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

                                    FORM 20F

            ANNUAL REPORT PURSUANT TO SECTION 12(g) OF THE SECURITIES
                  EXCHANGE ACT OF 1934 OF A FOREIGN CORPORATION

                                 March 31, 2001

                        LEADER MINING INTERNATIONAL, INC.
                        ---------------------------------
             (Exact name of registrant as specified in its charter)

                          Commission File no 000-26447

               Alberta, Canada                        (N/A)
               ---------------                        -----
       (State or other jurisdiction              (I.R.S. Employer
       of incorporation or organization)         Identification No.)

           400 Fifth Avenue, S.W., Suite 810, Calgary, Alberta T2POL6
           ----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (403) 234-7501
                                 --------------
               Registrant's telephone number, including area code

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

                  Title of each class to be so registered: None

       Name of each exchange on which each class is to be registered: None

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

           Title of class
           Common                    Unlimited Shares of Common Stock

A total of 21,234,680 shares of common stock of Registrant were issued and
outstanding as of March 31, 2001. No other classes of stock were issued and
outstanding.

Indicated 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      No  X

Indicate by check mark which financial statement item the Registrant has elected
to follow:  Item 17 __X__   Item 18 ______




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                                TABLE OF CONTENTS
                                     PART I


                                                                      Page

Item 1.     Description of Business......................................5

Item 2.     Description of Property.....................................11

Item 3.     Legal Proceedings...........................................16

Item 4.     Security Ownership of Certain Beneficial Owners
            and Management (Control of Registrant)......................16

Item 5.     Nature of Trading Market
            Market Price of and Dividends on
            Registrants Common Equity and
            Related Stockholder matters.................................18

Item 6.     Exchange Controls and Other Limitations Affecting Security
            Holders.....................................................18

Item 7.     Taxation....................................................19

Item 8.     Selected Financial Information..............................20

Item 9.     Management Discussion and Analysis..........................22
             of Financial Condition and Results of Operations

Item 10.    Directors and Executive Officers ...........................28

Item 11.    Compensation of Officers and Directors......................30

Item 12.    Options to Purchase Securities from Registration or
            Subsidiaries................................................33

Item 13.    Interest of Management in Certain Transactions..............34

Item 14.    Description of Securities ..................................36

Item 15.    Defaults upon Senior Securities.............................36

Item 16.    Changes in Securities, Changes in Security for Registered
            Securities..................................................36

Item 17.    Financial Statements........................................37

Item 18.    Financial Statements (Not applicable) ......................37



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Item 19.    Financial Statements, Exhibits, and Supplementary Data...F-1 - F-24

                     Signatures.........................................38




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                                    GLOSSARY

INDUSTRY DEFINITIONS

Alteration Zone:         an  area  of  distinct  mineralization  where  there is
                         evidence of physical or chemical change in the minerals
                         subsequent to their formation.

Anticipated Resources:   expected to  be  found  within  a  specified  property,
                         mining camp,  or other area,  which  is  restricted  by
                         local  geologic  conditions  or  property  boundaries -
                         Canadian  Institute of Mining, Metallurgy and Petroleum
                         (CIM),   Ad  Hoc  Committee  Report  entitled  "Mineral
                         Resource/Reserve      Classification:       Categories,
                         Definitions and Guidelines" - February 1996.

Base Metals:             metals other  then gold,  silver,  mercury and platinum
                         group.

Commercial Production:   Operation of a  mineral prospect or any part thereof as
                         a mine but does not include  milling for the purpose of
                         testing or milling by a pilot plant.

Diamond Drilling:        coring of  rock by  a boring  machine  that uses a ring
                         shaped bit in which chips of diamond  are set to obtain
                         samples for observation or sampling.

Domain:                  A region distinctively marked by some common geological
                         feature.

Electro-magnetic:        Geophysical prospecting  technique that uses the inter-
                         relation of electricity and magnetism.

EM:                      Electro-magnetic

Geochemical              Prospecting: The search for mineral deposits,
                         particularly metalliferous deposits, by analyzing
                         rocks, stream silts, springs, soils, surface water or
                         organisms for abnormal concentrations of elements.

Geochemistry:            The study of the abundances of elements and isotopes in
                         the earth,  and the  distribution  and migration of the
                         individual elements in the  various  parts of the earth
                         (the  atmosphere,  hydrosphere,  crust, etc.) with  the
                         object   of  discovering  principles   governing   such
                         distribution and migration.

Geophysical Prospecting: Advanced prospecting  based on measurement  of physical
                         properties of rocks and minerals.

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Geophysics:              The science of  the physics of the earth, including its
                         atmosphere and hydrosphere.

Grade:                   Concentration of  desired  metal contained  within  one
                         tonne of mineralized rock.

Hypothetical             Resources: those expected to be present because of
                         favourable geology and known mineralization within a
                         general area limited by specified political,
                         physiographic or geologic boundaries - Canadian
                         Institute of Mining, Metallurgy and Petroleum (CIM), Ad
                         Hoc Committee Report entitled "Mineral Resource/Reserve
                         Classification: Categories, Definitions and Guidelines
                         - February 1996.

Indicated Resource:      the estimated quantity  and grade of  part of a deposit
                         for which the continuity  of grade,  together with  the
                         extent  and  shape,  are so  well  established  that  a
                         reliable  grade  and  tonnage  estimate  can  be  made.
                         Fundamental to  the  indicated  resource  class is well
                         established geological information on the continuity of
                         the mineralized  zones - Canadian  Institute of Mining,
                         Metallurgy and Petroleum (CIM), Ad Hoc Committee Report
                         entitled   "Mineral  Resource/Reserve   Classification:
                         Categories,  Definitions  and  Guidelines"  -  February
                         1996.

Inferred Resource:       the estimated  quantity  and  grade of  a deposit, or a
                         part  thereof,  that  is  determined  on  the  basis of
                         limited sampling, but for  which  there  is  sufficient
                         geological information  and a reasonable  understanding
                         of the continuity and distribution of  metal  values to
                         outline  a  deposit   of  potential  economic  merit  -
                         Canadian Institute of Mining,  Metallurgy and Petroleum
                         (CIM),  Ad  Hoc   Committee  Report  entitled  "Mineral
                         Resource/Reserve      Classification:       Categories,
                         Definitions and Guidelines" - February 1996.

Measured Resource:       the estimated  quantity  and  grade of  that  part of a
                         deposit for  which the  size,  configuration, and grade
                         have been  very well  established  by  observation  and
                         sampling of outcrops, drill  holes,  trenches  and mine
                         workings.  -  Canadian  Institute of Mining, Metallurgy
                         and Petroleum (CIM), Ad  Hoc Committee  Report entitled
                         "Mineral Resource/Reserve  Classification:  Categories,
                         Definitions and Guidelines" - February 1996.

Mineral:                 A  naturally occurring  inorganic  element  or compound
                         with a characteristic external structure as a result of
                         a fixed internal arrangement of atoms or ions.

Mineral Deposit:         a  body  of  rock  containing  metals  or  minerals  of
                         commercial  interest  which  has  been  by a sufficient
                         number  of  drill  holes  tested  to support sufficient
                         tonnage  and  average  grade  of  metal(s)  to  warrant
                         further exploration. This deposit does not qualify as a
                         commercially minable ore body,  until  a  comprehensive
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                         economic, feasibility study based upon the test results
                         is concluded.

Mineral Prospect:        A mineral occurrence  that has some potential  of being
                         of mineable size and mineral content.

Mineral Resource:        a deposit or concentration of natural, solid, inorganic
                         or fossilized organic substance in such quantity and at
                         such a grade or quality that extraction of the material
                         at  a  profit  is  currently  or potentially possible -
                         Canadian Institute of Mining,  Metallurgy and Petroleum
                         (CIM),  Ad  Hoc  Committee   Report  entitled  "Mineral
                         Resource/Reserve       Classification:      Categories,
                         Definitions and Guidelines" - February 1996.

Net                      Smelter Royalty: the right to an amount equal to a
                         percentage of the gross sales proceeds received from
                         the sale of minerals obtained from a property less the
                         smelting costs and the costs of handling, transporting
                         and insuring the production from the mine to a
                         treatment facility.

Operator:                Party  responsible   for   performing   the  activities
                         necessary or desirable to explore,  develop, or perform
                         work on  a  property  or  any part thereof on behalf of
                         another party.

Ore:                     a natural aggregate of one or more minerals which, at a
                         specified time  and place,  may  be mined and sold at a
                         profit,  or from  which  some  part  may  be profitably
                         separated.

Pegmatite:               Coarsely crystalline  rock  of plutonic  or replacement
                         origin,  generally  forming   dykes,  sills,  or  small
                         irregular masses.

Precious Metals:         Gold and silver only

Prospecting:             Searching and examining outcrops,  soil, and gravel for
                         indications of valuable minerals.

Strata-bound             deposit: A concordant or transcurrent mineral deposit
                         occurring in stratified sedimentary, volcanic, or
                         metamorphic rocks, not necessarily formed at he same
                         time as the strata.

Sulphide:                A compound of sulphur with another element.

Tonne:                   a unit of weight measurement equal to 2204 pounds.

Volcanics:               Rock  that solidified  or  crystallized at surface from
                         hot, molten, or partly molten mass or magma.

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Volcanogenic Massive
Sulphide Deposit:        Concordant,  strata-bound  sulphide  deposit   commonly
                         associated  with   volcanic  rocks   or   volcanic  and
                         sedimentary rock sequences.

VMS:                     Volcanogenic massive sulphide



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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

(a)  The Company

Leader Mining International Inc. ("Leader," "Company," or "Registrant") was
incorporated on June 22, 1987 as Durga Resources Ltd. ("Durga"), under the
Business Companys Act (Alberta). By a Certificate of Amalgamation dated March
31, 1993 Durga amalgamated with Durvada Resources Ltd. and resulted in new Durga
Resources Ltd. By a Certificate of Amendment dated September 24, 1993, Durga
changed its name to Leader Mining Company ("LMC"). By a Certificate of Amendment
dated July 18, 1994. It consolidated its shares (reverse split) in 1994 by one
for five shares. LMC changed its name to the Leader Mining International Inc.

The Registrant was listed on the Alberta Stock Exchange on December 18, 1987.

Leader is extraprovincially registered in the Province of Saskatchewan by a
Certificate of Registration dated November 21, 1996, under The Business
Corporations Act (Saskatchewan) and in the Province of Manitoba by a Certificate
of Registration dated November 20, 1996, under The Business Corporations Act
(Manitoba).

The registered office of the Company in Alberta is at 400 Fifth Avenue, S.W.,
Suite 810, Calgary, Alberta, T2P 0L6. The head office and records office of the
Corporation is at 810, 400-5th Avenue S. W., Calgary, Alberta, T2P 0L6.

The Company is a reporting company in the Province of British Columbia and in
the Province of Alberta. The Corporation's shares are listed and posted for
trading on the Canadian Venture Exchange (CDNX) under the symbol "LMN" and
quoted on the NASD under the symbol "LDRMF."

The Company was formed by Mr. Yashvir (Jasi) Nikhanj, the current President and
a director, to pursue the principal business of exploring for gold, silver and
base metal deposits. There is no assurance that a commercially viable mineral
deposit or reserve exists on any of its property until further exploration is
done and a comprehensive engineering feasibility evaluation based on such work
is performed which concludes economic and legal viability.

From 1987 to 1999, the Company was engaged in mineral exploration for gold,
copper, zinc and diamonds in the Northwest Territories and Saskatchewan, Canada.
The Company was also exploring for gold in the state of Nevada. The Company had
minimal capitalization during such period, and its activities were very limited.

The Company's strategy with respect to its mineral exploration related
activities is to identify geological areas in which the Company may invest or
participate in non-producing or producing mineral prospects or joint ventures,
and where the company may acquire mineral prospects for exploration through
staking claims.


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During the last five (5) fiscal years, the Company conducted exploration
activities on certain mineral prospects as follows:

Similco Mines Ltd.; British Columbia, Canada, 2000. Approximately $185,000
expended for property acquisition, due diligence, and geologic and engineering
studies to examine the potential for re-opening the past producing mine and
mineral processing facilities. The acquisition and further development work have
been postponed pending improved markets.

KARMEL, ORANGE FREE STATE, REPUBLIC OF SOUTH AFRICA, 1999. Approximately
$185,000 was expended for land acquisition, airborne geophysic survey and ground
follow-up to explore prospective diamond bearing kimberlite targets. Prospecting
permits could not be obtained and this prospect has been abandoned and expenses
written off.

Voisey's Bay; Labrador, Canada, 1998. Approximately $55,000 expended for land
acquisition and prospecting and ground geophysics to explore for prospective
nickel deposits. No further work is planned.

Ariel Resources  Ltd.;  Costa Rica,  1998.  Approximately  $250,000  expended to
perform  due  diligence  and  technical  feasibility  studies to  ascertain  the
viability of corporate merger. No further work is planned.

Nighthawk Lake; Ontario, Canada, 1996-1998. Approximately $275,000 expended for
land acquisition and prospecting; ground geophysics; and diamond drilling to
test prospective gold targets. No further work is planned.

Bristol; Ontario, Canada, 1996-1997. Approximately $125,000 expended for land
acquisition and prospecting; ground geophysics; and diamond drilling to test
prospective gold targets. No further work is planned.

Steephill Lake; Saskatchewan Canada, 1997. Approximately $300,000 expended for
land acquisition and prospecting; airborne geophysics; and diamond drilling to
test prospective base metal targets. No further work is planned.

The Company hires third-party companies to conduct drilling, testing, and to
provide services and evaluation on a negotiated contract basis, except that a
company, Nikhanj and Associates Geo Consulting, owned by the Company's President
and largest shareholder, Y.S. (Jasi) Nikjanj provides management, geological,
and exploration consulting services to the Company for $10,000 per month.

The Company is not carrying any reserve values on any prospects due to the lack
of any quantifiable reserves. The Company has not earned any revenue from
operations to date, and it continues to be an exploration stage company.

(b) Current Business

The focus of the Company is to actively pursue mineral exploration to find and
outline mineral deposits in under-explored terrain within jurisdictions that are
politically stable. The Company currently has one major prospect, which is the
Knife Lake Project (located in Saskatchewan, Canada). The property is comprised
of a mining lease and 55 mineral claims; of which the Company owns 100% interest
in the mining lease and 44 mineral claims, and can earn up to 90% interest in an
additional 11 mineral claims.

