UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F

(Mark One)

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

or

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

For the fiscal year ended December 31, 2003

or

[  
]               
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from________________ to __________________

Commission file number 0-17791

Twin Mining Corporation

(Exact name of registrant as specified in its charter)



Incorporated in the Province of British Columbia on March 6, 1985
and continued into the Province of Ontario effective March 15, 2000

(Jurisdiction of incorporation or organization)



Suite 1250, 155 University Avenue, Toronto, Ontario, Canada M5H 3B7

(Address of principal executive offices)



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

|Title of each                    |  | Name of each exchange                
|-------------------------------- |  | -------------------------------------
|Class                            |  | on which registered                  
|________________________________ |  | _____________________________________



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:



(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.  As ofDecember 31, 2003: 89,920,654 common shares



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

Yes

[X]            No

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

Item 17 
[X]

Item 18

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In the Annual Report furnished in this Form 20-F, unless otherwise specified, all monetary amounts are expressed in Canadian dollars. The noon rate of exchange reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars on February 26, 2004 was U.S.$1.00 = Cdn$1.3401.   A table disclosing the high, low, year-end, and average exchange rates for the previous five fiscal years is located in ITEM 3
- Selected Financial Data.

THIS REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND IS SUBJECT TO THE SAFE HARBOR CREATED BY THAT SECTION. FORWARD LOOKING STATEMENTS CONTAINED IN THIS REPORT INCLUDE, WITHOUT LIMITATION, STATEMENTS IN THIS REPORT RELATING TO EXPLORATION ACTIVITIES PROPOSED TO BE UNDERTAKEN BY THE CORPORATION AND EXPECTED RESULTS THEREFROM AS SET OUT BELOW UNDER ITEM 3 "KEY INFORMATION
- SELECTED FINANCIAL DATA" AND CERTAIN EXPECTATIONS OF MANAGEMENT OF THE CORPORATION AS SET OUT BELOW UNDER ITEM 5 "OPERATING AND FINANCIAL REVIEW AND PROSPECTS".  FACTORS THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE SUCH FORWARD LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, THOSE FACTORS, INCLUDING RISK FACTORS, SET FORTH BELOW UNDER ITEM 3 "KEY INFORMATION
- RISK FACTORS" AND ITEM 5 "OPERATING AND FINANCIAL REVIEW AND PROSPECTS".

Part I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

Selected Financial Data

Set forth in the tablesbelow are selected financial data with respect to the Corporation's financial condition and results of operations for the five most recent financial years. In Table 1, the selected financial data were prepared in accordance with accounting principles generally accepted ("GAAP") in Canada, which, for the purposes of these data, conform in all material respects to accounting principles generally accepted in the United States, and are qualified by reference to the U.S. GAAP Reconciliation information, indexed herein as ITEM 19(a)(the Corporation has responded to ITEM 8in lieu of responding to this item) and by reference to "Management's Discussion and Analysis" in the annual report furnished pursuant to ITEM 17 hereof (and ITEM 19 (b)). In Table 2, the selected financial data were prepared in accordance to U.S. GAAP. The Corporation is in the exploration stage and has not commenced commercial operations, consequently the data disclosed herein are not indicative of future financial position or results of operations.

2.

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|                                                                                               | Table 1
      - Prepared in accordance with Canadian GAAP
(Canadian Dollars, In Thousands, except per share data)
|---------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------
|                                                                                               |                                                                                                                  
|                                                                                               |                                                                                                                  
|FINANCIAL POSITION AS AT                                                                       | 2003                                                                                                             
|                                                                                               | $                                                                                                                
|Cash                                                                                           | 720                                                                                                              
|Other current assets                                                                           | 536                                                                                                              
|Fixed assets                                                                                   | 60                                                                                                               
|Mineral properties                                                                             | 30,466                                                                                                           
|Total assets                                                                                   | 31,782                                                                                                           
|                                                                                               |                                                                                                                  
|Current liabilities                                                                            | 3,118                                                                                                            
|Long-term liabilities                                                                          | -                                                                                                                
|Future income taxes                                                                            | 2,117                                                                                                            
|Share capital                                                                                  | 47,743                                                                                                           
|Deficit                                                                                        | (21,196)                                                                                                         
|OPERATING RESULTS FOR THE YEARS ENDED                                                          | 31,782                                                                                                           
|Interest income                                                                                | (23)                                                                                                             
|General and administrative expenses                                                            | 1,037                                                                                                            
|(Gain)/loss from foreign exchange                                                              | (18)                                                                                                             
|Future income tax (recovery)                                                                   | (922)                                                                                                            
|Mineral property costs written off                                                             | 31                                                                                                               
|Loss, per Canadian GAAP                                                                        | 105                                                                                                              
|Loss per share, per Canadian GAAP

Number of common shares issued and subscribed, in Thousands | $0.001


89,921                                                                                                  

* - excludes 6,160,328 special warrants issued on December 31, 1999, and converted into common shares in 2000 (see Exhibit 2.17 included with the 1999 Form 20-F).

3.

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|                                               | Table 2
- Prepared in accordance with U.S. GAAP
(Canadian Dollars, In Thousands, except per share data)
|---------------------------------------------- | -------------------------------------------------------------------------------------------------------
|                                               |                                                                                                        
|FINANCIAL POSITION AS AT                       | 2003                                                                                                   
|                                               | $                                                                                                      
|Cash                                           | 720                                                                                                    
|Other current assets                           | 536                                                                                                    
|Fixed assets                                   | 60                                                                                                     
|Mineral properties                             | 4,395                                                                                                  
|Total assets                                   | 5,711                                                                                                  
|                                               |                                                                                                        
|Current liabilities                            | 3,118                                                                                                  
|Long-term liabilities                          | -                                                                                                      
|Future income taxes                            | 2,117                                                                                                  
|Share capital                                  | 47,743                                                                                                 
|Deficit                                        | (47,267)                                                                                               
|OPERATING RESULTS FOR THE YEARS ENDED          | 5,711                                                                                                  
|Loss, per Canadian. GAAP                       | 105                                                                                                    
|Change in accounting policy, net of tax        | -                                                                                                      
|Development and exploration costs              | 4,499                                                                                                  
|Reversal of mineral property costs written off | (31)                                                                                                   
|Income tax (recovery) costs                    | 922                                                                                                    
|Loss, per U.S. GAAP                            | 5,495                                                                                                  
|Loss per share, per U.S. GAAP                  | $0.061                                                                                                 

The following table discloses certain high, low and average exchange rates for converting Canadian dollars into US dollars for the five years ended December 31 and six most recent months in the last financial year:

|Period                                                                                                                                                                                                                                 | End of
      Period                             | Average                                         | High                                            | Low                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | -----------------------------------------------
|Year ended December 31, 1999                                                                                                                                                                                                           | 0.680                                           | 0.672                                           | 0.686                                           | 0.652                                          
|Year ended December 31, 2000                                                                                                                                                                                                           | 0.666                                           | 0.673                                           | 0.691                                           | 0.639                                          
|Year ended December 31, 2001
Year ended December 31, 2002
Month ended July 31, 2003
Month ended August 31, 2003
Month ended September 30, 2003
Month ended October 31, 2003
Month ended November 30, 2003
Year ended December 31, 2003 | 0.628
0.639
0.725
0.722
0.747
0.758
0.771
0.756 | 0.640
0.640
0.726
0.716
0.736
0.758
0.765
0.759 | 0.691
0.659
0.746
0.729
0.747
0.765
0.771
0.771 | 0.623
0.620
0.709
0.709
0.722
0.747
0.756
0.639



Risk Factors

Nature of Mineral Exploration and Mining

At the present time, the Corporation does not hold any interest in a mining property in production. The Corporation's viability and potential success lie in its ability to develop, exploit and generate revenue out of

4.



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mineral deposits.  The exploration and development of mineral deposits involve significant financial risks over a significant period of time which even a combination of careful evaluation, experience and knowledge may not eliminate.  While discovery of a mine may result in substantial rewards, few properties which are explored are ultimately developed into producing mines.  Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a site.  It is impossible to ensure that the current or proposed exploration programs on exploration properties in which the Corporation has an interest will result in a profitable commercial mining operation.

The operations of the Corporation are subject to all of the hazards and risks normally incident to exploration and development of mineral properties, any of which could result in damage to life or property, environmental damage and possible legal liability for any or all damage.  The activities of the Corporation may be subject to prolonged disruptions due to weather conditions depending on the location of operations in which the Corporation has interests.  Hazards, such as unusual or unexpected formation, rock bursts, pressures, cave-ins, flooding or other conditions may be encountered in the drilling and removal of material.  While the Corporation may obtain insurance against certain risks in such amounts as it considers adequate, the nature of these risks are such that liabilities could exceed policy limits or could be excluded from coverage.  There are also risks against which the Corporation cannot insure or against which it may elect not to insure.  The potential costs which could be associated with any liabilities not covered by insurance or in excess of insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting the future earnings and competitive position of the Corporation and, potentially, its financial position.

Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as its size and grade, proximity to infrastructure, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Corporation not receiving an adequate return on invested capital.

Fluctuating Prices

Factors beyond the control of the Corporation may affect the marketability of any diamonds, gold or any other minerals discovered.  Resource prices have fluctuated widely and are affected by numerous factors beyond the Corporation's control.  The effect of these factors cannot accurately be predicted. The following table sets forth in U.S. dollars the high, average and low sales price of gold for the last five years:

Year

High

Low

Average

Close



1999

326

253

279

290

2000

313

264

279

275

2001

293

256

271

277

2002

349

278

310

347

2003

416

320

363

416



Source:  www.kitco.com

(Historical London Fix)

Permits and Licenses

The operations of the Corporation require licenses and permits from various governmental authorities.  The Corporation believes that it presently holds all necessary licenses and permits required to carry on with activities which it is currently conducting under applicable laws and regulations and the Corporation believes it is presently complying in all material respects with the terms of such licenses and permits.  However, such licenses and permits are subject to change in regulations and in various operating circumstances.  There can be no assurance that the Corporation will be able to obtain all necessary licenses and permits required to carry out exploration, development and mining operations at its projects.

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Competition

The mineral exploration and mining business is competitive in all of its phases.  The Corporation competes with numerous other companies and individuals, including competitors with greater financial, technical and other resources than the Corporation, in the search for and the acquisition of attractive mineral properties.  The ability of the Corporation to acquire properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable properties or prospects for mineral exploration.  There is no assurance that the Corporation will continue to be able to compete successfully with its competitors in acquiring such properties or prospects.

Financing Risks

The Corporation has limited financial resources and there is no assurance that additional funding will be available to it for further exploration and development of its projects or to fulfill its obligations under applicable agreements.  Although the Corporation has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Corporation will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.  Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the property interests of the Corporation with the possible dilution or loss of such interests.

No Assurance of Titles

The acquisition of title to mineral projects is a very detailed and time-consuming process. Although the Corporation has taken precautions to ensure that legal title to its property interests is properly recorded in the name of the Corporation, there can be no assurance that such title will ultimately be secured.  The interests of the Corporation in its properties in Indonesia are held under applications for contracts of work, which have yet to receive final approval from the Government of Indonesia, and therefore may not be approved at all or, if approved, may not cover all of the area applied for.  Furthermore, there is no assurance that the interests of the Corporation in any of its properties may not be challenged or impugned.

Environmental Regulations

The operations of the Corporation are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution.  A breach of such legislation may result in the imposition of fines and penalties.  In addition, certain types of operations require the submission and approval of environmental impact assessments.  Environmental legislation is evolving in a manner which means stricter standards, and enforcement, fines and penalties for non-compliance are more stringent.  Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and their directors, officers and employees.  The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.

Currency Fluctuation

The Corporation's currency fluctuation exposure is primarily to the US dollar as the Atlanta Gold Property is in the United States of America and all material commitments on the Atlanta Gold Property and the Corporation's Indonesian properties are in Canadian or US dollars.  Such fluctuations may materially affect the Corporation's financial position and results of the Corporation.

Conflicts of Interest

The directors and officers of the Corporation may serve as directors or officers of other public resource companies or have significant shareholdings in other public resource companies.  Situations may arise in

6.

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connection with potential acquisitions and investments where the other interests of these directors and officers may conflict with the interests of the Corporation.  In the event that such a conflict of interest arises at a meeting of the directors of the Corporation, a director is required under the Business Corporations Act (Ontario) to disclose the conflict of interest and to abstain from voting on the matter.

From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program.  It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment.  In determining whether or not the Corporation will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Corporation may be exposed and its financial position at that time.

Estimates of Reserves, Mineral Deposits and Production Costs

Although the reserve and mineral deposit figures included or incorporated by reference herein have been carefully prepared by the Corporation, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and no assurance can be given that any particular level of recovery of gold or other mineral from reserves will in fact be realized or that an identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be economically exploited.  Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions.  In addition, the grade of ore ultimately mined may differ from that indicated by drilling results.  Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations.  Material changes in reserves, grades, stripping ratios or recovery rates may affect the economic viability of projects.  Reserves are reported as general indicators of mine life.  Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations.  There is a degree of uncertainty attributable to the calculation of reserves and corresponding grades being mined or dedicated to future production.  Until ore is actually mined and processed, reserves and grades must be considered as estimates only.  In addition, the quantity of reserves may vary depending on mineral prices.  Any material change in reserves, or grades or stripping ratios will affect the economic viability of the projects.  In addition, there can be no assurance that gold recoveries or other mineral recoveries in pilot plant tests will be duplicated during production.

U.S. Mining Law

Proposed legislation has been introduced in the United States Congress which would supplant or radically alter the provisions of the Mining Law of 1872 which currently applies to unpatented mining claims held in the United States of America.  The Atlanta Gold Property includes unpatented mining claims.  If enacted, such legislation could substantially increase the cost of holding unpatented mining claims and could materially impair the ability to develop mineral resources on unpatented mining claims.  Under the proposed legislation, the ability of companies to obtain a patent on unpatented mining claims would be nullified or substantially impaired.  Moreover, such proposed legislation contains provisions for the payment of royalties to the federal government in respect of production from unpatented mining claims, which could materially and adversely affect the potential for development of such claims and the economics of operating existing mines on federal unpatented mining claims. In addition, the proposed legislation may prohibit mineral exploration or development, even on existing unpatented mining claims, unless and until a federal agency finds that mining is a suitable use of the land in question, a review process which could take years.

Incorporation

The Corporation exists under the laws of the Province of Ontario, Canada and five of the Corporation's six directors and all of its officers are residents of Canada. Consequently, it may be difficult for United States

7.



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investors to effect service of process within the United States upon the Corporation or upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States securities laws. A judgment of a U.S. court predicated solely upon such civil liabilities may be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Corporation predicated solely upon such civil liabilities.

ITEM 4.

INFORMATION ON THE COMPANY

History and development of the Company

Twin Mining Corporation (the "Corporation") was incorporated under the laws of the Province of British Columbia under the name Atlanta Gold Corporation by memorandum of incorporation dated March 6, 1985. On April 3, 1997, Atlanta Gold Corporation acquired Voisey Bay Resources Inc. pursuant to an amalgamation by way of an arrangement effected under the Companies Act (British Columbia) and changed the name of Atlanta Gold Corporation to Twin Gold Corporation.  On March 15, 2000, the Corporation was continued under the Business Corporations Act (Ontario) and the name of the Corporation was changed from Twin Gold Corporation to Twin Mining Corporation.  The registered and executive office of the Corporation is located at Suite 1250, 155 University Avenue, Toronto, Ontario M5H 3B7.  The Corporation has a field office located at Suite B, 1509 Tyrell Lane, Boise, Idaho, 83706 and a registered head office for the territory of Nunavut, Canada, located at the P.O. Box 1779, Building 1088C, Iqaluit, Nunavut, X0A 0H0.

The Corporation has four subsidiaries, Atlanta Gold Corporation of America, Inc. ("Atlanta U.S.") (a Nevada company), Voisey Bay Resources Inc. ("Voisey Bay") (a British Columbia company), and Twin Gold Cayman Corporation and Twin Gold Layuh Mining (Resources) Corporation ("Twin Gold Layuh") (each of which is a Cayman Islands company), all of which are wholly-owned.

The Corporation is engaged in the exploration and development of mineral resource properties. The Corporation has various interests in five mineral resource properties: the Torngat diamond property (the "Torngat Property") located in the Province of Quebec, consisting of a 100% interest in three Mine Exploration permits; the Jackson Inlet diamond property ("Jackson Inlet") consisting of 532 mineral claims located on the Brodeur Peninsula of Baffin Island; the Atlanta gold property (the "Atlanta Gold Property") located in the State of Idaho, consisting of 35 patented and 113 unpatented mining claims; the Abitibi Gold Property ("Abitibi") located in eastern Quebec, consisting of 91 mining claims; and one gold property having an area of 86,880 hectares located in Kalimantan, Indonesia.

In addition to the interests currently held by the Corporation in mineral resource properties, management of the Corporation reviews opportunities to acquire interests in further mineral resource properties as such opportunities become available to the Corporation.

Properties

Torngat Property, Quebec

Between July and November 1999, the Corporation was issued four contiguous exploration permits covering a total of 444 square kilometres by the Quebec Ministry of Natural Resources. A fifth exploration permit covering 62.85 square kilometres was issued in 2000. In 2001, the Corporation renewed three of the permits covering 327 square kilometres. Total costs of $218,060 for the two abandoned permits were written off during 2001. In 2002, the three permits were again renewed. The permits are valid for five years and may be renewed for an additional five-year period. The Corporation's efforts to date have been directed towards a series of five (5) diamondiferous kimberlite dyke systems that strike over a combined length of 37 km.



8.

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Location and Access

The
Torngat Property is located in northeast Quebec on the eastern shore of Ungava
Bay.  The nearest habitation is the town of Kangiqsualujjuaq (formerly
George River) about 90 kilometres south-southwest of the Torngat Property and
the town of Kuujjuaq (formerly Fort Chimo) about 250 kilometres southwest of the
Torngat Property.  Montreal is approximately 1,500 kilometres south-southwest of the Torngat Property. Access to the Torngat Property is by boat, fixed-wing aircraft or helicopter from Kuujjuaq or Kangiqsualujjuaq, both of which have scheduled air service.

The central part of the Torngat Property is a plateau about 400 metres above sea level and is part of a larger geographical entity, the George Plateau.  The plateau is broken by steep-sided gorges and fjords.  The largest fjord is Alluviaq Fjord that bisects the property and trends in a southeast-northwest direction.  The first of the dikes discovered on the Torngat Property is exposed in the steep-sided walls on the northern side of Alluviaq Fjord.

The Torngat Property is above the tree line.  The climate is arctic with an average annual temperature between -7.5° Celsius and -5° Celsius (18.5° Fahrenheit and 23° Fahrenheit). The property area receives about 400 millimetres to 500 millimetres of precipitation annually, with about 45 per cent of the total falling as snow.  There are normally about 20 to 40 frost free days annually.

Regional and Property Geology

The Torngat Property lies within the Torngat Orogen.  The crust in the Orogen is thickened because Rae Province rocks were thrust below the Nain Province more than a billion years ago.

The Torngat Property covers three different tectonic regimes.  To the southwest are quartzo-felspathic gneisses of the Rae Province.  Locally, there are infolds of Aphebian age shallow water sedimentary rocks of the Lake Harbour Group, which are progressively deformed to the northeast by the Abloviak Shear Zone.  The predominant rock type on the Torngat Property is the Tasiuyak Gneiss, a northwest trending belt of garnet-quartz-plagioclase gneisses which extend southwards into Labrador.  The gneisses are considered to be altered sedimentary rocks.  The northeastern part of the Torngat Property is underlain by granulitic gneiss of the Burwell Terrane.

The rocks of the Torngat Orogen strike northwest-southeast within the Torngat Property.  Cross-cutting the gneisses, there are a number of kimberlite dikes.  The first dikes discovered are located on the northern shore of Alluviaq Fjord.  These dikes strike northeast and dip subvertically.  They are exposed on the steep side of the fjord, typically in crevices where the kimberlite has been eroded preferentially and the debris from weathering flushed from the crevice by water flowing over the fjord wall.

Three dikes in this area have been sampled by the Corporation numbered, from east to west, Torngat 1 to 3.  The dikes are approximately 2.5 metres, 1 metre and 0.6 metres in thickness, respectively.  Torngat 1, the largest dike, has been traced through discontinuous exposure about 1.5 kilometres across the plateau to an unnamed lake. A number of other dikes have been identified by the Corporation and three narrow dikes have been observed so far at sea level on the south side of Alluviaq Fjord. The Corporation completed a lineament study of the property using air photographs.  This study demonstrated that there are a number of linear features striking northeast across the property on the northern side of Alluviaq Fjord.  South of the fjord, the trend of the linear feature swings to north-south.  Near the Baufremont River, in an area called Torngat South, other kimberlite dikes have been identified and one has been sampled.  One sample is from float overlying a dike estimated to be about 3 metres wide.  Based on outcrop patterns, other parallel dikes are recognized in this area. The individual dikes are dark green and generally coarse-grained. Torngat1 has a thin selvage of fine-grained kimberlite on both sides, which is typically about 10 to 15 centimetres thick.  Contacts between the coarse-grained and fine-grained kimberlite and between the kimberlite and the enclosing rocks are sharp.  The dikes outcrop recessively, and the fine-grained kimberlite is more resistant to weathering than the coarse-grained kimberlite.  Torngat 1 appears to bifurcate in the fjord cliff face, so that a horse of wall rock is surrounded by kimberlite.

9.

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Mineralogically, the dikes are made up of olivine, which is frequently serpentinized, and phlogopite, contained in a matrix of fine-grained phlogopite, olivine, spinel (titanium-magnesium chromites, magnesium-aluminum chromites and titanium-magnesium magnetites), perovskite and carbonate.  Previous geochemical work completed by staff and students of the University of Quebec in Montreal showed that the rocks contain very low silica and are ultra potassic, and that titania is high and alumina is low.  Based on these results, and the mineralogy, these rocks are classified as Type 1 kimberlites.

2001 Exploration Program

The Corporation had three objectives in taking the mini-bulk samples, being to determine that the dyke produces commercial size diamonds, to assess the relationship between micro-diamond results and mini-bulk sample macro-diamond recoveries and to assess the macro-diamond distribution along the dyke.

Considering that the objectives of the mini-bulk samples have been positively met plus the positive results from the 50 kilogram grab-samples, the Corporation is now focusing on the 4.5 kilometre long Torngat North area. In addition, the ongoing exploration program for the Torngat Property is expected to identify other sections of the dyke system of higher diamond grade.

Between September 16 and 20, 2001, a total of 9 samples totaling 2,591 kilograms was collected from the Torngat North area. The position of the samples ensures a complete coverage of this section of the dyke. Samples of 300 kilograms were taken at intervals of 100 to 400 meters. Emphasis was given to taking a representative 300-kilograms sample from each of the sites where previous 50 kilograms grab samples had yielded high diamond counts.

Mini-bulk sample analysis
- Summer/Fall 2002

In 2002 samples from two anomalously diamondiferous dyke segments were processed. In January 2003, fifteen samples, ranging in weight from 24 kg to 100 kg were analyzed for diamonds by caustic fusion (100-micron cut-off size), selection and description was completed by SGS Lakefield Research Limited ("Lakefield") and reviewed by AMEC E & C Services Limited ("AMEC").

Analytical results of the 900-meter and 400-meter segment, respectively, are tabulated below.



Dyke Segment Diamond Summary- According to square mesh sieve analysis provided by Lakefield

Sampled
      segment900m dyke segment
      (578.52kg)400m dyke segment
      (432kg)Sieve size
    (mm square mesh)Number of diamondsWeight of diamonds    (carats)Number of diamondsWeight of diamonds    (carats)0.85 to 1.1830.04251130.034710.600 to 0.850100.046633120.050980.425 to 0.600270.038755140.0196300.300 to 0.425380.020585190.0109650.212 to 0.300690.015260380.0078400.150 to 0.212990.007448500.0032300.100 to 0.1501030.002725610.001585Total3490.1739171970.128940




10.

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Samples listed in this table make up the 900 meter TORNGAT North dyke segment

Sample No.Sample Weight (Kg)Diamonds recoveredTotal Diamond Weight In Sample           (Carats)GL10101.80990.02683588757324.00320.006175DB09100.00600.017590GL0972.52470.03028588757424.00140.002190DB03100.00430.015010GL0881.25200.03238588757524.0020.000060DU character50.95320.043387TOTAL578.523490.173917


1. 13 diamonds measure greater than 0.5 mm in three dimensions and

2. 41 diamonds measure greater than 0.5 mm in two dimensions.



Samples listed in this table make up the 400 meter TORNGAT North dyke segment

Sample No.Sample Weight (Kg)Diamonds recoveredTotal diamond weight   in sample                 (Carats)DB04100.00360.021595DB01100.00630.02997588758724.00150.021265DB06100.00530.011465GL0784.00290.04207088758824.0010.002570TOTAL432.001970.128940


12 diamonds measure greater than 0.5 mm in three dimensions and

28 diamonds measure greater than 0.5 mm in two dimensions



Largest diamonds discovered to date from the 900 meter and 400 meter dyke sections are 2.90 x 2.50 x 1.80mm (0.065 ct) and 1.85 x 1.25 x 1.07mm (0.0142 ct), respectively.  The diamonds are very white, mostly transparent and of high preservation, as previously described by Lakefield.

These results and work to date on the project relate to exposed dyke intervals that strike roughly at right angles to stratigraphy.  Cross faults, that are believed to occupy overburden covered valley floors, also intersect dykes at rights angles and potential exists for dyke width enhancement where dykes and cross structures exist.  Additional surveying and ultimately diamond drilling would be required to evaluate overburden covered sections of dyke material.

The company's diamond project focus in the coming year is directed towards its large tonnage potential Jackson Inlet project. Consequently, management will pursue other options, including Joint Venture participation to advance the project in the coming year.

Property Status and Acquisition

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Sufficient work has been completed to secure the mining rights: 1) on the first permit staked, totaling 50 square kilometers, for the next 10 years; 2) on the second permit totaling 101 square kilometers, until 2006; and 3) on the third permit, totaling 176 square kilometers, until 2005.

Jackson Inlet, Baffin Island

Pursuant to agreements dated April 27, 2000 and November 7, 2000 (the
"Agreement"), the Corporation acquired a 100% interest in three mineral claims from Helix Resources Inc. ("Helix") covering a total of 7,128.5 acres (28.85 square kilometres). One of the claims, covering 2,480 acres (10.03 square kilometres), was allowed to lapse because of apparent low potential. These mineral claims were acquired by the Corporation by paying $50,000 and issuing 30,000 common shares. To maintain the Agreement in good standing, Helix was paid $100,000 and issued 45,000 common shares of the Corporation in 2001. In 2002, the Corporation paid $150,000 and issued another 75,000 common shares of the Corporation to Helix. In 2003, the Corporation issued 105,000 additional common shares and paid $200,000 in January 2004 to Helix. In order to maintain a 100% interest, the Corporation is required to make further payments totaling $350,000 and to issue 120,000 common shares by December 31, 2006. In addition, a payment of $500,000 is due upon receipt of all development permits and a payment of $1,000,000 plus 500,000 common shares is due upon production of 500,000 carats. Subsequently, Helix is to receive a 5% net profits interest and a 1% gross royalty after crediting all previous payments. In May 2000, the Corporation staked 16 additional claims covering 106 square kilometres (26,290 acres) over nearby potential kimberlite target areas chosen in consultation with Helix. In 2001, the Corporation staked 61 mineral claims covering 529.77 sq. km (130,908.35 acres) and paid an initial filing fee of $13,091 and in 2002, the Corporation staked another 32 mineral claims covering 334.43 sq. km (82,640 acres) and paid an initial filing fee of $8,264. During the current year, the Corporation staked 426 additional mineral claims in the region covering 4,118 sq. km (1,017,593 acres) and paid an initial filing fee of $101,759. Five of the claims staked in prior years were allowed to lapse. Total direct exploration costs of $29,806 for the five abandoned claims were written off during the year. By the end of the 2003, the Corporation owned a 100% interest in 532 mineral claims totaling 5,086 sq. km (1,256,781 acres) within the region.

Location and Access

The Jackson Inlet cluster of kimberlite pipes is located 12 kilometres east of Tidewater on the Brodeur Peninsula, on the west coast of Baffin Island. It is centered 3.3 kilometres south of Jackson River at 73°14' 48" latitude north and 88°16' 12" longitude west. Approximately 100 kilometres to the east is the community of Arctic Bay (Ikpiarjuk), which is linked by a 21 kilometre all-weather highway to the more easterly Nanisivik zinc mine and townsite.

Arctic Bay and Nanisivik have First Air Boeing 727 jet service twice weekly. Marine shipping companies make the first scheduled delivery in mid-July and the last in mid-September. Navigable waters of Admiralty Inlet, Lancaster Sound and Prince Regent Inlet bound the Brodeur Peninsula.

Geology

Flat-lying ordovician and silurian carbonates are exposed along the steep coastline of the Brodeur Peninsula and in the deeply incised river gorges. From the air, evidence of the Jackson Inlet cluster of kimberlite pipes is manifested as three dark brown circular patches along a northeast-southwest axis and surrounded by a 500 metres by 600 metres halo of tan colouration. Within the halo are patches of darker tan colour.

The unweathered kimberlite, sampled from three pipes, has a dark brownish green, fine-grained ground mass which comprises 20% to 30% of the rock. The remaining 70% to 80% is primarily light green olivine of random dimensions up to 2 centimetres. Fragments of limestone, shale and gneiss are also present.  Although hand specimens are only slightly magnetic, many contain 5% to 10% very magnetic fragments. These

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fragments resemble a siliceous iron-manganese shale or iron formation and are prominent in the weathered material in permafrost and "soil" above the pipes.

Thin sections of various kimberlite samples were examined by microscope at Lakefield. The mineral assemblage consists of abundant olivine macrocrysts as well as scarce phlogopite and garnet macrocrysts set in a fine grained serpentine matrix. The presence of pyroclastic texture suggests crater facies material and a relatively shallow level of erosion.



2001 Airborne Survey

In March 2001, the Corporation commissioned a helicopter-borne magnetic and electromagnetic survey by Fugro-SIAL Geosciences Inc., of St. Laurent, Quebec, ("Fugro-SIAL") which involved flying 6,641-line kilometers. It was completed in May 2001. Lines were flown in both northeast and northwest directions and spaced 100 meters apart. It defined Freightrain as one large kimberlite pipe and detected 13 additional prospective kimberlitic pipes.

A regional flight line spacing of 250 meters was selected as adequate to detect the larger kimberlite pipes. The survey detected 14 magnetic anomalies  (including Freightrain). The profiles are suggestive of shallow intrusives and are listed in the table below.



Magnetic
AnomaliesApproximate
Diameter (metres)Magnetic
AnomaliesApproximate
Diameter (metres)Freightrain500Ano 4D600Ano 1150Ano 5600Ano 2100Ano 6300Ano 3
    - Cargo1140Ano 7300Ano 4A240Ano 8 - Cargo250Ano 4B - Cargo3300Ano 930Ano 4C600Ano 1060




Spring 2001 Sampling Program

In April 2001, the Corporation commenced excavation of larger bedrock kimberlite samples from the two most promising Freightrain pipe outcrop areas tested in 2000, namely, JI-6 (0.023 carats in 21 kilograms (1.10 carats/tonne)) and JI-3 (1.049 carats in 560 kilograms (1.87 carats/tonne)). The results of the Lakefield DMS processing to recover +1 millimetre diamonds are presented on the following table as sample #1 and #2 respectively. Sample #2 produced the breakthrough, the Corporation's first 1-carat gem quality diamond.

ParameterUnitsSample # 1Sample # 2TotalSample weight processedDry tonnes1.9116.518.41Diamonds  + 1 millimetreNumber
Carats12
0.56074
3.08486
3.644Two largest DiamondsCarats
Size     (millimetres)0.311
3.28x2.99x2.70
3.19x2.17x1.701.217
6.98x5.64x3.60
3.90x3.19x2.40


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As can be established from the diamonds presented in length categories below, the percentage of larger stones is higher in the 18.4 tonnes taken in 2001 than in the sample (0.58 tonnes) taken in 2000 from the same sites, i.e. 38% vs. 25% of +1 millimetre stones equal or exceed 2 millimetres in length. These diamond distributions in favour of larger sizes provide an indication of the high value potential of Freightrain.



Sample DiamondNumber of diamonds categorized by lengthTonnes1
    - 2 millimetres2 - 3 millimetres+ 3 millimetresSample # 1, JI-6 site1.91732JI-6 (Year 2000 Sample)0.02300TOTAL
    - Sample # 1 site1.931032Sample # 2, JI-3 site16.5046226JI-3 (Year 2000 Sample)0.56612TOTAL
    - Sample # 2 site17.0652238




Summer 2001 Core Drilling Program

In July 2001, the Corporation commenced constructing a camp suitable for housing up to 20 people.  The camp is located approximately 3 kilometers north of the Freightrain pipe, on a terrace adjacent to the Jackson River. All equipment and materials brought to the site were first delivered to Nanisivik either by scheduled ship or by First Air Boeing 727 aircraft. Transportation to the site was by Twin Otter that landed on a strip

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located within the Jackson River estuary, approximately 5km west of the camp. Helicopter services provided the link between the landing strip and the camp or work sites.

Core Drilling Program and Results - Freightrain

Seventeen holes, totaling 1,108 metres, were positioned to test the extent of the diamondiferous kimberlite body at three points along the anticipated perimeter of the pipe. Eleven of the holes tested the outer edge of the pipe and six holes were drilled in the central area of the pipe. The drill results showed a total of 314 metres of kimberlite intersections in 15 of the drill holes. The kimberlite, logged at Freightrain, is consistent with previous petrographic studies by Lakefield which report both crater and diatreme facies textures

Core Drilling Program and Results - Cargo1

Hole JI-CG1-01 at Cargo1 intersected 83.1 metres of kimberlite and the second hole, drilled perpendicular to the bearing of the discovery hole, returned 147.9 metres of kimberlite core.  The diamond distribution in the limited core samples for which results were available at December 2001 appears to follow the pattern established at Freightrain where there is a relatively high proportion of large macro-diamonds (+1 millimerte). A 5-meter section of JI-CG1-02, weighing 18.65 kilograms returned 11 diamonds of which 4 were macros. Two of these stones were greater than 1 millimetre, weighed 0.028 carats, measured 2.05 x 1.48 x 1.12 millimetres and 1.14 x 0.80 x 0.22 millimetres and were described by Lakefield as fragments. Also similar to the Freightrain diamonds is their white, transparent and gem quality character.

Summer 2001 Mini-Bulk Program and Results

Six mini-bulk sample sites were selected on the basis of previous results (2000 JI trenches) and the depth to fresh bedrock. To obtain the mini-bulk samples the frozen, weathered material was excavated with a small backhoe to expose the fresh kimberlite. The kimberlite was drilled, blasted and then bagged. The results of diamond analysis of kimberlite from the six Freightrain mini-bulk pit samples, designated JI-1, JI-3, JI-4, JI-5, JI-5S and JI-6 is shown in the table below. Analysis confirmed that the kimberlite recovered from these sample pits is crater facies material.

