United States
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                 _____________

                                  FORM 10-QSB

                                   (Mark One)

 [ X ]   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

                         For the quarterly period ended

                               December 31, 2003

 [   ]   Transition Report Under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

               For the transition period from                 to

                       Commission File Number: 000-49690


                        MCKENZIE BAY INTERNATIONAL, LTD.
       (Exact Name of Small Business Issuer as Specified in Its Charter)


        Delaware                                   51-0386871

(State or Other Jurisdiction of        (IRS Employer Identification No.)
Incorporation or Organization)


                            975 Spaulding Avenue SE
                          Grand Rapids, Michigan 49546

                    (Address of Principal Executive Offices)

                                 (616) 940-3800

                   (Issuer's Telephone Number with Area Code)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ___


On May 6, 2004, the registrant had outstanding 26,177,548 shares of common
stock, $.001 par value.

Transitional Small Business Disclosure Format (check one):  Yes      No    X


                        MCKENZIE BAY INTERNATIONAL, LTD.
                              INDEX TO FORM 10-QSB

                                                                       Page
                                                                      Number
                                                                  -------------
Part I. Financial Information

Item 1. Financial Statements...................................................1
  Condensed Consolidated Balance Sheets as of
   December 31, 2003 and September 30, 2003,...................................1

  Consolidated Statements of Loss for the
   three months ended December 31, 2003 and 2002,..............................2

  Consolidated Statements of Cash Flows for
   the three months ended December 31, 2003 and 2002...........................3

  Notes to Condensed Consolidated Financial Statements.........................5
Item 2.  Management's Discussion and Analysis or Plan of Operation............14
Item 3.  Controls and Procedures..............................................18

Part II.  Other Information
Item 2.  Changes in Securities................................................19
Item 6.  Exhibits and Reports on Form 8-K.....................................19
Signatures....................................................................23
Certifications................................................................24

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.          Yes  [X]     No  [ ]     .

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes  [ ]         No   [X]

================================================================================


                        MCKENZIE BAY INTERNATIONAL LTD.
                                      and
                                  subsidiaries
                         (A development-stage company)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                         (Amounts stated in US dollars)


                                              December 31,      September 30,
                                                 2003                2003
                                              -----------        -----------
                    ASSETS                     UNAUDITED
Current:
    Cash and cash equivalents                 $    29,962      $      49,208
    Accounts receivable                           117,317            262,979
    Prepaid expenses and deposits                 104,403            145,441
                                              -----------        -----------
Total current assets                              248,682            457,628
Reclamation cash bond                             338,685            338,685
Property and equipment                             72,688             76,263
                                              -----------        -----------
Total assets                                  $   660,055      $     872,576
                                              ===========        ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current:
    Bank indebtedness                         $   100,588      $      83,463
    Accounts payable and accrued liabilities    2,161,155          2,162,934
    Current portion of long-term debt              71,635             32,945
                                              -----------        -----------
Total current liabilities                       2,333,378          2,279,342

Long-term and other liabilities:
Long-term debt                                  1,080,244          1,074,651
Reclamation and closure liabilities               250,000            250,000
Redeemable capital stock                          252,175            252,175
                                              -----------        -----------
Total long-term and other liabilities           1,582,419          1,576,826

Stockholders' equity (deficit):
 Capital stock
   75,000,000 shares of common stock authorized, at
   $0.001 par value 25,362,244 shares
   issued and outstanding
   (30/09/2003, 25,229,958)                        23,781             23,649
 Additional paid in capital (note 4)           17,004,922         16,781,788
 Accumulated deficit                          (19,950,827)       (19,564,758)
 Accumulated other comprehensive income(loss)    (333,618)          (224,271)
                                              -----------        -----------
Total stockholders' deficit                    (3,255,742)        (2,983,592)
                                              -----------        -----------
Total liabilities and stockholders' deficit   $   660,055       $    872,576

   (See accompanying notes to condensed consolidated financial statements)

 <table>
  
                                                  <c>            <c>              <c>
                                                                                    Cumulative
                                                        Three months ended        from inception
                                                            December 31,           on August 23,
                                                         2003          2002             1996
                                                      ----------    ----------     ---------------

Revenue                                               $        -    $   21,681     $        12,825
                                                      ----------    ----------     ---------------

Expenses:
 Research, development and exploration                    16,750       280,370           7,720,022
 General administration                                   84,348        38,657           1,237,283
 Reorganization costs                                          -             -             102,914
 Wages and benefits                                       31,799        89,606           1,177,793
 Management wages and benefits                           151,554       340,903           2,504,354
 Professional fees                                        45,662       332,460           1,620,623
 Advertising, promotion and travel                        35,437        36,764             859,038
 Amortization                                              4,046         5,320             392,888
 Interest and bank charges                                15,789             -             175,591
 Interest on long-term debt                                  728         1,622              90,902
                                                      ----------     ---------      --------------
                                                         386,113     1,125,702          15,881,408
                                                      ----------     ---------      --------------

Loss before the following:                              (386,113)   (1,104,021)        (15,868,583)
Write-down of assets                                           -             -          (1,626,821)
Write-off of incorporation and
 reorganization costs                                          -             -             (49,137)
Write-down of marketable securities                            -         3,779          (1,104,214)
Bad debts recovery                                             -         1,678                   -
Gain (loss) on sale of marketable securities                   -           632            (138,028)
Interest income                                               44           131              27,941
                                                      ----------     ---------      --------------
Net loss before mining taxes and cumulative
  effect of change in accounting principle
   for SFAS 142                                         (386,069)   (1,097,801)        (18,758,842)
Current mining tax recovery                                    -             -             141,000
                                                      ----------     ---------      --------------
Net loss before cumulative effect of change
  in accounting principle for SFAS 142                  (386,069)   (1,097,801)        (18,617,842)

