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

FORM 20-F

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

x Annual report
  pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
  For the fiscal year ending December 31, 2003 or

 ̈ Transition report
  pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
  For the transition period from __________ to __________ (N/A)

Commission File Number:0-28248

VICEROY EXPLORATION LTD.
  
  (formerly registered as Consolidated Trillion Resources Ltd.) 
  (Exact Name of Registrant as Specified in its Charter)

Not applicable
  (Translation of Registrant's Name into English)

Province of British Columbia, Canada
  (Jurisdiction of Incorporation or Organization)

Suite 520  700 West Pender Street, Vancouver, British
  Columbia V6C 1G8 
  (Address of Principal Executive Offices)

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|                    |                                          
|None                |                                          

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

Common shares without par value
  (Title of Class)

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

None
  (Title of Class)

---

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

Nil - First preferred shares without par value 
  Nil - Second preferred shares without par value 
  24,471,158 - Common shares without par value

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

YES x NO  ̈

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

ITEM 17 x ITEM
  18  ̈

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TABLE OF CONTENTS

|PART I |                                                            | 1 
|------ | ---------------------------------------------------------- | --
|1.     | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS      | 1 
|2.     | OFFER STATISTICS AND EXPECTED TIMETABLE                    | 1 
|3.     | KEY INFORMATION                                            | 1 
|A.     | Selected Financial Data.                                   | 1 
|B.     | Capitalization and Indebtedness                            | 3 
|C.     | Reasons for the offer and use of proceeds.                 | 3 
|D.     | Risks                                                      | 3 
|4.     | INFORMATION ON THE COMPANY                                 | 8 
|A.     | History and Development of the Company                     | 8 
|B.     | Business Overview                                          | 11
|C.     | Organizational structure                                   | 12
|D.     | Property, plants and equipment                             | 14
|5.     | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               | 20
|A.     | Operating results.                                         | 23
|B.     | Liquidity and Capital Resources                            | 23
|C.     | Research and development, patents and licenses,
      etc. | 27
|D.     | Trend information                                          | 27
|E.     | Off-balance sheet arrangements                             | 27
|F.     | Tabular Disclosure of Contractual Obligations              | 28
|G.     | Safe Harbour                                               | 28
|6.     | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 | 28
|A.     | Directors and senior management                            | 28
|       | Summary Compensation Table                                 | 31
|       | Long Term Incentive Plans (LTIP) Awards                    | 31
|C.     | Board Practices                                            | 34
|D.     | Employees                                                  | 35
|E.     | Share ownership                                            | 35
|7.     | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTION           | 36
|A.     | Major Shareholders                                         | 36
|B.     | Related Party Transactions                                 | 37
|C.     | Interests of experts and counsel                           | 39
|8.     | FINANCIAL INFORMATION                                      | 40
|A.     | Consolidated Statements and Other Financial Information    | 40
|B.     | Significant Changes                                        | 40
|9.     | THE OFFER AND LISTING                                      | 41
|A.     | Offer and listing details                                  | 41
|B.     | Plan of distribution                                       | 42
|C.     | Markets                                                    | 42
|D.     | Selling Stockholders                                       | 42
|E.     | Dilution                                                   | 42
|F.     | Expenses of the Issue                                      | 42
|10.    | ADDITIONAL INFORMATION                                     | 43
|A.     | Share capital                                              | 43
|B.     | Memorandum and articles of association                     | 43
|C.     | Material Contracts                                         | 51
|D.     | Exchange Controls                                          | 52
|E.     | Taxation                                                   | 52
|F.     | Dividends and paying agents                                | 60
|G.     | Statement by experts                                       | 60
|H.     | Documents on display                                       | 60
|I.     | Subsidiary Information                                     | 60

i

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|11.        | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK                  | 60
|---------- | --------------------------------------------------------------------------------- | --
|12.        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                            | 60
|PART II    |                                                                                   | 60
|13.        | DEFAULT, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 60
|14.        | MATERIAL MODIFICATIONS TO THE RIGHT OF SECURITY
      HOLDERS AND USE OF PROCEEDS | 60
|15.        | CONTROLS AND PROCEDURES                                                           | 61
|16.        | [RESERVED]                                                                        | 61
|A.         | Audit Committee Expert                                                            | 61
|B.         | Code of Ethics                                                                    | 62
|C.         | Principal Accountant Fees and Services                                            | 62
|PART III   |                                                                                   | 62
|17.        | FINANCIAL STATEMENTS                                                              | 62
|18.        | FINANCIAL STATEMENTS                                                              | 63
|19.        | EXHIBITS                                                                          | 63
|SIGNATURES | 66                                                                               

ii

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GENERAL

In this Annual Report on Form 20-F, all references to the
  Company and We refer to Viceroy Exploration Ltd.

We use the Canadian dollar as our reporting currency. All
  references in this document to dollars or $ are expressed
  in Canadian dollars, unless otherwise indicated. See also Item 3  Key
  Information for more detailed currency and conversion information.

Except as noted, the information set forth in this Annual
  Report is as of June 15, 2004 and all information included in this document
  should only be considered correct as of such date.

GLOSSARY OF TERMS USED IN THIS ANNUAL REPORT ON FORM 20-F

|Alteration       | Changes in the chemical or mineralogical composition
        of a rock, generally produced by weathering or hydrothermal solutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Anomalous        | Inconsistent with or deviating from what is usual, normal or expected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Anomaly          | The geographical area corresponding to anomalous geochemical or geophysical
      values.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Assay            | A chemical test performed on a sample of ores or minerals to determine
      the amount of valuable metals contained.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Au               | Gold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Breccia          | Rock consisting of fragments, more or less angular, in a matrix of finer-grained
      material or of cementing material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Carbonate        | A mineral containing the radical CO3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Carried interest | An interest which does not require funding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Cateo            | In Argentina, a cateo is an exploration
        concession granted for a period of up to 1,100 days. In areas where field
        work seasons are limited, only the available field season will be considered
        in determining the 1,100 days. A cateo allows the holder the exclusive
        right to explore the area, subject to certain pre-existing rights of owners
        of minas within the area and adjacent owners of cateos.
        Through exploration, the owner of the cateo may make and file manifestaciones
        of discovery and petition the mining office for the granting of minas.
        A cateo may be up to 10,000 hectares in size. A single legal entity
        may not hold more than 20 cateos or 200,000 hectares of cateos
        in any one province. When the cateo is officially granted, a one
        time payment of about US$0.35 (Pesos $0.80) per hectare is made.

iii

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|Chalcopyrite        | A sulfide mineral containing copper and iron.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Chip Sample         | A sample composed of continuous chips of rock collected over a
      specific surface line and distance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Disseminated        | Mineralization scattered through a volume of host rock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Geology             | A science that deals with the history of the earth as recorded
      in rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Grade               | The concentration of an ore metal in a rock sample,
        given either as weight percent for base metals or in grams per tonne (g/t)
        or ounces per short ton (oz/t) for precious metals. The grade of an ore
        deposit is calculated, often using sophisticated statistical procedures,
        as an average of the grades of a very large number of samples collected
        from throughout the deposit.                                                                                                                                                                                   
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|g/t                 | Grams per tonne                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Intrusive/intrusion | An igneous rock that was once molten and has intruded
      into pre-existing rokcs in that state, after which it cools.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|km                  | Kilometre.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|m                   | Metre                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Manifestaciones     | In Argentina, manifestaciones of discovery
        are official notices filed with the mining department indicating that
        the person filing (who must be the owner of the cateo in an area
        covered by a cateo) has made a discovery. The filing and acceptance
        of such a notice constitutes the first step in converting a discovery
        to a mina. A manifestacion of discovery may cover one or
        more claims in the case of either a vein or disseminated deposit. The
        size of the manifestaciones and the annual payments are the same
        as those for minas.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|MASA                | An indirect 100% owned Argentinean subsidiary which holds all of
      the Companys Argentinean assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Mina                | In Argentina, a mina is a real property
        interest. It is a right to explore on a permanent basis after the completion
        of an official survey for as long as the right is diligently utilized
        and semi-annual payments of US$17.50 (Pesos $40) per claim are made. A
        mina may consist of one or several claims or pertinencias.
        In the case of vein deposits, each claim is a maximum of 200 by 300 metres
        or six hectares; for disseminated deposits, each claim is up to one square
        kilometre or 100 hectares.                                        
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Mineralization      | Minerals of value occurring in rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|MRDI                | Mineral Resources Development Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

iv

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|Ore        | A naturally occurring material from which one or
        more minerals may be mined and sold at a profit, or from which some part
        may be profitably separated.
|---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           |                                                                                                                                                                       
|ppb        | Parts per billion                                                                                                                                                     
|           |                                                                                                                                                                       
|ppm        | Parts per million                                                                                                                                                     
|           |                                                                                                                                                                       
|Pyrite     | An iron sulfide mineral.                                                                                                                                              
|           |                                                                                                                                                                       
|Pyrrhotite | A magnetic sulfide of iron.                                                                                                                                           
|           |                                                                                                                                                                       
|QDD        | Quebrada del Diablo, a gold bearing carbonate zone on the Gualcamayo
      Property.                                                                                  
|           |                                                                                                                                                                       
|RC         | Reverse circulation.                                                                                                                                                  
|           |                                                                                                                                                                       
|Skarn      | A style of alteration characterized by iron and magnesium bearing
      aluminosilicate materials such as garnet and diopside.                                        
|           |                                                                                                                                                                       
|Sulphide   | A compound containing sulphur and some other metal.                                                                                                                   

v

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NOTE REGARDINGFORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains statements that constitute
  "forward-looking statements" within the meaning of Section 27A of the Securities
  Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements
  appear in a number of different places in this Annual Report and can be identified
  by words such as "estimates", "projects", "expects", "intends", "believes",
  "plans", or their negatives or other comparable words. Such forward-looking
  statements involve known and unknown risks, uncertainties and other factors
  which may cause our actual results, performance or achievements to be materially
  different from any future results, performance or achievements that may expressed
  or implied by such forward-looking statements. The statements, including the
  statements contained in Item 3D Risk Factors, Item 4B Business
  Overview, Item 5 Operating and Financial Review and Prospects
  and Item 11 Quantitative and Qualitative Disclosures About Market Risk,
  are inherently subject to a variety of risks and uncertainties that could cause
  actual results, performance or achievements to differ significantly. Forward-looking
  statements include statements regarding the outlook for our future operations,
  plans and timing for our exploration programs, statements about future market
  conditions, supply and demand conditions, forecasts of future costs and expenditures,
  the outcome of legal proceedings, and other expectations, intentions and plans
  that are not historical fact. You are cautioned that any such forward-looking
  statements are not guarantees and may involve risks and uncertainties. Our actual
  results may differ materially from those in the forward-looking statements due
  to risks facing us or due to actual facts differing from the assumptions underlying
  our predictions. Some of these risks and assumptions include:

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

We advise you that these cautionary remarks expressly qualify
  in their entirety all forward-looking statements attributable to us or persons
  acting on our behalf. We assume no obligation to update our forward-looking
  statements to reflect actual results, changes in assumptions or changes in other
  factors affecting such statements. You should carefully review the cautionary
  statements and risk factors contained in this and other documents that we file
  from time to time with the Securities and Exchange Commission.

vi

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PART I

1.     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
  AND ADVISORS

This Form 20-F is being filed as an annual report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this item.

2.     OFFER STATISTICS AND EXPECTED TIMETABLE

This Form 20-F is being filed as an annual report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this item.

3.     KEY INFORMATION

A.     Selected Financial Data

The following tables summarize selected financial data for
  the Company (stated in Canadian dollars) prepared in accordance with Canadian
  generally accepted accounting principles (Canadian GAAP) and in
  accordance with United States generally accepted accounting principals (US
  GAAP). The information in the table was extracted from the more detailed
  financial statements and related notes included herein and should be read in
  conjunction with these financial statements and with the information appearing
  under the heading Item 5  Operating and Financial Review and Prospects.
  Note 8 of the financial statements of the Company included herein sets forth
  the measurement differences were such information to be presented in accordance
  with US GAAP.

Results for the periods ended December 31, 2003 and June 30,
  2003 are not necessarily indicative of results for future periods.

INFORMATION IN ACCORDANCE WITH CANADIAN GAAP:

(Canadian dollars)

|                                         | Fiscal Year
      July 1, 2003 to 
      December 31, 
      2003 | Fiscal Year
      March 31, 2003
      (date of 
      incorporation) to
      June 30, 2003 | Twelve Months
      Ended
      December 31,
      2002 | Twelve Months
      Ended
      December 31, 
      2001
|---------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------- | --------------------------------------------------------
|Total Revenues                           | -                                                                 | -                                                                                            | -                                                       | -                                                       
|Net Income (Loss)                        | (1,436,596)                                                       | (10,813)                                                                                     | -                                                       | -                                                       
|Income (Loss) per common
      share (1) | (0.10)                                                            | (0.00)                                                                                       | -                                                       | -                                                       
|Interest Income                          | 7,604                                                             | -                                                                                            | -                                                       | -                                                       
|Exploration Properties                   | 6,369,419                                                         | 6,015,995                                                                                    | -                                                       | -                                                       
|Total Assets                             | 11,324,275                                                        | 6,572,056                                                                                    | -                                                       | -                                                       
|Long term debt                           | -                                                                 | -                                                                                            | -                                                       | -                                                       
|Total shareholders equity               | 11,089,588                                                        | 6,504,383                                                                                    | -                                                       | -                                                       
|Capital Stock                            | 11,284,526                                                        | 6,515,196                                                                                    | -                                                       | -                                                       
|Common Shares Outstanding                | 24,471,158                                                        | 13,800,000                                                                                   | -                                                       |                                                         

|(1) | The net loss per share amounts are the same on both a basic and a diluted
      basis.
|--- | --------------------------------------------------------------------------------------

1

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INFORMATION IN ACCORDANCE WITH US GAAP:

(Canadian dollars)

|                                         | Fiscal Year
      July 1, 2003 to
      December 31,
      2003 | Fiscal Year
      January 1, 2003
      to
      June 30, 2003 | Twelve Months
      Ended
      December 31,
      2002 | Twelve Months
      Ended 
      December 31,
      2001
|---------------------------------------- | --------------------------------------------------------------- | -------------------------------------------------------------- | ------------------------------------------------------- | --------------------------------------------------------
|Total Revenues                           | -                                                               | -                                                              | -                                                       | -                                                       
|Net Income (Loss)                        | (1,790,020)                                                     | (132,846)                                                      | (2,020,738)                                             | (1,025,128)                                             
|Income (Loss) per common
      share (1) | (0.12)                                                          | (0.00)                                                         | (0.15)                                                  | (0.07)                                                  
|Interest Income                          | 7,604                                                           | -                                                              | -                                                       | -                                                       
|Exploration Properties                   | -                                                               | -                                                              | -                                                       | -                                                       
|Total Assets                             | 4,945,060                                                       | 556,061                                                        | -                                                       | -                                                       
|Long term debt                           | -                                                               | -                                                              | -                                                       | -                                                       
|Total shareholders equity               | 4,710,373                                                       | 488,388                                                        | -                                                       | -                                                       
|Capital Stock                            | 11,284,526                                                      | 6,515,196                                                      | -                                                       | -                                                       
|Common Shares Outstanding                | 24,471,158                                                      | 13,800,000                                                     | -                                                       | -                                                       

|(1) | The net loss per share amounts are the same on both a basic and a diluted
      basis.                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | For December 31, 2002 and 2001, 13,800,000 was used
        as the weighted average share number, being the opening number of shares
        issued by the Company on June 30, 2003.

We have not declared or paid any dividends since incorporation.

Currency and Exchange Rates

In this Annual Report, unless otherwise specified, all monetary
  amounts are expressed in Canadian dollars. On June 15, 2004, the exchange rate,
  based on the noon buying rate published by the Bank of Canada, for the conversion
  of Canadian dollars into United States dollars (the Noon Rate of Exchange)
  was $1.3690.

The following table sets out the highest and lowest exchange
  rates for one United States dollar, expressed in terms of one Canadian dollar,
  for each month during the previous six months.

|                | 2004   | 2003  
|--------------- | ------ | ------
|June
      1-15 | May    | April 
|High for period | 1.3820 | 1.4003
|Low for period  | 1.3396 | 1.3555

The following table set out the average exchange rates for
  one United States dollar (US$), expressed in terms of one Canadian
  dollar (Cdn$) for the two financial years since incorporation calculated
  by using the average of the Noon Rate of Exchange during the period.

2

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|                       | Financial Year Ended
|---------------------- | --------------------
|December 31, 2003(1)   | June 30, 2003(2)    
|Average for the period | 1.3482              

|(1) | For period from July 1, 2003 to December 31, 2003.                      
|--- | ------------------------------------------------------------------------
|(2) | For period from March 31, 2003 (date of incorporation) to June 30, 2003.

B.     Capitalization and Indebtedness

This Form 20-F is being filed as an annual report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this item.

C.     Reasons for the offer and use of proceeds.

This Form 20-F is being filed as an annual report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this item.

D.     Risks

An investment in our common shares is highly speculative and
  subject to a number of risks. Only those persons who can bear the risk of the
  entire loss of their investment should participate. An investor should carefully
  consider the risks described below and the other information that we file with
  the Securities and Exchange Commission and with Canadian securities regulators
  before investing in our common shares. The risks described below are not the
  only ones faced. Additional risks that we are aware of or that we currently
  believe are immaterial may become important factors that affect our business.
  If any of the following risks occur, or if others occur, our business, operating
  results and financial condition could be seriously harmed and the investor may
  lose all of their investment.

Nature of the Securities

The purchase of our common shares involves a high degree of
  risk and should be undertaken only by investors whose financial resources are
  sufficient to enable them to assume such risks and who have no need for immediate
  liquidity in their investment. Our common shares should not be purchased by
  persons who cannot afford the loss of their entire investment. Furthermore,
  an investment in our securities should not constitute a major portion of an
  investors portfolio.

No Revenues

We have not generated any revenues from our business activities
  since our incorporation. Our plan of operations involves the completion of exploration
  programs on our mineral properties. There is no assurance that these exploration
  activities will result in the establishment of commercially exploitable mineral
  deposits on our mineral properties. Even if commercially exploitable mineral
  deposits are discovered, we will require substantial additional financing in
  order to carry out the full exploration and development of our mineral properties
  before we are able to achieve revenues from sales of mineral resources that
  we are able to extract.

3

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Exploration and Development

Resource exploration and development is a speculative business
  and involves a high degree of risk. There is no known body of commercial ore
  on the Argentine properties. There is no certainty that the expenditures to
  be made by us in the exploration of the Argentine Property or otherwise will
  result in discoveries of commercial quantities of minerals. The marketability
  of natural resources which may be acquired or discovered will be affected by
  numerous factors beyond the control of the Company. These factors include market
  fluctuations, the proximity and capacity of natural resource markets and processing
  equipment, government regulations, including regulations relating to prices,
  taxes, royalties, land tenure, land use, importing and exporting of minerals
  and environmental protection. 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.

Financing Risks

Additional funding will be required to complete the funding
  of the proposed exploration program on the Argentine Property and to conduct
  any other exploration programs. If our proposed exploration programs are successful,
  additional funds will be required for the development of an economic mineral
  body and to place it in commercial production. The only sources of future funds
  presently available to us are the sale of equity capital, or the offering by
  us of an interest in its properties to be earned by another party or parties
  carrying out exploration or development thereof. There is no assurance that
  any such funds will be available for operations. Failure to obtain additional
  financing on a timely basis could cause us to reduce or terminate our proposed
  operations.

Dilution

We plan to focus on exploring our Argentine Property, but
  to continue such activities, other than completion of phase one exploration
  program on the Gualcamayo, and to explore other properties will require additional
  funds. We will have to sell additional securities including, but not limited
  to, its common stock or some form of convertible debentures, the effect of which
  will result in a substantial dilution of the equity interests of any persons
  who may become shareholders of the Company.

No History of Earnings

We have only recently commenced operations and therefore have
  no history of earnings or of a return on investment, and there is no assurance
  that any of the properties that we have or will acquire will generate earnings,
  operate profitably or provide a return on investment in the future. We have
  no plans to pay dividends for some time in the future. The future dividend policy
  of the Company will be determined by its board of directors.

Dependence on Management

We are dependent upon the personal efforts and commitment
  of its existing management which is responsible for the development of future
  business. To the extent that managements services would be unavailable
  for any reason, a disruption to the operations of the Company could result,
  and other persons would be required to manage and operate the Company.

4

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Title Matters

The acquisition of title to mineral properties is a very detailed
  and time-consuming process. Title to and the area of mineral properties may
  be disputed. While we have diligently investigated title to all the Argentine
  Properties and have received a title opinion from Dra. Patricia Inés
  Mattar an independent legal counsel of San Juan, Argentina, this should not
  be construed as a guarantee of title to any of the Argentine Properties. The
  Argentine Properties may be subject to prior unregistered agreements or transfers
  and title may be affected by undetected defects. We have not surveyed the boundaries
  of any of the Argentina Properties and consequently the boundaries of the Argentine
  Properties may be disputed. The Argentine Properties may also be subject to
  prior unregistered agreements of transfer or aboriginal land claims, and title
  may be affected by undetected defects. All of the properties are held 100% by
  Minas Argentina S. A. subject to certain royalty agreements.

Permits and Licenses

Our operations will require licenses and permits from various
  governmental authorities. We believe we will be able to obtain in the future
  all necessary licences and permits to carry on the activities which we intends
  to conduct, and we intends to comply in all material respects with the terms
  of such licenses and permits. There can be no guarantee, however, that we will
  be able to obtain and maintain, at all times, all necessary licenses and permits
  required to undertake its proposed exploration and development or to place its
  properties into commercial production and to operate mining facilities thereon.
  In the event of commercial production the cost of compliance with changes in
  governmental regulations has the potential to reduce the profitability of operations
  or preclude the economic development of the property.

Foreign Countries and Regulatory Requirements

Even if our properties are proven to host economic reserves
  of metals, factors such as political instability, terrorism, opposition from
  local constituents, or governmental expropriation or regulation may prevent
  or restrict mining of any such deposits or repatriation of profits. Our mineral
  properties are located in Argentina. Mineral exploration and mining activities
  in Argentina may be affected by varying degrees by political stability and government
  regulations relating to the mining industry. Any changes in regulations or shifts
  in political conditions are beyond our control of and may adversely affect our
  business. Operations may be affected in varying degrees by government regulations
  with respect to restrictions on production, price controls, export controls,
  income taxes, expropriation of property, environmental legislation and mine
  safety. Argentinas status as a developing country may make it more difficult
  for us to obtain any required exploration, development and production financing
  for our projects.

Argentina

Mining Industry

Mineral companies are subject to both the Argentinean Mineral
  Code and the Environmental Protection Mining Code. We believe we are in material
  compliance with both the Argentinean Mineral Code and the Environmental Protection
  Mining Code.

5

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Mining Law in Argentina

The right to explore a property (a cateo)
  and the right to exploit (a mina) are granted by administrative
  or judicial authorities via concessions. Foreign individuals and corporations
  may apply for and hold cateos and minas, at the same level as
  local investors without differences of any nature. Cateos and minas
  are freely transferable upon registration with the Provincial Mining Registry
  where title to the cateo or mina was first registered. Upon the
  grant of a legal concession of a cateo or a mina, parties have
  the right to explore the land or to own the mine and the resources extracted
  therefrom.

Regulatory Environment

We believe that the present government is deeply committed
  to opening up the economy and there has been significant progress in reducing
  import duties and export taxes. Local industry has been protected for many years
  and the transition to greater international competitiveness will take some time.