As of December 31, 1998, the Company has spent $7.3 million (Canadian) exploring
for base and precious metals within the Scimitar Complex of northeastern

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Saskatchewan and outline the Knife Lake copper deposit. Over the next three
years expenditure of an additional $3.3 million (Canadian) is anticipated for
geological reconnaissance ground geophysics, drilling, and preliminary
engineering studies.

The Company is always searching for high quality exploration opportunities,
which can be acquired at low cost. Identification of targets of opportunity
represent the Company's focus for growth, and annual expenditures of $0.25
million (Canadian) are anticipated for examination, acquisition, and initial
testing of new projects.

Corporate overhead is held to a minimum. Expenditure for office rent, office
supplies, travel, and administration are expected to continue at the current
level of $0.7 million (Canadian) per year.



A summary of the Company's proposed expenditures is presented below:

                       CORPORATE EXPLORATION BUDGET
                            ($Canadian x 1000)
--------------------------------------------------------------------------------
 Fiscal year, March 31         2002       2003       2004      2005       Total
--------------------------------------------------------------------------------
  Knife Lake Project          1,000      1,000      1,000     1,000      4,000
--------------------------------------------------------------------------------
   Opportunity Targets          300        300        300       300       1,200
--------------------------------------------------------------------------------
Overhead and Administration     700        700        700       700       2,800
--------------------------------------------------------------------------------
    Grand Total (CAN $)       2,000      2,000      2,000     2,000      8,000
--------------------------------------------------------------------------------

The Company intends to finance its proposed expenditures by selling up to 50%
interest in the Knife Lake Project to the Korea Resources Corporation for $5.2
million. Additional cash requirements will be met via private placements of the
Company's common shares to sophisticated investors, under market conditions
prevailing at that time. Failure to obtain sufficient funding in a timely manner
could result in delay or indefinite postponement of further exploration work of
the Company's prospects with the possible loss of exploration or exploitation
permits.

The Company's current business plan is in mineral exploration including foreign
mineral joint ventures, in Canada and South/Central America. The Company has
determined that it must build an asset base through exploration; and acquisition
by exchange of stock for other mineral companies, leases, and mineral prospects
for exploration if the opportunity arises. The Company believes that debt will
rarely be desirable to acquire any mineral prospect or company. The Company may
acquire other assets by exchange of stock or cash.

The Company has not established, and does not intend to formally establish,
criteria for the selection or evaluation of mineral prospects or participations.
When a mineral prospect is located which in management's opinion, shows
favorable data to the Company, an attempt will be made to secure an option, or
lease, for the prospects. Shareholder approval will not be sought for mineral
prospect acquisitions. Therefore, shareholders will be dependent upon the
judgment of management in selecting mineral prospects (see "Management"). If
such an interest is acquired, the Company will then expend funds for preliminary

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exploration and if warranted test sample the mineral prospect to determine
whether any mineral deposit could qualify as a resource. Based on the results of
such preliminary testing, the Company will decide, without shareholder approval,
whether to acquire or abandon the mineral prospect. A mineral prospect or
interest may be acquired by outright purchase; by earning an interest through
participation with other companies; or by exchange of the shares for leases or
interests in mineral prospects.

The Company may expend funds to explore or test any mineral prospects it
acquires to determine the economic feasibility, if any, of such mineral
prospects. If, and only if, a mineral deposit appears to have been located will
further funds be expended to delineate the deposit. If a deposit is delineated,
then a feasibility analysis will be conducted to determine if a development
attempt is warranted. The Company will rely on its own management and outside
consultants engaged for specific work on a limited basis, mineral prospect by
mineral prospect, to provide competent evaluation and recommendations concerning
mineral prospects or interests in mineral prospects to be considered for
acquisition or exploration. The Company has agreements with several third party
companies for providing specific limited services related to mineral prospects,
such as mapping, geochemical, sampling, or drilling. Based upon the results of
such exploration and tests, as interpreted by management, the Company will then
determine whether such mineral prospects should be acquired, explored further,
sold or leased to a third party, held for possible later development or
abandoned; and whether these activities should be attempted by the Company
either by itself or through joint venture or other business arrangements with
other companies or entities.

The Company may agree to assign rights in certain mineral prospects to be
explored to the general or managing partner of a partnership or joint venture,
which thereby becomes the owner of the working interest in the mineral prospect.
The Company may also agree to supervise and manage all activities on the
prospect and to obtain, through subcontractors, all necessary related services
and equipment. The Company actively reviews mineral prospects for putting
together exploration joint ventures.

Parents and Subsidiaries

                  Parent                  LEADER MINING INTERNATIONAL, INC.

                  Subsidiaries            None.

The Company's principal areas of exploration are described herein below under
"Description of Properties."

RISK FACTORS

"Penny Stock" Rule

Leader Mining's common stock is covered by a Securities and Exchange Commission
rule that imposes additional sales practice requirements on broker-dealers who
sell these securities to persons other than established customers and accredited
investors, generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding

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$200,000 or $300,000 jointly with their spouse. For transactions covered by the
rule, the broker-dealer must make a special suitability determination for the
purchaser and transaction prior to the sale. Consequently, the rule may affect
the ability of broker-dealers to sell our securities and also may affect the
ability of purchasers of our stock to sell their shares in the secondary market.
It may also cause less broker-dealers willing to make a market and it may affect
the level of news coverage received by the Company.

Risks of Exploration

Resource exploration is a speculative business and involves a high degree of
risk. The marketability of natural resources which may be acquired or discovered
by the Company will be affected by numerous factors beyond its control. These
factors include commodity price and currency volatility, the proximity and
capacity of natural resource markets and processing equipment, and government
regulations and changes thereto, including regulations relating to prices,
taxes, royalties, land tenure, importing and exporting of minerals and
environmental protection. In addition, few mineral exploration properties become
commercially viable mines, nor can there be any assurances that exploration work
carried out by the Company will be successful. The exact effect of these factors
cannot be accurately predicted, but the combination of these factors may result
in the Company not receiving an adequate return on invested capital.

Resource Estimates

In carrying on its mineral exploration activities, the Company may rely upon
calculations as to prospective resources and corresponding grades on the
Company's prospects which, by their nature, are not exact. Until ore is actually
mined and processed, ore resources and ore grades must be considered as
estimates only. The quantity of resources will also vary depending on mineral
prices which have historically been highly cyclical and dependent upon numerous
factors beyond the Company's control including changes in investment trends and
international monetary systems, political events and changes in the supply and
demand for minerals on public and private markets. Any material changes in
reserves, grades or stripping ratios will affect the economic feasibility of any
mineral prospects which might be developed. Further, short term operating
factors relating to the mineral prospect must be analyzed, such as fule prices,
water availability, climate/weather conditions, location in relation to labor
forces and transportation facilities.

Fluctuation of Mineral Prices

The Company's exploration activities will be subject to the normal commodity
risks that are subject to fluctuations in mineral prices, in particular the
market price of the mineral to be sought. The price of minerals has fluctuated
widely in recent years and is affected by numerous factors beyond the Company's
control including international economic and political trends, expectations of
inflation, interest rates, global or regional consumptive patterns, speculative
activities and increased production due to new mine developments and improved
mining and production methods. The effect of these factors on the price of
minerals cannot be accurately predicted.

Competition

The Company competes with major mining companies and other smaller natural
resources companies in the acquisition, exploration, financing and development
of new properties and projects. Some of these companies are more experienced,
larger and better capitalised than the Company. The Company's competitive
position will depend upon its ability to successfully and economically explore
acquire new and existing mineral resource properties or projects. Factors which

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allow producers to remain competitive in the market over the long term are the
quality and size of the mineral deposit, if any, cost of production, and
proximity to market. Because of the number of companies and variables involved,
no individual or group of producers can be pointed to as being in direct
competition with the Company.

Capitalization and Commercial Viability

The Company has limited financial resources and there is no assurance that
additional funding would be available to the Company for further exploration of
its properties or to fulfill its obligations under any 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 of the Company's prospects with the possible loss of exploration or
exploitation permits.

The commercial viability of a particular mineral prospect will be affected by
factors that are beyond the Company's control, including the particular
attributes of the deposit, the fluctuation in mineral prices, the costs of
constructing and operating a mine, processing facilities, the availability of
economic sources of energy, government regulations including regulations
relating to prices, royalties, restrictions on production, quotas on exportation
of minerals, as well as the costs of protection of the environment and
agricultural lands.

It is impossible to assess with certainty the impact of these factors.

Uninsurable Risks

Exploration generally involve a high degree of risk. Hazards such as unusual or
unexpected formations, power outages, labour disruptions, flooding, explosions,
cave-ins, landslides, inability to obtain suitable or adequate machinery
equipment or labour and other risks are involved. The Company may become subject
to liability for pollution, cave-ins or hazards against which it cannot insure
or against which it may elect not to insure. The payment of such liabilities may
have a material, adverse effect on the Company's financial position.

Compliance with Governmental Regulations

The Company's exploration activities are subject to natural resource, health,
labour and environmental regulations, changes in which could result in
additional expenses and capital expenditures, availability of capital,
competition, resource uncertainty, potential conflicts of interest, title risks,
dilution and restrictions and delays in operations, the extent of which cannot
be predicted.

Currency

All transactions are in Canadian dollars. The company converts any other
currency used in a transaction into Canadian dollars as required to conduct
local activities. Accordingly, the company maybe subject to foreign currency
fluctuations, and such fluctuations may materially affect the Company's
financial position.

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Location of Mineral Prospects

There are certain political and economic risks inherent in the fact the Company
carries on business in foreign jurisdictions. These include the risk of foreign
currency restrictions and currency fluctuations as well as the risk of
governmental intervention by way of expropriation of the Company's properties or
nationalization of the mining industry. While the Company pursue opportunities
in stable political climates in there is a risk that political instability could
adversely affect the Company's operations.

Conflicts of Interest

None of the directors and officers of the Company are also directors,  officers,
and  shareholders  of  other  companies  engaged  in  mineral   exploration  and
development. However, Manish Bindal is also a director of Canex Energy, Inc. and
Aspen Energy Corp., both of them are oil and gas exploration companies.


ITEM 2:  DESCRIPTION OF PROPERTIES

The Company owns no properties. It has mineral prospects which consist of mining
claims or contractual exploration agreements which may be evolved to development
if the Company so decides. It holds such contracts in the name of Leader Mining
INternational, Inc. For all purposes in this description, Registrant is referred
to as "Leader."

Knife Lake Prospect, Saskatchewan, Canada

Location and History

The Knife Lake Prospect is located in northeastern Saskatchewan close to the
Manitoba border. Knife Lake itself is located in the southeastern portion of the
project area at latitude 55 degrees 54' N and longitude 102 degrees 43' W. The
project is operated from a well-equipped bush camp on Knife Lake, 136-km
north-northwest of Flin Flon, Manitoba (approximate population 7,600) and 180 km
northeast of La Ronge, Saskatchewan. The property, whose NTS reference is
63-M-15E, can be found on the Gilbert Lake, 63M15 claim map, available from
Saskatchewan Energy, Mines and Resources in Regina.

Leader is the operator in all the option agreements covering all claims in the
project area. It is currently proceeding with, or making preparations for,
exploration it has planned or is required to do under the option agreements. All
the field exploration, on all mineral lands in which Leader has, or is earning,
an interest and which are described in this summary is carried out for Leader by
its own field staff or contractors directly under its control.

The Knife Lake prospect, optioned by Leader from CopperQuest, Inc. in March,
1996, initially consisted of mining lease ML 5269. It is 648 ha in size and
covers the known copper showing and soil geochemistry anomaly as well as the
projected extensions. During 1996 and 1997, additional claims were staked by the
Company.

In 1997, the Company fulfilled all of the earn-in requirements and acquired 100%
interest in the mining lease and staked claims. CopperQuest Inc. retains a 2%
net smelter royalty; which becomes payable if and when commercial production

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occurs from the aforesaid claims. Leader has the right to purchase one half of
this net smelter royalty at any time for $1,000,000.

In 1997, the Company optioned eleven claims from Consolidated Pine Channel Gold
Corp. The terms of the agreement were amended in 1999 so that Leader can earn a
90% interest in these claims by spending $500,000 over 6 years; and paying
$1,000,000 in cash and 10,000 common shares of Leader.

Consolidated Pine Channel Gold Corp. retains a 2% net smelter royalty which
becomes payable if and when commercial production occurs from these eleven
claims. Leader has the right to purchase one half of this net smelter royalty at
any time for $2,000,000.00.

All transactions  involving  Leader,  CopperQuest  Inc., and  Consolidated  Pine
Channel Gold Corp. have been arms-length.

On November 10, 1999 Leader entered into a joint venture agreement with Kores
Canada Corp. a wholly owned subsidiary of the Korea Resources Corporation, to
further explore the Knife Lake Project. Under the terms of the agreement Kores
Canada Corp. has the right to earn up to 50% interest by funding $4,000,000
exploration work over 4 years, and making cash payments to Leader totaling
$1,200,000. Leader will act as operator for the joint venture, and Leader will
receive an additional $300,000 bonus payment upon the start of commercial
production.

As amended on November 28, 2000, to earn the Interest set forth below, Kores
must make the following payments to Leader on or before the dates indicated and
fund the following Expenditures by the dates indicated:

<TABLE>
<CAPTION>
                                                                 Cumulative     Interest
Payment Date            Payment      Expenditures by Date       Amount Spent    Earned
--------------          -------      --------------------       ------------    --------
<S>                     <C>          <C>                         <C>             <C>
Effective Date          $300,000     $1,000,000 on or before     $1,300,000      20.00%
                                     1st Anniversary Date

1st Anniversary Date    $100,000     $330,000 on or before       $1,730,000      24.96%
                                     2nd Anniversary Date

2nd Anniversary Date    $200,000     $670,000 on or before       $2,600,000      33.33%
                                     3rd Anniversary Date

3rd Anniversary Date    $300,000     $1,000,000 on or before     $3,900,000      42.86%
                                     4th Anniversary Date

4th Anniversary Date    $300,000     $1,000,000 on or before     $5,200,000      50.00%
                                     5th Anniversary Date

</TABLE>

The Expenditures will be funded according to Cash Calls received by Kores and
are cumulative such that any excess of Expenditures in one period will be

12

<PAGE>

carried over into the next period. Any payment or Expenditures may be
accelerated at the option of Kores.