Cumulative effect of change in accounting
  principle for SFAS 142                                       -      (146,972)           (146,972)
                                                      ----------     ---------      --------------
Net loss                                             $  (386,069)  $(1,244,773)     $  (18,764,814)
                                                      ----------     ---------      --------------
Comprehensive loss (note 6)                          $  (495,416)  $(1,257,634)     $  (19,098,432)

Basic and diluted loss per share: Net loss
    before cumulative effect of change in
    accounting principle                             $     (0.02)  $     (0.05)
Cumulative effect of change in accounting
    principle                                                  -         (0.01)
                                                      ----------     ---------
Net loss                                             $     (0.02)  $     (0.06)
                                                      ==========     =========
Weigthed average shares outstanding                  $25,321,191   $23,420,095

   (See accompanying notes to condensed consolidated financial statements)
</table>

                        MCKENZIE BAY INTERNATIONAL LTD.
                                      and
                                  subsidiaries
                         (A development-stage company)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Amounts stated in US dollars)
<table>

                                                     <c>            <c>           <c>

                                                                                      Cumulative
                                                         Three months ended         from inception
                                                            December 31,              on August 23,
                                                         2003            2002             1996
                                                      ----------      ----------    ---------------
Cash flows used in operating activities:
  Net loss                                            $ (386,069)   $ (1,244,773)  $   (18,764,814)
  Items not affecting cash:
    Cumulative effect of change in accounting principle        -         146,972           146,972
    Amortization                                           4,046           5,320           392,888
    Expenses settled through issuance of common stock          -               -         1,805,662
    Capitalized interest on convertible notes payable          -               -             2,571
    Reclamation and closure costs                              -               -           250,000
    Write-down of assets                                       -               -         1,626,821
    Write-down(up) of marketable securities                    -          (3,779)        1,104,214
    Write-off of incorporation and reorganization costs        -               -            49,137
    (Gain)Loss on sale of marketable securities                -            (632)          138,028
    Stock-based compensation                              57,125         298,482         1,729,266
  Net change in non-cash working capital related to
      operations:
    Accounts receivable                                  152,983         (15,782)          (52,633)
    Inventories                                                -          19,562                 -
    Prepaid expenses and deposits                         41,038          20,877           (53,919)
    Accounts payable and accrued liabilities             (74,624)        448,805         2,061,578
                                                     -----------       ---------     -------------
 Net cash used in operating activities                  (205,501)       (324,948)       (9,564,229)

Financing activities:
  Issuance of notes payable                                    -               -           350,000
  Increase (decrease)in bank indebtedness                 18,945            (731)           96,141
  Increase in convertible notes payable                        -               -            23,055
  Issuance of long-term debt                                   -               -           137,435
  Repayment of long-term debt                             (9,604)         (7,631)         (114,094)
  Receipt of repayable government assistance               4,950               -           931,581
  Proceeds from sale of common stock                     168,370         309,614        12,046,027
  Proceeds on sale of options                                  -               -            33,160
  Redemption of redeemable capital stock                       -               -           (37,500)
  Purchase of common stock for treasury                        -               -          (149,622)
                                                     -----------       ---------      ------------
                                                         182,661         301,252        13,316,183

Investing activities:
  Purchase of marketable securities                  $         -       $       -      $ (1,767,835)
  Purchase of reclamation cash bond                            -               -          (338,685)
  Purchase of property and equipment                           -          (1,738)       (2,058,006)
  Proceeds - sale of marketable securities                     -           4,447           525,593
  Incorporation and reorganization costs                       -               -           (81,769)
  Business acquisition - Dermond                               -               -           (31,286)
                                                     -----------       ---------       -----------
                                                               -           2,709        (3,751,988)
                                                     -----------       ---------       -----------
Effect of foreign currency
    exchange rate changes on cash and equivalents            594         (12,861)           26,996
                                                     -----------       ---------       -----------
Net increase (decrease) in cash and cash
    equivalents                                          (22,246)        (33,848)           26,962
Cash and cash equivalents, beginning of period            49,208          45,325                 -
                                                     -----------       ---------       -----------
Cash and cash equivalents, end of period             $    26,962       $  11,477       $    26,962
                                                     ===========       =========       ===========
Supplemental non-cash financing activities:

Issuance of common stock in lieu of requiring
  the Company to repurchase redeemable capital stock $         -       $       -       $   110,000

Issuance of options in lieu of requiring Company
  to repurchase redeemable capital stock                       -               -           605,210

Issuance of common stock in lieu of payment of notes
  payable                                                      -               -           356,424

Conversion of notes payable into capital stock                 -               -            25,626

Repurchase of capital stock in settelment of
  accounts receivable                                          -               -            11,300
                                                    ------------       ---------       -----------
                                                    $          -       $       -       $ 1,108,560
                                                    ============       =========       ===========

    (See accompanying notes to condensed consolidated financial statements)

</table>

                        MCKENZIE BAY INTERNATIONAL LTD.
                                      and
                                  subsidiaries
                         (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                               December 31, 2003
           (Amounts stated in US dollars unless indicated otherwise)

1. Nature of operations

The Company is a development stage company with no operations.  The company has
interests in a vanadium/titanium deposit, with turbine technology and a diamond
mine.  The Company was incorporated in Delaware on August 17, 1998 under the
name Decker Organic Systems, Inc.

