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

**FORM 20-F**

|_ | REGISTRATION STATEMENT
        PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                      
|- | --------------------------------------------------------------------------------------------------------------------------------------------
|  | OR                                                                                                                                          
|X | ANNUAL REPORT PURSUANT TO SECTION
        13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year
        ended June 30, 2002
|  |                                                                                                                                             
|  | OR                                                                                                                                          
|  |                                                                                                                                             
|_ | TRANSITION REPORT PURSUANT
        TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                            
|  | For the transition period from __________
      to __________                                                                               

Commission file number: 0-49917

Continental Ridge Resources Inc.(Exact name of Registrant as specified in its charter)

British Columbia, Canada 
  (Jurisdiction of incorporation or organization)

900-409 Granville Street, Vancouver, British Columbia V6C
  1T2 CANADA 
  (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
|------------------- | -----------------------------------------
|                    |                                          
|N/A                 | N/A                                      

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

Common Stock, No Par Value
  ( Title of Class)

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

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:       8,863,669

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       
  No       N/A X

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

X Item 17      _ Item 18

Page 1 of 84
  Index to Exhibits on Page 65(a)

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**Continental Ridge Resources Inc. 
  Form 20-F Registration Statement 
  Table of Contents**

|         | **Part I**                                      | **Page** | 
|-------- | ----------------------------------------------- | -------- | 
|         |                                                 |          | 
|Item 1.  | Identity of Officers and Directors              | 3        | 
|Item 2.  | Offer Statistics and Expected Timetable         | 3        | 
|Item 3.  | Key Information                                 | 3        | 
|Item 4.  | Information on the Company                      | 10       | 
|Item 5.  | Operating and Financial Review and Prospects    | 26       | 
|Item 6.  | Directors, Senior Management and Employees      | 35       | 
|Item 7.  | Major Shareholders and Related Party            |          | 
|         | Transactions                                    | 40       | 
|Item 8.  | Financial Information                           | 41       | 
|Item 9.  | Offer and Listing of Securities                 | 41       | 
|Item 10. | Additional Information                          | 45       | 
|Item 11. | Disclosures about Market Risk                   | 63       | 
|Item 12. | Description of Other Securities                 | 63       | 
|         |                                                 |          | 
|         |                                                 |          | 
|         | **Part II**                                     |          | 
|Item 13. | Defaults, Dividend Arrearages and Delinquencies | 63       | 
|Item 14. | Modifications of Rights of Securities Holders   |          | 
|         | and Use of Proceeds                             | 63       | 
|         |                                                 |          | 
|         | **Part III**                                    |          | 
|Item 17. | Financial Statements                            | 63       | 
|Item 18. | Financial Statements                            | 64       | 
|Item 19. | Exhibits                                        | 65       | 

2

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**Part I**

**Item 1.   Identity of Officers and Directors**

Not Applicable

**Item 2.   Offer Statistics and Expected Timetable**

Not Applicable

**Item 3.   Key Information**

**SELECTED FINANCIAL DATA**

The selected financial data of the Company for Fiscal 2002,
  2001, and Fiscal 2000 June 30th was derived from the financial statements
  of the Company which have been audited by Morgan & Company, Chartered Accountants,
  Independent Auditors, as indicated in their audit report which is included elsewhere
  in this Registration Statement. Morgan and Company is located at 700 West Georgia
  Street, Suite 1488, Vancouver, British Columbia V7Y 1A1. The telephone number
  for Morgan and Company is 604-687-5841 and the contact person is Peter Witzerman.
  Morgan and Company is a member of the Canadian Institute of Chartered Accountants.
  The Companys banker is the Royal Bank of Canada located at 685 West Hastings
  Street, Vancouver, British Columbia V6B 1N9. The telephone number for the Royal
  Bank of Canada is 604-665-5209 and the contact person is Margaret. The Companys
  legal counsel is Miller Thompson located at 840 Howe Street, Suite 1000, Vancouver,
  British Columbia V6Z 2M1. The telephone number of the Companys legal counsel
  is 604-643-1258 and the contact person is Gregory C. Smith. The selected financial
  data set forth for Fiscal 1999 and Fiscal 1998 ended June 30th are
  derived from the Company's audited financial statements, not included herein.

The selected financial data should be read in conjunction
  with the financial statements and other financial information included elsewhere
  in the Registration Statement.

