrued closure costs                            |   | 495       |   |   | 375       |   |   | 161         |   |   | (22          | )
|Stock-based compensation                         |   | 336       |   |   | -         |   |   | -           |   |   | -            |  
|Foreign exchange                                 |   | 26        |   |   | (28       | ) |   | (29         | ) |   | 59           |  
|Net interest earned on sinking fund              |   | (174      | ) |   | (143      | ) |   | (50         | ) |   | (153         | )
|Adjustment of sinking fund value                 |   | -         |   |   | -         |   |   | -           |   |   | 57           |  
|Gain on sale of marketable securities            |   | -         |   |   | (1,047    | ) |   | (59         | ) |   | (11          | )
|Gain on sale of mineral properties               |   | -         |   |   | (922      | ) |   | -           |   |   | -            |  
|Gain on sale of property, plant and              |   |           |   |   |           |   |   |             |   |   |              |  
|equipment included
      in operating costs      |   | (290      | ) |   | -         |   |   | -           |   |   | -            |  
|Write-down of marketable securities              |   | -         |   |   | 275       |   |   | -           |   |   | 70           |  
|Write-down of mining interest                    |   | -         |   |   | 1,262     |   |   | -           |   |   | -            |  
|                                                 |   | (5,666    | ) |   | (311      | ) |   | (543        | ) |   | (391         | )
|Accounts payable and accrued liabilities         |   | 533       |   |   | (138      | ) |   | (439        | ) |   | (698         | )
|Closure cost expenditures                        |   | (2,057    | ) |   | (692      | ) |   | (83         | ) |   | (118         | )
|Due to related parties                           |   | (1,043    | ) |   | (659      | ) |   | 484         |   |   | 197          |  
|Inventories                                      |   | 7,194     |   |   | (2,270    | ) |   | (144        | ) |   | (1,335       | )
|Receivables                                      |   | (68       | ) |   | 26        |   |   | 163         |   |   | (28          | )
|Cash Flow Used for Operating
      Activities    |   | (1,107    | ) |   | (4,044    | ) |   | (562        | ) |   | (2,373       | )
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Investing Activities                             |   |           |   |   |           |   |   |             |   |   |              |  
|Cash
      acquired on amalgamation              |   | -         |   |   | -         |   |   | 1,483       |   |   | -            |  
|Purchases
      of property, plant and equipment |   | (461      | ) |   | (79       | ) |   | (138        | ) |   | (104         | )
|Proceeds of disposition of property, plant and   |   |           |   |   |           |   |   |             |   |   |              |  
|equipment                                        |   | 304       |   |   | 56        |   |   | -           |   |   | -            |  
|Reclamation
      sinking fund withdrawals       |   |           |   |   |           |   |   |             |   |   |              |  
|(contributions)                                  |   | 465       |   |   | -         |   |   | -           |   |   | (352         | )
|Cash Flow Provided By (Used
      for) Investing |   |           |   |   |           |   |   |             |   |   |              |  
|Activities                                       |   | 308       |   |   | (23       | ) |   | 1,345       |   |   | (456         | )
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Financing Activities                             |   |           |   |   |           |   |   |             |   |   |              |  
|Issuance
      of share capital                  |   | 1,181     |   |   | 31        |   |   | 45          |   |   | -            |  
|Proceeds
      on sale of marketable securities  |   | -         |   |   | 2,551     |   |   | 170         |   |   | 29           |  
|Cash Flow Provided By Financing
      Activities |   | 1,181     |   |   | 2,582     |   |   | 215         |   |   | 29           |  
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Foreign Exchange                                 |   | (26       | ) |   | 28        |   |   | 29          |   |   | (59          | )
|Net Increase (Decrease)
      in Cash and Cash   |   |           |   |   |           |   |   |             |   |   |              |  
|Equivalents                                      |   | 356       |   |   | (1,457    | ) |   | 1,027       |   |   | (2,859       | )
|Cash
      and cash equivalents - Beginning of   |   |           |   |   |           |   |   |             |   |   |              |  
|period                                           |   | 1,107     |   |   | 2,564     |   |   | 1,537       |   |   | 4,396        |  
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Cash and Cash Equivalents - End of Period        | $ | 1,463     |   | $ | 1,107     |   | $ | 2,564       |   | $ | 1,537        |  
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Supplementary Schedule of
      Cash             |   |           |   |   |           |   |   |             |   |   |              |  
|Transactions:                                    |   |           |   |   |           |   |   |             |   |   |              |  
|Interest
      paid during the period            | $ | 61        |   | $ | 79        |   | $ | -           |   | $ | 141          |  
|Income taxes paid
      during the period        | $ | -         |   | $ | -         |   | $ | -           |   | $ | -            |  
|                                                 |   |           |   |   |           |   |   |             |   |   |              |  
|Supplementary Schedule of
      Non-cash         |   |           |   |   |           |   |   |             |   |   |              |  
|Transactions:                                    |   |           |   |   |           |   |   |             |   |   |              |  
|Shares
      issued for business combination     | $ | -         |   | $ | -         |   | $ | 2,287       |   | $ | -            |  
|Marketable
      securities received for mineral |   |           |   |   |           |   |   |             |   |   |              |  
|properties                                       | $ | -         |   | $ | 900       |   | $ | 1,000       |   | $ | -            |  
|Stock-based
      compensation                   | $ | 336       |   | $ | -         |   | $ | -           |   | $ | -            |  
|Accrued
      closure costs capitalized as       |   |           |   |   |           |   |   |             |   |   |              |  
|property, plant and equipment                    | $ | 495       |   | $ | -         |   | $ | -           |   | $ | -            |  

- See Accompanying Notes -

F-8

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|1. | Nature
        of Operations and Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The Company
        is involved in the exploration, development and operation of gold properties.
        The Company owns a 49% interest in the Denton-Rawhide Mine, located near
        Fallon, Nevada, U.S.A., a 100% interest in certain exploration licence
        areas, known as El Dorado and La Calera, located in El Salvador and exploration
        interests in mineral claims in the United States.                                                                                                                                                                                                                                                    
|  
|   | Basis
        of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | These consolidated
        financial statements are presented in accordance with generally accepted
        accounting principles ("GAAP") applicable in Canada and have been reconciled
        as to significant differences in measurement to generally accepted accounting
        principles applicable in the United States as disclosed in Note 14.                                                                                                                                                                                                                                                                                                             
|  
|   | Certain
        of the comparative figures have been reclassified to conform to the current
        year's presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | These consolidated
        financial statements include the accounts of the Company's wholly-owned
        subsidiaries, Dayton Mining (US) Inc., DMC Cayman Inc., Andacollo Gold
        Inc., La Serena Inc., Dayton Chile Exploraciones Mineras Limitada, Dayton
        Acquisition Inc., 449200 B.C. Ltd., Pacific Rim El Salvador S.A. De C.V.
        and Recursos Salvadorenos S.A. de C.V. Also included in these consolidated
        financial statements are the accounts of the Company's wholly-owned subsidiaries,
        Pac Rim Cayman, Pac Rim Caribe III and International Pacific Rim S.A.
        from the date of acquisition of April 11, 2002.
|  
|   | The 49%
        joint venture interest in Denton-Rawhide is accounted for on the proportionate
        consolidation basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-9