     For greater certainty:

        (a) upon the date that Kores has made payments and funded Expenditures
        in a cumulative amount and on time as set forth in the table above,
        Kores will be vested with the interest specified for such amount; and

        (b) for the maximum Interest of 50%, Kores must make payments to Leader
        totalling $1,200,000 on or before the 3rd anniversary Date and fund
        Expenditures totalling $4,000,000 on or before the 4th Anniversary Date.

The Effective Date of the Joint Venture between the Company and KORES is
December 22, 1999. As of June 30, 2001; KORES has made the $400,000 cash payment
to Leader and incurred $1,330,000 in exploration expenditures.

Termination During First Year

If Kores fails to make the payment required on the Effective Date, then this
Agreement will terminate on the Effective Date. If Kores fails to fund the
Expenditures required by the first Anniversary Date, then this Agreement will
terminate on the first Anniversary Date. Upon such termination, Kores will have
no Interest nor any right to acquire an Interest, and neither party will have
any further obligation or liability hereunder except as may have arisen prior to
such termination.

Leader Mining developed a land position in the area, conducted numerous
geophysical surveys and collected extensive geological data. The data sets
consist of two airborne surveys, a regional gravity survey, extensive drilling
and mapping with accompanying lithogeochemical sampling. To further evaluate the
area, it was necessary to synthesize Leader's geophysical data and known geology
with the aim to identify areas on the property with the highest potential to
host various Volcanogenic Massive Sulphide (VMS) style sulphide deposits.

At Knife Lake, Leader now possesses or controls 108 mining claims and 1 mining
lease with a total land area of approximately 85,113 hectares. The claims are
held directly by Leader and other companies, which have optioned the mineral
prospects to Leader.

Mineral exploration and production in the Flin Flon Mining area has been active
for 80 years. Only recently has new geological modeling recognized that the
favorable Amisk Volcanics extend to the north from the Flin Flon Domain and
includes the former Hanson, Glennie, Scimitar and Kissenew Domains. These
domains have been explored intermittently by Hudson Bay Mining, Noranda, and
Cominco. With the current geological understanding, these domains are highly
prospective for VMS style mineralization. Leader's Knife Lake Volcanogenic
Massive Sulphide Deposit conforms well within the context of the newly defined
model for the Flin Flon-Glennie Domain. Recent government mapping has shown the
Knife Lake property to lie within the newly recognized Flin Flon-Glennie Domain,
which hosts the Flin Flon/Snow Lake VMS deposits.

The claims have received little mineral exploration and have no production
history, but appear to be an extension of the volcanic terrain which hosts the
base metal mineralization of the Flin Flon mining area. The Amisk Volcanics in
Flin Flon are host to Volcanogenic Massive Sulphide style, base metal
mineralization.

13

<PAGE>

Since 1968, prospecting and mapping in the area of Knife Lake and Scimitar Lake
has resulted in the discovery of several copper occurrences. The largest of
these occurrences is the Knife Lake copper-gold deposit. The mineralization is
located on the west side of the Knife Lake, less than 100 metres west of the
shoreline, in the southern portion of Leader's property.

Infrastructure on the Knife Lake property is limited to the bush camp and winter
road access. Water for mineral processing and other needs is available in
abundance in the project area. The Island Falls hydroelectric power generating
station is located on the Churchill River at Sandy Bay. This station was
constructed to provide power to the town of Flin Flon. However, in the mid
1990's, the Government of Saskatchewan constructed a new high-tension power line
to deliver the power to the uranium mines of the Athabasca Basin in northern
Saskatchewan and all of the station's power output is now devoted to this
purpose. The transmission line comes within 20km of the southwestern corner of
the Knife Lake property.

While the Sandy Bay-Flin Flon area has been explored for base and precious
metals at various times over the past 80 years, the earliest records of work in
the immediate area of Knife Lake are dated October 1968. From 1968, through
1972, Straus Exploration conducted extensive exploration work, consisting of
horizontal loop, vertical loop and Turam EM ground geophysical surveys, ground
magnetometer surveys, geochemical soil sampling, geological mapping, trenching,
sampling and diamond drilling, over a copper-gold showing on the western shore
of Knife Lake. Approximately 4.7 square km of grid was geologically mapped at a
scale of 1:6,000 over the copper prospect area. A slightly smaller area was
covered by geochemical and geophysical surveys. D.E. Pearson, as part of his
1971 mapping project, mapped in detail a portion of the grid on a scale of
1:7,200. A diamond drill program consisting of 87 holes (2 Winkie and 85 XT
sized core), totaling approximately 8,484m, was completed. As a result of the
exploration work, a mining lease was taken out, covering the copper showing and
surrounding geochemical anomaly.

Hudson Bay Exploration and Development, the wholly-owned exploration division of
Hudson Bay Mining and Smelting, conducted a regional airborne EM survey in 1980
and 1982. During 1989 and 1990 Cominco performed line cutting, geological and
geochemical surveys, on property approximately 2 km north of Knife Lake. Results
of these programs are not available.

The Knife Lake copper showing remained inactive until early 1989 when
CopperQuest was formed. CopperQuest commissioned Standing Geophysics Ltd.
(Standing) to re-establish Staus' grid over the copper prospect and to conduct
horizontal-loop EM and magnetometer surveys. Standing Geophysics completed 77.6
line-km of magnetic surveying and 101 line-km of EM surveying in February 1989.
In completing the EM surveying, Standing used different cable lengths (coil
separations) over the copper prospect in an attempt to locate areas where the
copper mineralization may have been thickened due to folding. Three such areas
were located and recommended for diamond drilling. In addition, three other
conductive zones were identified outside of the immediate copper prospect area.
A total of 1,829m of drilling in 24 holes was recommended but never carried out.

In March 1996, Leader Mining acquired the mining leases, after entering into an
agreement with CopperQuest. Leader has access to the CopperQuest, and most of
the Straus, exploration data. A summary of Leader's expenditures on the prospect
is presented below:

14

<PAGE>
<TABLE>
<CAPTION>


----------------------------------------------------------------------------------------------------------------------
Summary of Exploration Expenditures (June 1996 to December 1998)
----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                                  <C>
Prospecting and                          1,172 man days                                                    $342,600

Geological Mapping
----------------------------------------------------------------------------------------------------------------------
Line Cutting                             313 line km                                                       $119,400

----------------------------------------------------------------------------------------------------------------------
Geophysics            Airborne           12,689 line km                                                    $753,700
----------------------------------------------------------------------------------------------------------------------
                      Ground             427 line km                                                       $243,300


----------------------------------------------------------------------------------------------------------------------
Geochem               Soil               2,374                                                              $23,300
----------------------------------------------------------------------------------------------------------------------
                      Assay              8597 (588 whole rock)                                             $164,200
----------------------------------------------------------------------------------------------------------------------
Trenching                                180m3                                                              $48,400
----------------------------------------------------------------------------------------------------------------------
Drilling                                 30,866 m                                                        $2,960,500
----------------------------------------------------------------------------------------------------------------------
Other (staking, logistics,                                                                               $2,656,200
transportation)
----------------------------------------------------------------------------------------------------------------------
                                                                                              TOTAL =    $7,311,000
----------------------------------------------------------------------------------------------------------------------
</TABLE>

The Knife Lake Deposit is interpreted by the Company to be a remobilized
fraction of a larger primary VMS deposit. It is hosted within an altered
pegmatite, high in Na, K, Sr, and Ba which geochemistry has shown is derived

15

<PAGE>

from alkali rich sedimentary rocks. To date, a total of 26,397 metres of diamond
drilling among 308 drill holes have been completed on the Knife Lake Deposit and
a digital geological model has been constructed. The mineralization is outlined
over a distance of 4,300 metres and to a depth of 100 metres. Internal
Geological modeling has generated sufficient indications to cause the Company to
continue exploration work.

GEOLOGICAL DESCRIPTION

Volcanogenic massive sulphide deposits occur in geological terraces that are
dominated by volcanic rocks. Individual deposits may be hosted by volcanic or
sedimentary strata which compromise the volcanic complex. These deposits are
formed as sygentic accumulations of sulphide and sulphate minerals deposited
from fluids exiting hydrothermal vents at or near the sea floor. Copper,
typically present as chalcopyrite, and zinc, typically present as sphalerite
constitute the primary economic constituents; and gold and silver can contribute
by-product values.

ITEM 3.  LEGAL PROCEEDINGS

The Company is currently involved in only one contractual dispute, involving
legal proceedings, with a private Saskatchewan company, and the outcome of such
proceeding, if adverse to the Company, would not be material.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  (CONTROL
OF REGISTRANT)

         (a) Beneficial owners of five percent (5) or greater, of the
Registrant's Common Stock and Warrants: No Preferred Stock is outstanding at the
date of this offering. The following sets forth information with respect to
ownership by holders of more than five percent (5%) of the Company's Common
Stock known by the Company based upon 19,984,680 shares outstanding at March 31,
2001.

<TABLE>
<CAPTION>

<S>                      <C>                                <C>                                 <C>
------------------------------------------------------------------------------------------------------------------------
Title of Class           Name Beneficial of Owner           Amount and Nature of Beneficial     Percent of Class
                                                            Ownership
------------------------------------------------------------------------------------------------------------------------
Common Stock             Y.S. Jasi Nikhanj                  2,182,000 Shares (1)(2)             8.1%
                         320 Pumphill Cr. S.W. Calgary,
                         Alta T2V 4M1
------------------------------------------------------------------------------------------------------------------------
</TABLE>

         (1) Includes 685,000 shares owned by spouse, Aski Nikhanj.
         (2) Includes 655,000 share option includable under Sec. 13d.

     b) The following sets forth information with respect to the Company's
Common Stock beneficially owned by each Officer and Director,

16

<PAGE>

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------
Title of Class         Name Beneficial of Owner            Amount and Nature of Beneficial      Percent of Class
                                                           Ownership
<S>                    <C>                                 <C>                                  <C>
------------------------------------------------------------------------------------------------------------------------
Common                 Y.S. Jasi Nikhanj (1) Pres/Director 2,182,000 shares (1)(5)              11.0%
------------------------------------------------------------------------------------------------------------------------
Common                 Kurt Marty Director                 500,000 shares                       2.5%
------------------------------------------------------------------------------------------------------------------------
Common                 Manish Bindal Secretary/Director    200,000 shares (2)(5)                1.0%
------------------------------------------------------------------------------------------------------------------------
Common                 Roland Kesselring V.P.              600,000 shares (3)(5)                3.0%
------------------------------------------------------------------------------------------------------------------------
Common                 Raymond Lai V.P.                    420,000 shares (4)(5)                2.1%
------------------------------------------------------------------------------------------------------------------------

Total amount owned by officers and directors as a group.

------------------------------------------------------------------------------------------------------------------------
Title of Class         Name Beneficial of Owners           Amount and Nature of Beneficial      Percent of Class
                                                           Ownership
------------------------------------------------------------------------------------------------------------------------
Common                 Directors                           2,882,000 shares (5)                 14.4%
------------------------------------------------------------------------------------------------------------------------
Common                 Officers                            1,020,000 shares (5)                 5.1%
------------------------------------------------------------------------------------------------------------------------
Common                 Combined                            3,902,000 shares (5)                 19.5%
------------------------------------------------------------------------------------------------------------------------

</TABLE>


(1)      Includes 685,000 shares owned by spouse, Aski Nikhanj.
(2)      Includes 25,000 shares owned by spouse Sehra Bindal.
(4)      Includes 146,000 shares owned by spouse, Amanda Lai.
(5)      Includes option shares includable under Section 13d.

17

<PAGE>

ITEM 5. (a) MARKET  PRICE OF AND  DIVIDENDS  ON  REGISTRANTS  COMMON  EQUITY AND
RELATED STOCKHOLDER MATTERS

The Company's  common stock is listed and traded on the Alberta  Stock  Exchange
and is quoted on OTCBB. The following table sets forth high and low closing
prices of the Company's common stock for the three (3) years ended March 31,
2001, 2000, 1999, and 1998 on the Alberta Stock Exchange as follows:

                                                      Closing
                                                     (Canadian $)
                                                High             Low

2001     First Quarter                          1.12              0.73
         Second Quarter                         1.00              0.73
         Third Quarter                          0.99              0.46
         Fourth Quarter                         0.97              0.40

2000
         First Quarter                          2.00              0.85
         Second Quarter                         1.00              0.65
         Third Quarter                          1.58              0.80
         Fourth Quarter                         1.84              0.91

1999
         First Quarter                          1.19              0.50
         Second Quarter                         1.05              0.65
         Third Quarter                          0.89              0.57
         Fourth Quarter                         1.60              0.75

1998
         First Quarter                          5.10              3.40
         Second Quarter                         4.00              2.95
         Third Quarter                          3.15              0.54
         Fourth Quarter                         0.85              0.30

 (b) As of April 30, 2001, the Company had an estimated 500 shareholders of
record of the common stock, including those held in brokerage accounts in
"street name."

(c) No dividends on outstanding common stock have been paid within the last two
fiscal years, and interim periods. The Company does not anticipate or intend
upon paying dividends for the foreseeable future.

The  Company  estimates  that 5% of the  shareholders  of the  Company  are U.S.
shareholders.


ITEM 6.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

There are currently no limitations imposed by Canadian federal or provincial
laws on the rights of non-resident or foreign owners of Canadian securities to
hold or vote the securities held. There are also no such limitations imposed by
the Company's articles and bylaws with respect to the common shares of the
Company.

Under the Investment Canada Act, the acquisition of certain "businesses" by
"non-Canadians" or "Americans" are subject to review by Investment Canada, a
federal agency, and will not be allowed unless they are found likely to be of
"net benefit" to Canada. An acquisition will be reviewable by Investment Canada

18

<PAGE>

only if the value of the assets of the Canadian business being acquired is CDN
$5 million or more in the case of a "direct" acquisition or CDN $50 million or
more in the case of an "indirect" acquisition. Under the Free Trade Agreement
between Canada and the United States, an acquisition by an American is
reviewable only if it involves the direct acquisition of a Canadian business
with assets of CDN $160 million or more. If the foregoing thresholds are not
reached, the acquisition of a Canadian business by a non-Canadian will not be
subject to review unless it relates to Canada's cultural heritage or national
identity. Even if the transaction is not reviewable, a non-Canadian must still
give notice to Investment Canada of the acquisition of a Canadian business
within 30 days after its completion.


ITEM 7.  TAXATION

Canadian Federal Income Tax Consequences for Canadian Shareholders

The following summarizes the material Canadian federal income tax consequences
applicable to the holding and disposition of a common share by a holder (the
"Holder") of one or more common shares who is resident in the United States of
America and holds the common share as capital property. This summary is based on
the current provisions of the Income Tax Act (Canada) (the "Tax Act"), the
regulations thereunder and all amendments to the Tax Act publicly proposed by
the government of Canada to the date hereof. It is assumed that each such
amendment will be enacted as proposed and there is no other relevant change in
any governing law, although no assurance can be given in these respects.