2. Accounting policies

The accompanying consolidated financial statements have been prepared in
accordance with United States generally accepted accounting principles ("US
GAAP") and reflect the following significant accounting policies:

(a) Basis of presentation

The financial statements of the Company have been prepared on the basis of the
Company continuing as a going concern, which contemplates the realization of
assets and the payment of liabilities in the ordinary course of business. Should
the Company be unable to continue as a going concern, it may be unable to
realize the carrying value of its assets and to meet its liabilities as they
become due.

The Company suffered recurring losses and has a deficiency in assets that raise
substantial doubt about its ability to continue as a going concern. The
Company's continued existence is dependent upon its ability to raise additional
capital and generate profits. Although management believes that it will be
successful at raising additional capital in the short-term and will have
profitable operations in the long-term, it is unable to disclose firm
commitments as of the date of these financial statements.

As discussed in note 4, the Company may be required to repurchase shares, at the
option of the holders, for an amount of $252,175.

The accompanying financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets and classification of
liabilities that might be necessary should the Company is unable to continue as
a going concern.

(b) Consolidation

These financial statements include the activities of the Company and its wholly-
owned subsidiaries, Lac Dore Mining Inc. (formerly McKenzie Bay Resources Ltd.),
Great Western Diamond Company, Experts Conseils Dermond Inc. and a 62.5%
interest in Ptarmigan Energie Inc.  All intercompany balances and transactions
have been eliminated in consolidation.

(c) New accounting pronouncements

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" (FIN 46). FIN 46 requires a variable interest entity
to be consolidated by a company if that company is subject to a majority of the
risk of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. FIN 46 also
requires disclosures about variable interest entities that a company is not
required to consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. In addition, FIN 46, as amended in
December 2003 (FIN 46R), will be effective by public entities for periods ending
after March 15, 2004. The adoption of this interpretation and its revision will
not have a material impact on the Company's financial position or results of
operations.

In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity",
which is effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, to address the balance sheet
classification of certain financial instruments that have characteristics of
both liabilities and equity.  The company does not expect that this
pronouncement will have a material effect since Redeemable Capital Stock is
already classified as a balance sheet item.

In July 2001, the Financial Accounting Standards Board finalized SFAS 143,
Accounting for Asset Retirement Obligations ("ARO"), which requires the
recognition of a liability for an asset retirement obligation in the period in
which it is incurred.  Retirement obligations associated with long-lived assets
included within the scope of SFAS 143 are those for which there is a legal
obligation to settle under existing or enacted law, statute, written or oral
contract, or by legal construction under the doctrine of promissory estoppel.
Retirement obligations are included in the scope of the standard only if the
legal obligation exists in connection with or as a result of the permanent
retirement, abandonment or sale of a long-lived asset.  When the liability is
initially recorded, the carrying amount of the related long-lived asset is
correspondingly increased.  Over time, the liability is accreted to its future
value.  The corresponding amount capitalized at inception is depreciated over
the useful life of the asset.  The liability must be revalued each period based
on current market prices.  SFAS 143 is effective for fiscal years beginning
after June 15, 2002.  The Company has adopted the requirements of the statement.


(d) Stock-based compensation plan

i. The Company has stock-based compensation plans which are described in
note 4.  The Company uses the fair value method of accounting for all stock
options granted to non-employees in accordance with the provisions of SFAS 123
and the intrinsic value method for those granted to employees in conformity with
Accounting Principles Board Opinion No. 25 and its related interpretation and
allowed by SFAS 123.  Under the fair value based method, compensation cost
attributable to awards is measured at the date of the grant and recognized over
the vesting period in operating expense as it is the case under the intrinsic
value method when exercise price is lower than the current market price at the
date of the grant.  No compensation cost is recorded for all other stock-based
employee compensation awards and consideration paid by employees on the exercise
of stock options is recorded as capital stock.

ii. Fair value disclosure

SFAS 123 encourages but does not require companies to include in compensation
cost the fair value of stock options granted to employees. A company that does
not adopt the fair-value method must disclose the cost of stock compensation
awards, at their fair value, on the date the award is granted. This fair value
was estimated using the Black-Scholes model with assumptions of a 2 to 10 years
expected term, 113% to 130% volatility, interest rates ranging from 1.49% to
4.03% and an expected dividend yield of 0%. Had the compensation cost for stock
options issued to employees, officers and directors been determined based on the
fair value at the grant date consistent with SFAS No. 123, the Company's net
loss, loss per share and stock based compensation would have been as follows:

                                Three Months Ended December 31,

                                     2003                 2002
                               ----------------     ----------------
Net Loss:
As reported                $         (386,069)    $    (1,244,773)

Pro forma                  $       (1,300,388)    $    (1,835,335)


                                Three Months Ended December 31,

                                    2003                  2002
                               ---------------      ---------------
Net loss Per Share:
Basic and diluted:
As reported                     $  (0.02)         $      (0.06)

Pro forma                       $  (0.05)         $      (0.08)




                                Three Months Ended December 31,

                                    2003                  2002
                               ---------------      ---------------
Stock based
compensation
expense
as reported                   $    6,442              $   244,212

Stock based
compensation
expense if
fair value was
used                          $  920,761              $   834,773



3. Goodwill and other intangible assets

Effective October 1, 2002 the Company adopted SFAS 141, "Business Combinations,
"and SFAS 142, "Goodwill and Other Intangible Assets".  SFAS 141 was issued by
the FASB in June 2001. SFAS 141 requires that the purchase method of accounting
be used for all business combinations completed after June 30, 2001.  SFAS 141
also specifies the types of acquired intangible assets that are required to be
recognized and reported separately from goodwill and those acquired intangible
assets that are required to be included in goodwill.  The Company's adoption of
this standard did not have any effect on our accounting for prior business
combinations.