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|1. | Nature
        of Operations and Basis of Presentation- Continued
|-- | -----------------------------------------------------------------
|  
|   | d)                                                               
|  
|   |                                                                  
|  
|   |                                                                  

| |  | Cash,
      short-term investments and receivables | $ | 2,341 |  
| |  | -------------------------------------------------- | - | ----- | -
| |  | Property, plant and equipment                      |   | 43    |  
| |  | Accounts
      payable and accruals                |   | (97   | )
| |  | Net Assets Acquired                                | $ | 2,287 |  
| |  |                                                    |   |       |  
| |  | Value attributed to common
      shares issued     | $ | 2,287 |  
| |  |                                                    |   |       |  
| |  |                                                    |   |       |  



|2. | Significant Accounting
        Policies and Accounting Changes                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Cash and Cash
        Equivalents                                                                                                                                                                                                                                                                                                                                
|  
|   | Cash and cash equivalents
        includes cash on hand, demand deposits, and short term highly liquid investments
        with a term to maturity of three months or less from inception which are
        readily convertible to known amounts of cash and which, in the opinion
        of management, are subject to an insignificant risk of loss in values.
|  
|   | Bullion                                                                                                                                                                                                                                                                                                                                                          
|  
|   | Gold and silver bullion
        is valued at the lower of cost and estimated fair market value.                                                                                                                                                                                                                                                                  
|  
|   | Inventories                                                                                                                                                                                                                                                                                                                                                      
|  
|   | Inventories, comprised
        of ore on leach pads, gold in process and mine operating supplies are
        valued at the lower of cost and net realizable value.                                                                                                                                                                                               

F-10

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|2. | Significant Accounting
        Policies and Accounting Changes- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Property, Plant
        and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | Property, plant and
        equipment is stated at estimated fair value as at the date of acquisition
        less accumulated depreciation and accumulated write-downs. Mining property,
        plant and equipment is depreciated using the unit of production method
        over estimated recoverable ounces.                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | Annually, reviews
        are undertaken to evaluate the carrying values of operating mines and
        development properties. If it is determined that the estimated net recoverable
        amount is significantly less than the carrying value and the impairment
        in value is likely to be permanent, a write-down to the net recoverable
        amount is made by a charge to earnings.                                                                                                                                                                                                                                                                                                                                           
|  
|   | All exploration expenditures
        are expensed as incurred. Significant property acquisition payments for
        active exploration properties are capitalized. If no mineable ore body
        is discovered, previously capitalized costs are expensed in the period
        the property is abandoned. Expenditures for the development of new mines,
        to define further mineralization in existing ore bodies, and to expand
        the capacity of operating mines, are capitalized and amortized on a units
        of production basis over estimated recoverable reserves.                                                                                                                                                   
|  
|   | Effective May 1,
        2003, the Company prospectively adopted the Canadian Institute of Charter
        Accountants ("CICA") Handbook Section 3063 "Impairment of Long-Lived Assets",
        which requires that an impairment loss be recognized if the carrying value
        of a long-lived asset exceeds its fair market value. An estimate of fair
        market value is undertaken annually and the impairment loss, if any, is
        recorded. There were no impairment losses recorded during fiscal 2004.
        Management's estimates of resources, inventories and reclamation costs
        are subject to risks and uncertainties that may affect its assessment
        of the recoverability of mineral property costs.
|  
|   | Environmental
        Expenditures and Closure Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The operations of
        the Company may in the future be affected by changes in environmental
        regulations, including those for future removal and site restoration costs.
        Both the likelihood of new regulations and their overall effect upon the
        Company vary greatly and are not predictable. The Company's policy is
        to meet standards set by relevant legislation by application of technically
        proven and economically feasible measures.                                                                                                                                                                                                                                                        
|  
|   | Environmental expenditures
        that relate to ongoing environmental and reclamation programs are charged
        against earnings as incurred or capitalized and amortized depending on
        their future economic benefits. Estimated future removal and site restoration
        costs, when the ultimate liability is reasonably determinable, are charged
        against earnings over the estimated remaining life of the operation, net
        of expected recoveries.                                                                                                                                                                                                                                                            

F-11

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|2. | Significant
        Accounting Policies and Accounting Changes- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Environmental
        Expenditures and Closure Costs- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | The Company's
        share of estimated closure costs associated with the Denton-Rawhide Mine
        at the time of acquisition was recognized in full as part of the acquisition
        cost. Increases in estimates of closure liabilities subsequent to the
        acquisition of Denton-Rawhide are accounted for in accordance with CICA
        3110 " Asset Retirement Obligations" which conforms in all material
        respects to FASB (Financial Accounting Standards Board) Statement No.
        146 as required under United States GAAP requirements for the reporting
        of asset retirement obligations. Effective May 1, 2003, the Company elected
        early implementation of CICA 3110, whereby the Company prospectively recognizes
        asset retirement obligations in the period in which they are incurred,
        if a reasonable estimate of fair market value can be made. The asset retirement
        costs are capitalized as part of the carrying amount of the long term
        asset to be amortized over the estimated remaining useful life of the
        asset and the associated liability is accreted over the estimated future
        ounces of gold production until settlement of the obligation. As a result
        of the adoption of this accounting standard, the carrying value of the
        Rawhide Mine and the corresponding asset retirement obligation was increased
        by $ 0.5 million during the year ended April 30, 2004.
|  
|   | Income
        Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | The Company
        uses the asset and liability method of accounting for future income taxes.
        Under this method, current income taxes are recognized for the estimated
        income taxes payable for the current period. Future income tax assets
        and liabilities are recognized for temporary differences between the tax
        and accounting basis of assets and liabilities as well as for the benefit
        of losses available to be carried forward to future years for tax purposes,
        which are likely to be realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | Share
        Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Stock-based
        Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | Effective
        May 1, 2003, the Company has prospectively adopted the new recommendations
        of CICA Handbook Section 3870 " Stock-based Compensation and Other
        Stock-based Payments" which requires fair value accounting for all
        stock options issued during the year. This change in accounting treatment
        increased expenses by $336 in the current fiscal year. The prior years
        stock-based compensation expense was only recognized when stock-based
        compensation awards were made to non-employees, while pro forma disclosure
        was acceptable for awards made to employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | Revenue
        Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | Revenues
        from the sale of all precious metal bullion are recognized when title
        to the bullion passes to the buyer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-12