Every Holder is liable to pay a withholding tax on every dividend that is or is
deemed to be paid or credited to him on his common shares. Under the
Canada-United States Income Tax Convention (1980) (the "Treaty"), the rate of
withholding tax is 10% of the gross amount of the dividend where the Holder is a
company that owns at least 10% of the voting stock of the Company and
beneficially owns the dividend, and 15% in any other case. A Protocol amending
the Treaty was ratified by the representatives of the Canadian and United States
governments. Effective in December, 1995 one of the amendments in the Protocol
reduces the 10% withholding rate on dividends to 6% in 1996 and 5% in 1997.

Under the Tax Act, a Holder will not be subject to Canadian tax on any capital
gain realised on an actual or deemed disposition of a common share, including a
deemed disposition at death, provided that he did not hold the common share as
capital property used in carrying on a business in Canada, and that neither he
nor persons with whom he did not deal at arm's length, alone or together, owned
25% or more of the issued shares of any class of the Company at any time in the
five years immediately preceding the disposition.

A Holder who otherwise would be liable for Canadian tax in respect of a capital
gain realised on an actual or deemed disposition of a common share will be
relieved under the Treaty from such liability unless

         (1) the common share formed part of the business property of a
permanent establishment in Canada that the Holder had within the twelve-month
period preceding the disposition; or

         (2)      the Holder

     (a) was  resident  in Canada  for 120  months  during  any  20-year  period
preceding the disposition, and

19

<PAGE>

     (b) was  resident  in Canada at any time  during the 10 years  immediately
      preceding the disposition, and

     (c) owned the common share when he ceased to be a resident of Canada

U.S. Tax Consequences

U.S. shareholders will not be impacted by Canada "Flow-through" shares under the
Internal Revenue Code shares. U.S. shareholders who hold shares for less than
one year will be able to take short time capital gain or loss for sales within a
twelve month period and be taxed at ordinary income rates on profits. If a
shareholder holds shares for one year or more, the shareholder will be able to
treat profit or loss as long term capital gain or loss, and, if a gain, the tax
rate is a maximum of 28% unless Alternative Minimum Tax applies, which could
only be determined on an individual's tax year basis.

ITEM 8.  SELECTED FINANCIAL DATA

The selected financial data set forth below are derived from the accompanying
audited financial statements of the Company to March 31, 2000. Financial
statements of the Company included elsewhere herein should be read in
conjunction with those financial statements and the footnotes thereto. The
financial statements have been prepared in accordance with Canadian generally
accepted accounting principles ("GAAP"). For United States GAAP reconciliation,
see attached financial statements and notes. Reference should also be made to
"Item 9 Management's Discussion and Analysis of Financial Conditions and Results
of Operations."

20

<PAGE>
<TABLE>
<CAPTION>

              Selected Financial Information for 5 Years (in Cdn$)
                          Fiscal Year Ended March 31st


                        2001       2000          1999           1998         1997
                        ----       ----          ----           -----        ----
<S>                  <C>        <C>         <C>           <C>         <C>
Interest                29,511      6,018       49,044       152,132            0
Mgmt Fees               64,358     60,000            0             0            0
                       -------    -------     --------       -------       ------
Total Revenue           93,869     66,018       49,044       152,132       28,702
                       -------    -------     --------       -------       ------
General &
Admin. Expenses        707,100    624,463      898,873     1,358,156      640,625
Exploration Costs
Written Off            565,774    360,858    1,848,313       561,500    1,506,392
Amortization             6,263      8,405       11,282        27,082       12,182
Other Expenses               0          0      137,723        92,420            0
Loss for the Period (1,185,268)  (927,708)  (2,847,147)   (1,887,026) (2,130,497)
                    -----------------------------------   -----------  ----------

Loss per Share           (0.06)     (0.05)       (0.20)       (0.17)       (0.20)
                    ----------------------  -----------   -----------  ----------
Weighted average
shares outstanding  18,669,609  17,221,284   14,446,458   13,911,958   10,924,623
                    -----------------------------------  -----------    ---------
Balance Sheet Data
Current Assets         476,925     245,468      696,996    3,011,601    6,729,786
Capital Assets          19,245      24,829       32,579      155,645       68,834
Deferred Acq. &
Expl. Costs          7,862,415   8,004,148    8,100,426    8,957,965    4,440,824
                     ----------  ---------    ---------    ---------     -------
Exploration Costs

Total Assets         8,358,585   8,274,445    8,830,001   12,125,211   11,239,444
                     ----------  ---------    ----------   ---------     -------
Current Liabilities    196,437      55,643      277,590    1,820,664    1,117,428
Due to Related Parties 177,089           0       22,800        8,553      231,243
Long Term Liabilities        0           0            0            0            0
Capital Stock       21,914,840  20,963,315   20,346,416   19,265,652   16,973,405
Deficit            (13,929,781)(12,744,513) (11,816,805)  (8,969,658) (7,082,632)
                    ----------   ----------  -----------  -----------  ----------

Total Equity
& Liabilities        8,358,585   8,274,445    8,830,001   12,125,211   11,239,444
                    ----------   ----------   ----------   ---------     -------
</TABLE>

21

<PAGE>


Loss for the period and deficit as determined in accordance with Canadian GAAP
differ from those determined in accordance with U.S. GAAP, due principally to
the deferral under Canadian GAAP of exploration costs and the exclusion of
compensation expense arising from the issue of options at a discount from their
fair value. Under U.S. GAAP the exploration costs would have been expensed when
incurred, and the compensation expense would have been recorded.

<TABLE>
<CAPTION>

                                                              2001                 2000                1999
<S>                                                           <C>                  <C>                 <C>

         Net loss for the year under Canadian GAAP            $(1,185,268)         $   (927,708)       $ (2,847,147)
         Deferred exploration costs (i)                           (81,243)             (115,778)           807,539
         Stock based compensation (ii)                                -                    -              (379,250)
                                                              ----------------     ----------------    -----------------

         Loss for the year under U.S. GAAP                    $(1,266,511)         $ (1,043,486)        $(2,418,858)
                                                              ----------------     ----------------    -----------------

         Loss per share under U.S. GAAP                            $(0.07)              $(0.06)          $    (0.17)
                                                              ----------------     ----------------    -----------------
</TABLE>



ITEM 9. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND CHANGES
IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Differences between Canadian and U.S. GAAP (continued)

Under U.S.  GAAP, a grant of stock  options and warrants to acquire  shares at a
price  below the fair  market  value of the shares at the time of the grant,  is
compensatory under APB No. 25 and is accounted for as compensation expense. This
has the effect of increasing capital stock and deficit under U.S. GAAP.

The Company's interest in a joint venture has been proportionately consolidated
in the Company's financial statements. For purposes of U.S. GAAP, this interest
would be accounted for by the equity method. Net loss, loss per share, and

22

<PAGE>

shareholders' equity under U.S. GAAP are not impacted by the proportionate
consolidation of this joint venture interest.

<TABLE>
<CAPTION>

Balance sheet components

                                 2001                           2000                           1999
                                 ---------------------------    --------------------------     --------------------------
                                 Canadian GAAP   U.S. GAAP      Canadian GAAP  U.S. GAAP       Canadian GAAP  U.S. GAAP
<S>                              <C>             <C>            <C>            <C>             <C>            <C>

      Mineral properties and
      deferred exploration         $7,862,415         $67,117   $  8,004,148   $    158,500    $  8,100,426   $    169,000
      costs (a) (i)
      Capital stock (a) (ii)     $ 21,914,840    $ 25,697,758   $ 20,963,315   $ 24,746,233    $ 20,346,416   $ 24,214,334
      Deficit (a)                $(13,929,781)   $(25,926,146)  $(12,744,513)  $(24,659,635)   $(11,816,805)  $(23,616,149)

     Shareholders' equity

</TABLE>

<TABLE>
<CAPTION>

         Under U.S. GAAP, shareholders' equity would be as follows:

                                                      2001                 2000                 1999
<S>                                               <C>                  <C>                  <C>

        Under Canadian GAAP                       $     7,985,059      $     8,218,802      $   8,529,611
        U.S. GAAP adjustment to net loss
             Current (a)(i) and (a)(ii)                   (81,243)            (115,778)           428,289
             Cumulative                               (11,915,122)         (11,799,344)       (12,227,633)
        U.S. GAAP adjustment to capital stock
             Current (a)(ii)                                    -                    -            379,250
             Cumulative                                 3,782,918            3,782,918          3,488,668
                                                  -----------------    -----------------    ----------------

        Under U.S. GAAP                           $      (228,388)     $        86,598     $      598,185
                                                  -----------------    -----------------    ----------------

</TABLE>

Recent accounting pronouncements

The Company has determined that there is no impact from the adoption of SFAS No.
133 "Accounting for Derivative Instruments and Hedging Activities", which
standardizes the accounting for derivative instruments.

The weighted average number of common shares used to calculate the loss per
share under Canadian GAAP is equal to weighted average number of common shares
under U.S. GAAP.

Effective January 1, 2001, the Canadian Institute of Chartered Accountants
issued a revised version of CICA Handbook Section 3500 "Earnings Per Share".
This standard complies in all material respects with SFAS 128, issued by the
Financial Accounting Standards Board.

23

<PAGE>

RESULTS OF OPERATIONS

The Company is mainly involved in exploration for base and precious metals. At
present time, the Company does not have any producing properties, and
consequently, no revenue from mineral production. All the financing is raised by
way of private placement of equity shares. The revenue in FY2001 is made up by
$29,511 interest income generated by investing excessive working capital in the
short term money market, $64,358 is from management fees charged to Knife lake
Joint Venture with Kores Canada Corp. As the project's operator, the Company is
entitled to charge a 10% management fee on the actual expenditures spent on
Knife Lake. The project is expected to wind down in FY02.

The exploration costs written off are $565,774 in FY01 compared to $360,858 in
FY00. The large amount written off in FY01 is due to the fact that the Company
concentrated its efforts in Knife Lake and all other mining properties have been
written off. The General and Administrative Expenses for FY01 is $707,100
comparing to $624,463 in FY00, up $82,637 mainly due to legal expenses spent on
the Seagrove Case. The increase of operating losses of $257,560 incurred in FY01
reflect the above exploration costs written off, and increase in Admin. Expense.

CHANGES IN FINANCIAL CONDITION AS AT MARCH 31, 2001

At year-end  2001,  the Company's  assets  increased to  $8,358,585  from
$8,274,445 at March 31, 2000. The increase of $84,140 is mostly from the
increase of cash on hand and current assets.

The Current Liabilities increased $317,883 from $55,643 in 2000 to $373,526 in
2001 due to accrued expenses.

Accumulated deficit in 2001 was $13,929,781 which increased $1,185,268 from
$12,744,513 in 2000. The increase was the Operating Deficit for 2001.


COMPARISON OF RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED MARCH 31, 2001
AND 2000 (UNDER CANADIAN GAAP)

The  Company had  Management  Fees  Revenue of $64,358 in fiscal year 2001.  The
Management  Fees were for the  operatorship  of the  Knife  Lake  Joint  Venture
Exploration Program in 2001 for Kores and is expected to wind down in 2002.  The
interest income of $29,511 in 2001 increased $23,493 from $6,018 in 2000 which
is the result of rental income for camp equipment used in the Knife Lake Joint
Venture.

The General and Administrative Expense increased $82,637 from $624,463 in 2000
to $707,100 in 2001 due to the legal expense incurred for the Seagrove case.
Exploration costs written off increased $204,916 from $360,858 in 2000 as the
company wrote off some low value mineral properties.

The Net loss for the year has increased $257,560 from $927,708 in 2000 to
$1,185,288 in 2001 mainly due to the increase in exploration costs written off
and general and administrative expense.

The loss per share in 2001 was $0.06 increased from $0.05 in 2000. The increase
is due to the increase of $257,560 in the net loss in 2001.

24

<PAGE>


COMPARISON  OF RESULTS OF  OPERATIONS  FOR THE FISCAL YEARS ENDED MARCH 31, 2000
AND 1999 (UNDER CANADIAN GAAP)

The Company had Management Fees Revenue of $60,000 in fiscal year 2000. The
Management Fees were for the operatorship of the Knife Lake Joint Venture
Exploration Program in 2000 for Kores and is expected to continue in 2001. The
interest income of $6,018 in 2000 decreased $43,026 from $49,044 in 1999 funds
raised for exploration were used up.

The General and Administrative expense decreased $274,410 from $898,873 in 1999
to $624,463 in 2000 due to the winding down of 1998 Knife Lake exploration
program. Exploration costs written off decreased $1,487,455 from $1,848,313 in
1999 to $360,858 in 2000. The Company had not bought any new mineral claims in
2000. Loss on write-down of marketable securities of $139,840 incurred in 1999
was due to marketable securities which decreased in market value substantially
when the Company sold them in 1999 and no such activity occurred in 2000.

The Net loss for the year had decreased $1,919,439 from $2,847,147 in 1999 to
$927,708 in 2000. The decrease is mainly due to the decrease of $1,487,455 in
Exploration costs written off and decreases of $274,410 in General and
Administrative expense and no further loss on marketable securities ($139,480
loss was incurred in 1999).

The Loss per share in 2000 was $0.05 decreased $0.15 from $0.20 in 1999. The
decrease was due to the decrease of $1,919,439 in Net loss for the year in 2000.


LIQUIDITY AND CAPITAL RESOURCES

The following chart summarizes all capital funding raised in the past five
years.