SFAS 142 requires that goodwill no longer be amortized, but instead be tested
for impairment at least annually.  SFAS 142 requires recognized intangible
assets to be amortized over their respective estimated useful lives and reviewed
for impairment in accordance with SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets".  Any recognized intangible assets determined to
have an indefinite useful life are not amortized, but instead tested for
impairment in accordance with the standard until its life is determined to no
longer be indefinite.

In the quarter ended March 31, 2003, the Company completed their SFAS 142
transitional impairment review and determined that the goodwill ("excess cost of
investment over net assets acquired") of $146,972 associated with the fiscal
2002 acquisitions of DERMOND INC. should be reduced to $0.  The fair value of
the reporting unit (DERMOND INC.) was determined using the present value of
expected future cash flows and other valuation measures.


The $146,972 non-cash charge is reflected as a cumulative effect of an
accounting change in the accompanying Consolidated Statements of Loss.  In
accordance with SFAS 142 and SFAS 3, "Reporting Accounting Changes in Interim
Financial Statements" ("SFAS 3"), when a transitional impairment loss for
goodwill (cumulative effect type accounting change) is measured in other than
the first interim reporting period, it shall be recognized in the first interim
period irrespective of the period in which it is measured.  The impact on the
three-month period ended December 31, 2002 was as follows:


                       Three months ended December 31, 2002

                           Net income        Basic loss
                              (loss)         per share
                          -------------    -------------

Reported net income        $(1,097,801)    $(0.05)
Less:  Impairment charge      (146,972)     (0.01)
Adjusted net loss          $(1,244,773)    $(0.06)


4. Capital stock

Authorized -
        75,000,000 common stock, par value $0.001 per share

Issued -                                               Additional
                                            Common       paid in
                                 Shares     stock        capital       Total
                              ----------  ---------   ------------   -------

Balance, September 30, 2003   25,229,958  $  23,741   $ 16,942,618  $16,966,359

Common stock issued for:
        Cash                     132,286        132        168,238      168,370

Stock options, compensation            -          -         54,896       54,896
                              ----------    --------   -----------  -----------
Balance December 31, 2003     25,362,244     23,873     17,165,752   17,189,625

Less treasury stock at cost      (92,000)       (92)      (160,830)    (160,922)
                              ==========  =========   ============  ===========
Balance, December 31, 2003    25,270,244  $  23,781   $ 17,004,922  $17,028,703




Share-based incentive plans

As of December 31, 2003, the Company has the following three stock-based
incentive plans.  Each plan permits the issuance of up to 2,500,000 options.

Under the 2001 Employee Incentive Stock Option Plan, options may be granted at
an exercise price equal to the market price on the grant date.  All options
expire no later than ten years from the grant date.  If an option is granted to
an employee who owns 10% or more of the Company's voting stock, the purchase
price of each share shall be 110% of the fair market value on the grant date and
the expiration date shall not exceed five years after the grant date.

Under the 2001 Employee Non-Qualified Stock Option Plan, options may be granted
to employees or certain non-employees at an exercise price as determined by the
administrator of the plan on the grant date.  All options expire ten years after
the date of grant.

Under the 2001 Directors Non-Qualified Stock Option Plan, options may be granted
to directors of the Company or certain non-employees for terms up to ten years
at an exercise price as determined by the administrator on the grant date.

The following tables contain information with respect to all options granted by
the Company:
                                                          Weighted
                                                          average
                                                          exercise
                                                           price
                                                            per
                                          Shares           share
                                     --------------    -------------
Balance, September 30, 2003             13,131,617         $1.04
        Granted                            550,000         $1.89
Options outstanding,
December 31, 2003                       13,681,617         $1.08


        Outstanding options                           Exercisable options
----------------------------------            ---------------------------------
                          Weighted                           Weighted
                           average                           average
                            price                             price
                Shares    per share             Shares      per share
               --------   ---------            --------    -----------
$0.74           300,000     $ 0.74                   -      $     -
$1.00        11,121,917       1.00          10,431,917         1.00
$1.25           476,200       1.25             476,200         1.25
$1.30 - $1.50 1,175,000       1.38             775,000         1.42
$1.88           525,000       1.88             525,000         1.88
$2.00 - $3.00    83,500       2.63              83,500         2.63
             ----------                     -----------
             13,681,617                     12,291,617




(a) Stock warrants

        As at December 31, 2003, the following warrants are outstanding:

                                              Number
                                           of warrants
                                           -----------
Outstanding, September 30, 2003               952,619
Issued during the year                         66,143
Exercised during the year                     (42,857)
Outstanding, December 31, 2003                975,905

The warrants outstanding can be exercised at prices ranging from $1.55 to $3.00
(150,000 warrants outstanding exercisable at CDN$2.00).  The expiration dates of
the warrants range from January 1, 2004 to November 6, 2005.

(b) Redeemable capital stock

The Company has 81,700 common shares outstanding that have certain rights
attached permitting the holder to require the Company to repurchase these
shares.  Pertaining to subscription agreements, if stockholders exercise their
rights, the Company would be obligated to pay, as of December 31, 2003 or
gradually over the next two years, a maximum amount of $252,175.  This right
requires a repurchase at prices increasing in time from $2.50 to $3.25.