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|2. | Significant Accounting
        Policies and Accounting Changes- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | Basic earnings (loss)
        per share is computed by dividing income available to common shareholders
        by the weighted average number of common shares outstanding during the
        period. The computation of diluted earnings per share assumes the conversion,
        exercise or contingent issuance of securities only when such conversion,
        exercise or issuances would have a dilutive effect on earnings per share.
        The dilutive effect of outstanding options and warrants and their equivalents
        is reflected in diluted earnings per share by application of the treasury
        stock method.
|  
|   | Derivative Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | The Company may enter
        into gold hedging contracts to manage its exposure to fluctuations in
        the market price of gold and to establish minimum prices for certain of
        its future production. The Company's entire hedging activity is considered
        normal course sales requiring settlements through physical delivery. Gains
        or losses on these contracts are included in sales revenue when product
        is delivered against the contract.                                                                                                                                                         
|  
|   | Foreign Exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | Transaction amounts
        denominated in other currencies are translated into their United States
        dollar equivalents at exchange rates prevailing at the transaction date.
        Carrying values of monetary assets and liabilities are adjusted at each
        balance sheet date to reflect exchange rates prevailing at that date.
        Gains and losses arising from restatement of foreign currency monetary
        assets and liabilities at each year-end are included in earnings.                                                                                                                                  
|  
|   | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The preparation of
        financial statements in conformity with Canadian generally accepted accounting
        principles requires management to make estimates and assumptions that
        affect the reported amounts of assets and liabilities and disclosures
        of contingent assets and liabilities at the date of the financial statements
        and the reported amounts of revenues and expenses during the reporting
        period. Actual results could differ from those estimates.                                                                                                                                  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | The Company's financial
        instruments consist of cash and cash equivalents, bullion (Note 10)receivables, closure fund, accounts payable, amounts due to related
        parties and accrued closure costs. Unless otherwise noted, it is management's
        opinion that the Company is not exposed to significant interest, currency
        or credit risks arising from the financial instruments. The fair value
        of these financial instruments approximates their carrying value due to
        their short-term maturity or capacity of prompt liquidation.                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-13

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|4. | Bullion                
|-- | -----------------------
|   |                        
|   | Details are as follows:

| |                                      | April 30, 2004 |  | April 30, 2003 | 
| | ------------------------------------ | -------------- |  | -------------- | 
| |                                      | Gold           |  | Silver         | 
| | Ounces at
      Refinery             | 2,727          |  | 39,600         | 
| | Market value per ounce
      ($/oz.) | $390.00        |  | $6.00          | 
| | Market Value                         | $1,064         |  | $237           | 
| | Total market value                   | $1,301         |  | $594           | 

|   |                        
|-- | -----------------------
|   |                        
|5. | Inventories            
|   |                        
|   | Details are as follows:

| |                                                       |   | April 30, |  |   | April 30, |  
| | ----------------------------------------------------- | - | --------- |  | - | --------- | -
| |                                                       |   | 2004      |  |   | 2003      |  
| | Production
      inventory                            | $ | 2,696     |  | $ | 10,291    |  
| | Supplies inventory                                    |   | 234       |  |   | 540       |  
| |                                                       |   | 2,930     |  |   | 10,831    |  
| | Less: Long term portion
      of production inventory |   | -         |  |   | (2,002    | )
| |                                                       | $ | 2,930     |  | $ | 8,829     |  

|   | The estimated value of inventory that
      will not be recovered within the next fiscal year has been reclassified
      as long term.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                        
|   |                                                                                                                                        
|6. | Property, Plant and Equipment                                                                                                          
|   |                                                                                                                                        
|   | Details are as follows:                                                                                                                

| |                                                |   | April 30, |   |   | April 30, |  
| | ---------------------------------------------- | - | --------- | - | - | --------- | -
| |                                                |   | 2004      |   |   | 2003      |  
| | Cost                                           | $ | 10,320    |   | $ | 10,652    |  
| | Accumulated depreciation
      and write-downs |   | (5,218    | ) |   | (5,197    | )
| |                                                | $ | 5,102     |   | $ | 5,455     |  
| |                                                |   |           |   |   |           |  

F-14

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|7. | Mineral Properties
|-- | ------------------
|  
|   | a)                
|  
|   |                   
|  
|   |                   
|  
|   |                   
|  
|   |                   

| |                                                           |   |          |  |   | Minimum      | 
| | --------------------------------------------------------- | - | -------- |  | - | ------------ | 
| |                                                           |   | Option   |  |   | Exploration  | 
| |                                                           |   | Payments |  |   | Expenditures | 
| | Upon signing
      (paid)                                 | $ | 5        |  | $ | -            | 
| | Upon completion of a
      two month due diligence (paid) |   | 15       |  |   | -            | 
| | On
      or before September 10, 2003 (paid and incurred) |   | 20       |  |   | 25           | 
| | On or before September
      10, 2004 (paid subsequent to |   |          |  |   |              | 
| | year
      end and incurred)                              |   | 35       |  |   | 50           | 
| | On or before September 10,
      2005 (incurred)          |   | 75       |  |   | 100          | 
| | On or before
      September 10, 2006 (incurred)          |   | 150      |  |   | 200          | 
| |                                                           | $ | 300      |  | $ | 375          | 

| |  |      | The property is subject
        to a 0.5% NSR which can be purchased by the Company for $200 if purchased
        within six months from the start of commercial production.                                                                                                                                                                         
| |  | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |      | This property is
        also subject to an El Salvador governmental NSR of 2%.                                                                                                                                                                                                                                                                      
|
| |  | iii) | By agreement dated
        November 14, 2003, the Company has agreed to an option to acquire a parcel
        of land near the El Dorado property. To exercise its option, the Company
        has to pay $14 on or before May 14, 2004 (paid subsequent to year end),
        $14 on or before May 14, 2005 and $971 on or before November 14, 2005.