25

<PAGE>

                                 FUNDING SUMMARY
                           FROM APRIL 1996 TO MAY 2001

--------------------------------------------------------------------------------
  Year                         Total Shares Issued  Share Price     Total Amount
--------------------------------------------------------------------------------
  1996    Private Placement       1,000,000             $3.90        $3,900,000
--------------------------------------------------------------------------------
            Flow Through            425,000             $4.70        $1,997,500
--------------------------------------------------------------------------------
         Exercise of Options        628,000             $2.63        $1,652,200
--------------------------------------------------------------------------------
         Exercise of Warrants       950,000             $1.58        $1,502,500
--------------------------------------------------------------------------------
  1996 Total                      3,003,000             $3.01        $9,052,200
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  1997    Private Placement       1,288,000             $3.90        $5,023,200
--------------------------------------------------------------------------------
          Private Placement         472,000             $4.55         $2,147,60
--------------------------------------------------------------------------------
         Exercise of Options        195,000             $3.90          $760,500
--------------------------------------------------------------------------------
         Exercise of Warrants        75,000             $4.12          $309,000
--------------------------------------------------------------------------------
  1997 Total                      2,030,000             $4.06        $8,240,300
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  1998    Private Placement         260,000             $3.40          $884,000
--------------------------------------------------------------------------------
  1998 Total                        260,000             $3.40          $884,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  1999    Private Placement       2,000,000             $0.35          $700,000
--------------------------------------------------------------------------------
         Exercise of Options        687,000             $0.43          $295,410
--------------------------------------------------------------------------------
  1999 Total                      2,687,000             $0.37          $995,410
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  2000   Private Placement          410,000             $0.52          $214,800
--------------------------------------------------------------------------------
         Exercise of Options        680,000             $0.43          $298,100
--------------------------------------------------------------------------------
         Exercise of Warrants       210,000             $0.50          $104,000
--------------------------------------------------------------------------------
  2000 Total                      1,300,000             $0.47          $616,900
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  2001    Private Placement         623,615             $0.65          $405,350
--------------------------------------------------------------------------------
            Exercise of Options     405,000             $0.51          $206,150
--------------------------------------------------------------------------------
            Exercise of Warrants    837,500             $0.45          $376,875
--------------------------------------------------------------------------------
  2001 Total                      1,866,115             $0.53          $988,375
--------------------------------------------------------------------------------

26

<PAGE>


The principal sources of funding for the Company's operation in the past five
years have been issuance of securities through private placements, flow through
shares, exercise of director and employee stock options, and loans from
directors and officers for cash and as consideration for certain acquisitions.

The company currently has $303,000 in cash at March 31, 2001.

The principal uncertainty that could affect the Company's liquidity is the
Capital Markets interest or lack thereof in Mining Industry which is beyond the
control of the Company.

On a short term basis, the Company is planning to raise $1 million through
private placements and the exercise of options and warrants to cover the
operating budget for 2001.

On a long-term basis, the Company does not have any assured certain source of
additional working capital and the continuation of operations is subject to its
ability to raise more equity money and its success in the exploration of the
Knife Lake and Karmel Projects.

Foreign Currency Adjustments

Other than adjustments between Canadian dollars and US dollars which are
reflected in its financial statements, the Company does not denominate expenses
in any other foreign currency. The Company recorded any South African expenses
in Canadian currency. South African currency has occasionally been volatile, and
there are strict currency controls to prevent the export of capital. To date,
the Company has only expended money in South Africa, and since it terminated its
exploration venture, does not anticipate export of capital from South Africa at
any time.

Hedging Activities

The Company does not engage in any hedging activities.

27

<PAGE>

ITEM 10. DIRECTORS AND OFFICERS OF THE COMPANY

The names, residences, terms, and periods of service within the past five years
of each of the directors and executive officers of the Company are as follows:


                               Position
Name                           Within                               Period of
                               the Company              Term        Service

Yashvir (Jasi) Nikhanj (1,2) President and Director     Annual      1987 to date
Calgary, Alberta

Kurt Marty (1,2)             Director                   Annual      2000 to date
Switzerland

Manish Bindal (2)            Secretary and director     Annual      1996 to date
Calgary, Alberta

Raymond Lai                   Vice president Finance    Annual      1996 to date
Calgary, Alberta

Roland Kesselring (2)         Vice president            Annual      1997 to date
Switzerland                   Corporate Affairs


(1)    Member of the audit committee.
(2)    Member of Nomination and Compensation Committee.

Yashvir Nikhanj, age 55, has been President and director of the Registrant since
1987. He obtained a Bachelor of Science in Geology from Ranchi University,
Bikar, India in 1968. He received a MSc in Earth Sciences from Massachusetts
Institute of Technology in 1970 and a MSc in Applied Geology from McGill
University in 1972. He also has been President and principal shareholder of
Nikhanj and Associates Consulting of Calgary, Canada since 1975.

Kurt Marty, age 38, is a director of the Registrant. He received a Commercial
Diploma as a banker in 1982 in Switzerland. He was a Procurist at Swissvolks

28

<PAGE>

bank from 1982 to 1997. He was an Assistant Vice President of Credit Suisse from
1997 to 1999. He is also a director of Earthramp.com, a high-tech company listed
on the Canadian Venture Exchange.

Manish  Bindal,  age 37, is a director and General  Counsel to the Company.  Mr.
Bindal received a Bachelor of Science in 1984 and a Bachelor of Law in 1987 from
Kurukashetra  University  in India.  From August 1987 to May 1991 Mr. Bindal was
engaged  in  private  practice  of law at  Chandigarh,  India.  From May 1991 to
September 1994 Mr. Bindal was a law student in Calgary,  Canada. He was employed
as a  student-at-law  at the firm of  Howard  Mackie,  Nova  Corp.  and  Alberta
Securities  Commission from October 1994 to October 1995. He has been in private
law practice since November,  1995.  Other than the  Registrant,  Mr. Bindal has
been a director of Canex Energy,  Inc. and Aspen Energy Corp.,  both oil and gas
companies listed on the Albert Stock Exchange.

Raymond Lai, age 50, is Vice  President  of Finance and  Administration  for the
Registrant  and has been since 1995.  Mr. Lai received his B.Sc.  degree in 1971
from the University of Calgary. He became a Certified  Management  Accountant in
1979.  From 1993 to 1995, Mr. Lai was controller of Mission  Packaging,  Inc. in
Calgary.

Ronald  Kesselring,  age 38, is V.P  Corporate  Affairs - Europe since 1996.  He
completed  Banking School in  Switzerland in 1982. He is CEO of Mascon  Finance,
Ltd. of  Ermatingen,  Switzerland  and has been since 1995 a Managing  Director.
From April 1992 to 1995, he was a Managing Director at the  institutional  sales
desk of Swiss Bank Corp. Zurich, Switzerland.

The directors of the Company are elected by the shareholders at each annual
general meeting and typically hold office until the next annual general meeting
at which time they may be re-elected or replaced. Casual vacancies on the board
are filled by the remaining directors and the persons filling those vacancies
hold office until the next annual general meeting at which time they may be
re-elected or replaced. The senior officers are appointed by the board and hold
office indefinitely at the pleasure of the board.

Within the five years proceeding the date of this filing document, none of the
directors, officers or promoters of the Company have been a director, officer or
promoter of other reporting companies other than as follows:

       Mr. Bindal has been a director  of Canex Energy,  Inc. and Aspen Energy
       Corp., both oil and gas companies listed on the Alberta Stock Exchange,
       since 1996.

       Mr. Kurt Marty has been a director of Earthramp.com, a high-tech company
       listed on the Canadian Venture Exchange.

No director, officer or promoter of the Company has, within the ten years
preceding the date of this filing document, been the subject of any penalties or
sanctions by a court or securities regulatory authority relating to trading in
securities, the promotion, formation or management of a publicly-traded company
or involving theft or fraud, other than as follows:

         In 1996, Mr. Nikhanj entered into a Settlement Agreement and
         Understanding with the Alberta Securities Commission because he had not
         timely filed insider reports for purchases and sales of shares in

29

<PAGE>

         Leader Mining International with the Alberta Securities Commission. The
         Settlement resulting in a $5,000 penalty and the Agreement to be
         diligent in complying with the responsibility to report trades.

There are no understandings or arrangements pursuant to which any officers or
director was selected or appointed to such position.

         (b)  Identification of Certain Significant Employees.

There are no employees other than the executive officers disclosed above who
make, or are expected to make, significant contributions to the business of the
Company, the disclosure of which would be material.

         (c) Family Relationships. Spouses of Yashvir (Jasi) Nikhanj and Raymond
Lai  are  currently   employed  on  a  part  time  basis  with  the  Company  in
non-executive positions.

Conflicts of Interest

The officers of the Company devote full time to the affairs of the Company, but
they may have other investment interests. There will be occasions when the time
requirements of the Company's business conflict with the demands of any other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company. Several of the Directors, Messrs. Bindal, Schurch, and
Kesselring are employed in other businesses and devote time to the company at
Director's meetings.

Conflicts of Interest - General. Certain of the officers and Directors of the
Company may be Directors and/or principal shareholders of other companies, and
therefore, could face conflicts of interest with respect to potential
acquisitions. A policy has been adopted whereby officers and Directors will not
participate in business ventures which could be deemed to complete directory
with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future in the event the Company's officers or
Directors are involved in the management of any firm with which they or their
family members own or hold a controlling ownership interest. Although the Board
of Directors could elect to change this policy, the Board of Directors has not
present intention to do so.


ITEM 11.   COMPENSATION OF OFFICERS AND DIRECTORS

     (a)  Cash Compensation.

Compensation paid by the Company for all services provided during the fiscal
year ended March 31, 2000, (1) to each of the Company's five most highly
compensated executive officers whose cash compensation exceeded $30,000 and (2)
to all officers as a group is set forth below under directors.

30

<PAGE>
<TABLE>
<CAPTION>

                        SUMMARY COMPENSATION TABLE OF EXECUTIVES
                                   Annual Compensation

                                                      Awards
========== --------------------------------------------------------------================
Name and    Year  Salary ($)  Bonus ($)  Other Annual    Restricted      Securities
Principal                                Compensation($) Stock           Underlying
Position                                                 Award(s)($)     Options/SARs(#)
========= ---------------------------------------------------------------================
<S>         <C>     <C>           <C>      <C>            <C>         <C>
Y.S. Jasi   2001      0           0        120,000 (1)       0        265,000 shares
Nikhanj
President
and Director ------------------------------------------------------ =================
            2000      0           0        120,000 (1)       0        265,000 shares
          --------------------------------------------------------- =================
            1999      0           0        120,000 (1)       0        840,000 shares
          --------------------------------------------------------- =================
            1998      0           0        120,000 (1)       0        250,000 shares
========= --------------------------------------------------------- =================
Manish      2001      0           0         18,000 (2)       0         75,000 shares
Bindal
Secretary
and Director ------------------------------------------------------ =================
            2000      0           0         37,000 (2)       0         25,000 shares
          --------------------------------------------------------- =================
            1999      0           0         37,200 (2)       0         25,000 shares
          --------------------------------------------------------- =================
            1998      0           0         37,200 (2)       0         50,000 shares
========= --------------------------------------------------------- =================
Raymond Lai 2001    60,000        0              0           0         50,000 shares
V.P. Finance &
Administration ---------------------------------------------------- =================
            2000    60,000        0              0           0         50,000 shares
          --------------------------------------------------------- =================
            1999    60,000        0              0           0         85,000 shares
          --------------------------------------------------------- =================
            1998    60,000        0              0           0         50,000 shares
======== ---------------------------------------------------------- =================
Roland      2001         0        0              0        $75,000       5,000 shares
Kesselring
V.P. Corporate
Affairs-Europe ---------------------------------------------------- =================
            2000         0        0              0           0        100,000 shares
         ---------------------------------------------------------- =================
            1999         0        0              0           0        100,000 shares
         ---------------------------------------------------------- =================
            1998         0        0              0    50,000 shares    75,000 shares
======== ======== ========== ========== ============== ============ =================

</TABLE>

         (1) Paid as consulting  fees to Nikhanj and  Associates  Geoconsulting.
         (2) Paid as legal fees for services.

31

<PAGE>


     (b)  Compensation Pursuant to Plans.

None.

     (c)  Other Compensation.

None. No stock appreciation rights or warrants exist to management

     (d)  Compensation of Directors.

Each member of the Board of Directors of the Company receives $500.00 plus
reasonable outside travel expenses for each Board meeting he attends and for
each Committee meeting he attends during the fiscal year. Directors who are also
officers of the Company receive no compensation for services as a director.

<TABLE>
<CAPTION>

                  DIRECTOR'S COMPENSATION FOR LAST FISCAL YEAR

(Except for compensation of Officers who are also Directors whose Compensation
is listed in Summary Compensation Table of Executives)

                                    Cash Compensation                  Security Grants
----------------------- -------------------------------------------------------------------------------- ---------------------------
         Name                                                                                            Number of Securities
                        Annual Retainer       Meeting Fees       Consulting Fees/      Number of         Underlying Options/SARs
                        Fees ($)              ($)                Other Fees ($)        Shares (#)        (#)
----------------------- -------------------------------------------------------------------------------- ---------------------------
<S>                              <C>                   <C>                <C>                   <C>               <C>

A. Director                      0                     0                  0                     0                 0
Kurt Marty
----------------------- -------------------------------------------------------------------------------- ---------------------------
B. Director                      0                     0                  0                     0                 0
Y.S. Nikhanj
------------------------------------------------------------------------------------------------------------------------------------
C. Director                      0                     0                  0                     0                 0
Manish Bindal
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     (e)  Termination of Employment and Change of Control Arrangements.

None

     (f)  Stock Option Plan

32

<PAGE>

The Company has adopted a stock option plan covering officers, consultants, key
employees. The plan is administered by the Board of Directors and is limited to
10% of the total outstanding shares, in the aggregate, except if approval is
granted by the Alberta Stock Exchange (the "Exchange). Option prices shall not
be lower than the market price of the shares on the date of grant of the option
less the maximum discount permitted under the By-Laws and policies of the
Alberta Stock Exchange. The options may be granted by the Board under provisions
which may be established by the Board of Directors from time to time. The
options may not be granted for an exercise period of more than five years.


ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT

Stock Options

The Company has, from time to time, granted stock options to purchase common
shares to its directors and employees. The options have been granted on various
terms resulting from negotiation between the Company and such persons and the
exercise price per share was based on the average trading price of the Company's
shares pursuant to the policies of the Alberta Stock Exchange (the "Exchange").
The exercise price for all options currently issued by the Company is equal to
or in excess of the market price of the Company's stock at the date of issuance
less the maximum discount permitted under the by-laws and polices of The Alberta
Stock Exchange (or any stock exchange on which the Shares are then listed). The
options are non-assignable and have been granted as incentives and not in lieu
of any compensation for services. As at March 31, 2001 the Company has granted
outstanding options to its directors and employees to purchase an aggregate of
1,790,000 common shares as follows:


                       Share           Price        Amount         Expiry Date
----------------------------------   ----------   -----------    ---------------

Outstanding Options   1,190,000        $0.45        $535,000      Dec. 22, 2003
-----------------------------------------------   -----------    ---------------
                        100,000        $0.35         $35,000      Nov. 4, 2001
-----------------------------------------------   -----------    ---------------
                        500,000        $0.54        $270,000      Mar. 18, 2002
-----------------------------------------------   -----------    ---------------
Total Options         1,790,000                     $840,500
-----------------------------------------------   -----------    ---------------
Outstanding Warrants    311,807        $0.80        $249,445      Sept. 7, 2001
-----------------------------------------------   -----------    ---------------
Outstanding Warrants    152,500        $0.65         $99,125      Oct. 25, 2001
-----------------------------------------------   -----------    ---------------
Total Options
& Warrants            2,254,307                   $1,189,070
-----------------------------------------------   -----------    ---------------

33

<PAGE>

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

The directors, senior officers, holders of greater than 10% of the common shares
of the Company and any associate or affiliate of such persons of the Company
have no other interest in any material transactions in which the Company has
participated in the preceding year or intends to participate in at this time,
except as follows:

     a)   Due to related parties


                                             2001          2000           1999
                                              $             $              $

i)The Company's president and his wife     177,089             -         22,800
ii)Other shareholders, directors            63,000             -              -
                                           =======       ========      ========

The shareholders' loans have no fixed terms of repayment, are non-interest
bearing and are unsecured.

     b) Advances from the related parties have no fixed terms of repayment, are
non-interest bearing and are unsecured.

     c) The following transactions were conducted with related parties and
recorded at the exchange amounts:

(i)               During 2001 the President made exploration expenditures on
                  behalf of the Company of $57,286 (2000 - $194,105; 1999 -
                  $78,120) and made net advances to the Company of $13,442 (2000
                  - $21,167; 1999 - $157,887). The advances were repaid in full
                  with no interest or fees charged.

34

<PAGE>

(ii)              During 2001 the President and the President's wife exercised
                  options for 300,000 shares for $83,440. During 2000 the
                  President and the President's wife exercised options for
                  325,000 shares for $147,750. During 1999 the President and the
                  President's wife exercised options for 677,000 shares for
                  $291,110. All of these amounts were settled from amounts owed
                  by the Company.

(iii)               During  2001 a  company  owned  by the  President  was  paid
                    $90,000 (2000 - $120,000;  1999 - $120,000)  for  geological
                    consulting services provided during the year.

(iv)                During 2001 a director's  law firm was paid $17,150  (2000 -
                    $33,150; 1999 26,000) for legal services provided during the
                    year.

(v)                 During  2001 a company  owned by a  Vice-President  was paid
                    $72,000  (2000 -  $72,000;  1999 - $72,000)  for  geological
                    consulting services provided during the year.


35

<PAGE>


                                     PART II

ITEM 14. DESCRIPTION OF SECURITIES

The Company is authorized to issue an unlimited number of Common Shares without
nominal or par value, and an unlimited number of Preferred Shares, issuable in
series, of which, as at the date hereof, 16,818,565 Common Shares and no
Preferred Shares are issued and outstanding as fully-paid and non-assessable.

Common Shares

The holders of Common Shares are entitled to dividends if, as and when declared
by the directors, to one (1) vote per share at meetings of the holders of Common
Shares of the Company and, upon liquidation, to receive such assets of the
Company as are distributable to the holders of the Common Shares. All of the
Common Shares to be outstanding upon completion of this offering will be
fully-paid and non-assessable.

Preferred Shares

The Preferred Shares may be issued from time to time in one or more series. each
series consisting of a number of Preferred Shares as determined by the board of
directors of the Company who may also fix the designation, rights, privileges,
restrictions and conditions attaching to the shares of each series of Preferred
Shares. There are no Preferred Shares issued and outstanding.

The Preferred Shares of each series shall, with respect to payment of dividends
and distribution of assets in the event of liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary, or any other
distribution of the assets of the Company among its shareholders for the purpose
of winding-up its affairs, rank on a parity with the Preferred Shares of every
other series and shall be entitled to preference over the Common Shares and the
shares of any other class ranking junior to the Preferred Shares.


TRANSFER AGENT

The transfer agent for the company shares is Computershare Trust Company of
Canada, 600, 530-8th Avenue SW, Calgary, Alberta T2P3S8 (403) 267-6872.

                                    PART III

ITEM 15. DEFAULTS UPON SENIOR SECURITIES

There have been no defaults by the Company upon Senior Securities during the
fiscal year 1998 to date of this Annual Report.

ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED SECURITIES

There have been no changes in securities or changes in security for the
registered securities to date of this Annual Report.

36

<PAGE>

                                     PART IV

ITEM 17. FINANCIAL STATEMENTS

The following documents are filed as a part of this report:

     1)   Financial   Statements:   (See  Financial  Exhibits  Index  below  and
          Financial Exhibits furnished as Pages F-1 through F-24).


     2)   Financial Statement Schedules: None

ITEM 18.  NOT APPLICABLE.


ITEM 19.  FINANCIAL STATEMENTS AND EXHIBITS

         a)       INDEX TO FINANCIAL STATEMENTS
                  AND SUPPORTING SCHEDULES


37

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

DATED: October 10, 2001

                                            LEADER MINING INTERNATIONAL, INC.

                                            By:  /s/ Y.S. Nikhanj
                                                ------------------------------
                                                 President


                                             Directors:


                                             /s/ Manish Bindal
                                             ---------------------------------
                                             Secretary and Director


                                             /s/ Ulrich Schurch
                                             ---------------------------------
                                             Director



                                             /s/ Y.S. Nikhanj
                                             ---------------------------------
                                             Director



                                             /s/ Raymond Lai
                                             ---------------------------------
                                             Vice President of Finance



                                             /s/ Roland Kesselring
                                             ---------------------------------
                                             Vice President of Corporate Affairs


38

<PAGE>

                        LEADER MINING INTERNATIONAL INC.
                         (an exploration stage company)

                              FINANCIAL STATEMENTS

                         March 31, 2001, 2000, and 1999
                         (expressed in Canadian dollars)


<PAGE>





Auditors' Report

To the Shareholders of Leader Mining International Inc.

We have audited the balance sheets of Leader Mining International Inc. (an
exploration stage company) as at March 31, 2001 and 2000, and the statements of
loss and deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at March 31, 2001 and 2000,
and the results of its operations and its cash flows for each of the years then
ended in accordance with Canadian generally accepted accounting principles.

The financial statements as at March 31, 1999 were audited by another firm of
Chartered Accountants who issued an unqualified report dated June 25, 1999.



CALGARY, ALBERTA
June 19, 2001, except                         /s/ "Coakwell Crawford Cairns LLP"
for notes 12 b), c) and d),                                Chartered Accountants
which are as of August 7, 2001


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

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as those described in

                                      F-1

<PAGE>

Note 1 to the financial statements. Our report to the shareholders dated June
19, 2001, except for notes 12 b), c) and d), which are as of August 7, 2001, is
expressed in accordance with Canadian standards which do not permit a reference
to such events and conditions in the auditors' report when these are adequately
disclosed in the financial statements.



CALGARY, ALBERTA
June 19, 2001, except                         /s/ "Coakwell Crawford Cairns LLP"
for notes 12 b), c) and d),                                Chartered Accountants
which are as of August 7, 2001


                                      F-2
<PAGE>
<TABLE>
<CAPTION>


Leader Mining International Inc.
(an exploration stage company)
Balance Sheets
As at March 31
(expressed in Canadian dollars)

                                              2001                 2000                  1999
                                              -----------------    ------------------    -----------------
<S>                                           <C>                  <C>                   <C>

Assets

Current assets
Cash                                          $303,216             $211,125              $456,425
Accounts receivable                           58,992               20,724                37,856
Marketable securities - at market             -                    -                     22,942
Deposits and prepaid expenses                 114,717              13,619                179,773
                                              -----------------    ------------------    -----------------

                                              476,925              245,468               696,996

Capital assets (Note 4)                       19,245               24,829                32,579

Mineral properties and deferred
exploration costs  (Note 5)                   7,862,415            8,004,148             8,100,426
                                              -----------------    ------------------    -----------------

                                              $8,358,585           $8,274,445            $8,830,001
                                              -----------------    ------------------    -----------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities      $196,437             $54,769               $277,590
Due to related parties (Note 7)               177,089              874                   22,800
                                              -----------------    ------------------    -----------------

                                              373,526              55,643                300,390
                                              -----------------    ------------------    -----------------

Shareholders' equity

Capital stock (Note 8)                        21,914,840           20,963,315            20,346,416

Deficit                                       (13,929,781)         (12,744,513)          (11,816,805)
                                              -----------------    ------------------    -----------------

                                              7,985,059            8,218,802             8,529,611
                                              -----------------    ------------------    -----------------

                                              $8,358,585           $8,274,445            $8,830,001
                                              -----------------    ------------------    -----------------
</TABLE>

Nature of operations and going concern (Note 1)


Approved by the Board of Directors  /s/ Jasi N. Nikhanj
                                    ------------------------
                                    Director


                                    /s/ Manish Bindal
                                    ------------------------
                                    Director


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

                                      F-3

<PAGE>
<TABLE>
<CAPTION>


Leader Mining International Inc.
(an exploration stage company)
Statements of Loss and Deficit
For the years ended March 31
(expressed in Canadian dollars)



                                                     2001                  2000                 1999
                                                     -----------------     -----------------    -----------------
<S>                                                  <C>                   <C>                  <C>

Revenue
Management fees (Note 5 (d))                         $64,358               $60,000              $-
Interest and other                                   29,511                6,018                49,044
                                                     -----------------     -----------------    -----------------

                                                     93,869                66,018               49,044
                                                     -----------------     -----------------    -----------------

Expenses
General and administrative (Note 7)                  707,100               624,463              898,873
Mineral properties and exploration costs             565,774               360,858              1,848,313
written-off (Note 5(c))
Amortization                                         6,263                 8,405                11,282
Gain on disposal of capital assets                   -                     -                    (2,117)
Loss on write-down of marketable securities          -                     -                    139,840
                                                     -----------------     -----------------    -----------------

                                                     1,279,137             993,726              2,896,191
                                                     -----------------     -----------------    -----------------

Net loss for the year                                1,185,268             927,708              2,847,147

Deficit - beginning of year                          12,744,513            11,816,805           8,969,658
                                                     -----------------     -----------------    -----------------

Deficit - end of year                                $ 13,929,781          $ 12,744,513         $11,816,805
                                                     -----------------     -----------------    -----------------

Loss per share                                       $                     $                    $
                                                     0.06                  0.05                 0.20
                                                     -----------------     -----------------    -----------------


</TABLE>

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

                                      F-4

<PAGE>
<TABLE>
<CAPTION>


Leader Mining International Inc.
(an exploration stage company)
Statements of Cash Flows
For the years ended March 31
(expressed in Canadian dollars)


                                                                   2001               2000             1999
                                                                   -----------------  ---------------- -----------------
<S>                                                                <C>                <C>              <C>

 Cash flows from operating activities
 Net loss for the year                                             $(1,185,268)       $(927,708)       $(2,847,147)
 Items not affecting cash
   Mineral properties and exploration costs written-off            565,774            360,858          1,848,313
   Amortization                                                    6,263              8,405            11,282
   Consulting fees                                                 128,500            -                -
   Gain on disposal of capital assets                              -                  -                (2,117)
   Loss on write-down of marketable securities                     -                  -                139,840
   Employee bonuses paid in common shares                          -                  -                (113,700)
                                                                   -----------------  ---------------- -----------------

                                                                   (484,731)          (558,445)        (963,529)

Net change in non-cash working capital
  Accounts receivable                                              (32,018)           18,006           341,420
  Deposits and prepaid expenses                                    (101,099)          166,154          (44,367)
  Accounts payable and accrued liabilities                         141,668            (222,821)        (1,543,074)
                                                                   -----------------  ---------------  -----------------
                                                                   8,551              (38,661)         (1,246,021)
                                                                   -----------------  ---------------  -----------------

                                                                   (476,180)          (597,106)        (2,209,550)
                                                                   -----------------  ---------------  -----------------

Cash flows from financing activities
   Advances from joint venture participant                         1,064,000          -                -
   Issuance of common shares, net of share issue costs             861,835            358,349          675,954
   Repayments to related parties, net                              19,869             235,750          305,357
                                                                   -----------------  ---------------- -----------------

                                                                   1,945,704          594,099          981,311
                                                                   -----------------  ---------------  -----------------

Cash flows from investing activities
   Mineral properties and deferred exploration costs               (1,376,754)        (264,580)        (990,774)
   Purchase of capital assets                                      (679)              (655)            (2,599)
   Proceeds on disposal of capital assets                          -                  -                116,500
   Sale (purchase) of marketable securities                        -                  22,942           (162,782)
                                                                   -----------------  ---------------- -----------------

                                                                   (1,377,433)        (242,293)        (1,039,655)
                                                                   -----------------  ---------------  -----------------

Increase (decrease) in cash                                        92,091             (245,300)        (2,267,894)

Cash, beginning of year                                            211,125            456,425          2,724,319
                                                                   -----------------  ---------------  -----------------

Cash, end of year                                                  $303,216           $211,125         $456,425
                                                                   -----------------  ---------------  -----------------

Supplemental Cash Flow Information
   Interest income                                                 $5,469             $6,018           $49,044
                                                                   -----------------  ---------------  -----------------
</TABLE>

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

                                      F-5

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

1.   Nature of operations and going concern

     Leader Mining  International Inc. (the "Company") is in the process of
     exploring its mineral properties and has not yet determined whether these
     properties contain mineral resources that are economically recoverable.

     The recoverability of amounts shown for mineral properties and deferred
     exploration costs is dependent upon the existence of economically
     recoverable reserves, securing and maintaining title and beneficial
     interest in the properties, the ability of the Company to obtain necessary
     financing to complete the development, and upon future profitable
     production or proceeds from disposition of the mineral properties. There
     are no guarantees that such conditions will be met. The amounts shown as
     mineral properties and deferred exploration costs represent net costs to
     date, less amounts written-off and do not necessarily represent present or
     future values.

     The Company will have to raise additional funds to meet its planned
     corporate and administrative expenses for the coming year, and to undertake
     further exploration and development of its mineral properties. Management
     is pursuing such additional sources of financing and while it has been
     successful in the past there can be no assurance that it will be able to do
     so in the future. Subsequent to March 31, 2001, the Company completed a
     private placement of shares for proceeds of $500,000, see Note 12 (c).