Freightrain Mini-Bulk Samples by Location:

Pit Sample SiteSample Dry Weight
(tonnes)Total CaratsLargest Stone Weight
(carats)JI-176.3017.3091.557JI-356.867.4540.384JI-441.8714.0830.867JI-523.722.5250.936JI-5S2.490.3020.133JI-626.954.5350.466TOTAL228.1946.208


The Corporation recovered its first 1.557carat gem quality diamond as part of a combined parcel of 46.208 carats. The combined mini-bulk samples produced a total of 30 diamonds between 0.25 and 1.557 carats.

Freightrain Mini-Bulk Samples, Results by Screen Size and Number of Diamonds:

Sample NumberSample Weight+ 4.75 millmetres3.35 to 4.75 millmetres2.36 to 3.35 millimertes1.70 to 2.36 millimetres1.18 to 1.70 millimetres0.85 to 1.18 millimetresTotal(tonnes)# stones# stones# stones# stones# stones# stones# stonesJI-176.302521409396257JI-356.8610216474169JI-41.8711549100108273JI-523.72124162144JI-5S2.492316JI-626.9511154954120TOTAL228.192849131325354869




Freightrain Mini-Bulk Samples, Results by Screen Size and Carat Weight:

Sample NumberSample Weight+ 4.75 millmetres3.35 to 4.75 millmetres2.36 to 3.35 millimertes1.70 to 2.36 millimetres1.18 to 1.70 millimetres0.85 to 1.18 millimetresTotal(tonnes)(carat)(carat)(carat)(carat)(carat)(carat)(carat)JI-176.302.3463.0504.2243.3773.1071.20517.309JI-356.862.7341.7352.0660.9197.454JI-441.870.8684.1324.4113.3591.31314.083JI-523.720.9360.5380.2600.4840.3072.525JI-5S2.490.2100.0860.0060.302JI-626.950.2850.4661.5401.5670.6774.535TOTAL228.192.3465.13912.09411.53210.6694.42746.208








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The five largest stones have the following dimensions:

Size
      - millimetresWeight
      - carat7.10 x 6.27 x 3.941.5577.07 x 4.99 x 3.300.9366.56 x 4.85 x 3.080.8706.21 x 4.22 x 3.460.8674.56 x 4.56 x 3.930.809




Diamonds, retrieved from the combined mini-bulk samples, were examined by Diamond Trading N.V. of Antwerp, Belgium ("Diamond Trading"), who found the quality profile of the diamonds to be promising, with a high colour and purity grading of the sawable and makeable stones and the absence of boart. Diamond Trading's findings are extremely encouraging for the project economics although they are based on a small sample (869 diamonds, all greater than 0.85 mm square mesh sieve size and, in aggregate 46.208 carats) and therefore should be considered preliminary only and not necessarily reflective of future results. Diamond Trading is a minority shareholder of the Corporation (less than 1%).

Of importance are the results of diamond grade modelling, as determined by AMEC, indicating that projected grades are significantly higher than recovered grades.

The nature of diamond distribution within kimberlite is such that the relatively small mini-bulk sample size, as compared to feasibility stage bulk samples that may consist of several thousand tonnes of material, requires that modelled grades should be considered as indicative rather than absolute and as such are within a broad
range of possible values.  Additionally, actual grades would also be subject to recovery factors based on the overall efficiency of a commercial processing plant.

Freightrain Modelled Mini-Bulk Sample Grades

SampleCarat
Weight (+0.85mm)Recovered grade
+0.85 mm
(ct / tonne)Modelled grade
+0.85 mm
(ct / tonne)NameDry weight
TonnesJI-176.317.3080.2270.5JI-356.97.4540.1310.2JI-441.914.0830.3360.5JI-523.72.5260.1070.1JI-5S2.50.3020.1210.1JI-626.94.5350.1690.3Total228.246.2070.2020.4




2002 Core Drilling Program

To advance the Jackson Inlet Project, the Corporation pursued a multi-phase exploration program. The two main objectives for the 2002 exploration season were the evaluation of known potential kimberlite targets by drill testing.

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Work started with Phase-1 comprising ground magnetometer surveys, soil sampling, gravity and core drilling on known pipes and previously identified airborne magnetometer anomalies. Soil samples and drill core samples were processed by Lakefield in 2003.

The indicator mineral distribution from 489 soil samples collected in 2002 together with recovery of the micro-diamond from till immediately above bedrock in drill hole JI-CG2-02 led to a change in the 2003 exploration program objectives discussed in the prior year's annual report.  Instead of drilling to establish geometry of the Freightrain pipe and the drill testing of other targets, it was decided that giving immediate attention to the overall upside potential of the project would enable the Corporation to acquire the most favorable land position on the Brodeur Peninsula.

Reinterpretation of government air-borne magnetic data in light of the distribution of known kimberlites and indicator minerals made possible the selection of priority areas for claim staking. Two high sensitivity ground magnetic surveys were carried out by JVX Ltd. to further clarify structural control of kimberlite emplacement and to clearly define drill targets not readily apparent from low resolution and suspect data obtained by 2002 ground magnetic surveys. The soil sampling area was considerably enlarged from the initially contemplated survey of selected claims and target areas. Soil sampling was supplemented by collection of stream sediments at an approximate density of one sample per 42 sq. km in order to cover as much of the newly staked claims as possible on a reconnaissance basis.

Results of 2002 Exploration reported in 2003

In 2003, analytical testing was finalized on bedrock and overburden recovered from ten holes (1,173m) drilled (NQ core, 47-mm diameter)at four targets during the July-September period of 2002. The Cargo2 and ANO 10 magnetic anomalies detected by the 2001 Fugro-SIAL helicopter-borne survey were each tested by three holes and another hole tested ANO 9.



The three holes at ANO 10 and one at the nearby ANO 9 (2.5 km) did not encounter kimberlite nor explain both airborne and ground magnetic anomalies. Drilling at Cargo2 recovered a micro-diamond from till immediately above bedrock in drill hole JI-CG2-02.

The objective of two of the three holes drilled at Cargo1 pipe (JI-CG1-03 & -04) was to obtain representative samples from the fine grained ashy core facies and the coarse rim facies.

Laboratory investigations of the third hole (JI-CG1-05) revealed low magnetic susceptibility of the core which explains the weak magnetic anomalies over this and a number of other suspected kimberlites. The two other holes intersected as much as 200 meters apart and the dimensions of the pipe could be much larger than what the magnetic contours indicate.

Summary of Caustic Fusion Processing Results,Cargo 1 kimberlite drill holes JI-CGI-03, -04 and -05

Hole
No.Weight
(kg)Diamonds Recovered by Sieve Class (square mesh opening in millimeters)+1.7 mm1.18 mm0.85 mm0.600 mm0.425 mm0.300 mm0.212 mm0.150 mm0.100 mmTotal032840000127122042046471102517245386189058700000005510Total101811026193170111241


The diamonds are mostly white and transparent. Largest stones (JI-CG1-04): 2.34 x 2.25 x 1.65mm  - 0.0869 carat; 2.14 x 1.68 x 1.14mm - 0.0269 carats

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Results were received in 2003 from processing and indicator mineral grain selection by Lakefield on 489 soil samples which were collected in 2002. The 2002 regional till sampling program covered the main claim block at that time. The sampling involved collection of approximately 25 kg of till at 400-metre intervals on lines two kilometers apart in the Freightrain-Cargo1 pipe and Cargo2 areas and four kilometers apart elsewhere.  Pyrope and eclogitic garnet, Mg-ilmenite and spinel were found in anomalous concentrations in a number of clusters, most notably at Cargo2 and immediately surrounding the Freightrain and Cargo1 pipes.

2003 Claim-Staking Programs

An early awareness of the enhanced economic potential precipitated two claim-staking campaigns during the year. The first added 1,145 sq. km following receipt of indicator mineral counts from the 2002 till sampling program and evidence of diamonds at Cargo2.

Following the discovery of the 1.7km kimberlite fragment trail and detailed ground magnetic survey confirmation of previously inferred geological controls of kimberlite emplacement, the Corporation staked a further contiguous 2,283 sq. km to the east and south. After allowing for the expiry of 5 claims where results did not warrant further exploration, the net 100%-owned land position at the end of 2003 was 5,086 sq. km (1,256,781 acres).

2003 Exploration Program and Results

During the 2003 field season a further 426 samples were collected to define airborne survey targets in a large portion of the newly staked claims and to determine whether discrete and separate drill targets are present in the immediate vicinity of Freightrain and Cargo1 pipes.  Based on the recovery of kimberlite indicator mineral grains from the 355 soil and 71 stream sediment samples, twelve (12) new kimberlite indicator mineral clusters were discovered. Of the 426 samples collected, 110 contained kimberlite indicator minerals.

Seven of the twelve (12) clusters are located in the eastern half of the new Jackson Inlet claim block from 72 degrees 15' to 73 degrees 15' latitude. Several of the seven clusters correlate well with airborne magnetic anomalies and intersecting structures, which enhances the probability of their relationship to kimberlite targets. Five clusters are within 3 to 6 km of the Freightrain and Cargo1 pipes. The high numbers of kimberlite indicator minerals from the five areas provide strong evidence of kimberlite bodies under shallow overburden cover. These new indicator mineral clusters are in addition to the previously reported finds of the diamondiferous kimberlite fragment corridor between Freightrain and Cargo1 pipes and the eight potential kimberlite targets at Cargo2. 2003 key results are summarized below:

(*)  High indicator mineral counts are due to 2 of 5 samples taken closer to outcropping Freightrain kimberlite.

In 2003, most soil and stream sediment samples were collected at approximately 500 m intervals along 4 km spaced N-S lines. Samples collected near Freightrain and Cargo1 pipes were more closely spaced, at 500 m by 1 km. The samples cover 3,490 sq. km of the 100% owned 5,086 sq. km Jackson Inlet diamond property.



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A heavy mineral concentrate was produced by Lakefield followed by diamond indicator mineral picking by HDM Laboratories Inc. ("HDM"). HDM is located in Loveland, CO, U.S.A., and has specialized in kimberlite indicator mineral recovery and evaluation for more than 10 years.

In July 2003, the Corporation's field personnel made a significant discovery of kimberlite fragments by careful classic prospecting along a NE-SW corridor that connects Freightrain with Cargo1 pipes. The fragments, which are interpreted to originate from kimberlite bodies beneath and brought to surface by frost boil action, are distributed across up to 50 meters width within this corridor. They were surveyed and sampled over a distance of 1.7 km; 1 km SW from Cargo1 pipe towards Freightrain and 0.7 km to the NE beyond Cargo1 pipe. They show no evidence of transport.

Three kimberlite fragment samples totaling 50.5 kg collected from separate portions along the 1.7 km were analyzed by Lakefield. Diamond indicator minerals were extracted from two of the three samples and one was analyzed for diamond content only. Thirteen micro diamonds were extracted from the three samples.

Regarding diamond indicator minerals, the Lakefield report states that "highly depleted sub-calcic Cr-pyrope garnet (G10) and rare high-pressure eclogitic garnet, which are associated with diamonds and occur as inclusions in diamonds, are present, as is mantle ilmenite. Mantle ilmenite compositions indicate that diamond will be highly preserved, if present."

"Pressures and temperatures calculated using single clinopyroxene geothermometry for clinopyroxene grains that are interpreted to have equilibrated with garnet in garnet
lherzolite, indicate that all of these clinopyroxenes and host kimberlites erupted from within the diamond stability field. Calculated pressures and
temperatures form a linear array coincident with a relatively cool 35 to 40 mW/m(2) conductive geotherm similar to that of geothermal arrays for kimberlites from the Slave province in Canada."

High sensitivity ground magnetic (gradiometer) surveys were performed by JVX Ltd. ("JVX") in July and August 2003 over a 2 km by 3 km area encompassing Fugro-SIAL's Cargo2 aeromagnetic anomaly as well as a 2 km by 6 km corridor encompassing Freightrain and Cargo1 pipes (Gap Grid). Objectives of the latter survey were to identify new or satellite pipes and to determine whether the kimberlite fragment trail reflects bodies that are as magnetic as the initially discovered portion of Cargo1 pipe or whether the source is probably more like the weakly magnetic northeast portion of the pipe probed by drill hole JI-CG1-05.

At Cargo2, the objectives were to define the anomalies, which were not established by the 2002 survey, and to develop drill targets for 2004. These objectives were exceeded in that the small area (6 sq. km) yielded 8 anomalies, about which the JVX report concludes that
"if kimberlite is recognized at Anomaly A-I this entire trend becomes prospective."  The JVX report describes A-I, that is Cargo2, from which the grid takes its name, as
"a moderate anomaly with an amplitude of about 23 nano taslas (nT) spread over a roughly circular area about 300m across."  They describe Anomaly A-IV as
"probably the most intriguing anomaly on the grid. The intensity of this anomaly is comparable to Cargo2 but it appears to be the strongest of a series of 5 magnetic highs that trend NW-SE."

Within the Gap Grid, the JVX survey clearly defined 5 lobes or components of the Freightrain kimberlite the two most prominent of which are: 1) approximately 22 nT and
"roughly 125 by 100 m, flanked on the North, West, and East by magnetic lows", and 2) approximately 20 nT that is
"roughly 100 by 150 m with secondary lobes to the northeast".

JVX recommends prospecting about 0.75 km northeast of the Freightrain anomaly in the vicinity of Anomaly 2, a new anomaly of which the
"source probably extends to depth as there is no accompanying magnetic low".

The JVX report describes Cargo1 pipe as  "a strong (~ 15 nT), roughly circular magnetic high.  It is about 160 m across and it is truncated on the northeast side by a magnetic depression".  The kimberlite bodies discovered over 1.7 km on the Freightrain
- Cargo1 pipes corridor are visible on surface as a diamondiferous kimberlite fragment corridor. Due to their low magnetic susceptibility their magnetic footprint is very faint.

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Program Objectives for 2004

The results from the 2003 till samples and ground mag programs will determine the nature and extent of the geophysical and core drilling programs for 2004.

Atlanta Gold Property, Idaho

The Corporation, through its wholly owned subsidiary Atlanta U.S., owns and leases a total of 33 patented lode claims, 2 patented mill site claims and 113 unpatented contiguous mining claims known as the Atlanta Gold Property covering 1,840 acres near the town of Atlanta in Elmore County, Idaho, approximately 60 miles east-northeast of Boise, Idaho. Of the mining claims comprising the Atlanta Gold Property ("Atlanta"), three of the patented claims and 70 of the unpatented claims are beneficially owned by Atlanta U.S. and 32 of the patented claims and 43 of the unpatented claims are leased by Atlanta U.S. with terms extending to various dates up to 2015.  Since the acquisition by Atlanta U.S. of an interest in the Atlanta Gold Property in 1985, the Corporation has endeavoured to establish and expand estimated proven and probable reserves at Atlanta and to evaluate the feasibility of constructing and operating a mine at Atlanta.

On July 22, 1997, Atlanta U.S. and Canadian American Mining Company, LLC ("CAMC") (formerly Quest International Resources Corporation) ("Quest"), entered into a joint venture agreement (the
"Quest Agreement") whereby Atlanta U.S. was appointed the operator of, and held an 80 per cent interest in Atlanta, with Quest holding the remaining 20% participating interest. On December 17, 1997, Quest advised Atlanta U.S. that it had elected under the Agreement not to participate in its contractual share of further property costs incurred after 1997. On December 13, 2002, CAMC agreed to transfer its 20 per cent participating interest in the joint venture to Atlanta U.S. CAMC retains the 2% net smelter return royalty on Atlanta, as per the Quest Agreement.

On February 2, 1999, Atlanta U.S. signed a Lease/Option to Purchase Agreement ("the Monarch Agreement") with Monarch Greenback, LLC ("Monarch") relating to Monarch's surface and mineral rights to the Atlanta Gold Property. During the term of the ten-year lease, Atlanta U.S. has the option to purchase such surface and mineral rights for US$2 million. If this option is exercised, the existing minimum annual rental payments on such surface and mineral rights will be terminated and replaced by a net smelter return royalty of 0.5% of gold sales if the average realized gold price is US$365 per ounce or less, provided that the cumulative minimum annual rental payments made by Atlanta U.S. pursuant to the Monarch Agreement are credited against the obligation of Atlanta U.S. to make net smelter return royalty payments to Monarch. For each US$1 increase in the average realized gold price over US$365 per ounce, the net smelter return royalty will be increased by 0.01% to a maximum rate of 3.5%. In 1999, the terms of the minimum annual rental payments payable to Monarch were amended. US$25,000 owing in 1999, was paid in January 2000 and the US$75,000 unpaid balance was added to the option price. In May 2000, Atlanta U.S. paid US$100,000 in minimum annual rental payments to Monarch. In 2001, the Monarch Agreement was further amended such that, commencing in 2001, Atlanta U.S. will pay Monarch US$50,000 per year in minimum annual rental payments until 2008. The cumulative balance owing to 2008 of US$800,000 will be added to the option price. By then, the option price to purchase such surface and mineral rights will be US$2,875,000.

A net smelter return royalty is payable on production from Atlanta, subject to annual payments to the lessors as set forth below. These payments are required to keep the agreements in good standing. The advance royalty payments will be terminated if the option to purchase is exercised. During the year, the Company paid US$17,500 (2002 - US$17,500; 2001 - US$15,000) in advance royalty payments to the lessors.

The following table sets forth the existing minimum annual lease payments required to be made by Atlanta U.S. under the amended leases entered into by Atlanta U.S. in respect of the Atlanta Gold Property:

Year ending
December 31
Minimum annual
Rental paymentsAdvance Royalty PaymentUS$US$2004 to 200550,00017,500200650,000159,5002007 to 200850,00020,0002009 to 2011-20,0002012 to 2015-10,000




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Extensive drilling programs carried out on Atlanta from 1985 through 1995 identified a number of significant deposits.  A feasibility study carried out on behalf of Atlanta U.S. in 1989 estimated open pit-mineable proven and probable reserves to be 8,274,200 tons at 0.087 ounces of gold per ton at a location of Atlanta known as the Monarch Pit and 6,211,300 tons at 0.049 ounces of gold per ton at a location of Atlanta known as the Idaho Pit, with silver grades of 0.238 ounces per ton and 0.088 ounces per ton, respectively.  In addition to the near surface mineralization, an underground deposit in areas of Atlanta known as the east extension zone and the Farish zone has been outlined by Atlanta U.S.

In 1997, a prefeasibility study completed on behalf of Quest identified a total resource for Atlanta estimated to be 1,083,000 ounces of gold at 0.02 ounces per ton cutoff and 3,217,000 ounces of silver.  The scoping studies conducted on behalf of Atlanta U.S. in 1998 and January 1999 confirmed the estimated gold and silver resources for Atlanta identified in the 1997 prefeasibility study and recommended that Atlanta U.S. proceed with a feasibility study for Atlanta.

Atlanta U.S. has performed a resource evaluation of Atlanta in preparation of a final feasibility study to assess the upside open-pit reserve potential.  The results of the evaluation, carried out in February 1998, were positive
and identified a total resource estimated to be 22,082,700 tons at 0.062 ounces of gold per ton or 1,370,250 ounces of gold.

In August 2000, a wildfire that was raging in the United States mountain States, including Idaho, destroyed several items on Atlanta. The Corporation filed a claim for damages with its insurance company. In 2000, the insurer issued proceeds of US$38,206 and, in May 2001, after further negotiations, the insurer paid another US$71,794. The proceeds were credited to mineral costs recovered.

2002 Environmental Audit and Drilling and Testing Programs

Atlanta was reactivated once it became evident that the price of gold had risen above U.S.$300 on a sustained basis and is now advancing rapidly toward preparation of a final feasibility study and a production decision expected by May 2004.

Montgomery Watson Harza, an environmental consulting firm experienced in mine permitting, was retained in May 2002 to conduct a review of the existing environmental baseline data and recommend a program to update our information for a new Environmental Impact Statement (EIS). A Draft Environmental Impact Statement (DEIS) had been prepared for Atlanta by the United States Department of Agriculture ("USDA") Forest Service, Boise, National Forest in l989. A great advantage for Atlanta is the extensive amount of baseline data, which currently exists on the project and can be used to update the existing DEIS. This should help to reduce the lengthy permitting process significantly.

To confirm extensive previous in-house and third party test work (more than 50 column leach tests) and simulate conventional heap leach conditions, a metallurgical column testing program is planned using fresh mineralization representative of the Monarch and the Idaho deposits.

The metallurgical drilling program was designed by Atlanta U.S. staff and reviewed by Behre Dolbear and Company of Denver, Colorado ("Behre Dolbear"). Drilling commenced on October 23, 2002.  A total of 1,284 meters (4,211 feet) was drilled on 13 core holes using HQ size core (63.5mm / 2.5 inch diameter).  Nine holes

21.

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were drilled into the Monarch ore body and four holes were drilled into the Idaho ore body. One of the four holes was a geotechnical hole, which was drilled into the south wall of the Idaho ore body.

Split core samples were collected in 3-meter increments and were assayed for gold using a 500-gram cyanide bottle roll test as a first step in determining gold recovery characteristics.

Monarch Deposit

hole #dipMineralized
IntervalCore lengthAssayoz/tong/tonneD02-14W0550°147'-177'
    227'-267'30'
    40'0.103
0.0613.52
2.09D02-10W0654°30'-148'118'0.0612.09D02-8W0760°142'-322'
    or 142'-362'180'
    220'0.076
0.0662.61
2.25D02-6W0856°90'-158'
    181'-301'
    or 181'-341'68'
    120'
    160'0.054
0.059
0.0501.86
2.02
1.70D02-5W0965°55'-360'
    incl. 265'-360'305'
    95'0.065
0.1202.23
4.10


D02-1W1068°95'-185'
      285'-409.5'
      425'-465'90
      124.5'
      40'0.029
0.039
0.1490.99
1.33
5.08D02-1E1164°196'-282'
    incl. 246'-282'
    incl. 256'-266'86'
    36'
    10'0.231
0.481
1.0307.91
16.5
35.3D02-3W1254°10'-70'60'0.1685.76D02-3E1356°100'-290'190'0.0581.97




Idaho Deposit

hole #DipMineralized
IntervalCore lengthAssayoz/tong/tonneD02-36W0160°0'-280'280'0.0461.56D02-34W0357°10'-310'300'0.0461.56D02-31W0460°10'-305'295'0.0391.32




Environmental/Geotechnical Hole For Wall Rock Sample

hole #DipMineralized
IntervalCore lengthassayoz/tong/tonneD02-34W02*58°20'-150'130'0.0140.46




All of the holes were drilled as angle holes ranging from -45 to -60 degrees which cut across the width of the shear zone (which is 18 to 55 meters wide) to obtain representative samples of gold mineralization.  Mineralized drill core was sawed lengthwise with one half of the core saved for metallurgical testing, one quarter for assaying, and one quarter was saved for reference.

Atlanta ores have undergone extensive metallurgical testing over the years, including over 50 column leach tests.  However, most of these tests were done in-house, used primarily coarse crush sizes (38.1 to 50.8 mm, 1
1/2 to 2 inches)

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and were leached for relatively short periods of time (approx. 60 days).  A close examination of the historic metallurgical data and a limited amount of column test data from l998 indicates that finer crushing and a longer leach time will significantly improve the gold recovery over what was achieved in previous work, especially for the moderate and low recovery ores.

Following the project outline in the l998 Behre Dolbear Scoping Study, a conventional open pit, cyanide heap leach operation is planned.  The measured mineral resource, calculated for the two deposits with a cut-off grade of 0.68 grams per tonne (0.02 ounce per ton), is 18,042,000 metric tonnes grading 1.9 gram per tonne gold.  The resource by deposit is shown below:

Atlanta Gold Project Mineral Resources by Deposit

Mineral ResourcesTotalMeasured ResourceInferred ResourceTotalTonnesGold g/tonneTonnesGold g/tonneTonnesGold g/tonneTonnes


Monarch Open pit9,959,0002.39,959,0002.322.9Idaho Open pit8,083,0001.38,083,0001.310.8Total Measured Mineral & Inferred18,042,0001.918,042,0001.933.7Resource Underground40,80011.6670,40010.3711,20010.67.5




The feasibility study will incorporate the new gold recovery information from the metallurgical testing program, develop final capital and operating costs for the project, and calculate a mineable reserve from the measured mineral resource.  This new cost and reserve information will then be used to determine the most economic mining schedule for Atlanta and set the stage for construction and gold production.

In parallel with the metallurgical testing program and feasibility study, an Environmental Impact Statement (EIS) will be prepared in compliance with the United States National Environmental Policy Act (NEPA). Atlanta has a tremendous advantage in this area, since it has most of the baseline environmental data needed for an EIS and in fact, had previously prepared a draft EIS in l989.  Most of this information is still valid for the current project and will be updated during the summer season of 2003.

Key components of the process are underway: the preparation of a Memorandum of Understanding ("MOU") between the U.S. Forest Service and Atlanta U.S., an updated Plan of Operations, and a new Reclamation Plan.  The MOU serves to outline each party's responsibilities and lay out the procedures and timetable for the EIS process. The Plan of Operations is a preliminary description of the mining operation that is proposed by Atlanta U.S. and is used as the basis for public scoping and the development of the data required for the EIS.  Based on the Plan of Operations, a Reclamation Plan is prepared to outline the proposed methods and timing to reclaim the mining and processing areas after the project has ceased production.

Atlanta U.S. has maintained close ties with both state and federal regulatory authorities during the past several years and has been proactive in soliciting support.  Meetings have been held with the Idaho Governor's office, Idaho Department of Lands, the U.S. Senators from Idaho, and the Environmental Protection Agency. The Corporation believes that a partnership approach to the permitting process, where everyone participates, will allow it to proceed quickly and efficiently to final approval of the EIS.

Plan of Operations - 2003

In April 2003, a proposed Plan of Operations was submitted to the USDA Forest Service ("USFS"), Idaho City Ranger District, which outlined the mining plan for the Atlanta Gold Project.  As the lead Federal agency for

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the environmental permitting process, the USFS issued a Notice of Intent on July 10, requiring the preparation of an Environmental Impact Statement (EIS) for the project.  A Memorandum of Understanding (MOU) outlining the procedures and responsibilities of the USFS and Atlanta Gold for the preparation of the EIS was executed on July 10, 2003.

The EIS Process

In October 2003, Tetra Tech Maxim Technologies ("Maxim") was chosen as the third-party environmental contractor to prepare the EIS. Maxim has extensive experience in the preparation of mine related environmental studies and recently completed the EIS for the Astaris Dry Valley Mine (Phosphate) located in southeast Idaho. At the same time, Atlanta U.S. appointed Patrick J. Maley as Environmental Manager for the project as the Corporation's representative in this process of preparing the EIS.  Mr. Maley is highly qualified, having held similar positions with companies like Battle Mountain, Sante Fe Pacific Gold Corporation and ASARCO.

Environmental data collection began in mid-October with field crews active on the mine site working through the fall and winter.  Surface water, ground water, cultural resources, soils, fisheries, wildlife, and air quality, are all being studied to evaluate the potential impacts of the project.   New information is being collected to up-date and supplement the extensive, existing baseline data that is available from a Draft EIS that was prepared in the late l980s on the project.

Once the Final EIS has been completed, a Record of Decision (ROD) is issued by the USFS, which is the final step in the federal permitting process.  State and local permits are being developed in parallel with the EIS process.  Completion of the permitting process is anticipated to occur during the fourth quarter 2004 or first quarter 2005.

Atlanta U.S. believes that the EIS and permitting process is a partnership between the company, the federal, state and local agencies, and the public.  Effective participation in the process is encouraged and critical to our success.

Metallurgical Drilling and Testing - 2003

Results from the metallurgical fall 2002 core-drilling program were received in January 2003 and approximately 2.9 tonnes of core samples were shipped to Kappes Cassiday and Associates of Reno, Nevada for column leach testing.  Fourteen column tests were run on four composite samples taken from the Monarch and Idaho ore bodies.  The composites were tested at two crush sizes, 12.7 mm and 9.5 mm (0.5 inch and 0.375 inch) and were leached for 121 days.  All columns were agglomerated with cement and lime, which provides both pH control and enhanced porosity in the heap to maximize gold extraction.

Gold extraction increased significantly as a result of the finer crush size and longer leach time when compared to past testing that used coarser crush sizes of 38.1 mm to 50.8 mm (1.50 to 2 inches) and a 60 day leach cycle.  In fact, gold extraction from the column tests for the bulk of the ore body exceeds 70%.  An overall average of 54% silver extraction was achieved in the column testing.

Atlanta Project
- Final Column Leach Results

SampleCrush SizeCalculated                 Head Grade GoldGold ExtractionMonarch Pit
High Extraction*0.5 inch
(12.7 mm)0.089 oz/ton
(3.04 g/tonne)77 %Monarch Pit
High Extraction0.375 inch
(9.5 mm)0.076 oz/ton
(2.60 g/tonne)75 %Monarch Pit
Moderate Extraction0.5 inch
(12.7 mm)0.102 oz/ton
(3.49 g/tonne)70 %Monarch Pit
Moderate Extraction0.375 inch
(9.5 mm)0.110 oz/ton
(3.76 g/tonne)72 %


*High extraction means a high recovery of gold when cyanide is applied to the heap.

Full Feasibility Study

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Behre Dolbear will act as the manager of the final feasibility study and is also responsible for the calculation of a new mineral resource, the mineable reserve, and the mine operating plan.  It is anticipated that the final feasibility study will be completed by May 2004. The Atlanta deposits are to be developed as a conventional open pit, heap leach operation. The current measured mineral resource calculated as part of a l998 Behre Dolbear Scoping Study, based upon a cut-off grade of 0.68 grams per tonne (0.02 ounce per ton), is 18,042,000 metric tonnes grading 1.9 grams gold per tonne (1,083,000 ounces contained gold) and 5.6 grams silver per tonne (3,248,000 ounces contained silver).

Improved gold recovery results from the Kappes Cassiday & Associates metallurgical testing program will be incorporated into the study and final capital and operating costs will be developed.  These up-dated economic parameters will then be used to calculate the new mineable reserve for Atlanta, which will form the economic basis of the feasibility study.

Once the final feasibility study is complete and the EIS process is well underway by mid-2004, project financing will be sought to maintain our targeted start of construction by the second quarter of 2005.

The Atlanta Gold Project Team

To ensure the Atlanta Gold Mine is being built in an efficient, timely and cost effective manner, Doug Glaspey, Project Manager for Atlanta U.S. is assisted by Lance D. Bacon, registered professional geologist and by Pat Maley, Environmental Manager. Behre Dolbear will supervise the Full Feasibility Study and will be responsible for establishing mine reserves, mining schedule and the economic mine model.

Other highly qualified project partners and their areas of responsibility are as follows:

ACZ Laboratories, Inc.
- chemical analysis of environmental samples

Air Sciences Inc.
- air quality

Baird Hanson Williams LLP
- legal counsel for NEPA, NPDES and wetlands issues

Haz-Tech Drilling Inc.
- drill geotechnical holes

Kappes Cassiday & Associates
- metallurgical testing

Knight Piesold Consulting
- geotechnical design of leach pads, rock dumps, process ponds and water balance

Layne Christensen Company
- drill groundwater monitoring wells and piezometers

Lyntek Inc.
- Feasibility Study, process plant and ancillary facilities

Parsons Behle and Latimer
- legal counsel for air quality issues

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RTR Resource Management Inc. (formerly Earthworks Technology)
- NPDES and transportation management plan.

Steffen Robertson & Kirsten (U.S.), Inc  - geochemistry, hydrogeology, surface & groundwater, reclamation/closure plan

Tetra Tech Maxim Technologies, Inc.
- Third Party EIS Contractor.  EIS scoping and preparation; fisheries, wildlife, cultural resources, vegetation, soils, wetlands socio-economic impacts

According to the needs of the project, people and/or companies may vary.

Abitibi Gold Property, Eastern Quebec

In view of the positive market developments for gold, the Corporationdecided early in 2003 to build on its Atlanta Gold base and to expand its gold sector and develop a project pipeline. Atlanta Gold now approaches the completion of the full feasibility study and is expected to be a producer by the end of 2005. Considering the lead times from exploration to production, the Corporation decided, for its next gold project, to acquire strategically located gold properties in historically productive gold districts in North America.

Location and Access

After examining data on numerous individual opportunities, it became apparent that history has demonstrated the Abitibi volcanic belt to be characterized by one of the highest probabilities for discovering new or adding to known gold resources. The Province of Quebec is also the top ranked North American jurisdiction for mining investment according to the Fraser Institute, both with respect to policy and mineral potential.

The Abitibi gold belt is the source of approximately 5,000 (150 million ounces) of the 8,000 tonnes of gold which have been extracted from the Superior Province of the Canadian Shield. Quebec's portion of the belt continues to yield many new discoveries and annual production exceeds one million ounces, of which a large portion is from the Doyon-Bousquet-LaRonde Mining Camp.

Breakwater Option Granted in 2003

In late August 2003, Breakwater Resources Ltd. ("Breakwater") granted the Corporation an option to purchase up to an 80% interest in the 6 properties along Quebec's Cadillac-Malartic portion of the Abitibi gold belt. The 6 properties, totaling 2,721 hectares, are known as Normar, Malartic
"H", Malartic "H" Annex, Mouskor, Joannes North and Joannes West. Under terms of the option agreement, the Corporation is required to spend $150,000 before September 2004 and make a payment of $25,000 on that date to renew the option. Aggregate expenditures of $3.5 million and payments totaling $125,000 will be required to maintain the option through September 2008 and to earn an initial 60% interest. The Corporation can then purchase a further 10% interest for $100,000 and following completion of a feasibility study, the Corporation can purchase an additional 10% interest by paying $500,000. There is a provision to buy Breakwater out of the project for $1,500,000 if it decides not to participate in the development of the properties.

Following a comprehensive review of Breakwater's information on the optioned properties, an exploration program was established to focus on Normar, Malartic
"H", Malartic "H" Annex and the Mouskor claims.

Regional Geology

Normar was selected as having a high potential for discovery of a gold resource because it straddles the prolific Cadillac Break which most recently has yielded Agnico Eagle's impressive Lapa gold deposit about 20 km to the east. Past drilling had confirmed the existence of the Decoeur and Paquin gold deposits for which Breakwater reports cited a combined
"drill-indicated mineral inventory" of 60,000 tonnes at 6.6 g of gold per tonne. This grade is better than the 5.3 g Au/t reserve grade at Cambior's Doyon mine some 8 km to the northeast.

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The Malartic
"H" property is situated on the northern limb of the Malartic Syncline which hosts within 2.5 km of the property boundary the Black Cliff, Marban, Malartic Hygrade, Norlartic and Camflo gold mines. Production from these mines has exceeded 2 million ounces. Up to six gold-bearing zones are associated with the Norbenite/Norlartic shear where it crosses the south portion of the Malartic
"H" claims. The shear zone continues on to the south where it has yielded significant gold production.  Portions of the Malartic
"H" zones, from one of the deeper holes reported in Breakwater files, assayed 5.33 g Au/t over 1.05 m, 5.54 g Au/t over 1.76 m, 7.93 g Au/t over 2.25 m, 42.7 g Au/t over 0.9 m and 3.86 g Au/t over 2.89 m.