Importers and exporters must be registered with the customs
  agency. Except for a very limited list of items requiring prior approval, there
  ae no import restrictions. Import of pharmaceuticals, drugs, foodstuffs, defense
  materials and some other items require the approval of the applicable government
  authority. Import duties are being progressively reduced in accordance with
  the free enterprise and free-trade policy being implemented by the government
  in order to become more competitive globally. Duties range between zero and
  20%. Restrictions on exports are not generally imposed.

Political Environment and Economy

In recent years Argentina has experienced a number of changes
  to its government. The current president, Nestor Kirchner, came to power in
  May 2003. The country continues to struggle with its external debt. Negotiations
  continue with the IMF and several of its other major creditors. The Argentine
  economy has been troubled and uncertain since the late 1990s. We believe
  that there are currently some positive indications that the economy is improving.

Potential Profitability Depends Upon Factors Beyond the Control of the Company

If minerals were discovered on the Argentine Properties, the
  potential profitability of such properties is dependent upon many facts beyond
  our control. For instance, world prices of and markets for minerals are unpredictable,
  highly volatile, potentially subject to governmental fixing, pegging and/or
  controls and respond to changes in domestic, international, political, social
  and economic environments. Another factor is that rates of recovery of minerals
  from mined ore may vary from the rate experienced in tests and a reduction in
  the recovery rate will adversely affect profitability and, possibly, the economic
  viability of the property. Profitability also depends on the costs of operations,
  including costs of labour, equipment, electricity, environmental compliance
  or other production inputs. Such costs will fluctuate in ways we cannot predict
  and are beyond our control, and such fluctuations will impact on profitability
  and may eliminate profitability altogether. Additionally, due to worldwide economic
  uncertainty, the availability and cost of funds for development and other costs
  have become increasingly difficult, if not impossible, to project. These changes
  and events may materially affect our financial performance.

6

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Influence of Mineral Prices

Factors beyond our control may affect the marketability and
  price of any minerals discovered, if any. Resource prices have fluctuated widely
  in recent years and are affected by numerous factors beyond our control, including
  international, economic and political trends, expectations of inflation, currency
  exchange fluctuations, interest rates, global or regional consumptive patterns,
  speculative activities and increased production due to new extraction developments
  and improved extraction and production methods. The effects of these factors
  cannot be accurately predicted.

Competitive Nature of the Mining Industry

There is aggressive competition within the mining industry
  for the discovery and acquisition of properties considered to have commercial
  potential. We will be competing with other mining companies, many of which have
  greater financial resources than we do, for the acquisition of mineral claims,
  leases and other mineral interests as well as for the recruitment and retention
  of qualified employees and other personnel. There can be no assurance that the
  necessary funds can be raised or that any projected work will be completed.

Environmental, Health and Safety Regulation of Resource Industry

Mining operations are subject to federal, provincial and local
  laws relating to the protection of the environment, including laws regulating
  removal of natural resources from the ground and the discharge of materials
  into the environment. Mining operations are also subject to federal, provincial
  and local laws and regulations which seek to maintain health and safety standards
  by regulating the design and use of mining methods and equipment. Various permits
  from government bodies are required for mining operations to be conducted; no
  assurance can be given that such permits will be received. No assurance can
  be given that environmental standards imposed by federal, provincial or local
  authorities will not be changed or that any such changes would not have material
  adverse effects on our activities. Moreover, compliance with such laws may cause
  substantial delays or require capital outlays in excess of those anticipated,
  thus causing an adverse effect on the Company. Additionally, we may be subject
  to liability for pollution or other environmental damages, which we may not
  insure against.

Penny Stock Regulation

The U.S. Securities and Exchange Commission (SEC)
  has adopted rules that regulate broker-dealer practices in connection with transactions
  in penny stocks. Generally, penny stocks are equity securities with
  a price of less than US$5.00 (other than securities registered on certain national
  securities exchanges or quoted on the NASDAQ system). Since our shares are traded
  for less than US$5.00 per share, the shares are subject to the SECs penny
  stock rules.

Currency Fluctuations

Our functional currency is the Canadian dollar. If we locate
  minerals on our properties, our market for sale of such minerals will be in
  foreign countries and may be subject to foreign currency fluctuations. Such
  fluctuations may materially affect its financial position and results.

7

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Uninsurable Risks

In the course of exploration, development and production of
  mineral properties, several risks and, in particular, unexpected or unusual
  geological or operating conditions, may occur. It is not always possible to
  fully insure against such risks, and we may decide not to take out insurance
  against such risks as a result of high premiums or other reasons. Should such
  liabilities arise they could reduce or eliminate any future profitability and
  result in an increase in costs and a decline in value of our securities.

We are not insured against most environmental risks. Insurance
  against environmental risks (including potential liability for pollution or
  other hazards as a result of the disposal of waste products occurring from exploration
  and production) has not been generally available to companies within the industry.
  We will periodically evaluate the cost and coverage of the insurance against
  certain environmental risks that is available to determine if it would be appropriate
  to obtain such insurance. Without such insurance, and if we becomes subject
  to environmental liabilities, the payment of such liabilities would reduce or
  eliminate our available funds or could exceed the funds we have to pay such
  liabilities and result in bankruptcy. Should we are unable to fund fully the
  remedial cost of an environmental problem, we might be required to enter into
  interim compliance measures pending completion of the required remedy.

See Item 10E Additional Information  Taxation
  for a more detailed discussion of material United States federal income tax
  consequences for U.S. Shareholders.

4.     INFORMATION ON THE COMPANY

A.     History and Development of the Company

Incorporation

Viceroy Exploration Ltd. (We or the Company) was incorporated under the Company Act, (British Columbia) on March 31, 2003 .

Offices

Our head office and the registered and records office, are
  located at Suite 520  700 West Pender Street, Vancouver, British Columbia,
  V6C 1G8, Canada. Our telephone number is 604-669-4777 and our website is www.viceroyexploration.com.

Viceroy Arrangement

We entered into an agreement dated May 15, 2003 to participate
  in a statutory plan of arrangement (the Viceroy Arrangement) involving
  Viceroy Resource Corporation (Viceroy Resource), Quest Investment
  Corporation (Quest), Avatar Petroleum Inc. (Avatar),
  Arapaho Capital Corp. (Arapaho), SpectrumGold Inc. (SpectrumGold),
  Oro Belle Resources Corporation (Oro Belle) and 650399 B.C. Ltd.
  (SpectrumSub). The Viceroy Arrangement was approved by the Supreme
  Court of British Columbia and was completed on June 30, 2003. On completion
  of the Viceroy Arrangement, the following events took place in order to complete
  our corporation organization:

8

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|1. | We acquired Oro Belle from Viceroy Resource in consideration
        of the issue of an aggregate of 13,800,000 of our common shares to Viceroy
        Resource. Oro Belle was formerly a wholly owned subsidiary of Viceroy
        Resource that owned Viceroy Resources Argentine mineral exploration
        assets (the Argentine Properties) and held approximately $500,000
        cash.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Viceroy Resource distributed 11,150,400 of our common shares to the shareholders
      of Viceroy Resource effective as of June 30, 2003.                                                                                                                                                                                                                                                           

We did not carry on any material business operations from March
  31, 2003, the date of our incorporation, to June 30, 2003, the date of the closing
  of the Viceroy Arrangement.

Trillion Arrangement

In July 12, 2003, we executed a letter agreement (Letter
  Agreement) providing for the acquisition of all the shares of Consolidated
  Trillion Resources Ltd., (Trillion) by way of a statutory plan of
  arrangement under the Company Act (British Columbia) (the Trillion Arrangement).
  Closing of the Trillion Arrangement was conditional upon, among other things,
  receipt of all regulatory and shareholder approvals and the Company obtaining
  a listing on a recognized Canadian national stock exchange and raising a minimum
  of $1 million. On November 14, 2003, we were granted a Tier 1 listing on the
  TSX Venture Exchange under the symbol VYE. On November 18, 2003,
  we closed a private placement of 4,200,000 units at $0.50 per unit for a total
  consideration of $2,100,000. Each unit consisted of one common share and one
  share purchase warrant granting the holder the right to purchase one common
  share of the Company at a price of $0.60 until November 18, 2006. We issued
  6,471,158 common shares to the shareholders of Trillion on completion of the
  Trillion Arrangement.

The Trillion Arrangement closed on December 2, 2003 and resulted
  in us acquiring all of the common shares of Trillion and merging Trillion with
  Oro Belle to continue under the name Oro Belle. Prior to the completion of the
  Trillion Arrangement, Trillion's common shares were registered pursuant to Section
  12(g) of the Exchange Act. As a result of the exchange of our common shares
  for Trillion common shares, our common shares were deemed registered under the
  Exchange Act by application of Rule 12g-3(a) of the Exchange Act. The Company
  is the successor issuer to Trillion in this transaction.

In December 2003, Patrick Downey was appointed President and
  Chief Executive Officer of the Company. Mr Downey was previously President and
  CEO of Trillion. Ronald Netolitzky resigned as President of the Company and
  was appointed Chairman.

Pursuant to the Trillion Arrangement, we acquired cash of
  $2,816,280 and a 30% carried interest up to total expenditures of US$300,000
  in two mineral exploration properties in Zimbabwe.

British Columbia Business Corporations Act

In March 2004, the Province of British Columbia, in which
  the Company is incorporated, adopted the Business Corporations Act (British
  Columbia) (the New Act) which replaced the Company Act (British
  Columbia) (the Former Act) and is designed to provide greater flexibility
  and efficiency for British Columbia companies. The New Act adopts many provisions
  similar to those contained in corporate legislation elsewhere in Canada. The
  New Act also uses new forms and terminology, most particularly a Memorandum
  is now called a Notice of Articles. We have taken steps to bring
  our charter documents into conformity with the New Act and to that end have
  filed our Notice of Articles,

9

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which replaces our Memorandum, with the Registrar of Companies.

At our Annual General and Special Meeting held on April 29,
  2004, we received shareholder approval of certain amendments to our Notice of
  Articles and to our existing articles (Articles) with a view to
  incorporating certain provisions of the New Act. Our Notice of Articles include,
  amongst others, the following changes:

|1.  | in order to pass a special resolution, a two-thirds majority of those
      votes cast is allowed instead of three-quarters as required under the Former
      Act;                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2.  | our authorized capital was increased from 300,000,000
        shares divided into (i) 100,000,000 first preferred shares without nominal
        or par value; (ii) 100,000,000 second preferred shares without par value;
        and (iii) 100,000,000 common shares without par value to an unlimited
        number of common shares, an unlimited number of first preferred shares
        and an unlimited number of second preferred shares without par value;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3.  | incorporation of new terminology used in the New
        Act, including changing references to shareholder(s) from
        member(s) and to the Business Corporations Actfrom the Company Act;                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4.  | deletion or amendment of certain provisions which are inconsistent with
      the New Act;                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5.  | deletion of the requirement for pro rata purchase of shares;                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6.  | changing the quorum for shareholders meetings from two shareholders
      to one shareholder present in person or represented by proxy;                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|7.  | the chairman of a shareholders meeting has a second or casting
      vote in the event of a tie;                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|8.  | requiring annual general meetings to be held each
        calendar year and not more than fifteen months (was thirteen months under
        the Former Act) after the holding of the last preceding annual general
        meeting;                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9.  | allowing shareholder meetings to be held outside British Columbia, if
      the location is approved by directors resolutions;                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10. | allowing the directors to approve a change of name of the Company without
      the necessity for shareholder approval; and                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|11. | the directors causing the Company to indemnify officers on the same basis
      upon which directors are required to be indemnified.                                                                                                                                                                                                                                                                                                                                 

Exploration

We are a mineral exploration company. On June 30, 2003, we
  acquired our portfolio of Argentinean properties at a value of $6.015 million,
  of which $5.225 million was ascribed to the Gualcamayo project. Since acquiring
  the Argentine mineral properties (see Item 4D for a description of the properties)
  in June 2003, we have spent an aggregate of $759,866 to the end of the
  first quarter 2004 on acquisition and exploration expenditures primarily on
  the Gualcamayo Project, which is our main focus. A breakdown of the expenditures
  is as follow:

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|                                            | Acquisition
      cost (1)
      $ | Exploration
      expenditures
      $ | Total
      $
|------------------------------------------- | ---------------------------------- | -------------------------------------- | -------------
|                                            |                                    |                                        |              
|Gualcamayo                                  | 5,255,808                          |                                        |              
|Purchase of adjacent land                   | 42,962                             |                                        |              
|Drilling                                    |                                    | 65,037                                 | 65,037       
|Geologists/engineers fees, travel/lodging |                                    | 225,040                                | 225,040      
|Field support                               |                                    | 122,775                                | 122,775      
|Assays                                      |                                    | 51,160                                 | 51,160       
|Property permits/licences/taxes             |                                    | 99,408                                 | 99,408       
|Road maintenance/drill pads                 |                                    | 25,910                                 | 25,910       
|Location administration/office support      |                                    | 3,979                                  | 3,979        
|Water samples                               |                                    | 87,837                                 | 87,837       
|Non-recoverable IVA                         |                                    | 35,758                                 | 35,758       
|                                            | 5,298,770                          | 716,904                                | 6,015,674    
|                                            |                                    |                                        |              
|Salamanca                                   | 260,187                            |                                        | 260,187      
|Las Flechas                                 | 200,000                            |                                        | 200,000      
|Evelina                                     | 200,000                            |                                        | 200,000      
|Las Carachas                                | 200,000                            |                                        | 200,000      
|                                            | 6,058,957                          | 716,904                                | 6,775,861    

|(1) | The total acquisition cost of the exploration properties
        at June 30, 2003 pursuant to the Viceroy Arrangement was $6,015,995. In
        the first quarter of 2004, we purchased additional land for $42,962.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We are presently engaged in exploration on our Gualcamayo project, as described
  in further detail under Item 4.B  Business Overview.

B.     Business Overview

Since the completion of the Viceroy Arrangement on June 30,
  2003, our focus has been the acquisition and exploration of the Argentinean
  mineral properties (see Item 4.D  Property, plants and equipment
  for further information), with particular emphasis on our most advanced project,
  the Gualcamayo Property.

From July 2003 to early 2004, we carried out a first phase
  exploration program on the Gualcamayo property designed to expand the surface
  trace of the mineralized zones and to identify specific targets for drilling.
  Based on the results of this phase of exploration, several drill targets were
  identified. A 9,000 metre reverse circulation drilling program is underway,
  budgeted at $1.15 million inclusive of a 10% contingency. A drill contract was
  signed in March 2004 and drilling commenced in April 2004.

We raised private placement financing of $2,100,000 in November
  2003. We raised further financing of $2,679,640 during our first quarter of
  2004, of which $2,520,000 was from the exercise of the 4,200,000 warrants issued
  in connection with the November private placement, $48,000 from exercise of
  80,000 of the total 350,000 brokers warrants issued in connection with
  the private placement and $111,640 from exercise of stock options for 251,000
  shares. We completed these financings in order to raise the funds necessary
  for us to pursue our exploration programs on our Argentinean mineral properties.

In February 2004, with the termination of the arrangement
  with a company related to Viceroy Resource by virtue of common directors and
  officers for the provision of administrative and corporate services and office
  space, we established the Vancouver head office at 520  700 West Pender
  Street, Vancouver,

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BC. We signed an office lease for the premises to July 31,
  2007 at an annual rate of $30,000, payable monthly, with payments beginning
  August 1, 2004. New staff was recruited, including a receptionist, a corporate
  communications assistant, corporate secretary and chief financial officer.

Also in February 2004, we retained MacDougall Consultants
  Ltd., an Ontario based company specializing in corporate finance and communications,
  to provide investor relations services. The agreement between the Company and
  McDougall is for a term of five years and may be terminated upon one months
  written notice after May 1, 2004. McDougall will receive a consulting fee up
  to $4,800 per month with an option to purchase up to 200,000 common shares of
  the Company, subject to vesting requirements. As of March 31, 2004, 44,750 of
  their options had been earned.

In April, 2004, we reached an agreement with Tenke Mining
  Corp. (Tenke) whereby Tenke may earn a 75% interest in our Las Flechas
  Project through expenditures with pre-agreed minimum annual exploration expenditures
  aggregating to US$4.5 million over 5 years. The agreement is subject to all
  requisite regulatory approvals and execution of a detailed earn-in agreement
  within 45 days, which, on May 12, 2004 was extended by a further 45 days. Tenke
  will commence a first full season of concerted exploration on Las Flechas staring
  next October, at the beginning of the 2004/2005 high Andes exploration season.

The first set of results from the current 9,000 metre drill
  program on the Gualcamayo Property have been released (see Item 4-D for more
  details). Plans for the year ahead are to:

- complete the drilling of the identified targets;
- complete 4,000 metres of drilling in the main QDD target to increase the confidence
    in the resource calculations in terms of National Instrument 43-101;
- complete an independent scoping study of the Gualcamayo Property;
- initiate a prefeasibility study of the Gualcamayo gold resource; and
- commence a regional exploration program on Gualcamayo, including the Salamanca
    Project.

Competition

We compete with other mineral resource exploration companies
  for financing, for the acquisition of new mineral properties and for the recruitment
  and retention of qualified employees and other personnel. Many of the mineral
  resource exploration and development companies with whom we compete have greater
  financial and technical resources than those available to us. Accordingly, these
  competitors may be able to spend greater amounts on acquisitions of mineral
  properties of merit, on exploration of their mineral properties and on development
  of their mineral properties. In addition, they may be able to afford more geological
  expertise in the targeting and exploration of mineral properties. This competition
  could result in competitors having mineral properties of greater quality and
  interest to prospective investors who may finance additional exploration and
  development. This competition could adversely impact on our ability to finance
  further exploration and to achieve the financing necessary for us to develop
  our mineral properties.

C.     Organizational structure

The following chart sets out our corporate structure as at the date of this annual report:

12

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13

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D.     Property, plant and equipment

Cautionary Note to U.S. Investors

As a British Columbia corporation and a reporting issuer
  in several Canadian jurisdictions, we are subject to certain rules and regulations
  issued by Canadian securities commissions. Under these rules, we are required
  to provide information regarding our properties, including mineralization, drilling,
  sampling and analysis and mineral resource estimates. Further, we are required
  to describe our properties utilizing mining and geological terminology such
  as indicated resources and inferred resources that are
  required by Canadian regulations but are not recognized by the US Securities
  and Exchange Commission (SEC). For clarification, we have no properties
  that contain reserves as defined by the SEC and we have provided
  the following property information in accordance with National Instrument 43-101.

Our properties are located in Argentina and are held by Minas
  Argentinas, S.A. (MASA), an indirect Argentinean subsidiary. MASA
  controls a portfolio of mineral projects consisting of a land position in excess
  of 70,000 hectares, all located in the Province of San Juan. The principal MASA
  property is the Gualcamayo gold project. In addition to Gualcamayo, MASA controls
  four other less advanced properties including Las Flechas, Salamanca, Evelina,
  and Las Carachas/La Brea.

The Argentine Properties were acquired under the Viceroy Arrangement
  as described in Item 4-A. All of the properties are held 100% by MASA, subject
  to certain royalty agreements. All properties are subject to a 1% net smelter
  return royalty agreement with IMA Exploration Inc., a mineral exploration company
  located in Vancouver, Canada. The Salamanca property is subject to a 2% production
  royalty with the original owners, the Ridao brothers who reside in La Rioja,
  Argentina. A title opinion has been received which was completed by Dra. Patricia
  Inés Mattar an independent legal counsel of San Juan, Argentina. In the
  opinion of Dra. Mattar, all properties are in good standing.

In Argentina, the right to explore a cateo and the
  right to exploit a mina are granted by the mining authority. Foreign
  individuals or companies may apply for and hold cateos and minas, in the same
  manner as local residents. Cateos and minas are freely transferable
  upon registration. Upon the grant of a legal concession of a cateo or
  mina, the holder has the right to explore the land or to own the mina
  and the resources extracted therefrom.

We have obtained a title opinion and diligently investigated
  title to all our Argentine properties, however title to and the area of exploration
  properties may be disputed. The properties may be subject to prior unregistered
  agreements or transfers and title may be affected by undetected defects.

Gualcamayo Project

Property Description and Location

The Gualcamayo Project is located in west central Argentina
  in the San Juan Province approximately 220 kilometres north of the city of San
  Juan. The Gualcamayo Project consists of approximately 24,600 hectares of land
  and is subject to a 1% production-based net smelter return royalty.

14

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Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Gualcamayo Project is accessible throughout the year from
  the city of San Juan by paved and dirt roads. The climate is semi-arid with
  summer highs exceeding 40o Celsius and winter temperatures averaging 15o
  Celsius with sub-zero temperatures reached. The property is located in rugged
  terrain, with elevations in the project area ranging from 1,600 to 2,500 metres.
  July and August can experience snow accumulations to 15 centimetres above the
  2,000 metre elevation. The snow typically melts within one or two weeks. The
  general services and infrastructure for the area is good, and the national power
  grid is located approximately 65 kilometres from the project. Local labour is
  readily available and staff engineers and geologists are available through the
  University of San Juan, as well as consulting firms based in the region.

History

Local miners have sporadically prospected the Gualcamayo area
  over the past 60 years. These exploration activities were directed towards surface
  occurrences of skarn hosted lead, zinc, copper, gold and silver mineralization.

Mincorp Exploraciones S. A. (Mincorp), a joint
  venture between Minorco, owned by Anglo American, and Perez Companc, an Argentinean
  conglomerate, explored the skarn/intrusive related gold mineralization at Amelia
  Ines, Magdalena and Belgrano deposits between 1983 and 1988. Mincorp reportedly
  spent US$6.5 million on exploration during this period with the work being comprised
  of surface trenching, sampling and mapping; surface and underground diamond
  drilling; underground development and geophysical surveys.

MASA entered into a joint venture with Mincorp in 1997 to
  earn a 60% interest by spending US$5 million over five years. By 1999, MASA
  had earned its 60% interest and in 2002 acquired the remaining 40% for US$1,000,000.
  MASAs exploration program was developed to explore and evaluate the potential
  for epithermal sediment hosted gold mineralization peripheral to the skarn hosted
  mineralization explored by Mincorp. Between December 1997 and December 2000,
  MASA discovered a gold bearing carbonate breccia zone referred to as the Quebrada
  del Diablo (QDD) zone and completed four drill programs for a total
  of 11,256 metres.

Regional Geology

The Gualcamayo Project is located along the eastern margin
  of the Precordillera of west central Argentina, immediately to the east of the
  Cordillera de Los Andes. The Precordillera consists of a series of north-south
  trending ranges comprised of Cambrian-Early Ordovician marine platform carbonates
  overlain by mid-Ordovician through Early Carboniferous marine clastics, which
  in turn are overlain by late Carboniferous Tertiary continental clastics. Perm-Triassic
  and Tertiary granitic complexes locally intrude all sediments.

During the Tertiary Andean Orogeny, sedimentary blocks were
  telescoped (shortened) eastward into a high-level fold and thrust belt with
  crustal shortening on the order of 60-90%. The net effect is a series of north-south
  trending thrust faults, with a stratigraphic displacement of more than 100 kilometres
  to the east, superimposing lower Paleozoic sediments over Tertiary and Permo-Triassic
  continental clastic redbeds.