F-15

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|7. | Mineral
        Properties- Continued
|-- | -------------------------------------
|  
|   | b)                                   
|  
|   |                                      

| |  |                                                                                      |                                       |   | April 30, |   |   | April 30, |  
| |  | ------------------------------------------------------------------------------------ | ------------------------------------- | - | --------- | - | - | --------- | -
| |  |                                                                                      |                                       |   | 2004      |   |   | 2003      |  
| |  |                                                                                      | Current assets                        | $ | 4,434     |   | $ | 9,516     |  
| |  |                                                                                      | Inventories - long-term
      portion |   | -         |   |   | 2,002     |  
| |  |                                                                                      | Property,
      plant and equipment   |   | 878       |   |   | 1,219     |  
| |  |                                                                                      | Closure fund                          |   | 3,119     |   |   | 3,410     |  
| |  |                                                                                      | Current liabilities                   |   | (2,061    | ) |   | (4,359    | )
| |  |                                                                                      | Long-term liabilities                 |   | (1,636    | ) |   | (1,900    | )
| |  |                                                                                      | Net assets                            | $ | 4,734     |   | $ | 9,888     |  
| |  |                                                                                      |                                       |   |           |   |   |           |  
| |  | The condensed statements of
      loss of the Company's 49% interest are as follows: |                                      

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                |   |   |                |   |   | Four Months    |   |   | Year Ended   |  
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | -------------- | - | - | ------------ | -
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Year Ended     |   |   | Year Ended     |   |   | Ended          |   |   | December 31, |  
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | April 30, 2004 |   |   | April 30, 2003 |   |   | April 30, 2002 |   |   | 2001         |  
| |  | Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | $ | 12,140         |   | $ | 12,509         |   | $ | 5,303          |   | $ | 14,913       |  
| |  | Costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (13,193        | ) |   | (13,348        | ) |   | (5,763         | ) |   | (16,639      | )
| |  | Net loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $ | (1,053         | ) | $ | (839           | ) | $ | (460           | ) | $ | (1,726       | )
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                |   |   |                |   |   |                |   |   |              |  
| |  | During
        the year ended April 30, 2003, the Denton-Rawhide Mine experienced unexpected
        production shortfalls due to slower than expected heap leach recoveries.
        A review of the carrying value of the Denton-Rawhide investment indicated
        that the fair value of this investment had been impaired; therefore a
        $1,262 reduction in carrying value was recorded and charged to that year's
        operations.
      The condensed statements
        of cash flows of the Company's 49% interest are as follows:

| |  |                                            |   |                |   |   |                |   |   | Four Months    |   |   | Year Ended   |  
| |  | ------------------------------------------ | - | -------------- | - | - | -------------- | - | - | -------------- | - | - | ------------ | -
| |  |                                            |   | Year Ended     |   |   | Year Ended     |   |   | Ended          |   |   | December 31, |  
| |  |                                            |   | April 30, 2004 |   |   | April 30, 2003 |   |   | April 30, 2002 |   |   | 2001         |  
| |  | Cash flows
      provided by (used for)    |   |                |   |   |                |   |   |                |   |   |              |  
| |  | operations                                 | $ | 5,160          |   | $ | 549            |   | $ | 310            |   | $ | (595         | )
| |  | Cash flows
      provided by (used for)    |   |                |   |   |                |   |   |                |   |   |              |  
| |  | investment activities                      |   | (150           | ) |   | (23            | ) |   | (138           | ) |   | (104         | )
| |  | Cash
      flows from financing activities |   | (1,021         | ) |   | -              |   |   | -              |   |   | -            |  
| |  |                                            |   |                |   |   |                |   |   |                |   |   |              |  
| |  | Net cash
      flow                        | $ | 3,989          |   | $ | 526            |   | $ | 172            |   | $ | (699         | )

F-16

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|7. | Mineral
        Properties Continued                                              
|-- | -----------------------------------------------------------------------------------
|  
|   | c)                                                                                 
|  
|   |                                                                                    
|  
|   |                                                                                    
|  
|   |                                                                                    
|  
|   |                                                                                    
|  
|   | d)                                                                                 
|  
|   |                                                                                    
|  
|8. | Closure
        Fund, Accrued Closure Costs and Loan Payable/Due to a Related Party
|  
|   | a)                                                                                 
|  
|   |                                                                                    

F-17

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|8. | Closure
        Fund, Accrued Closure Costs and Loan Payable/Due to a Related Party-
        Continued                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | a)                                                                                                                                                                                                                                                                                                                                    
|  
|   |                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                    
|  
|   |                                                                                                                                                                                                                                                                                                                                       
|  
|   | c)                                                                                                                                                                                                                                                                                                                                    
|  
|   |                                                                                                                                                                                                                                                                                                                                       
|  
|   |                                                                                                                                                                                                                                                                                                                                       
|9. | Share
        Capital                                                                                                                                                                                                                                                                                                                 
|  
|   | Stock
        Options                                                                                                                                                                                                                                                                                                                 
|  
|   | Upon amalgamation,
        stock options outstanding under the plans of Dayton and PRMC were rolled
        over, provided that upon surrender, termination or expiry without exercise
        the shares would not be available for the grant of new options.                                                                        
|  
|   | In October
        2002 shareholders approved a new stock option and bonus plan under which,
        up to 6,000,000 common shares are reserved for the grant of stock options
        and up to 367,000 common shares are reserved for the grant of bonus shares
        to directors, employees or consultants ("eligible parties").

F-18

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|9. | Share Capital- Continued                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Stock Options Continued                                                                                                                                                                                                                                                                                                                 
|  
|   | Stock options or
        bonus shares may be granted under the 2002 Plan, by the Board of Directors,
        to eligible parties, for a term of up to 10 years, at the closing price
        on the TSX on the date prior to the grant, and on conditions as may be
        determined by the Board of Directors. Details are as follows:

| |                                                                                                                                         | Number of Options |   |           |   |                 
| | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | - | --------- | - | ----------------
| |                                                                                                                                         | Pre-              |   | October   |   | Weighted Average
| |                                                                                                                                         | Amalgamation      |   | 2002      |   | Exercise Price  
| |                                                                                                                                         | Plans             |   | Plan      |   | (in Cdn $)      
| | Options outstanding
      at April 30, 2002                                                                                             | 5,356,880         |   | -         |   | $0.71           
| | Year ended April 30, 2003          
      - granted                                                                                     | -                 |   | 2,130,000 |   | $0.62           
| | - expired/cancelled                                                                                                                     | (719,600          | ) | (20,000   | ) | $0.73           
| | - exercised                                                                                                                             | (119,800          | ) | -         |   | $0.40           
| | Options outstanding
      at April 30, 2003                                                                                             | 4,517,480         |   | 2,110,000 |   | $0.73           
| | Year ended April 30, 2004          
      - granted                                                                                     | -                 |   | 1,425,800 |   | $0.80           
| | - expired/cancelled                                                                                                                     | (952,700          | ) | (130,000  | ) | $1.27           
| | - exercised                                                                                                                             | (1,760,400        | ) | (195,000  | ) | $0.80           
| | Options outstanding
      at April 30, 2004                                                                                             | 1,804,380         |   | 3,210,800 |   | $0.60           
| | Vested as at April 30, 2004                                                                                                             | 1,804,380         |   | 2,260,266 |   | $0.56           
| |                                                                                                                                         |                   |   |           |   |                 
| | The following
      table summarizes information about stock options outstanding to directors
      and employees as at April 30, 2004.