On the Malartic
"H" Annex claims gold has been known to be associated with pyrite where a prominent shear zone cuts basaltic volcanics ("Discovery Zone"). Over 2 million ounces of gold have been produced from the Siscoe and Sullivan mines, which are located on the same shear zone.  This is the only property for which Breakwater files revealed that additional geophysical coverage might result in definition of new drill targets. Thus, it was decided to conduct induced polarization and magnetometer surveys to focus drilling on unexplored parts of the shear zone with the highest gold potential. Grab samples from a trench on the
"Discovery Zone" were reported in Breakwater files to have returned gold values of more than 1,800 g Au/tonne.  A drill hole (M-3, 1936) under this mineralization encountered sections which assayed 94 g Au/t over 0.35 m, 31 g Au/t over 0.34 m and 21 g Au/t over 0.65 m.

The Mouskor property is considered to be located on the same favorable horizon, which to the east contains the Doyon, Bousquet #1, Bousquet #2 and Dumagami Mines. More than 5 million ounces of gold already have been produced from the Doyon and Bousquet #1 mines.

Exploration Program and Results
- 2003

With the high prospectivity of the area, the Corporation set its objectives to make a significant gold discovery. Forage Benoit/Benoit Diamond Drilling Limited commenced drilling in September 2003. Six (6) drill rigs (BQ, 36.5 mm core diameter) were deployed on the four properties. 61 holes were drilled totaling over 22,000 meters.

On the Mouskor property, 10 holes, totaling 2,191 meters were drilled; on the Malartic "H" and Malartic
"H" Annex properties, 20 holes, totaling 9,392 meters were drilled. The described gold zones were tested at depth, as were several geophysical targets. Overall continuity was confirmed while grade and thickness did not change.

On the Normar Property, 31 holes, totaling 11,008 meters, were drilled resulting in two gold discoveries. Although thickness did not change previously interpreted mineralization continuity at Decoeur and Paquin was consistent with previous results. To complement the investigation of the known gold occurrences, profiles were drilled across other areas of favorable geology on the property. One gold discovery was made with three "profile" holes. Two were drilled into a package of intrusive highly altered tonalite intersected gold values which showed a more than eightfold increase in the lower 40 meters from hole # TMN-03-07 to hole # TMN-03-08 approximately 130 meters vertically below. The third hole, TMN-03-31, collared 400 meters to the west, encountered 148.7 meters of tonalite and produced a 1.5 m intersection of 5.67 g/t Au (3.82 g/t Au pulp check assay). The discovery zone has an indicated width of approximately 100 meters, a strike length of more than 500 meters and an apparent steep northerly dip.  A review of the geological and assay results by Roscoe Postle Associates Inc. ("RPA") concluded that this newly discovered mineralized area has potential for an economic concentration of gold.

Another "profile" hole to the north of the Paquin East zone, TMN03-19, returned an uncut assay of 44.7 g/t Au from a 0.6 m interval within a 12.5 m intersection containing numerous blue to smokey quartz injection veinlets and veins, sericitic alteration and silicification, arsenopyrite (locally > 5 %), pyrrhotite and pyrite. Most sulphides are fine grained and mainly in altered dark siltstone at the margin of the quartz veins. This intersection is more sulphide-rich and stratigraphically separated by at least 150 m from Paquin East.

New claim staking

Because
of occurrence of the gold discovery in tonalite within a few hundred meters of
the north boundary of the Normar property, 68 claims (1, 083 hectares) were
staked in late December to protect the depth and strike extension potential.
These claims bridge a gap between Normar and Cambior's Doyon mine property to
the east. Further testing is planned for 2004 to assess the extent of these
high-grade discoveries.

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Indonesian Properties

On February 18, 1997 and May 16, 1997, the Corporation, through its wholly-owned subsidiary, Twin Gold Layuh Mining Corporation ("Twin Gold Layuh") entered into agreements (collectively the "Layuh Agreements") with two wholly-owned subsidiaries of PT Harita Jayaraya ("PT Harita"), an Indonesian company, to form a joint venture between Twin Gold Layuh and such subsidiaries to explore for gold and related minerals and, if successful, to mine in an area covering 86,880 hectares (the "Layuh Property") in the Layuh area of South Kalimantan, Indonesia.  The joint venture will be formed provided that an application is granted for a Seventh Generation Draft C.O.W. ("Contract of Work"). In 2003, a fifth extension for the Approval in Principle was granted. The request was made to the Directorate General of Geology and Mineral Resources who passed it on for further processing to the South Kalimantan Governor. Twin Gold Layuh, will have an 85 per cent interest in the joint venture and will be the operator and technical advisor to the joint venture and PT Harita, through its subsidiaries, will have a 15 per cent carried interest in the joint venture.

The Layuh Property is currently being maintained on a care and maintenance basis. It's in the early stages of exploration with very positive early indicators for significant gold-copper potential. In 2003, the Corporation executed a confidentiality agreement with a major explorer in the region with the objective to form a joint venture to develop the Layuh Property.

Method of Operation

The Corporation has been an exploration stage mineral resource company since inception and has undertaken gold exploration and mine development activities since 1994. Between July 1999 and December 2001, the Corporation focused on diamond exploration in Canada. In 2002, the Corporation reactivated development activities on its Atlanta Gold Property and continued to direct its efforts towards diamond exploration on its Jackson Inlet Diamond Property. In 2003, after a sustained period of increases in the price of gold, the Corporation acquired rights to a block of gold claims in the Abitibi gold belt in Eastern Quebec ("Abitibi"), advanced its Atlanta Gold Project towards production by an anticipated date of late 2005, and staked additional claims at Jackson Inlet.

In 1999, the Torngat Property was staked and exploration commenced. By the end of 1999, the Ministère des Ressources naturelles du Quebec had granted the Corporation four contiguous Mine Exploration Permits for a period of five years that cover an area of 444 sq. km on the east coast of Ungava Bay in Northern Quebec. In 2000, a fifth permit was granted for five years covering 62.85 sq. km. Three of the five permits were renewed in 2003.

Commencing with the entering of its agreement with Helix in 2000, the Corporation began acquiring mining claims for its second diamond property, Jackson Inlet, located on the Brodeur Peninsula of Baffin Island. By the end of the 2003, the Corporation owned a 100% interest in 532 mineral claims totaling 5,086 sq. km (1,256,781 acres) within the region.

The Corporation's goal has always been to continue the development of its gold assets, particularly the advanced Atlanta Gold Property ("Atlanta") in Idaho, with a view to concluding a bankable feasibility study at the earliest possibility, upon a sustained improvement in gold prices. As the price of gold consistently exceeded US$300 per ounce in early May 2002, including reaching a then 5-year high of US$327 per ounce,  the Corporation reactivated Atlanta by carrying out an environmental audit of existing environmental baseline data in June 2002 and completing a 13-hole core drilling program totaling 1,264 metres (4,211 feet) in early December 2002. In December 2002, the Corporation increased its operating interest in Atlanta from 80% to 100%. In 2003, samples taken from the 2002 core-drilling program were assayed for gold and a column leach testing program was carried out. The results from the testing program will be incorporated into a feasibility study,

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expected to be completed by May 2004. The column leach testing program was completed in September and indicated a gold extraction rate in excess of 70%, which compares well with similar gold projects in North & South America. In July, the U.S. Department of Agriculture
- Forest Service ("USFS"), the lead agency in
the permitting process, issued a notice of intent (NOI) to initiate the EIS (Environmental Impact Statement) process. An independent contractor was selected in October to carry out the EIS, expected to be completed by the end of 2004. Mine construction is expected to commence in the second quarter of 2005 and gold is expected to be poured before the end of 2005.

The Corporation's Indonesia gold property, located on the Island of Kalimantan, Indonesia, remained on care and maintenance during the year.

In 2002, the Corporation completed two private offerings. The first offering was completed in December 2002 for gross proceeds of $3,255,000 by the issuance of 6,510,000 flow through common shares of the Corporation and warrants to purchase another 3,255,000 common shares of the Corporation at $1.00 per share. In the second offering, members of management of the Corporation paid $45,000 to subscribe for a total of 90,000 flow through common shares of the Corporation. Net proceeds from these private offerings totaled $2,939,192, net of share issue costs of $360,808, including $226,100 paid as agency fees to the agent of the first offering. The agent was also granted purchase warrants to acquire 586,000 common shares of the Corporation at $0.50 per share. All warrants expire within two years from date of grant. In 2003, four private offerings were completed for total proceeds of $2,938,063 by issuing 5,357,143 flow through shares, 4,379,167 common shares, and 2,116,667 common share purchase warrants, with each warrant exercisable at $0.50 per warrant. Total share issue costs for the 2003 offerings was only $128,601 because the 2003 offerings were non-brokered efforts initiated by the Corporation's management. In early 2004, the Corporation completed a private financing for total proceeds of $1,315,175, by issuing 4,288,667 common shares of the Corporation and 4,288,667 common share purchase warrants. Each warrant is exercisable at $0.40 per warrant in the first year, and $0.50 per warrant in the second year. The funds will be used to continue the above-noted project operations on Atlanta, Abitibi, and Jackson Inlet, and general-purpose operations in 2004. Although the Corporation has been successful in the past in obtaining similar financing, there's no assurance that the Corporation will be able to currently obtain adequate financing on a timely basis. Failure to obtain such additional financing could result in delay of further exploration and development of the Corporation's properties.

The results of operations of the Corporation reflect the overhead costs incurred during the acquisition, exploration and mine development stages, the costs necessary to keep the Corporation in good standing with various regulatory authorities and to provide the infrastructure to administer these acquisition, exploration, mine development and financing activities. Also reflected in the loss for the period is the write-off of deferred mineral costs of properties the Corporation has acquired, explored and ultimately abandoned. General and administrative costs can be expected to increase or decrease in relation to changes in the administrative activity required as exploration continues on Abitibi and Jackson Inlet and development activity proceeds on Atlanta. The objective at Atlanta is to have it in production by the end of 2005.

Segmented Information

Information regarding geographical segments in which the Corporation has operated is disclosed in note 7 to the annual consolidated financial statements in the 2003 annual report of the Corporation, which consolidated financial statements and notes thereto are incorporated herein by reference.

Mining Agreements

Certain of the interests of the Corporation in the mineral properties of the Corporation are held through various agreements which are described in note 3 to the consolidated financial statements of the Corporation as set out in the 2003 annual report of the Corporation, which consolidated financial statements and notes thereto are incorporated herein by reference.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Disclosure regarding management's discussion and analysis of financial condition and results of operations is set out in the 2003 annual report of the Corporation, which disclosure is incorporated herein by reference.

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Off-Balance Sheet Arrangements



The Corporation does not have any off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

The Company has operating lease commitments for head office space until January 2005, and office equipment until November 2004 as follows:

|Year | Payments due
|---- | ------------
|2004 | $ 65,000    
|2005 | $   5,000   



ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and officers of the Corporation

Name and Position

Term of Office

Hermann  Derbuch, P.Eng.



Chairman, President &

Chief Executive Officer

Since December 3, 1996

Alfred Powis, O.C. *



Director

Since March 8, 1999

Robert Pendreigh *

Director

Since May 1, 1999



James K. Gray, O.C. *

Director

Since March 15, 2000

Gerard E. Munera

Director

Since January 26, 2001

Cedric E. Ritchie, O.C. *

Director

Since July 15, 2003

Domenico Bertucci, CA

Chief Financial Officer

Since February 18, 2000

F. Paul Collins,

Secretary

Since March 15, 2001

* Members of the Audit Committee of the Board of Directors of the Corporation

.

Hermann Derbuch, the Chairman, Chief Executive Officer and President of the Corporation, has over 25 years of international mining, exploration and investment experience.  In addition to his past roles as President and Chief Executive Officer of Minorca Resources Inc. and President and Chief Operating Officer of Eden Roc Mineral Corp., Mr. Derbuch is a past Director of Mining with Noranda Minerals Inc.  Mr. Derbuch has a masters degree in mining engineering and is a Professional Engineer in the Province of Ontario.

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James K. Gray, O.C., a director of the Corporation, has been engaged in the oil and natural gas exploration business in Western Canada for the past 45 years.  In 1973, Mr. Gray co-founded Canadian Hunter Exploration Ltd.  He's the former Chairman of Canadian Hunter Exploration Ltd., one of the larger natural gas producers in Canada. Mr. Gray is also a director of Canadian National Railways, EdperBrascan Corporation and Nova Scotia Power.  Mr. Gray was awarded an Honourary Doctor of Laws degree in 1991 by the University of Calgary, a Citation for Citizenship by the Government of Canada in 1992, the Fellowship of Honour by YMCA, Canada and was appointed as an Officer of the Order of Canada in 1995.

Gerard Munera, a director of the Corporation, is a former President and CEO of Minorco (U.S.A.), a Senior VP Corporate Planning and Development and Member of the Executive Committee of RTZ and CEO of Union Minière (Brussels). His extensive business experience of over 40 years includes chairmanships and directorships of senior and junior, private and public companies in the U.S., South America, Australia and Europe.

Robert Pendreigh, a director of the Corporation, has a degree in metallurgical engineering from the University of Glasgow and has worked as a consulting engineer at gold, uranium, diamond and base metal deposits in South Africa, Australia and North America.  Prior to becoming a director of the Corporation's predecessor, Atlanta Gold Corporation, in 1988, Mr. Pendreigh was a consulting metallurgist for Anglo-American Corporation.  Mr. Pendreigh is a fellow of the Canadian Institute of Mining and Metallurgy.

Alfred Powis, a director of the Corporation, is a current director of Inmet Mining Corporation and Denison Mines Limited, a former director of Sears Canada Inc. and Sun Life Assurance Company of Canada, a retired director of Canadian Imperial Bank of Commerce, a retired member of the president's advisory council of Ford Motor Company of Canada Limited and the board of trustees of Princess Margaret Hospital and the former chairman of the board of trustees of The Toronto Hospital.  Mr. Powis was appointed as an Officer of the Order of Canada in 1984.  In addition, Mr. Powis has received an award from the Mineral Economics and Management Society for outstanding contribution to mineral economics, and was made and honourary associate of The Conference Board of Canada in 1997.

Cedric Ritchie, a director of the Corporation, brings extensive national and international experience in the finance business to the Corporation. He is the former chairman of Scotia Bank and present chairman of the Business Development Bank of Canada.

Domenico Bertucci, the Chief Financial Officer of the Corporation, formerly worked as an independent financial consultant and, prior thereto, was the Controller and Secretary Treasurer of Oxbridge Securities Inc. and articled with Laventhol & Horwath, Chartered Accountants. Mr. Bertucci received his chartered accountant designation in 1991 and joined the Corporation in July 1997 as accounting manager.

F. Paul Collins, the Secretary of the Corporation, has been a partner with the law firm of Lang Michener LLP since 1991, practicing in the areas of corporate finance, mergers and acquisitions and securities law.

Directors of the Corporation are elected at each annual meeting of shareholders of the Corporation and hold office until the close of the first annual meeting of shareholders of the Corporation, occurring following their election unless their office is earlier vacated in accordance with the by-laws of the Corporation. Officers of the Corporation are appointed by the directors of the Corporation and serve as officers at the pleasure of the directors of the Corporation.

Family relationships among directors and executive officers

There are no family relationships between any director or executive officer of the Corporation and any other director or executive officer of the Corporation.

31.



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Employees

As of December 31, 2003, the Corporation had five employees. Four employees reside in Canada and one employee resides in the United States.

Compensation

Disclosure regarding the compensation paid by the Corporation and its subsidiaries to the directors and officers of the Corporation is set out in the management information circular dated February 4, 2004 of the Corporation, which disclosure is incorporated herein by reference.  In 2003, the aggregate compensation paid by the Corporation and its subsidiaries to the directors and officers of the Corporation as a group for services in all capacities was $328,000.

Options and Warrants

Certain of the directors and officers and employees who are not directors or officers of the Corporation have been granted options to purchase common shares of the Corporation at various prices under the share option plan of the Corporation. As at March 18, 2004, the following options were outstanding under the share option plan of the Corporation:

Number of

Exercise

Held by

Options

Price

Expiration Date

Directors and Officers

450,000

$0.35

December 22, 2004

150,000

$0.49

February 4, 2005

1,000,000

$0.43

December 22, 2005

150,000

$0.45

January 30, 2006

500,000

$0.52

June 1, 2006

450,000

$0.60

January 18, 2007

250,000

$0.63

February 12, 2007

200,000

$0.51

May 17, 2007

50,000

$0.40

February 5, 2008

200,000

$0.35

August 19, 2008

100,000

$0.39

November 13, 2008

3,500,000

Employees & others who

are not directors or officers

200,000

$0.35

December 22, 2004

300,000

$0.52

June 1, 2006

150,000

$0.60

January 18, 2007



50,000

$0.51

May 17, 2007

100,000

$0.45

January 17, 2008

50,000

$0.40

January 29, 2008

100,000

$0.35

August 21, 2008

200,000

$0.39

November 13, 2008

1,150,000

Total options outstanding

4,650,000

Share Ownership of Directors and Officers

As of March 18, 2004, to the knowledge of the Corporation, the total amount of any class of the Corporation's voting securities owned by the officers and directors of the Corporation as a group is as follows:





32.





|Title of Class | Identity of Person 
      or Group | Amount  Owned  | Percent of Class
|-------------- | ---------------------------------- | -------------- | ----------------
|Common shares  | Officers and directors             | 14,865,738
(1) | 14.8%           







(1) Includes 5,921,667 common shares which the officers and directors as a group have the right to acquire beneficial ownership pursuant to the exercise of stock options and common share purchase warrants.



The following table discloses on an individual basis the number of shares owned and options granted to directors and senior management of the Corporation.

NameNumber of shares ownedOptions grantedExercise priceExpiry datesHermann Derbuch951,2681,850,000$0.35 to $0.6322-Dec-04 to 17-May-07James K. Gray3,316,906400,000 (2)$0.49 to $0.6004-Feb-05 to 17-May-07Gerard E. Munera25,500250,000$0.45 to $0.5230-Jan-06 to 01-Jun-06Robert Pendreigh210,000250,000$0.35 to $0.5222-Dec-04 to 01-Jun-06Alfred Powis1,312,897250,000$0.35 to $0.5222-Dec-04 to 01-Jun-06Cedric E. Ritchie2,891,500150,000 (2)$0.3519-Aug-08Domenico Bertucci236,000350,000$0.35 to $0.6001-Jun-06 to 13-Nov-08F. Paul Collins----


(2) Excludes common share purchase warrants granted to James K. Gray to purchase 1,119,167 common shares of the Corporation and to Cedric E. Ritchie to purchase 1,302,500 common shares of the Corporation. For each director, 952,500 warrants have an exercise price of $0.40 per common share, if purchased on or before February 26, 2005; or $0.50 per common share if purchased after February 26, 2005 and on or before February 26, 2006. The remaining warrants have an exercise price of $0.50 per common share and expire on 09-Nov-04.



To the knowledge of the Corporation, there are no arrangements, the operation of which may at a subsequent date result in a change in control of the Corporation.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

To the knowledge of the Corporation, the Corporation is not directly or indirectly owned or controlled by a corporation or foreign government and no person is the owner of more than five per cent of any class of voting securities of the Corporation.

Disclosure regarding the interest of management in certain transactions is set out in the management information circular dated February 4, 2004 of the Corporation, which disclosure is incorporated herein by reference.

ITEM 8.

FINANCIAL INFORMATION (also see ITEMS 3 and 19(a))

Legal Proceedings

On August 30, 1999, the Corporation and Atlanta U.S. were made third party defendants in an action commenced in the United States District Court for the District of Idaho by Monarch Greenback, LLC against, among others, Doe Run Resources Corporation ("Doe Run").  The third party complaint was commenced by Doe Run against, among others, the Corporation and Atlanta U.S. and involves claims for environmental cleanup cost recovery and contribution arising out of a failure in May 1997 of a tailings impoundment on a
property known as the Butler Ranch near Atlanta, Idaho, which property is adjacent to the Atlanta Gold Property. The Corporation disputes the claims made in the third party complaints and has instructed legal counsel to move for summary judgment dismissing all claims against the Corporation and Atlanta U.S. In 2002, the Corporation obtained an order from the U.S. District Judge in Boise, Idaho, summarily dismissing the claims against the Corporation and Atlanta Gold. Doe Run has appealed that order to the United States Court of Appeals for the Ninth Circuit. The Appeal has not yet been heard.

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On June 30, 1999, a statement of claim was filed in the Supreme Court of British Columbia alleging that Stephen Walters, the former exploration manager in Indonesia of the Corporation, was constructively dismissed by the Corporation and seeking damages of approximately US$242,000.  On January 29, 2001, the claim was settled for US$175,000.

On March 14, 2000, following the Corporation's termination (in September, 1999) of a joint venture agreement, a statement of claim was filed in the Supreme Court of British Columbia by Indotan Inc. alleging that the Corporation and its predecessors had failed to comply with certain provisions of the letter agreement dated August 23, 1996 (the "Indotan Agreement") between Atlanta U.S., Voisey Bay Resources Inc. and Indotan regarding the acquisition and exploration of mining rights relating to certain mineral properties located in Kalimantan, Indonesia. In particular, Indotan alleged that the Corporation and its predecessors had not complied with certain provisions of the Indotan Agreement regarding the issue to Indotan of up to 3,500,000 common shares of the Corporation in relation to expenditures in respect of such mineral properties and regarding expenditures required to be made in respect of such mineral properties. In October 2001, the Indotan claim was settled by paying $7,800, issuing 300,000 common shares of the Corporation, and transferring the Corporation's interest in the Saran Properties, having a carrying value of $297,124, to Indotan.

ITEM 9.

OFFER AND LISTING DETAILS

The table below summarizes the high and low trading prices of the common shares of the Corporation on the Toronto Stock Exchange for (a) each of the five financial years; (b) each of the eight quarterly periods within the past two financial years of the Corporation; and (c) each of the most recent five months:



































































Period                                                                                              
        (In Canadian Dollars)High
      LowFinancial year ended December 31,
      1999
    $0.72
    $0.085Financial year ended December 31,
      2000
    $1.20
    $0.37Financial year ended December 31,
      2001
    $0.66
    $0.30Quarter ended March 31, 2002
    $0.82
    $0.40Quarter ended June 30, 2002
    $0.59
    $0.35Quarter ended September
      30,2002
    $0.49
    $0.30Quarter ended December 31,
      2002
    $0.42
    $0.315Quarter ended March 31, 2003
    $0.36
    $0.27Quarter ended June 30, 2003
    $0.33
    $0.22Quarter ended September 30,
      2003
    $0.47
    $0.27Month ended October 31, 2003
    $0.39
    $0.33Month ended Novmber 30, 2003
    $0.49
    $0.33Month ended December 31, 2003
    $0.425
    $0.365Month ended January 31, 2004
    $0.395
    $0.315Month ended February 29, 2004
    $0.345
    $0.30






As at February 5, 2004 there were 8,940,424common shares (9.49% of the outstanding common shares) of the Corporation held of record by 145 persons residing in the United States.

There is no United States market in which any securities of the Corporation are traded. The common shares of the Corporation are traded on the Toronto Stock Exchange under the trading symbol "TWG" and on the Berlin/Frankfurt Over-the­ Counter Exchange under the symbol "#878 341, EDV Kurzel ATG".



ITEM 10.

ADDITIONAL INFORMATION

A.

Share Capital (See Consolidated Statement of  Shareholders' Equity in ITEM 19(a))

B.

Articles of Continuance and By-laws

The Corporation was incorporated under the laws of the Province of British Columbia on March 6, 1995 as Atlanta Gold Corporation.  On April 3, 1997, Atlanta Gold Corporation acquired Voisey Bay Resources Inc.

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pursuant to an amalgamation by way of an arrangement and changed its name to Twin Gold Corporation.  By Certificate and Articles of Continuance dated March 15, 2000, the Corporation was continued under the laws of the Province of Ontario as Twin Mining Corporation.  The Corporation's Articles of Continuance do not contain any limitations on the objects or purposes of the Corporation.

Matters in Which a Director or Officer is Interested

The Corporation's by-laws and the Business Corporations Act (Ontario) (the
"Act") provide that each director or officer of the Corporation who is a party to or who is a director or officer of or who otherwise has a material interest in any entity which is a party to, any existing or proposed material contract or transaction with the Corporation, must disclose in writing or request to have entered in the minutes of a directors' meeting, the nature and extent of such interest.  The declaration of interest must be made at the meeting of the Corporation's Board of Directors at which the question of entering into the proposed contract or transaction is first taken into consideration, or if the interested director did not then have an interest in the contract or transaction, at the first meeting of the Board of Directors occurring after the director acquired an interest.  An officer who is not a director must declare his or her interest forthwith after the officer becomes aware that the contract or transaction is to be considered or has been considered by the Board of Directors.  The Corporation's by-laws provide that a director interested in a contract or transaction shall not vote on any motion to approve any such contract or transaction, except as otherwise permitted by the Act.  The Act permits a director to vote on resolutions in respect of arrangements by way of security for money lent to or obligations undertaken for the benefit of the Corporation, in respect of matters relating primarily to his or her remuneration as a director, officer, employee or agent of the Corporation and in respect of matters relating to indemnity and insurance.

Borrowing Powers

Pursuant to the Corporation's by-laws, the Board of Directors may from time to time, without the authorization of the shareholders of the Corporation:

(i)

borrow money upon the credit of the Corporation;

(ii)

issue, reissue, sell or pledge debt obligations of the Corporation;

(iii)

subject to the Act, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and

(iv)

mortgage, hypothecate, pledge or otherwise create a security interest in all or any present or future property of the Corporation to secure an obligation of the Corporation.

The Board of Directors may by resolution delegate any or all of the above-noted powers to a director, a committee of directors or to an officer of the Corporation.

Directors' Retirement and Share Ownership

The Corporation's articles and by-laws do not require directors to retire at a fixed age and do not require a director to hold qualifying shares of the Corporation.  Unless otherwise stated, the term of office for each director expires at the close of the next annual meeting of shareholders following such director's election or
when such director's successor is elected unless prior to such annual meeting, such director retires or is removed from office or otherwise ceases to be qualified to be a director, in each case in accordance with the Act.

Rights and Preferences of Shares

The authorized share capital of the Corporation consists of an unlimited number of common shares, an unlimited number of first preference shares ("First Preference Shares") issuable in series and an unlimited number of second preference shares ("Second Preference Shares") issuable in series.  As of February 29, 2004,

35.

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the Corporation had 94,209,321 common shares, no First Preference Shares and no Second Preference Shares issued and outstanding.  Each common share of the Corporation entitles the holder to one vote at all meetings of shareholders of the Corporation, other than meetings at which only holders of another class or series of shares are entitled to vote.  Subject to the prior rights and privileges attaching to the First Preference Shares and the Second Preference Shares and the shares of any other class ranking senior to the common shares, holders of common shares are entitled to receive dividends in such amounts as and when declared by the Board of Directors.  In the event of the liquidation, dissolution or winding-up of the Corporation or other distribution of the property and assets of the Corporation for the purpose of winding-up the affairs of the Corporation and subject to the prior rights of holders of First Preference Shares, Second Preference Shares and shares of any class ranking senior to the common shares, holders of common shares are entitled to receive the remaining property and assets of the Corporation.

The First Preference Shares and the Second Preference Shares are each issuable in one or more series.  The Board of Directors is entitled to fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the First Preference Shares and the Second Preference Shares of each series, including voting and dividend rights.  With regard to payment of dividends and the distribution of property and assets in the event of the liquidation, dissolution or winding-up of the Corporation, the First Preference Shares rank in priority to the Second Preference Shares and the First Preference Shares and Second Preference Shares rank in priority to the common shares and any other shares of the Corporation ranking junior to the First Preference Shares or Second Preference Shares.  The First Preference Shares and Second Preference Shares of each series may also be given such other preferences over any other shares ranking junior to them as may be determined.  Each series of First Preference Shares will rank on a parity with every other series of First Preference Shares and each series of Second Preference Shares will rank on a parity with every other series of Second Preference Shares, in each case with respect to payment of dividends and priority in the return of capital in the event of the liquidation, dissolution or winding-up of the Corporation.

The First Preference Shares and Second Preference Shares are non-voting, except as otherwise required by the Act and except as may be designated by the Board of Directors with respect to any series of such shares.

Amendment of Share Capital

Pursuant to the Act, the creation of a new class of shares, the addition, change or removal of any rights, privileges or restrictions in respect of all or any of the Corporation's shares and the change of the Corporation's shares into a different number of shares, among other things, require the approval of a majority of not less than two-thirds of the votes cast by shareholders who vote in respect of the matter, and in certain circumstances, with each class or series of shares entitled to vote separately.  The Board of Directors is authorized (without shareholder approval) to designate one or more series of First Preference Shares and Second Preference Shares and to fix the rights, privileges, conditions and restrictions attaching to each such series.

Shareholders' Meetings

The Act requires that an annual meeting of the Corporation's shareholders be held not later than 15 months after the preceding annual meeting, at a time and place determined by the Board of Directors of the Corporation.  The Board of Directors may at any time call a special meeting of the shareholders.  At least 21 days' notice and not more than 50 days' notice of every shareholders meeting, specifying the time, place and purpose for holding such meeting and, when special business is to be considered, specifying the nature of the
special business to be transacted, must be given to the Corporation's shareholders entitled to vote at the meeting, to each director and to the auditor of the Corporation.  Those persons entitled to notice of the shareholders' meeting, those entitled to vote at the meeting and such other persons as may be required by the Act, are entitled to be present at the meeting.  Any other person may be admitted to the shareholders' meeting only on the invitation of the chairman of the meeting or with the consent of the meeting.

36.



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Shareholder Ownership Disclosure

The Corporation's articles and by-laws do not contain a provision governing the ownership threshold at which a shareholder's ownership must be disclosed.  Under the securities laws of the Province of Ontario, a person or company who acquires beneficial ownership of, or the power to exercise control or direction over, 10% or more of the outstanding common shares of the Corporation, is required to forthwith issue and file a news release and within 2 business days after such acquisition, file a report, in each case containing prescribed information.  Thereafter, such person or company must issue a further news release and file a further report for each additional 2% increase in its shareholdings.

Investment Canada Act

Except as provided in the Investment Canada Act (the "Investment Act"), there are no limitations under the laws of Canada, the Province of Ontario or in the articles or bylaws of the Corporation, on the right of non- Canadians to hold or vote the Corporation's common shares.

The Investment Act generally prohibits implementation of a reviewable investment by an individual, government (or agency thereof), corporation, partnership, trust or joint venture that is not a "Canadian" as defined in the Investment Act (a "non-Canadian"), unless after review the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. An investment in the Corporation's common shares by a non-Canadian (other than a "WTO Investor" or a
"NAFTA Investor" as defined in the Investment Act) would be reviewable under the Investment Act if it was an investment to acquire control of the Corporation and the value of the assets of the Corporation was $5 million or more. A non-Canadian (other than a WTO Investor or NAFTA Investor) would be deemed to acquire control of the Corporation for the purposes of the Investment Act if he acquired a majority of the common shares outstanding (or less than a majority but controlled the Corporation in fact through the ownership of one-third or more of the common shares outstanding) unless it could be established that, on the acquisition, the Corporation was not controlled in fact by the acquisition through the ownership of such shares. Certain transactions in relation to the Corporation's common shares would be exempt from review under the Investment Act, including, among others, the following:

(a)

acquisition of shares by a person in the ordinary course of that person's business as a trader or dealer in securities;

(b)

acquisition of control of the Corporation in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provision of the Investment Act; and

(c)

acquisition of control of the Corporation by reason of any amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control of the Corporation, through the ownership of voting interests, remains unchanged.

The Investment Act provides for special review thresholds for WTO Investors and NAFTA Investors, who are essentially a natural or permanent resident of a World Trade Organization ("WTO") or North American Free Trade Agreement ("NAFTA") member, or an entity controlled by such persons. The United States is a member of the WTO and NAFTA. Under the Investment Act, as amended, an investment in the Corporation's common shares by a WTO Investor or a NAFTA Investor would be reviewable only if it was an investment to acquire control of the Corporation and the value of the assets of the Corporation was equal to or greater than a
specified amount (the "Review Threshold"), which increases in stages. The Review Threshold is currently  $237 million , and is adjusted annually (calculated as prescribed in the Investment Act).

The provisions of the Investment Act may have an anti-takeover effect as they may operate to prevent  non-Canadian persons from directly or indirectly acquiring control of the Corporation.

37.



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Shareholders Rights Plan

In November 2000, the Board of Directors of the Corporation adopted a Shareholder Rights Plan (the
"Plan"), the terms of which are set forth in the Shareholder Rights Plan Agreement dated as of November 17, 2000 between the Corporation and Equity Transfer Services Inc. As amended by agreement dated January 26, 2001, the Plan was ratified by shareholders at a meeting held on March 15, 2001 and the Plan will be in effect until the 2011 annual meeting.

Under the Plan, a right to purchase one of the Corporation's common shares (a
"Right") was issued for each outstanding common share as of November 17, 2000. In addition, a Right will be issued for each share issued subsequent to November 17, 2000 and prior to the separation date of the Rights. The rights are initially not separate from the Corporation's common shares nor are they represented by separate certificates. However, upon a person acquiring ownership of 20% or more of the Corporation's common shares (other than by means of complying with the Plan's Permitted Bid provisions or with approval of the Board of Directors of the Corporation), a holder of a Right (other than the acquiror of 20% or more of the Corporation's common shares) becomes entitled to exercise the Right and to purchase the number of common shares as determined under the Plan at a 50% discount to the then prevailing market price per share.

Under the Plan, a Permitted Bid is, among other things, a bid made to all shareholders for all common shares that is open for at least 60 days and which must be accepted by holders of at least 50% of the Corporation's outstanding common shares, excluding shares held by the offeror and certain related parties. If at the end of 60 days, at least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been tendered, the offeror may take up and pay for the shares, but must extend the bid for a further 10 days to allow other shareholders to tender. The Rights may, in certain circumstances, be redeemed by the Corporation at a price of $0.00001 per Right.

C.

Material Contracts

On July 22, 1997, the Corporation and Canadian American Mining Company, LLC ("CAMC") (formerly Quest International Resources Corporation) ("Quest"), entered into a joint venture agreement (the
"Quest Agreement") whereby the Corporation was initially appointed as the operator of Atlanta with an 80% interest, with Quest holding the remaining 20% participating interest. Quest subsequently advised the Corporation that it had elected under the Quest Agreement not to participate in its contractual share of further property costs incurred after 1997. In December 2002, CAMC transferred its 20% participating interest in the joint venture to the Corporation. CAMC retains the 2% Net Smelter Return royalty on Atlanta, as per the Quest Agreement.