15

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Land and Property Geology

The Gualcamayo project is located primarily within a package
  of lower Paleozoic stratigraphy characterized by thick carbonate sequences of
  upper-Cambrian La Flecha and Ordovician San Juan formations which are overlain
  by marine clastics of Upper Ordovician Trapiche formation. The entire stratigraphic
  section exceeds 1,000 metres in thickness. The immediate project area is intruded
  by a dioritic-dacitic porphyry complex, oriented several kilometres east-west
  by one kilometre north-south, as a larger stock and a series of dikes.

The dominate structural regime of the Precordillera is an
  east-west compressional deformation consistent with Andean deformation resulting
  in a series of north-south trending regional thrust faults. The Gualcamayo project
  is located between several of these regional thrust faults. Folding generated
  by this period of compressional deformation is by east north-east and east-west
  reverse faulting indicative of a subsequent north-south compressional event.

Mineralization

Gualcamayo is a sediment-hosted, structurally controlled,
  intrusive related gold occurrence. Gold mineralization is concentrated within
  stockwork fractured carbonates, carbonate breccias and intrusive breccias within
  or proximal to a porphyry intrusive complex. The mineralization can be described
  as a low sulfide bearing (<3%) and low silica system. The gold in the breccias
  is related to a hydrothermal event overprinting the skarn and extending into
  the surrounding carbonate section. The mineralized structures are strongly oxidized
  throughout the depth of drilling. Skarn mineralization at Amelia Ines is comprised
  of chalcopyrite, sphalerite, galena phyrrhotite and pyrite representing an earlier
  higher temperature event.

Exploration

During 1996  1997, Viceroy Resource conducted stream
  sediment sampling and reconnaissance rock-chip sampling that identified several
  areas, including the QDD zone. General geologic reconnaissance mapping followed
  the sampling including a detailed structural mapping at a scale of 1:250 in
  2000. Between 1997 and 2000, Viceroy Resource completed 58 drill holes totaling
  11,256 metres (33 diamond holes and 25 reverse circulation) focused primarily
  on the QDD zone. The core was photographed, logged, split and samples were collected
  at generally two metre intervals.

No further work was conducted between 2001 and mid 2003 due
  to low metal prices. The project was placed on a care and maintenance basis
  during this period.

In July 2003, we recommenced exploration of the Gualcamayo
  Project. The prime focus of the exploration was to continue the systematic geological
  mapping and sampling to the south and west of the Amelia Ines and Magdelena
  areas where previous limited sampling had been conducted by Viceroy Resource.
  The program confirmed the extension of the mineralized breccias to the west
  for approximately 1.5km.

The results of the program confirmed that the mineralized
  system remains open. Based on the results of this work, we identified several
  new drill targets and a drilling program was planned.

16

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In late April 2004, 9,000 metres of reverse circulation (RC)
  drilling commenced on the Gualcamayo Property. The inital 5,000 metres of drilling
  is designed to test five new exploration targets. The remaining 4000 metres
  are within the main QDD resource area. The overall 9000 metre program is expected
  to take 12-14 weeks.

To date, we have received the first set of results from the
  drill program. These results include assay results for three drill holes on
  each of Target 11 and the Magdalena Target.

The drilling program is being conducted under the supervision
  of Mr. Rick Diment P.Geo., who is our qualified person under NI 43-101. All
  samples were collected in accordance with industry standards and submitted to
  ALS Chemex for processing in their Santiago, Chile, facility.

Mineral Resources and Mineral Reserve Estimates

Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources

This section uses the terms measured and indicated
  resources. We advise U.S. investors that while these terms are recognized and
  required by Canadian regulations, the U.S. Securities and Exchange Commission
  does not recognize them. U.S. investors are cautioned not to assume that
  any part or all of mineral deposits in these categories will ever be converted
  into reserves.

Cautionary Note to U.S. Investors concerning estimates of Inferred Resources

This section uses the terms inferred resources.
  Resources that are classified as inferred resources have a great
  amount of uncertainty as to their existence, and great uncertainty as to their
  economic and legal feasibility. It cannot be assumed that all or part of an
  inferred mineral resource will ever be upgraded to a higher category. Under
  Canadian rules, estimates of inferred mineral resources may not form the basis
  of feasibility or pre-feasibility studies, except in rare cases. U.S. investors
  are cautioned not to assume that part or all of an inferred resource exists,
  or is economically or legally minable.

Based on the drilling through 1999, MASA estimated an inferred
  geological resource for QDD of 37.7 million tonnes @ 1.16 grams per tonne (g/t)
  gold. Mineral Resources Development Inc. (MRDI), a geological consulting
  firm located in San Francisco, California, was retained to confirm MASAs
  resource estimate. MRDI verified the model using independently derived grade
  distributions, variography and kriged grade models. MRDI estimated the inferred
  resource at 37.2 million tonnes grading 1.13 g/t. Upon completion of the 2000
  drill program, MASA updated the geologic model using all drill data up to and
  including QDR-058 and estimated a probable resource of 12.7 million tonnes grading
  1.172 g/t gold with an additional inferred resource of 22.4 million tonnes grading
  1.016 g/t gold.

Based on the drilling up to 2000, a revised geological resource
  was estimated by Ronald G. Simpson, P. Geo. (GeoSim Services Inc.) in August
  2001. The estimate was based on all drill data as well as geologic data collected
  during the 2000 program. The global resource estimate is based on a cut-off
  grade of 0.6 g/t gold and is as follows:

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|Category  | Tonnes
      (000's) | Grade
      g/t gold
|--------- | -------------------- | --------------------
|Indicated | 12,734               | 1.17                
|Inferred  | 22,449               | 1.02                

Mineral Processing and Metallurgical Testing

Metallurgical testwork to date includes 24-hour bottle-roll
  on eight samples by Resources Development Inc. (RDI), a metallurgical
  testing facility of Boulder, Colorado, and 140 reverse circulation samples by
  Viceroy Resource at its Castle Mountain and Brewery Creek facilities. The results
  from RDIs work showed gold recoveries in excess of 92% within 24 hours
  on all oxidized samples with sodium cyanide consumption being low. The recoveries
  from Viceroy Resources testwork for oxidized material averaged 85%, again
  indicating the amenability of oxide material to direct cyanidation. To date,
  a very small percentage (10%) of the mineralized body is classified as sulfide.
  Bottle roll testing was recommenced in April 2004 to test all drilling data
  completed during 2000. Bottle roll testing will then be completed for all 2004
  drilling.

Las Flechas Project, Argentina

Property Description and Location

The Las Flechas property area is located on the eastern side
  of the Andean Cordillera, approximately 340 km northwest of the city of San
  Juan. Although the property is located above 4000 metres elevation, it is easily
  accessible by four-wheel drive vehicle. The property consists of 12 contiguous
  cateos covering 23,419 hectares.

History

During 1995, MASA conducted a reconnaissance mapping and samping
  campaign in the project area. The program indicated that anomalous gold values
  (200-300 ppb) were widespread over two hydrothermal alteration zones. Gold values
  between 1 and 2 g/t were obtained from several areas within the broader anomalous
  zones.

During January 1996, MASA remapped and sampled the property
  at a scale of 1:10,000. It was concluded from the sampling results that the
  widespread 100-200 ppb gold values obtained during the January 1995 program
  were likely due to analytical error. However, the new sampling revealed that
  anomalous gold mineralization occurs in five distinct areas of the property,
  four of which are associated with structural intersections. During October and
  November of 1996, these areas were extensively resampled and 10 trenches were
  excavated by bulldozer. A geophysical program was carried out in late 1996 and
  consisted of a gradient array IP survey and a ground magnetic survey.

Between February 4 and March 20, 1997, MASA completed 17 diamond
  drill holes totaling 1815metres which produced no significant results. The property
  did not receive any further exploration between 1997 to 2004.

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In April, 2004, the Company reached an agreement with Tenke
  Mining Corp. (Tenke) whereby Tenke may earn a 75% interest in the
  las Flechas Project through expenditures annual exploration expenditures aggregating
  to US$4.5 million over 5 years. The agreement is subject to a requisite regulatory
  approvals and execution of a detailed earn-in agreement within 45 days, which,
  on May 12, 2004 was extended by a further 45 days. Tenke will commence a first
  full season of concerted exploration on Las Flechas starting October 2004, at
  the beginning of the 2004/2005 high Andes exploration season.

Mineralization

The Las Flechas property is underlain by Tertiary volcanics
  and subvolcanics that have been variably altered by widespread hydrothermal
  alteration. The volcanic sequence consists of intermediate flows and porphyries
  overlain by intermediate to felsic tuffs and ignimbrites. The volcanics have
  been intruded by quartz-feldspar porphyries that appear to be associated with
  major structures.

Sampling and trenching have identified anomalous gold mineralization
  in three broad areas referred to as the Central, Northern and Southern Zones.
  Limited exploration drilling in these areas has encountered anomalous gold values
  and confirmed the presence of a major high-sulfidation epithermal system.

Salamanca Project, Argentina

Property Description and Location

The Salamanca Project is located in the northeast part of
  the Guandacol District. The project is situated on the boundary of La Rioja
  and San Juan Provinces, approximately 230 km north of the city of San Juan and
  within 10 kilometres of the Gualcamayo Project. The property consists of 3,155
  hectares. The Salamanca Project is accessible throughout the year by paved and
  dirt roads. The property is located in rugged terrain, with elevations ranging
  from 1,600 to 2,500 metres.

History

In the late 1980, Anglo American conducted mapping, sampling,
  trenching and limited drilling on the property. MASA acquired the project under
  an option agreement and between 1996 and 1997, completed two of phases work
  that included mapping, sampling, and drilling. MASAs exploration program
  outlined a sediment-hosted, skarn-related mineralized zone with a strike length
  of over 600 metres and a thickness of up to 55 metres.

No significant work has been completed on Salamanca since 1997.

Mineralization

The mapping, sampling and drilling completed by Mincorp and
  MASA have defined a potential mineralized zone extending approximately 600 metres
  along strike and 40 to 55 metres thick. The zone appears to be open along strike
  and at depth.

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The Company now plans to review the exploration potential
  at the Salamanca Property due to its proximity to the main Gualcamayo Property.
  Mapping and sampling of the area around the main mineralization are planned
  in late 2004, with a follow-up drill program if warranted.

Other Projects

MASA controls two other projects situated in the high Andes
  of Argentina. These projects are Evelina and Las Carachas-Cordon de la Brea.

Evelina is located approximately 210 kilometres northwest
  of San Juan City in the Valle del Cura Region, San Juan Province and consists
  of 6,498 hectares. The Las Carachas-Cordon de la Brea project consists of 8,600
  hectares, and is located 320 kilometres north of the provincial capital of San
  Juan.

Both properties have had various amounts of work completed
  by MASA and its former partners. MASA is currently compiling and reviewing all
  the historical data collected in order to develop an exploration program and
  budget.

5.     OPERATING AND FINANCIAL REVIEW AND
  PROSPECTS

Overview

We are presently engaged in the exploration of our Argentinean
  mineral properties. We do not have revenues from operations and, except for
  income from its cash and cash equivalents, we rely on equity funding by investors
  for our continuing financial liquidity. We acquired our properties effective
  June 30, 2003 and accordingly were in initial start up during the 2003 first
  quarter ended June 30, 2003. Our results of operations for the 2004 first quarter
  is representative of the level of ongoing operating expenses with the establishment
  of offices and commencement of drilling as referred to in Item 4-B above.

Plan of Operations

Our plans for the year ahead are to:

- complete the current drill program on the Gualcamayo Property at a budgeted
    cost of $1.15 million;
- complete a second phase of drilling at QDD in preparation for a scoping
    study;
- complete an independent scoping study of the Gualcamayo Property;
- initiate a prefeasibility study of the Gualcamayo gold resource; and
- commence a regional exploration program on Gualcamayo, including the Salamanca
    Project.

Cash and cash equivalents of $6.7 million and working capital
  of $6.8 million as at March 31, 2004 is considered sufficient for the currently
  planned work on the Gualcamayo Property, property maintenance requirements and
  administrative overhead for at least the next 18 months.

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Presentation of Financial Information

The Company was incorporated on March 31, 2003 under the British Columbia Company
  Act.

21

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Acquisition of Oro Belle and Argentinean Mineral Properties

On June 30, 2003, we acquired certain exploration properties
  of Viceroy Resource located in Argentina and certain other assets and liabilities
  from Viceroy Resource by issuing 13,800,000 common shares in exchange for all
  of the issued shares of Oro Belle which was a wholly owned subsidiary of Viceroy
  at the time of the acquisition. The mineral properties are held by Minas Argentinas,
  S.A. (MASA) an indirect wholly owned Argentinean subsidiary of Oro Belle. The
  transaction was accounted for at the book value of Viceroy after conforming
  the accounting policies in respect of the exploration properties to those of
  the Company.

The net assets acquired consist of:

|Cash                                     | $ | 549,747   |  
|---------------------------------------- | - | --------- | -
|Prepaids and other receivables           |   | 5,961     |  
|Exploration properties                   |   | 6,015,995 |  
|Accounts payable and accrued liabilities |   | (56,507   | )
|                                         |   |           |  
|Total                                    | $ | 6,515,196 |  

We did not carry on any material business operations from
  March 31, 2003, the date of our incorporation, to June 30, 2003, the date of
  the Viceroy Arrangement. The Viceroy Arrangement was completed on June 30, 2003
  and accordingly there were limited operations prior to this date.

Due to the fact that Viceroy Resources, which was the parent
  company of Oro Belle and Minas Argentinas (Barbados) Inc. at the time, was inactive
  during 2000 to 2003, we are in the process of ensuring that all filings for
  those companies, including tax returns, are brought up-to-date.

Acquisition of Trillion

On December 2, 2003, the Company acquired all of the shares
  of Trillion by way of the arrangement (note 1) whereby holders of Trillion common
  shares received 0.70 common shares of the Company for each Trillion share. Trillion
  and Oro Belle amalgamated under the British Columbia Company Act under the name
  of Oro Belle Resources Corporation and is a wholly owned subsidiary of the Company.

The acquisition has been accounted for using the purchase
  method of accounting and the following is a breakdown of the fair market value
  of the net assets acquired:

The net assets acquired consist of:

|Cash                   | $ | 2,816,280 |  
|---------------------- | - | --------- | -
|Short-term investments |   | 76,500    |  
|Accounts receivable    |   | 135,134   |  
|Accounts payable       |   | (39,941   | )
|                       |   |           |  
|Total                  | $ | 2,987,973 |  

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Canadian Generally Accepted Accounting Principles

The following discussion of the financial condition, changes
  in financial condition and results of operations of the Company should be read
  in conjunction with the audited consolidated financial statements for the six
  months ended December 31, 2003 and related notes therein, prepared in accordance
  with Canadian generally accepted accounting principles. Unless expressly stated
  otherwise, all references to dollar amounts in this section are to Canadian
  dollars. Please refer to Note 8 of the Consolidated Financial Statements for
  a reconciliation to generally accepted accounting principles in the U.S.

Change of Fiscal Year End

In December 2003, the Company changed its fiscal year end
  from June 30 to December 31 effective December 31, 2003. Hence, the comparative
  periods are March 31, 2003 to June 30, 2003 and July 1, 2003 to December 31,
  2003.

A.     Operating results.

Operations for the six months ended December 31, 2003 as compared
  to the period March 31, 2003 (date of incorporation) to June 30, 2003 are as
  follows:

General and administrative expenses for the six months were
  $1,433,285. The main costs during the six months ended December 31, 2003 were
  in the stock based compensation to directors, employees and consultants. The
  Company recorded stock based compensation of $1,027,680 for stock options granted
  to employees and directors during the current period. This is due to the Company
  applying the newly mandated fair value method of accounting for stock options
  granted to officers, directors and employees on a prospective basis. The remaining
  costs were for fees associated with the TSX-Venture listing application and
  general increase in activity. Consulting fees included stock based compensation
  of $89,400, also based on the fair value method of accounting, and fees of $7,500
  per month paid to a related party for management services effective July 1,
  2003. Administrative, corporate service and rent expenditures of $55,000 were
  paid to a company that is related by virtue of common directors and officers
  for general administrative, accounting and corporate services and office space.

We had a loss of $1,436,596 ($0.10 per share) for the six
  month period ended December 31, 2003 and a loss of $10,813 for the three months
  ended June 30, 2003.

B.     Liquidity and Capital Resources

We had cash of $4,717,030 as of December 31, 2003, compared
  to cash of $549,747 as of June 30, 2003. We had working capital of $4,720,169
  as of December 31, 2003, compared to working capital of $488,388 as of June
  30, 2003.

Cash Flows for Operating Activities

We used cash of $212,321 in operating activities for the six
  months ended December 31, 2003. Cash used in operating activities was attributable
  to expenses incurred in connection with startup, listing on

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the TSX-Venture exchange, acquisition of Trillion, as discussed
  above under Operating Results, and administrative expenses associated with operating
  a junior public company.

Cash Flows for Investing Activities

We used cash of $353,424 in investing activities which was
  attributable to deferred property expenditures. As a result of these deferred
  property expenditures, our exploration properties increased to $6,369,419 as
  at December 31, 2003 from $6,015,995 as at June 30, 2003. An analysis of exploration
  properties according to type of expense and property is as follows:

|                          |   |            |  |   |           |  |   |             |  |   |         |  |   | Las      |  |   |          
|------------------------- | - | ---------- |  | - | --------- |  | - | ----------- |  | - | ------- |  | - | -------- |  | - | ---------
|                          |   | Gualcamayo |  |   | Salamanca |  |   | Las Flechas |  |   | Evelina |  |   | Carachas |  |   | Total    
|                          |   |            |  |   |           |  |   |             |  |   |         |  |   |          |  |   |          
|Balance-June 30, 2003     | $ | -          |  | $ | -         |  | $ | -           |  | $ | -       |  | $ | -        |  | $ | -        
|Acquisition costs         |   | 5,255,808  |  |   | 260,187   |  |   | 200,000     |  |   | 200,000 |  |   | 100,000  |  |   | 6,015,995
|Geologists &             |   |            |  |   |           |  |   |             |  |   |         |  |   |          |  |   |          
|engineers fees,          |   |            |  |   |           |  |   |             |  |   |         |  |   |          |  |   |          
|travel/lodging            |   | 122,753    |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 122,753  
|Field support             |   | 83,898     |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 83,898   
|Administrative &          |   |            |  |   |           |  |   |             |  |   |         |  |   |          |  |   |          
|office support            |   | 59,790     |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 59.790   
|Assays                    |   | 38,940     |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 38,940   
|Property                  |   |            |  |   |           |  |   |             |  |   |         |  |   |          |  |   |          
|permits/licences/taxes    |   | 27,944     |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 27,944   
|Water samples             |   | 3,979      |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 3,979    
|Road maintenance          |   | 3,637      |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 3,637    
|Non-recoverable IVA       |   | 12,483     |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 12,483   
|Change in the period      |   | 353,424    |  |   | -         |  |   | -           |  |   | -       |  |   | -        |  |   | 353,424  
|Balance-December 31, 2003 |   | 5,609,232  |  |   | 260,187   |  |   | 200,000     |  |   | 200,000 |  |   | 100,000  |  |   | 6,369,419

In accordance with Canadian generally accepted accounting
  principles, we record our interests in exploration properties at cost. The costs
  of acquiring mineral properties and related exploration and development expenditures
  are deferred and would be amortized against future production following commencement
  of commercial production or are written off if the properties are sold, allowed
  to lapse or abandoned. General exploration, overhead and administrative costs
  are expensed in the period they are incurred. See Critical Accounting
  Policies below for future discussion.

Cash Flows from Financing Activities

Cash from financing activities was $4,733,028 for the six
  months ended December 31, 2003 compared to cash of $549,747 for the three months
  ended June 30, 2003.

Cash received during the six months ended December 31, 2003
  included net proceeds of $1,997,700 from a private placement financing completed
  in November 2003 and cash acquired in connection with the Trillion Arrangement
  in the amount of $2,735,328. We acquired cash of $549,747 on June 30, 2003 in
  connection with the the acquisition of Oro Belle on completion of the Viceroy
  Arrangement.

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We completed a private placement financing on November 18,
  2003 that consisted of the issue of 4.2 million units at $0.50 per unit. Each
  unit consisted of one common share and one warrant entitling the holder to purchase
  one additional share for a price $0.60 for a period of three years or if for
  a period of 20 consecutive days the closing price of the Companys shares
  was at or above $1.20, then the warrants would expire 30 business days following
  delivery of notice. As of December 23, 2003, the Companys closing price
  had been at or above $1.20 for 20 consecutive days. Accordingly, the Company
  provided written notice to all warrant holders effective January 6, 2004. All
  4.2 million warrants were exercised on or before February 16, 2004. We received
  proceeds of $2,520,000 upon exercise of these warrants.

Financing Requirements

As a result of the private placement and arrangement with
  Trillion, we had a working capital position of $4,720,169 as at December 31,
  2003. We anticipate that this working capital and the $2.5 million received
  pursuant to the warrant exercise in February 2004 will be sufficient for administrative
  overhead, property maintenance requirements and currently planned work at the
  Gualcamayo Property, including exploration expenditures of $2.0 million, for
  the next 18 months. Dependent on results from the currently planned programs,
  exploration activity and expenditures could increase significantly thereby reducing
  this length of time. Thereafter, funds would have to be raised to continue the
  business of the Company and there is no assurance that we will be successful
  in securing such funding.

We are in the mineral exploration business and are exposed
  to a number of risks and uncertainties inherent to that industry. This activity
  is capital intensive at all stages and subject to fluctuations in the prices
  of the commodities being sought, market sentiment, currencies, inflation and
  other risks. We currently have no sources of revenue other than interest income
  and rely primarily on equity financings to fund exploration and administrative
  activities.

Refer to Item 5-F for tabular disclosure of our contractual commitments.

Critical Accounting Policies

Our consolidated financial statements have been prepared in
  accordance with Canadian generally accepted accounting principles, including
  the following:

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 assets and liabilities at the date of the financial
  statements and the reported amounts of expenditures during the reporting period.
  Actual results could differ from those reported.

Exploration property costs

The Company records its interests in exploration properties
  at cost. The costs of acquiring mineral properties and related exploration and
  development expenditures are deferred and would be amortized against future
  production following commencement of commercial production or are written off
  if the properties are sold, allowed to lapse or abandoned. General exploration,
  overhead and administrative costs are expensed in the period they are incurred.

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Management of the Company will regularly review the net carrying
  value of each mineral property. Where information is available and conditions
  suggest impairment, estimated future net cash flows from each property are calculated
  using estimated future prices, proven and probable reserves, and operating capital
  and reclamation costs on an undiscounted basis. Reductions in the carrying value
  of each property would be recorded to the extent the net book value of the investment
  exceeds the estimated future cash flows.

Where estimates of future net cash flows are not available
  and where other conditions suggest impairment, management assesses if carrying
  value can be recovered.

Provision for reclamation

The Company estimates the fair value of site restoration and
  clean-up costs on acquisition of mineral properties and reflects this amount
  in the cost of the mineral property acquired.

On an ongoing basis, site restoration and cleanup costs for
  exploration projects are estimated and charged to operations when reasonably
  determinable.

Stock-based compensation plans

The Company has an stock option plan which was approved by
  the shareholders at the Annual General and Special Meeting held on April 29,
  2004. In 2003, the Company elected to apply the fair value method of accounting
  for stock options granted to directors, officers and employees on a prospective
  basis in accordance with the recommendations of the Canadian Institute of Chartered
  Accountants. Accordingly, effective July 1, 2003, the fair value of all stock
  options granted are recorded as a charge to operations and a credit to fair
  value of stock options and warrants over the period the stock options are outstanding.
  Any consideration paid on exercise of stock options is credited to share capital.