| |                    |  | Exercise Price |  | Number      |  | Number   
| | ------------------ |  | -------------- |  | ----------- |  | ---------
| | Expiry Date        |  | (in Cdn $)     |  | Outstanding |  | Vested   
| | June 29, 2004      |  | $1.36          |  | 36,080      |  | 36,080   
| | September 24, 2004 |  | $1.30          |  | 29,000      |  | 29,000   
| | May 28, 2005       |  | $0.54          |  | 763,300     |  | 763,300  
| | July 4, 2006       |  | $0.29          |  | 976,000     |  | 976,000  
| | April 18, 2007     |  | $0.62          |  | 1,810,000   |  | 1,810,000
| | July 23, 2008      |  | $0.43          |  | 170,800     |  | 56,933   
| | October 8, 2008    |  | $0.85          |  | 1,230,000   |  | 393,333  
| |                    |  |                |  | 5,015,180   |  | 4,064,646

F-19

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|9. | Share Capital-
        Continued                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Stock Options- Continued                                                                                                                                                                                                                                                                                                                             
|  
|   | TheCompany
        has prospectively adopted the recommendations of CICA Handbook Section
        3870 "Stock-based Compensation and Other Stock-based Payments"
        for stock options granted to directors, officers and employees effective
        May 1, 2003. Comparative figures have been shown on a pro forma basis,
        as required.

| | Stock-based compensation expense
      relating to:      |   | 2004(i) |   |   | 2003(ii) |  
| | -------------------------------------------------------- | - | ------- | - | - | -------- | -
| | Administrative costs                                     | $ | 316     |   | $ | 473      |  
| | Exploration
      costs                                  |   | 20      |   |   | -        |  
| | Total stock-based
      compensation                     | $ | 336     |   | $ | 473      |  
| |                                                          |   |         |   |   |          |  
| | Loss for
      the year  as reported                    | $ | (6,859  | ) | $ | (2,800   | )
| | Loss for the year  pro
      forma                      | $ | N/A     |   | $ | (3,273   | )
| | Loss
      Per Share - Basic and Diluted (in US dollars) |   |         |   |   |          |  
| | As
      reported                                        | $ | (0.09   | ) | $ | (0.04    | )
| | Pro-forma                                                | $ | N/A     |   | $ | (0.04    | )

| | (i)                                                                                                                                                                                                                 | Recorded
        as an expense with the offsetting entry to share capital.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------
| | (ii)                                                                                                                                                                                                                | Disclosed
        as an expense on a pro forma basis only.                
| |                                                                                                                                                                                                                     |                                                                           
| | No
        stock-based compensation was reported in the fiscal periods ended April
        30, 2002 and December 31, 2001.                                                                                         
| |                                                                                                                                                                                                                     |                                                                           
| | The
        fair value of the options used in the information above has been estimated
        at the date of grant of options using the Black-Scholes Option Pricing
        Model with the following assumptions:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | April 30, 2004 |  | April 30,2003 | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- |  | ------------- | 
| | Average risk
      free interest rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3.85%          |  | 4.31%         | 
| | Average expected option life                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 4 years        |  | 4 years       | 
| | Stock
      volatility  based on trading history                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 82.31%         |  | 89.46%        | 
| | Dividend payments during life
      of option                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Nil            |  | Nil           | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                |  |               | 
| | The
        Black-Scholes Option Pricing Model was created for use in estimating the
        fair value of freely tradable, fully transferable options. The Company's
        employee stock options have characteristics significantly different from
        those of traded options, and because changes in the highly subjective
        input assumptions can materially effect the calculated values, management
        believes that the accepted Black-Scholes model does not necessarily provide
        a reliable measure of the fair value of the Company's stock option awards.

F-20

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|10. | Gold Sales Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | At April 30, 2004,
        the Company's gold hedging position consisted of 6,000 ounces (2003 -
        6,000) of forward sales contracts for future delivery of gold at various
        dates from May 2004 to October 2004 (2003 - May to August 2003) at an
        average price of US$411 (2003 - US$368) per ounce. At April 30, 2004 the
        Company had no financial exposure to market risks related to the settlement
        of outstanding hedges as gold spot prices were approximately US$390 (2003
        - US$339) per ounce at that date. The estimated fair value of these contracts
        at the April 30, 2004 spot prices was $126 (2003 - $174), which represents
        the fair value to the Company on the balance sheet date if it were to
        settle these instruments prior to their maturity.
|   
|    | The credit risk exposure
        related to the Company's gold hedging activities is limited to the unrealized
        gains (losses) on outstanding contracts based on current market prices.
        The Company's gold hedging contract counter parties are large international
        credit-worthy institutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|11. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | As at April 30, 2004
        the Company has the following tax loss carry forwards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | Country       |  | Category                                  |  |   | Amount |  | Expiry   
| | ------------- |  | ----------------------------------------- |  | - | ------ |  | ---------
| | Argentina     |  | Operating
      losses                    |  | $ | 2,376  |  | 2005-2009
| | Canada        |  | Non-capital losses                        |  | $ | 5,812  |  | 2005-2011
| |               |  | Net capital
      losses                  |  | $ | 2,380  |  | N/A      
| |               |  | Mineral expenditures                      |  | $ | 10,096 |  | N/A      
| | El Salvador   |  | Mineral expenditures                      |  | $ | 12,665 |  | (i)      
| | United States |  | Operating  Regular tax                   |  | $ | 11,863 |  | 2005-2024
| |               |  | Operating
       Alternative minimum tax |  | $ | 7,063  |  | 2008-2024

| | (i) | These expenditures expire when
      they are written-off for local accounting purposes.                                                                                                                                              
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                       
| |     | Future income tax assets are
      not recorded for the above tax loss carry forwards due to the significant
      uncertainty of their recovery. The tax losses may be subject to audit and
      adjustment by local tax authorities