5. Kelsey Lake Diamond Mine

The Company is actively seeking a partner or purchaser to take over the Kelsey
Lake mine. If the Company is unable to find a partner or purchaser in 2004,
Great Western Diamond Company intends to close the Kelsey Lake mine permanently
and initiate mine reclamation.

6. Comprehensive loss                                   Cumulative
                                                            from
                          Three months ended           inception on
                              December 31,               August 23,
                       2003                 2002            1996
                   ------------         -----------     --------------
Net loss        $   (386,069)          $ (1,244,773)    $  (18,764,814)
                   ------------         -----------     --------------
Foreign currency
translation
adjustment      $   (109,347)          $    (12,861)    $     (333,618)
                   ------------         -----------     --------------
Comprehensive
loss            $   (495,416)          $ (1,257,634)    $  (19,098,432)
                   ============         ===========     ==============


7. Net loss per common share

The Company follows Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share" which requires the presentation of both basic and diluted
earnings (loss) per share.

Basic net loss per common share has been computed based upon the weighted
average number of shares of common stock outstanding during the periods. Diluted
loss per share has not been presented, as it would be anti-dilutive. The
computation of net loss per share is reflected in the following schedule:

Computation of Net Loss           Three Months ended December 31,
Per Common Share                 2003                    2002
-----------------------   -----------------       ------------------
Net Loss                   $   (386,069)          $     (1,244,773)
                          -----------------       ------------------
Total Weighted Average
Number of Common Shares
and Equivalents              25,321,191                 23,420,095
                          -----------------       ------------------
Net Loss per
Common Share               $      (0.02)          $          (0.06)
                          =================       ==================


8. Related party transactions

Company has retained a law firm to perform legal services for which Company has
incurred total expenditure of $21,499 for the three months ended December 31,
2003.  A director for the Company is a partner in that law firm.  The
transactions were valued at the exchange amount, which is the amount of
consideration agreed to by the related parties.  As of December 31, 2003, an
amount of $81,794 resulting from these transactions is included in accounts
payable and accrued liabilities.

9. Commitments and Contingencies

The company has provided a 50% lien on the reclamation bond on deposit with the
state of Colorado with payment being made in the event that the Great Western
Diamond Company is sold and the deposit returned.

Royalty Agreements

The Company has entered into a royalty agreement that will pay 2.5% of Dermond
wind turbine sales to the former owners.

As a result of exploration work performed at the Lac Dore Vanadium/Titanium
Project, the Company has a potential environmental liability in the range of
$15,000 to $30,000.  This liability will not be incurred if the project goes
into production.  As management believes that the project will go into
production, the amount has not been accrued in the financial statements.

Bank indebtedness and other loans

The bank indebtedness of a subsidiary company, Great Western Diamond Company,
carries interest at 8% per annum and is secured by the assets of Great Western
Diamond Company.

The bank indebtedness of a subsidiary company, Experts Conseils Dermond Inc.,
carries interest at 7.5% per annum and is secured by an assignment of the
subsidiary's refundable research and development tax credit.

In addition to the above, the assets of Great Western Diamond Company have been
pledged to secure certain of the accounts payable of Great Western Diamond
Company.

In the normal course of business, the Company and its subsidiaries are parties
to various legal claims, actions and complaints and various other risks. It is
not possible to predict with certainty whether or not the Company and its
subsidiaries will ultimately be successful in any of these legal matters or, if
not, what the impact might be. However, the Company's management does not expect
that the results in any of these legal proceedings will have a material adverse
effect on the Company's results of operations, financial position or cash flows.

10. Subsequent events

On April 6, 2004 the Company entered into a Standby Equity Distribution
Agreement with Cornell Capital Partners, L.P. Under the agreement and subject to
its terms and conditions, which the Company may not be able to satisfy, the
Company may require Cornell Capital Partners, L.P. to purchase newly issued
common shares from the Company, to a maximum market value of  $15 million, over
a 24-month period, less certain fees and expenses.

Item 2. Management's Discussion and Analysis or Plan of Operation.

Development of WindStor

We anticipate that, with adequate funding, we can complete engineering and
development of the DWT and WindStor, construct and install prototypes of each
and, assuming successful operation of the prototypes, begin commercial
installations of WindStor in 2004.

We believe that we will require additional funds of approximately $1.2 million
to complete development and construct, install and test the DWT and WindStor and
begin a marketing program.  We have received conditional commitments from
Canadian governmental agencies for an additional $330,000 in non-refundable
grants and loans of $590,000.  Because we do not know if we can satisfy the
conditions, we do not know if we will receive any of the additional funds.
Other than a conditional commitment from Cornell Capital Partners, LP as
described in our Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2003, we have received no commitments for the balance of the
requisite funds and there can be no assurance that we will be successful in
obtaining those funds.  If we do not obtain all of the requisite funds, we will
not be able to produce or sell any DWTs.

We intend to retain ownership of the WindStor installations and sell the
electricity generated by DWTs to WindStor users.  We believe, with successful
testing of WindStor, that WindStor installations will provide adequate cash flow
to allow for debt to be a component of each installation's financial structure.
We will, however, require significant amounts of funds in order to install
WindStor and for general and administrative expenses.  If we are successful in
obtaining funds to be utilized in connection with WindStor, we intend to
allocate them as follows:


DWT & WindStor marketing         $5,700,000

DWT Prototype design,
construction and installation     1,200,000

Operating requirements            9,000,000
                               ------------
TOTAL                           $15,900,000
                               ============
Four entities have expressed interested in commercial installations of WindStor.
Prior to any installation of WindStor, we and each prospective customer must be
satisfied that adequate wind power exists at the respective location to provide
sufficient electricity production from a DWT to create an economically feasible
WindStor facility.  While wind testing is being conducted, zoning, permitting
and site location issues will be addressed.  If wind power is sufficient, all
regulatory issues are resolved, site plans are approved, we are able to obtain
adequate financial resources, we successfully obtain working prototypes and
pricing terms are agreed upon by prospective customers, we intend to begin to
install WindStor.