Significant Differences between Canadian and U.S. GAAP

The significant differences between Canadian and U.S. generally accepted accounting principles are as follows:

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|1. | Resource property costs and related
        exploration expenditures are accounted for in accordance with Canadian
        GAAP. For U.S. GAAP purposes exploration costs relating to unproven mineral
        properties are expensed as incurred. When proven and probable reserves
        are determined for a property and a feasibility study prepared, then subsequent
        exploration and development costs of the property are capitalized. The
        capitalized costs of such properties are then measured periodically, for
        recoverability of carrying values under Statement of Financial Accounting
        Standard (SFAS) No. 144.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2. | Under U.S. GAAP, the Companys
        short term investments would be adjusted from their carrying values under
        Canadian GAAP to year-end quoted market values and the differences recorded,
        net of applicable income taxes, as adjustments to shareholders equity.
        However, given the size of the Companys holding relative to their
        recent trading volumes, these quoted market values may not be indicative
        of the ultimate proceeds the Company would receive should the investments
        be tendered for sale.                                                                                               

Please refer to Note 8 of the Annual Consolidated Financial Statements which is attached as an exhibit hereto.

C.     Research and development, patents and licenses,
  etc.

Not applicable. See Item 4-D Information on the Company
  - Property, Plant and Equipment for a review of the Companys exploration
  properties.

D.     Trend information

With the current drill program underway at the Gualcamayo
  Property and the work planned thereafter (as discussed in Item 4-B), it is expected
  that expenditures will continue to increase and that 2004 will show a significant
  increase in such expenditures. We are not aware of any other trend, commitment,
  event or uncertainty that is both presently known to management and reasonably
  expected to have a material effect on the Companys business, financial
  condition or results of operations as at the date of this report except as otherwise
  disclosed herein or except in the ordinary course of business.

E.     Off-balance sheet arrangements

We do not have any off-balance sheet arrangements that have
  or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of
  operations, liquidity, capital expenditures or capital resources that is material
  to investors.

As used in this Item 5.E., the term off-balance sheet arrangement
  means any transaction, agreement or other contractual arrangement to which an
  entity unconsolidated with the company is a party, under which the company has:

|(a) | Any obligation under a guarantee contract that has
        any of the characteristics identified in paragraph 3 of FASB Interpretation
        No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees,
        Including Indirect Guarantees of Indebtedness of Others (November 2002)
        (FIN 45), as may be modified or supplemented, excluding the
        types of guarantee contracts described in paragraphs 6 and 7 of FIN 45;
        27
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|(b) | A retained or contingent interest in assets transferred
        to an unconsolidated entity or similar arrangement that serves as credit,
        liquidity or market risk support to such entity for such assets;                                                                                                                                                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(c) | Any obligation under a derivative instrument that
        is both indexed to the companys own stock and classified in stockholders
        equity, or not reflected, in the companys statement of financial
        position; or                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) | Any obligation, including a contingent obligation,
        arising out of a variable interest (as referenced in FASB Interpretation
        No. 46, Consolidation of Variable Interest Entities (January 2003), as
        may be modified or supplemented) in an unconsolidated entity that is held
        by, and material to, the company, where such entity provides financing,
        liquidity, market risk or credit risk support to, or engages in leasing,
        hedging or research and development services with, the company.

F.     Tabular Disclosure of Contractual Obligations

As at fiscal year end December 31, 2003, we had the following contractual obligations:

|                                                                                                                                            | Payments due by period ($Cdn)
|------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------
|Contractual Obligations                                                                                                                     | Total                        
|Rental of Argentina office                                                                                                                  | 28,800                       
|Contract with Keewatin Consultants, a division of
        Chintz & Co. Ltd., 49% held by Ronald Netolitzky, Chairman of the
        Company | 15,000                       

G.     Safe Harbour

The safe harbor provided in Section 27A of the Securities
  Act and Section 21E of the Exchange Act applies to forward-looking
  information provided pursuant to Item 5.E and F above.

6.     DIRECTORS, SENIOR MANAGEMENT AND
  EMPLOYEES

A.     Directors and senior management

The following table sets forth the names and addresses of
  directors and officers of the Company, their positions and offices with the
  Company, their principal occupations and the date of commencement of their term.

28

---

|Name and municipality ofresidence and position                                                                  | Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Previous service
      as a director or 
      officer
|--------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------
|W. David Black(1) (2) (3)
      Vancouver, British Columbia,
        Canada 
        Director                   | Mr. Black has been Associate
        Counsel with the law firm, DuMoulin Black, since January 2004. He was
        previously a Partner with the firm from 1968 to December 2003. Mr. Black
        acts as a director of several public companies which trade on the TSX
        and TSX-V Exchanges.                                                                                                                                                                                                                                                                                                     | Since March 2003                                      
|Eric Cunningham(3)
      Toronto, Ontario, Canada
        Director                                              | Mr. Cunningham is a Mining
        Consultant. He was previously a director of Trillion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Since December 2003                                   
|Patrick G. Downey(2)
      North Vancouver, British
        Columbia, Canada 
        President, CEO & Director | Mr. Downey was the President
        and CEO of Trillion from January 1999 to December 2003 prior to being
        appointed as President and C.E.O. of the Company. He was a partner of
        Rescan Engineering Services Ltd. (a mining engineering firm) from April
        1992 to February 1997; President and Director of Oliver Gold Corporation
        from November 1997 to February 2002; and a Director of Canico Resource
        Corporation from February 2002 to February 2003. Mr. Downey is a Professional
        Engineer.                                                           | Since December 2003                                   
|John P. Fairchild
      Vancouver, British Columbia,
        Canada 
        Chief Financial Officer            | Mr. Fairchild is a Chartered Accountant.
        Prior to joining the Company, he was CFO and Corporate Secretary of Jordex
        Resources Inc./iTech Capital Corp./Sirit Inc. from July 1, 1994 to November
        24, 2003.                                                                                                                                                                                                                                                                                                                                                                          | Since April 2004                                      
|Michael H. Halvorson(1) (2)
      Edmonton, Alberta, Canada
        Director                                    | Mr. Halvorson has been President of Halcorp
        Capital Ltd. (Halcorp), a private investment and consulting
        company, since 1980. He was a stock broker from 1967 to 1974 and marketed
        syndicated real estate from 1974 to 1979. In 1980 he formed Halcorp, an
        Alberta-based broker dealer which specialized in financings for natural
        resource companies until 1992. Since 1993, Halcorp has acted as a financial
        consultant to natural resource companies. Mr. Halvorson has served as
        a director of several natural resource companies since 1993. | Since March 2003                                      
|Michele A. Jones
      Vancouver, British Columbia,
        Canada 
        Corporate Secretary                 | Prior to joining the Company, Miss Jones
        was Executive Vice President, Administration, and Corporate Secretary
        of Cross Lake Minerals Ltd., a TSX listed exploration company, from April
        1997 to December 2003. She has served as Corporate Secretary of several
        natural resource public companies since 1990.                                                                                                                                                                                                                                                             | Since February 2004                                   

29

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|Robert V. Matthews(1)
      North Vancouver, British
      Columbia, Canada
      Director | Mr. Matthews is currently President of Sheppards Building Materials Inc.
      He was previously a director of Viceroy Resource and Manager/Controller
      for MacMillan Bloedel from 1974 to 1993. Mr. Matthews has been a director
      for several joint venture companies and other associations. Mr. Matthews
      is a Chartered Accountant.                                                                                                                            | Since March 2003
|------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------
|Ronald K. Netolitzky(3)Victoria, British Columbia,
      Canada
      Chairman & Director  | Mr. Netolitzky was President of the Company until December 2003 when he
      was appointed Chairman. He was Chairman of Viceroy Resource from October
      1996 to November 2002 and President from December 2001 to June 2003; Chairman
      of Trillion from January 1999 to December 2003; and director and officer
      of several other public companies. Mr. Netolitzky has also been President
      of Keewatin Consultants since 1988 and is a consulting geologist. | Since March 2003

1)  Member of the audit committee.

2)  Member of the compensation committee.

3)  Member of the corporate governance committee.

The term of office of directors and executive officers is
  one year. The directors are elected annually at the Companys Annual General
  Meeting and subsequent to their election, they appoint the executive officers
  for the ensuing year.

B. Compensation

During the fiscal year ended December 31, 2003, the Company
  paid a total of $57,500 in cash compensation to its officers. No cash compensation
  was paid to a director in his capacity as such. This does not include other
  non-cash compensation or incentive stock options granted to or exercised by
  such directors and officers. No amounts were set aside or accrued by the Company
  or its subsidiaries to provide pension, retirement or similar benefits.

The Company is required under applicable securities rules
  in Canada to disclose in its information circular to shareholders details of
  compensation paid to its executive officers as defined. The following reflects
  all material information regarding compensation paid to the Companys executive
  officers which has been disclosed to the Companys shareholders under Canadian
  securities rules.

Cash and Non-Cash Compensation  Executive Officers
  and Directors

The following table sets forth all annual and long term compensation
  for services in all capacities to the Company and its subsidiaries for the past
  two fiscal year ends, being the three month period from incorporation March
  31, 2003 to June 30, 2003 and the six month period from July 1, 2003 to December
  31, 2003, in respect of the Companys President and Chief Executive Officer
  and Chairman (the Named Executive Officers). No executive officer
  of the Company received salary and bonus exceeding $100,000 during the most
  recently completed financial year.

30

---

Summary Compensation Table

|                                                              | Annual Compensation  | Long-Term Compensation |              
|------------------------------------------------------------- | -------------------- | ---------------------- | -------------
|                                                              | Awards               | Payouts               
|Name andPrincipalPosition                                     | FiscalYearended      | Salary($)              | Bonus($)     
|Patrick G. Downey
      President &CEO (1)                    | Dec 31
      June 30 | Nil
      n/a          | Nil
      n/a
|Ronald K.Netolitzky
      Chairman(PastPresident &C.E.O.) (2) | Dec 31
      June 30 | Nil
      Nil          | Nil
      Nil

|(1) | Appointed December 2003. Remuneration
        of $12,500 per month commenced December 2003 and is paid to Downey &
        Associates, a company controlled by Mr. Downey.                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                   
|(2) | President & C.E.O. of the Company
        from April to December 2003. Remuneration of $7,500 per month commenced
        July 2003 and is paid to Keewatin Consultants Inc., a division of Chintz
        & Co. Ltd., 49% held by Mr. Netolitzky.

Long Term Incentive Plans (LTIP) Awards

The Company does not have a LTIP, pursuant to which cash or
  non-cash compensation intended to serve as an incentive for performance (whereby
  performance is measured by reference to financial performance or the price of
  the Companys securities) was paid or distributed to the Named Executive
  Officer during the most recently completed financial year.

The following table sets out stock options granted during
  the fiscal year ended December 31, 2003 to the Named Executive Officers:

31

---

|Name                                                      | SecuritiesUnderOptionsGranted(#)    | % of TotalOptionsGranted
      toEmployees inFinancialYear | Exercise orBase Price($/Security) | Market Valueof SecuritiesUnderlyingOptions on theDate of Grant($/Security) | ExpirationDate                         
|--------------------------------------------------------- | ----------------------------------- | ---------------------------------------------------------- | --------------------------------- | -------------------------------------------------------------------------- | ---------------------------------------
|Patrick G. Downey
      President & CEO                   | 400,000                             | 65%                                                        | $1.25                             | 1.20                                                                       | Dec 3/08                               
|Ronald K. Netolitzky
      Chairman (PastPresident & CEO) | 100,000
      200,000
      100,000 | 16%
      33%
      16%                                    | $0.50
      $1.06
      $1.25     | n/a(1)n/a(2)1.20                                                           | Sep 12/08
      Oct 7/08
      Dec 3/08

|(1) | The Companys shares began trading
        on the TSX Venture Exchange (the TSX-V) on November 14, 2003.
        Exercise price was set based on the price of a private placement of the
        Companys shares which was arranged in July and completed in early
        November.                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Exercise price was determined by the
        directors after taking into account the pending listing of the Companys
        shares on the TSX-V and the arrangement with Trillion. The price was set
        at $0.60 per share or the average trading price of the Companys
        stock for the first five days of trading on the TSX-V, whichever was greater.
        The Companys shares began trading on the TSX-V on November 14, 2003.
        The average price for the first five days of trading, November 14-20,
        2003, was $1.06.

Option Re-Pricings

There was no re-pricing of stock options under the Companys
  stock option plan or otherwise during the most recently completed financial
  year.

Defined Benefit or Actuarial Plan Disclosure

The Company does not have a defined benefit or actuarial plan.

Termination of Employment, Change in Responsibilities and
  Employment Contracts

Except as disclosed herein, the Company does not have any
  compensatory plan or arrangement in respect of compensation received or that
  may be received by the Named Executive Officers in the Companys most recently
  completed or current financial year to compensate such executive officer in
  the event of the termination of employment (resignation, retirement, change
  of control) or in the event of a change in responsibilities following a change
  in control, where in respect of the Named Executive Officers the value of such
  compensation exceeds $100,000.

Compensation Committee

The Compensation Committee, consisting of Patrick G. Downey,
  W. David Black and Michael H. Halvorson, determines the compensation of the
  executive officers of the Company. See Item 6-C Board Practices
  for further details.

32

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Compensation of Directors

The Company does not have any arrangements, standard or otherwise,
  pursuant to which directors are compensated by the Company or its subsidiaries
  for their services in their capacity as directors, or for committee participation,
  involvement in special assignments or for services as consultants or expert
  during the most recently completed financial year or subsequently, up to and
  including the date of this information circular. The directors are reimbursed
  for actual expenses reasonably incurred in connection with the performance of
  their duties as directors.

The Company has a formalized stock option plan for the granting
  of incentive stock options to the officers, employees and directors. The purpose
  of granting options pursuant to the stock option plan is to assist the Company
  in compensating, attracting, retaining and motivating the officers, directors
  and employees of the Company and to closely align the personal interests of
  such persons to that of the shareholders.

The following stock options were outstanding to directors
  of the Company at the most recently completed financial year:

|Date Granted       | Number of Shares Under Option | Exercise Price Per Share | Expiry Date       
|------------------ | ----------------------------- | ------------------------ | ------------------
|February 12, 2002  | 52,500(1)                     | $0.39                    | February 12, 2005 
|February 27, 2003  | 10,500(1)                     | $0.39                    | February 26, 2008 
|September 12, 2003 | 35,000(1)                     | $0.39                    | September 11, 2008
|September 12, 2003 | 400,000                       | $0.50                    | September 12, 2008
|October 7, 2003    | 200,000                       | $1.06                    | October 7, 2008   
|December 3, 2003   | 700,000                       | $1.25                    | December 3, 2008  

(1) Options rolled over pursuant to the Trillion Arrangement.

Aggregated Option Exercises in Last Financial Year and
  Financial Year-End Option Values

The Named Executive Officers did not exercise any stock options
  during the most recently completed financial year.

|Name                                                       | CommonSharesAcquiredonExercise(#) | AggregateValueRealized($) | UnexercisedOptions atFinancial
      YearEnd(#)Exercisable/Unexercisable | Value(1)ofUnexercisedin-the-MoneyOptions atFinancial YearEnd($)
      Exercisable/Unexercisable
|---------------------------------------------------------- | --------------------------------- | ------------------------- | ------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------
|Patrick G. Downey
      President & CEO                    | -                                 | -                         | 400,000/0                                                                | 52,000/0                                                                                       
|Ronald K. Netolitzky
      Chairman (Past President & CEO) | -                                 | -                         | 400,000/0                                                                | 165,000/0                                                                                      

(1)Based on the difference between the option exercise price and
  the closing market price of the Companys shares as at December 31, 2003
  ($1.38).

33

---

The following table sets out stock options granted by the
  Company during the fiscal year ended December 31, 2003 to directors who are
  not Named Executive Officers:

|Name                 | SecuritiesUnderOptionsGranted(#) | % of TotalOptionsGranted
      toEmployees inFinancialYear | Exercise orBase Price($/Security) | Market Valueof SecuritiesUnderlyingOptions on theDate of Grant($/Security) | ExpirationDate          
|-------------------- | -------------------------------- | ---------------------------------------------------------- | --------------------------------- | -------------------------------------------------------------------------- | ------------------------
|W. David Black       | 100,000
      50,000             | 24%                                                        | 0.50
      1.25                   | 1.20(1)                                                                    | Sep 12/08
      Dec 3/08
|Eric Cunningham(2)   | 50,000                           | 8%                                                         | 1.25                              | 1.20                                                                       | Dec 3/03                
|Michael H. Halvorson | 100,000
      50,000             | 24%                                                        | 0.50
      1.25                   | 1.20 (1)                                                                   | Sep 12/08
      Dec 3/08
|Robert V. Matthews   | 100,000
      50,000             | 24%                                                        | 0.50
      1.25                   | 1.20 (1)                                                                   | Sep 12/08
      Dec 3/08

|(1) | The Companys shares began trading on the TSX Venture
      Exchange (the TSX-V) on November 14, 2003. Exercise price was
      set based on the price of a private placement of the Companys shares
      which was arranged in July and completed in early November.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                          
|(2) | Upon completion of the Trillion Arrangement, Mr. Cunningham
      also held the following options which had been previously granted by Trillion:                                                                                                                         

- 52,500 options granted February 12, 2002 at an exercise price of $0.39 expiring
    February 12, 2005
- 10,500 options granted February 27, 2003 at an exercise price of $0.39 expiring
    February 26, 2008;
- 35,000 options granted September 12, 2003 at an exercise price of $0.39
    expiring September 11, 2008;

all of which were exercised by Mr. Cunningham in February of 2004.

During fiscal year ended December 31, 2003, no stock options
  of the Company were exercised by directors and no stock options granted by the
  Company and held by directors were repriced.

C.     Board Practices

The term of office of directors and executive officers is
  one year. The directors are elected annually at the Companys Annual General
  Meeting and subsequent to their election, they appoint the executive officers
  for the ensuing year. The Companys most recent annual general meeting
  was held on April 29, 2004. See Item 6-A Directors and Senior Management
  for the current directors and officers and the length of time each has served.

Neither the Company nor any of its subsidiaries have any arrangement
  to provide benefits to directors upon termination of employment.

There are three Board committees, all of which have a majority
  of members who are outside directors.

All directors are members of at least one Board committee.
  The committees are as follows:

34

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|a) | The Compensation Committee is comprised of three
        directors, two of which are outside directors. The members are W. David
        Black, Michael H. Halvorson and Patrick Downey. This committee is responsible
        for reviewing and making recommendations to the Board regarding human
        resources matters, including management compensation policies and programs,
        succession plans and recruitment. A copy of the Compensation Committee
        Mandate is available on request from the Company.                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b) | The Corporate Governance Committee is comprised of
        three directors, two of which are outside directors. The members are W.
        David Black, Eric Cunningham and Ronald K. Netolitzky. This committee
        is responsible for monitoring the quality and effectiveness of the governance
        system and ensuring effective communication and reporting to shareholders.
        A copy of the Corporate Governance Committee Mandate is available on request
        from the Company. The Companys Statement of Corporate Governance
        Practices is included in its 2004 information circular dated March 30,
        2004, which is incorporated by reference hereto.                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|c) | The Audit Committee is comprised of three members,
        none of whom are officers or employees. The current members are W. David
        Black, Michael H. Halvorson and Robert V. Matthews, who is also the Committees
        financial expert. The purpose of the Audit Committee is to assist the
        Board in fulfilling its oversight responsibilities by reviewing the financial
        information which will be provided to the shareholders and others, the
        systems of corporate controls which management and the Board have established
        and the audit process. The mandate and charter of the Audit Committee
        is also included in the Companys 2004 information circular dated
        March 30, 2004.

D.     Employees

During fiscal years ended December 31, 2003 and June 30, 2003,
  the Company had no employees. Up to February 14, 2004, the Company paid $5,000
  per month to a company which is related by virtue of common directors and officers
  for the provision of administration and corporate services and office space.
  At the date of this annual report, the Company has two employees, both of whom
  were hired in January 2004. Consulting services arrangements have been made
  with each of the Companys four officers, two of which are also directors
  of the Company. See subsection 6.B Compensation for additional information.

E.     Share ownership

The following table sets out the share ownership as at June
  15, 2004 of those persons listed in subsection 6.B above and includes the details
  of all options or warrants to purchase shares of the Company held by such persons:

35

---

|Name                                                       | Number ofCommonShares Held | Number ofOptions orWarrantsHeld     | BeneficialPercentageOwnership(1) | ExercisePrice                 | ExpiryDate                             
|---------------------------------------------------------- | -------------------------- | ----------------------------------- | -------------------------------- | ----------------------------- | ---------------------------------------
|Patrick G. Downey
      President & CEO                    | 767,826                    | 400,000                             | 4.0%                             | $1.25                         | Dec 3/08                               
|Ronald K. Netolitzky
      Chairman (Past President & CEO) | 1,258,887                  | 100,000
      200,000
      100,000 | 5.7%                             | $0.50
      $1.06
      $1.25 | Sep 12/08
      Oct 7/08
      Dec 3/08

(1)
      Beneficial ownership is determined in accordance
          with the rules of the Securities and Exchange Commission. In computing
          the number of shares owned by a person and the percentage ownership
          of that person, common shares subject to options and warrants held by
          that person that are currently exercisable or exercisable within 60
          days of June 15, 2004, are deemed outstanding. Such shares, however,
          are not deemed outstanding for the purposes of computing the percentage
          ownership of any other person. This table has been prepared based on
          29,247,158 common shares outstanding as of June 15, 2004.


The Company adopted its current stock option plan (Stock
  Option Plan) in September 2003. The purpose of the Stock Option Plan is
  to allow the Company to grant options to directors, officers, employees and
  consultants, as additional compensation, and as an opportunity to participate
  in the success of the Company. The granting of such options is intended to align
  the interests of such persons with that of the shareholders. Options will be
  exercisable over periods of up to five years as determined by the Board of Directors
  of the Company and are required to have an exercise price no less than the Market
  Price prevailing on the date the option is granted less applicable discount,
  if any, permitted by the policies of the Exchanges and approved by the Board.
  Market Price means the last closing price per share on the trading day immediately
  preceding the day on which the Company announces the grant of the option or,
  if the grant is not announced, on the Grant Date. Pursuant to the Stock Option
  Plan, the Board of Directors may from time to time authorize the issue of options
  to directors, officers, employees and consultants of the Company and its subsidiaries
  or employees of companies providing management or consulting services to the
  Company or its subsidiaries. The number of common shares which may be reserved
  for issuance to insiders of the Company may not exceed 10% of the outstanding
  common shares of the Company; the number of common shares which may be issued
  to insiders of the Company, within a one year period, may not exceed 10% of
  the outstanding common shares of the Company; and the number of common shares
  which may be issued to any one insider of the Company or to such insiders
  associates, within a one year period, may not exceed 5% of the outstanding common
  shares of the Company. The Stock Option Plan does not contain any vesting requirements,
  but permits the Board of Directors to specify a vesting schedule in its discretion.
  The Stock Option Plan was approved by shareholders at the annual general meeting
  held on April 29, 2004.

7.     MAJOR SHAREHOLDERS
  AND RELATED PARTY TRANSACTION

A.     Major Shareholders

To the best of the knowledge of the directors and senior officers
  of the Company, the following are the shareholders of the Company that beneficially
  own, directly or indirectly, or exercise control over, shares carrying more
  than 5% of the outstanding voting rights attached to the Company's common shares
  as at June 15, 2004:

36

---

|Name                 | Number of Common Shares Held | Percentage of Common Shares Outstanding(2)
|-------------------- | ---------------------------- | ------------------------------------------
|Ronald K. Netolitzky | 1,658,887(1)                 | 5.7                                       

|(1) | Including 400,000 shares issuable upon exercise of stock
      options held by Mr. Netolitzky.
|--- | ----------------------------------------------------------------------------------------------
|(2) | The number of shares outstanding as at June 15, 2004 was
      29,247,158.                    