F-21

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|12. | Commitments
|--- | -----------
|   
|    | a)         
|   
|    |            

| |  |      |  |     | Office   |  |   |             |  |   |      
| |  | ---- |  | --- | -------- |  | - | ----------- |  | - | -----
| |  |      |  | (i) | Premises |  |   | Photocopier |  |   | Total
| |  | 2005 |  | $   | 64.7     |  | $ | 3.6         |  | $ | 68.3 
| |  | 2006 |  |     | 43.9     |  |   | 3.6         |  |   | 47.5 
| |  | 2007 |  |     | 39.7     |  |   | 3.6         |  |   | 43.3 
| |  | 2008 |  |     | 33.6     |  |   | 3.6         |  |   | 37.2 
| |  | 2009 |  |     | 7.2      |  |   | -           |  |   | 7.2  
| |  |      |  | $   | 189.1    |  | $ | 14.4        |  | $ | 203.5

| |    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                  | In addition to the
        basic rent, the Company is responsible for its proportionate share of
        property taxes and operating costs.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) | Proposed
        Sale of Subsidiaries                                                                                                                                                                                                                                                                                                                                                                               
|
| |    | On March
        31, 2004, the Company signed a Proposal for Acquisition Agreement in which
        it agreed to sell to an unrelated party 100% of the shares of its wholly
        owned subsidiaries Andacollo Gold Inc., La Serena Inc., Dayton Chile Exploraciones
        Mineras Limitada and Compania Minera Dayton ("CMD") for $5,000 cash and
        4,000,000 common shares of the purchaser as follows:

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Cash  |  | Shares   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----- |  | ---------
| |  | Upon closing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $ | 1,000 |  | 3,000,000
| |  | On or before December 31, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 1,000 |  | 1,000,000
| |  | On or before
      December 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 1,000 |  | -        
| |  | On or before December 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 1,000 |  | -        
| |  | On
      or before December 31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 1,000 |  | -        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $ | 5,000 |  | 4,000,000
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |       |  |          
| |  | The closing
        of the transaction is subject to (i) a satisfactory completion of due
        diligence by the purchaser, (ii) approval of the transaction by the board
        of directors of the purchaser, (iii) regulatory approval of the transaction,
        and (iv) reduction of CMD's debt from approximately US $2,700, to US $2,000
        or less. CMD's primary holding is the Andacollo gold mine property in
        Chile which the Company officially shut down in December 2000.

F-22

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|13. | Segmented Information  
|--- | -----------------------
|    |                        
|    | Details are as follows:

| |                                                |   | Year      |   |   | Year      |   |   | Four Months |   |   | Year         |  
| | ---------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | - | - | ------------ | -
| |                                                |   | Ended     |   |   | Ended     |   |   | Ended       |   |   | Ended        |  
| |                                                |   | April 30, |   |   | April 30, |   |   | April 30,   |   |   | December 31, |  
| |                                                |   | 2004      |   |   | 2003      |   |   | 2002        |   |   | 2001         |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total Assets                                   |   |           |   |   |           |   |   |             |   |   |              |  
| | Canada                                         | $ | 1,017     |   | $ | 99        |   | $ | 2,682       |   | $ | 1,064        |  
| | USA                                            |   | 8,556     |   |   | 17,094    |   |   | 18,445      |   |   | 19,275       |  
| | El Salvador                                    |   | 4,457     |   |   | 4,252     |   |   | 4,184       |   |   | 4,184        |  
| | Chile                                          |   | 3         |   |   | 2         |   |   | 19          |   |   | 17           |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total                                          | $ | 14,033    |   | $ | 21,447    |   | $ | 25,330      |   | $ | 24,540       |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total Property,
      Plant and Equipment      |   |           |   |   |           |   |   |             |   |   |              |  
| | Canada                                         | $ | 9         |   | $ | 8         |   | $ | 11          |   | $ | 2            |  
| | USA                                            |   | 909       |   |   | 1,263     |   |   | 5,238       |   |   | 6,262        |  
| | El Salvador                                    |   | 4,184     |   |   | 4,184     |   |   | 4,184       |   |   | 4,184        |  
| | Chile                                          |   | -         |   |   | -         |   |   | 17          |   |   | 17           |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total                                          | $ | 5,102     |   | $ | 5,455     |   | $ | 9,450       |   | $ | 10,465       |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Revenue,
      Excluding Interest Income       |   |           |   |   |           |   |   |             |   |   |              |  
| | Canada                                         | $ | -         |   | $ | -         |   | $ | -           |   | $ | -            |  
| | USA                                            |   | 12,140    |   |   | 12,509    |   |   | 5,303       |   |   | 14,913       |  
| | El Salvador                                    |   | -         |   |   | -         |   |   | -           |   |   | -            |  
| | Chile                                          |   | -         |   |   | -         |   |   | -           |   |   | -            |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total                                          | $ | 12,140    |   | $ | 12,509    |   | $ | 5,303       |   | $ | 14,913       |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Depreciation,
      Depletion and Amortization |   |           |   |   |           |   |   |             |   |   |              |  
| | Canada                                         | $ | 5         |   | $ | 4         |   | $ | 1           |   | $ | 6            |  
| | USA                                            |   | 1,290     |   |   | 3,088     |   |   | 1,195       |   |   | 2,974        |  
| | El Salvador                                    |   | -         |   |   | -         |   |   | -           |   |   | -            |  
| | Chile                                          |   | -         |   |   | -         |   |   | -           |   |   | -            |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total                                          | $ | 1,295     |   | $ | 3,092     |   | $ | 1,196       |   | $ | 2,980        |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Net Income
      (Loss)                        |   |           |   |   |           |   |   |             |   |   |              |  
| | Canada                                         | $ | (1,010    | ) | $ | 847       |   | $ | (969        | ) | $ | (1,021       | )
| | USA                                            |   | (1,475    | ) |   | (1,004    | ) |   | (401        | ) |   | (1,770       | )
| | El Salvador                                    |   | (4,822    | ) |   | (3,151    | ) |   | (231        | ) |   | (580         | )
| | Chile                                          |   | 448       |   |   | 508       |   |   | -           |   |   | -            |  
| |                                                |   |           |   |   |           |   |   |             |   |   |              |  
| | Total                                          | $ | (6,859    | ) | $ | (2,800    | ) | $ | (1,601      | ) | $ | (3,371       | )