The Company has not declared any dividends since incorporation
  and does not anticipate that it will do so in the foreseeable future. The present
  policy of the Company is to retain future earnings for use in its operations
  and the expansion of its business.

3

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Table No. 2 is derived from the financial statements of the
  Company, which have been prepared in accordance with Canadian Generally Accepted
  Accounting Principles (GAAP), the application of which, in the case of the Company,
  conforms in all material respects for the periods presented with US GAAP, except
  as disclosed in a footnote to the financial statements.

Table No. 2 
  Selected Financial Data 
  (CDN$ in 000, except per share data)

|                         | Year    |   | Year    |   | Year    |   | Year    |   | Year    |  
|------------------------ | ------- | - | ------- | - | ------- | - | ------- | - | ------- | -
|                         | Ended   |   | Ended   |   | Ended   |   | Ended   |   | Ended   |  
|                         | 6/30/02 |   | 6/30/01 |   | 6/30/00 |   | 6/30/99 |   | 6/30/98 |  
|                         |         |   |         |   |         |   |         |   |         |  
|Revenue                  | 0       |   | 0       |   | 0       |   | 0       |   | .7      |  
|Net Income (Loss)        | ($277   | ) | ($189   | ) | ($743   | ) | ($545   | ) | ($769   | )
|(Loss) per Share         | ($0.04  | ) | ($0.03  | ) | ($0.23  | ) | ($0.20  | ) | ($0.38  | )
|Dividends Per Share      | 0       |   | 0       |   | 0       |   | 0       |   | 0       |  
|Wtg. Avg. Shares (000)   | 7,588   |   | 5,515   |   | 3,264   |   | 2,729   |   | 2,020   |  
|                         |         |   |         |   |         |   |         |   |         |  
|Working Capital          | $92     |   | ($38    | ) | ($236   | ) | ($149   | ) | ($80    | )
|Long-Term Debt           | 0       |   | 0       |   | 0       |   | 0       |   | 0       |  
|Shareholders Equity     | $380    |   | $122    |   | $117    |   | $507    |   | $847    |  
|Total Assets             | $419    |   | $202    |   | $127    |   | $694    |   | $979    |  
|                         |         |   |         |   |         |   |         |   |         |  
|US GAAP Net Loss         | ($374   | ) | ($204   | ) | ($238   | ) | ($314   | ) | N/A     |  
|US GAAP Loss per Share   | ($0.05  | ) | ($0.04  | ) | ($0.07  | ) | ($0.12  | ) | N/A     |  
|USGAAP Avg Shares        | 7,588   |   | 5,515   |   | 3,169   |   | 2,540   |   | N/A     |  
|                         |         |   |         |   |         |   |         |   |         |  
|                         |         |   |         |   |         |   |         |   |         |  
|US GAAP Equity (Deficit) | $124    |   | $31     |   | ($206   | ) | ($104   | ) | N/A     |  
|US GAAP Total Assets     | $16     |   | $71     |   | 37      |   | N/A     |   | N/A     |  

In this Registration Statement, unless otherwise specified,
  all dollar amounts are expressed in Canadian Dollars (CDN$). The Government
  of Canada permits a floating exchange rate to determine the value of the Canadian
  Dollar against the U.S. Dollar (US$).

Table No. 3 sets forth the rate of exchange for the Canadian
  Dollar at the end of the five most recent fiscal periods ended June 30th,
  the average rates for the period, and the range of high and low rates for the
  period.

For purposes of this table, the rate of exchange means the
  noon buying rate in New York City for cable transfers in foreign currencies
  as certified for customs purposes by the Federal Reserve Bank of New York. The
  table sets forth the number of U.S. dollars required under that formula to buy
  one Canadian Dollar. The average rate means the average of the exchange rates
  on the last day of each month during the period.