     These financial statements have been prepared on a going concern basis,
     which assumes the Company will be able to realize its assets and discharge
     its liabilities in the normal course of business for the foreseeable
     future. These financial statements do not include any adjustments that
     would be necessary should the Company be unable to continue as a going
     concern.

     Although the Company has taken steps to verify the title to resource
     properties in which it has an interest, in accordance with industry
     standards for the current stage of exploration of such properties, these
     procedures do not guarantee the Company's title. Property title may be
     subject to unregistered prior agreements, transfers or Native land claims
     and title may be affected by undetected defects.

                                      F-6

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


2.   Significant accounting policies

     Accounting principles

     These financial statements are prepared in accordance with accounting
     principles generally accepted in Canada ("Canadian GAAP"). Significant
     differences from accounting principles generally accepted in the United
     States ("U.S. GAAP") are described in Note 11.

     Use of estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amount of assets and liabilities and
     disclosure of contingent liabilities at the date of the financial
     statements, and the reported amounts of revenues and expenses during the
     reporting period. The most significant estimates relate to the
     recoverability of amounts recorded for mineral properties and deferred
     exploration costs. Actual results could differ from those reported.

     Cash

     Cash includes short-term deposits that mature within 90 days of the
     original date of acquisition.

     Marketable securities

     Marketable securities are recorded at the lower of cost and market.

     Interests in joint ventures

     Interests in joint ventures are accounted for using the proportionate
     consolidation method. Under this method the Company's proportionate share
     of joint venture revenue, expenses, assets and liabilities is included in
     the accounts of the Company.

     Mineral properties and deferred exploration costs

     Acquisition and exploration costs relating to mineral properties are
     deferred. Upon commencement of commercial production, these costs will be
     amortised. The carrying values of mineral properties are, where necessary,

                                      F-7

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


2.  Significant accounting policies (continued)


     written down to the estimated recoverable amount based on undiscounted
     estimated future cash flows. Costs relating to properties abandoned are
     written-off when the decision to abandon is made. On a quarterly basis,
     senior management reviews the carrying values of mineral properties and
     deferred exploration costs with a view to assessing whether there has been
     an impairment in value. In the event that management determines potential
     reserves to be insufficient to recover the carrying value of the property,
     the carrying amount will be written down or written off as appropriate.

     The Company follows the cost reduction method of accounting for receipt of
     option and similar payments. Cash payments received from the Company's
     exploration partners are credited to the respective property until
     capitalised costs are recovered; thereafter, such payments are included in
     operations. Option payments are exercisable at the discretion of the
     optionee and are only recognised when received.

     Capital assets

     Capital assets are recorded at cost. Amortization is provided on a
     declining balance basis based on the estimated useful life of the assets
     from the year of acquisition up to, and excluding the year of disposal, at
     the following annual rates:

                  Computer equipment                          30%
                  Furniture and fixtures                      20%
                  Camp equipment                              20%

     Loss per share information

     Per share amounts are calculated based on the weighted average number of
     shares outstanding during the year of 18,669,609 (2000 - 17,221,284; 1999 -
     14,446,458). Fully dilutive amounts per share are not shown, as there are
     no material dilutive factors.

     Future income taxes

     In providing for corporate income taxes, temporary differences between the
     tax basis of assets or liabilities and their carrying amounts are reflected
     as future income taxes. Tax rates anticipated to be in effect when these
     temporary differences reverse are used to calculate future income taxes.

                                      F-8

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


2.  Significant accounting policies (continued)


     Stock-based compensation plan

     The Company has stock-based compensation plans which are described in Note
     8. No compensation expense is recognized for these plans when stock options
     are issued to directors, officers, or employees. Any consideration paid by
     directors, officers, or employees on exercise of stock options or purchase
     of stock is credited to share capital. If stock or stock options are
     repurchased from directors, officers, or employees, the excess of the
     consideration paid over the carrying amount of the stock or stock option
     cancelled is charged to retained earnings.

     Financial instruments

     The Company's financial instruments consist of cash, accounts receivable,
     marketable securities, accounts payable and accrued liabilities, and
     amounts due to related parties. The fair values of all financial
     instruments approximate their carrying values due to their short-term
     maturity.


3.   Change in accounting policy

     Effective April 1, 1999, the Company retroactively changed its method of
     reporting corporate income taxes to conform with the new recommendations of
     the Canadian Institute of Chartered Accountants. These recommendations
     require the future income taxes be provided as described in Note 2. Prior
     to this change, the Company used the deferral method of reporting income
     taxes. This change in accounting policy did not change the Company's
     previously reported income, retained earnings, and income taxes.

                                      F-9

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


<TABLE>
<CAPTION>

4.   Capital assets

                                          2001
                                        --------------------------------------------------------------
                                            Cost            Accumulated             Net Book Value
                                                            Amortization
<S>                                        <C>              <C>                     <C>

      Computer equipment                   $38,425          $9,816                  $8,609
      Furniture and fixtures               32,632           25,034                  7,599
      Camp equipment                       9,029            5,991                   3,037
                                           --------------   ------------------      -----------------

                                           $80,086          $60,841                 $19,245
                                           --------------   ------------------      -----------------

                                           2000
                                           -----------------------------------------------------------
                                           Cost             Accumulated             Net Book Value
                                                            Amortization

      Computer equipment                   $38,425          $26,126                 $12,299
      Furniture and fixtures               31,952           23,219                  8,733
      Camp equipment                       9,029            5,232                   3,797
                                           ---------------- -------------------     ------------------

                                           $79,406          $54,577                 $24,829
                                           ---------------- -------------------     ------------------

                                             1999
                                           -----------------------------------------------------------
                                           Cost             Accumulated             Net Book Value
                                                            Amortization

      Computer equipment                   $38,425          $20,855                 $17,570
      Furniture and fixtures               31,297           21,035                  10,262
      Camp equipment                       9,029            4,282                   4,747
                                           ---------------- -------------------     ------------------

                                           $78,751          $46,172                 $32,579
                                           ---------------- -------------------     ------------------

</TABLE>

                                      F-10

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

<TABLE>
<CAPTION>

5.       Mineral properties and deferred exploration costs

      a) Summary
                                                 2001                  2000               1999
          Balance, beginning of year             $  8,004,148          $  8,100,426       $  8,957,965
                                                 ------------------    ------------------ -------------------
<S>                                              <C>                   <C>                <C>

         Expenditures capitalised in the year:
          Acquisition of mineral properties      332,117               19,500             30,000
          Exploration costs                      91,924                245,080            960,774
                                                 ------------------    ------------------ -------------------

                                                 424,041               264,580            990,774

         Less: Costs written-off                 (565,774)             (360,858)          (1,848,313)
                                                 ------------------    ------------------ -------------------

                                                 (141,733)             (96,278)           (857,539)
                                                 ------------------    ------------------ -------------------

         Balance, end of year                    $7,862,415            $8,004,148         $8,100,426
                                                 ------------------    ------------------ -------------------
</TABLE>

b)       During the year, the Company  capitalized  $409,700 (2000 - $224,400;
         1999 - $84,000) of general and administrative costs to deferred explor-
         ation costs.

c)       During the year, the Company wrote-off $565,774 (2000 - $360,858; 1999
         - $1,848,313) of mineral properties and exploration costs relating to
         properties on which no further exploration activities are planned.
         Included in the amounts written-off in 2001, are costs incurred to
         acquire Similco Mines Ltd. as per Note 5 (h).

d)       On November 10, 1999, the Company signed a joint venture agreement with
         Kores Canada Corp. ("Kores") in respect of the Knife Lake property.
         This agreement was amended in November 2000. Under the terms of the
         amended agreement, the Company has granted Kores the right to acquire
         up to a 50% working interest in this property by making both payments
         to the Company and funding exploration expenditures on the property.

                                      F-11

<PAGE>

Leader Mining International Inc.
(an exploration stage company) Notes to Financial Statements March 31, 2001,
2000, and 1999 (expressed in Canadian dollars)


5. Mineral properties and deferred exploration costs (continued)


         To earn a 50% working interest, Kores must make the following payments
         and expenditures:

         i)  To the Company

                $300,000 upon signing of the agreement
                $100,000 by December 22, 2000
                $200,000 by December 22, 2001
                $300,000 by December 22, 2002
                $300,000 by December 22, 2003

         ii)  Exploration expenditures on the project

                $1,000,000 before December 22, 2000
                $330,000 before December 22, 2001
                $670,000 before December 22, 2002
                $1,000,000 before December 22, 2003
                $1,000,000 before December 22, 2004

         Based on the payments and expenditures to December 22, 2000, Kores has
         earned a 20% working interest in the property (Note 6). Assuming
         further payments and expenditures are made as detailed above, the
         working interest will be earned as follows:

         December 22, 2001 -        24.96%
         December 22, 2002 -        33.33%
         December 22, 2003 -        42.86%
         December 22, 2004 -        50.00%

         Under the terms of the agreement, the Company granted Kores a stock
         option to purchase 500,000 common shares at a price of $1.00 per share,
         up to December 22, 2001. In addition, the Company is entitled to
         receive a 10% management fee based on exploration expenditures on the
         project incurred by Kores.

e)       The Company has an  obligation  to pay a 2% net smelter  return on its
         Knife Lake property to Copper Quest, Inc. and has an option to purchase
         a 1% net smelter return for $1 million.

f)       The Company has an option to spend $500,000 on the Knife Lake Pistol
         Lake property to earn an 80% working interest from Consolidated Pine
         Channel Gold Corp. ("Consolidated Pine"). The Company has an additional
         obligation to pay a 2% net smelter return on its Pistol Lake properties
         to Consolidated Pine and has an option to purchase an additional 10%
         working interest for $1 million and an option to purchase a 1% net
         smelter return for $2 million.

g)       In January 2001, the Company entered into a royalty and option to
         purchase agreement to acquire a 100% interest in the Bright Lake

                                      F-12

<PAGE>

Leader Mining International Inc.
(an exploration stage company) Notes to Financial Statements March 31, 2001,
2000, and 1999 (expressed in Canadian dollars)

5.   Mineral properties and deferred exploration costs (continued)


         properties. The Company may acquire a 30% net profit interest and 0.6%
         net smelter royalty by incurring $100,000 in acquisition and
         exploration costs by July 31, 2002. In addition, the Company may at any
         time purchase the net profits interest for $500,000 and the net smelter
         royalty for $300,000.

h)       On June 5, 2000 the Company signed an option agreement with Imperial
         Metals Corporation ("Imperial") and HML Mining Inc. to purchase all of
         the issued and outstanding shares of Similco Mines Ltd. (a wholly owned
         subsidiary of Imperial), and the mineral claims and crown granted
         claims related to the Invermay property. To grant a further extension
         to February 28, 2001, the Company signed an amended agreement with
         Imperial. As consideration, Imperial received cash of $50,000 and
         100,000 common shares in the Company.

         The Company was unable to complete this acquisition by February 28,
         2001 and consequently deposits and project costs of $497,628 were
         written off. The Company plans to renegotiate this potential
         acquisition.

6.       Interest in joint venture

     As of March 31, 2001 the Company's 80% joint venture interest in the Knife
     Lake project is proportionately consolidated in the financial statements
     and summarized as follows:

        Assets

        Current assets
        Cash                                                    $97,709
        GST receivable                                          26,242
        Deposits                                                73,360
                                                                ----------------

                                                                197,311
        Mineral properties and deferred exploration costs       7,270,967
                                                                ----------------

                                                                $7,468,278
                                                                ----------------
        Liabilities

        Accounts payable and accrued liabilities                $65,718

        Joint venturers' equity                                 7,402,560
                                                                ----------------

                                                                $7,468,278
                                                                ----------------
        Cash flows from:
        Operating activities                                    $(33,884)
        Financing activities                                    $1,064,000
        Investing activities                                    $(932,407)

                                      F-13

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

6.   Interest in joint venture (continued)


     The joint venture did not earn any revenues or incur any expenses, other
     than exploration expenditures during the year ended March 31, 2001. The
     cost of the interest to the Company of $7,792,000 at March 31, 2001 is
     included in mineral properties and deferred exploration costs. The excess
     of the Company's cost of the Knife Lake Project over its share of the
     equity has been allocated to mineral properties. The joint venture
     agreement is described more fully in Note 5 (d).

<TABLE>
<CAPTION>

7.   Related party transactions

a)   The following summarises the amounts due to officers and directors of the Company:

                                                   2001                2000                1999
                                                   ----------------    ----------------    ----------------
<S>                                                <C>                 <C>                 <C>

     Balance, beginning of year                    $874                $22,800             $8,553

     Expenditures paid on behalf of the Company    239,786             194,105             78,120

     Debt assumed                                  -                   -                   389,622

     Net advances                                  19,869               (68,282)           (162,385)

     Share options exercised                       (83,440)            (147,750)           (291,110)
                                                   ----------------    ----------------    ----------------

     Balance, end of year                          $177,089            $874                $22,800
                                                   ----------------    ----------------    ----------------
</TABLE>

     b) Advances from the related parties have no fixed terms of repayment, are
        non-interest bearing and are unsecured.

     c) The following transactions were conducted with related parties and
        recorded at the exchange amounts:

        (i)       During 2001 the President made exploration expenditures on
                  behalf of the Company of $57,286 (2000 - $194,105; 1999 -
                  $78,120) and made net advances to the Company of $13,442 (2000
                  - $21,167; 1999 - $157,887). The advances were repaid in full
                  with no interest or fees charged.

                                      F-14

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

7.   Related party transactions (continued)

        (ii)      During 2001 the President and the President's wife exercised
                  options for 300,000 shares for $83,440. During 2000 the
                  President and the President's wife exercised options for
                  325,000 shares for $147,750. During 1999 the President and the
                  President's wife exercised options for 677,000 shares for
                  $291,110. All of these amounts were settled from amounts owed
                  by the Company.

        (iii)     During 2001 a company owned by the President was paid $90,000
                  (2000 - $120,000;  1999 - $120,000) for  geological consulting
                  services provided during the year.

        (iv)      During 2001 a director's law firm was paid $17,150 (2000 -
                  $33,150; 1999 26,000) for legal services provided during the
                  year.

        (v)       During 2001 a company owned by a Vice-President was paid
                  $72,000 (2000 - $72,000;  1999 - $72,000) for geological
                  consulting services provided during the year.