F-23

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|14. | United States Generally
        Accepted Accounting Principles ("US GAAP")
      The effect of the measurement
        differences between Canadian GAAP and US GAAP are summarized below.
      Under US GAAP, securities
        that are available-for-sale are recorded at fair value and unrealized
        gains or losses are excluded from earnings and recorded as a separate
        component of shareholders' equity. Declines in fair value that are other
        than temporary are written off. Under Canadian GAAP, investments in marketable
        securities are carried at the lower of cost and estimated fair market
        value. The significant changes in the consolidated financial statements
        relative to US GAAP are as follows:
      Statements of Loss(in thousands of US dollars, except for per share amounts)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                   |   | Year      |   |   | Year      |   |   | Four Months |   |   | Year         |  
| | ------------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | - | - | ------------ | -
| |                                                   |   | Ended     |   |   | Ended     |   |   | Ended       |   |   | Ended        |  
| |                                                   |   | April 30, |   |   | April 30, |   |   | April 30,   |   |   | December 31, |  
| |                                                   |   | 2004      |   |   | 2003      |   |   | 2002        |   |   | 2001         |  
| |                                                   |   |           |   |   |           |   |   |             |   |   |              |  
| | Net loss
      following Canadian GAAP            | $ | (6,859    | ) | $ | (2,800    | ) | $ | (1,601      | ) | $ | (3,371       | )
| | Loss on write-down of marketable
      securities |   | -         |   |   | -         |   |   | -           |   |   | (62          | )
| |                                                   |   |           |   |   |           |   |   |             |   |   |              |  
| | Net loss following US GAAP                        |   | (6,859    | ) |   | (2,800    | ) |   | (1,601      | ) |   | (3,433       | )
| | Unrealized
      holding gain on marketable       |   |           |   |   |           |   |   |             |   |   |              |  
| | securities                                        |   | -         |   |   | 50        |   |   | 72          |   |   | 43           |  
| | Loss on write-down
      of marketable securities |   | -         |   |   | -         |   |   | -           |   |   | 62           |  
| |                                                   |   |           |   |   |           |   |   |             |   |   |              |  
| | Comprehensive
      loss, following US GAAP       |   | (6,859    | ) |   | (2,750    | ) |   | (1,529      | ) |   | (3,328       | )
| | Weighted average number of
      common shares,   |   |           |   |   |           |   |   |             |   |   |              |  
| | computed under US GAAP (thousands of              |   |           |   |   |           |   |   |             |   |   |              |  
| | shares)                                           |   | 79,146    |   |   | 78,450    |   |   | 58,707      |   |   | 31,124       |  
| |                                                   |   |           |   |   |           |   |   |             |   |   |              |  
| | Loss per share, following US
      GAAP           | $ | (0.09     | ) | $ | (0.04     | ) | $ | (0.03       | ) | $ | (0.11        | )

| | Deficit and Comprehensive Gain (Loss)(in thousands of US dollars)
| | -----------------------------------------------------------------

| |                                                                  |   | April 30, |   |   | April 30, |  
| | ---------------------------------------------------------------- | - | --------- | - | - | --------- | -
| |                                                                  |   | 2004      |   |   | 2003      |  
| | Deficit                                                          |   |           |   |   |           |  
| | Adjusted deficit, beginning of period per US GAAP                | $ | (41,275   | ) | $ | (38,475   | )
| | Net loss per US GAAP                                             |   | (6,859    | ) |   | (2,800    | )
| | Adjusted deficit, end of period per US GAAP                      | $ | (48,134   | ) | $ | (41,275   | )
| |                                                                  |   |           |   |   |           |  
| | Accumulated Other Comprehensive
      Gain (Loss)                |   |           |   |   |           |  
| | Beginning of period per US GAAP                                  | $ | -         |   | $ | (50       | )
| | Current year other comprehensive gain (loss)                     |   | -         |   |   | 50        |  
| | Accumulated
      other comprehensive gain (loss), end of period |   |           |   |   |           |  
| | per US GAAP                                                      | $ | -         |   | $ | -         |  

| | As the Company delivers
        gold against outstanding forward sales contracts, it has determined that
        there is no impact from the adoption of Statement of Financial Accounting
        Standard ("SFAS") No. 133, Accounting For Derivative Instruments and Hedging
        Activities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-24

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|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|14. | United States
        Generally Accepted Accounting Principles- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Recent U.S. Accounting
        Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    | In June 2001, the
        Financial Accounting Standards Board ("FASB") issued SFAS No. 141, " Business
        Combinations". SFAS No. 141 mandates the purchase method of accounting
        for all business combinations initiated after June 30, 2001. In addition,
        SFAS No. 141 addresses the accounting for intangible assets and goodwill
        acquired in business combinations completed after June 30, 2001. The Company
        adopted SFAS No. 141, as required, with no material impact on its financial
        statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    | In June 2001, the
        FASB issued SFAS No. 142, " Goodwill and Other Intangible Assets",
        which revises the accounting for purchased goodwill and other intangible
        assets. Under SFAS No. 142, goodwill and other intangible assets with
        indefinite lives will no longer be systematically amortized into operating
        results. Instead, each of these assets will be tested, in the absence
        of an indicator of possible impairment, at least annually, and upon an
        indicator of possible impairment, immediately. The Company adopted SFAS
        No. 142, as required, on January 1, 2002 with no material impact on its
        financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    | In August 2001, the
        FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations".
        SFAS No. 143 requires entities to record the fair value of a liability
        for an asset retirement obligation in the period in which it is a cost
        by increasing the carrying amount of the related long-lived asset. Over
        time, the liability is accreted to its present value each period, and
        the capitalized cost is depreciated over the useful life of the related
        obligation for its recorded amount or incurs a gain or loss upon settlement.
        The Company adopted SFAS No. 143, as required, on May 1, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | In August 2001, the
        FASB issued SFAS No. 144, " Accounting for the Impairment or Disposal
        of Long- lived Assets". SFAS No. 144 was issued to resolve certain
        implementation issues that had arisen under SFAS No. 121. Under SFAS No.
        144, a single uniform accounting model is required to be used for long-lived
        assets to be disposed of by sale, whether previously held and used or
        newly acquired, and certain additional disclosures are required. The Company
        adopted SFAS No. 144, as required, with no material impact on its financial
        statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    | In April 2002, the
        FASB issued SFAS No. 145, " Rescission of FASB Statements Nos. 4, 44,
        and 64, Amendment of FASB Statement No. 13, and Technical Corrections". SFAS No. 145 updates, clarifies and simplifies existing accounting
        pronouncements, by rescinding SFAS No. 4, which required all gains and
        losses from extinguishment of debt to be aggregated and, if material,
        classified as an extraordinary item, net of related income tax effect.
        As a result, the criteria in APB No. 30 will now be used to classify those
        gains and losses. Additionally, SFAS No. 145 amends SFAS No. 13 to require
        that certain lease modifications that have economic effects similar to
        sale-leaseback transactions be accounted for in the same manner as sale-leaseback
        transactions. Finally, SFAS No. 145 also makes technical corrections to
        existing pronouncements. While those corrections are not substantive in
        nature, in some instances, they may change accounting practice. The Company
        adopted the provisions of SFAS No. 145 that amended SFAS No. 13, as required,
        on May 15, 2002 for transactions occurring after such date with no material
        impact on its financial statements. The Company adopted the remaining
        provisions of SFAS No. 145, as required, on May 1, 2003 with no material
        impact on its financial statements.