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Table No. 3 
  Canadian Dollar/U.S. Dollar

|                          | Average |  | High  |  | Low   |  | Close | 
|------------------------- | ------- |  | ----- |  | ----- |  | ----- | 
|                          |         |  |       |  |       |  |       | 
|                          |         |  |       |  |       |  |       | 
|Fiscal Year Ended 6/30/02 | $1.57   |  | $1.61 |  | $1.51 |  | $1.52 | 
|Fiscal Year Ended 6/30/01 | $1.62   |  | $1.58 |  | $1.46 |  | $1.52 | 
|Fiscal Year Ended 6/30/00 | $1.47   |  | $1.51 |  | $1.44 |  | $1.48 | 
|Fiscal Year Ended 6/30/99 | $1.51   |  | $1.57 |  | $1.44 |  | $1.51 | 
|Fiscal Year Ended 6/30/98 | $1.42   |  | $1.47 |  | $1.37 |  | $1.47 | 

**The exchange rate was 1.59 on September 30, 2002**

**Statement of Capitalization and Indebtedness**

Table No. 4 
  Statement of Capitalization and Indebtedness 
  June 30, 2002

|Shareholders Equity:                                              |             |  
|------------------------------------------------------------------ | ----------- | -
|Common Shares, no par value;                                       |             |  
|100,000,000 common shares authorized                               |             |  
|25,000,000 first preferred shares, no
      par value authorized   |             |  
|25,000,000 second preferred shares, no
      par value, authorized |             |  
|8,863,669 common shares
      issued and outstanding               | $3,214,733  |  
|Unissued Common Stock Subscribed                                   | Nil         |  
|Retained Earnings (deficit)                                        | ($2,943,346 | )
|Net Stockholders Equity                                           | $380,487    |  
|TOTAL CAPITALIZATION                                               | $3,214,733  |  
|                                                                   |             |  
|Stock Options Outstanding                                          | 831,000     |  
|Warrants Outstanding                                               | 810,000     |  
|First Preferred Shares Outstanding                                 | Nil         |  
|Second Preferred Shares Outstanding                                | Nil         |  
|Capital Leases                                                     | Nil         |  
|Guaranteed Debt                                                    | Nil         |  
|Secured Debt                                                       | Nil         |  

**Risk Factors**

**Unsuccessful Exploration Efforts By Company Personnel Could Result
  In a Significant Negative Effect on the Company :**

The expenditures to be made by the Company in the exploration
  of its properties as described herein may not result in discoveries of mineralized
  material in commercial quantities. Most exploration projects do not result in
  the discovery of commercially mineable ore deposits.

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**The Company Has No Positive Cash Flow and No History
  of Earnings and Is Dependent Upon Public and Private Distributions of Equity
  to Obtain Capital in Order to Sustain Operations:**

None of the Companys properties have advanced to the
  commercial production stage and the Company has no history of earnings or cash
  flow from operations. The Company does not know if it will ever generate material
  revenue from mining operations or if it will ever achieve self-sustaining commercial
  mining operations. Historically, the only source of funds available to the company
  have been through the sale of its common shares. Any future additional equity
  financing would cause dilution to current stockholders.

**The Company has No Proven Reserves on the Properties
  in Which It Has an Interest:**

The properties in which the Company has an interest or the
  concessions in which the Company has the right to earn an interest are in the
  exploratory stage only and are without a known body of ore. Properties on which
  mineral reserves are not found will have to be discarded causing the Company
  to write each respective property off thus sustaining a loss.

**There is No Guarantee of Clear Title to Any of the
  Companys Mineral Properties:**

Unregistered agreements or unregistered transfers of title
  could cause the Company to forfeit its interests in one or more of its property
  interests.

**Mineral Prices May Not Support Corporate Profit:**

The mining industry is intensely competitive and even if commercial
  quantities of mineral resources are developed, a profitable market may not exist
  for the sale of same. If a profitable market does not exist the Company could
  have to cease operations.

**The Expense of Meeting Environmental Regulations Could
  Cause a Significantly Negative Effect on the Company:**

The current and anticipated future operations of the Company,
  including further exploration activities require permits from various Mexican
  Federal and State governmental authorities. Such operations are subject to various
  laws governing land use, the

6

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protection of the environment, production, exports, taxes,
  labor standards, occupational health, waste disposal, toxic substances, mine
  safety and other matters. The permits which the Company may require for construction
  of mining facilities and conduct of mining operations must be obtainable on
  reasonable terms to the Company. Unfavorable amendments to current laws, regulations
  and permits governing operations and activities of mining companies, or more
  stringent implementation thereof, could have a materially adverse impact on
  the Company and cause increases in capital expenditures which could result in
  a cessation of operations by the Company.

Failure to comply with applicable laws, regulations and permitting
  requirements may result in enforcement actions thereunder, including orders
  issued by regulatory or judicial authorities causing operations to cease or
  be curtailed, and may include corrective measures requiring capital expenditures,
  installation of additional equipment or remedial actions. Parties engaged in
  mining operations may be required to compensate those suffering loss or damage
  by reason of the mining activities and may have civil or criminal fines or penalties
  imposed for violation of applicable laws or regulations.