The Companys major shareholders do not have different
  voting rights.

As of June 15, 2004, the Company's directors and senior officers,
  as a group, beneficially held a total of 4,795,679 common shares (including
  stock options), directly or indirectly, representing 16.4% of the Company's
  issued Common shares.

To the best knowledge of the Company, it is not directly or
  indirectly controlled by another corporation, a foreign government or by any
  other natural or legal persons severally or jointly.

As at June 15, 2004, there were 29,247,158 common shares of
  the Company issued and outstanding. Based on the records of the Companys
  registrar and transfer agent, Computershare Trust Company of Canada, as at such
  date there were 74 registered holders resident in the United States, holding
  an aggregate of 2,601,786 common shares which represent approximately 8.9% of
  the total issued and outstanding. The beneficial holders of the Companys
  common shares resident in the United States as at June 15, 2004, had an aggregate
  2,548,718 common shares representing 8.7% of the total issued and outstanding.

B.     Related Party Transactions

Except as disclosed below, we have not since July 1, 2003,
  being the date of our most recently completed fiscal year, entered into or made,
  and does not propose to enter into or make:

|(1) | any transaction with a related party which is either material to us or
      the related party;                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                     
|(2) | any transaction with a related party which is unusual in its nature or
      conditions, involving goods, services or tangible or intangible assets;
|    |                                                                                                                                                     
|(3) | any loans or guarantees directly by us or through any of our subsidiaries
      to or for the benefit of any related party.                         

For the purposes of this Item 7.B, the following definitions
  apply:

| | (a) | associate means
        any unconsolidated enterprises in which the Company has significant influence
        or which has significant influence over the Company; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                         
| | (b) | related party
        includes any of the following persons:                                                                                                          
| |     |                                                                                                                                                                         
| |     | (i)                                                                                                                                                                     
| |     |                                                                                                                                                                         
| |     | (ii)                                                                                                                                                                    

37

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| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                           | individuals owning, directly or indirectly, shares
        of the Company that gives them significant influence over the Company
        and close members of such individuals family;                                                                                                        
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                            | key management personnel, that is, those persons
        having authority and responsibility for planning, directing and controlling
        the activities of the Company, including directors and senior management
        of the Company and close members of such individuals families; or
| |     |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                             | enterprises in which a substantial interest in the
        voting power is owned, directly or indirectly, by any person described
        in (c) or (d) or over which such a person is able to exercise significant
        influence.                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (c) | significant influence
        over an enterprise means the power to participate in the financial
        and operating policy decisions of the enterprise but is less than control
        over these policies. Shareholders beneficially owning a 10% interest in
        the voting power of a company are presumed to have a significant influence
        on the company.

No related party has had any material interest, direct or indirect,
  in any transaction since the commencement of the Companys last completed
  financial year to June 15, 2004, except as follows:

|(a) | In November 2003, certain directors and officers
        of the Company subscribed for 420,000 units of a private placement of
        4,200,000 units at $0.50 each consisting of one common share and one warrant
        entitling the holder to purchase one additional share for a price $0.60
        for a period of three years or if for a period of 20 consecutive days
        the closing price of the Company was at or above $1.20, then the warrants
        would expire 30 business days following delivery of notice. On January
        6, 2004, the Company provided notice of exercise and all warrants were
        exercised by February 16, 2004. The following is a list of the insiders
        who participated in the private placement:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name of Insider             | Position                                                    | Units Subscribed
|--------------------------- | ----------------------------------------------------------- | ----------------
|W. David Black              | Director                                                    | 80,000          
|Robert V. Matthews          | Director                                                    | 50,000          
|Eric Cunningham             | Director                                                    | 70,000          
|Susan Neale                 | Previous Chief Financial Officer                            | 5,000           
|Patrick Downey & Associates | Company controlled by Mr. Patrick Downey, current President | 40,000          
|Patrick Downey              | President                                                   | 40,000          
|Ronald Netolitzky           | Chairman                                                    | 55,000          
|Michael Halvorson           | Director                                                    | 80,000          

38

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|(b) | From June 2003 to February 2004, Quest
        Management Corporation (QMC) provided operating space and
        administrative services to the Company at a cost of $5,000 per month,
        plus direct costs. Messrs. R. Netolitzky, D. Black and M. Halvorson are
        directors of both the Company and Quest Capital Corporation, the parent
        company of QMC.                                                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The Company has consulting services
        arrangements with each of its four officers (R. Netolitzky, P. Downey,
        J. Fairchild and M. Jones), two of which (R. Netolitzky and P. Downey)
        are also directors of the Company. Cash paid or payable pursuant to these
        arrangements in the three months ended March 31, 2004 is $37,500, $22,500,
        $22,000 and $4,970, an aggregate of $86,970. Included in director/employee
        stock-based compensation in the three months ended March 31, 2004 is $144,820
        fair value of stock options granted to one of the officers.
|(d) | Mr. David Black, a director of the Company
        is associate counsel to the law firm providing corporate legal advice
        to the Company. In the three months ended March 31, 2004, the Company
        paid $11,896 to this firm for legal services.                                                                                                                                                                                                                                                                                                                                                       
|(e) | At June 15, 2004, the directors and officers held shares
      and stock options in the Company as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|Name and position                          | Number of common shares beneficially owned or, directly
      or indirectly controlled
|------------------------------------------ | --------------------------------------------------------------------------------------
|W. David BlackDirector                     | 205,720 common shares and options to acquire 150,000 common
      shares              
|Eric CunninghamDirector                    | 307,840 common shares and options to acquire 50,000 common
      shares               
|Patrick G. DowneyPresident, CEO & Director | 767,826 common shares and options to acquire 400,000 common
      shares              
|John P. FairchildChief Financial Officer   | Nil common shares and options to acquire 150,000 common shares                        
|Michael H. HalvorsonDirector               | 521,406 common shares and options to acquire 150,000 common
      shares              
|Michele A. JonesCorporate Secretary        | Nil common shares and options to acquire 150,000 common shares                        
|Robert V. MatthewsDirector                 | 134,000 common shares and options to acquire 150,000 common
      shares              
|Ronald K. NetolitzkyChairman & Director    | 1,258,887 common shares and options to acquire 400,000 common
      shares            

C.     Interests of experts and counsel

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

39

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8.     FINANCIAL INFORMATION

A.     Consolidated Statements and Other Financial
  Information

Financial Statements

The financial statements required as part of this Annual Report
  are filed under Item 17 of this Annual Report.

Legal and Arbitration Proceedings

The Company is not involved in any legal or arbitration proceedings.

Dividends

The Company has not paid any dividends on any of its shares
  since incorporation. The Company does not presently have any intention of paying
  dividends. Its future dividend policy will be determined by its Board of Directors
  on the basis of earnings, financial requirements and other relevant factors.

B.     Significant Changes

The following are the significant changes since the end of
  the fiscal year ended December 31, 2003:

- cash proceeds of $2.7 million were received in the first
      quarter of 2004 from exercise of warrants and stock options;
- we had $6.7 million in cash and working capital of $6.8
      million at March 31, 2004;
- we commenced drilling on the Gualcamayo property on April
      14, 2004 with a planned 9000 metre RC program budgeted at $1.15 million;
- surface rights adjacent to the Gualcamayo property were
      purchased providing water, construction and access rights;
- exploration expenditures of $2 million are planned over
      the next 18 months inclusive of the above $1.15 million, property maintenance
      and overheads;
- a letter of intent to earn 75% of our 100% held Las Flechas
      gold prospect in Argentina was signed with Tenke Mining Corp. who must spend
      US$4.5 million over 5 years to earn the interest;
- on the Gualcamayo Property, we incurred exploration expenditures
      of $363,480 and capitalized land purchase of $42,962 in the first quarter
      of 2004;
- For the 2004 first quarter, the Company had a loss of
      $579,365 as compared to a loss of $321,532 for the 2003 first quarter. The
      Company acquired its properties effective June 30, 2003 and accordingly
      was in initial start up during the 2003 first quarter. Results of operations
      for the 2004 first quarter is representative of the level of ongoing operating
      expenses as referred to in the general overview above.

40

---

A significant component of expenses in both these periods
  is stock-based compensation, which pursuant to the Companys accounting
  policy is recorded as an expense at fair value, calculated using the Black-Scholes
  model. In the 2004 first quarter, stock-based compensation recorded in connection
  with stock options granted to employees is $218,325 and to a non-related consultant
  (which is subject to vesting) is $178,790, a total $397,115 which represents
  68% of the $579,365 loss for the current period. In the 2003 first quarter,
  stock-based compensation recorded in connection with stock options granted to
  employees and directors is $250,306 and represents 78% of the $321,532 loss
  for that period.

9.     THE OFFER AND LISTING

A.     Offer and listing details

The Company was incorporated on March 31, 2003 and its shares
  were listed for trading on the TSX-V on November 14, 2003 under the symbol VYE.
  The following table sets forth the high and low market prices, in Canadian dollars,
  of the Companys common shares during the periods indicated.

|                    | High | Low 
|------------------- | ---- | ----
|Last six months:    |      |     
|June 1-15           | 0.94 | 0.89
|May 2004            | 1.15 | 0.89
|April 2004          | 1.38 | 1.15
|March 2004          | 1.45 | 1.19
|February 2004       | 1.35 | 1.30
|January 2004        | 1.33 | 1.26
|December 2003       | 1.39 | 1.20
|                    |      |     
|Last two quarters:  |      |     
|First quarter 2004  | 1.45 | 1.19
|Fourth quarter 2003 | 1.39 | 1.01
|                    |      |     
|Last year:          |      |     
|2003                | 1.39 | 1.01

The closing price of the Companys common shares on the
  TSX-V on June 15, 2004 was $0.93.

As a result of the Trillion Arrangement which closed on December
  2, 2003, the Company acquired all of the common shares of Trillion and merged
  Trillion with Oro Belle to continue under the name Oro Belle. Prior to the completion
  of the Trillion Arrangement, Trillion's common shares were registered pursuant
  to Section 12(g) of the Exchange Act and were traded on the Over the Counter
  Bulletin Board (OTCBB) under the symbol TLNOF. As a
  result of the exchange of the Companys common shares for Trillion common
  shares, the Companys common shares were deemed registered under the Exchange
  Act by application of Rule 12g-3(a) of the Exchange Act. The Company is the
  successor issuer to Trillion in this transaction and is listed on the OTCBB
  under the symbol VCRYF.

41

---

Since completion of the Trillion Arrangement in December 2003, the high and
  low sale prices (in US dollars) for the common shares of the Company on the
  OTCBB for the periods indicated are as follows

|                    | High  | Low 
|------------------- | ----- | ----
|Last six months:    |       |     
|June 1-15           | 0.715 | 0.60
|May 2004            | 0.85  | 0.63
|April 2004          | 1.05  | 0.80
|March 2004          | 1.10  | 0.90
|February 2004       | 1.06  | 0.82
|January 2004        | 1.147 | 0.80
|December 2003       | 1.08  | 0.86
|                    |       |     
|Last two quarters:  |       |     
|First quarter 2004  | 1.147 | 0.80
|Fourth quarter 2003 | 1.08  | 0.76
|                    |       |     
|Last year:          |       |     
|2003                | 1.08  | 0.76

The closing price of the Companys common shares on the
  OTCBB on June 15, 2004 was US$0.60.

B.     Plan of distribution

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

C.     Markets

The Companys common shares have traded on the TSX-V
  since November 14, 2003 and, as a result of the Trillion Arrangement, have been
  quoted on the OTCBB since December 2, 2003.

D.     Selling Stockholders

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

E.     Dilution

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

F.     Expenses of the Issue

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

42

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10.     ADDITIONAL INFORMATION

A.     Share capital

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

B.     Memorandum and articles
  of association

Incorporation

The Company was incorporated on March 31, 2003 pursuant to
  the Company Act (British Columbia) and registered with the Registrar of Companies
  for British Columbia under incorporation number 666937.

The Business Corporations Act (British Columbia) (the " Business
  Corporations Act") has been adopted in British Columbia and is now in effect.
  The Business Corporations Act replaces the Company Act (British Columbia) (the
  "Former Act") and adopts many provisions similar to those contained in corporate
  legislation elsewhere in Canada. The Business Corporations Act also uses new
  forms and terminology; most particularly a Memorandum is now called a "Notice
  of Articles". The Company has taken steps to bring its charter documents into
  conformity with the Business Corporations Act and to that end has filed its
  Notice of Articles, which replaces the Company's "Memorandum", with the Registrar
  of Companies (British Columbia).

The Company received shareholder approval on April 29, 2004
  of certain amendments to its Notice of Articles (the "Altered Notice of Articles").
  In addition, the Company received shareholder approval of a new form of Articles
  (the "New Articles") with a view to updating its charter documents to bring
  them into line with the Business Corporations Act and incorporating some of
  the new provisions of the Business Corporations Act as well as approval of certain
  changes to its share capital. Specifically, shareholders approved the following
  changes by approval of the New Articles:

1. in order to pass a special resolution, a two-thirds majority of those votes
    cast is allowed instead of three-quarters as required under the Former Act;
2. increase in the Companys authorized capital from 300,000,000 shares
    divided into (i) 100,000,000 first preferred shares without nominal or par
    value; (ii) 100,000,000 second preferred shares without par value; and (iii)
    100,000,000 common shares without par value to an unlimited number of common
    shares, an unlimited number of first preferred shares and an unlimited number
    of second preferred shares without par value;
3. incorporation of new terminology used in the New Act, including changing
    references to shareholder(s) from member(s) and to
    the Business Corporations Actfrom the Company
    Act;
4. deletion or amendment of certain provisions which are inconsistent with
    the New Act;
5. deletion of the requirement for pro rata purchase of shares;
6. changing the quorum for shareholders meetings from two shareholders
    to one shareholder present in person or represented by proxy;

43

---

1. the chairman of a shareholders meeting has a second
      or casting vote in the event of a tie;
2. requiring annual general meetings to be held each calendar
      year and not more than fifteen months (was thirteen months under the Former
      Act) after the holding of the last preceding annual general meeting;
3. allowing shareholder meetings to be held outside British
      Columbia, if the location is approved by directors resolutions;
4. allowing the directors to approve a change of name of
      the Company without the necessity for shareholder approval; and
5. the directors shall cause the Company to indemnify officers
      on the same basis upon which directors are required to be indemnified.

These changes were made effective of April 29, 2004 and the
  description of rights, preferences and restrictions attaching to each class
  of shares as a result of such changes is included in paragraph 3 below.

The Company is entitled under the Business Corporations Act
  to carry on all lawful businesses which can be carried on by a natural person.

The following is a summary of certain material provisions
  of the Companys Altered Notice of Articles and New Articles and certain
  provisions of the Business Corporations Act applicable to the Company:

Directors

|A. | Directors power to vote on a proposal,
        arrangement or contract in which the director is interested.
      The New Articles provide that when a director holds
        any office or possesses any property, right or interest that could result,
        directly or indirectly, in the creation of a duty or interest that materially
        conflicts with that individual's duty or interest as a director (i.e.,
        a disclosable interest), he must declare the nature and extent of his
        interest in such contract or transaction or of any other possible conflict,
        in accordance with the provisions of the Business Corporations Act. A
        director who holds a disclosable interest may not vote on the transaction
        but will be counted in the quorum present at the meeting at which such
        vote is taken.
      According to the Business Corporations Act, a director holds a disclosable
        interest in a contract or transaction if:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

44

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| |  | b. | the director is a director or senior officer of, or has a material interest
      in, a person who has a material interest in the contract or transaction.
| |  | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

However, the Business Corporations Act also provides that in the following
  circumstances, a director does not hold a disclosable interest in a contract
  or transaction:

|1. | where the situation that
        would otherwise constitute a disclosable interest arose before the coming
        into force of the Business Corporations Act or, if the company was recognized
        under the Business Corporations Act, before that recognition, and was
        disclosed and approved under, or was not required to be disclosed under,
        the legislation that:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|   | a.                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|   | b.                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                              
|2. | where both the company and
        the other party to the contract or transaction are wholly owned subsidiaries
        of the same corporation;                                                                                                                                                                                                                                             
|3. | where the company is a wholly
        owned subsidiary of the other party to the contract or transaction;                                                                                                                                                                                                                                                                                    
|4. | where the other party to
        the contract or transaction is a wholly owned subsidiary of the company;
        or                                                                                                                                                                                                                                                                         
|5. | where the director or senior
        officer is the sole shareholder of the company or of a corporation of
        which the company is a wholly owned subsidiary.                                                                                                                                                                                                                           

The Business Corporations Act further provides that a director
  of a company does not hold a disclosable interest in a contract or transaction
  merely because:

|1. | the contract or transaction is an arrangement by
        way of security granted by the company for money loaned to, or obligations
        undertaken by, the director or senior officer, or a person in whom the
        director or senior officer has a material interest, for the benefit of
        the company or an affiliate of the company;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                      
|2. | the contract or transaction relates to an indemnity
        or insurance;                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                      
|3. | the contract or transaction relates to the remuneration
        of the director or senior officer in that person's capacity as director,
        officer, employee or agent of the company or of an affiliate of the company;                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                      
|4. | the contract or transaction relates to a loan to
        the company, and the director or senior officer, or a person in whom the
        director or senior officer has a material interest, is or is to be a guarantor
        of some or all of the loan; or                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                      
|5. | the contract or transaction has been or will be made
        with or for the benefit of a corporation that is affiliated with the company
        and the director or senior officer is also a director or senior officer
        of that corporation or an affiliate of that corporation.                                                           

45

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|B. | Directors' power, in
        the absence of an independent quorum, to vote compensation to themselves
        or any members of their body.
      The compensation of the directors is decided by the
        directors unless the board of directors requests approval to the compensation
        from the shareholders. If the issuance of compensation to the directors
        is decided by the directors, a quorum is the number of directors in office
        as set by the directors and, if not so set, is deemed to be set at two
        directors.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|C. | Borrowing powers exercisable by the
        directors.
      The directors may, on behalf of the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|D. | Retirement and non-retirement
        of directors under an age limit requirement.
      There are no such provisions applicable to the Company
        under its Altered Notice of Articles and New Articles or the Company Act.                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|E. | Number of shares required
        for a directors qualification.
      A director of the Company shall not be required to hold
        a share in the capital of the Company as qualification for his office.                                                                                                                                                                                                                                                                                                                                                  

Rights, Preferences and Restrictions Attaching to each Class of Shares

As of the date of the Annual Report, the authorized capital
  of the Company consists of an unlimited number of Common Shares, First Preferred
  Shares and Second Preferred Shares, in each case without nominal or par value.
  As at June 15, 2004, 2004, there were 29,247,158 shares and no First Preferred
  or Second Preferred Shares issued and outstanding. The holders of the common
  shares are entitled to one vote per share.

46

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First Preferred Shares and Second Preferred Shares may be
  issued in one or more series. The directors of the Company may by resolution
  of the directors before the issue of any series alter the Company's Notice of
  Articles to fix the number of preferred shares in a series and create, attach
  and define special rights such as payment of dividends and rights of redemption,
  conversion and retraction. Holders of First Preferred Shares shall be entitled
  to one vote in respect of each First Preferred Share held at general meetings.
  Holders of Second Preferred Shares shall not be entitled as such to vote at
  any general meeting of shareholders of the Company. Holders of First Preferred
  Shares of each series rank on a parity with the First Preferred Shares of every
  other series and are entitled to preference over the Second Preferred Shares
  and the Common Shares. Holders of Second Preferred Shares of each series rank
  on a parity with the Second Preferred Shares of every other series and are entitled
  to preference over the Common Shares.

There are no indentures or agreements existing or proposed
  limiting the payment of dividends and there are no special liquidation rights
  or pre-emptive rights. The presently outstanding share capital is not subject
  to any call or assessment, all having been issued as fully paid and non-assessable.

With respect to the rights, preferences and restrictions attaching
  to the Companys common shares, there are generally no significant differences
  between Canadian and United States law as the shareholders, or the applicable
  corporate statute, will determine the rights, preferences and restrictions attaching
  to each class of the Companys shares.

Changes to Rights and Restrictions to Shares

The Business Corporations Act provides that a company may,
  by the type of shareholders' resolution specified by the articles, or, if the
  articles do not specify the type of resolution, by a special resolution:

| | i)  | create special rights or restrictions for, and attach
        those special rights or restrictions to, the shares of any class or series
        of shares, whether or not any or all of those shares have been issued;
        or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii) | vary or delete any special rights or restrictions
        attached to the shares of any class or series of shares, whether or not
        any or all of those shares have been issued.                                            

If special rights and restrictions are altered and any right
  or special right attached to issued shares is prejudiced or interfered with,
  then the consent of the holders of shares of that class or series by a special
  separate resolution will be required.

Subject to the Business Corporations Act, the New Articles
  provide the directors of the Company with the ability to alter the rights or
  restrictions of any class or series of shares:

1. by directors resolution or by ordinary resolution, in each case as
    determined by the directors, if none of those shares have been issued; and
2. by special resolution of the shareholders of the class or series affected
    (i.e., approved by at least 66 % of the votes cast at a meeting of those shareholders
    or consented to in writing by each of those shareholders), do any of the acts
    in the preceding paragraph, if any of the shares of the class or series of
    shares have been issued.

47

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The Business Corporations Act also provides that the Company
  may reduce its capital if it is authorized to do so by a court order, or, if
  the capital is reduced to an amount that is not less than the realizable value
  of the company's assets less its liabilities, by a special resolution or court
  order.

Generally, there are no significant differences between British
  Columbia and United States law with respect to changing the rights of shareholders
  as most state corporation statutes require shareholder approval (usually a majority)
  for any such changes that affect the rights of shareholders.

Meetings of Shareholders

The Company must hold its annual general meeting once in every
  calendar year (being not more than 15 months from the last annual general meeting)
  at such time and place to be determined by the directors of the Company. The
  Company must publish an advance notice in the manner required by the Business
  Corporations Act of any general meeting at which directors are to be elected.
  The directors may fix in advance a date, which is no fewer than 21 days prior
  to the date of the meeting. All the holders of common shares as at that date
  are entitled to receive notice of and to attend and vote at a general meeting.

Most state corporation statutes require a public company to
  hold an annual meeting for the election of directors and for the consideration
  of other appropriate matters. The state statutes also include general provisions
  relating to shareholder voting and meetings. Apart from the timing of when an
  annual Meeting must be held and the percentage of shareholders required to call
  an annual Meeting or an extraordinary meeting, there are generally no material
  differences between Canadian and United States law respecting annual meetings
  and extraordinary meetings.

Rights to Own Securities

There are no limitations under the applicable laws of Canada,
  except as provided in the Investment Canada Act (the ICA)
  as described below, or by the Companys charter or other constituent documents
  on the rights of non-resident or foreigners to hold or vote common shares or
  other securities of the Company.

The ICA requires a non-Canadian making an investment to acquire
  control of a Canadian business, the gross assets of which exceed certain defined
  threshold levels, as set out below, to file an application for review with Investment
  Canada, an agency of the Canadian government created by the ICA.