F-25

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|14. | United States
        Generally Accepted Accounting Principles- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Recent U.S. Accounting
        Pronouncements- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    | In June 2002, the
        FASB issued SFAS No. 146, " Accounting for Costs Associated with Exit
        or Disposal Activities". SFAS No. 146 was issued to address the financial
        accounting and reporting for costs associated with exit or disposal activities,
        unless specifically excluded. SFAS No. 146 requires that a liability for
        costs associated with an exit or disposal activity be recognized and measured
        at its fair value in the period in which the liability is incurred. The
        Company adopted SFAS No. 146, as required, on May 1, 2003 with the result
        that the carrying value of the Rawhide Mine and the corresponding asset
        retirement obligation was increased by $0.5 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    | In December 2002, the FASB issued SFAS
          No. 148, "Accounting for Stock-Based Compensation -- Transition and
          Disclosure". SFAS 148 amends SFAS No. 123, to provide alternative
          methods of transition for a voluntary change to the fair value based
          method of accounting for stock-based employee compensation. In addition,
          SFAS 148 amends the disclosure requirements of SFAS 123 to require prominent
          disclosures in both annual and interim financial statements about the
          method of accounting for stock-based employee compensation and the effect
          of the method used on reported results. SFAS 148 is effective for fiscal
          years beginning after December 15, 2002. The interim disclosure provisions
          are effective for financial reports containing financial statements
          for interim periods beginning after December 15, 2002. The Company adopted
          SFAS No. 148, on May 1, 2003. This change in accounting treatment increased
          expenses by $336 in the current fiscal year (Note 9).
        In January 2003, the FASB issued FASB
          Interpretation No. 46 ("FIN 46"), " Consolidation of Variable Interest
          Entities, an Interpretation of ARB No. 51."FIN 46 requires certain
          variable interest entities to be consolidated by the primary beneficiary
          of the entity, if the equity investors in the entity do not have the
          characteristics of a controlling financial interest or do not have sufficient
          equity at risk for the entity to finance its activities without additional
          subordinated financial support from other parties. FIN 46 is effective
          for all new variable interest entities created or acquired after January
          31, 2003. For variable interest entities created or acquired prior to
          February 1, 2003, the provisions of FIN 46 must be applied for the first
          interim or annual period beginning after June 15, 2003. However, in
          December 2003, the FASB published a revision to FIN 46 to clarify some
          of the provisions of FIN 46, and to exempt certain entities from its
          requirements. Under the new guidance, there are new effective dates
          for companies that have interests in structures that are commonly referred
          to as special-purpose entities. The rules are effective in financial
          statements for periods ending after March 15, 2004. The adoption did
          not have any impact on the Company's financial statements.
|   
|    | On April 30, 2003,
        the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative
        Instruments and Hedging Activities". SFAS No. 149 amends and clarifies
        accounting for derivative instruments, including certain derivative instruments
        embedded in other contracts, and for hedging activities under SFAS No.
        133. The new guidance amends SFAS No. 133 for decisions made as part of
        the Derivatives Implementation Group ( "DIG") process that effectively
        required amendments to SFAS No. 133, and decisions made in connection
        with other FASB projects dealing with financial instruments and in connection
        with implementation issues raised in relation to the application of the
        definition of a derivative and characteristics of a derivative that contains
        financing components. In addition, it clarifies when a derivative contains
        a financing component that warrants special reporting in the statement
        of cash flows. SFAS No. 149 is effective for contracts entered into or
        modified after June 30, 2003 and for hedging relationships designated
        after June 30, 2003. The Company adopted SFAS 149, as required, on July
        1, 2003, with no material impact on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-26

---

|Pacific
      Rim Mining Corp. Notes to Consolidated Financial Statements
      April 30, 2004 and 2003In thousands of U.S. dollars
|-----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                   

|14. | United States
        Generally Accepted Accounting Principles- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | Recent U.S. Accounting
        Pronouncements- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    | In May 2003, the
        FASB issued SFAS 150, "Accounting for Certain Financial Instruments
        with Characteristics of both Liabilities and Equity". SFAS No. 150
        establishes standards for classifying and measuring as liabilities certain
        financial instruments that embody obligations of the issuer and have characteristics
        of both liabilities and equity. SFAS No. 150 is effective for all financial
        instruments created or modified after May 31, 2003 and otherwise is effective
        at the beginning of the first interim period beginning after June 15,
        2003. The Company adopted SFAS 150, as required, on August 1, 2003, with
        no material impact on its financial statements.
|   
|    | In December 2003,
        the Securities and Exchange Commission ("SEC") issued Staff Accounting
        Bulletin ("SAB") No. 104, Revenue Recognition. SAB 104 revises or rescinds
        portions of the interpretive guidance included in Topic 13 of the codification
        of staff accounting bulletins in order to make this interpretive guidance
        consistent with current authoritative accounting and auditing guidance
        and SEC rules and regulations. The adoption of SAB 104 did not have a
        material effect on the Company's financial statements.                                                                                                                                                                

F-27

---

3

ITEM 19:             EXHIBITS

Exhibits as follows:

|Exhibit |  | Exhibit Description                                                                               
|------- |  | --------------------------------------------------------------------------------------------------
|Number  |  |                                                                                                   
|        |  |                                                                                                   
|12.1    |  | Certification of Chief Executive
      Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|12.2    |  | Certification of Chief Financial
      Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|13.1    |  | Certification of Chief Executive
      Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|13.2    |  | Certification of Chief Financial
      Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|14.1    |  | Consent of Staley & Okada &
      Partners                                                        
|        |  |                                                                                                   
|14.2    |  | Consent of PricewaterhouseCoopers
      LLP                                                       

---

4

SIGNATURE

Pursuant to the requirements of Section 12 of the Securities
  Exchange Act of 1934, the Company certifies that it meets all of the requirements
  for filing on Form 20-F and has duly caused this Annual Report to be signed
  on its behalf by the undersigned, thereunto duly authorized.

|      |                | PACIFIC RIM MINING CORP.    
|----- | -------------- | ----------------------------
|      |                |                             
|      |                |                             
|Date: | April 19, 2005 | /s/ Thomas C. Shrake        
|      |                | Thomas C. Shrake            
|      |                | Its: Chief Executive Officer

---

5

EXHIBITINDEX

|Exhibit |  | Exhibit Description                                                                               
|------- |  | --------------------------------------------------------------------------------------------------
|Number  |  |                                                                                                   
|        |  |                                                                                                   
|12.1    |  | Certification of Chief Executive
      Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|12.2    |  | Certification of Chief Financial
      Officer pursuant to s.302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|13.1    |  | Certification of Chief Executive
      Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|13.2    |  | Certification of Chief Financial
      Officer pursuant to s.906 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                   
|14.1    |  | Consent of Staley & Okada &
      Partners                                                        
|        |  |                                                                                                   
|14.2    |  | Consent of PricewaterhouseCoopers
      LLP                                                       

---