Development of Lac Dore Mining Co.

If funding becomes available during the fiscal year ending September 30, 2004,
we intend to continue research and development of the vanadium recovery and
refining technology developed for McKenzie Bay during the feasibility study of
the Lac Dore deposit.  The next planned step is operation of a Sample Product
Unit (SPU) planned for construction by SGS Lakefield Research at their
facilities in Lakefield, Ontario, Canada.  This facility would be used to
advance vanadium refining processes and produce and provide small samples of
high-purity vanadium chemicals to potential customers.

The planned cost to operate the SPU is $1 million over a 16-month period.
Although grants and/or loans may be available to us for part of the cost, we
have not assumed or relied upon their availability.

If results from the SPU project are successful and demand for the chemicals
provided to potential customers of Lac Dore Mining Co. are sufficient to warrant
additional development, we intend to build a larger production facility, called
the Development Production Pilot Plant (DPPP).  If feasible and also largely
dependent upon adequate funding being available, this project would take place
after the end of the fiscal year ending September 30, 2004.  The cost to build
the DPPP has been estimated to be approximately $10 million.

Our plans for Lac Dore are dependent upon a number of events coming together
successfully, including, but not limited to, an adequate demand for high-purity
vanadium, our ability to raise between $280 and $350 million to build and
operate the mine and refinery, our ability to find and hire management and
employees to operate the mine and refinery and successful permitting of the mine
and refinery to be built and operated.  At a minimum, we believe contemplation
of the building of Lac Dore is several years into the future.

Cash Requirements for 2004 Fiscal Year Administrative Costs

To date our activities have been funded primarily through the sale of equity
securities and financial assistance from Canadian governmental agencies in the
form of loans and grants.  As noted above, we must obtain substantial additional
capital to engage in our proposed businesses.

Our cash requirements for administrative costs for the fiscal year ending
September 30, 2004 (including direct support of subsidiary operations) are as
follows:

           Use                            Amount
---------------------------------     --------------
Employee salaries                         $600,000

Professional costs (includes
consultants, outside accountants,
independent auditors and
legal counsel)                          $1,400,000

General administrative (includes
lease obligations, travel and
other administrative costs)               $450,000

The Company and its subsidiaries are not able to continue development and
administrative functions for more than a few months unless additional funding
becomes available.

In its report dated December 23, 2003, the Company's independent auditors state
that the Company has suffered recurring losses from operations and has a
deficiency in assets that raise substantial doubt about the Company's ability to
continue as a going concern.

The Company cannot be sure that it will be able to obtain adequate financing
from outside sources to fund its operations.  If the Company is unable to obtain
the necessary funding, the Company will not be able to continue to operate.

Additional Employees

We will need to add a number of employees to DERMOND in anticipation of
successful DWT and WindStor prototype testing.  Additions include, project
managers, mechanical, aeronautic and electrical engineers and administrative
personnel.  McKenzie Bay intends to add administrative personnel, including a
controller.

Forward-Looking Statements

This Form 10-QSB contains statements that are forward-looking statements. In
some cases, you can identify forward-looking statements by terminology such as
"estimates," "anticipates," "plans," "believes," "projects," "expects,"
"intends," "predicts," "potential," "future," "may," "contemplates," "will,"
"should," "could," "would" or the negative of such terms or other comparable
terminology. These statements relate to our future operations and financial
performance or other future events.  Many of the forward-looking statements are
based on current expectations, management beliefs, certain assumptions made by
our management and estimates and projections about our industry.

Forward-looking statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict with respect to timing, extent, likelihood and degree of occurrence.
Therefore, actual events, results, performance or achievements may differ
materially from the events, results, performance or achievements expressed,
forecasted or contemplated by any such forward-looking statements.  In addition
to factors described in this Quarterly Report on Form 10-QSB for the quarter
ended December 31, 2003, and other periodic reports filed with the Securities
and Exchange Commission, including those disclosed in our Annual Report on Form
10-KSB for the fiscal year ended September 30, 2003 under the caption "FORWARD
LOOKING STATEMENTS AND CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN OUR COMMON
STOCK," which disclosure is hereby incorporated by reference, of the factors
that could cause actual results to differ from those described in the forward-
looking statements include or result from:

- Because we have no operating history, there is no basis on which you can
evaluate our proposed business and prospects.

- We have had losses since inception and expect losses to continue for the
foreseeable future.

- Because of our limited capital, unless we obtain substantial additional
capital we may not have sufficient capital to engage in our proposed business
activities or to continue as a going concern.  The auditor's report on our
consolidated financial statements for the year ended September 30, 2003 states
that the Company suffered recurring losses and has a deficiency in assets that
raise substantial doubt about the our ability to continue as a going concern.

- Although we intend to obtain additional capital primarily through the sale of
equity securities to be issued by us, we cannot assure you that additional
financing will be available on terms not unfavorable to us, if at all.

- If we raise additional funds through the issuance of our equity securities,
the percentage ownership of our stockholders will be reduced and stockholders
may experience dilution which could substantially diminish the value of their
common stock.