If applicable to an investment, the ICA will prohibit implementation,
  or if necessary, require divestiture of an investment deemed reviewable
  under the ICA by an investor that is not a Canadian as defined in
  the ICA (a non-Canadian), unless after review the Minister responsible
  for the ICA (the Minister) is satisfied that the reviewable
  investment is likely to be of net benefit to Canada. An investment in the Companys
  common shares by a non-Canadian would be reviewable under the ICA if it was
  an investment to acquire control of the Company and the value of the Companys
  assets was $5 million or more. A non-Canadian would be deemed to acquire control
  of the Company for the purposes of the ICA if the non-Canadian acquired a majority
  of the Companys outstanding common shares (or less than a majority but
  controlled the Company in fact through the ownership of one-third or more of
  the Companys outstanding common shares) unless it could be established
  that, on the acquisition, the Company was not controlled in fact by the acquirer
  through the ownership of such common shares.

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Certain transactions in relation to the Companys common
  shares would be exempt from review under the ICA, including, among others, the
  following:

1. acquisition of common shares by a person in the ordinary
      course of that persons business as a trader or dealer in securities;
2. acquisition of control of the Company in connection
      with the realization of security granted for a loan or other financial assistance
      and not for any purpose related to the provisions of the ICA; and
3. acquisition of control of the Company by reason of an
      amalgamation, merger, consolidation or corporate reorganization following
      which the ultimate direct or indirect control of the Company, through the
      ownership of voting interests, remains unchanged.

As a result of the Canada-U.S. Free Trade Agreement, the ICA
  was amended in January 1989 to provide distinct threshold levels for Americans
  who acquire control of a Canadian business. The threshold levels for Americans,
  as described below, gradually rose between 1989 and 1992 to its present level.

The ICA was amended with the World Trade Organization Agreement
  to provide for special review thresholds for WTO Investors of countries
  belonging to the World Trade Organization, among others, nationals and permanent
  residents (including WTO Investor controlled entities as defined
  in the ICA). Under the ICA, as amended, an investment in the Companys
  common shares by WTO Investors would be reviewable only if it was an investment
  to acquire control of the Company and the value of the Companys assets
  was equal to or greater than a specified amount which is published by the Minister
  after its determination for any particular year.

A Canadian business is defined in the ICA as a business carried
  on in Canada that has a place of business in Canada, an individual or individuals
  in Canada who are employed or self-employed in connection with the business,
  and assets in Canada used in carrying on the business.

An American, as defined in the ICA, includes: an individual
  who is an American national or a lawful permanent resident of the U.S.; a government
  or government agency of the U.S.; an American-controlled entity, corporation
  or limited partnership; and a corporation, limited partnership or trust of which
  two-thirds of its board of directors, general partners or trustees, as the case
  may be, are Canadians or Americans.

The following investments by a non-Canadian other than WTO
  Investors are subject to review by Investment Canada:

|(a) | all direct acquisitions of control of Canadian businesses
        with assets of $5 million or more;                                                                                                                                                 
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | all indirect acquisitions of control of Canadian
        businesses with assets of $50 million or more if such assets represent
        less than 50% of the value of the assets of the entities, the control
        of which is being acquired; and
|(c) | all indirect acquisitions of control of Canadian
        businesses with assets of $5 million or more if such assets represent
        more than 50% of the value of the assets of the entities, the control
        of which is being acquired.     

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Review by Investment Canada is required when investments by
  WTO Investors, including Americans, exceed $223 million (US $150 million) for
  direct acquisitions of control. No review by Investment Canada is required for
  indirect acquisitions of control.

For purposes of the ICA:

indirect acquisition of control means a purchase
    of the voting interest of a corporation, partnership, joint venture or trust,
    whether a Canadian or foreign entity, which controls a corporation, partnership,
    joint venture or trust company on a Canadian business in Canada.


The acquisition of certain Canadian businesses is excluded
  from the higher thresholds set out for Americans. These excluded businesses
  are oil, gas, uranium, financial services (except insurance), transportation
  services and cultural services (i.e., the publication, distribution or sale
  of books, magazines, periodicals (other than printing or typesetting businesses),
  music in print or machine readable form, radio, television, cable and satellite
  services; the publication, distribution, sale or exhibition of film or video
  recordings or audio or video music recordings). Direct or indirect acquisitions
  of control of these excluded businesses are reviewable at the $5 million and
  $50 million thresholds.

A non-Canadian shall not implement an investment reviewable
  under the ICA unless the investment has been reviewed and the Minister responsible
  for Investment Canada is satisfied or is deemed to be satisfied that the investment
  is likely to be a net benefit to Canada, the non-Canadian shall not implement
  the investment or, if the investment has been implemented, shall divest himself
  of control of the business that is the subject of the investment.

A non-Canadian or American making the following investments:

|(a) | an investment to establish a new Canadian business; and
|--- | -------------------------------------------------------
|    |                                                        
|(b) | an investment to acquire control of a Canadian business

which investment is not subject to review under the ICA, must
  notify Investment Canada, within prescribed time limits, of such investments.

Restrictions on Changes in Control, Mergers, Acquisitions
  or Corporate Restructuring of the Company

There are no provisions in the Companys Notice of Articles
  or Articles that would have the effect of delaying, deferring or preventing
  a change in control of the Company or that would operate only with respect to
  a merger, acquisition or corporate restructuring involving the Company.

The Business Corporations Act does not contain any provisions
  that would have the effect of delaying, deferring or preventing a change of
  control of the Company.

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Generally, there are no significant differences between British
  Columbia and United States law in this regard, as many state corporation statutes
  also do not contain such provisions and only empower a companys board
  of directors to adopt such provisions.

Ownership Threshold Requiring Public Disclosure

There are no provisions in the Companys Notice of Articles
  or Articles or in the New Act governing the threshold above which shareholder
  ownership must be disclosed. The Company is a reporting company under Canadian
  provincial securities legislation, including securities legislation in the provinces
  of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, Quebec, New Brunswick
  and Northwest Territories. As a reporting company, provincial securities legislation
  requires that a shareholder disclose ownership of 10% or more of the shares
  (and any further increases of 2% or more) of the Company by issuing a news release
  and filing a report (both containing prescribed disclosure) with the Securities
  Commissions in those provinces. They also require the Company disclose, in its
  proxy circular sent out for an Annual Meeting or Special Meeting, the names
  of holders known to the Company to beneficially own more than 10% of the Companys
  issued and outstanding shares.

Most state corporation statutes do not contain provisions
  governing the threshold above which shareholder ownership must be disclosed.
  United States federal securities laws require a company that is subject to the
  reporting requirements of the Securities Exchange Act of 1934 to disclose, in
  its annual reports filed with the Securities and Exchange Commission those shareholders
  who own more than 5% of a corporations issued and outstanding shares.

Dividend Record

The Company has not paid any dividends on its common shares
  and has no policy with respect to the payment of dividends.

Changes in the Capital of the Corporation

There are no conditions imposed by the Companys Notice
  of Articles or Articles which are more stringent than those required by the
  Business Corporations Act.

A copy of the Companys amended Articles is included
  as an Exhibit hereto.

C. Material Contracts

The Company has entered into the following material contracts,
  other than contracts entered into in the ordinary course of business, in the
  past two years:

1. Purchase Agreement entered into between Trillion, Trillion
      Resources (Guernsey) Limited (Guernsey) and Great Lakes Minerals
      (Private) Limited (Great Lakes dated June 23, 2003, and the
      Amendment thereto dated July 2, 2003, whereby Great Lakes purchased 100%
      of the shares of Guernsey, a wholly-owned subsidiary of Trillion, thereby
      acquiring all of Guernseys assets, including the exploration properties
      in Zimbabwe, subject to Trillion (now Oro Belle) retaining a 30% carried
      interest up to US$300,000 in certain of the properties.

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1. Viceroy Arrangement Agreement dated May 15, 2003 between
      Viceroy Resource Corporation, Quest Investment Corporation, the Company,
      et al., whereby the Company participated in a reorganization and exchange
      of shares which resulted in the acquisition of Oro Belle;
2. Trillion Arrangement Agreement dated July 12, 2003 between
      the Company, Trillion and Oro Belle whereby Trillion merged with Oro Belle
      (to continue under the name Oro Belle) and the Company acquired all the
      shares of Trillion at an exchange of 1 of the Companys shares for
      0.70 Trillion share.
3. Letter of Intent dated March 23, 2004 between the Company
      and Tenke Mining Corp. whereby Tenke may earn a 75% interest in the Las
      Flechas property of the Company by making expenditures aggregating US$4.5
      million over 5 years. The transaction is subject to all necessary approvals
      and execution of a detailed earn-in agreement.

These material contracts are discussed in greater detail under Item 4 of this
  Annual Report on Form 20-F.

D.     Exchange Controls

There are no governmental laws, decrees or regulations in
  Canada relating to restrictions on the import of capital affecting the remittance
  of interest, dividends or other payments to non-resident holders of our shares.
  Any such remittances to United States residents, however, are subject to a 5%
  to 15% withholding tax pursuant to Article X of the reciprocal tax treaty between
  Canada and the United States. See Taxation below.

E.     Taxation

Canadian Federal Income Tax Consequences

The following is a general summary of all material Canadian
  federal income tax considerations generally applicable to a holder of the Companys
  common shares who is not a resident of Canada for the purposes of the Income
  Tax Act (Canada) (the Act). The discussion does not address
  individual consequences to persons subject to special provisions of federal
  income tax law.

The summary is based on the current provisions of the Act
  and the regulations thereunder and the Companys understanding of the current
  administrative practices published by, and press announcements released by Canada
  Customs and Revenue Agency and the Department of Finance. This summary takes
  into account proposals to amend the Act announced prior to the date hereof (although
  no assurances can be given that such changes will be enacted in the form presented
  or at all), but does not otherwise take into account or anticipate any other
  changes in law, whether by judicial, governmental or legislative action or decision
  nor does it take into account any provincial, territorial, local or foreign
  tax considerations. Accordingly, holders and prospective holders of the Companys
  shares are urged to consult their own tax advisors about the federal, provincial,
  territorial, local and foreign tax consequences of purchasing, owning and disposing
  of such shares.

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The Act provides in subsection 212(2) that dividends and other
  distributions which are deemed to be dividends and which are paid or credited
  or are deemed to be paid or credited by a Canadian resident company to a non-resident
  of Canada shall be subject to non-resident withholding tax equal to 25 percent
  of the gross amount of the dividend or deemed dividend.

Subsections 2(3) and 115(1) of the Act provide that a non-resident
  person is subject to tax in Canada at the rates generally applicable to residents
  of Canada on any taxable capital gain arising on the disposition
  of the shares of a company which are listed on a prescribed stock exchange if
  such nonresident, together with persons with whom he does not deal at arms
  length, owned 25 percent or more of the issued shares of any class of the capital
  stock of the Company at any time in the five years immediately preceding the
  date of disposition of the shares. Subsections 2(3) and 115(1) also provide
  that a non-resident person is subject to tax in Canada on taxable capital gains
  arising on the disposition of shares that constitute capital property used in
  carrying on a business in Canada. The taxable portion of a capital gain is equal
  to one-half of the amount by which the proceeds of disposition of such shares,
  net of any reasonable costs associated with the disposition, exceeds the adjusted
  cost base to the holder of the shares.

Provisions in the Act relating to dividend and deemed dividend
  payments and gains realized by nonresidents of Canada who are residents of the
  United States are subject to the Canada-United States Income Tax Convention
  (1980), as amended (the 1980 Convention).

Article X of the 1980 Convention provides that for 1997 and
  subsequent taxation years pursuant to the Third Protocol to the 1980 Convention
  the rate of Canadian non-resident withholding tax on dividends paid to a U.S.
  company that beneficially owns at least 10% of the voting stock of the Company
  shall not exceed 5% of the dividends. Otherwise, and except in the case of dividends
  received by a resident of the United States who carries on business in Canada
  through a Canadian permanent establishment and the shares in respect of which
  the dividends are paid are effectively connected with that permanent establishment,
  the rate of non-resident withholding shall not exceed 15 percent of the dividend.
  Where the dividends are received by a United States person carrying on business
  in Canada through a Canadian permanent establishment and the shares in respect
  of which the dividends are paid are effectively connected with that permanent
  establishment the dividends are generally subject to Canadian tax as business
  profits, generally without limitation under the 1980 Convention.

Article XXI of the 1980 Convention generally exempts from
  Canadian income tax, dividends paid to a religious, scientific, literary, educational
  or charitable organization or to an organization constituted and operated exclusively
  to administer a pension, retirement or employee benefit fund or plan, if the
  organization is resident in the U.S. and exempt from income tax under the laws
  of the U.S.

Article XIII of the 1980 Convention provides that gains realized
  by a United States resident on the disposition of shares of a Canadian company
  may not generally be taxed in Canada unless the value of those shares is derived
  principally from real property situated in Canada (including the right to explore
  for or exploit natural resources and rights to amounts computed by reference
  to production) or the shares form part of the business property of a permanent
  establishment or pertained to a fixed base used for the purpose of performing
  independent personal services which the United States shareholder has or had
  in Canada within the 12 month period preceding the date of disposition. Canada
  also retains the right to tax gains on property owned at the time of departure
  from Canada if it is sold by a person who was resident

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in Canada for 120 months in any 20 consecutive years preceding
  the sale and who was a resident in Canada at any time in the 10 years preceding
  sale.

Notwithstanding the potential exemption from Canadian tax
  provided under the 1980 Convention, where a non-resident of Canada disposes
  of common shares of the Company that are taxable Canadian property,
  the non-resident is required to file a Canadian income tax return in respect
  of any such dispositions.

If a common share of the Company is disposed of by the shareholder
  to the Company other than in the open market in the manner in which shares would
  normally be purchased by the public, the proceeds of disposition will, in general
  terms, be limited to the paid-up capital of the share and the balance of the
  price paid will be deemed to be a dividend. The amount of such dividend will
  be subject to Canadian withholding tax as previously described.

United States Federal Income Tax Consequences

The following is a general discussion of all material United
  States federal income tax consequences, under current law, generally applicable
  to a U.S. Holder (as hereinafter defined) of common shares of the Company. This
  discussion does not address individual consequences to persons subject to special
  provisions of federal income tax law, such as those described below as excluded
  from the definition of a U.S. Holder. In addition, this discussion does not
  cover any state, local or foreign tax consequences. (See Canadian Federal
  Tax Consequences).

The following discussion is based upon the sections of the
  Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations,
  published Internal Revenue Service (IRS) rulings, published administrative
  positions of the IRS and court decisions that are currently applicable, any
  or all of which could be materially and adversely changed, possibly on a retroactive
  basis, at any time. This discussion does not consider the potential effects,
  both adverse and beneficial, of any recently proposed legislation which, if
  enacted, could be applied, possibly on a retroactive basis, at any time. This
  discussion is for general information only and it is not intended to be, nor
  should it be construed to be, legal or tax advise to any holder or prospective
  holder of common shares of the Company and no opinion or representation with
  respect to the United States federal income tax consequences to any such holder
  or prospective holder is made. Accordingly, holders and prospective holders
  of common shares of the Company are urged to consult their own tax advisors
  about the federal, state, local, and foreign tax consequences of purchasing,
  owning and disposing of common shares of the Company.

U.S. Holders

As used herein, a U.S. Holder means a holder of
  common shares of the Company who is a citizen or individual resident of the
  United States, a corporation or partnership created or organized in or under
  the laws of the United States or of any political subdivision thereof or a trust
  whose income is taxable in the United States irrespective of source. This summary
  does not address the tax consequences to, and U.S. Holder does not include,
  persons subject to specific provisions of federal income tax law, such as tax-exempt
  organizations, qualified retirement plans, individual retirement accounts and
  other tax-deferred accounts, financial institutions, insurance companies, real
  estate investment trusts, regulated investment companies, broker-dealers, nonresident
  alien individuals or foreign corporations, persons or entities that have a functional
  currency other than the U.S. dollar, shareholders who hold common shares
  as part of

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a straddle, hedging or a conversion transaction, shareholders
  who acquired their common shares through the exercise of employee stock options
  or otherwise as compensation for services and U.S. Holders to whom the Company
  is a controlled foreign corporation or a foreign personal holding company. This
  summary is limited to U.S. Holders who own common shares as capital assets.
  This summary does not address the consequences to a person or entity holding
  an interest in a shareholder or the consequences to a person of the ownership,
  exercise or disposition of any options, warrants or other rights to acquire
  common shares.

Distribution on Common Shares of the Company

The Company has not distributed dividends to date. In such
  event, U.S. Holders receiving dividend distributions (including constructive
  dividends) with respect to common shares of the Company are required to include
  in gross income for United States federal income tax purposes the gross amount
  of such distributions equal to the U.S. dollar value of such dividends on the
  date of receipt (based on the exchange rate on such date) to the extent that
  the Company has current or accumulated earnings and profits, without reduction
  for any Canadian income tax withheld from such distributions. Such Canadian
  tax withheld may be credited, subject to certain limitations, against the U.S.
  Holders federal income tax liability or, alternatively, may be deducted
  in computing the U.S. Holders federal taxable income by those who itemize
  deductions. (See more detailed discussion at Foreign Tax Credit
  below). To the extent that distributions exceed current or accumulated earnings
  and profits of the Company, they will be treated first as a return of capital
  up to the U.S. Holders adjusted basis in the common shares and thereafter
  as gain from the sale or exchange of the common shares. Preferential tax rates
  for long-term capital gains are applicable to a U.S. Holder which is an individual,
  estate or trust. There are currently no preferential tax rates for long-term
  capital gains for a U.S. Holder which is a corporation.

A U.S. Holder who is an U.S. resident individual may, under
  certain circumstances, be entitled to a reduced dividend tax rate of 15% on
  dividends received from the Company (unless the Company qualified as a foreign
  personal holding company or a passive foreign investment company,
  as defined below). Foreign corporations must meet various criteria in order
  for their dividends to qualify for the reduced tax rate which are beyond the
  scope of this discussion.

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

Dividends paid on the common shares of the Company will not
  generally be eligible for the dividends received deduction provided to corporations
  receiving dividends from certain United States corporations. A U.S. Holder which
  is a corporation may, under certain circumstances, be entitled to a 70% deduction
  of the United States source portion of dividends received from the Company (unless
  the Company qualifies as a foreign personal holding company or a
  passive foreign investment company, as defined below) if such U.S.
  Holder owns shares representing at least 10% of the voting

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power and value of the Company. The availability of this deduction
  is subject to several complex limitations which are beyond the scope of this
  discussion.

U.S. information reporting requirements may apply with respect
  to the payment of dividends to U.S. Holders of the Companys common shares.
  Under Treasury Regulations currently in effect, a non-corporate holder may be
  subject to backup withholding at a 30% rate with respect to dividends when such
  holder (1) fails to furnish or certify a correct taxpayer identification number
  to the payor in the required manner, (2) is notified by the IRS that it has
  failed to report payments of interest or dividends properly or (3) fails, under
  certain circumstances, to certify that it has been notified by the IRS that
  it is subject to backup withholding for failure to report interest and dividend
  payments. Finalized Treasury Regulations have generally expanded the circumstances
  under which U.S. information reporting and backup withholding may apply. Holders
  should consult their own tax advisors regarding the application of the U.S.
  information reporting and backup withholding rules, including the finalized
  Treasury Regulations.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions)
  Canadian income tax with respect to the ownership of common shares of the Company
  may be entitled, at the option of the U.S. Holder, to either receive a deduction
  or a tax credit for such foreign tax paid or withheld. Generally, it will be
  more advantageous to claim a credit because a credit reduces United States federal
  income taxes on a dollar-for-dollar basis, while a deduction merely reduces
  the taxpayers income subject to tax. This election is made on a year-by-year
  basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder
  during that year. There are significant and complex limitations which apply
  to the credit, among which is the general limitation that the credit cannot
  exceed the proportionate share of the U.S. Holders United States income
  tax liability that the U.S. Holders foreign sources income bears to his
  or its worldwide taxable income. In the determination of the application of
  this limitation, the various items of income and deduction must be classified
  into foreign and domestic sources. Complex rules govern this classification
  process. In addition, this limitation is calculated separately with respect
  to specific classes of income such as passive income, high
  withholding tax interest, financial services income, shipping
  income, and certain other classifications of income. Dividends distributed
  by the Company will generally constitute passive income or, in the
  case of certain U.S. Holders, financial services income for these
  purposes. The availability of the foreign tax credit and the application of
  the limitations on the credit are fact specific, and U.S. Holders of common
  shares of the Company should consult their own tax advisors regarding their
  individual circumstances.

Disposition of Common Shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of
  common shares of the Company equal to the difference, if any, between (i) the
  amount of cash plus the fair market value of any property received, and (ii)
  the shareholders tax basis in the common shares of the Company. Preferential
  tax rates apply to long-term capital gains of U.S. Holders who are individuals,
  estates or trusts. This gain or loss will be capital gain or loss if the common
  shares are a capital asset in the hands of the U.S. Holder, which will be long-term
  capital gain or loss if the common shares of the Company are held for more than
  one year. Deductions for net capital loss may be carried over to be used in
  later tax years until such net capital loss is thereby exhausted. For U.S. Holders
  that are corporations (other than corporations subject to Subchapter S of the
  Code), an unused net capital loss may be carried back three years and carried

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forward five years from the loss year to be offset against
  capital gains until such net capital loss is thereby exhausted.

Other Considerations

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

Passive Foreign Investment Company

Certain United States income tax legislation contains rules
  governing passive foreign investment companies (PFIC)
  which can have significant tax effects on U.S. Holders of foreign corporations.
  Section 1297 of the Code defines a PFIC as a corporation that is not formed
  in the United States and, for any taxable year, either (i) 75% or more of its
  gross income is passive income, which includes interest, dividends
  and certain rents and royalties or (ii) the average percentage, by fair market
  value (or, if the Company makes an election, adjusted tax basis) of its assets
  that produce or are held for the production of passive income is
  50% or more. Due to the lack of operating revenue, it is likely that the Company
  has been a PFIC in prior years and will continue to be a PFIC for its year ended
  December 31, 2003. Each U.S. Holder of the Company is urged to consult a tax
  advisor with respect to how the PFIC rules affect their tax situation.

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

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

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

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The procedure a U.S. Holder must comply with in making an
  effective QEF election will depend on whether the year of the election is the
  first year in the U.S. Holders holding period in which the Company is
  a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a
  timely QEF election, then the U.S. Holder may make the QEF election by simply
  filing the appropriate documents at the time the U.S. Holder files his tax return
  for such first year. If, however, the Company qualified as a PFIC in a prior
  year, then in addition to filing documents, the U.S. Holder must elect to recognize
  (i) under the rules of Section 1291 of the Code (discussed below), any gain
  that he would otherwise recognize if the U.S. Holder sold his stock on the qualification
  date or (ii) if the Company is a controlled foreign corporation, the U.S. Holders
  pro rata share of the Companys post-1986 earnings and profits as of the
  qualification date. The qualification date is the first day of the Companys
  first tax year in which the Company qualified as a qualified electing
  fund with respect to such U.S. Holder. The elections to recognize such
  gain or earnings and profits can only be made if such U.S. Holders holding
  period for the common shares of the Company includes the qualification date.
  By electing to recognize such gain or earnings and profits, the U.S. Holder
  will be deemed to have made a timely QEF election. U.S. Holders are urged to
  consult a tax advisor regarding the availability of and procedure for electing
  to recognize gain or earnings and profits under the foregoing rules.