Large increases in capital expenditures resulting from any
  of the above factors could force the Company to cease operations.

**Operating Hazards and Risks Associated with the Mining
  Industry Could Result in a Significantly Negative Effect on the Company**

Mining operations generally involve a high degree of risk.
  Hazards such as unusual or unexpected formations and other conditions are involved.
  Operations in which the Company has a direct or indirect interest will be subject
  to all the hazards and risks normally incidental to exploration, development
  and production of precious and base metals, any of which could result in work
  stoppages, damage to or destruction of mines and other producing facilities,
  damage to life and property, environmental damage and legal liability for any
  or all damage. The Company may become subject to liability for cave-ins and
  other hazards for which it cannot insure or against which it may elect not to
  insure where premium costs are disproportionate to the Companys perception
  of the relevant risks. The payment of such insurance premiums and of such liabilities
  would reduce the funds available for exploration activities and could force
  the Company to cease operations.

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**There is the Possibility of Significant Dilution to
  the Present and Prospective Shareholders:**

The Companys plan of operation, in part, contemplates
  the accomplishment of business negotiations by the issuance of cash, securities
  of the Company, or a combination of the two, and possibly, incurring debt. Any
  transaction involving the issuance of previously authorized but unissued shares
  of common stock, or securities convertible into common stock, would result in
  dilution, possibly substantial, to present and prospective holders of common
  stock.

**The Risks Associated with Penny Stock Classification
  Could Affect the Marketability of the Companys Common Stock:**

The Companys stock is subject to penny stock
  rules as defined in 1934 Securities and Exchange Act rule 3a51-1. The Commission
  has adopted rules that regulate broker-dealer practices in connection with transactions
  in penny stocks. The Companys common shares are subject to these penny
  stock rules. Transaction costs associated with purchases and sales of penny
  stocks are likely to be higher than those for other securities. Penny stocks
  generally are equity securities with a price of less than U.S. $5.00 (other
  than securities registered on certain national securities exchanges or quoted
  on the NASDAQ system, provided that current price and volume information with
  respect to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a
  transaction in a penny stock not otherwise exempt from the rules, to deliver
  a standardized risk disclosure document that provides information about penny
  stocks and the nature and level of risks in the penny stock market. The broker-dealer
  also must provide the customer with current bid and offer quotations for the
  penny stock, the compensation of the broker-dealer and its salesperson in the
  transaction, and monthly account statements showing the market value of each
  penny stock held in the customers account. The bid and offer quotations,
  and the broker-dealer and salesperson compensation information, must be given
  to the customer orally or in writing prior to effecting the transaction and
  must be given to the customer in writing before or with the customers
  confirmation.

In addition, the penny stock rules require that prior to a
  transaction in a penny stock not otherwise exempt from such rules, the broker-dealer
  must make a special written determination that the penny stock is a suitable
  investment for the purchaser and

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receive the purchasers written agreement to the transaction.
  These disclosure requirements may have the effect of reducing the level of trading
  activity in the secondary market for the Companys common shares in the
  United States and shareholders may find it more difficult to sell their shares.

**The Company is Dependent on Key Personnel and the
  Absence of Any of These Individuals Could Result in a Significantly Negative
  Effect on the Company:**

The Company strongly depends on the business and technical
  expertise of its management and key personnel. There is little possibility that
  this dependence will decrease in the near term. As the Companys operations
  expand, additional general management resources will be required, especially
  since the Company encounters risks that are inherent in doing business in several
  countries. The Company is dependent, in particular, on its President Mr. Brian
  Fairbank. The Company has no employment and/or consulting contracts with its
  President, Mr. Brian Fairbank. Key man life insurance is not in place on Mr.
  Fairbank.

**The Lack of Trading Volume Associated with the Companys
  Stock Reduces the Liquidity of the Stock for Investors**

The lack of trading volume of the Companys shares reduces
  the liquidity of an investment in the Companys shares. The limited daily
  trading activity in the Companys stock can make it difficult for investors
  to readily sell their shares in the open market.