In August 2003, the Corporation signed a letter agreement with Breakwater Resources Ltd. ("Breakwater"), whereby Breakwater granted the Company the exclusive right and option to earn up to a 100% interest in six gold properties, totaling 91 mining claims and covering 28.49 sq. km, located along a 65km stretch of the Abitibi gold belt in eastern Quebec.  The Corporation can earn a 60% interest by paying Breakwater $125,000 in rental and option payments ("Payments") and by incurring $3,500,000 in expenditures as follows:

On
or before

Payments

Expenditures
to be incurred



Signing

Nil

Nil

01-Sep-04

$  25,000

$    150,000

01-Sep-05

$  25,000

$    350,000

01-Sep-06

$  25,000

$    600,000

01-Sep-07

$  25,000

$ 1,000,000

01-Sep-08

$  25,000

$ 1,400,000



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Expenditures exceeding minimum annual requirements incurred may be carried forward to following years and credited against future expenditure minimums. The Corporation can acquire an additional 10% interest by making a $100,000 cash payment to Breakwater. Within six months after the preparation of an independent positive feasibility study, the Corporation may acquire a further 10% interest in the property by making a $500,000 cash payment to Breakwater. Upon formation of a joint venture, expenditures will be shared between the Corporation and Breakwater in accordance with their respective ownership interest. If Breakwater's interest in the joint venture is reduced to, or below, a 10% interest, then Breakwater's interest in the joint venture will be deemed to be converted to a 1.5% net smelter return (NSR) royalty. The Corporation may purchase the 1.5% NSR royalty at any time for a cash payment of $1,500,000 to Breakwater (See Exhibit 5.1).

D.

Exchange Controls

There are currentlyno restrictions on the export or import of capital out of or into Canada, nor are there foreign exchange controls or other laws, decrees or regulations of Canada or the Province of Ontario restricting remittance of dividends or other payments to non-resident holders of the Corporation's common shares, other than any applicable withholding taxes. However, no assurance can be given that legislation enacted in the future will not have an adverse impact on non-Canadian shareholders.

E.

Taxation

The following paragraphs set forth certain United States and Canadian income tax considerations in connection with the ownership of common shares of the Corporation. These tax considerations are stated in general terms. There may be relevant state, provincial or local income tax considerations which are not discussed.

Certain United States Federal Income Tax Consequences

The following is a general discussion of certain possible United States Federal income tax consequences, under current law, generally applicableto a U.S. Holder (as defined below) of common shares of the Corporation. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, provincial, local or foreign tax consequences. (See certain Canadian tax consequences below under the heading "Certain Canadian Federal Income Tax Consequences"). The following discussion is based upon the sections of the Internal Revenues Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal Revenue Service (the "IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The following discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Corporation, and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares should consult their own tax advisors about the Federal,state, provincial, local, and foreign tax consequences of purchasing, owning and disposing of common shares.

U.S. Holders

As used herein, a "U.S. Holder" includes a holder of common shares who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof and any other person or entity whose ownership of common shares is effectively connected with the conduct of a trade or business in the United States. A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies,  real estate investment trusts, regulated investment companies, broker-dealers, partnerships, estates, trusts, nonresident alien individuals or foreign corporations whose

39.



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ownership of common shares is not effectively connected with the conduct of a trade or business in the United States and shareholders who are not residents or citizens of the United States who acquired their stock through the exercise of employee stock options or otherwise as compensation.

Distributions on Common Shares

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions in the year received to the extent that the Corporation has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder's Federal income tax liability, or alternatively, may be deducted in computing the U.S. Holder's United States Federal taxable income by corporations or individuals who itemize deductions. (See more detailed discussion in "Foreign Tax Credit" below). To the extent that distributions exceed current or accumulated earnings and profits of the Corporation, they will be treated first as a return of capital up to the U.S. Holder's adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while net long term capital gains of a shareholder other than a corporation are subject to a maximum tax rate of 20%. Corporate United States shareholders are taxed on the net capital gains at the regular tax rates. Gain from the sale or exchange of the common shares will be capital gain if the Common shares are held as a capital asset, and will be long term capital gain if the common shares with respect to which the gain is realized have been held for more than twelve months.

Dividends paid on the common shares will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Corporation (unless the Corporation is a "foreign personal holding company" or a "passive foreign investment company", as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Corporation and such U.S. Holder has held the shares of the Corporation for at least 46 days. The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to dividends paid with respect to common shares may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's income subject to tax. The foreign tax credit is elective, and if the U.S. Holder elects to take the credit, no deduction for foreign taxes paid is available. Generally, the U.S. Holder accounts for the foreign tax credit in a manner consistent with the U.S. Holder's method of accounting. However, the U.S. Holder may be able to claim a foreign tax credit in the year that the foreign taxes accrue even if the U.S. Holder uses the cash method of accounting. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the
proportionate share of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. There are further limitations on the foreign tax credit for certain types of income such as "passive income," "high withholding tax interest," "financial services income," "shipping income," and certain other classifications of income. The availability of the foreign tax credit and the application on the limitations on the credit are fact specific and holders and prospective holders of common shares should consult their own tax advisors regarding their individual circumstances.

40.



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Other Considerations

In the following circumstances, the above sections of this discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Corporation:

i) Foreign Personal Holding Corporation

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Corporation's outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 60% or more of the Corporation's gross income for such year was derived from certain passive sources (e.g. possibly dividends received from its non Canadian subsidiaries), the Corporation would be treated as a "foreign personal holding company". In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allowable portions of such passive income to the extent the Corporation does not actually distribute such income. A person acquiring stock of a Foreign Personal Holding Corporation from a decedent will not be entitled to a step-up in the basis of the Foreign Personal Holding Corporation at the decedent's death

ii) Foreign Investment Corporation

If 50% or more of the combined voting power or total value of the Corporation's outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701 (a)(31)), and the Corporation is found to be engaged primarily in the business of investing, reinvesting or trading in securities, commodities or any interest therein,it is possible that the Corporation may be treated as a "foreign investment company" as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gains. A U.S. Shareholder acquiring stock of a Foreign Investment Corporation from a decedent may not be entitled to a step-up in the basis of the Foreign Investment Corporation  at the decedent's death.

iii) Passive Foreign Investment Corporation

Under the Code, certain tax consequences may result from classification of a corporation as a passive foreign investment company (a "PFIC"). A corporation not formed in the United States is a PFIC if 75% or more of its gross income for the taxableyear is from passive sources such as interest, dividends and certain rents and royalties or if the average percentage of assets by value (in the case of a publicly-traded corporation) held by such corporation during the taxable year which produce passive income is at least 50%. Where the Corporation is both a controlled foreign corporation and a PFIC, the PFIC rules will not apply. Furthermore, a PFIC will not include any Foreign Investment Corporation which has made an election to distribute its income currently under Code section 1247.  Classification of the Corporation as a PFIC may affect shareholders who are United States citizens, resident aliens or United States corporations, estates or trusts other than foreign estates or trusts (a "U.S. shareholder").  A U.S. shareholder who holds stock indirectly (i.e., is a partner in a partnership or a beneficiary in an estate or trust) is also subject to these rules. The Corporation believes that there is a significant possibility that it would be deemed to fit within the PFIC definition.

U.S. shareholders of a company that is a PFIC who held stock after December 31, 1986 are subject to certain adverse tax consequences. For example, a gain recognized on disposition of PFIC stock or on receipt of an excess distribution from a PFIC is considered earned pro rata over the U.S. shareholder's holding period and is treated as ordinary income and is generally taxed at the highest marginal rates in effect during that period (an excess distribution is the amount of any distribution received by the U.S. shareholder during the taxable year over 125% of the average amount received in respect of the PFIC stock by the U.S. shareholder during the three preceding taxable years, subject to certain adjustments). U.S. shareholders must also pay an interest charge based on the value of tax deferral when the U.S. shareholder disposes of its stock or receives an excess distribution. Additionally, a U.S. shareholder who uses PFIC stock as security for a loan is treated as having disposed of the stock.  A transfer of the PFIC stock where there is not full recognition of gain,  will be

41.



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treated as a taxable disposition in some circumstances, and a U.S. shareholder acquiring PFIC stock from a decedent who was a U.S. shareholder during his or her holding period of the PFIC stock, will not be entitled to a step-up in the basis of the PFIC stock at death.

Shareholder Election and Corporation Record-keeping Requirements

Adverse tax consequences, other than the loss of the step-up in basis at death, and the deemed disposition where PFIC stock is used as security of a loan, can be avoided, if (i) the U.S. shareholder has elected to treat the PFIC as a qualified electing fund (a "QEF'") with respect to that U.S. shareholder effective for each of the PFIC's taxable years beginning on or after January 1, 1987, which include any portion of the U.S. shareholder's holding period, and (ii) the Corporation complies with reporting requirements to be prescribed by the Secretary of the Treasury.

THE QEF ELECTION FOR A TAXABLE YEAR MUST BE FILED BY THE DUE DATE (PLUS EXTENSION) FOR FILING THE U.S. SHAREHOLDER'S INCOME TAX RETURN FOR THAT YEAR. A U.S. shareholder makes a QEF election by filing a Form 8621 with his or her tax return. Once the election is made with respect to the Corporation, it cannot be revoked without permission from the Secretary of the Treasury.

When a PFIC becomes a QEF with respect to a U.S. shareholder and an election by the U.S. shareholder to treat the PFIC as a QEF has not been in effect for each of the PFIC's taxable years beginning on or after January 1, 1987, which include any portion of the U.S. shareholder's holding period, the U.S. shareholder may elect to recognize gain as if it had sold the QEF stock on the first day of the taxable year in which the QEF election is made, if (i) the U.S. shareholder holds stock in the PFICon that day, and (ii) the U.S. shareholder can establish the fair market value of the PFIC stock on that day.The U.S. shareholder will treat that deemed sale transaction as a disposition of PFIC stock and will thereafter be subject to the rules described below applicable to U.S. shareholders of a QEF.

The Corporation intends to comply with the reporting requirements that are prescribed in Treasury regulations.  In particular, the Corporation will maintain information so that the ordinary earnings and net capital gain of the Corporation may be determined. If, after review of the requirements, the Corporation decides not to comply with the PFIC record-keeping requirements, the Corporation will so notify its shareholders.

Qualified Electing Funds

In general, U.S. shareholders of a QEF are taxable currently on their pro rata share of the QEF's ordinary income and net capital gain, unless they elect to defer payments of tax on amounts included in income for which no distribution has been received (subject to an interest charge). Because the Corporation technically fits within the PFIC definition,each U.S. shareholder of the Corporation should consult its tax advisor to determine whether it wishes to make the QEF election and with respect to how the PFIC rules affect its tax situation generally.

Controlled Foreign Corporation

If more than 50% of the voting power of all classes of stock or the total value of the stock of the Corporation is owned, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own 10% or more of the total combined voting power of all classes of stock of the Corporation ("United States shareholders"), the Corporation could be treated as a "controlled foreign corporation" under Subpart F of the Code. This classification would effect many complex results including the required inclusion by such United States shareholders in income of their pro rata shares of "Subpart F income" (as specially defined by the Code) of the Corporation. In addition, under Section 1248 of the Code, a gain from the sale or exchange of stock by a holder of common shares who is or was a United States shareholder at any time during the five year period ending with the sale or exchange is treated as ordinary dividend income to the extent of earnings and profits of the

42.



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Corporation attributable to the stock sold or exchanged. Because of the complexity of Subpart F a more detailed review of these rules is outside of the scope of this discussion.

THE FOREGOING SUMMARY IS A GENERAL DISCUSSION OF THE UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS GENERALLY APPLICABLE TO U.S. HOLDERS OF COMMON SHARES UNDER CURRENT LAW. IT DOES NOT DISCUSS ALL OF THE TAX CONSEQUENCES THAT MAY BE RELEVANT TO PARTICULAR HOLDERS IN LIGHT OF THEIR CIRCUMSTANCES OR TO HOLDERS SUBJECT TO SPECIAL RULES, SUCH AS TAX-EXEMPT ORGANIZATIONS, QUALIFIED RETIREMENT PLANS, FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, REAL ESTATE INVESTMENT TRUSTS, REGULATED INVESTMENT COMPANIES, BROKER-DEALERS, NONRESIDENT ALIEN INDIVIDUALS OR FOREIGN CORPORATIONS WHOSE OWNERSHIP OF COMMON SHARES IS NOT EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES, SHAREHOLDERS WHO ACQUIRED THEIR STOCK THROUGH THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, AND ANY OTHER NON-U.S. HOLDERS. IN ADDITION, U.S. HOLDERS MAY BE SUBJECT TO STATE, LOCAL OR FOREIGN TAX CONSEQUENCES. THIS DISCUSSION IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OF COMMON SHARES OF THE REGISTRANT AND NO OPINION OR REPRESENTATION WITH RESPECT TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO ANY SUCH HOLDER OR PROSPECTIVE HOLDER IS MADE. HOLDERS AND PROSPECTIVE HOLDERS SHOULD THEREFORE CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES.

Certain Canadian Federal Income Tax Considerations

The following summary of certain Canadian federal income tax considerations is generally applicable to a holder (a "Holder") of common shares who for the purposes of the Income Tax Act(Canada) (the "Act") is not a resident of Canada, holds the common shares as capital property, dealsat arm's length and is not affiliated with the Corporation, does not use or hold the common shares in carrying on a business in Canada and is not a non-resident insurer for the purposes of the Act.

Dividends

A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his common shares. Under the Canada-U.S. Income Tax Convention (1980) (the "Treaty") the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Corporation, 5% and, in any other case, 15% of the gross amount of the dividend. The Corporation will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount to the Canada Customs and Revenue Agency.

Disposition of Common Shares

A Holder who disposes of a common share, including by deemed disposition on death, will not be subject to tax under the Act on any capital gain thereby realized unless the common share constituted "taxable Canadian property" at the time of disposition as defined in the Act.  Generally, a common share of a corporation listed on a prescribed stock exchange (the Toronto Stock Exchange is a prescribed stock exchange) will not constitute taxable Canadian property of a Holder unless, at any time within the 60 months preceding the disposition, the Holder or persons with whom the Holder did not deal at arm's length or the Holder together with such persons owned or had an interest in or an option to acquire 25% or more of the shares of any class of the capital stock of the Corporation.

A Holder who is a resident of the United States and realizes a capital gain on disposition of a common share that is taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common share is derived from, or from an interest in,

43.

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Canadian real property, including Canadian mineral resource properties, or (b) the Holder (i) was a resident of Canada at any time within the ten years immediately preceding the disposition and was a resident of Canada for a total of 120 months during the 20 consecutive years preceding the disposition, and (ii) owned the common share when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of a common share must include one-half of the capital gain realized ("taxable capital gain") in computing his taxable income earned in Canada.  The Holder may, subject to the detailed rules in the Act, deduct one-half of any capital loss arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition upon the disposition of other taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.

F.

Dividends

Not applicable.

G.

Documents on Display

All material contracts listed herein may be inspected between the hours of 9:00 a.m. and 5:00 p.m. at the head office of the Corporation located at 1250 - 155 University Avenue, Toronto, Ontario, L4W 3T6. The Financial Statements of the Corporation are also available on the SEDAR website at www.sedar.com.

ITEM 11.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Gold Call Options

In 1999, the Corporation entered into gold call option transactions. Call options for 15,000 ounces of gold, exercisable at US$290 per ounce and maturing in June 2001, were sold for US$243,000. Call options for 20,000 ounces of gold, exercisable at US$320 per ounce and maturing in June 2001, were purchased for US$128,000. The Corporation received cash proceeds of US$106,250 (net of commission of US$8,750) In 2001, the gold call options contracts expired and the gold call option liability of US$35,000 was recorded as income (2000
- US$51,000; 1999 - US$20,250) and $10,000 (US$6,500) was paid as interest expense for the balance outstanding since 1999.



ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

Part II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

See Item 10. B.

Articles of Continuance and By-laws

ITEM 15.

CONTROLS AND PROCEDURES

The directors of the Corporation are elected annually and hold office until the next annual meeting of the shareholders of the Corporation or until their successors in office are duly elected or appointed. The Corporation does not have an executive committee. All directors are elected for a one-year term. All officers serve at the pleasure of the Board.

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The Corporation's Board of Directors has only one committee, the Audit Committee, which is composed entirely of independent directors, being Cedric Ritchie, Robert Pendreigh, Alfred Powis and James Gray. The Audit Committee has the responsibility of reviewing with the Corporation's external auditor all financial statements to be submitted to an annual meeting of the shareholders of the Corporation, prior to their consideration by the Board of Directors. The members of the Audit Committee do not receive any separate remuneration for acting as members of the committee. (Please see
"Statement of Corporate Governance Practices" in the Management Information Circular dated February 4, 2004 indexed herein as ITEM 19(b)).

As of the end of the period covered by this report, the Corporation's management (with the participation of its Chief Executive Officer and Chief Financial Officer) conducted an evaluation pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures. Based on this evaluation, the Corporation's Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report such disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Corporation in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

ITEM 16.



A.

Audit Committee Financial Experts

Mr. Powis and Mr. Richie have been determined by the board of directors to be the Audit Committee's financial experts.

B.

Code of Ethics

During the year, the Corporation adopted a Code of Conduct, including an Insider Trading Policy, applicable to all directors, officers, senior management and employees of the Corporation. The text of the Code of Conduct is available on our website, www.twinmining.com. A copy of the Code of Conduct is indexed as Exhibit 5.2.

C.

Principal Accountant Fees and Services

The Corporation's external auditors, PricewaterhouseCoopers LLP, billed the Corporation CD$27,500 for professional services rendered in connection with the 2003 financial year-end audit and $25,000 in connection with the 2002 financial year-end audit. There were no other fees incurred by PricewaterhouseCoopers LLP during this period.

During 2003, the Corporation adopted a formal charter for its Audit Committee. Among other things, the Committee's role is to recommend to the board of directors the choice of auditor to be nominated for appointment by the Corporation's shareholders. The Committee has the authority to approve all audit engagement terms and fees. The Committee must pre-approve all non-audit and assurance services to be provided by the auditor. The auditor is required to breport directly to the Audit Committee. On January 7, 2004, there was a meeting of the Audit Committee with the auditors present to discuss and, ultimately, approve the audit plan for the 2003 fiscal year-end.



Part III

ITEM 17.

FINANCIAL STATEMENTS

Indexed herein at ITEM 19.





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ITEM 19.

FINANCIAL STATEMENTS AND EXHIBITS

|a)                                          | Index to Financial Statements                                                                                                                       
|------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|                                            | The Management Discussion and Analysis of the Corporation is included in the 2003 Annual Report of the Corporation incorporated herein by reference.
|                                            | Management's report on the consolidated financial statements.                                                                                       
|                                            | Independent auditors' report to the shareholders.                                                                                                   
|                                            | Consolidated balance sheets as at December 31, 2003 and December 31, 2002.                                                                          
|                                            | Consolidated statements of loss for the years ended December 31, 2003, December 31, 2002 and December 31, 2001.                                     
|                                            | Consolidated statements of cash flow for the years ended December 31, 2003, December 31, 2002 and December 31, 2001.                                
|                                            | Consolidated statements of mineral properties for the years ended December 31, 2003, December 31, 2002 and December 31, 2001.                       
|                                            | Consolidated statement of shareholders' equity for the years ended December 31, 2003, December 31, 2002 and December 31, 2001.                      
|                                            | Notes to the consolidated financial statements.                                                                                                     
|                                            | U.S. GAAP reconciliation Schedule appended to notes and auditors' report                                                                            
|b)                                          | Index to Exhibits                                                                                                                                   
|Documents
    Incorporated
    by Reference |                                                                                                                                                     
|                                            | The 2003 Annual Report of the Corporation.                                                                                                          
|                                            | Item 4, Segmented Information, Note. 7 to the consolidated financial statements of the 2002 Annual Report of the Corporation                        
|                                            | Item 5, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the 2003 Annual Report of the Corporation
|                                            | Item 19(a), Index to Financial Statements, included in the 2003 Annual Report of the Corporation                                                    
|                                            | Management information circular dated February 4, 2004 of the Corporation                                                                           
|                                            | Item 6, Directors, Senior Management and Employees, "Executive Compensation" is set in the management information circular.                         
|                                            | Item 7, Related Party Transactions, "Interest of Management and Others in Material Transactions" set out in the management information circular.    
|                                            |                                                                                                                                                     



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|Exhibit
Number | Description                                                                                                                                                                                                                                                                                                                                                                                | # of Pages
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------
|2.23#          | A fifth five-year diamond mine exploration permit (see 2.13 above) granted to the Corporation by the Ministry of Natural Resources (Quebec) covering 62.85 square kilometres for terms ranging from September 15, 2000 to September 15, 2005.                                                                                                                                              |           
|2.24#          | Amendment dated April 30, 2001 to the Second Amendment (see 2.20 above) of the mining lease and option to purchase agreement dated January 5, 2000, regarding the Atlanta Gold Property.                                                                                                                                                                                                   |           
|2.25#          | Claim Purchase, Gross Royalty and Net Profit Interest ("NPI") Agreements with Helix Resources Inc., signed on December 15, 2000, to exercised its option to acquire 100% of three mineral claims from Helix
    (Freightrain, tag # F65593; Slot, tag # F45691; and 38S, tag # F45683) totaling 7,128.5 acres (28.85 square
    kilometres). Claim 38S (2,480 acres) was allowed to lapse. |           
|2.26#          | 16 mineral claim permits transferred and 49 mineral claim permits granted to the Corporation by the Department of Indian and Northern Affairs Canada ("INAC") covering an additional 136,854.85 acres.                                                                                                                                                                                     |           
|2.27#          | Shareholder Rights Plan Agreement dated as of November 17, 2000 between the Corporation and Equity Transfer Services Inc. ("Equity Transfer")                                                                                                                                                                                                                                              |           
|2.28#          | Amending Agreement to the Shareholders Rights Plan dated as of January 26, 2001 between the Corporation and Equity Transfer.                                                                                                                                                                                                                                                               |           

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|2.29#          | Agency Agreement dated May 5, 2000 between the Corporation, Dundee Securities Corporation and National Bank Financial Inc.                                                                                                                                                                                                                                                                                                |         
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|2.30#          | The form of subscription and renunciation agreement entered into on May 17 and 18, 2000 between the Corporation and subscribers for flow-through common shares of the Corporation.                                                                                                                                                                                                                                        |         
|2.31#          | The form of subscription and renunciation agreement entered into on May 17 and 18, 2000 between the Corporation and agents appointed by the subscribers for flow-through common shares of the Corporation.                                                                                                                                                                                                                |         
|2.32##         | Second Amendment dated January 19, 2001 of the mining lease and option to purchase agreement dated March 4, 1998 regarding the Atlanta Gold Property (the
    "Hollenbeck lease").                                                                                                                                                                                                                                        |         
|2.33##

2.34## | Second Amendment dated April 30, 2001 of the mining lease and option to purchase agreement dated on April 19, 1998 regarding the Atlanta Gold Property (the
    "Gardner lease").
    First Amendment dated November 30, 2001 to the of the mining lease and option to purchase agreement expiring on, and extended annually after, December 30, 1996 regarding the Atlanta Gold Property (the
    "Hill & Davis lease"). |         
|2.35##         | The fourth and fifth diamond mine exploration permit (see 2.23 and 2.13 above) are not renewed by the Corporation, as confirmed by the Ministry of Natural Resources (Quebec) covering 111.7 square kilometres and 62.85 square kilometres, respectively.                                                                                                                                                                 |         
|2.36##         | 32 mineral claim permits granted to the Corporation on April 18, 2002 by the Department of Indian and Northern Affairs Canada ("INAC") covering an additional 82,640 acres.                                                                                                                                                                                                                                               |         
|4.1###         | Agreement to abandon the 20% Participating Interest by Canadian American Mining Company, LLC ("CAMC") (formerly Quest USA Resources Inc. ("Quest")) under Venture Agreement dated July 22, 1997 between Quest and Atlanta U.S.                                                                                                                                                                                            | 3 pages 
|99.1###        | Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                    | 1 page  
|5.1            | Option to acquire a 60% Participating Interest on 6 non-contiguous claim blocks totaling ninety one claims or 2,849 hectares from Breakwater Resources Ltd. ("Breakwater") under an Option to Purchase Agreement dated August 13, 2003 between Breakwater and the Corporation.                                                                                                                                            | 5 pages 
|5.2            | Charter of the Audit Committee of the Board of Directors of the Corporation and Code of Conduct, including Insider Trading Policy, adopted by the Corporation by way of written consent by the Board of Directors of Resolutions dated on December 8, 2003.                                                                                                                                                               | 10 pages
|31.1           | Chief Executive Officer certification pursuant to Rule 13(a)-14 of the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                   | 1 page  
|31.2           | Chief Financial Officer certification pursuant to Rule 13(a)-14 of the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                   | 1 page  
|32             | Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                    | 1 page  





#

Previously filed with 2000 Report on FORM 20-F.

##                      
Previously filed with 2001 Report on FORM 20-F.

###                     
Previously filed with 2002 Report on FORM 20-F.



SIGNATURE

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



TWIN MINING CORPORATION





DATE: March 31, 2004

/s/ Hermann Derbuch



HERMANN DERBUCH

CHAIRMAN, PRESIDENT &

CHIEF EXECUTIVE OFFICER

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MANAGEMENT DISCUSSION AND ANALYSIS

(The following discussion and analysis should be read in conjunction with the consolidated financial statements and the corresponding notes)

Summary

Twin Mining Corporation the ("Company"), has been an exploration-stage mineral resource company since inception and has undertaken gold exploration and mine development activities since 1994. Since June 1999, the Company has focused on diamond exploration in the Torngat region of Ungava Bay in Northern Quebec ("TORNGAT") and the Jackson Inlet region of Baffin Island in Nunavut ("Jackson Inlet"). In 2002, the Company reactivated development activities on its Atlanta Gold Property ("Atlanta") and, also, continued to direct its efforts towards diamond exploration on Jackson. In 2003, after a sustained period of steady rise in the price of gold, the Company acquired rights to a block of gold claims in the Abitibi gold belt in Eastern Quebec ("Abitibi"), advanced Atlanta towards production by late 2005, and staked additional claims on two separate occasions at Jackson Inlet.

TORNGAT Diamond Property

In 1999, the Ministère des Ressources naturelles du Quebec had granted the Company four contiguous Mine Exploration Permits for a period of five years that cover an area of 444 sq. km on the eastern coast of Ungava Bay in Northern Quebec. In 2000, a fifth permit covering 62.85 sq. km was granted for five years. In 2001, the Company renewed three of the permits covering an area of 327 sq. km and wrote off costs of $218,060 from the two abandoned properties. In 2002, these three permits were again renewed. In January 2003, the results of the analysis of 15 grab samples taken in 2001 from its TORNGAT North dyke system revealed two dyke segments with high stone densities, measuring 900 metres and 400 metres, respectively, that are consistent with the results of high quality, high purity and very white diamonds taken from the mini-bulk sample of 2000. Since the Company is already focused on the larger tonnage potential at Jackson Inlet, the Company is pursuing several options in 2004, including seeking joint venture participation, to advance the property further.

Jackson Inlet Diamond Property

On April 27, 2000, the Company signed a letter agreement with Helix Resources Inc. ("Helix"), a private company based in Niagara Falls, for a second diamond property covering three mining claims totaling 28.85 sq. km (7,128.5 acres) staked on the Jackson Inlet Property on the Brodeur Peninsula of Baffin Island ("Jackson Inlet"). One of the claims, covering 10.03 sq. km (2,480 acres), was subsequently allowed to lapse. In 2000, the Company staked another 16 claims covering 106.39 sq. km (26,289.85 acres) close to the claims acquired above by paying an initial filing fee of $2,629. On December 15, 2000 the Company exercised its right to the Jackson Inlet mining claims by paying $50,000 in cash and issuing 30,000 common shares of the Company to Helix. By the end of 2000, the total area staked in the region was 125.21 sq. km (30,938.35 acres). In 2001, the Company staked another 61 mineral claims in the region covering a further 529.77 sq. km (130,908.35 acres) by paying initial filing fees of $13,091. In 2002, another 32 mineral claims covering a further 334.43 sq. km (82,640 acres) were staked, an initial filing fee of $8,264 was paid, resulting in the Company holding a 100% interest in 111 mineral claims totaling 986 sq. km (243,563.6 acres) within the region. During the current year, the Company staked 426 additional mineral claims in the region covering 4,118 sq. km (1,017,593 acres), allowed five claims covering 29 sq. km (7,128 acres) to lapse, and paid an initial filing fee of $101,759. By the end of the 2003, the Company owned a 100% interest in 532 mineral claims totaling 5,075 sq. km (1,254,029 acres) within the region.



In September 2002, the Company completed geophysical and core-drilling programs in the region. In 2003, results from the samples taken in 2002, combined with results from a reinterpretation of the 2001 airborne magnetaometer survey, led to additional claim staking in May. A ground magnetic survey ("ground mag") was completed in August in the
Freightrain, Cargo1 and Cargo2 areas. The results from the survey at Cargo2 revealed eight anomalies along two corridors, 1.2km apart, and running parallel to the Freightrain - Cargo 1 corridor. The results from the 2002 till sample and 2003 ground mag programs triggered the collection of 426 additional till samples on previously staked ground plus another staking campaign. The results from the 2003 till samples and ground mag programs will determine the nature and extent of the geophysical and core drilling programs for 2004.

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Atlanta Gold Property

The Company's goal has always been to continue the development of the Company's gold assets, particularly the advanced Atlanta Gold Project ("Atlanta") in Idaho, USA, with a view to concluding a bankable feasibility study at the earliest possibility, upon a sustained improvement in gold prices. In 2002, with the steady rise in the price of gold which reached a 5-year high of U.S.$327 per ounce, the Company reactivated Atlanta by carrying out an environmental audit of existing environmental baseline data in June 2002 and completing a 13-hole core drilling program totaling 1,264 metres (4,211 feet) in early December 2002. In December 2002, the Company increased its operating interest in Atlanta from 80% to 100% (see note 3(c)). In 2003, samples taken from the 2002 core drilling program were assayed for gold and a column leach testing program was carried out. The results from the testing program will be incorporated into a feasibility study, expected to be completed by April 2004. The column leach testing program was completed in September and indicated a gold extraction rate in excess of 70%, which compares well with similar gold projects in North & South America. In July, the U.S. Department of Agriculture
- Forest Service ("USFS"), the lead agency in the permitting process, issued a notice of intent
(NOI) to initiate the EIS (Environmental Impact Statement) process. An independent contractor was selected in October to carry out the
EIS, scheduled to be completed by the end of 2004. Mine construction is scheduled to commence in early 2005 and gold is expected to be poured before the end of 2005.

Abitibi Gold Property

In August 2003, as the price of gold was surpassing the US$360 mark, the Company was granted an option to earn up to 100% interest on six gold properties, totaling 91 claims and covering 28.49 sq. km, along the 65km stretch of the Abitibi gold belt in Eastern Quebec ("Abitibi"). The Company can earn a 60% interest by issuing payments totaling $125,000 to Breakwater and incurring $3,500,000 in expenditures for the five year ended September 1, 2008. Another 40% can be earned by meeting certain requirements (set out in note 3(e)). By the end of the year, the Company had completed a core-drilling program totaling 61 BQ holes ((i.e. 35mm diameter) drilling over 22,000 metres on four of the claim blocks, conducted an induced polarization survey ("IP") on one of the claim blocks, and staked 68 new claims covering 10.83 sq. km on the northern border of the Normar property to protect the depth and strike potential of the new gold discovery, which will be tested in 2004.

Indonesia Gold Property

The Company's Layuh Property, located on the Island of
Kalimantan, Indonesia, remains on care and maintenance, awaiting political and economic stability. In 2001, it was written down to $1,432,298. The Saran Property was transferred to Indotan Inc. as part of the legal claim that was settled with Indotan Inc. in October 2001. In 2003, as the price of gold was approaching a 10-year high, the Company has signed confidentiality agreements with two potential joint venture partners to advance the property.

Liquidity and Capital Resources

In 2002, there were two private offerings. The first offering was completed in December 2002 for gross proceeds of $3,255,000 by issuing of 6,510,000 flow through common shares of the Company and warrants to purchase another 3,255,000 common shares of the Company at $1.00 per share. In the second offering, members of management of the Company paid $45,000 to subscribe for a total of 90,000 flow through common shares of the Company. Net proceeds from these private offerings totaled $2,939,192, net of share issue costs of $360,808, including $226,100 paid as underwriting fees to the agent of the first offering. The agent was also granted purchase warrants to acquire 586,000 common shares of the Company at $0.50 per share. All warrants expire within two years from date of grant.



In 2003, four private offerings were completed  for total proceeds of $2,938,063 by issuing 5,357,143 flow through shares, 4,379.167 common shares, and 2,116,667 common share purchase warrants, with each warrant exercisable at $0.50 per warrant (see Note 4(d)). Total share issue costs for the 2003 offerings was $128,601, compared to $360,808 for the 2002 financing of, relatively, same gross proceeds, because the 2003 offerings were non-brokered efforts initiated by Company management.



The working capital of the Company at December 31, 2003 was ($1,861,512), which is $2,970,069 less than that from the 2002 fiscal year end, primarily reflecting extensive development activity on Atlanta and extensive exploration activity on Abitibi at the end of the year increased trade payables. The Company is presently actively pursuing equity financing to raise funds sufficient to continue the above-noted project operations on Atlanta, Abitibi, and Jackson Inlet, general purpose operations, and to repay the trade

---

payables arising at the end of 2003. Although the Company has been successful in the past in obtaining similar financing, there's no assurance that the Company will be able to currently obtain adequate financing on a timely basis. Failure to obtain such additional financing could result in delay of further exploration and development of the Company's properties.



The working capital of the Company at December 31, 2002 was $1,108,557, a decline of $830,747 from the 2001 fiscal year, primarily, as a result of costs incurred in reactivating development of Atlanta.



In 2001, total proceeds received from financing activities of the Company was $719,143, which consisted of the issuance of 2,625,005 common shares of the Company upon the exercise of common share purchase warrants and employee stock options.



The working capital of the Company at December 31, 2001 was $1,939,304, a decrease of $4,949,429 from December 31, 2000, as a result of the diamond exploration programs carried out in 2001 and described in more detail below (see
"Results of Operation-2001").



To December 31, 2003, the Company has spent $15,938,888 to lease, explore and develop the Atlanta Gold Property. On February 2, 1999, the Company signed a Lease/Option to Purchase Agreement with Monarch Greenback, LLC ("Monarch") relating to Monarch's surface and mineral rights to the Atlanta Gold Property. During the term of the ten-year lease, the Company has the option to purchase such surface and mineral rights for the purchase price of US$2,075,000, and Monarch is entitled to receive minimum annual lease payments and a net smelter return royalty on any production. The annual lease payments are credited against the obligation of the Company to make royalty payments. If the purchase option is exercised, the existing minimum annual lease payments on such surface and mineral rights will be terminated and replaced by a net smelter royalty of 0.5% of sales if the average realized gold price is US$365 per ounce or less. For each US$1 increase in the average realized gold price over US$365 per ounce, the net smelter royalty will be increased by 0.01% to a maximum rate of 3.5%. Under this agreement, an amount of US$100,000 held in trust under the terms of a prior agreement with Monarch was paid to Monarch in February 1999. Commencing in 2001, the Company pays US$50,000 annually to Monarch for the remaining eight years of the term of the lease. The US$800,000 cumulative balance is added to the purchase price of the surface and mineral rights. At that time, the option price to purchase the surface and mineral rights will total US$2,875,000 (see note 3(c)).