- We may have incurred significant contingent liabilities through offers and
sales of our equity securities.

- If we violated certain securities laws, we may not now be able to privately
offer our equity securities for sale.

- Because our proprietary technologies processes may prove ineffective or
unfeasible, we are unable to determine if our engineering and test results can
be duplicated in commercial production.

- We have not been issued any patents and will not file for patents on certain
capabilities and processes that we consider intellectual property. In the
absence of patent protection, similar technology could be developed
independently by a third party which could materially harm us.

- If we fail to obtain needed governmental approvals or encounter significant
delays in obtaining or renewing governmental permits or approvals, we may not be
able to engage in our proposed business activities.

- Because there has not been an active trading market for our common stock, an
investment in the stock is less liquid and involves inherently more risk than
are securities that are actively traded.

- The ability to sell shares of our common stock in a public market may be
significantly impaired by the SEC's penny stock rules.

- Because of the concentration of ownership of our common stock by a small
number of stockholders, it is unlikely that any other holder of common stock
will be able to affect our management or direction.

- Certain stockholders have the right to require us to repurchase their shares
for a maximum amount of approximately $252,000 which could materially, adversely
affect our financial position.

- Because none of our officers has had any prior experience in our proposed
business activities, their judgment may not be sound.

- Because we are in arrears in the payment of salaries to our executive officers
and employees of our subsidiaries, any or all of them may resign and we may be
liable for additional payments in which case we could be materially adversely
affected.

- Because our business plan is heavily dependent on the success of new and
untried products successfully entering the market place, we can not be sure that
they will perform as we anticipate.

- Although we plan on maintaining commercial insurance to reduce some operating
hazard risks, such insurance may not be available to us at economically feasible
rates, if at all.

- Technological advances by others could make our products obsolete.

- Because we plan to rely on independent third-party manufacturers to fabricate
the DWT and WindStor products, supplier capacity, shortages in necessary raw
materials, work stoppages and transportation problems could materially,
adversely affect our business.

- Recently enacted and proposed changes in securities laws and regulations have
and will continue to increase our accounting and legal costs.

Unless required by law, we undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.

Item 3.  Controls and Procedures.

Our Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934) as of a date within 90 days
of the filing date of this Quarterly Report on Form 10-Q (the "Evaluation
Date").  These individuals have concluded that, as of the end of the period
covered by this Report, our disclosure controls and procedures were adequate and
effective.  There were no significant changes in our internal controls or in
other factors that could significantly affect our disclosure controls and
procedures subsequent to the Evaluation Date.

PART II.  OTHER INFORMATION

Item 2.  Changes in Securities.

The following information relates to equity securities we sold during the
quarter ended December 31, 2003 that were not registered under the securities
Act of 1933.

- On October 1, 2003, we granted options to purchase 525,000 shares of common
stock to the then six directors of the McKenzie Bay International Ltd., the five
directors of Lac Dore Mining, Inc. and the four directors of DERMOND, INC in
exchange for services rendered.  The options are exercisable until September 30,
2013 at $1.88 per share.

- On October 24, 2003, we sold 89,286 shares of common stock and warrants for
the purchase of 44,643 shares to a private investor for approximately $100,000.
The warrants are exercisable until October 23, 2005 at $2.00 per share.

- On November 7, 2003, we sold 43,000 shares of common stock and warrants for
the purchase of 21,500 shares to a private investor for approximately $67,370.
The warrants are exercisable until November 6, 2005 at $3.00 per share.

- On December 11, 2003, we issued options to purchase 25,000 shares of common
stock to a consultant in exchange for services to be rendered to us.  The
options are exercisable until December 10, 2013 at $2.10 per share.

There were no principal underwriters in connection with any of the foregoing
transactions. We claimed exemption from registration provisions of the
Securities Act of 1933 pursuant to Section 4(2) thereof and/or Rule 506
thereunder. Although we believed that the transactions did not involve a public
offering and that each purchaser either received adequate information about us
or had access, through employment or other relationships, to such information,
the exemptions may not have been available to us.

Item 6. Exhibits and Reports on Form 8-K.

 (a)    Exhibits

Exhibit
Number              Description
-----------------------------------------------------
2.1   Share Purchase Agreement between McKenzie Bay International, Ltd. and
      Jacquelin Dery, Laurent Mondou and Experts Conseils Dermond Inc. of
      February 12, 2002.  Previously filed as an exhibit to Amendment No. 2 to
      our registration statement on Form 10-SB and hereby incorporated by
      reference.

3.1   Certificate of Incorporation, as amended.  Previously filed as an exhibit
      to our registration statement on Form 10-SB and hereby incorporated by
      reference.

3.2   Bylaws.  Previously filed as an exhibit to our registration statement on
      Form 10-SB and hereby incorporated by reference.

4.1   See Exhibits 3.1 and 3.2.

4.3   Specimen Stock Certificate.  Previously filed as an exhibit to our Annual
      Report on Form 10-KSB for the fiscal year ended September 30, 2002 and
      hereby incorporated by reference.

4.4   Form of Warrant.  Previously filed as an exhibit to our Annual Report on
      Form 10-KSB for the fiscal year ended September 30, 2002, and hereby
      incorporated by reference.

4.5   Form of Subscription Agreement.  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002
      and hereby incorporated by reference.

10.1  Employment Agreement between Experts Conseils Dermond Inc. and Jacquelin
      Dery, dated February 12, 2002.*  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002
      and hereby incorporated by reference.