**It is Difficult for U.S. Investors to Effect Service
  of Process Against the Company**

The Company is incorporated under the laws of Canada. The
  Companys directors and officers are residents of Canada and a substantial
  portion of the Companys assets are located outside of the United States.
  Consequently, it may be difficult for United States investors to effect service
  of process in the United States upon the Companys directors and officers
  or to realize in the United States upon judgments of United States courts predicated
  upon civil liabilities under the United States Securities Exchange Act of 1934,
  as amended. A judgment of a U.S. court predicated solely upon such civil liabilities
  would probably be enforceable in Canada by a Canadian court if the U.S. court
  in which the judgment was obtained had jurisdiction, as determined by the Canadian
  court, in the matter. There is substantial doubt whether an original action
  could be brought

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successfully in Canada against any of such persons or the
  Company predicated solely upon such civil liabilities.

**Item 4.    Information on the Company**

**DESCRIPTION OF BUSINESS**

**Introduction**

The Company's executive office is located at: 
  Suite 900  409 Granville Street, Vancouver, B.C. V6C 1T2 CANADA 
  Telephone: (604) 688-1553 
  Facsimile: (604) 688-5926 
  E-Mail: fairbank@intergate.ca 
  Website: www.continentalridge.com

The contact person in Vancouver is: Mr. Brian Fairbank, President.

The Company's fiscal year ends June 30th.

The Company's common shares trade on the Canadian Venture Exchange under the symbol "KRI".

The Company has 100,000,000 common shares, with no par value;
  25,000,000 first preferred shares, with no par value; and, 25,000,000 second
  preferred shares, with no par value, authorized. At 6/30/2002, the end of the
  Company's most recent fiscal year, there were 8,863,669 common shares issued
  and outstanding and no first or second preferred share issued and outstanding.

**Corporate Background**

Continental Ridge Resources Inc. was incorporated on April
  13, 1995 in the Province of British Columbia, Canada, under the name Blue
  Desert Mining Inc. by registration of its Articles and Memorandum pursuant
  to the Company Act (British Columbia). The Company obtained a receipt on November
  24, 1995, for a prospectus filed with the Alberta Securities Commission. Following
  the completion of the initial public offering in Canada, the Companys
  shares were listed for trading on the Alberta Stock Exchange on January 31,
  1996. The Company was designated a Reporting Issuer in the Province
  of British Columbia on December 5, 1996. Since November 29, 1999, the

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Companys shares have been listed for trading on the Canadian
  Venture Exchange (the Exchange).

On May 25, 2000, the name of the Company was changed to Canada
  Fluorspar Inc. and the Company consolidated its share capital on the basis
  of three old shares for one new share. On February 5, 2001, the name of the
  Company was changed to Continental Ridge Resources Inc.

The Company holds interests in the following wholly-owned
  subsidiaries:

|(a) | Blue Desert Mining (U.S.) Inc., a Nevada corporation which
      is wholly-owned by the Company1; and                 
|--- | ----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                       
|(b) | Blue Desert Mining (Chile) Limitada, a Chilean corporation
      which is wholly-owned by the Company and is inactive.

The Companys mineral property interests in Alaska are held by Blue Desert
  Mining (U.S.) Inc.

**Business**

The Company, through subsidiaries, is engaged in the acquisition
  and exploration of mineral resource and geothermal properties.2During
  the three fiscal years ending June 30, 2001, the Company was involved in the
  exploration of the Nuevo Año and Enero Prospects in the Province of Petorca3,
  Chile; the Snowstorm Property, in Elko County, Nevada4; the South
  Midas Property, in Elko County, Nevada5; the Portal/Gobi Property,
  in Alaska (now referred to as the Pogo Area Project)6; and the Plateau
  Property (formerly known as the Dot Com Property) in Quebec7.

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2Currently the Company is involved almost exclusively
  in Nevada where geothermal leases are held by Noramex Corp., which is the US
  subsidiary of Blue Mountain Power Company Inc. (Continental Ridge has an Option
  Agreement with Blue Mountain Power Company Inc.). Mining claims in the US are
  held by Blue Desert Mining (US) Inc., which is a US subsidiary of Continental
  Ridge Resources Inc.

3 Exploration completed and projects terminated
  with no further interest by Company.4 Grass roots exploration completed and project terminated by
  Company.5 Project terminated with no further interest by Company.6The property has been optioned to Anglo Gold (USA) who may earn
  a 7% interest by completing U.S.$750,000 of work. A drilling program is currently
  in process by Anglo Gold (USA).7 Project terminated with no further interest by Company.