Results of Operations

The results of operations of the Company reflect the overhead costs incurred during the acquisition, exploration and mine development stages, the costs necessary to keep the Company in good standing with various regulatory authorities and to provide the infrastructure to administer these acquisition, exploration, mine development and financing activities. Also reflected in the loss for the period is the write-off of deferred mineral costs of properties the Company has acquired, explored and ultimately abandoned. General and administrative costs can be expected to increase or decrease in relation to changes in the administrative activity required as exploration continues on Abitibi and Jackson Inlet and development activity proceeds on Atlanta. The objective at Atlanta is to have it in production by the end of 2005.



The following table discloses certain financial data for the eight most recently completed quarters. Canadian dollars, In thousand (except per share data - basic and fully diluted):



|Period                                                                                                                                                 | Operating
    expenses | Net
    loss
    (gain)
    (1) | Loss
    per share           
|------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------- | ------------------------------- | -----------------------------
|Quarter ended December 31, 2003 (2)                                                                                                                    | 195                    | (705)                           | (0.008)                      
|Quarter ended September 30, 2003                                                                                                                       | 210                    | 200                             | 0.002                        
|Quarter ended June 30, 2003                                                                                                                            | 237                    | 224                             | 0.002                        
|Quarter ended March 31, 2003
Quarter ended December 31, 2002
Quarter ended September 30, 2002
Quarter ended June 30, 2002
Quarter ended March 31, 2002 | 394
191
187
247
257    | 386
178
184
243
251             | 0.005
0.002
0.003
0.003
0.003

(1)Net loss (gain) for the period includes operating expenses, interest income, foreign exchange gain or loss, mineral property costs written and future income tax recovery (see note 6).

---



(2) Includes mineral property costs of $31,000 written off in fiscal 2003 (2002
- Nil) and future income tax recovery of $922,000 incurred in fiscal 2003 (2002 -
Nil).

2003

General and administrative expenses for the year ended December 31, 2003 increased compared to the same period in 2002, primarily because (a) Part Xll.6 tax was incurred in 2003 whereas none was incurred in 2002, and (b) an additional salary that was incurred when the Company hired a Vice President, Exploration. The position was vacated in September 2003 and a replacement has not been named. Offsetting these increases was a sharp decline in investor relations costs primarily because of the largely non-brokered financing conducted during the year (note 4 (d)), compared to the brokered financing carried out in 2002. Interest income for the year was unchanged from 2002 because the bank balances were relatively the same throughout both 2003 and 2002. Since the Company pays its Atlanta Gold costs in US dollars, the stronger Canadian dollar resulted in a foreign currency gain for the year.



Since five Jackson Inlet mining claims were allowed to lapse during the year, the Company has written off total acquisition and exploration costs of $31,219 related to these lapsed claims.



Mineral property expenditures incurred in 2003 were significantly higher than in 2002 primarily because: (a) over $1.6Million was spent on a 22,000-metre BQ (35mm) core-drilling program and sample assaying at
Abitibi; (b) over $1.7Million was incurred on Atlanta, specifically for base line work on flora and fauna, air, and water quality, as the Company commenced the EIS preparation stage in July 2003; and (c) over $1.4Million was spent on Jackson Inlet, primarily on a ground mag survey, a soil sampling program, and two major claim-staking campaigns carried out during the year. Since the Company's focus in 2003 was on
Abitibi, Atlanta and Jackson Inlet, expenditures on TORNGAT and Indonesia were essentially limited to renewing permits and annual filings, as it seeks joint venture participation to advance both properties.

2002

General and administrative expenses for the year ended December 31, 2002 remained relatively unchanged from similar expenses incurred in 2001, except that no Part XII.6 tax was incurred in 2002 compared to $135,825 in Part XII.6 incurred in 2001. Conversely, interest income for the year declined by approximately 88% to $23,767 from $210,655 in 2001 due to lower bank balances reflecting expenditures being incurred on both Jackson Inlet and Atlanta. In 2003, Part XII.6 tax will, again, be incurred due to the flow through share financing completed in December 2002.



Property acquisition, drilling and field exploration, and project administration expenditures incurred on Jackson Inlet totaled $2,238,288 during 2002 (compared to $3,946,298 incurred in 2001). These costs relate to ground geophysical surveys, core drilling program, and soil sample extraction and analysis done in 2002 (compared to a mini-bulk sampling program and a 6,641-line kilometre air-borne geophysical survey completed in 2001). Costs incurred on TORNGAT during 2002 totaled $72,779, compared to $622,862 incurred in 2001 (before writing off $218,060 relating to two abandoned exploration permits, which were allowed to lapse in 2001). Total mine development expenditures incurred on Atlanta in 2002 was $475,900 (compared to $12,649 incurred in 2001). Included in these costs were $310,715 for completing a 13-hole core-drilling program, $61,091 for risk and sample analysis and $42,397 for consulting fees.

2001

General and administrative expenses for the year ended December 31, 2001 increased by approximately 11% to $986,984 from $883,166 in 2000. This increase primarily reflects: (a) costs relating the Public Offerings in December 1999 and May 2000 which resulted in $135,825 in Part XII.6 tax paid or payable to Canada Custom and Revenue Agency ("CCRA") (formerly Revenue Canada) prior to March 2002, whereas no Part XII.6 tax was owing in fiscal 2000; (b) an increase in salary expenses from fiscal 2000, with the addition of head office personnel during the year; and (c) a 27% increase in investor relations costs from fiscal 2000, due primarily to increased investor relations activity during the year. In addition, interest income for the year declined by approximately 25% to $210,655 from $280,667 in 2000, due primarily to lower bank balances as funds were expended on the Jackson Inlet diamond property acquisition and exploration program undertaken during the year and also due to lower interest rates during 2001. Offsetting some of this increase in operating expenses in 2001, compared to fiscal 2000, was a 46% decline in legal fees to $74,797 reflective in part of the settlement of two legal claims against the Company in the year (see note 4(d)).

---





During the year, the May 1999 gold call option contracts expired. The value of these contracts are marked to market annually, with the resulting gains and losses included in income for the year. In 2001, the mark to market gain on the gold call options transaction was $51,450, compared to $75,550 in fiscal 2000 and $29,188 in fiscal 1999 (see note 5).



Mineral property costs for the Layuh Gold Properties were written down to $1,432,298. The $1,158,296 write-down reflects gold exploration and project administration costs incurred since 1997 and the cost of the two legal claims settled during the year (see note 4(d)).



Total diamond property acquisition, drilling and field exploration, and project administration expenditures on the TORNGAT Property for the year were $32,700 (see note 3(a)), $504,946, and $10,216 respectively, for a total of $547,862 compared to $50,685, $2,689,259, and $21,718 respectively, for a total of $2,762,259 incurred in 2000. Conversely, similar expenditures for Jackson Inlet for the year were $129,918, $3,773,516, and $42,864 respectively, for a total of $3,946,298 compared to $74,376, $415,731, and $28,085 respectively, for a total of $518,192 incurred in 2000. The primary reason for these changes in 2001 is that the diamond property acquisition and field exploration activities focused on the Jackson Inlet Property, whereas, the focus in 2000 was on the TORNGAT Property. Also, the Company decided that two of the permits in the TORNGAT Property covering an area of 179.85 sq. km be allowed to lapse in 2001 and $218,060 relating to diamond property acquisition and exploration costs incurred in prior years in respect of these permit areas was written off in the year. Net holding and gold exploration and mine development expenditures for Atlanta Gold for the year were $129,505 compared to $280,583 for fiscal 2000 because annual royalty advances were reduced during the year (see note 3 (c)). Net project administration and general costs in 2001 in Indonesia were $6,233 compared to $52,129 in 2000 because of a decline in legal fees incurred during the year.

Uncertainties and Risk Factors

The Company does not currently hold any interest in a mining property in production and its future success depends upon its ability to find, develop, exploit and generate revenue from mineral deposits. Exploration and development of mineral deposits involve significant financial risks, which even a combination of careful evaluation, experience and knowledge may not eliminate and there can be no assurance that any of the Company's current projects will ultimately be developed into a profitable mining operation. A number of factors beyond the control of the Company may affect the marketability of any diamonds, gold or any other minerals discovered. Resource prices have fluctuated widely and are beyond the Company's control. Revenue and profitability will be determined by the relationship of the Company's production costs and in respect of diamonds and gold, the relative quality of the diamonds extracted and recovered grade of gold, to resource prices.  The effect of these factors cannot accurately be predicted. The Company has limited financial resources and there is no assurance that additional funding will be available to it for further exploration and development of its projects or to fulfill its obligations under applicable agreements.  Although the Company has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be
favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the Company's properties with the possible dilution or loss of such interests. The operations of the Company require licenses and permits from various governmental authorities and while the Company currently holds all necessary licenses and permits required to carry on its activities and believes it is complying with such licenses, permits and all applicable laws and regulations, such licenses, permits and laws are subject to change and there can be no assurance that the Company will in future be able to obtain all necessary licenses and permits. Furthermore, the cost of complying with changes in governmental laws and regulations has the potential to reduce the profitability of future operations. The acquisition of title to mineral projects is a very detailed and time-consuming process and although the Company has taken precautions to ensure that legal title and interest to its properties are properly recorded, there can be no assurance that the interests of the Company in any of its properties may not be challenged or impugned.



Forward Looking Statements

Statements in this report that describe the Company's objectives, estimates, expectation or predictions and other statements in this report preceded by words such as
"should, "anticipate" or similar expressions may be "forward looking statements" within the meaning of applicable securities legislation. The Company cautions that such statements involve risk and uncertainty and that actual results could differ materially

from those expressed or implied. Important factors that could cause differences include, but are not limited to, global diamond and gold prices and supply and demand, changes in government regulation, competitive factors, litigation and other factors including those set out in the annual report on form 20-F of the Company as filed with securities regulatory authorities.

---



Management's Report on the Consolidated Financial Statements



The accompanying consolidated financial statements of Twin Mining Corporation have been prepared by and are the responsibility of the Company's management. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada and contain estimates based on management's
judgement. Management maintains a system of internal controls adequate to provide reasonable assurance that transactions are authorized, assets are safeguarded and records are maintained.



The Audit Committee comprises four independent directors and meets with management and the Company's auditors, PricewaterhouseCoopers
LLP, to review the consolidated financial statements before they are presented to the Board of Directors for approval.



PricewaterhouseCoopers LLP have examined these consolidated financial statements and their report follows.

---



|TWIN MINING CORPORATION                                                                |                  |   |              |  |   |              | 
|-------------------------------------------------------------------------------------- | ---------------- | - | ------------ |  | - | ------------ | 
|                                                                                       |                  |   |              |  |   |              | 
|CONSOLIDATED BALANCE SHEETS                                                            |                  |   |              |  |   |              | 
|As at December 31, 2003 and 2002                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|(in Canadian dollars)                                                                  |                  |   | 2003         |  |   | 2002         | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|ASSETS                                                                                 |                  |   |              |  |   |              | 
|Current assets                                                                         |                  |   |              |  |   |              | 
|Cash and cash equivalents                                                              |                  | $ | 719,606      |  | $ | 1,650,789    | 
|Receivables                                                                            |                  |   | 231,377      |  |   | 31,770       | 
|Prepaid expenses                                                                       |                  |   | 112,914      |  |   | 83,089       | 
|Supply inventory
    (note 3(b))                                                       |                  |   | 192,584      |  |   | 111,972      | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   | 1,256,481    |  |   | 1,877,620    | 
|                                                                                       |                  |   |              |  |   |              | 
|Mineral properties(note 3)                                                             |                  |   | 30,466,013   |  |   | 25,688,484   | 
|                                                                                       |                  |   |              |  |   |              | 
|Property, plant and equipment                                                          |                  |   | 59,773       |  |   | 42,562       | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  | $ | 31,782,267   |  | $ | 27,608,666   | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|LIABILITIES                                                                            |                  |   |              |  |   |              | 
|Current liabilities                                                                    |                  |   |              |  |   |              | 
|Accounts payable and accrued liabilities                                               |                  | $ | 3,117,993    |  | $ | 769,063      | 
|                                                                                       |                  |   |              |  |   |              | 
|Future income taxes(note 6)                                                            |                  |   | 2,117,003    |  |   | -            | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   | 5,234,996    |  |   | 769,063      | 
|Contingency and commitments (note 8)                                                   |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|SHAREHOLDERS' EQUITY                                                                   |                  |   |              |  |   |              | 
|Capital stock                                                                          |                  |   | 47,743,477   |  |   | 47,931,153   | 
|Accumulated deficit                                                                    |                  |   | (21,196,206) |  |   | (21,091,550) | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   | 26,547,271   |  |   | 26,839,603   | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  | $ | 31,782,267   |  | $ | 27,608,666   | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|The accompanying notes are an integral part of these consolidated financial statements |                  |   |              |  |   |             
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|Approved by the Board                                                                  |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|/s/Hermann Derbuch                                                                     | /s/C. E. Ritchie |   |              |  |   |              | 
|                                                                                       |                  |   |              |  |   |              | 
|Hermann Derbuch                                                                        | C. E. Ritchie    |   |              |  |   |              | 
|Director                                                                               | Director         |   |              |  |   |              | 

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|TWIN MINING CORPORATION                                |   |            |  |   |            |  |   |            | 
|------------------------------------------------------ | - | ---------- |  | - | ---------- |  | - | ---------- | 
|                                                       |   |            |  |   |            |  |   |            | 
|CONSOLIDATED STATEMENTS OF LOSS                        |   |            |  |   |            |  |   |            | 
|For the years ended December 31, 2003, 2002 and 2001   |   |            |  |   |            |  |   |            | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   |            |  |   |            |  |   |            | 
|(in Canadian dollars)                                  |   | 2003       |  |   | 2002       |  |   | 2001       | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   |            |  |   |            |  |   |            | 
|Interest income                                        | $ | 22,792     |  | $ | 23,767     |  | $ | 210,655    | 
|Other income(note 5)                                   |   | -          |  |   | -          |  |   | 51,450     | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   | 22,792     |  |   | 23,767     |  |   | 262,105    | 
|General and administrative expenses                    |   |            |  |   |            |  |   |            | 
|Salaries                                               |   | 521,870    |  |   | 398,471    |  |   | 403,552    | 
|Professional fees                                      |   | 117,840    |  |   | 99,345     |  |   | 74,797     | 
|Investor relations                                     |   | 126,264    |  |   | 206,797    |  |   | 181,192    | 
|Travel                                                 |   | 19,211     |  |   | 35,071     |  |   | 14,754     | 
|Interest                                               |   | -          |  |   | -          |  |   | 10,000     | 
|Administrative and office                              |   | 183,683    |  |   | 65,778     |  |   | 228,379    | 
|Office rent                                            |   | 57,804     |  |   | 56,853     |  |   | 50,109     | 
|Depreciation                                           |   | 9,704      |  |   | 19,545     |  |   | 24,201     | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   | 1,036,376  |  |   | 881,860    |  |   | 986,984    | 
|                                                       |   |            |  |   |            |  |   |            | 
|Mineral property costs written off(notes 3(a) and (d)) |   | 31,219     |  |   | -          |  |   | 1,376,356  | 
|                                                       |   |            |  |   |            |  |   |            | 
|Future income tax recovery(note 6)                     |   | (922,135)  |  |   | -          |  |   | -          | 
|                                                       |   |            |  |   |            |  |   |            | 
|(Gain) loss from foreign translation                   |   | (18,012)   |  |   | (2,435)    |  |   | 3,512      | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   | 127,448    |  |   | 879,425    |  |   | 2,366,852  | 
|                                                       |   |            |  |   |            |  |   |            | 
|Loss for the year                                      | $ | 104,656    |  | $ | 855,658    |  | $ | 2,104,747  | 
|                                                       |   |            |  |   |            |  |   |            | 
|                                                       |   |            |  |   |            |  |   |            | 
|Weighted average number of shares outstanding          |   | 83,664,662 |  |   | 74,638,781 |  |   | 72,122,980 | 
|                                                       |   |            |  |   |            |  |   |            | 
|Loss per share - basic and fully diluted               |   | $0.001     |  |   | $0.011     |  |   | $0.029     | 

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

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|TWIN MINING CORPORATION                              |   |             |  |   |             |  |   |             | 
|---------------------------------------------------- | - | ----------- |  | - | ----------- |  | - | ----------- | 
|                                                     |   |             |  |   |             |  |   |             | 
|CONSOLIDATED STATEMENTS OF CASH FLOW                 |   |             |  |   |             |  |  
|For the years ended December 31, 2003, 2002 and 2001 |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|(in Canadian dollars)                                |   | 2003        |  |   | 2002        |  |   | 2001        | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|Operating activities                                 |   |             |  |   |             |  |   |             | 
|Loss for the year                                    | $ | (104,656)   |  | $ | (855,658)   |  | $ | (2,104,747) | 
|Add (deduct) items not involving cash:               |   |             |  |   |             |  |   |             | 
|Mineral property costs written off                   |   | 31,219      |  |   | -           |  |   | 1,376,356   | 
|Depreciation                                         |   | 9,704       |  |   | 19,545      |  |   | 24,201      | 
|Income tax expense (recovery)                        |   | (922,135)   |  |   | -           |  |   | -           | 
|Mark to market adjustment on gold call options       |   | -           |  |   | -           |  |   | (51,450)    | 
|Net change in non-cash working capital               |   | 2,038,886   |  |   | (65,055)    |  |   | 449,016     | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   | 1,053,018   |  |   | (901,168)   |  |   | (306,624)   | 
|                                                     |   |             |  |   |             |  |   |             | 
|Financing activities                                 |   |             |  |   |             |  |   |             | 
|Issuance of common shares:                           |   |             |  |   |             |  |   |             | 
|For cash, net of issue costs (note 4(d))             |   | 1,373,858   |  |   | -           |  |   | -           | 
|For cash, on exercise of warrants                    |   | -           |  |   | -           |  |   | 569,893     | 
|For cash, on exercise of options                     |   | -           |  |   | -           |  |   | 149,250     | 
|Issuance of flow-through shares:                     |   |             |  |   |             |  |   |             | 
|For cash, net of issue costs
    (note 4(d))         |   | 1,435,604   |  |   | 2,939,192   |  |   | -           | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   | 2,809,462   |  |   | 2,939,192   |  |   | 719,143     | 
|                                                     |   |             |  |   |             |  |   |             | 
|Investing activities                                 |   |             |  |   |             |  |   |             | 
|Mineral property expenditures                        |   | (4,766,748) |  |   | (2,913,908) |  |   | (4,903,822) | 
|Capital assets                                       |   | (26,915)    |  |   | (19,918)    |  |   | (9,110)     | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   | (4,793,663) |  |   | (2,933,826) |  |   | (4,912,932) | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|(Decrease) increase in cash                          |   | (931,183)   |  |   | (895,802)   |  |   | (4,500,413) | 
|                                                     |   |             |  |   |             |  |   |             | 
|Cash and cash equivalents, beginning of year         |   | 1,650,789   |  |   | 2,546,591   |  |   | 7,047,004   | 
|                                                     |   |             |  |   |             |  |   |             | 
|Cash and cash equivalents, end of year               | $ | 719,606     |  | $ | 1,650,789   |  | $ | 2,546,591   | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|                                                     |   |             |  |   |             |  |   |             | 
|Net change in non-cash working capital items         |   |             |  |   |             |  |   |             | 
|Receivables                                          | $ | (199,607)   |  | $ | 4,547       |  | $ | 167,828     | 
|Prepaid expenses                                     |   | (29,825)    |  |   | (3,503)     |  |   | (74,314)    | 
|Supply inventory                                     |   | (80,612)    |  |   | 44,667      |  |   | (156,639)   | 
|Accounts payable and accrued liabilities             |   | 2,348,930   |  |   | (110,766)   |  |   | 512,141     | 
|                                                     | $ | 2,038,886   |  | $ | (65,055)    |  | $ | 449,016     | 
|                                                     |   |             |  |   |             |  |   |             | 

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

---

TWIN MINING CORPORATION

CONSOLIDATED STATEMENTS OF MINERAL PROPERTIES

|For the years ended December 31, 2003, 2002 and 2001 |   |            |  |   |            |  |   |             | 
|---------------------------------------------------- | - | ---------- |  | - | ---------- |  | - | ----------- | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|(in Canadian dollars)                                |   | 2003       |  |   | 2002       |  |   | 2001        | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|TORNGAT Diamond Property                             |   |            |  |   |            |  |   |             | 
|Balance, beginning of year                           | $ | 3,303,216  |  | $ | 3,305,437  |  | $ | 2,975,635   | 
|Drilling, assays and related field work              |   | 5,275      |  |   | 39,125     |  |   | 579,946     | 
|Project administration and general                   |   | 421        |  |   | 954        |  |   | 10,216      | 
|Property acquisition and holding costs               |   | 34,335     |  |   | 32,700     |  |   | 32,700      | 
|Costs recovered during the year(note 3(a))           |   | -          |  |   | (75,000)   |  |   | (75,000)    | 
|Property costs written off(note 3(a))                |   | -          |  |   | -          |  |   | (218,060)   | 
|                                                     |   |            |  |   |            |  |   |             | 
|Total expenditures during the year                   |   | 40,031     |  |   | (2,221)    |  |   | 329,802     | 
|                                                     |   |            |  |   |            |  |   |             | 
|Balance, end of year                                 |   | 3,343,247  |  |   | 3,303,216  |  |   | 3,305,437   | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|Jackson Inlet Diamond Property                       |   |            |  |   |            |  |   |             | 
|Balance, beginning of year                           |   | 6,702,778  |  |   | 4,464,490  |  |   | 518,192     | 
|Drilling, assays and related field work              |   | 1,273,296  |  |   | 2,011,282  |  |   | 3,773,516   | 
|Project administration and general                   |   | 10,058     |  |   | 37,704     |  |   | 39,830      | 
|Property acquisition and holding costs               |   | 158,674    |  |   | 189,302    |  |   | 132,952     | 
|Property costs written off(note 3(b))                |   | (31,219)   |  |   | -          |  |   | -           | 
|                                                     |   |            |  |   |            |  |   |             | 
|Total expenditures during the year                   |   | 1,410,809  |  |   | 2,238,288  |  |   | 3,946,298   | 
|                                                     |   |            |  |   |            |  |   |             | 
|Balance, end of year                                 |   | 8,113,587  |  |   | 6,702,778  |  |   | 4,464,490   | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|Abitibi Gold Property                                |   |            |  |   |            |  |   |             | 
|Balance, beginning of year                           |   | -          |  |   | -          |  |   | -           | 
|Drilling, assays and related field work              |   | 1,614,959  |  |   | -          |  |   | -           | 
|Project administration and general                   |   | 1,499      |  |   | -          |  |   | -           | 
|Property acquisition and holding costs               |   | 3,207      |  |   | -          |  |   | -           | 
|                                                     |   |            |  |   |            |  |   |             | 
|Total expenditures during the year                   |   | 1,619,665  |  |   | -          |  |   | -           | 
|                                                     |   |            |  |   |            |  |   |             | 
|Balance, end of year                                 |   | 1,619,665  |  |   | -          |  |   | -           | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|Atlanta Gold Property                                |   |            |  |   |            |  |   |             | 
|Balance, beginning of year                           |   | 14,237,752 |  |   | 13,545,351 |  |   | 13,415,846  | 
|Drilling, assays and related field work              |   | 1,535,142  |  |   | 475,900    |  |   | 12,649      | 
|Project administration and general                   |   | 52,800     |  |   | 90,923     |  |   | 111,627     | 
|Property acquisition and holding costs               |   | 113,194    |  |   | 125,578    |  |   | 118,464     | 
|Costs recovered during the year(note 3(c))           |   | -          |  |   | -          |  |   | (113,235)   | 
|                                                     |   |            |  |   |            |  |   |             | 
|Total expenditures during the year                   |   | 1,701,136  |  |   | 692,401    |  |   | 129,505     | 
|                                                     |   |            |  |   |            |  |   |             | 
|Balance, end of year                                 |   | 15,938,888 |  |   | 14,237,752 |  |   | 13,545,351  | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     |   |            |  |   |            |  |   |             | 
|Indonesia Properties                                 |   |            |  |   |            |  |   |             | 
|Balance, beginning of year                           |   | 1,444,738  |  |   | 1,432,298  |  |   | 2,142,437   | 
|Project administration and general                   |   | 5,888      |  |   | 12,440     |  |   | 448,157     | 
|Property costs written off(note 3(d))                |   | -          |  |   | -          |  |   | (1,158,296) | 
|                                                     |   |            |  |   |            |  |   |             | 
|Total expenditures during the year                   |   | 5,888      |  |   | 12,440     |  |   | (710,139)   | 
|                                                     |   |            |  |   |            |  |   |             | 
|Balance, end of year                                 |   | 1,450,626  |  |   | 1,444,738  |  |   | 1,432,298   | 
|                                                     |   |            |  |   |            |  |   |             | 
|                                                     | $ | 30,466,013 |  | $ | 25,688,484 |  | $ | 22,747,576  | 
|                                                     |   |            |  |   |            |  |   |             | 

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

---

TWIN MINING CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

|(in Canadian dollars)               | Shares
    issued and subscribed |  |   |            |             |   |             
|----------------------------------- | -------------------------------- |  | - | ---------- | ----------- | - | ------------
|                                    | Number of                        |  |   | Ascribed   |             |   | Accumulated 
|                                    | shares                           |  |   | value      |             |   | deficit     
|                                    |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|Balance, December 31, 2000          | 70,434,373                       |  | $ | 44,077,818 |             | $ | (18,131,145)
|                                    |                                  |  |   |            |             |   |             
|Issue of shares for cash            |                                  |  |   |            |             |   |             
|- at $0.20 and $0.50 per share      |                                  |  |   |            |             |   |             
|on exercise of warrants             | 2,000,005                        |  |   | 569,893    |             |   |             
|- at $0.17 to $0.35 per share       |                                  |  |   |            |             |   |             
|on exercise of options              | 625,000                          |  |   | 149,250    |             |   |             
|Issue of shares to Helix Resources  |                                  |  |   |            |             |   |             
|Inc.(note 3(b))                     | 45,000                           |  |   | 18,000     |             |   |             
|Issue of shares to Indotan Inc.     |                                  |  |   |            |             |   |             
|(note 3(d))                         | 300,000                          |  |   | 150,000    |             |   |             
|Voisey Bay Resources Inc.           |                                  |  |   |            |             |   |             
|consolidation                       | (34)                             |  |   | -          |             |   |             
|Loss for the year                   |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|Balance, December 31, 2001          | 73,404,344                       |  | $ | 44,964,961 |             | $ | (20,235,892)
|                                    |                                  |  |   |            |             |   |             
|Issue of shares for cash            |                                  |  |   |            |             |   |             
|- at $0.50 per flow through share,  |                                  |  |   |            |             |   |             
|net of share issue costs(note 4(d)) | 6,600,000                        |  |   | 2,939,192  |             |   |             
|Issue of shares to Helix Resources  |                                  |  |   |            |             |   |             
|Inc.(note 3(b))                     | 75,000                           |  |   | 27,000     |             |   |             
|Loss for the year                   |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|Balance, December 31, 2002          | 80,079,344                       |  | $ | 47,931,153 |             | $ | (21,091,550)
|                                    |                                  |  |   |            |             |   |             
|Issue of shares for cash            |                                  |  |   |            |             |   |             
|- at $0.28 per flow through share,  |                                  |  |   |            |             |   |             
|net of share issue costs(note 4(d)) | 5,357,143                        |  |   | 1,435,604  |             |   |             
|- at $0.30 per common share,        |                                  |  |   |            |             |   |             
|net of share issue costs(note 4(d)) | 616,667                          |  |   | 178,331    |             |   |             
|- at $0.345 per common share,       |                                  |  |   |            |             |   |             
|net of share issue costs(note 4(d)) | 762,500                          |  |   | 250,994    |             |   |             
|- at $0.33 per common share,        |                                  |  |   |            |             |   |             
|net of share issue costs(note 4(d)) | 3,000,000                        |  |   | 944,533    |             |   |             
|Issue of shares to Helix Resources  |                                  |  |   |            |             |   |             
|Inc.(note 3(b))                     | 105,000                          |  |   | 42,000     |             |   |             
|Share issue costs regarding         |                                  |  |   |            |             |   |             
|flow through shares(note 6)         | -                                |  |   |            | (3,039,138) |   |             
|Loss for the year                   |                                  |  |   |            |             |   |             
|                                    |                                  |  |   |            |             |   |             
|Balance, December 31, 2003          | 89,920,654                       |  | $ | 47,743,477 |             | $ | (21,196,206)
|                                    |                                  |  |   |            |             |   |             

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

---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three years ended December 31, 2003

(Canadian dollars)



1.

NATURE OF OPERATIONS AND GOING CONCERN BASIS OF ACCOUNTING



The Company's two diamond properties, located in Northern Quebec and on Baffin Island, and its Quebec gold property, acquired in August 2003, are currently in the exploration stage. The Atlanta Gold Property ("Atlanta"), located in Idaho, U.S.A., and which contains a measured mineral resource, is in the feasibility stage currently awaiting financing. The Indonesia Gold Property remains on care and maintenance.



The recoverability of exploration and development expenditures is dependent upon the discovery of economically recoverable reserves, the preservation of the Company's interest in the underlying mineral claims, the ability to obtain necessary financing, obtain government approval and attain profitable production, or alternatively, upon the Company's ability to dispose of its interest on an advantageous basis.  Changes in future conditions could require material write-downs of the carrying amounts of deferred exploration expenditure.





2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of presentation

The consolidated financial statements are presented in Canadian dollars and are prepared in accordance with accounting principles generally accepted in Canada.



(b)

Use of estimates

The preparation of the consolidated financial statements in conformity with Canadian generally accepted accounting principles (Canadian GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amount of expenses during the period. Actual results could differ from those reported.



(c)

Cash and cash equivalents

Cash and cash equivalents include investments to maturity of less than 90 days after purchase.



(d)

Supply inventory

Supply inventory is recorded at the lower of cost and net realizable value, and will be capitalized to mineral property costs in the year it is utilized.



(e)

Property, plant and equipment

Property, plant and equipment of the Company are recorded at cost and include office furniture, fixtures, and equipment and computer hardware and software. The office furniture, fixtures and equipment are depreciated over ten years and vehicles, computer hardware and software are depreciated over three years. All capital assets are depreciated on a straight-line basis.



(f)

Mineral property costs

Direct exploration and development costs are deferred in the accounts, net of amounts recovered from third parties, including receipts from options. At production, these costs will be amortized using the units-of-production method based on estimated reserves. Costs relating to properties abandoned are written off when the decision to abandon is made, or earlier if a determination is made that the property does not have economically recoverable reserves.



The Company is in the process of exploring and developing its various properties. On a regular basis, the Company reviews the carrying values of deferred mineral property acquisition and exploration expenditures with a view to assessing whether there has been any impairment in value. In the event that reserves are determined to be insufficient to recover the carrying value of any property, the carrying value will be written down or written off, as appropriate.





---





(g)

Loss per share

Basic loss per share is computed by dividing the loss for the year by the weighted-average number of common shares outstanding during the year, including contingently issuable shares which are included when the conditions necessary for issuance have been met. Diluted loss per share is calculated in a manner similar to basic loss per share, except the weighted-average shares outstanding are increased to include potential common shares from the assumed exercise of options and warrants, if dilutive. The number of additional shares included in the calculation is based on the treasury stock method for options and warrants.



(h)

Translation of foreign currencies

Monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities at the exchange rates in effect at the time of acquisition or issue. Revenues and expenses are translated at exchange rates in effect at the        
date of the transactions. Exchange gains or losses arising on translation are included in income or loss
for the year.



(i)

Financial Instruments

The carrying amounts of cash, receivables, accounts payable and accrued liabilities approximate the fair values of those financial instruments due to the short-term maturity of such instruments. The Company places its cash with high quality financial institutions.



(j)

Stock options



The Company has a stock option plan as described in Note 4(c).  During the year ended December 31, 2002, the Company changed its method of accounting for stock options to comply with CICA Handbook, section 3870,
"Stock-Based Compensation and Other Stock-Based Payments".  Since the Company had elected not to use the fair value method of accounting for stock options, no compensation expense is recognized when options are issued to employees with exercise prices at the grant date equal to or greater than prevailing market prices.  Stock options issued in lieu of cash to non-employees for services performed are recorded at the fair value of the options at the time they are issued and are expensed as service is provided.



Effective January 1, 2004, the Canadian Accounting Standards Board (AcSB) will require public companies to expense all stock-based compensation awards (including stock options), includes those made to employees, officers and directors of the
Company. The AcSB will permit either retroactive with, or without, restatement application of the recognition provisions to awards not previously accounted for at fair value.



(k)

Income taxes

The provision for future income taxes is based on the liability method. Future income taxes arise from the recognition of the tax consequences of temporary differences by applying enacted statutory tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The Company records a valuation allowance against any portion of those future income tax assets that it believes will, more likely than not, fail to be realized.



3.

MINERAL PROPERTIES

(a)

TORNGAT Diamond Property

In 1999, the Company was granted four contiguous Diamond Mine Exploration permits ("the permits") by the Quebec Ministry of Natural Resources ("Quebec Ministry") for a period of five years which cover 444 sq. km in the Torngat Mountain region along the east coast of Ungava Bay in Northern Quebec ("TORNGAT"). In 2000, the Company was granted a fifth permit, which covers an additional 62.85 sq. km. The permits are renewable annually after five years.

03/18/0411:11 AM



---



In 2001, the Company renewed three of the permits covering 327 sq. km. and for an annual amount of $32,700. Total direct exploration costs of $218,060 for the two abandoned permits were written off during the year.



In 2002, the Company renewed the three permits for $32,700. In July 2002, the Company received a Mineral Exploration grant of $75,000 (2001 - $75,000) from the Quebec Ministry for exploration expenditures incurred during the fiscal period ending on March 31, 2002 (March 31, 2001)



During the year, the Company renewed the three permits for $34,335.



(b)

Jackson Inlet Diamond Property

On April 27, 2000,the Company signed a letter agreement ("the Agreement") with Helix Resources Inc. ("Helix"), a private company based in Niagara Falls, Ontario, concerning three mining claims totaling 28.85 sq. km (7,128.5 acres) staked on the Jackson Inlet Property on the Brodeur Peninsula of Baffin Island ("Jackson Inlet"). Fulfilling the assessment requirements on these mining claims conferred the right to exercise the Agreement by paying $50,000 and issuing 30,000 common shares of the Company to Helix. The Agreement was extended to December 15, 2000, and on that date, the Company exercised its right to acquire Helix's rights in the mineral claims.



In order to maintain the Agreement in good standing, the Company was required to pay Helix $200,000 in the current year ($150,000
- 2002) and issued 105,000 (75,000 - 2002) common shares of the Company to them. Helix waived the payment until January 8, 2004. The Company can continue to maintain the Agreement in good standing by paying Helix the following amounts:



|                  | Payment |         |  |              
|----------------- | ------- | ------- |  | -------------
|Due Date          |         | amount  |  | Common shares
|December 31, 2004 | $       | 250,000 |  | 120,000      
|December 31, 2006 | $       | 100,000 |  | -            





In addition, $500,000 is due upon receipt of all development permits and $1,000,000 plus 500,000 common shares is due upon production of 500,000 carats. Subsequently, a 5% net profits interest and a 1% gross royalty is due after crediting all previous payments.