10.2  Royalty Agreement between McKenzie Bay International, Ltd. and Jacquelin
      Dery as of February 12, 2002.*  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002
      and hereby incorporated by reference.

10.3  Employment Agreement between Experts Conseils Dermond Inc. and Lauren
      Mondou, dated February 12, 2002.*  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002
      and hereby incorporated by reference.

10.4  Royalty Agreement between McKenzie Bay International, Ltd. and Lauren
      Mondou as of February 12, 2002.*  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002,
      and incorporated herein by reference.

10.5  Employment Agreement between McKenzie Bay Resources, Ltd. and Michel
      Garon, dated November 1, 2002.*  Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002
      and hereby incorporated by reference.

10.6  2001 Employee Non-qualified Stock Option Plan.*  Previously filed as an
      exhibit to our Annual Report on Form 10-KSB for the fiscal year ended
      September 30, 2002 and hereby incorporated by reference.

10.7  Amended 2001 Directors Non-qualified Stock Option Plan.*  Previously filed
      as an exhibit to  Amendment No. 1 to our Annual Report on Form 10-KSB for
      the fiscal year ended September 30, 2002 and hereby incorporated by
      reference.

10.8  2001 Employee Incentive Stock Option Plan.*  Previously filed as an
      exhibit to our Annual Report on Form 10-KSB for the fiscal year ended
      September 30, 2002, and incorporated herein by reference.

10.9  Agreement dated April 17, 2003 between McKenzie Bay Resources Ltd. and
      SOQUEM Inc. terminating prior agreements. *  Previously filed as an
      exhibit to our Annual Report on Form 10-KSB for the fiscal year ended
      September 30, 2003, and incorporated herein by reference.

10.10 Employment Agreement dated March 21, 2003 between Gary L. Westerholm and
      McKenzie Bay International, Ltd. * Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2003,
      and incorporated herein by reference.

10.11 Employment Agreement dated March 21, 2003 between Gregory N. Bakeman and
      McKenzie Bay International, Ltd. * Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30,
      2003, and incorporated herein by reference.

10.12 Employment Agreement dated March 21, 2003 between John W. Sawarin and
      McKenzie Bay International, Ltd. * Previously filed as an exhibit to our
      Annual Report on Form 10-KSB for the fiscal year ended September 30, 2003,
      and incorporated herein by reference.

10.13 Consulting Agreement as of February 15, 2003 between McKenzie Bay
      Resources, Inc.(now known as Lac Dore Mining Inc.) and Savanco, (Pty) Ltd,
      incorporated.  Previously filed as an exhibit to our Annual Report on Form
      10- KSB for the fiscal year ended September 30, 2003, and incorporated
      herein by reference.

10.14 Agreement of August 19, 2003 between McKenzie Bay International, Ltd.
      Resources, Inc. and Yes International Inc. Previously filed as an exhibit
      to our Annual Report on Form 10-KSB for the fiscal year ended September
      30, 2003, and incorporated herein by reference.

10.15 Standby Equity Distribution Agreement as of April 6, 2004 between Cornell
      Capital Partners, LP and McKenzie Bay International Ltd. Previously filed
      as an exhibit to our Annual Report on Form 10-KSB for the fiscal year
      ended September 30, 2003, and incorporated herein by reference.

10.16 Registration Rights Agreement as of April 6, 2004 between Cornell Capital
      Partners, LP and McKenzie Bay International Ltd. Previously filed as an
      exhibit to our Annual Report on Form 10-KSB for the fiscal year ended
      September 30, 2003, and incorporated herein by reference.

10.17 Placement Agent Agreement as of April 6, 2004 between McKenzie Bay
      International Ltd. and Spencer Clarke LLC.

10.18 Escrow Agreement as April 6, 2004 between McKenzie Bay International Ltd.,
      and Butler Gonzalez LLP. Previously filed as an exhibit to our Annual
      Report on Form 10-KSB for the fiscal year ended September 30, 2003, and
      incorporated herein by reference.

21.1  Subsidiaries. Previously filed as an exhibit to our Annual Report on Form
      10-KSB for the fiscal year ended September 30, 2003, and incorporated
      herein by reference.

31.1  Rule 13a-14(a) Certification of Gary L. Westerholm. ++

31.2  Rule 13a-14(a) Certification of Gregory N. Bakeman. ++

32.1  Certification Pursuant to 18 U.S.C. Section 1350 of Gary L. Westerholm. ++

32.2  Certification Pursuant to 18 U.S.C. Section 1350 of Gregory N. Bakeman. ++

99.1  Lac Dore Feasibility Study & Executive Summary. *Previously filed as an
      exhibit to Amendment No. 2 to our registration statement on Form 10-SB and
      hereby incorporated by reference.

*     Management contract or compensatory plan or arrangement.
++    Filed herewith.




(b)     Reports on Form 8-K

We filed the following Current Reports on Form 8-K during the quarter ended
December 31, 2003:

Date of Report      Item(s) Reported
---------------------------------------
November 24, 2003       5 and 7
November 24, 2003       5 and 7




SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


McKENZIE BAY INTERNATIONAL, LTD.


Date:  May 6, 2004   By:   /s/ Gary L. Westerholm
                               ----------------------
                               Gary L. Westerholm
                               President, Chief Executive Officer and Director
                               (Principal Executive Officer)



Date:  May 6, 2004   By:    /s/ Gregory N. Bakeman
                              ----------------------
                               Gregory N. Bakeman
                               Treasurer, Chief Financial Officer and Director
                               (Principal Financial and Accounting Officer)