If the Company no longer qualifies as a PFIC in a subsequent
  year, a timely QEF election will remain in effect, although not applicable,
  during those years that the Company is not a PFIC. Therefore, if the Company
  requalifies as a PFIC, the QEF election previously made is still valid, and
  the U.S. Holder is required to satisfy the requirements of that election. Furthermore,
  a QEF election remains in effect with respect to a U.S. Holder, although dormant,
  after a U.S. Holder disposes of its entire interest in the Company. Upon the
  U.S. Holders reacquisition of an interest in the Company, the QEF election
  will apply to the newly acquired stock of the Company.

Effective for tax years of U.S. Holders beginning after December
  31, 1997, U.S. Holders who hold (actually or constructively) marketable stock
  of a foreign corporation that qualifies as a PFIC, may annually elect to mark
  such stock to the market (a mark-to-market election). If such an
  election is made, such U.S. Holder will not be subject to the special taxation
  rules of Section 1291 described below for the taxable year for which the mark-to-market
  election is made. A U.S. Holder who makes such an election will include in income
  for the taxable year for which the election was made in an amount equal to the
  excess, if any, of the fair market value of the common shares of the Company
  as of the close of such tax year over such U.S. Holders adjusted basis
  in such common shares. In addition, the U.S. Holder is allowed a deduction for
  the lesser of (i) the excess, if any, of such U.S. Holders adjusted tax
  basis in the common shares over the fair market value of such shares as of the
  close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market
  gains for the common shares in the Company included by such U.S. Holder for
  prior tax years, including any amount which would have been included for any
  prior tax year but for Section 1291 interest on tax deferral rules discussed
  below with respect to Non-Electing U.S. Holders, over (B) the mark-to-market
  losses for shares that were allowed as deductions for prior tax years. U.S.
  Holders adjusted tax basis in the common shares of the Company will be
  increased to reflect the amount included or deducted as a result of a mark-to-market
  election. A mark-to-market election only applies to the taxable year in which
  the election was made. A separate election must be made by a U.S. Holder for
  each subsequent taxable year. U.S. Holders should consult their tax advisor
  regarding the manner and appropriateness of making such an election.

58

---

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

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

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

Under Section 1291(f) of the Code, the IRS has issued proposed
  regulations that, subject to certain exceptions, would treat as taxable certain
  transfers of PFIC stock by Non-Electing U.S. Holders that are generally not
  otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations,
  and transfers at death. Generally, in such cases the basis of the Company common
  shares in the hands of the transferee and the basis of any property received
  in the exchange for those common shares would be increased by the amount of
  gain recognized. An Electing U.S. Holder would not be taxed on certain transfers
  of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations,
  and transfers at death. The transferees basis in this case will depend
  on the manner of the transfer. In a transfer at death, for example, the transferees
  basis is equal to (i) the fair market value of the Electing U.S. Holders
  common shares, less (ii) the excess of the fair market value of the Electing
  U.S. Holders common shares reduced by the U.S. Holders adjusted
  basis in these common shares at death. The specific tax effect to the U.S. Holder
  and the transferee may vary based on the manner in which the common shares are
  transferred. Each U.S. Holder of the Company is urged to consult a tax advisor
  with respect to how the PFIC rules affect their tax situation.

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

59

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F.     Dividends and paying agents

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

G.     Statement by experts

This Form 20F is being filed as an Annual Report under the
  Exchange Act and, as such, there is no requirement to provide any information
  under this section.

H.     Documents on display

All documents referred to in this Annual Report on Form 20-F
  are available for inspection at the head office of the Company, Suite 520, 700
  West Pender Street, Vancouver, British Columbia, Canada, V6C 1G8, during normal
  office hours.

I.     Subsidiary Information

There is no information relating to the Companys subsidiaries
  which must be provided in Canada and which is not otherwise called for by the
  body of generally accepted accounting principles used in preparing the financial
  statements.

11.     QUANTITATIVE AND QUALITATIVE
  DISCLOSURES ABOUT MARKET RISK

The Company is a small business issuer and, as such, there
  is no requirement to provide any information under this section.

12.     DESCRIPTION OF SECURITIES
  OTHER THAN EQUITY SECURITIES

This 20F is being filed as an annual report under the Exchange
  Act and, as such, there is no requirement to provide any information under this
  item.

PART II

13.     DEFAULT, DIVIDEND ARREARAGES
  AND DELINQUENCIES

There has not been a material default in the payment of principal,
  interest, a sinking or purchase fund installment, or any other material default
  relating to indebtedness of the Company or any if its significant subsidiaries.
  There are no payments of dividends by the Company in arrears, nor has there
  been any other material delinquency relating to any class of shares of the Company.

14.     MATERIAL MODIFICATIONS
  TO THE RIGHT OF SECURITY HOLDERS AND USEOF PROCEEDS

None.

60

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15.     CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with
  the participation of the Companys management, including the chief executive
  officer and chief financial officer, of the effectiveness of the design and
  operation of the Companys disclosure controls and procedures (as defined
  in Rule 13a-15 of the U.S. Securities Exchange Act of 1934, as amended) as of
  the end of the period covered by the Annual Report on 20-F. Based on that evaluation,
  the Companys management, including the chief executive officer and chief
  financial officer, concluded that the Companys disclosure controls and
  procedures were effective as of the end of the period covered by this Annual
  Report to provide reasonable assurance that information required to be disclosed
  by the Company in the reports that it files or submits under the U.S. Securities
  Exchange Act of 1934, as amended, is recorded, processed, summarized and reported
  with the time period specified in the U.S. Securities and Exchange Commission
  rules and forms.

The Companys management, including the chief executive
  officer and chief financial officer, identified no change in the Companys
  internal control over financial reporting that occurred during the Companys
  fiscal year ended December 31, 2003, and that has materially affected, or is
  reasonably likely to materially affect, the Companys internal control
  over financial reporting.

The term internal control over financial reporting
  is defined as a process designed by, or under the supervision of, the registrant's
  principal executive and principal financial officers, or persons performing
  similar functions, and effected by the registrant's board of directors, management
  and other personnel, to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles and includes
  those policies and procedures that:

| | (1) | Pertain to the maintenance of records that in reasonable
        detail accurately and fairly reflect the transactions and dispositions
        of the assets of the registrant;                                                                                                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | Provide reasonable assurance that transactions are
        recorded as necessary to permit preparation of financial statements in
        accordance with generally accepted accounting principles, and that receipts
        and expenditures of the registrant are being made only in accordance with
        authorizations of management and directors of the registrant;and
| |     |                                                                                                                                                                                                                                                                                                                                                                                 
| | (3) | Provide reasonable assurance regarding prevention or
        timely detection of unauthorized acquisition, use or disposition of the
        registrant's assets that could have a material effect on the financial
        statements.                                                                                                                                         

16.     [RESERVED]

A.     Audit Committee Expert

The Companys board of directors has determined that
  Robert V. Matthews, Chairman of the Audit Committee, qualifies as an audit
  committee financial expert as defined by the rules of the SEC. Mr. Matthews
  is a Chartered Accountant. He is currently President of Sheppards Building Materials
  Inc., was previously a director of Viceroy Resource (now Quest) and Manager/Controller
  for MacMillan

61

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Bloedel from 1974 to 1993. Mr. Matthews has been a director
  of several joint venture companies and other associations.

B.     Code of Ethics

On March 25, 2004, the Company adopted its Code of Ethics
  which applies to all directors, officers, employees and consultants, including
  the President and Chief Executive Officer and the Chief Financial Officer. A
  copy of the Companys Code of Ethics is included as an exhibit hereto and
  is available without charge to the public upon written request to the Corporate
  Secretary of the Company at Suite 510-700 West Pender Street, Vancouver, British
  Columbia, Canada, V6C 1G8.

C.     Principal Accountant Fees and Services

The following outlines the expenditures for accounting fees for the last two
  fiscal periods:

|               | Six Months Ended
      December 31, 2003 | Three Months Ended
      June 30, 2003
|-------------- | ---------------------------------------- | --------------------------------------
|Audit Fees     | $17,000                                  | $14,000(1)                            
|Tax Fees       | Nil                                      | Nil                                   
|All Other Fees | Nil                                      | Nil                                   

The Companys Audit Committee Mandate and Charter (copy
  included as an exhibit hereto  see Item 19B) requires that prior approval
  of the audit committee is received on every occasion that the auditors
  services are engaged. Each year, the auditors present their proposed services,
  including the nature, type and scope of services contemplated and the related
  fees, to the audit committee for their approval. to be rendered by these firms
  during the year. In addition, Audit Committee pre-approval is also required
  for those engagements that may arise during the course of the year that are
  outside the scope of the initial services and fees pre-approved by the Audit
  Committee.

D.Exemptions from
  the Listing Standards for Audit Committees

Not Applicable.

E.Purchases of Equity
  Securities by the Issuer and Affiliated Purchasers

Not Applicable.

PART III

17.     FINANCIAL STATEMENTS

This Annual Report on Form 20-F includes the Companys
  audited financial statements for the six months ended December 31, 2003 and
  the period from incorporation (March 31, 2003) to June 30, 2003:

62

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|      | Description                                                                                                                                                                  | Page No.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|(i)   | Independent Auditors Report of PricewaterhouseCoopers
      LLP dated February 18, 2004                                                                                     | 68      
|(iii) | Consolidated Balance Sheets as at December
      31, 2003 and June 30, 2003                                                                                                  | 69      
|(iv)  | Consolidated Statements of Operations
      and Deficit for the six months ended December 31, 2003 and the period from
      incorporation (March 31, 2003) to June 30, 2003 | 70      
|(v)   | Consolidated Statements of Cash Flow for
      the six months ended December 31, 2003 and the period from incorporation
      (March 31, 2003) to June 30, 2003              | 71      
|(vi)  | Notes to Consolidated Financial Statements                                                                                                                                   | 72      

These financial statements were prepared in accordance with Canadian GAAP
  and are expressed in Canadian dollars. Such financial statements have been reconciled
  to U.S. GAAP (see notes included therein).

18.     FINANCIAL STATEMENTS

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

19.     EXHIBITS

The following exhibits are included in this Annual Report on Form 20-F:

|Exhibit Number | Description of Exhibit                                                                                                                                                                                                            | Note
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|1.1            | Certificate of British Columbia, Registrar of
      Companies as to the incorporation of Viceroy Exploration Ltd. dated March
      31, 2003.                                                                                     | (1) 
|1.2            | Certificate of British Columbia, Registrar of
      Companies as to the amalgamation of Trillion with Oro Belle Resources Corporation
      (Oro Belle), a wholly-owned subsidiary of the Company dated
      December 2, 2003. | (1) 
|1.3            | Amended Articles of the Company.                                                                                                                                                                                                  | (1) 
|2              | Not applicable                                                                                                                                                                                                                    | --  
|3              | Not applicable                                                                                                                                                                                                                    | --  

63

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|Exhibit Number | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                         | Note
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|4.1            | Arrangement Agreement dated May 15, 2003 between
        Quest Investment Corporation, Viceroy Resource Corporation, the Company,
        et al., whereby the Company participated in a reorganization and exchange
        of shares which resulted in the acquisition of Oro Belle.                                                                                          | (2) 
|4.2            | Amendment No. 1 to Arrangement Agreement dated as
        of June 3, 2003 among Quest Investment Corporation, Viceroy Resource Corporation,
        the Company, et al., whereby the Company participated in a reorganization
        and exchange of shares which resulted in the acquisition of Oro Belle.                                                                   | (3) 
|4.3            | Trillion Arrangement Agreement dated July 12, 2003
        between the Company, Trillion and Oro Belle whereby Trillion merged with
        Oro Belle (to continue under the name Oro Belle) and the Company acquired
        all the shares of Trillion at an exchange of 1 of the Companys shares
        for 0.70 Trillion share.                                          | (4) 
|4.4            | Stock Option Plan of the
        Company adopted by the Directors on September 12, 2003 and approved by
        the shareholders on April 29, 2004.                                                                                                                                                                                                                            | (1) 
|4.5            | Listing Application with the TSX Venture Exchange
      dated November 5, 2003.                                                                                                                                                                                                                                                                                                | (1) 
|4.6            | Purchase Agreement entered into between Trillion,
        Trillion Resources (Guernsey) Limited and Great Lakes Minerals (Private)
        Limited dated June 23, 2003 the Amendment thereto dated July 2, 2003.                                                                                                                                                               | (4) 
|4.7            | Letter of Intent dated
        March 23, 2004 between the Company and Tenke Mining Corp. whereby Tenke
        may earn a 75% interest in the Las Flechas property of the Company by
        making expenditures aggregating US$4.5 million over 5 years. The transaction
        is subject to all necessary approvals and execution of a detailed earn-in
        agreement. | (1) 
|8.1            | List of Subsidiaries                                                                                                                                                                                                                                                                                                                                                           | (1) 
|11             | Code of Ethics of the Company dated March 25,
      2004.                                                                                                                                                                                                                                                                                                                      | (1) 
|12.1           | Certification of the Chief
        Executive Officer of the Corporation pursuant to Rule 13a-14(a) of the
        Securities Exchange Act of 1934                                                                                                                                                                                                                              | (1) 
|12.2           | Certification of the Chief
        Financial Officer of the Corporation pursuant to Rule 13a-14(a) of the
        Securities Exchange Act of 1934                                                                                                                                                                                                                              | (1) 
|13.1           | Certification of the Chief
        Executive Officer of the Corporation pursuant to Rule 13a-14(b) of the
        Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title
        18 of the United States Code                                                                                                                                                 | (1) 

64

---

|Exhibit Number | Description of Exhibit                                                                                                                                                                                                         | Note
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----
|13.2           | Certification of the Chief
        Financial Officer of the Corporation pursuant to Rule 13a-14(b) of the
        Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title
        18 of the United States Code | (1) 
|13.3           | Consent of Independent Accounts, PricewaterhouseCoopers
      LLP.                                                                                                                                                             | (1) 
|14.1           | Audit Committee Mandate and Charter dated March
      25, 2004.                                                                                                                                                                | (1) 

Notes:

|(1) | Filed as an exhibit to this Annual Report on Form 20-F.                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed with the Commission on June 27, 2003 by Quest Investment Corporation
      (file number 01-31380), now Quest Capital Corp. (file number 000-16778)
      under the annual report on Form 20-F as Exhibit 4.1.
|(3) | Filed with the Commission on June 27, 2003 by Quest Investment Corporation
      (file number 01-31380), now Quest Capital Corp. (file number 000-16778)
      under the annual report on Form 20-F as Exhibit 4.2.
|(4) | Filed with the Commission on October 28, 2003 (and amended November
      4, 2003) by Consolidated Trillion Resources Ltd. (file number 000-28248),
      under the annual report on Form 20-F as Exhibit 4.3.     

65

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SIGNATURES

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

VICEROY EXPLORATION LTD.(Registrant)

Patrick G. DowneyName: Patrick G. Downey 
  Title: President and Chief Executive Officer

Date: June 28, 2004

66

---

Viceroy Exploration Ltd. 
  (an exploration stage company)

Consolidated Financial Statements For the six-month period ended December 31, 2003
  and the three-month period ended June 30, 2003

(expressed in Canadian dollars)

66

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Management's Responsibility for Financial Reporting

The accompanying consolidated financial statements of the
  Company have been prepared by management in accordance with Canadian generally
  accepted accounting principles and reconciled to United States generally accepted
  accounting principles. These consolidated financial statements contain estimates
  based on management's judgement. Management maintains an appropriate system
  of internal controls to provide reasonable assurance that transactions are authorized,
  assets safeguarded, and proper records maintained.

The Audit Committee of the Board of Directors, which is composed
  of a majority of independent directors, reviews the results of the annual audit
  and the consolidated financial statements prior to submitting the consolidated
  financial statements to the Board for approval.

The Company's auditors, PricewaterhouseCoopers LLP, are appointed
  by the shareholders to conduct an audit and their report follows.

|                                                |                        
|----------------------------------------------- | -----------------------
|Patrick Downey                                  | Susan Neale            
|CEO and President                               | Chief Financial Officer
|                                                |                        
|Vancouver, B.C., Canada
      February 18, 2004 |                        
|                                                |                        

67

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| | PricewaterhouseCoopers LLP
      Chartered Accountants
      PricewaterhouseCoopers Place
      250 Howe Street, Suite 700
      Vancouver, British Columbia
      Canada V6C 3S7
      Telephone +1 (604) 806 7000
      Facsimile +1 (604) 806 7806
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Auditors Report

To the Shareholders of 
  Viceroy Exploration Ltd.

We have audited the consolidated balance sheets of Viceroy
  Exploration Ltd. (an exploration stage company) as at December 31, 2003 and
  June 30, 2003 and the consolidated statements of operations and deficit and
  cash flows for the six-month period ended December 31, 2003 and the three-month
  period ended June 30, 2003. 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 and United
  States generally accepted auditing standards. Those standards require that we
  plan and perform an audit to obtain reasonable assurance whether the financial
  statements are free of material misstatement. An audit includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  December 31, 2003 and June 30, 2003 and the results of its operations and its
  cash flows for the six-month period ended December 31, 2003 and the three-month
  period ended June 30, 2003 in accordance with Canadian generally accepted accounting
  principles. As required by the British Columbia Company Act, we report that,
  in our opinion, these principles have been applied on a consistent basis.



Chartered Accountants

Vancouver, British Columbia 
  February 18, 2004

> PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers
>     LLP and the other member firms of PricewaterhouseCoopers International Limited,
>     each of which is a separate and independent legal entity.

68

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Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Consolidated Balance Sheets 
  (expressed in Canadian dollars)

|                                                 | December 31,
      2003
      $ |   | June 30,
      2003
      $ |  
|------------------------------------------------ | ------------------------------- | - | --------------------------- | -
|                                                 |                                 |   |                             |  
|Assets                                           |                                 |   |                             |  
|                                                 |                                 |   |                             |  
|Current assets                                   |                                 |   |                             |  
|Cash and cash equivalents                        | 4,717,030                       |   | 549,747                     |  
|Short-term investments                           | 76,501                          |   | -                           |  
|Prepaids and other receivables                   | 161,325                         |   | 6,314                       |  
|                                                 |                                 |   |                             |  
|                                                 | 4,954,856                       |   | 556,061                     |  
|                                                 |                                 |   |                             |  
|Exploration properties(notes 3 and 4)            | 6,369,419                       |   | 6,015,995                   |  
|                                                 |                                 |   |                             |  
|                                                 | 11,324,275                      |   | 6,572,056                   |  
|                                                 |                                 |   |                             |  
|Liabilities                                      |                                 |   |                             |  
|                                                 |                                 |   |                             |  
|Current liabilities                              |                                 |   |                             |  
|Accounts payable and accrued liabilities         | 234,687                         |   | 67,673                      |  
|                                                 |                                 |   |                             |  
|Shareholders Equity                              |                                 |   |                             |  
|                                                 |                                 |   |                             |  
|Capital stock(note 6)                            | 11,284,526                      |   | 6,515,196                   |  
|                                                 |                                 |   |                             |  
|Fair value of stock options and warrants(note 6) | 1,252,471                       |   | -                           |  
|                                                 |                                 |   |                             |  
|Deficit                                          | (1,447,409                      | ) | (10,813                     | )
|                                                 |                                 |   |                             |  
|                                                 | 11,089,588                      |   | 6,504,383                   |  
|                                                 |                                 |   |                             |  
|                                                 | 11,324,275                      |   | 6,572,056                   |  

Nature of operations(note 1)

Approved by the Board of Directors

|               |               
|-------------- | --------------
|Patrick Downey | Robert Mathews

69

---

Viceroy Exploration Ltd.(an exploration stage company) 
  Consolidated Statements of Operations and Deficit 
  (expressed in Canadian dollars)

|                                                       | Period from
      July 1, 2003 to
      December 31,
      2003
      $ |   | Period from
      March 31, 2003
      (date of
      incorporation)
      to June 30,
      2003
      $ |  
|------------------------------------------------------ | ----------------------------------------------------------------------- | - | --------------------------------------------------------------------------------------------------------- | -
|                                                       |                                                                         |   |                                                                                                           |  
|Expenses                                               |                                                                         |   |                                                                                                           |  
|Director/employee stock-based compensation (note 6(e)) | 1,027,680                                                               |   | -                                                                                                         |  
|Consultants (notes 6(e) and 7(a))                      | 151,556                                                                 |   | -                                                                                                         |  
|Administrative and corporate services (note 7(b))      | 55,000                                                                  |   | -                                                                                                         |  
|Stock exchange/transfer agent                          | 42,089                                                                  |   | -                                                                                                         |  
|Legal                                                  | 40,488                                                                  |   | 5,813                                                                                                     |  
|Shareholders communication                             | 35,265                                                                  |   | -                                                                                                         |  
|Audit                                                  | 24,080                                                                  |   | 5,000                                                                                                     |  
|Investor relations                                     | 18,358                                                                  |   | -                                                                                                         |  
|Licenses, permits and fees                             | 15,250                                                                  |   | -                                                                                                         |  
|Travel and lodging                                     | 11,916                                                                  |   | -                                                                                                         |  
|Office and miscellaneous                               | 11,603                                                                  |   | -                                                                                                         |  
|                                                       |                                                                         |   |                                                                                                           |  
|Loss before the following                              | 1,433,285                                                               |   | 10,813                                                                                                    |  
|                                                       |                                                                         |   |                                                                                                           |  
|Interest income                                        | (7,604                                                                  | ) | -                                                                                                         |  
|                                                       |                                                                         |   |                                                                                                           |  
|Foreign exchange loss                                  | 10,915                                                                  |   | -                                                                                                         |  
|                                                       |                                                                         |   |                                                                                                           |  
|Loss for the period                                    | 1,436,596                                                               |   | 10,813                                                                                                    |  
|                                                       |                                                                         |   |                                                                                                           |  
|Deficit - Beginning of period                          | 10,813                                                                  |   | -                                                                                                         |  
|                                                       |                                                                         |   |                                                                                                           |  
|Deficit - End of period                                | 1,447,409                                                               |   | 10,813                                                                                                    |  
|                                                       |                                                                         |   |                                                                                                           |  
|Basic and diluted loss per share                       | (0.10                                                                   | ) | (0.00                                                                                                     | )
|                                                       |                                                                         |   |                                                                                                           |  
|Weighted average shares outstanding                    | 14,389,263                                                              |   | 13,800,000                                                                                                |  

70

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Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Consolidated Statements of Cash Flows 
  (expressed in Canadian dollars)

|                                                      | Period from
      July 1, 2003 to
      December 31,
      2003
      $ |   | Period from
      March 31, 2003
      (date of
      incorporation)
      to June 30,
      2003
      $ |  
|----------------------------------------------------- | ----------------------------------------------------------------------- | - | --------------------------------------------------------------------------------------------------------- | -
|                                                      |                                                                         |   |                                                                                                           |  
|Cash flows from operating activities                  |                                                                         |   |                                                                                                           |  
|Loss for the period                                   | (1,436,596                                                              | ) | (10,813                                                                                                   | )
|Non-cash charges - stock-based compensation           | 1,117,080                                                               |   | -                                                                                                         |  
|Changes in non-cash working capital items (note 9(b)) | 107,195                                                                 |   | 10,813                                                                                                    |  
|                                                      |                                                                         |   |                                                                                                           |  
|                                                      | (212,321                                                                | ) | -                                                                                                         |  
|                                                      |                                                                         |   |                                                                                                           |  
|Cash flows from investing activities                  |                                                                         |   |                                                                                                           |  
|Deferred property expenditures                        | (353,424                                                                | ) | -                                                                                                         |  
|                                                      |                                                                         |   |                                                                                                           |  
|Cash flows from financing activities                  |                                                                         |   |                                                                                                           |  
|Private placement proceeds - net                      | 1,997,700                                                               |   | -                                                                                                         |  
|Cash acquired on acquisition of subsidiaries - net    | 2,735,328                                                               |   | 549,747                                                                                                   |  
|                                                      |                                                                         |   |                                                                                                           |  
|                                                      | 4,733,028                                                               |   | 549,747                                                                                                   |  
|                                                      |                                                                         |   |                                                                                                           |  
|Increase in cash and cash equivalents                 | 4,167,283                                                               |   | 549,747                                                                                                   |  
|                                                      |                                                                         |   |                                                                                                           |  
|Cash and cash equivalents - Beginning of period       | 549,747                                                                 |   | -                                                                                                         |  
|                                                      |                                                                         |   |                                                                                                           |  
|Cash and cash equivalents - End of period             | 4,717,030                                                               |   | 549,747                                                                                                   |  