In 2001, the Company staked 61 mineral claims covering 529.77 sq. km (130,908.35 acres) and paid an initial filing fee of $13,091 and in 2002, the Company staked another 32 mineral claims covering 334.43 sq. km (82,640 acres) and paid an initial filing fee of $8,264. During the current year, the Company staked 426 additional mineral claims in the region covering 4,118 sq. km (1,017,593 acres) and paid an initial filing fee of $101,759. Five of the claims staked in prior years were allowed to lapse. Total direct exploration costs of $29,806 for the five abandoned claims were written off during the year. By the end of the 2003, the Company owned a 100% interest in 532 mineral claims totaling 5,075 sq. km (1,254,029 acres) within the region.



The Company has supply inventory of $192,584 as at December 31, 2003 (2002 - $111,972) in connection with fuel and supplies for use in the diamond exploration program at Jackson Inlet.



(c)

Atlanta Gold Property, Idaho, U.S.A.



On July 22, 1997, the Company and Canadian American Mining Company, LLC ("CAMC") (formerly Quest International Resources Corporation) ("Quest"), entered into a joint venture agreement (the
"Agreement") whereby the Company is the operator of Atlanta with an 80% interest, with Quest holding the remaining 20% participating interest. Quest has subsequently advised the Company that it had elected under the Agreement not to participate in its contractual share of further property costs incurred after 1997.  In December 2002, CAMC agreed to transfer its 20% participating interest in the joint venture to the Company. CAMC retains the 2% Net Smelter Return royalty on Atlanta, as per the Agreement.

03/18/0411:11 AM



---



On February 2, 1999, the Company had signed a Lease/Option to Purchase Agreement ("the Monarch Agreement") with Monarch Greenback, LLC ("Monarch") relating to Monarch's surface and mineral rights to Atlanta. During the term of the ten-year lease, the Company has the option to purchase such surface and mineral rights for US$2 million. If this option is exercised, the existing minimum annual rental payments on such surface and mineral rights will be terminated and replaced by a net smelter royalty of 0.5% of gold sales if the average realized gold price is US$365 per ounce or less. For each US$1 increase in the average realized gold price over US$365 per ounce, the net smelter royalty will be increased by 0.01% to a maximum rate of 3.5%. In 1999, the Company amended the minimum annual rental payment to Monarch. U.S.$25,000 owing in 1999, was paid in January 2000 and the U.S.$75,000 unpaid balance was added to the option price. In 2001, the Monarch Agreement was further amended such that, commencing in 2001, the Company will pay Monarch US$50,000 per year in minimum annual rental payments until 2008. The cumulative balance owing to 2008 of US$800,000 will be added to the option price. By then, the option price to purchase such surface and mineral rights will be US$2,875,000.



A net smelter returns royalty is payable on production from Atlanta, subject to annual payments to the lessors as set forth below. These payments are required to keep the agreements in good standing. The advance royalty payments will be terminated if the option to purchase is exercised. During the year, the Company paid US$17,500 (2002 - US$17,500; 2001 - US$15,000) in advance royalty payments to the lessors.



Minimum

Year ending

annual rental

Advance royalty

December 31,

payments US$

payments US$

2004 to 2005

50,000

17,500

2006

50,000

159,500

2007 to 2008

50,000

20,000

2009 to 2011

-

20,000

2012 to 2015

-

10,000



In August 2000, a wildfire that was raging in the United States mountain States, including Idaho, destroyed several items on the Atlanta Gold Property. The Company filed a claim for damages with its insurance company. In 2000, the insurer issued proceeds of US$38,206 and, in May 2001, after further negotiations, the insurer paid another US$71,794. The proceeds were credited to mineral costs recovered.



(d)

Indonesia Properties

The acquisition of title to mineral projects is a very time consuming process. Although the Company has taken every precaution to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured. The Company's interest in the majority of its properties in Indonesia is held under applications for Contract of Work ("C.O.W.") which, if approved, may not cover all of the areas applied for. Furthermore, there is no assurance that its interests in such properties may not be challenged.



In January 2001, the legal claim alleging constructive dismissal commenced in 1999 by the Company's former Exploration Manager in Indonesia was settled for US$175,000.



(i) Layuh Joint Venture Agreement

In 1997, the Company entered into agreements with PT Harita Jayaraya ("PT Harita"), an Indonesian company, to form a joint venture to explore for gold and related minerals. The Company will have an 85% interest in the venture and be the operator and technical advisor to the venture. The 15% interest of PT Harita is a carried interest.



In May 1999, the Company notified the Indonesian Ministry of Mines of its intent to proceed with its application for a seventh generation C.O.W. The draft seventh generation C.O.W. for initialing. The

03/18/0411:11 AM



---

Company continues to operate on a care and maintenance basis in connection with the property, awaiting political stability.



(ii) Indotan Joint Venture Agreement

In 1996, the Company entered into a joint venture with Voisey Bay and Indotan Inc. ("Indotan") for the acquisition of exploration and mining rights on seven mineral properties in
Kalimantan, Indonesia. In order to keep the joint venture in good standing, the Company was required to issue one common share for each US$0.75 spent by the joint venture on the mineral properties to a maximum of 2,000,000 common shares, and also, one further common share for each US$1 spent, to a maximum of 1,500,000 common shares.



In September 1999, the Company exercised its right under the agreement and notified Indotan of its decision to cease participation in the agreement. In March 2000, Indotan commenced legal proceedings against the Company, seeking 3,500,000 common shares of the Company arising from spending commitments on the properties by the Company. In October 2001, the Indotan claim was settled by paying $7,800, issuing 300,000 common shares of the Company, and transferring the Company's portion of the Saran Properties, having a carrying value of $297,124, to
Indotan. At fiscal year end 2001, the Company wrote down the carrying value of the Indonesia Properties, including the cost of the two legal claims settled, by a total of $1,158,296.



(e)

Abitibi Gold Property, Quebec

In August 2003, the Company signed a letter agreement with Breakwater Resources Ltd. ("Breakwater"), whereby Breakwater granted the Company the exclusive right and option to earn up to a 100% interest in six gold properties, totaling 91 mining claims and covering 28.49 sq. km, located along a 65km stretch of the Abitibi gold belt in eastern Quebec.  The Company can earn a 60% interest by paying Breakwater $125,000 in rental and option payments ("Payments") and by incurring $3,500,000 in expenditures as follows:



On or before

Payments

Expenditures to be incurred



Signing

Nil

Nil

01-Sep-04

$  25,000

$    150,000

01-Sep-05

$  25,000

$    350,000

01-Sep-06

$  25,000

$    650,000

01-Sep-07

$  25,000

$ 1,000,000

01-Sep-08

$  25,000

$ 1,400,000



Expenditures exceeding minimum annual requirements incurred may be carried forward to following years and credited against future expenditure minimums. The Company can acquire an additional 10% interest by making a $100,000 cash payment to Breakwater. Six months after the preparation of an independent positive feasibility study, the Company may acquire a further 10% interest in the property by making a $500,000 cash payment to Breakwater. Upon formation of a joint venture, expenditures will be shared between the Company and Breakwater in accordance with their respective ownership interest. If Breakwater's interest in the joint venture is reduced to, or below, a 10% interest, then Breakwater's interest in the joint venture will be deemed to be converted to a 1.5% net smelter return
(NSR) royalty. The Company may purchase the 1.5% NSR royalty at any time for a cash payment of $1,500,000 to Breakwater.



In 2003, the Company spent $1,619,665 on these gold properties and staked 68 additional claims covering 10.83 sq. km in the Bousquet township within the same Abitibi gold belt.





4.

CAPITAL STOCK

(a)

Authorized share capital

Following the continuance into the Province of Ontario on March 15, 2000 under the OBCA, the Company's authorized capital consists of an unlimited number of common shares, an unlimited

03/18/0411:11 AM



---

number of first preference shares, issuable in series and an unlimited number of second preference shares, issuable in series.







(b)

Warrants

The following summarizes warrants that have been granted, exercised or have expired during the three years ended December 31, 2003:

Weighted

average

Number of

exercise

Shares

price $

Outstanding, December 31, 2000

3,113,548

Warrants exercised

(2,000,005)

0.28

Warrants expired

(1,113,543)

0.73

Outstanding, December 31, 2001

-

Warrants issued on issuance of shares for cash

3,255,000

1.00

Warrants issued as part of underwriting fees (note 4(d))

586,000

0.50

Outstanding, December 31, 2002

3,841,000

Warrants issued on issuance of shares for cash (note 4(d))

2,116,667

0.50

Outstanding, December 31, 2003

5,957,667







The fair value of the warrants issued in 2003 is $182,976 (2002 - $292,695), and was estimated on the date of grant using the Black Scholes option-pricing model with the similar assumptions adopted by the stock options in 4 (c) below, except that expected life to maturity is 1 year.



(c) Stock options

The Company has a stock option plan (the
"Plan") to attract, retain and motivate directors, officers, employees, and certain consultants with options to purchase common shares of the Company. Under the plan, the exercise price of each option must equal or exceed the market price of the Company's stock on the day of grant and the maximum term of any option is five years. The number of shares reserved for issuance (the
"Optioned Shares") pursuant to stock options granted to insiders cannot exceed 10% of the outstanding shares of the Corporation. The aggregate number of shares reserved for issuance to any one person cannot exceed 5% of the outstanding shares of the Corporation.  If option rights granted to an individual under the Plan expire or terminate for any reason without having been exercised in respect of certain Optioned Shares, such Optioned Shares may be made available for other options to be granted under the Plan. The Plan is administered by the Board of Directors or any committee designated by the Board, which has full and final authority, but subject to the express provisions of the Plan and the approval of The Toronto Stock Exchange. The following summarizes the employee and director stock options that have been granted, exercised, cancelled or expired during the three years ended December 31, 2003:



Weighted

average

Number of

exercise

Shares

price $



Outstanding, December 31, 2000

3,930,000

0.47



Options granted

950,000

0.51

Options exercised

(625,000)

0.24

Options expired

(455,000)

0.69

Outstanding, December 31, 2001

3,800,000

0.50

Options granted

1,400,000

0.56

Options forfeited

(50,000)

0.60

Options expired

(800,000)

0.66

Outstanding, December 31, 2002

4,350,000

0.49

03/18/0411:11 AM



---



Options granted

800,000

0.38

Options forfeited

(250,000)

0.45

Options expired

(250,000)

0.65

Outstanding, December 31, 2003

4,650,000

0.47





The Company amended the Plan on March 20, 2003 to reserve additional 1,500,000 common shares for issue and increase the number of common shares available for issue from 7,500,000 to 9,000,000. As of December 31, 2003, there are 6,650,000 additional common shares in reserve available for stock compensation. All options outstanding at December 31, 2003 expire at various dates to November 13, 2008 and are immediately exercisable upon granting.





During the year: (a) 350,000 options that were granted when their exercise price equaled the fair value of the stock at grant date had a weighted-average grant date fair value of $0.39 (2002: 900,000 options - $0.61; 2001: 950,000 - $0.51); and (b) 450,000 options that were granted when its exercise price exceeded the fair value of the stock at grant date had a weighted-average grant date fair value of $0.33 (2002: 500,000 options - $0.43; 2001: none). The weighted-average remaining contractual life of all stock options outstanding is 31 months.



Number of

Exercise

Expiry date

Stock options

price $

December 22, 2004

650,000

0.35

February 4, 2005

150,000

0.49

December 22, 2005

1,000,000

0.43

January 30, 2006

150,000

0.45

June 1, 2006

800,000

0.52

January 21, 2007

600,000

0.60

February 12, 2007

250,000

0.63

May 17, 2007

250,000

0.51

January 17, 2008

100,000

0.45

January 29, 2008

50,000

0.40

February 5, 2008

50,000

0.40

August 19, 2008

200,000

0.35

August 21, 2008

100,000

0.35

November 13, 2008

300,000

0.39

4,650,000





Had the Company recorded compensation expense based on the fair value of the options granted in 2003 and 2002, results would have been as follows:



|Loss for the year                        |   | 2003     |  |           | 2002    | 
|---------------------------------------- | - | -------- |  | --------- | ------- | 
|                                         |   |          |  |           |         | 
|As reported                              | $ | 104,656$ |  |           | 855,658 | 
|Pro forma                                |   | 284,278  |  | 1,322,181 |        
|                                         |   |          |  |           |         | 
|Loss per share - basic and fully diluted |   |          |  |           |         | 
|As reported                              | $ | 0.001    |  | $         | 0.011   | 
|Pro forma                                |   | 0.003    |  |           | 0.018   | 



The pro forma disclosure excludes the effect of the options granted prior to the adoption of CICA  3870. The weighted average fair value at the date of grant for stock options granted during the current year was $0.384 per share. The fair value of each option was estimated on the date of grant using the Black Scholes option-pricing model with the following assumptions at the measurement date:

03/18/0411:11 AM



---







(d) Capital Stock Offering

On December 30, 2002, the Company completed a private offering whereby 6,510,000 flow through units was issued at a price of $0.50 per unit for total gross proceeds of $3,255,000. Each flow through unit consisted of one flow through common share and one half of one common share purchase warrant of the Company exercisable at $1.00 per warrant. In addition, management of the Company subscribed for 90,000 flow through common shares of the Company at a price of $0.50 per share. The agents of the offering were paid underwriting fees of $226,100 and were granted 586,000 common share purchase warrants exercisable for 586,000 common shares of the Company at $0.50 per warrant. All warrants expire within two years from the grant date.



In 2003, the Company completed four stock offerings for total gross proceeds of $2,938,063 and can be summarized as follows:











Each unit issued on May 9 consisted of one common share at $0.30 and one common share purchase warrant of the Company. Each unit issued on November 9 consisted of one common share and one half of one common share purchase warrant of the Company. All warrants issued during the year are exercisable at $0.50 per warrant and expire within eighteen months from the grant date.



Total share issue costs incurred in 2003 was $128,601.





(e) Shareholder Rights Plan

In November 2000, the Board of Directors adopted a Shareholder Rights Plan (the
"Plan"), the terms of which

are set forth in a Shareholder Rights Plan Agreement dated as of November 17, 2000 between the Company

and Equity Transfer Services Inc. The Plan was approved by the shareholders at the annual meeting held on

March 15, 2001. The Plan will be in effect until the 2011 annual meeting, unless terminated earlier by the Board

of Directors.



Under the Plan, a right to purchase one of the Company's common shares (a
"Right") was issued for each outstanding common share as of November 17, 2000. In addition, a Right will be issued for each share issued subsequent to November 17, 2000 and prior to the separation date of the Rights. The rights are initially not separate from the Company's common shares nor are they represented by separate certificates. However, upon a person acquiring ownership of 20% or more of the Company's common shares (other than by means of complying with the Plan's Permitted Bid provisions or with approval of the Board of Directors of the Company), a holder of a Right (other than the acquiror of 20% or more of the Company's common shares) becomes entitled to exercise the Right and to purchase the number of common shares as determined under the Plan at a 50% discount to the then prevailing market price per share.



Under the Plan, a Permitted Bid is, among other things, a bid made to all shareholders for all common shares that is open for at least 60 days and which must be accepted by holders of at least 50% of the Company's outstanding common shares, excluding shares held by the offeror and certain related parties. If at the end of 60 days, at least 50% of the outstanding shares, other than those owned by

03/18/0411:11 AM



---

the offeror and certain related parties, have been tendered to the bid, the offeror may take up and pay for the shares, but must extend the bid for a further 10 days to allow other shareholders to tender. The Rights may, in certain circumstances, be redeemed by the Company at a price of $0.00001 per Right.









5.





GOLD CALL OPTIONS

In 1999, the Company entered into gold call option transactions. Call options for 15,000 ounces of gold, exercisable at US$290 per ounce and maturing in June 2001, were sold for US$243,000. Call options for 20,000 ounces of gold, exercisable at US$320 per ounce and maturing in June 2001, were purchased for US$128,000. The Company received cash proceeds of US$106,250 (net of commission of US$8,750). In May 2001, the gold call options contracts expired and the gold call option liability of US$35,000 were recorded as income. In 2001, $10,000 (US$6,500) was paid as interest expense for the balance outstanding since 1999.



6.

INCOME TAXES



The Company has non-capital tax losses of approximately $6,506,000 expiring between 2004 and 2010 which are available to reduce future Canadian taxable income. These losses expire as follows:













The Company has operating losses of approximately US$5,270,000 expiring between 2004 and 2023, which are available to reduce future United States taxable income. The Company did not pay any income taxes in 2003, 2002 or 2001.



The Company's has recorded future income tax liabilities and a future income tax recovery (provision) arising from temporary differences between the accounting values and tax base values of various net capital assets of the Company (using effective tax rates that range from 34% for capital losses to 100% for alternative minimum tax) as follows:



Effective



Description

tax rate (%)

Amount (CD$)





Canadian exploration expenditures (CEE) renounced

36

3,039,138



Other Canadian net assets

34

(696,647)

Business loss carryover - Canadian

34

(2,219,847)

Atlanta development expenditures

35

4,435,828

Alternative minimum tax
- U.S.

100

(50,191)

Tax loss carryover
- U.S.

35

(2,391,278)

(922,135)

Future income tax liability

2,117,003



Tax provisions arising from CEE renounced are recorded as share issue costs and charged directly to shareholders' equity.







03/18/0411:11 AM



---

7.

SEGMENTED INFORMATION

The Company has operated in the following geographical segments: Canada, United States, and Indonesia. Corporate administrative activities are conducted from Canada. The income and expenses for the three years ended December 31, 2003, and the assets of those years identifiable to those segments are as follows:





Canada

USA

Indonesia

Consolidated



December 31, 2003

Interest and other income

$      22,675

$             117

$                -

$       22,792

Loss (gain) for the year

1,025,383

(920,727)

-

104,656

Identifiable assets

14,350,811

15,980,830

1,450,626

31,782,267



December 31, 2002

Interest and other income

$      23,660

$             107

$                -

$        23,767

Loss (gain) for the year

855,734

(76)

-

855,658

Identifiable assets

11,859,778

14,304,149

1,444,739

27,608,666



December 31, 2001

Interest and other income

$    262,105

$                  -

$                -

$        262,105

Loss (gain) for the year

948,116

(1,665)

1,158,296

2,104,747

Identifiable assets

10,619,061

13,557,539

1,432,298

25,608,898



8.

CONTINGENCY AND COMMITMENTS

In November 1999, the Company and Atlanta Gold Corporation of America, Inc., the wholly owned U.S. subsidiary of the Company ("Atlanta Gold"), were named as third party defendants in a lawsuit commenced by Monarch against Doe Run Resource Corporation ("Doe Run") with respect to environmental liability on the Butler Ranch, which is adjacent to the Atlanta Property. In 2002, the Company obtained an order from the U.S. District Judge in Boise, Idaho, summarily dismissing the claims against the Company and Atlanta Gold. Doe Run has appealed that order to the United States Court of Appeals for the Ninth Circuit. The Appeal has not yet been heard.



The Company has operating lease commitments for head office space until January 2005, and office equipment until November 2004 as follows:



2004

$ 65,000

2005

$   5,000



The Company, by undertaking the issuance of flow through shares during the year, has made minimum spending commitments of approximately $1,200,000 on Canadian properties for the 2004 fiscal year.





9.

COMPARATIVE FIGURES

Certain comparative amounts have been reclassified to conform to the presentation adopted in 2003.

03/18/0411:11 AM





ITEM 18.



---



PROFILE



Twin
Mining Corporation is a Diamond, Gold Exploration and Gold Mine Development
Company. All of its properties are 100% owned.



Twin
Mining has discovered gem quality diamonds and opened new exploration frontiers
at:

-

Jackson
Inlet on the West Coast of the Brodeur Peninsula Baffin Island, Nunavut.

Twin
Mining has extracted more than 50 carats, discovered new diamondiferous
kimberlites,  established eight new potential kimberlite targets and
discovered twelve (12) new kimberlite indicator mineral clusters. Rio Tinto
reports the discovery of "..large kimberlite with significant coarse diamond
content" within 10 km of Twin Mining's diamondiferous Freightrain and Cargo1
pipes.



-

TORNGAT
on the East Side of the Ungava Bay in northern Quebec.

Twin
Mining has extracted more than 13 carats, discovered a 37 km long diamondiferous
kimberlite dyke system and established two dyke segments with higher stone
densities than other examined parts of the dyke. One of the diamonds became the "First
Diamond of Quebec", 0.566 carat, 4.97 x 3.87 x 3.40-mm which was cut and
polished in Quebec and certified. It has a high color rating of "E" and purity
rating of "SI1" and was exhibited at the Museum of Civilization in Quebec City.



Twin
Mining is a gold mine developer at:



-

Atlanta
Gold in Elmore County, Idaho U.S.A.

The
project has a measured mineral resource of 18,042,000 tonnes at a grade of 1.9
g/tonne (1,083,000 ounces) with the upside potential to double it. The
high-grade underground gold resources present further upside.

The
Atlanta Gold Project is progressing well, the Full Feasibility Study completion
is expected early in the second quarter of 2004, the EIS in the fourth quarter
of 2004 with gold production scheduled in the second half of 2005.



Twin
Mining is a gold explorer on the:



-

Abitibi
gold belt, Quebec.

In
line with its overall business strategy Twin Mining optioned six gold
properties. The properties are located on a section of the belt which produced
already 150,000,000 ounces of gold, still produces more than 500,000 ounces per
year and has excellent discovery potential. Just recently,a 1,000,000 ounce ore-body was discovered near Twin Mining's properties.
Twin Mining was fortunate to make, within only 3 months of exploration,
two new gold discoveries on its Normar property of which at least one has
potential for economic gold concentrations.



Twin
Mining's common shares are listed on the Toronto Stock Exchange ("TSX") under
the symbol TWG and the Berlin/Frankfurt OTC (878 341, EDV Kurzel ATG).



---



Highlights



Jackson
Inlet Diamond Project



- Land
    acquisition in 2003 at Jackson Inlet added 307 claims covering 3,428 square
    kilometers (847,283 acres) mainly south and east to the core land position,
    which covers the Freightrain, and Cargo1 pipes. Total land holdings of 532
    claims, covering 5,086 square kilometers (1,256,781 acres) are 100% owned.
- A
    significant NE-SW corridor of kimberlite fragments from kimberlite bodies
    beneath was discovered between and beyond Freightrain and Cargo1 over a
    distance of 1.7 kilometers. Samples from those fragments produced 13
    diamonds and favorable diamond indicator minerals.
- Eight
    potential kimberlite targets at Cargo2 were discovered with a high
    sensitivity ground magnetic (gradiometer) survey. The pattern for kimberlite
    targets, recognized with this survey, further enhances the significant
    prospectivity of the area on and surrounding the core claims.
- The
    2002 regional till sampling program over the main claim block recovered
    eclogitic garnet. Mg-ilmenite and spinel were found in anomalous
    concentrations suggesting the potential for kimberlite sources in addition
    to Freightrain and Cargo1 pipes.
- Caustic
    fusion of 1,018 kg of kimberlite core recovered from Cargo1 pipe in 2002,
    extracted mostly white and transparent diamonds with the largest stones
    coming from hole JI-CG-04, at 2.34 x 2.25 x 1.65 mm and 0.0869 carat and
    2.14 x 1.68 x 1.14 mm and 0.0269 carat. Kimberlite has been intersected in
    Cargo1 holes as much as 200 meters apart, the kimberlite body remains open
    in all directions below surface.
- Discovery
    of twelve (12) new indicator mineral clusters based on the recovery of
    kimberlite indicator mineral grains from 426 soil and stream sediment
    samples collected during 2003 exploration season.



TORNGAT
Diamond Project



- Analysis
    of TORNGAT kimberlite samples identified encouraging diamond results on two
    dyke segments of 900 meters and 400 meters length respectively.
    Higher stone densities as compared to other sampled parts of the dyke were
    identified.



Atlanta
Gold Project



- The
    heap leach gold recovery tests were performed on two ore crush sizes. 1/2inch
    (12.7 mm) and 3/8 inch (9.5 mm) and produced a gold extraction over 121 days
    of more than 70%. This compares well with the recovery rates obtained from
    similar gold projects in North and South America. The new gold recovery
    rates have the potential to improve the economic attractiveness of the
    Atlanta Gold Project. They form the base of the Full Feasibility Study,
    which is expected to be completed during the second quarter of 2004.
- The
    USDA Forest Service has issued the Notice of Intent to start the permitting
    process and to prepare the Environmental Impact Statement ("EIS") and a
    Memorandum of Understanding was signed between the Boise National Forest and
    Atlanta Gold Corporation Inc. a wholly owned subsidiary of Twin Mining. This
    set the stage for the hiring of Tetra Tech Maxim Technologies to prepare the
    Atlanta Gold Project EIS scheduled to be completed in the second half of
    2004.

---





Abitibi
Gold Exploration



- Twin
    Mining has optioned six gold properties on the high discovery potential
    Abitibi gold belt. The six properties are located along a 65 km stretch of
    the Abitibi gold belt in Quebec near two producing gold mines and a recently
    discovered +1 million ounce gold deposit.
- Twin
    Mining made two new gold discoveries on the Normar property, at least one of
    which has potential for an economic concentration of gold. Because of the
    gold occurrence within a few hundred meters of the north boundary of the
    Normar property, 68 claims have been staked to protect the depth and strike
    extension potential.



Financing
and Corporate



- Flow
    through financing of $3.3 million was completed by the end of 2002 followed
    by $1.5 million flow-through in July 2003, designated for diamond
    exploration and gold exploration on the Abitibi gold belt. The successful
    institutional none-flow-through financing of $1.3 million in November was
    primarily designated for the development of the Atlanta Gold Project.
- In
    July, Cedric Ritchie joinedTwin Mining'sBoard of Directors. Mr. Ritchie brings to Twin Mining a wealth of
    national and international experience in the finance business. He is the
    former Chairman of Scotia Bank and present Chairman of the Business
    Development Bank of Canada.



---

Message
to Shareholders





We
are in the midst of an unparalleled opportunity to move up to the next level of
delivering shareholder value. With an asset portfolio of excellent gold and
diamond projects, Twin Mining has become an outstanding, emerging company in the
ongoing search for attractive investment value opportunities. Our strong belief
in gold and diamonds and their intrinsic long-term value is underscored by the
fact that consumers today are buying diamonds and gold as a form of investment
and as a hedge against the future.



We
remain convinced that our efforts to produce gold by 2005 will pay significant
dividends as we are providing our shareholders exposure to a gold market with
increasing gold prices for the foreseeable future.



The
quality of the Jackson Inlet diamond project has also been substantiated by the
report from Rio Tinto on their discovery of diamondiferous kimberlite with
coarse diamond content within 10 km from our Freightrain and Cargo1 pipes. These
findings also increase the upside in Canadian diamond exploration in general and
the scope of our Jackson Inlet Project in particular.



2003
was a successful year for Twin Mining both in creating value for its
shareholders, in both the diamond and the gold segments of the Company, and in
making every investment dollar count. Twin Mining proved again that it has the
expertise, the skills and the resources to produce tangible results and
shareholder value in three ways:



Firstly,
our diamond assets increased in value with two claim staking campaigns which
added 307 claims (3,428 square kilometers), new kimberlite targets in the form
of a diamondiferous kimberlite fragment corridor up to 50 meters wide, 8
potential kimberlite pipes and 426 till samples.



Secondly,
our gold development asset value made a significant leap forward as our Atlanta
Gold Project development picked up speed, bringing us closer to production and
positive cash flow. We also acquired new gold exploration assets of high
discovery potential by optioning six properties on the Abitibi gold belt. This
area, which recently produced a 1 million ounce gold orebody for Agnico Eagle
nearby, gave us after only 3 months drilling two gold discoveries on our Normar
property. At least one of the new gold discoveries has already indicated
potential for an economic concentration of gold, creating and realizing value.



As
our assets are the building blocks for our growth and shareholder wealth, Twin
Mining has been careful in selecting assets and successful in picking winners.



In
1997, in a merger between Atlanta Gold Corporation and Voisey Bay Resources
Inc., the Atlanta Gold Project became the key asset for Twin Gold Corporation,
the emerging new company. Metallurgical test results and detailed engineeringstudiesto prepare the Full Feasibility
Study thus prove that we have a "company maker" in Atlanta.

---



In
2000, we were pioneers in doing a deal with Helix, a private company, to acquire
a diamond property on the Brodeur Peninsula of Baffin Island, Nunavut. By 2002,
exploration activities had delivered more than 50 carats of gem-quality diamonds
up to 1.557 carats in size and the Company presented the find at a "Diamond
Showing" at the Hilton, Toronto. The exceptional quality of the diamonds and the
coarse diamond content of the kimberlites explored to date encouraged the us to
acquire more land and Twin Mining is now the 100 per cent owner of 1.02 million
acres.



Rio
Tinto ("RTZ"), our closest exploration neighbor reported the discovery and drill
results of a "large kimberlite with significant coarse diamond content" plus two
other kimberlites, which remain to be drilled. These kimberlites are located
near Twin Mining's Freightrain and Cargo1 pipes. RTZ also reported another 20
drill targets to be investigated.



For
2004, our challenge is to develop better public relations and exposure and
consequently increase market awareness of Twin Mining so as to fully realize the
underlying value of Twin Mining as one of Canada's premier emerging mining
companies.



OUTLOOK

Twin
Mining has succeeded in 2003 in raising flow-through and non-flow-through funds
of $3 million to develop and sustain its project pipeline, in particular the
development of the Atlanta Gold Project targeted for production in 2005. It is
our belief, so well expressed in the Volume1 - Issue1- First Quarter 2004 issue
of the Gold Stock Investor, that "the most effective and the lowest risk way to
gain a large exposure to the gold market - and at the same time have some
expectation of near term gains - is to own a company that has an early stage
gold deposit. The advantage of owning these early stage companies is that even
as we wait for a big gain in the gold price, the value of the company should
continue to increase as drilling and other work advances the deposit".



For
its prospective diamond program Twin Mining's objective is to work with major
joint venture partners to deal with the large capital requirements of these
projects. For the Atlanta Gold Project equity financing is required until debt
financing for the project-loan takes over.



Diamonds

"For
2003 world polished diamond demand continued to increase, after a very strong
rebound in 2002. In US$ terms, exports from India increased 14 percent and
imports into the USA increased 5 percent.



Global
rough diamond production increased an estimated 15 percent by dollar value. This
is partly accounted for by increased production from Botswana and the
commissioning of the Diavik mine, and partly by higher rough prices. De Beers
introduced 2 price hikes during the course of 2003.



The
open rough diamond market has been strong throughout the year as manufacturers
competed for availability in order to run their factories at capacity. The
introduction of

---

computer
aided design and laser sawing came into full swing, greatly increasing
productivity (30 percent) and significantly improving product quality.



Polished
demand has been, and continues to be strong in the small sizes (1/20 carat and
smaller) and better melee (1/10 carat). This is good news for diamond mining
companies as the melee size fraction represents the bulk on the production. 2 -
5 carat polished diamonds are under the most acute demand pressure.



In
January 2004, De Beers has increased its prices by an overall 3% percent
already. The trend of 2003 is thus likely to continue with quality polished in
strong demand. The production of Diavik, as it reaches full capacity, is a
needed addition, as the quality of its diamonds answers that demand.



For
the medium term the consensus is that the supply demand gap will grow, as there
are no plans for major new diamond deposits coming into production. De Beers has
hiked up capacity in Botswana already and at the same time reduced its
inventory. Because of a growing shortfall in production, more attention will be
given to diamond exploration and more funds are being made available."*



Gold

"Gold
and its relationship with the U.S. dollar have been in lockstep. The greenback
is expected to fall at least another 40 percent during the next twelve months,
which augurs well for gold.



We
continue to believe that gold is in the early stage of its bull market following
an extended two-decade bear period. Noteworthy is that gold has established
successfully higher major support levels and thus technically is in excellent
shape. We continue to expect gold to surpass $510 an ounce and eventually a new
high.



We
expect the dollar sell-off to continue with downward pressure from the rising
current account deficit."* *



We
are committed to the creation of value for our shareholders and have provided
the base in diamonds and gold for a successful year 2004. We thank you, our
shareholders and stakeholders for your continued support and loyalty.





/s/
Hermann Derbuch





Hermann
Derbuch, P.Eng.

Chairman,
President & CEO

January,
2004







*
   Diamond Trading N.V. of Antwerp, Belgium, Internal Report

**
 Maison Placements Canada - Gold Report December 16, 2003



---

Jackson
Inlet Diamond Project

Baffin
Island, Nunavut  -100% ownership



A
YEAR OF DISCOVERIES



Verification
of Major Diamondiferous Kimberlite Province

Twin
Mining's fourth exploration season on the Brodeur Peninsula brought definitive
verification of a major new diamondiferous kimberlite province. A key
verification component was the November 2003 announcement by Rio Tinto PLC of
three pipes located some 8-10 km from Twin Mining's Freightrain-Cargo1 pipes and
20 more targets remaining to be tested by their Kennecott Canada subsidiary.
Equally important, was the discovery by Twin Mining of a 1.7 km train of
diamondiferous kimberlite fragments extending NE and SW of Cargo1 pipe, the
recovery of a micro-diamond from basal till at Cargo 2, the detection of 12
widespread clusters of indicator mineral grains in soil and stream sediments,
and, the definition of 8 ground magnetic anomalies in the Freightrain and Cargo2
areas.



An
early awareness of the enhanced economic potential precipitated two claim
staking campaigns during the year. The first added 1,145 sq. km following
receipt of indicator mineral counts from the 2002 till sampling program and
evidence of diamonds at Cargo2.

Following
the discovery of the 1.7 km kimberlite fragment trail and detailed ground
magnetic survey confirmation of previously inferred geological controls of
kimberlite emplacement, Twin Mining staked a further contiguous 2,283 sq. km to
the east and south. After allowing for the expiry of 5 claims where results did
not warrant further exploration, the net 100%-owned landposition
at the end of 2003 was 4,129 sq. km (1,020,345 acres).



2003
Exploration Program Objectives

The
indicator mineral distribution from 489 soil samples collected in 2002 together
with recovery of the micro-diamond from till immediately above bedrock in drill
hole JI-CG2-02 led to a change in the 2003 exploration program objectives
discussed in last year's annual report.  Instead of drilling to establish
geometry of the Freightrain pipe and the drill testing of other targets, it was
decided thatgivenimmediate
attention to the overall upside potential of the projectwould
enable Twin Mining to acquire the most favorable land position on the Peninsula.



Reinterpretation
of government aeromagnetic data in light of the distribution of known
kimberlites and indicator minerals made possible the selection of priority areas
for claim staking. Two high sensitivity ground magnetic surveys were carried out
by JVX Ltd. to further clarify structural control of kimberlite emplacement and
to clearly define drill targets not readily apparent from low resolution and
suspect data obtained by 2002 ground magnetic surveys. The soil sampling area
was considerably enlarged from the initially contemplated survey of selected
claims and target areas. Soil sampling was supplemented by collection of stream
sediments at an approximate density of one sample per 42 sq. km in order to
cover as much of the newly staked claims as possible on a reconnaissance basis.







Drill
Sampling Program

Results
from the 2002 exploration reported during 2003

In
2003, analytical testing was finalized on bedrock and overburden recovered from
ten holes (1,173m) drilled (NQ core, 47-mm diameter)at
four targets during the July-September period of 2002. The Cargo2 and ANO 10
magnetic anomalies detected by the 2001 Fugro Sial helicopter-borne survey were
each tested by three holes and another hole tested ANO 9.