                                      F-15

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

7.       Related party transactions (continued)

     c)  continued

        (vi)    During 2001 a company owned by a Vice-President was paid $10,000
                (2000 - $35,000; 1999 - $Nil)  in public relations fees during
                the year.

     d)  During 2001 directors and officers transferred shares held personally
         to an investment brokerage firm, as payment for financial, advisory and
         investment services provided to the Company, as follows:

                                          Number of Shares     Amount
                                          ------------------- ------------------

         President                        50,000              $   45,000
         President's wife                 25,000              20,500
         Vice-President                   25,000              20,500
         Director                         50,000              42,500
                                          ------------------- ------------------

         Totals                           150,000             $ 128,500
                                          ------------------- ------------------


         The fair market value was recorded using the ten day average trading
         price prior to the date of transfer and the total amount charged to
         general and administrative expenses.

     e)  During 2001 the President transferred 100,000 shares in the Company
         held personally to Imperial to secure a contract extension. This
         transaction has been recorded at $54,000 using the ten day average
         trading price prior to the date of transfer and the amount charged to
         mineral properties and deferred exploration costs.

                                      F-16

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


8.   Capital stock

     a)       Authorized

         The authorized share capital of the Company is comprised of an
         unlimited number of common and preferred shares.

<TABLE>
<CAPTION>

     b)  Common shares issued
                                                                          Number of             Amount
                                                                          Shares
                                                                          ----------------     ----------------
<S>                                                                       <C>                  <C>

     Balance - March 31, 1998                                             14,056,574           $ 19,265,652
                                                                          ----------------     ----------------

     Shares issued
         Director and employee bonus shares cancelled                     (157,000)            (529,500)
         Director and employee bonus shares reissued                      157,000              418,200
         Exercise of options                                              687,000              295,410
         Legal settlement                                                 75,000               225,000
         Private placement for cash, net of share issue costs             2,000,000            671,654
                                                                          ----------------     ----------------

                                                                          2,762,000            1,080,764
                                                                          ----------------     ----------------

     Balance - March 31, 1999                                             16,818,574           20,346,416
                                                                          ----------------     ----------------

     Shares issued
         Exercise of options                                              680,000              298,099
         Exercise of warrants                                             210,000              104,000
         Private placement for cash                                       200,000              104,000
         Settlement for debt                                              210,000              110,800
                                                                          ----------------     ----------------

                                                                          1,300,000            616,899
                                                                          ----------------     ----------------
                                      F-17

<PAGE>


Continued....

     Balance - March 31, 2000                                             18,118,574           20,963,315
                                                                          ----------------     ----------------

     Shares issued
         Exercise of options                                              405,000              206,150
         Exercise of warrants                                             837,500              376,875
         Private placement for cash, net of share issue costs             623,615              368,500
                                                                          ----------------     ----------------

                                                                          1,866,115            951,525
                                                                          ----------------     ----------------

     Balance - March 31, 2001                                             19,984,689           $ 21,914,840
                                                                          ----------------     ----------------

</TABLE>

                                      F-18

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


8.       Capital stock (continued)

<TABLE>
<CAPTION>

     c)   Share options

         The Company has established a stock option plan for directors,
         officers, and employees. Up to 10% of the issued and outstanding shares
         are reserved for issuance. The option price is equivalent to the share
         market price on the date of granting. Options are exercisable for
         periods up to five years from the date of granting. Options issued and
         exercised under this plan are summarized below:

                                                             Number of         Weighted average
                                                             shares            exercise price
                                                             ----------------  --------------------
<S>                                                          <C>                     <C>

          Outstanding, March 31, 1998                        1,357,000               $     0.93
          Granted                                            1,200,000                     0.76
          Exercised                                          (687,000)                     0.84
          Granted                                            (195,000)                     0.48
                                                             ----------------

          Outstanding, March 31, 1999                        1,675,000                     0.48
          Exercised                                          (680,000)                     0.51
                                                             ----------------

          Outstanding, March 31, 2000                        995,000                       0.51
          Granted                                            1,200,000                     0.45
          Exercised                                          (405,000)                     0.51
                                                             ----------------

          Outstanding and exercisable, March 31, 2001        1,790,000              $      0.47
                                                             ----------------  ------------------
</TABLE>

<TABLE>
<CAPTION>

         The following table summarizes information about stock options
         outstanding at March 31, 2001:

                                                                Average               Weighted
                                                               Remaining               Average
         Range of                        Number               Contractual             Exercise
         Exercise Prices               Outstanding               Life                   Price
----------------------------------------------------------------------------------------------
<S>      <C>                            <C>                    <C>                       <C>

         $0.35 - $0.44                    100,000              0.60 years                $0.35
         $0.45 - $0.53                  1,190,000               2.7 years                $0.45
         $0.54 - $0.55                    500,000               1.0 years                $0.54
----------------------------------------------------------------------------------------------

         $0.35 - $0.55                  1,790,000               2.1 years                $0.47
==============================================================================================

</TABLE>


                                      F-19

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


8.   Capital stock (continued)

<TABLE>
<CAPTION>

     d)  Share purchase warrants

         The number of share purchase warrants granted during the year in
         conjunction with the private share placements and outstanding at
         year-end were as follows:

                                                                       Number of warrants
<S>                                            <C>                      <C>                      <C>

                                               2001                     2000                     1999

         Balance, beginning of year            990,000                  1,000,000                130,000

         Granted                               311,807                  200,000                  1,000,000
         Exercised                             (837,500)                (210,000)                -
         Expired                               -                        -                        (130,000)
                                               ------------------------ -----------------------  ----------------------

         Balance, end of year                  464,307                  990,000                  1,000,000
                                               ------------------------ -----------------------  ----------------------
</TABLE>

         Warrants at March 31, 2001 expire as follows:
                                                             Number of warrants
                                                             -------------------

            Exercisable at $0.80 expiring September, 2001        311,807
            Exercisable at $0.65 expiring October, 2001          152,500
                                                                 ---------------

                                                                 464,307
                                                                 ---------------

9.   Commitments and contingencies

a)       Pursuant to an agreement relating to a lease for office premises, the
         Company is obligated to pay $32,950 per annum until June 2001 and
         $50,900 thereafter to November 2005.

b)       The Company is continuing to defend a legal action in respect of a 1995
         mining option agreement. The plaintiff is alleging damages of $486,000
         plus further unspecified damages. Discoveries are now completed and the
         trial is set for January 28, 2002. The Company believes that this claim
         is without merit and is continuing to vigorously defend it. In the
         opinion of management, the amount of ultimate liability, if any, with
         respect to this action, will not materially affect the financial
         position, results of operations or cash flows of the Company. The
         Company is not proceeding with its counterclaim in this action.
c)       The Company has a defamation action against the plaintiffs mentioned in
         b) above. Discoveries are complete and the next step in the action is a
         trial for which no date has been fixed.

                                      F-20

<PAGE>


Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)

9.     Commitments and contingencies (continued)

        d)     Subsequent to March 31, 2001, the Company agreed to discontinue a
               legal action against Merendon Mining  Corporation Ltd. subject to
               the receipt of a $340,000 cash  settlement.  This settlement will
               be recorded as revenue in the month it is received.
<TABLE>
<CAPTION>

10. Income taxes

     The provision for income taxes recorded in the financial statements differ
     from the amount which would be obtained by applying the statutory income
     tax rate of 45% to the loss for the years as follows:

                                                         2001                2000                1999
<S>                                                    <C>                 <C>                 <C>

     Net loss for the year                             $ (1,185,268)       $  (927,708)        $ (2,847,147)
                                                       ------------------  ------------------  ------------------

     Anticipated income tax recovery                   $(521,518)          (417,468)             (1,281,216)
     Benefit of income tax losses not recognized       521,518             417,468               1,281,216
                                                       ------------------  ------------------  ------------------
     Income tax provision                              $-                  $-                  $-
                                                       ------------------  ------------------  ------------------
</TABLE>

     The Company has non-capital losses for income tax purposes of approximately
     $5.3 million, which are available for application against future taxable
     income. These losses expire between 2002 and 2008. The Company also has tax
     pools for income tax purposes of approximately $11.1 million that are
     available for application against future taxable income.

11.  Differences between Canadian and U.S. GAAP

     Significant differences between Canadian GAAP and U.S. GAAP, which would
     have an effect on these financial statements, are as follows:

<TABLE>
<CAPTION>

a)       Adjustment to net loss for the year
                                                              2001               2000               1999
<S>                                                           <C>                <C>                <C>

         Net loss for the year under Canadian GAAP            $(1,185,268)       $(927,708)         $(2,847,147)
         Deferred exploration costs (i)                       (81,243)           (115,778)          807,539
         Stock based compensation (ii)                        -                  -                  (379,250)
                                                              ---------------    ---------------    ---------------

         Loss for the year under U.S. GAAP                    $(1,266,511)       $(1,043,486)       $(2,418,858)
                                                              ---------------    ---------------    ---------------

         Loss per share under U.S. GAAP                       $(0.07)            $(0.06)            $(0.17)
                                                              ---------------    ---------------    ---------------
</TABLE>

                                      F-21

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


11.      Differences between Canadian and U.S. GAAP (continued)


        (i)    Under  U.S.  GAAP,  exploration  costs,  net of the tax effect of
               flow-through  shares,  related to projects are charged to expense
               as  incurred.   As  such,   the  majority  of  costs  charged  to
               exploration costs written off under Canadian GAAP would have been
               charged to earnings in prior  periods under U.S.  GAAP.  Property
               acquisition  costs are  capitalized  for both  Canadian  and U.S.
               GAAP.

        (ii)   Under U.S. GAAP, a grant of stock options and warrants to acquire
               shares at a price  below the fair  market  value of the shares at
               the time of the grant,  is  compensatory  under APB No. 25 and is
               accounted  for as  compensation  expense.  This has the effect of
               increasing capital stock and deficit under U.S. GAAP.

        (iii)  The   Company's   interest   in  a   joint   venture   has   been
               proportionately   consolidated   in   the   Company's   financial
               statements.  For purposes of U.S.  GAAP,  this interest  would be
               accounted for by the equity method. Net loss, loss per share, and
               shareholders'  equity  under U.S.  GAAP are not  impacted  by the
               proportionate consolidation of this joint venture interest.

<TABLE>
<CAPTION>

     b)  Balance sheet components

                                 2001                           2000                           1999
                                 ---------------------------    --------------------------     --------------------------
                                 Canadian GAAP   U.S. GAAP      Canadian GAAP  U.S. GAAP       Canadian GAAP  U.S. GAAP
<S>                              <C>             <C>            <C>            <C>             <C>            <C>

      Mineral properties and
      deferred exploration       $7,862,415      $67,117        $8,004,148     $158,500        $8,100,426     $169,000
      costs (a) (i)
      Capital stock (a) (ii)     $  21,914,840   $  25,697,758  $  20,963,315  $  24,746,233   $  20,346,416  $  24,214,334
      Deficit (a)                $(13,929,781)   $(25,926,146)  $(12,744,513)  $(24,659,635)   $(11,816,805)  $(23,616,149)
</TABLE>

                                      F-22

<PAGE>

Leader Mining International Inc.
(an exploration stage company) Notes to Financial Statements March 31, 2001,
2000, and 1999 (expressed in Canadian dollars)


11.  Differences between Canadian and U.S. GAAP (continued)


<TABLE>
<CAPTION>

     c)  Shareholders' equity

         Under U.S. GAAP, shareholders' equity would be as follows:

                                                          2001                 2000                 1999
<S>                                                       <C>                  <C>                  <C>

        Under Canadian GAAP                               $7,985,059           $8,218,802           $8,529,611
        U.S. GAAP adjustment to net loss
             Current (a)(i) and (a)(ii)                   (81,243)             (115,778)            428,289
             Cumulative                                   (11,915,122)         (11,799,344)         (12,227,633)
        U.S. GAAP adjustment to capital stock
             Current (a)(ii)                              -                    -                    379,250
             Cumulative                                   3,782,918            3,782,918            3,488,668
                                                          -----------------    -----------------    ----------------

        Under U.S. GAAP                                   $(228,388)           $86,598              $598,185
                                                          -----------------    -----------------    ----------------
</TABLE>

        d)     Recent accounting pronouncements

              (i)   The Company has determined  that there is no impact from the
                    adoption  of  SFAS  No.  133   "Accounting   for  Derivative
                    Instruments and Hedging Activities",  which standardizes the
                    accounting for derivative instruments.

              (ii)  The  weighted  average  number  of  common  shares  used  to
                    calculate the loss per share under Canadian GAAP is equal to
                    weighted average number of common shares under U.S. GAAP.

              (iii) Effective  January  1,  2001,  the  Canadian   Institute  of
                    Chartered  Accountants  issued  a  revised  version  of CICA
                    Handbook  Section 3500  "Earnings Per Share".  This standard
                    complies in all material  respects with SFAS 128,  issued by
                    the Financial Accounting Standards Board.

12.  Subsequent events

a)       On May 4, 2001 the Company signed an option agreement to purchase an
         interest in the Cogburn Project in British Columbia. The Company has
         paid a $10,000 refundable deposit to secure the option. In addition,
         the Company is required to grant 100,000 share purchase warrants for $1
         each upon completion of a positive production feasibility study. The
         Company can acquire a 100% interest in the property at the end of five
         years for consideration of $395,000 cash, $1,515,000 towards mining
         exploration, and issuance of 200,000 common shares of the Company. In
         addition, the Company must pay a royalty of $50,000 on each
         anniversary, beginning May 4, 2002. The payments are due as follows:

                                      F-23

<PAGE>

Leader Mining International Inc.
(an exploration stage company)
Notes to Financial Statements
March 31, 2001, 2000, and 1999
(expressed in Canadian dollars)


12.   Subsequent events (continued)


           i)  Cash payments to Cogburn:

                      $10,000 upon signing of the agreement
                      $10,000 by October 1, 2001
                      $15,000 by May 4, 2002
                      $35,000 by May 4, 2003
                      $50,000 by May 4, 2004
                      $125,000 by May 4, 2005
                      $150,000 by May 4, 2006

           ii) Exploration expenditures on the project:

                      $25,000 before October 1, 2001
                      $40,000 before May 4, 2002
                      $200,000 before May 4, 2003
                      $500,000 before May 4, 2004
                      $750,000 before May 4, 2005


        b)     The Company has reserved  330,000 share purchase options at $0.50
               per  share  for a twelve  month  period  for a new  director.

        c)     Subsequent  to March  31,  2001,  the  Company  closed a  private
               placement  for  1,250,000  shares  at $0.40  per  share for total
               proceeds  of  $500,000.  Each  share  carries  one-half  a  share
               purchase  warrant  with an  exercise  price of $0.52  per  share,
               exercizable for up to eighteen months.


                                      F-24