Supplemental cash flow information(note 9)

71

---

Viceroy Exploration Ltd.(an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

|1 | Nature of operations and change in
        year-end
      The Company was incorporated on March 31, 2003 under
        the British Columbia Company Act as a wholly owned subsidiary of Viceroy
        Resource Corporation (Viceroy). On June 30, 2003, Viceroy sold to the
        Company its exploration properties in Argentina and other assets in accordance
        with the terms of a plan of arrangement between Viceroy, Quest Investment
        Corporation and other companies, and whereby Viceroy became Quest Capital
        Corp (Quest). On this date, Viceroy distributed 81% being 11,150,400 shares
        of the Company to the existing shareholders of Viceroy as of the record
        date of June 30, 2003 (see also note 3(a)).
      On December 2, 2003, the Company acquired all of the
        shares of Consolidated Trillion Resources Ltd. by way of a statutory plan
        of arrangement (the Arrangement) - note 3(b). The results of operations
        of Trillion have been consolidated since December 2, 2003.
      Management has estimated that the Company will have adequate
        funds from existing working capital and exercise of warrants in February
        2004 to meet its corporate administrative and property obligations for
        the coming year. If the Company is to advance or develop its mineral properties
        further, it will be necessary to obtain additional financing.
      The recoverability of the amounts shown for exploration
        properties is dependent upon the existence of economically recoverable
        reserves, 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. The amounts shown
        as property acquisition costs do not necessarily represent present or
        future values.
      Although the Company has taken steps to verify title
        to exploration 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 Companys title. Property title may
        be subject to unregistered prior agreements or transfers and may be affected
        by undetected defects.
      The Company has changed its year-end from June
        30 to December 31.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Significant accounting policies
      Generally accepted accounting policies
      These consolidated financial statements have been prepared
        in accordance with Canadian generally accepted accounting principles.
        Significant differences between Canadian and U.S. generally accepted accounting
        principles, as they relate to these financial statements, are described
        in note 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

72

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

| | Principles of consolidation
      These consolidated financial statements include the
        accounts of the Company and its active wholly owned subsidiaries as follows:
        Oro Belle Resources Corporation and Minas Argentina S.A. The accounts
        of the Companys subsidiaries are included from the date of acquisition
        ( notes 1 and 3(a)).
      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 assets and liabilities at the
        date of the financial statements and the reported amounts of expenditures
        during the reporting period. Actual results could differ from those reported.
      Foreign currency translations
      The Companys subsidiaries are integrated foreign operations
        and are translated into Canadian dollars using the temporal method. Monetary
        items are translated at the exchange rate in effect at the balance sheet
        date; non-monetary items are translated at historical exchange rates.
        Income and expense items are translated at the average exchange rate for
        the period. Income and expense items are translated at the average exchange
        ratefor the period. Translation gains and losses are reflected in the
        statement of operations and deficit for the period.
      Cash and cash equivalents
      Cash and cash equivalents include cash on hand, balances
        with banks and highly liquid deposits with an initial maturity of less
        than 90 days.
      Short-term investments
      Short-term investments are recorded at cost and written
        down to estimated net realizable value if there is an other than temporary
        decline in value. The net recoverable amount is based upon the short-term
        investments quoted market value.
      Exploration property costs
      The Company records its interests in exploration properties
        at cost. The costs of acquiring mineral properties and related exploration
        and development expenditures are deferred and would be amortized against
        future production following commencement of commercial production or are
        written off if the properties are sold, allowed to lapse or abandoned.
        General exploration, overhead and administrative costs are expensed in
        the period they are incurred.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

73

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

| | Management of the Company will regularly review the
        net carrying value of each mineral property. Where information is available
        and conditions suggest impairment, estimated future net cash flows from
        each property are calculated using estimated future prices, proven and
        probable reserves, and operating capital and reclamation costs on an undiscounted
        basis. Reductions in the carrying value of each property would be recorded
        to the extent the net book value of the investment exceeds the estimated
        future cash flows.
      Where estimates of future net cash flows are not available
        and where other conditions suggest impairment, management assesses if
        carrying value can be recovered.
      Provision for reclamation
      The Company estimates the fair value of site restoration
        and clean-up costs on acquisition of mineral properties and reflects this
        amount in the cost of the mineral property acquired.
      On an ongoing basis, site restoration and cleanup costs
        for exploration projects are estimated and charged to operations when
        reasonably determinable.
      Income taxes
      Income taxes are calculated using the liability method.
        Temporary differences arising from the difference between the tax basis
        of an asset or liability and its carrying amount on the balance sheet
        are used to calculate future income tax liabilities or assets. Future
        income tax liabilities or assets are calculated using tax rates anticipated
        to apply in the periods that the temporary differences are expected to
        reverse.
      Loss per common share
      Loss per share is calculated based on the weighted average
        number of common shares issued and outstanding during the period. Diluted
        losses are calculated using the treasury stock method.
      Financial instruments
      The carrying values of cash and cash equivalents, short-term
        investments, prepaids and other receivables and accounts payable and accrued
        liabilities approximate book values due to the short term nature of these
        instruments.
      Stock-based compensation plans
      The Company has an employee stock option plan. In 2003,
        the Company elected to apply the fair value method of accounting for stock
        options granted to directors, officers and employees on a prospective
        basis in accordance with the recommendations of the Canadian Institute
        of Chartered Accountants. Accordingly, effective July 1, 2003, the fair
        value of all stock options granted are recorded as a charge to operations
        and a credit to fair value of stock options and warrants over the period
        the stock options are outstanding. Any consideration paid on exercise
        of stock options is credited to share capital.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

74

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

|3 | Acquisitions
|- | ------------
|  | a)          

| |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  
| | ---------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
| | The net assets acquired consist of                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  
| | Cash                                                       | 549,747                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  
| | Prepaids and other receivables                             | 5,961                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  
| | Exploration properties                                     | 6,015,995                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  
| | Accounts payable and accrued liabilities                   | (56,507                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | )
| |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  
| |                                                            | 6,515,196                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  
| |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  
| | Consideration - issuance of 13,800,000
      common shares | 6,515,196                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  
| |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  
| | b)                                                         | Consolidated Trillion Resources Ltd. (Trillion)
      On December 2, 2003, the Company acquired all of the
        shares of Trillion by way of the arrangement (note 1) whereby holders
        of Trillion common shares received 0.70 common shares of the Company for
        each Trillion share. Trillion and Oro Belle amalgamated under the British
        Columbia Company Act under the name of Oro Belle Resources Corporation
        and is a wholly owned subsidiary of the Company.

75

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

The acquisition has been accounted for using the purchase
  method of accounting and the following is a breakdown of the fair market value
  of the net assets acquired:

| |                                     | $         |  
| | ----------------------------------- | --------- | -
| | The net asset acquired consist of   |           |  
| | Cash                                | 2,816,280 |  
| | Short-term investments              | 76,500    |  
| | Accounts receivable                 | 135,134   |  
| | Accounts payable                    | (39,941   | )
| |                                     |           |  
| |                                     | 2,987,973 |  
| |                                     |           |  
| | Consideration                       |           |  
| | Issuance of 6,471,158 common shares | 2,847,310 |  
| | Issuance of 339,500 stock options   | 59,711    |  
| | Transaction costs                   | 80,952    |  
| |                                     |           |  
| |                                     | 2,987,973 |  

|4 | Exploration properties
|- | ----------------------

| |                           | Gualcamayo | Salamanca | Las
      Fleches | Evelina | Las
      Caroches | Total     | 
| | ------------------------- | ---------- | --------- | ----------------- | ------- | ------------------ | --------- | 
| |                           | $          | $         | $                 | $       | $                  | $         | 
| |                           |            |           |                   |         |                    |           | 
| | Balance - January 1,      |            |           |                   |         |                    |           | 
| | 2001                      | 2,087,909  | 260,187   | 200,000           | 200,000 | 100,000            | 2,848,096 | 
| |                           |            |           |                   |         |                    |           | 
| | Expenditure in the year   | 1,025,128  | -         | -                 | -       | -                  | 1,025,128 | 
| |                           |            |           |                   |         |                    |           | 
| | Balance - December 31,    |            |           |                   |         |                    |           | 
| | 2001                      | 3,113,037  | 260,187   | 200,000           | 200,000 | 100,000            | 3,873,224 | 
| |                           |            |           |                   |         |                    |           | 
| | Expenditure in 2002       | 2,020,738  | -         | -                 | -       | -                  | 2,020,738 | 
| |                           |            |           |                   |         |                    |           | 
| | Balance - December 31,    |            |           |                   |         |                    |           | 
| | 2002                      | 5,133,775  | 260,187   | 200,000           | 200,000 | 100,000            | 5,893,962 | 
| |                           |            |           |                   |         |                    |           | 
| | Expenditure in period     | 122,033    | -         | -                 | -       | -                  | 122,033   | 
| |                           |            |           |                   |         |                    |           | 
| | Balance - June 30,        |            |           |                   |         |                    |           | 
| | 2003*                     | 5,255,808  | 260,187   | 200,000           | 200,000 | 100,000            | 6,015,995 | 
| |                           |            |           |                   |         |                    |           | 
| | Expenditure in the period | 353,424    | -         | -                 | -       | -                  | 353,424   | 
| |                           |            |           |                   |         |                    |           | 
| | Balance - December 31,    |            |           |                   |         |                    |           | 
| | 2003                      | 5,609,232  | 260,187   | 200,000           | 200,000 | 100,000            | 6,369,419 | 

* This is the acquisition cost per note 3(a).

76

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

|  | The exploration properties all of which located in
        Argentina are subject to a net smelter royalty ranging between 0.5% and
        2.5%.
      Gualcamayo project
      The Gualcamayo project is located in west central Argentina
        in the San Juan province. MASA has performed exploration and sampling
        of the project and further detailed mapping, sampling and drill testing
        are proposed.
      Salamanca project
      The Salamanca project is located in the northeast part
        of the Guandacol District. The project is situated on the boundary of
        La Rioja and San Juan provinces.
      Other projects
      The remaining three projects are situated in the high
        Andes of Argentina. Las Fleches is located in the Department of Inglesia,
        in northwestern San Juan province, Evelina is located northwest of San
        Juan City in the Valle del Curra Region, San Juan province, and Las Carachas
        project is located north of the provincial capital of San Juan. All three
        projects have had various amounts of work completed by MASA and its former
        partners.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5 | Income taxes
      The Company has recorded a valuation allowance for the
        full amount of future tax assets, substantially of which are non-capital
        losses for Canadian tax purposes of $1,447,409, which will expire in the
        fiscal years up to 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

77

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

|6 | Capital stock
|- | -------------
|  |              
|  | a)           
|  |              
|  |              
|  |              
|  |              
|  | b)           

| |                                                               | Number of  |  |            |  
| | ------------------------------------------------------------- | ---------- |  | ---------- | -
| |                                                               | shares     |  | Amount     |  
| |                                                               |            |  | $          |  
| |                                                               |            |  |            |  
| | Balance - March 31, 2003                                      | -          |  | -          |  
| |                                                               |            |  |            |  
| | Issued during the period for exploration properties
      and |            |  |            |  
| | other net assets (note 3(a))                                  | 13,800,000 |  | 6,515,196  |  
| |                                                               |            |  |            |  
| | Balance - June 30, 2003                                       | 13,800,000 |  | 6,515,196  |  
| |                                                               |            |  |            |  
| | Private placement                                             | 4,200,000  |  | 2,100,000  |  
| | Share issue costs                                             | -          |  | (177,980   | )
| | Issued pursuant to the Arrangement (note 3(b))                | 6,471,158  |  | 2,847,310  |  
| |                                                               |            |  |            |  
| | Balance - December 31, 2003                                   | 24,471,158 |  | 11,284,526 |  

| |    | On November 18, 2003, the Company completed a private
        placement for a total of 4,200,000 units for proceeds of $2,100,000. Each
        unit consisted of one common share and one warrant entitling the holder
        to purchase one additional common share at a price of $0.60 for a period
        of three years. In addition, brokers involved received commission of $102,300
        cash and 350,000 warrants (valued at $75,680) to acquire an additional
        350,000 shares at an exercise price of $0.60 per share for a period of
        one year.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) | Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                            |           |  | Weighted | 
| | ------------------------------------------ | --------- |  | -------- | 
| |                                            |           |  | average  | 
| |                                            | Number of |  | exercise | 
| |                                            | warrants  |  | price    | 
| |                                            |           |  | $        | 
| |                                            |           |  |          | 
| | Balance - June 30, 2003 and March 31, 2003 | -         |  | -        | 
| |                                            |           |  |          | 
| | Private placement                          | 4,200,000 |  | 0.60     | 
| | Brokers commission                         | 350,000   |  | 0.60     | 
| |                                            |           |  |          | 
| | Balance - December 31, 2003                | 4,550,000 |  | 0.60     | 

In February 2004, 4,200,000 warrants were exercised,
  for total proceeds of $2,520,000.

78

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

| | d) | Fair value of stock options and warrants                  |           | 
| | -- | --------------------------------------------------------- | --------- | 
| |    |                                                           |           | 
| |    |                                                           | $         | 
| |    |                                                           |           | 
| |    | Balance - June 30, 2003 and March 31, 2003                | -         | 
| |    |                                                           |           | 
| |    | Add                                                       |           | 
| |    | Fair value of stock options issued pursuant to            |           | 
| |    | the Arrangement
      (note 3(b))                         | 59,711    | 
| |    | Stock-based compensation                                  | 1,117,080 | 
| |    | Fair value of warrants issued as brokers
      commission | 75,680    | 
| |    |                                                           |           | 
| |    | Balance - December 31, 2003                               | 1,252,471 | 

| | e) | Stock options
      The Company has adopted a stock option plan under which
        the Company may grant options to its directors and employees for up to
        10% of the issued and outstanding shares of the Company. The maximum term
        is five years, with the vesting period determined at the discretion of
        the Board of Directors. The exercise price of each option is either equal
        to or higher than the market price of the Companys stock on the day of
        the grant.
      For the six months ended December 31, 2003, changes
        in the issued and outstanding options were as follows:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                |           |  | 2003             | 
| | ---------------------------------------------- | --------- |  | ---------------- | 
| |                                                |           |  |                  | 
| |                                                |           |  | Weighted average | 
| |                                                | Options   |  | exercise price   | 
| |                                                |           |  | $                | 
| |                                                |           |  |                  | 
| | Balance - July 1, 2003                         | -         |  | -                | 
| |                                                |           |  |                  | 
| | Granted during the period                      | 1,700,000 |  | 0.92             | 
| | Exercised during the period                    | -         |  | -                | 
| | Issued pursuant to the acquisition (note 3(b)) | 339,500   |  | 0.39             | 
| | Cancelled or expired during the period         | -         |  | -                | 
| |                                                |           |  |                  | 
| | Balance - December 31, 2003                    | 2,039,500 |  | 0.83             | 
| |                                                |           |  |                  | 
| | Options exercisable at end of period           | 2,039,500 |  | 0.83             | 

79

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

As at December 31, 2003, the following options were
  issued and outstanding:

| |                   |                     | Weighted average |                  | 
| | ----------------- | ------------------- | ---------------- | ---------------- | 
| | Range of exercise | Number of           | remaining        | Weighted average | 
| | prices            | outstanding options | contractual life | exercise price   | 
| | $                 |                     | (years)          | $                | 
| |                   |                     |                  |                  | 
| | $0.39 to $0.50    | 1,039,500           | 2.88             | 0.46             | 
| | $1.06 to $1.25    | 1,000,000           | 4.86             | 1.21             | 
| |                   |                     |                  |                  | 
| |                   | 2,039,500           | 3.85             | 0.83             | 

Effective July 1, 2003 the Company follows the fair
  value method of accounting for stock options granted to directors, officers
  and employees. The fair value of stock options was estimated using the Black-Scholes
  option pricing model based on the following assumptions:

| | Risk-free interest rate      | 3.84%   | 
| | ---------------------------- | ------- | 
| | Annual dividend per share    | 0%      | 
| | Expected price volatility    | 90%     | 
| | Expected life of the options | 5 years | 

During the six-month period ended December 31, 2003,
  1.6 million options were granted to employees and directors and 100,000 were
  granted to consultants resulting in $1,027,680 and $89,400 (included in consulting
  fees) charge to the operations statement.

|7 | Related party transactions
|- | --------------------------
|  | a)                        
|  | b)                        

80

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

|8 | Reconciliation between Canadian and United States generally accepted
        accounting principles
      The consolidated financial statements have been prepared
        in accordance with generally accepted accounting principles (GAAP) in
        Canada which conforms in all material respects with United States generally
        accepted accounting principles (U.S. GAAP) except as described below:
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | Under U.S. GAAP, the Companys
        short term investments would be adjusted from their carrying values under
        Canadian GAAP to year-end quoted market values and the differences recorded,
        net of applicable income taxes, as adjustments to shareholders equity.
        The following table sets out the quoted market values as at December 31,
        2003 and June 30, 2003 of the Companys investments based upon closing
        stock quoted market share prices at that date. However, given the size
        of the Companys holding relative to their recent trading volumes, these
        quoted market values may not be indicative of the ultimate proceeds the
        Company would receive should the investments be tendered for sale.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | Resource property costs
        and related exploration expenditures are accounted for in accordance with
        Canadian GAAP. For U.S. GAAP purposes exploration costs relating to unproven
        mineral properties are expensed as incurred. When proven and probable
        reserves are determined for a property and a feasibility study prepared,
        then subsequent exploration and development costs of the property are
        capitalized. The capitalized costs of such properties are then measured
        periodically, for recoverability of carrying values under Statement of
        Financial Accounting Standard (SFAS) No. 144.                                                                                                            
| | c) | Reconciliation to U.S. GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The application of the above
        described U.S. GAAP would have the following effect on loss, loss per
        share, marketable securities and total shareholders equity for U.S. GAAP:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |  |                                 |                                | December 31,
      2003
      $ |       | June 30,
      2003
      $ |       | December 31,
      2002
      $ |       | December 31,
      2001
      $ | 
| |  | ------------------------------- | ------------------------------ | ------------------------------- | ----- | --------------------------- | ----- | ------------------------------- | ----- | ------------------------------- | 
| |  |                                 |                                |                                 |       |                             |       |                                 |       |                                 | 
| |  | Loss                            |                                |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | As reported in accordance with |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | Canadian GAAP                  | 1,436,596                       |       | 10,813                      |       | -                               |       | -                               | 
| |  |                                 | Adjustment for exploration     |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | expenditures in the period     | 353,424                         |       | 122,033                     |       | 2,020,738                       |       | 1,025,128                       | 
| |  |                                 |                                |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | Loss under U.S. GAAP           | 1,790,020                       |       | 132,846                     |       | 2,020,738                       |       | 1,025,128                       | 
| |  |                                 | Other comprehensive income     |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | Adjustment for unrealized      |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | holding
      gains            | -                               |       | -                           |       | -                               |       | -                               | 
| |  |                                 |                                |                                 |       |                             |       |                                 |       |                                 | 
| |  |                                 | Comprehensive loss             | 1,790,020                       |       | 132,846                     |       | 2,020,738                       |       | 1,025,128                       | 
| |  |                                 |                                |                                 |       |                             |       |                                 |       |                                 | 
| |  | Loss per share under U.S. GAAP* | (0.12                          | )                               | (0.00 | )                           | (0.15 | )                               | (0.07 | )                              

81

---

Viceroy Exploration Ltd. 
  (an exploration stage company) 
  Notes to Consolidated Financial Statements 
  (expressed in Canadian dollars)

| |                                | December 31,
      2003
      $ |   | June 30,
      2003
      $ |  | December 31, |  | December 31, | 
| | ------------------------------ | ------------------------------- | - | --------------------------- |  | ------------ |  | ------------ | 
| |                                |                                 |   | 2002                        |  | 2001         | 
| |                                |                                 |   | $                           |  | $            | 
| | Investments and Marketable     |                                 |   |                             |  |              |  |              | 
| | securities                     |                                 |   |                             |  |              |  |              | 
| | Under Canadian GAAP            | 76,501                          |   | -                           |  | -            |  | -            | 
| | Adjusted for fair market value |                                 |   |                             |  |              |  |              | 
| | (note 8(a))                    | (9,796                          | ) | -                           |  | -            |  | -            | 
| |                                |                                 |   |                             |  |              |  |              | 
| | Under U.S. GAAP                | 66,705                          |   | -                           |  | -            |  | -            | 

| |  | * | For December 31, 2002 and 2001, 13,800,000 was used
        as the weighted average share number, being the opening number of shares
        issued by the Company on June 30, 2003.
| |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|  | d)                                 | Recent pronouncements
      The Canadian Institute of Chartered Accountants (CICA)
        has issued amendments to Section 3870 -Stock -based Compensation and Other
        Stock-based Payments, which require an expense to be recognized in financial
        statements for all forms of employee stock-based compensation, including
        stock options. The Company will be required to adopt the standard on January
        1, 2004, which will result in compensation expense on stock options granted
        to directors and employees, previously only disclosed on a pro forma basis,
        to be charged to earnings. The Company has adopted this standard early,
        as disclosed in the accounting policies note 2.
|- | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9 | Supplemental cash flow information
|  | a)                                 | The Company entered into the following non-cash investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                         | Period from
      July 1, 2003 to
      December 31,
      2003
      $ |                | Period from | 
| | ------------------------------------------------------- | ----------------------------------------------------------------------- | -------------- | ----------- | 
| |                                                         |                                                                         | March 31, 2003 |            
| |                                                         |                                                                         | (date of       |            
| |                                                         |                                                                         | incorporation) |            
| |                                                         |                                                                         | to June 30,    |            
| |                                                         |                                                                         | 2003           |            
| |                                                         |                                                                         | $              |            
| |                                                         |                                                                         |                |             | 
| | Issue of shares pursuant to the Arrangement (note 3(b)) | 2,847,310                                                               |                | -           | 
| | Issue of shares pursuant to the acquisition (note 3(a)) | -                                                                       |                | 6,515,196   | 

| | b) | Changes in non-cash working capital items:
| | -- | ------------------------------------------

| |                                          | Period from
      July 1, 2003 to
      December 31,
      2003
      $ |   | Period from
      March 31, 2003
      (date of
      incorporation)
      to June 30,
      2003
      $ |  
| | ---------------------------------------- | ----------------------------------------------------------------------- | - | --------------------------------------------------------------------------------------------------------- | -
| |                                          |                                                                         |   |                                                                                                           |  
| | Prepayments and other receivables        | (19,877                                                                 | ) | (353                                                                                                      | )
| | Accounts payable and accrued liabilities | 127,072                                                                 |   | 11,166                                                                                                    |  
| |                                          |                                                                         |   |                                                                                                           |  
| |                                          | 107,195                                                                 |   | 10,813                                                                                                    |  

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