---





The
three holes at ANO 10 and one at the nearby ANO 9 (2.5 km) did not encounter
kimberlite nor explain both airborne and ground magnetic anomalies. Drilling at
Cargo2 recovered a micro-diamond from till immediately above bedrock in drill
hole JI-CG2-02.



The
objective of two of the three holes drilledat
Cargo1 pipe (JI-CG1-03 & -04) was to obtain representative samples from the
fine grained ashy core facies and the coarse rim facies.



Laboratory
investigations of the third hole (JI-CG1-05) revealed low magnetic
susceptibility of the core which explains the weak magnetic anomalies over this
and a number of other suspected kimberlites. The two other holes intersected as
much as 200 meters apart and the dimensions of the pipe could be much larger
than what the magnetic contours indicate.



Summary of
Caustic Fusion Processing Results,

Cargo 1
kimberlite drill holes JI-CGI-03, -04 and -05



|Hole
      No. | Weight
      (kg) | Diamonds
      Recovered by Sieve Class (square mesh opening in millimeters)
|-------------- | ----------------- | ----------------------------------------------------------------------------
|+1.7
      mm  | 1.18
      mm     | 0.85
      mm                                                               
|03             | 284               | 0                                                                           
|04             | 647               | 1                                                                           
|05             | 87                | 0                                                                           
|Total          | 1018              | 1                                                                           



the
diamonds are mostly white and transparent.  Largest stones (JI-CG1-04):
2.34 x 2.25 x 1.65mm  - 0.0869 carat;  2.14 x 1.68 x 1.14mm - 0.0269
carats



Soil
and Stream Sediment Sampling

Results
from the 2002 exploration reported during 2003

Results
were received in 2003 from processing and indicator mineral grain selection by
SGS Lakefield Research Limited on 489 soil samples which were collected in 2002.
The 2002 regional till sampling program covered the main claim block at that
time. The sampling involved collection of approximately 25 kg of till at
400-metre intervals on lines two kilometers apart in the Freightrain-Cargo1 pipe
and Cargo2 areas and four kilometers apart elsewhere.  Pyrope and eclogitic
garnet, Mg-ilmenite and spinel were found inanomalous
concentrations in a number of clusters, most notably at Cargo2 and immediately
surrounding the Freightrain and Cargo1 pipes.



2003
Exploration Results

Discovery
of twelve (12) new indicator mineral clusters

During
the 2003 field season a further 426 samples were collected to define airborne
survey targets in a large portion of the newly staked claims and to determine
whether discrete and separate drill targets are present in the immediate
vicinity of Freightrain and Cargo1 pipes.  Based on the recovery of
kimberlite indicator mineral grains from the 355 soil and 71 stream sediment
samples, twelve (12) new kimberlite indicator mineral clusters were discovered.
Of the 426 samples collected, 110 contained kimberlite indicator minerals.







Seven
of the twelve (12) clusters are located in the eastern half of Twin Mining's new
claim block from 72 degrees 15' to 73 degrees 15' latitude. Several of the seven
clusters correlate well with airborne magnetic anomalies and intersecting
structures, which enhances the probability of their relationship to kimberlite
targets. Five clusters are within 3 to 6 km of the Freightrain and Cargo1 pipes.
The high numbers of kimberlite indicator minerals from the five areas provide
strong evidence of kimberlite bodies

---

under
shallow overburden cover. These new indicator mineral clusters are in addition
to the previously reported finds of the diamondiferous kimberlite fragment
corridor between Freightrain and Cargo1 pipes and the eight potential kimberlite
targets at Cargo2.











(*)
 High indicator mineral counts are due to 2 of 5 samples taken closer to

outcropping
Freightrain kimberlite.





In
2003, most soil and stream sediment samples were collected at approximately 500
m intervals along 4 km spaced N-S lines. Samples collected near Freightrain and
Cargo1 pipes were more closely spaced, at 500 m by 1 km. The samples cover 3,490
sq. km of the 100% owned 5,086 sq. km Jackson Inlet diamond property.



A
heavy mineral concentrate was produced by SGS Lakefield Research Limited
followed by diamond indicator mineral picking by HDM Laboratories Inc. The HDM
facilities are located in Loveland, CO, U.S.A., and the company has specialized
in kimberlite indicator mineral recovery and evaluation for 10 years.



Discovery
of Cargo1 Pipe Corridor of Diamondiferous Kimberlite Fragments

In
July 2003, Twin Mining's field personnel made a significant discovery of
kimberlite fragments by careful classic prospecting along a NE-SW corridor that
connects Freightrain with Cargo1 pipes. The fragments, which are interpreted to
originate from kimberlite bodies beneath and brought to surface by frost boil
action, are distributed across up to 50 meters width within this corridor. They
were surveyed and sampled over a distance of 1.7
km; 1 km SW from Cargo1 pipe towards Freightrain and 0.7 km to the NE beyond
Cargo1 pipe. They show no evidence of transport.



Three
kimberlite fragment samples totaling 50.5 kg collected from separate portions
along the 1.7 km were analyzed by SGS Lakefield Research Limited. Diamond
indicator minerals were extracted from two of the three samples and one was
analyzed for diamond content only. Thirteen micro diamonds were extracted from
the three samples.











Regarding
diamond indicator minerals, the SGS Lakefield report states that "highly
depleted sub-calcic Cr-pyrope garnet (G10) and rare high-pressure eclogitic
garnet, which are associated with diamonds and occur as inclusions in diamonds,
are present, as is mantle ilmenite. Mantle ilmenite compositions indicate that
diamond will be highly preserved, if present."

---





"Pressures
and temperatures calculated using single clinopyroxene geothermometry for
clinopyroxene grains that are interpreted to have equilibrated with garnet in
garnet lherzolite, indicate that all of these clinopyroxenes and host
kimberlites erupted from within the diamond stability field. Calculated
pressures and temperatures form a linear array coincident with a relatively cool
35 to 40 mW/m(2) conductive geotherm similar to that of geothermal arrays for
kimberlites from the Slave province in Canada."



Discovery
of Eight Potential Kimberlite Pipes

High
sensitivity ground magnetic (gradiometer) surveys were performed by JVX Ltd. in
July and August 2003 over a 2 km by 3 km area encompassing Fugro Sial's Cargo2
aeromagnetic anomaly as well as a 2 km by 6 km corridor encompassing Freightrain
and Cargo1 pipes (Gap Grid).  Objectives of the latter survey were to
identify new or satellite pipes and to determine whether the kimberlite fragment
trail reflects bodies that are as magnetic as the initially discovered portion
of Cargo1 pipe or whether the source is probably more like the weakly magnetic
northeast portion of the pipe probed by drill hole JI-CG1-05.



At
Cargo2, the objectives were to define the anomalies, which were not established
by the 2002 survey, and to develop drill targets for 2004. These objectives were
exceeded in that the small area (6 sq. km) yielded 8 anomalies, about which the
JVX reports concludes that "if kimberlite is recognized at Anomaly A-I this
entire trend becomes prospective."  The JVX report describes A-I, that is
Cargo2, from which the grid takes its name, as "a moderate anomaly with an
amplitude of about 23 nT spread over a roughly circular area about 300m across."
 They describe Anomaly A-IV as "probably the most intriguing anomaly on the
grid. The intensity of this anomaly is comparable to Cargo2 but it appears to be
the strongest of a series of 5 magnetic highs that trend NW-SE."



Within
the Gap Grid, the JVX survey clearly defined 5 lobes or components of the
Freightrain kimberlite the most prominent of which are one that is approximately

22
nT and "roughly 125 by 100 m, flanked on the North, West, and East by magnetic
lows", and, a second of 20 nT that is "roughly 100 by 150 m with secondary lobes
to the northeast".



JVX
recommends prospecting about 0.75 km northeast of the Freightrain anomaly in the
vicinity of Anomaly 2, a new anomaly of which the "source probably extends to
depth as there is no accompanying magnetic low".



The
JVX report describes Cargo1 pipe as  "a strong (~ 15 nT), roughly circular
magnetic high.  It is about 160 m across and it is truncated on the
northeast side by a magnetic depression".  The kimberlite bodies discovered
over 1.7 km on the Freightrain - Cargo1 pipes corridor are visible on surface as
a diamondiferous kimberlite fragment corridor. Due to their low magnetic
susceptibility their magnetic footprint is very faint.

---

TORNGAT
Diamond Project

Nunavik,
Northern Quebec - 100% ownership



In
January 2003, encouraging results from 15 samples, ranging in weight from 24 kg
to 100 kg, were announced. The samples, collected during 2002, originated from
two outcropping dyke segments (900 and 400 meters in length) produced 349
diamonds of 0.174 total carats and 197 diamonds of 0.129 total carats
respectively.



A
diamond indicator mineral extraction selection, analysis and evaluation on these
samples was performed by SGS Lakefield Research Limited to provide data with
which to correlate diamond prospectivity, as determined by mineral chemistry
interpretation, with historical micro- and macro-diamond recoveries, and to
provide data for any future micro-diamond sampling program.



Interpretation
of microprobe data from the extracted diamond indicator minerals shows that:





1.  
The interpretation of garnet mineral chemistry suggests that sample site DU has
high diamond prospectivity, as it produced the greatest number of garnets
associated with potentially diamondiferous mantle source rocks.





2.   
Sub-calcic, Cr-pyrope garnet having a dunitic or harzburgitic parentage
constitutes
between 1 and 70% of the garnet population. Sub-calcic, Cr-pyrope garnet (G10)
is abundant in heavy mineral concentrates produced from sample site DU (57%)
(see Figure 3: CaO  vs. Cr2O3 Garnet Plot).





3.    
Between 1 and 22% of the garnet populations are classified as potentially
high-pressure eclogitic garnets, similar to the compositions of eclogitic garnet
in diamondiferous eclogite xenoliths. 22% of the garnets in sample site DU
concentrates are such eclogitc garnets (see Figure II: Na2O vs. TiO2 garnet
plot).







AMEC
E & C Services Limited performed a review of the diamond size distribution
on the dyke segments and recommended a desktop study to identify other segments
of the dyke with favorable indicator mineral chemistry. These prospective
segments should be sampled to determine micro-diamond counts and combined with a
drilling program to investigate potential diamond grade anomalies at depth.



The
TORNGAT property consists of three mine exploration permits totaling 327 square
kilometers. We discovered a diamondiferous kimberlite dyke system with a total
combined length of 37 km and a width of up to 2.3 meters. Management is pursuing
Joint Venture as an option to advance TORNGAT in the coming years.



---



Atlanta
Gold Project

Elmore
County, Idaho, U.S.A. - 100% ownership

The
Atlanta Gold project is moving quickly forward to match the surging price of
gold.  Atlanta is an advanced development gold project owned 100% by the
Atlanta Gold Corporation of America Inc. (Atlanta Gold), a wholly owned
subsidiary of Twin Mining Corporation.  The Atlanta Gold Project is being
prepared for start of construction in spring 2005 and gold production in the
fourth quarter of 2005.



Environmental
Permitting

Plan
of Operations

In
April 2003, a proposed Plan of Operations was submitted to the USDA Forest
Service, Idaho City Ranger District, which outlined the mining plan for the
Atlanta Gold Project.  As the lead Federal agency for the environmental
permitting process, the US Forest Service (USFS) issued a Notice of Intent on
July 10, requiring the preparation of an Environmental Impact Statement (EIS)
for the project.  A Memorandum of Understanding (MOU) outlining the
procedures and responsibilities of the USFS and Atlanta Gold for the preparation
of the EIS was executed on July 10, 2003.



The
EIS Process

The
USFS selected a third-party environmental contractor to prepare the EIS and in
early October, Tetra Tech Maxim Technologies (Maxim) was chosen as the
third-party contractor. Maxim has extensive experience in the preparation of
mine related environmental studies and recently completed the EIS for the
Astaris Dry Valley Mine (Phosphate) located in southeast Idaho.   At
the same time, Atlanta Gold appointed Patrick J. Maley as Environmental Manager
for the project as the Company's representative in this process of preparing the
EIS.  Mr. Maley is highly qualified and held similar positions with
companies like Battle Mountain, Sante Fe Pacific Gold Corporation and ASARCO.



Environmental
data collection began in mid-October with field crews active on the mine site
working through the fall and winter.  Surface water, ground water, cultural
resources, soils, fisheries, wildlife, and air quality, are all being studied to
evaluate the potential impacts of the project.   New information is
being collected to up-date and supplement the extensive, existing baseline data
that is available from a Draft EIS that was prepared in the late l980s on the
project.



Once
the Final EIS has been completed, a Record of Decision (ROD) is issued by the
USFS, which is the final step in the federal permitting process.  State and
local permits are being developed in parallel with the EIS process.
 Completion of the permitting process is planned for the fourth quarter
2004 or first quarter 2005.



Atlanta
Gold Corporation Inc. believes that the EIS and permitting process is a
partnership between the company, the federal, state and local agencies, and the
public.  Effective participation in the process is encouraged and critical
to our success.



Metallurgical
Drilling and Testing

Results
from the metallurgical fall 2002 core drilling program were received in January
22, 2003 and approximately 2.9 tonnes of core samples were shipped to Kappes
Cassiday and Associates of Reno, Nevada for column leach testing.  Fourteen
column tests were run on four composite samples taken from the Monarch and Idaho
ore bodies.  The composites were tested at two crush

---

sizes,
12.7 mm and 9.5 mm (0.5 inch and 0.375 inch) and were leached for 121 days.
 All columns were agglomerated with cement and lime, which provides both pH
control and enhanced porosity in the heap to maximize gold extraction.



Gold
extraction increased significantly as a result of the finer crush size and
longer leach time when compared to past testing that used coarser crush sizes of
38.1 mm to 50.8 mm (1.50 to 2 inches) and a 60 day leach cycle.  In fact,
gold extraction from the column tests for the bulk of the ore body exceeds 70%.
 An overall average of 54% silver extraction in was achieved in the column
testing.



Atlanta
Project - Final Column Leach Results

|Sample                                            | Crush
      Size                      | Calculated
      Head
      Grade-Gold        | Gold
      Extraction
|------------------------------------------------- | ------------------------------------- | --------------------------------------------- | ---------------------
|Monarch
      Pit
      High
      Extraction*    | 0.5
      inch
      (12.7
      mm)  | 0.089
      oz/ton
      (3.04
      g/tonne) | 77
      %           
|Monarch
      Pit
      High
      Extraction     | 0.375
      inch
      (9.5
      mm) | 0.076
      oz/ton
      (2.60
      g/tonne) | 75
      %           
|Monarch
      Pit
      Moderate
      Extraction | 0.5
      inch
      (12.7
      mm)  | 0.102
      oz/ton
      (3.49
      g/tonne) | 70
      %           
|Monarch
      Pit
      Moderate
      Extraction | 0.375
      inch
      (9.5
      mm) | 0.110
      oz/ton
      (3.76
      g/tonne) | 72
      %           

*High
extraction means a high recovery of gold when cyanide is applied to the heap.



Full
Feasibility Study

Behre
Dolbear and Company of Denver, Colorado has been appointed to act as the manager
of the final feasibility study and is also responsible for the calculation of a
new mineral resource, the mineable reserve, and the mine operating plan.
 It is anticipated that the final feasibility study will be completed by
the end of the first quarter 2004.  The Atlanta deposits are to be
developed as a conventional open pit, heap leach operation.
   The current measured mineral resource calculated as part of a
l998 Behre Dolbear Scoping Study, based upon a cut-off grade of 0.68 grams per
tonne (0.02 ounce per ton), is 18,042,000 metric tonnes grading 1.9 grams gold
per tonne (1,083,000 ounces contained gold) and 5.6 grams silver per tonne
(3,248,000 ounces contained silver).



Improved
gold recovery results from the Kappes Cassiday & Associates metallurgical
testing program will be incorporated into the study and final capital and
operating costs will be developed.  These up-dated economic parameters will
then be used to calculate the new mineable reserve for Atlanta, which will form
the economic basis of the feasibility study.



Once
the final feasibility study is complete and the EIS process well underway by
mid-2004, project financing will be sought to maintain our targeted start of
construction by the 2nd quarter of 2005.



The
Atlanta Gold Project Team



To
ensure the Atlanta Gold Mine is being built in an efficient, timely and cost
effective manner Doug Glaspey, Project Manager for Atlanta Gold is assisted by
Lance D. Vacon, registered professional geologist and by Pat Maley,
Environmental Manager and by Behre Dolbear and Company ("Behre Dolbear") with
their experienced staff, Behre Dolbear supervise the Full

---

Feasibility
Study and are responsible for establishing mine reserves, mining schedule and
the economic mine model.



Other
highly qualified project partners and their areas of responsibility are as
follows:



ACZ
Laboratories, Inc. - chemical analysis of environmental samples



Air
Sciences Inc. - air quality



Baird
Hanson Williams LLP - legal counsel for NEPA, NPDES and wetlands issues



Haz-Tech
Drilling Inc. - drill geotechnical holes



Kappes
Cassiday & Associates - metallurgical testing



Knight
Piesold Consulting - geotechnical design of leach pads, rock dumps, process
ponds and water balance



Layne
Christensen Company - drill groundwater monitoring wells and piezometers



Lyntek
Inc. - Feasibility Study, process plant and ancillary facilities



Parsons
Behle and Latimer - legal counsel for air quality issues



RTR
Resource Management Inc. (formerly Earthworks Technology) - NPDES and
transportation management plan.



Steffen
Robertson & Kirsten (U.S.), Inc  - geochemistry, hydrogeology, surface
& groundwater, reclamation/closure plan



Tetra
Tech Maxim Technologies, Inc. - Third Party EIS Contractor.  EIS scoping
and preparation; fisheries, wildlife, cultural resources, vegetation, soils,
wetlands socio-economic impacts



According
to the needs of the project people and/or companies may vary.



---

Abitibi
Gold Project

Bousquet
Township, Quebec - Breakwater Option



A
YEAR OF DISCOVERIES



Gold's
role is firmly reestablished as a store of value and is widely predicted to show
strong growth in coming years.



In
view of the positive market developments for the yellow metal, Twin Miningdecided
early in 2003 to build on its Atlanta Gold to expand its gold sector and develop
a project pipeline. Atlanta Gold now approaches the completion of the full
feasibility study and is expected to be a producer by 2005. Considering the lead
times from exploration to production, the Company decided, for its next gold
project, to acquire strategically located gold properties in historically
productive gold districts in North America.









After
examining data on numerous individual opportunities, it became apparent that
history has demonstrated the Abitibi volcanic belt to be characterized by one of
the highest probabilities for discovering new or adding to known gold resources.
And Quebec isthe top ranked North American
jurisdiction for mining investment according to the Fraser Institute, both with
respect to policy and mineral potential.



The
Abitibi gold belt is the source of approximately 5,000 (150 million ounces) of
the 8,000 tonnes of gold which have been extracted from the Superior Province of
the Canadian Shield. Quebec's portion of the belt continues to yield many new
discoveries and annual production exceeds one million ounces, of which a large
portion is from the Doyon-Bousquet-LaRonde Mining Camp.



Breakwater
Option

In
late August 2003, Breakwater Resources Ltd. granted Twin Mining an option to
acquire up to an 80% interest in the 6 properties along Quebec's Cadillac-Malartic
portion of the Abitibi gold belt. The 6 properties, totaling 2,721 hectares, are
known as Normar, Malartic "H", Malartic "H" Annex, Mouskor, Joannes North and
Joannes West. Under terms of the option agreement, Twin Mining is required to
spend $150,000 before September 2004 and make a payment of $25,000 on that date
to renew the option. An expenditure of $3.5 million and payments totaling
$125,000 will be required to maintain the option through September 2008 and earn
an initial 60% interest. Twin Mining can then purchase a further 10% interest
for $100,000 and an additional 10% by completing an independent feasibility
study and paying $500,000. There is a provision to buy Breakwater out of the
project for $1,500,000 if it decides not to participate in the development of
the properties.



2003
Exploration Program and Results

Historical
Basis for program planning

Following
a comprehensive review of Breakwater's information on the optioned properties,
an exploration program was established to focus on Normar, Malartic "H",
Malartic "H" Annex and the Mouskor claims.



Normar
was selected as having a high potential for discovery of a gold resource because
it straddles the prolific Cadillac Break which most recently has yielded Agnico
Eagle's impressive Lapa gold deposit about 20 km to the east. Past drilling had
confirmed the existence of the Decoeur and Paquin gold deposits for which
Breakwater reports cited a combined "drill-indicated mineral inventory" of
60,000 tonnes at 6.6 g of gold per tonne. This grade is better than the 5.3 g
Au/treserve grade at Cambior's Doyon mine some 8
km to the northeast.



The
Malartic "H" property is situated on the northern limb of the Malartic Syncline
which hosts within 2.5 km of the property boundary the Black Cliff, Marban,
Malartic Hygrade, Norlartic and Camflo gold mines. Production from these mines
has exceeded 2 million ounces. Up to six gold-bearing zones are associated with
the Norbenite/Norlartic shear where it crosses the south portion of the Malartic
"H" claims. The shear zone continues on to the south where it has yielded
significant gold production.  Portions of the Malartic "H" zones, from one
of the deeper holes reported in Breakwater files, assayed 5.33 g Au/t over 1.05
m, 5.54 g Au/t over 1.76 m, 7.93 g Au/t over 2.25 m, 42.7 g Au/t over 0.9 m and
3.86 g Au/t over 2.89 m.

---





On
the Malartic "H" Annex claims gold has been known to be associated with pyrite
where a prominent shear zone cuts basaltic volcanics ("Discovery Zone"). Over 2
million ounces of gold have been produced from the Siscoe and Sullivan mines,
which are located on the same shear zone.  This is the only property for
which Breakwater files revealed that additional geophysical coverage might
result in definition of new drill targets. Thus, it was decided to conduct
induced polarization and magnetometer surveys to focus drilling on unexplored
parts of the shear zone with the highest gold potential. Grab samples from a
trench on the "Discovery Zone" were reported in Breakwater files to have
returned gold values ofmore than 1,800 g Au/tonne.
 A drill hole (M-3, 1936) under this mineralization encountered sections
which assayed 94 g Au/t over 0.35 m, 31 g Au/t over 0.34 m and 21 g Au/t over
0.65 m.



The
Mouskor property is considered to be located on the same favorable horizon,
which to the east contains the Doyon, Bousquet #1, Bousquet #2 and Dumagami
Mines. More than 5 million ounces of gold already have been produced from the
Doyon and Bousquet #1 mines.



Exploration
Execution

With
the high prospectivity of the area Twin Mining set its objectives to make a
significant gold discovery.

Forage
Benoit/Benoit Diamond Drilling Limited commenced drilling in September 2003. Six
(6) drill rigs (BQ, 36.5 mm core diameter) were deployed on the four properties.



Exploration
Results

Mouskor10 holes (2,191 m) Malartic "H" and Malartic "H" Annex

20
holes (9,392 m)

The
described gold zones were tested at depth, as were several geophysical targets.
Overall continuity was confirmed while grade and thickness did not change.



Two
Gold Discoveries on Normar

31
holes (11,008 m)

Although
thickness did not change previously interpreted mineralization continuity at
Decoeur and Paquin was consistent with previous results. To complement the
investigation of the known gold occurrences, profiles were drilled across other
areas of favorable geology on the property. One gold discovery was made with
three "profile" holes. Two were drilled into a package of intrusive
highly altered tonalite intersected gold values which showed a more than
eightfold increase in the lower 40 meters from hole # TMN-03-07 to hole #
TMN-03-08 approximately 130 meters vertically below. The third hole, TMN-03-31,
collared 400 meters to the west, encountered 148.7 meters of tonalite and
produced a 1.5 m intersection of 5.67 g/t Au (3.82 g/t Au pulp check assay). The
discovery zone has an indicated width of approximately 100 meters, a strike
length of more than 500 meters and an apparent steep northerly dip.  A
review of the geological and assay results by Roscoe Postle Associates Inc.
concluded that this newly discovered mineralized area has potential for an
economic concentration of gold.









Another
"profile" hole to the north of the Paquin East zone, TMN03-19,
returned an uncut assay of 44.7 g/t Au from a 0.6 m interval within a 12.5 m
intersection containing numerous blue to smokey quartz injection veinlets and
veins, sericitic alteration and silicification, arsenopyrite (locally > 5 %),
pyrrhotite and pyrite. Most sulphides are fine grained and mainly in altered
dark siltstone at the margin of the quartz veins. This intersection is more
sulphide-rich and stratigraphically separated by at least 150 m from Paquin
East.



New
claim staking

Because
of occurrence of the gold discovery in tonalite within a few hundred meters of
the north boundary of the Normar property, 68 claims (1, 083 hectares) were
staked in late December to protect the depth and strike extension potential.
These claims bridge a gap between Normar and Cambior's Doyon mine property to
the east.



Further
work is planned for 2004 to assess the extent and economic of these high-grade
discoveries and their potential to become Twin Mining's next "Development
Project".



---







Layuh
Gold Project

Kalimantan,
Indonesia



Twin
Mining's 85 % Joint Venture interest in the Layuh gold exploration project is
based on an application for a Seventh Generation Draft C.O.W. ("Contract of Work")
and extensions for the Approval in Principle, now requested for the 5th
time. The request was made to the Directorate General of Geology and Mineral
Resources who passed it on for further processing to the South Kalimantan
Governor. Twin Mining's Indonesian partner on this property is PT Harita
Jayaraya. The project is held by Twin Mining through its 100% owned subsidiary
Twin Gold Cayman Corporation.



The
property has produced encouraging results with gold samples in the Layuh breccia
zone assaying up to 7.31 g/t Au. There was also significant porphyry style
mineralization observed similar to Newmont's Batu Hijau mine on the island of
Sumbawa in Indonesian Archipelago.



The
Layuh Project is in the early stages of exploration with very positive early
indicators for significant gold-copper potential. Twin Mining has executed a
Confidentiality Agreement with a major explorer in the region with the objective
to form a Joint Venture to develop Layuh.

---







Corporate
Governance

Introduction

The
Board of Directors and management of the Company believe that effective
corporate governance is important to the prudent direction and operation of the
Company and are committed to instituting and monitoring such policies,
procedures, practices and structures as are necessary to ensure effective
corporate governance so as to best serve the interests of all shareholders.
 The Company's corporate governance practices and policies are subject to
ongoing review and refinement, having regard to changes within the Company and
having regard to changes in applicable laws and regulatory policies.

Governance
Structure

The
Board of Directors represents the shareholders' interest in its oversight of
management and how they discharge their responsibilities. Consequently, the
Board of Directors forms committees, as the need arises, to provide strategic
direction to management and oversee execution of corporate strategy. Currently,
the only committee of the Board of Directors of the Company is the Audit
Committee. During 2003, the Board of Directors adopted a formal Charter of the
Audit Committee, setting out that Committee's responsibilities and practices
within the governance framework of the company. Each member of the Audit
Committee meets the independence requirements established by the various
securities regulatory authorities. A copy of the Audit Committee Charter is
available on the Company's web site. You are invited to visit the web site.

Best
Practices

The
practices of the Board follow widely accepted best practices of corporate
governance. Each director nominee is put before the shareholders for election
annually. At the Board and Audit Committee meetings, there are regular executive
sessions without the presence of management, and each is empowered to hire
advisors independent of management. The Company's web site also contains current
information about the Board of Directors and its Officers. You are invited to
visit the web site.

Code
of Conduct

During
2003, in response to various corporate governance initiatives of securities
regulatory authorities, including the passage in the United States of the Sarbanes
Oxley Act of 2002, the Company adopted a formal Code of Conduct for its
directors, officers and employees to promote honest and ethical conduct, the
avoidance of conflicts of interest, full, fair, accurate and timely public
disclosure and compliance with applicable laws. The Code reaffirms the Company's
values, reflecting an expectation of the highest standards of business conduct,
and is part of its continuing efforts to ensure that it has an effective program
to prevent and detect violations of law, and provide education and training to
its employees. In many circumstances, the Code sets standards that are higher
than the law requires. A copy of the Code of Conduct is available on the Company's
web site. You are invited to visit the web site.



---

Management's
Report on the Consolidated Financial Statements



The
accompanying consolidated financial statements of Twin Mining Corporation have
been prepared by and are the responsibility of the Company's management. The
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada and contain estimates based
on management's judgement. Management maintains a system of internal controls
adequate to provide reasonable assurance that transactions are authorized,
assets are safeguarded and records are maintained.



The
Audit Committee comprises four independent directors and meets with management
and the Company's auditors, PricewaterhouseCoopers LLP, to review the
consolidated financial statements before they are presented to the Board of
Directors for approval.



PricewaterhouseCoopers
LLP have examined these consolidated financial statements and their report
follows.





/s/
Hermann Derbuch

/s/
Domenico Bertucci



Hermann
Derbuch, P. Eng.



Domenico
Bertucci, CA

Chairman,
President and

Chief
Financial Officer

Chief
Executive Officer





Independent
Auditors' Report to the Shareholders



We
have audited the consolidated balance sheets of Twin Mining Corporation as at
December 31, 2003 and 2002 and the consolidated statements of loss, cash flow,
shareholders' equity and mineral properties for each of the years in the
three-year period ended December 31, 2003. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.



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



In
our opinion, these consolidated financial statements present fairly, in all
material aspects, the financial position of the Company as at December 31, 2003
and 2002 and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2003, in accordance with
Canadian generally accepted accounting principles.





/s/
PricewaterhouseCoopers LLP



Chartered
Accountants

Toronto,
Canada



January
9, 2004











FINANCIAL STATEMENTS

The Corporation has responded to item 17 in lieu of responding to this Item.

---

corporate
information



Directors

Hermann
Derbuch, P.Eng

Chairman,
President and Chief Executive Officer

Twin
Mining Corporation



James
K. Gray, O.C.*

Founder
and former Chairman,

Canadian
Hunter Exploration Ltd.



Gerard
E. Munera

Former
President & Chief Executive Officer

Minorco
(USA)



Robert
Pendreigh, P.Eng *

Technical
Consultant and former Senior Vice President,

AMEC
E&C Services Limited



Alfred
Powis, O.C.*

Former
Chairman & Chief Executive Officer

Noranda
Inc.



Cedric
E. Ritchie, O.C.*

Chairman
of Business Development Bank of Canada

and
former Chairman of Scotiabank



* Member of the Audit
Committee



Officers

Hermann
Derbuch, P.Eng

Chairman,
President and Chief Executive Officer



Domenico
Bertucci, CA

Chief
Financial Officer



Senior
Management

Douglas
Glaspey, B.Sc.

Project
Manager

Atlanta
Gold Project



Senior
Consultants

Dallas
Davis, P..Eng

Consultant
- Diamond/Gold Exploration



Hendrick
Visagie, MBA, B Sc.

Consultant
- Business Development



---





Investor
Relations and Corporate Communications

Roswitha
Derbuch

ph:
416-777-0013

fax:
  416-777-0014

email:
       info@twinmining.com

website:
    www.twinmining.com



Head
Office

Suite
1250, 155 University Avenue

Toronto,
Ontario, Canada M5H 3B7



Telephone:
416-777-0013

Facsimile:
  416-777-0014

Website:
    www.twinmining.com

E-mail:
       info@twinmining.com





Idaho
Office

1509
Tyrell Lane, Suite B,

Boise,
Idaho, U.S.A. 83706



Legal
Counsel

Lang
Michener LLP

BCE
Place, P.O. Box 747

Suite
2500, 181 Bay Street

Toronto,
Ontario, Canada, M5J 2T7



Auditors

PricewaterhouseCoopers
LLP

Chartered
Accountants

P.O.
Box 82

Royal
Trust Tower, Suite 3000

Toronto
Dominion Centre

Toronto,
Ontario, Canada, M5K 1G8



Registrar
& Transfer Agent

Equity
Transfer Services Inc.

Suite
420, 120 Adelaide Street West

Toronto,
Ontario, Canada, M5H 4C3









Stock
Exchange Listings

The
Toronto Stock Exchange Symbol: TWG

Berlin/Frankfurt
OTC Exchange, Germany

878341,
EDV-Kurzel ATG

---





Authorized
Capital

Unlimited
common shares

Unlimited
first preference shares, issuable in series

Unlimited
second preference shares, issuable in series



Issued
Capital

89,920,654
Common Shares (January 2004)



Annual
Meeting

The
Annual and Special Meeting of the Shareholders

will
be held at 11:00 a.m., Thursday, March 18, 2004 at:

The
Hilton Toronto,

145
Richmond Street West,

Toronto,
Ontario, Canada, M5H 2L2

---

TWIN
MINING CORPORATION

Suite
1250

155
University Avenue

Toronto,
Ontario

M5H
3B7





NOTICE
OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE
IS HEREBY GIVENthat the annual and special meeting (the "Meeting") of
shareholders of Twin Mining Corporation (hereinafter called the "Company")
will be held at The Hilton Toronto Hotel, 145 Richmond Street West, Toronto,
Ontario, M5H 2L2, on Thursday, March 18, 2004 at the hour of 11:00 a.m. (Toronto
time) for the following purposes:



1.

to
receive and consider the report of the directors to the shareholders and the
consolidated financial statements of the Company together with the auditor's
report thereon for the year ended December 31, 2003;



2.

to
elect directors of the Company for the ensuing year;

3.

to
appoint the auditor of the Company for the ensuing year and to authorize the
directors to fix the remuneration to be paid to the auditor;

4.

to
consider and, if thought fit, to approve the issuance by the Company of up to
89,920,654 common shares of the Company by way of one or more private placements
during the period of one year following shareholder approval; and

5.

to
transact such other business as may properly be brought before the Meeting or
any adjournment thereof.

The
accompanying management information circular of the Company dated February 4,
2004 provides additional information relating to the matters to be dealt with at
the Meeting and is deemed to form part of this notice.

Shareholders
who are unable to attend the Meeting in person are requested to complete, date,
sign and return the accompanying form of proxy in the enclosed return envelope.
All instructions appointing proxies to be used at the Meeting or at any
adjournment thereof must be deposited with Equity Transfer Services Inc., Suite
420, 120 Adelaide Street West, Toronto, Ontario M5H 4C3 not later than 5:00 p.m.
(EST) on the last business day preceding the date of the Meeting or any
adjournment thereof or with the chairman of the Meeting prior to the
commencement of the Meeting or any adjournment thereof.



DATED
at Toronto, Ontario this 4th day of February, 2004.



By
Order of the Board of Directors

/s/
Hermann Derbuch

Hermann
Derbuch
Chairman, President and
Chief Executive Officer





---





TWIN
MINING CORPORATION

Suite
1250 - 155 University Avenue

Toronto,
Ontario M5H 3B7



MANAGEMENT
INFORMATION CIRCULAR



GENERAL
PROXY INFORMATION



SOLICITATION
OF PROXIES



This
management information circular ("Information Circular") is furnished in
connection with the solicitation of proxies by the management and the directors
of Twin Mining Corporation(the "Company") for use at the annual and special
meeting of the shareholders of the Company (the "Meeting") to be held at the
Toronto Hilton Hotel, 145 Richmond Street West, Toronto, Ontario, at 11:00 a.m.
(Toronto time) on Thursday, March 18, 2004 and at all adjournments thereof. The
solicitation of proxies will be made primarily by mail and may be supplemented
by telephone or other personal contact by the directors, officers and employees
of the Company. Directors, officers and employees of the Company will not
receive any extra compensation for such activities. The Company may pay brokers
or other persons holding common shares of the Company ("Common Shares") in their
own names, or in the names of nominees, for their reasonable expenses for
sending proxies and this Information Circular to beneficial owners of Common
Shares and obtaining proxies therefrom. The cost of the solicitation will be
borne by the Company.



No
person is authorized to give any information or to make any representation other
than those contained in this Information Circular and, if given or made, such
information or representation should not be relied upon as having been
authorized by the Company.



APPOINTMENT
AND REVOCATION OF PROXIES



The
persons named in the form of proxy accompanying this Information Circular are
directors or officers of the Company. A shareholder of the Company has the right
to appoint a person (who need not be a shareholder), other than the persons
whose names appear in such form of proxy, to attend and act for and on behalf of
such shareholder at the Meeting and at any adjournment thereof. Such right may
be exercised by either inserting the name of the person to be appointed in the
blank space provided in the form of proxy or by completing another proper form
of proxy and, in either case, delivering the completed and executed proxy to
Equity Transfer Services Inc. for use at the Meeting in the manner specified in
the Notice of Meeting.



A
shareholder of the Company who has given a proxy may revoke the proxy at any
time prior to use by an instrument in writing executed by the shareholder or by
his attorney authorized in writing or, if the shareholder is a corporation, by
an officer or attorney thereof properly authorized, and delivered either to the
registered office of the Company, Suite 1250, 155 University Avenue, Toronto,
Ontario, M5H 3B7, or to Equity Transfer Services Inc., Suite 420, 120 Adelaide
Street West, Toronto, Ontario M5H 4C3, not later than 5:00 p.m. (Toronto time)
on the last business day preceding the day of the Meeting, or any adjournments
thereof,  at which the proxy is to be used, or with the chairman on the day
of the Meeting and prior to the commencement thereof or any adjournment thereof,
or in any other manner permitted by law.





---

- 2 -



EXERCISE
OF DISCRETION BY PROXIES



The
common shares of the Company ("Common Shares") represented by an appropriate
form of proxy will be voted on any ballot that may be conducted at the Meeting
in accordance with the instructions contained therein. In the absence of
instruction, such Common Shares will be voted: (i) "For" the election of
directors named in this Information Circular, (ii) "For" the appointment of
PricewaterhouseCoopers LLP as auditor and authorizing the directors to fix the
remuneration of the auditor, and (iii) "For" the resolution confirming the
issuance of up to 89,920,654 Common Shares by way of one or more private
placements during the one year period following shareholder approval, all as
more particularly described herein.

The
enclosed form of proxy confers discretionary authority upon the persons named
therein to vote on any amendments to or variations of the matters identified in
the Notice of Meeting and on other matters, if any, which may properly come
before the Meeting or any adjournment thereof. At the time of the printing of
this Information Circular, the management of the Company knows of no such
amendments or variations or other matters to be brought before the Meeting.
However, if any other matters, which are not now known to the management of the
Company, should properly be brought before the Meeting or any adjournment
thereof, the proxy will be voted on such matters in accordance with the judgment
of the person named as proxy therein.

VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF



The
authorized capital of the Company consists of an unlimited number of Common
Shares, an unlimited number of first preference shares issuable in series and an
unlimited number of second preference shares issuable in series, of which, as of
the date of this Information Circular, there are 89,920,654 Common Shares
outstanding. Each Common Share entitles the holder of record thereof to one vote
per Common Share at all meetings of the shareholders of the Company.

The
directors of the Company have fixed February 5, 2004 as the record date for the
determination of shareholders of the Company entitled to receive notice of the
Meeting. Shareholders of record at the close of business on February 5, 2004,
will be entitled to vote at the Meeting and at all adjournments thereof except
to the extent that a shareholder has transferred any Common Shares after the
record date and the transferee of such Common Shares produces a properly
endorsed share certificate or otherwise establishes that the transferee owns the
Common Shares and requests, not later than ten days before the Meeting, that
his, her or its name be included in the list of the shareholders of the Company
entitled to vote at the Meeting, in which case the transferee will be entitled
to vote such Common Shares at the Meeting and at all adjournments thereof.

Except
for Common Shares held of record by certain securities depositories, the
beneficial ownership of which is not known to the Company, to the knowledge of
the directors and senior officers of the Company, no persons or companies own
beneficially, directly or indirectly, ten per cent or more of the outstanding
Common Shares of the Company.

---

- 3 -



VOTING
BY NON-REGISTERED SHAREHOLDERS

Only
registered shareholders or the persons they appoint as their proxies are
permitted to vote at the Meeting.  However, in many cases, Common Shares
beneficially owned by a person (a "Non-Registered Holder") are registered
either:



(i)

in
the name of an intermediary (an "Intermediary") (which may include, among
others, banks, trust companies, securities dealers or brokers and trustees or
administrators of self-administered registered retirement savings plans,
registered retirement income funds, registered education savings plans and
similar plans) that the Non-Registered Holder deals with in respect of the
Common Shares; or



(ii)

in
the name of a clearing agency (such as the Canadian Depository for Securities
Limited ("CDS")) of which the Intermediary is a participant.



In
accordance with the requirements of National Instrument 54-101, the Company has
distributed copies of the Information Circular and the accompanying Notice of
Meeting together with the form of proxy (collectively, the "Meeting Materials")
to the clearing agencies and Intermediaries for onward distribution to
Non-Registered Holders.



Intermediaries
are required to forward the Meeting Materials to Non-Registered Holders unless a
Non-Registered Holder has waived the right to receive them.  Frequently,
Intermediaries will use service companies to forward the Meeting Materials to
Non-Registered Holders.  Generally, Non-Registered Holders who have not
waived their right to receive Meeting Materials will either:



(i)

be
given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile stamped signature), which is restricted as to the
number of shares beneficially owned by the Non-Registered Holder but which is
not otherwise completed.  Since the Intermediary has already signed the
form of proxy, this form of proxy is not required to be signed by the
Non-Registered Holder when submitting the proxy.  In this case, the
Non-Registered Holder who wishes to vote by proxy should otherwise properly
complete the form of proxy and deliver it as specified above under "Appointment
and Revocation of Proxies"; or



(ii)

more
typically, be given a voting instruction form which must be completed and signed
by the Non-Registered Holder and returned to the Intermediary or its service
company in accordance with the directions accompanying the voting instruction
form.



In
either case, the purpose of these procedures is to permit Non-Registered Holders
to direct the voting of the Common Shares they beneficially own.  A
Non-Registered Holder who wishes to attend and vote at the Meeting in person (or
to have another person attend and vote on behalf of the Non-Registered Holder)
should print the Non-Registered Holder's (or such other person's) name in the
blank space provided for that purpose in the first paragraph of the proxy form
or, in the case of a voting instruction form, follow the corresponding
instructions on that form.  In either case, Non-Registered Holders
should carefully follow the instructions of their Intermediary and its service
company, as applicable.



STATEMENT
OF EXECUTIVE COMPENSATION

During
the year ended December 31, 2003, the Company had one "Named Executive Officer"
as that term is defined for purposes of the Securities Act (Ontario) and the
regulation

---

- 4 -



thereunder,
being Hermann Derbuch, the Company's Chairman, President and Chief Executive
Officer. The following table sets out all information concerning the annual and
long term compensation for services rendered to the Company and its subsidiaries
for the three most recently completed financial years in respect of the Named
Executive Officer.

Summary
Compensation Table

|                                                                            |                            | Annual
      Compensation           | Long
      Term Compensation |                                                           
|--------------------------------------------------------------------------- | -------------------------- | ----------------------------------- | ---------------------------- | ----------------------------------------------------------
|                                                                            |                            |                                     |                              |                                                           
|Name
      and Principal
      Position                                     | Year                       | Salary
      ($)                    | Bonus
      ($)              | Other
      Annual
      Compen-sation
      ($)
      (1)
|Hermann
      Derbuch
      Chairman, President and Chief Executive Officer | 2003
      2002
      2001 | 240,000
      240,000
      240,000 | -
      -
      -            | -
      -
      46,000
      (2)                          

(1)

Except
as noted, the value of the perquisites and benefits does not exceed the lesser
of $50,000 and 10% of the annual salary and bonus of the Named Executive
Officer.

(2)

$10,000
represents a car allowance. $36,000 represents the difference between the market
value of the Common Shares issued on the exercise of stock options and the
amount paid for the Common Shares.



During
the financial year ended December 31, 2003, no stock options were granted to the
Named Executive Officer.



The
following table sets out information concerning all exercises of options during
the financial year of the Company ended December 31, 2003 by the Named Executive
Officer and the year-end value of unexercised options on an aggregated basis.



Aggregate
Option Exercises During the Most Recently

Completed
Financial Year
and Financial Year End Options Values

|Name                  | Securities
      Acquired on
      Exercise
      (#) | Aggregate
      Value
      Realized (1)
      ($) | Unexercised
      Options at December 31, 2003
      (#)
      Exercisable / Unexercisable | Value
      of Unexercised
      In-the-Money Options (2) at
      December
      31, 2003
      ($)
      Exercisable / Unexercisable
|--------------------- | ----------------------------------------------------- | -------------------------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------
|Hermann
      Derbuch | -                                                     | -                                                  | 1,850,000
      / -                                                                        | 7,500
      / -                                                                                                                       

(1)

Aggregate
Value Realized is the difference between the market price of the Common Shares
on the date of exercise and the option exercise price multiplied by the number
of Common Shares acquired.

(2)

Value
of unexercised options is the difference between the market price of the Common
Shares on December 31, 2003 ($0.40) and the option exercise price, multiplied by
the number of Common Shares under option.



Employment
Agreements

Mr.
Derbuch is employed by the Company pursuant to the terms of an employment
agreement dated December 1, 1996.  Under the terms of this agreement, Mr.
Derbuch is paid an annual salary of $240,000, receives a  $10,000 annual
car allowance and is eligible to receive a performance bonus to be determined by
the Company. In the event of a termination of

---

- 5 -



employment,
a change in control of the Company or a change in employment responsibilities of
Hermann Derbuch, as the Chairman, President and Chief Executive Officer of the
Company, Mr. Derbuch will be entitled to a payment equal to three times the
value of his annual salary and bonus in the previous year. Mr. Derbuch's
employment contract is not limited in time.

Compensation
of Directors

Other
than by grants of stock options, the directors were not compensated for services
rendered as directors or for committee participation, involvement in special
assignments or for services as consultants or experts during 2003. The Company
reimburses out-of-pocket costs that are incurred by the directors.

During
2003, the Company granted a stock option, pursuant to the Company's Stock Option
Plan, to one of its directors. On August 19, 2003, Cedric E. Ritchie was granted
an option to purchase 150,000 Common Shares at a price of $0.35 per Common
Share. As of the date hereof, no portion of this option has been exercised.

Composition
of the Compensation Committee



During
2003, the entire Board of Directors of the Company, being Hermann Derbuch, James
Gray, Gerard Munera, Robert Pendreigh, Alfred Powis, and Cedric Ritchie acted as
the Company's Compensation Committee. Mr. Derbuch is the Chairman, President and
Chief Executive Officer of the Company.



Report
of Executive Compensation



The
Company applies a consistent compensation philosophy to all employees, including
its executive officers. This philosophy is premised on the belief that the
Company's performance is the result of coordinated efforts directed toward
common objectives. The Company recognizes the need to attract and retain a
stable and focused leadership with the capability to effectively coordinate the
operations, finances and assets of the Company in order to maximize shareholder
return.



The
Board of Directors identifies as the Company's peer group junior and mid-size
public Canadian companies in the mining industry.  With that in mind, the
Company's executive compensation program has two primary components, base salary
and long term incentives in the form of grants of stock options.  In
addition, the Chairman, President and Chief Executive Officer of the Company is
eligible to receive a bonus component at the discretion of the Board of
Directors. Salaries are reviewed on an annual basis. In recognition of the stage
of the Company's development and the financial limitations arising therefrom,
the salary of Hermann Derbuch, the Chairman, President and Chief Executive
Officer of the Company, has remained unchanged since his appointment to those
offices in December 1996. In recognition of the salary freeze, stock options
granted to acquire 700,000 Common Shares pursuant to Mr. Derbuch's employment
contract, and which had expired at various dates in 2001 and 2002, were reissued
in 2002.



The
Company's Stock Option Plan is designed to attract, retain and motivate
officers, employees and directors of the Company and its subsidiaries and
certain other persons providing services to the Company and to more closely
align the interests of such individuals with those of shareholders of the
Company by providing such individuals with an opportunity to acquire a
proprietary interest in the Company through the exercise of options.
 Options are granted at the discretion of the Board at an exercise price of
not less than the prevailing market

---

- 6 -



price
of the Company's Common Shares at the time of grant and for a term of exercise
not exceeding five years.



Performance
Graph



The
following graph compares the yearly percentage change in the cumulative total
shareholder return of the Common Shares of the Company for the period from
December 31, 1998 to December 31, 2003 with the cumulative total return of the
S&P/TSX Composite Total Return Index for the same period(1).









|                           | 1998      | 1999      | 2000      | 2001      | 2002      | 2003     
|-------------------------- | --------- | --------- | --------- | --------- | --------- | ---------
|Company
      Close        | $0.16     | $0.335    | $0.40     | $0.40     | $0.37     | $0.40    
|Company
      Value        | 100       | 209.4     | 250       | 250       | 231.3     | 250      
|S&P/TSX
      Total Return | 13,648.84 | 17,977.46 | 19,309.36 | 16,881.75 | 14,782.01 | 18,732.48
|S&P/TSX
      Value        | 100       | 132       | 141       | 124       | 108       | 137      

(1)

Assumes
$100 invested in Common Shares of the Company on December 31, 1998 and in the
S&P/TSX Composite Total Return Index, which assumes dividend reinvestment.



Indebtedness
of Directors and Officers



During
the year ended December 31, 2003, no director or officer of the Company was
indebted to the Company or any of its subsidiaries, nor did the Company or any
of its subsidiaries guarantee the indebtedness of any director or officer.



Directors
and Officers Liability Insurance

The
Company purchases and maintains directors' and officers' liability insurance.
The aggregate amount of insurance coverage in any one policy period is
$5,000,000 and provides for varying deductible amounts depending on the nature
of the claim, ranging between $5,000 and $150,000. The annual premium for the
period from August 1, 2003 to November 1, 2004 was $65,427.

---

- 7 -





STATEMENT
OF CORPORATE GOVERNANCE PRACTICES



The
Board of Directors and management of the Company believe that effective
corporate governance is important to the prudent direction and operation of the
Company and are committed to instituting and monitoring such policies,
procedures, practices and structures as are necessary to ensure effective
corporate governance so as to best serve the interests of all shareholders.
 The Company's corporate governance practices and policies are subject to
ongoing review and refinement, having regard to changes within the Company and
having regard to changes in applicable laws and regulatory policies.
 During 2003, in response to various corporate governance initiatives of
securities regulatory authorities, including the passage in the United States of
the Sarbanes Oxley Act of 2002, the Company adopted a formal Code of
Conduct for its directors, officers and employees to promote honest and ethical
conduct, the avoidance of conflicts of interest, full, fair, accurate and timely
public disclosure and compliance with applicable laws. A copy of the Code of
Conduct is available on the Company's website.  Also during 2003, the Board
of Directors adopted a formal Charter of the Audit Committee, setting out that
Committee's responsibilities and practices. A copy of the Audit Committee
Charter is available on the Company's website.



The
Toronto Stock Exchange requires each listed company to disclose its practices
relating to corporate governance, as such relate to the governance guidelines
published by the Exchange.  The corporate governance practices of the
Company are outlined below under headings which reference the guidelines adopted
by the Toronto Stock Exchange.



Mandate
of the Board of Directors



The
Board of Directors of the Company is responsible for the overall stewardship of
the Company and as such, supervises the management of the business and affairs
of the Company.  In furtherance of this responsibility, the Board has
assumed responsibility for the following matters:



(a)

the
adoption of a strategic planning process for the Company which establishes the
Company's long-term goals and strategies.  The Board annually assists
management in developing a strategic plan and continuously monitors the success
of the Company's management in achieving those goals and implementing those
strategies;



(b)

the
identification of the principal risks of the Company's business and ensuring
that there are systems in place to effectively monitor and manage such risks
with a view to the long-term success of the Company.  The Board works with
management of the Company to achieve a proper balance between the risks incurred
and the potential return to the Company's shareholders;



(c)

succession
planning, including the appointment, training and monitoring of senior
management.  The full Board monitors the performance of senior management.
 Ad hoc committees of the Board are struck from time to time to consider
the requirements for additional members of senior management, to assist in the
search and evaluation of candidates and to report to the full Board, which has
the authority to approve the appointment of members of senior management;



(d)

the
establishment of a communications policy to ensure that the Company effectively
communicates with its shareholders, other stakeholders and the public.  The
full Board reviews and approves the Company's annual and quarterly financial
statements and management's discussion and analysis thereof.  The Audit
Committee of the Board reviews the annual financial statements and delivers a
report thereon to the full Board.

---

- 8 -



The
Audit Committee also reviews the interim financial statements of the Company.
 Under the supervision of the Board, various members of the Company's
senior management team are charged with the responsibility of complying with the
regulatory disclosure obligations of the Company and dealing on an ongoing basis
with inquiries from shareholders and other interested parties; and



(e)

the
maintenance of the Company's internal control and information systems.  The
integrity of these systems are primarily the responsibility of management, with
oversight by the Audit Committee.



Composition
of the Board of Directors



Five
of the six members of the Board of Directors of the Company (being Messrs. Gray,
Munera, Pendreigh, Powis and Ritchie) are "unrelated directors".  An
unrelated director is a director who is independent of management and is free
from any interest and any business or other relationship which could, or could
reasonably be perceived to, materially interfere with the director's ability to
act with a view to the best interests of the Company, other than interests and
relationships arising from shareholdings.  Hermann Derbuch, the Chairman,
Chief Executive Officer and President of the Company, is the sole "related
director".



The
Company currently does not have any "significant shareholders" and consequently
no special procedures are in place to address issues applicable to minority
shareholders.



Appointment
of Nominating Committee and Mandate



The
Board of Directors of the Company has not appointed a committee of directors to
be responsible for proposing to the Board new nominees for directors or for
assessing directors of the Company on an ongoing basis.  The Board does not
consider that a nominating committee is currently necessary given the stage of
development of the Company, the small size of the Board, the low turnover of
Board membership and given that five of the Company's six directors are
independent of management and otherwise unrelated to the Company.



Orientation
and Education



The
Company has not adopted a formal orientation and education program for new
directors.  While the Board believes that adoption of a formal program is
not presently warranted given the size of the Company, the nature of its
business and the low turnover in Board membership, all new directors are
provided with background information on the Company and are provided with the
opportunity to attend the Company's properties and to meet with senior
management and with other directors to discuss the Company's affairs.



Determination
of Number of Directors



The
Board of Directors of the Company considers the current number of directors to
be appropriate given the size of the Company and its stage of development, the
nature of its business and the respective skills and experience of its members.
 The Board does not contemplate implementing a program to reduce the number
of directors in the foreseeable future.



Compensation
of Directors



In
recognition of the Company's stage of development, directors of the Company
currently receive no cash remuneration.  Members of the Board of Directors
are eligible to participate in the Company's stock option plan, pursuant to
which options may be granted to

---

- 9 -



purchase
Common Shares for a maximum of five years at an exercise price at or above the
market price of the Company's Common Shares at the date of grant.
 Currently, directors of the Company (other than Hermann Derbuch, the Chief
Executive Officer and President of the Corporation) hold, in aggregate, options
to purchase 1,300,000 Common Shares, representing approximately1.4% of
the number of outstanding Common Shares.  Mr. Derbuch currently holds
options to purchase1,850,000 Common Shares, representing approximately
2.0% of the number of outstanding Common Shares.



Committees
of Directors



Currently,
the only committee of the Board of Directors of the Company is the Audit
Committee.  In November 2002, Robert Pendreigh replaced Hermann Derbuch on
this committee, and in January 2004, Cedric Ritchie was appointed to the Audit
Committee, such that the Audit Committee is now composed entirely of unrelated
directors, being Robert Pendreigh, James Gray, Alfred Powis, and Cedric Ritchie.



During
2003, the Board adopted a formal Charter of the Audit Committee. The mandate of
the Audit Committee is to assist the Board in fulfilling its oversight
responsibilities and, to this end, the Committee assists the Board with its
review of: (i) the integrity, adequacy and timeliness of the Company's auditing,
accounting, and financial reporting processes; (ii) the financial statements and
related reports provided by the Company to its shareholders, securities
regulators, other government or regulatory bodies, and the public; and (iii) the
Company's system of internal controls regarding finance, accounting, legal
compliance and ethics, that management and the Board have established from time
to time.

The
Audit Committee mandate is also to encourage continuous improvement of, and to
foster adherence to, the Company's policies, procedures, and practices at all
levels.



The
Audit Committee meets at least annually with the Company's auditor in the
absence of members of management.  The Toronto Stock Exchange recommends
that all members of audit committees be "financially literate" (i.e. have the
ability to read and understand a balance sheet, an income statement, a cash flow
statement and the notes thereto) and that at least one member should have "accounting
or related financial experience" (i.e. have the ability to analyze and interpret
a full set of financial statements, including the notes thereto, in accordance
with Canadian generally accepted accounting principles).  All members of
the Audit Committee are financially literate and in the view of the Board, Mr.
Powis and Mr. Ritchie possess accounting or related financial experience.



Approach
to Corporate Governance Issues



As
part of their general duty to supervise the management of the business and the
affairs of the Company, the Board of Directors of the Company as a whole have
assumed responsibility for developing the Company's approach to corporate
governance matters, including the review and implementation of the corporate
governance policies of the Company.  The Board has approved this Statement
of Corporate Governance Practices, the Code of Conduct and the Charter of the
Audit Committee.



Management's
Responsibilities and Board Approval



The
Board of Directors has not developed formal position descriptions for the Chief
Executive Officer of the Company or for the Board itself.  Hermann Derbuch,
the Chairman, Chief Executive Officer and President of the Company, is
responsible for the day-to-day operations of the Company, and undertakes a
significant role in the long range planning and corporate finance activities of
the Company. Guidance and assistance is provided to

---

- 10 -



management
collectively by the full Board and by individual members of the Board.
 During 2003, the Board met six times.  The attendance rate of Board
members at the meetings was 90%.



All
significant business activities proposed to be undertaken by the Company are
subject to the approval of the Board of Directors.  Major capital
expenditures, acquisitions, divestitures, financing transactions, contracts with
significant financial commitments and other material transactions, as well as
the appointment of officers, stock option grants, financial statements and proxy
materials are all subject to the approval of the Board.



Board
Independence from Management



Five
of the Company's six directors are unrelated directors.  Mr. Derbuch, who
is the Chairman and Chief Executive Officer of the Company is primarily
responsible for setting the agenda for meetings of the Board of Directors.
 However, all members of the Board are able to submit particular matters
for inclusion on the agenda at Board meetings.  The current members of the
Board possess extensive experience in the management and operation of public
companies and it is the view of the Board that the fact that Mr. Derbuch
occupies the offices of Chairman and Chief Executive Officer does not impair the
ability of the Board to act independently of management.



Outside
Advisors



In
the case of non-arm's length transactions or other circumstances where a member
or members of the Board may have or appear to have a conflict of interest with
the Company, prudent corporate practice dictates that the interested member
declare his interest and refrain from voting on the matter and in certain
circumstances, the Board may strike a committee of independent directors to
review and to make recommendations in respect of the proposed transaction.
 Although no formal policy is in place with respect to the retention of
outside advisors, any individual director and any independent committee of the
Board may request the engagement of an outside advisor where the director or the
committee believes it is appropriate to do so.  Management regularly
consults with independent advisors in respect of technical, operational matters
and the maintenance of industry best practices, including AMEC  E&C
Services, MPH Consulting, Lakefield Research Limited, Malcolm McCallum, Diamond
Trading N.V., Behre Dolbear and Company, and Patrick Maley, and the advice and
reports of these consultants are also provided to the Board.



Shareholder
Communications



The
Company regularly communicates with its shareholders and the investment
committee through its quarterly reports, annual report and news releases as
appropriate from time to time and through the Company's website, which is
updated on a regular basis.  Shareholder communication is primarily the
responsibility of the Chief Executive Officer of the Company, assisted by the
Company's investor relations person who is employed at the Company's executive
offices.  Enquiries from shareholders and others are referred to the
appropriate corporate officer for consideration and are responded to promptly.



SHAREHOLDER
RIGHTS PLAN



The
Company adopted a shareholder rights plan (the "Rights Plan") effective
November 17, 2000, which was confirmed by the Company's shareholders at a
meeting held on March 15, 2001.  The Rights Plan will be in effect until
the 2011 annual meeting of shareholders of the Company unless terminated by the
Board of Directors prior to such meeting.  The

---

- 11 -



following
is a summary of the Rights Plan and is qualified in its entirety by the Rights
Plan set forth in the Shareholder Rights Plan Agreement made as of November 17,
2000 between the Company and Equity Transfer Services Inc., a copy of which is
available from the Company upon request.



Under
the Rights Plan, a right to purchase one Common Share of the Company (a "Right")
was issued for each outstanding Common Share of the Company as at November 17,
2000. In addition, a Right will be issued for each Common Share issued
subsequent to November 17, 2000 and prior to the time of separation (the "Separation
Time") of the Rights.  Prior to the Separation Time, Rights will be
evidenced by the corresponding Common Share certificate and will trade only with
the corresponding Common Shares.  The Rights will separate from the Common
Shares and become exercisable 10 business days following an announcement that a
person has acquired ownership of 20% or more of the Company's Common Shares (and
thereby become an "Acquiring Person") or has commenced a takeover bid for the
Company's Common Shares, other than, in each case, pursuant to a "Permitted Bid",
a "Competing Permitted Bid" or other transaction approved by the Board of
Directors of the Company.  Upon a person becoming an Acquiring Person
(other than by means of a "Permitted Bid", a "Competing Permitted Bid" or other
approved transaction), then holders of Rights, other than the Acquiring Person
and certain persons connected to the Acquiring Person, may exercise the Rights
to purchase Common Shares at a 50% discount to the then prevailing market price
for the Common Shares, with the number of Common Shares purchasable per Right
being equal to the number obtained by multiplying the exercise price of the
Rights ($20) by two and dividing the product so obtained by the then prevailing
market price.  In certain circumstances, the Rights may be redeemed by the
Company at a price of $0.00001 per Right.  Also, the Board of Directors has
discretion to waive the application of the Rights Plan.



Under
the Rights Plan, a "Permitted Bid" is a takeover bid made by a holder of 5% or
less of the outstanding Common Shares of the Company to all shareholders of the
Company for all Common Shares, which bid must be open for acceptance for a
minimum of 60 days, be accepted by holders of not less than 50% of the
outstanding Common Shares of the Company, excluding Common Shares owned by the
offeror and certain related parties and which if so accepted, must be extended
for a further 10 days to allow other shareholders to tender to the bid.
 A "Competing Permitted Bid" is a takeover bid made while a Permitted
Bid is ongoing and which satisfies all of the Rights Plan's criteria for a
Permitted Bid, except that a Competing Permitted Bid need only be open for
acceptance until the later of the 60th day after the earliest Permitted Bid then
in existence was commenced and 21 days after the Competing Permitted Bid was
made.



BUSINESS
OF THE MEETING



ELECTION
OF DIRECTORS



The
Articles of the Company provide that the Board of Directors will consist of a
minimum of one and a maximum of fifteen directors. The Board of Directors
presently consists of six directors and it is intended to elect six directors
for the ensuing year.

The
term of office of each of the present directors expires at the Meeting.
 The persons named in the form of proxy accompanying this Information
Circular intend to vote for the election of the nominees whose names are set
forth below, unless the shareholder of the Company who has given such proxy has
directed that the Common Shares represented by such proxy be withheld from
voting in respect of the election of directors of the Company. Management does
not contemplate that any of the nominees will be unable to serve as a director
of the Company for the ensuing year; however, if that should occur for any
reason prior to the Meeting or any adjournment thereof, the persons named in the
form of proxy

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- 12 -



accompanying
this Information Circular have the right to vote for the election of the
remaining nominees and may vote for the election of a substitute nominee in
their discretion.  Each director elected will hold office until the next
annual meeting of the Company or until his successor is elected or appointed,
unless his office is earlier vacated in accordance with the by-laws of the
Company.

The
following table sets forth certain information regarding nominees, their
position with the Company, their principal occupation or employment, the dates
upon which the nominees became directors of the Company and the number of Common
Shares beneficially owned by them, directly or indirectly, or over which control
or direction is exercised, as at the date hereof:

|Name,
      Position and Country of Residence                                                                       | Principal
      Occupation or
                  Employment                                                                                                                                                                     | Director
      of
      the Company since | Voting
      securities beneficially  owned or controlled (1)
|------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------- | -------------------------------------------------------------
|Hermann Derbuch, P.Eng.
      Chairman, President and
      Chief Executive Officer
      Oakville, Ontario, Canada | Chairman, Chief Executive Officer
      (C.E.O.) and President of the
      Company
      and Voisey Bay Resources Inc.                                                                                                        | December 3, 1996                          | 951,268                                                      
|James K. Gray, O.C. (2)
      Director,
      Calgary, Alberta, Canada                                              | Founder and former Chairman,
       Canadian Hunter Exploration Ltd.
                 (an oil
      and gas company)                                                                                                           | March 15, 2000                            | 2,364,406                                                    
|Gerard E. Munera
      Director,
      Greenwich, Connecticut,
      United States of America                       | Managing Partner, Synergex Group
      LLC, (a holding entity, which controls Arcadia Inc.); Chairman - Compania
      Minera Zamora SA (a gold mining company); and Director - Nevsun Ltd. (a
      gold exploration company) | January 26, 2001                          | 25,500                                                       
|Robert Pendreigh, P. Eng.
      Director, (2)
      West Vancouver,
                British
      Columbia, Canada  | Technical Consultant and Former
      Senior Vice-President, AMEC E&C Services Limited (an engineering
      consulting company), and General Manager of its mining division.                                                  | May 1, 1999                               | 210,000                                                      
|Alfred Powis, O.C. (2)
      Director,
      Toronto, Ontario, Canada                                               | Corporate Director,  Inmet
      Mining Corporation, Denison Mines Limited                                                                                                                                                     | March 8, 1999                             | 1,312,897                                                    
|Cedric E. Ritchie, O.C. (2)
      Director,
      Toronto, Ontario, Canada                                          | Chairman, Business Development
      Bank of Canada
      Former Chairman, Scotiabank                                                                                                                                          | July 15, 2003                             | 1,939,000                                                    

(1)

The
information as to the number of voting securities beneficially owned, directly
or indirectly, or over which control or direction is exercised has been
furnished by the respective nominee.

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- 13 -





(2)

Members
of the Audit Committee of the Board of Directors of the Company.



APPOINTMENT
OF AUDITOR

The
auditor of the Company is PricewaterhouseCoopers LLP, Chartered Accountants, of
Toronto, Ontario. PricewaterhouseCoopers LLP, Chartered Accountants, (including
its predecessor) has been the auditor of the Company since 1988. Unless
authority to do so is withheld, the persons named in the form of proxy
accompanying this Information Circular intend to vote for the appointment of
PricewaterhouseCoopers LLP, Chartered Accountants, as the auditor of the
Company, to hold such office until the close of the next annual meeting of the
shareholders of the Company or until its successor is appointed and to authorize
the directors of the Company to fix the remuneration of the auditor of the
Company.

FUTURE
PRIVATE PLACEMENTS

The
Meeting has also been called in part to consider and, if thought fit, to
authorize the Company to issue from time to time during the period ending one
year from the date of shareholder approval, up to 89,920,654 Common Shares by
way of one or more private placements.



From
time to time, the Company investigates opportunities to raise financing on
advantageous terms, including by means of private placement transactions. It is
the policy of the Toronto Stock Exchange (the "Exchange") that the number of
shares issued or made subject to issuance (i.e. common shares which are issuable
upon the exercise of warrants or options or upon conversion of convertible
securities) pursuant to private placement transactions during any six-month
period must not exceed 25% of the number of Common Shares outstanding (on a
non-diluted basis) prior to giving effect to such transactions, unless
shareholder approval to such transactions has been obtained.



The
approval of shareholders is being sought at the Meeting in order to provide the
Board of Directors of the Company with the flexibility to pursue financing
opportunities as they arise and to avoid the expense and delays arising from the
calling and holding of special meetings of shareholders to consider specific
proposed issuances of securities by way of private placement.  Any private
placements completed by the Company in reliance on this approval by shareholders
will be with parties dealing substantially at arm's length with the Company and
will not materially affect control of the Company.  Securities of the
Company will be issued at such prices and upon such terms and conditions as the
Board of Directors may from time to time deem advisable and will be subject to
the prior approval of the Exchange.  In addition, the price per Common
Share to be issued will not be lower than the closing market price of the Common
Shares on the Exchange on the trading day prior to the date on which notice of
the proposed private placement is provided to the Exchange (the "Market Price"),
less the applicable discount as follows:



Market
Price

Maximum
Discount Therefrom

$0.50
or less

25%

$0.51
to $2.00

20%

Above
$2.00

15%



For
this purpose, a private placement of convertible securities is deemed to be a
private placement of the underlying Common Shares at an issue price equal to the
lowest possible price at which the securities are convertible into Common Shares
by the holders thereof.



Shareholders
will be asked to approve the following resolution:

---

- 14 -



"RESOLVED
THAT the Company be hereby authorized from time to time during the period of one
year following the date hereof, to issue up to 89,920,654 Common Shares by way
of one or more private placements, with such shares to be issued at such prices
and upon such terms and conditions as the Board of Directors of the Company may
from time to time deem advisable".



Approval
of this resolution requires the affirmative vote of a majority of the votes cast
at the Meeting.  Unless a choice is otherwise specified, it is intended
that the Common Shares represented by proxies hereby solicited will be voted for
the resolution.  In the event that such approval is not obtained, then the
Company may be required to obtain shareholder approval in the future in order to
complete a private placement or alternatively, certain private placements may
not proceed.



INTEREST
OF INSIDERS IN MATERIAL TRANSACTIONS

To
the knowledge of management of the Company, no insider of the Company, proposed
nominee for election as a director or any associate or affiliate of any of the
foregoing, has any material interest, direct or indirect, in any transactions in
which the Company has participated since January 1, 2003 or in which the Company
proposes to participate, that has materially affected or will materially affect
the Company or its affiliates.

GENERAL

Management
of the Company is not aware of any other matter to come before the Meeting other
than as set forth herein.  If any other matter properly comes before the
Meeting, it is the intention of the persons named in the enclosed form of proxy
to vote the shares represented thereby in accordance with their best judgment on
such matter.



Information
contained herein is given as of the 4th day of February, 2004, except as
otherwise noted. The content and sending of this Information Circular has been
approved by the Board of Directors of the Company.



DATED
at Toronto, Ontario, this 4th day of February, 2004.



By
Order of the Board of Directors

/s/
Hermann Derbuch

Hermann
Derbuch
Chairman, President and

Chief
Executive Officer