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In August 1999, the Company entered into a letter of intent
  to acquire Burin Fluorspar Ltd. (Burin), which indirectly owns a
  100% interest in certain mining properties and related mill assets located in
  St. Lawrence Newfoundland. This transaction was subject to numerous conditions
  precedent including; a share consolidation (three old for one new) by the Company;
  settlement of debt; the issuance of approx. 12,000,000 transaction shares; a
  financing to raise approx. $2,000,000, and shareholder and regulatory approval.

This transaction was a reverse take-over under
  the policies of the Exchange. As a result, trading in the shares of the Company
  was halted in August 1999 pending completion or termination of the acquisition.

During the ensuing 12 month period, the majority of the Companys
  resources and managements time were committed to satisfying the transaction
  conditions and the regulatory requirements associated with the Burin acquisition.
  The Company satisfied virtually all such requirements, however difficult market
  conditions for resource companies prevented the Company from completing the
  financing. As a result, on September 8, 2000, the Company announced that the
  agreement to acquire Burin had been terminated. The shares of the Company were
  recalled for trading on September 18, 2000. The Company incurred expenditures
  totaling $62,227 for geological evaluation of the project, travel, and financial
  and legal expenses.

On September 25, 2000, the Company entered into an Option
  Agreement with the Freeman Prospecting Syndicate (represented by John Robins)
  to acquire a 100% interest, subject to a 2% NSR retained by the owners, in 106
  mineral claims located in the Val dOr Mining Division of Quebec, known
  as the Plateau Property. Under the terms of the agreement the Company is required
  to make cash payments of $55,000 ($25,000 paid), issue 200,000 special warrants
  (issued)and incur $250,000 of exploration expenditures on the property over
  a period of three years. After the three year earn-in period, the property is
  subject to a $10,000 annual advance royalty payment.

The Company acquired the Plateau property to determine the
  extent of certain platinum and paladium mineralization on the property. To date,
  the Company has issued 200,000 special warrants and incurred $34,852 of costs
  for option payments and exploration expenditures on the property.

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On February 23, 2001, the Company granted Denstone Ventures
  Ltd. (Denstone) an option to acquire 50 % of the Companys
  interest in the property. In order to exercise the option Denstone has paid
  $40,000 to the Company, has issued 100,000 special warrants to the Company,
  must incur $450,000 of exploration expenditures over 3 years and issue 100,000
  common shares to the Company before completion of the exploration expenditures.

Denstone has completed grid soil sampling, magnetic induced
  polarization surveys8, prospecting and rock sampling on the Plateau
  Property at a cost of approximately $85,000.

On June 19, 2001, the Company entered into an option agreement
  with Blue Mountain Power Company Inc. (BMP) to acquire up to a 60%
  interest in certain federal and private geothermal leases located in Humboldt
  County, Nevada. In order to earn a 60% interest the Company must pay US$50,000,
  incur a total of US$1,700,000 in exploration expenditures and issue 600,000
  common shares to BMP over a three year period. The first year commitments are
  US$10,000 in cash (paid), 200,000 common shares (issued) and US$200,000 of exploration
  expenditures. The Company will vest with a 20% interest after satisfying US$30,000
  in cash payments, US$500,000 of exploration expenditures and issuing 400,000
  common shares. The Company and BMP are not dealing at arms-length, since Brian
  D. Fairbank and Jack W. Milligan are directors and officers of both companies,
  and Mr. Fairbank is a substantial shareholder of both companies.

Regarding the issue of seasonality, project work, including
  drilling and other surface surveys can be conducted at any time of year at Blue
  Mountain, the Companys primary area of interest. The project is 20-miles
  along a gravel, all-season road from Winnemmucca, Nevada. Winter weather is
  cold, but precipitation is low and snow does not accumulate significantly. Topography
  is moderate.

The Steam Act of 1970 and subsequent leasing, work commitment
  and drilling regulations covering procedures and requirements for payments,
  permitting etc. on Federal Lands are administered by the Federal Bureau of Land
  Management (BLM). Drilling



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13

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projects require a permit from the BLM and the Nevada Division of Minerals.

In October of 2001 test drilling resumed at the Blue Mountain site under a
  cost-sharing contract between the U.S. Department of Energy and Noramex Corp.,
  a U.S. subsidiary of Blue Mountain Power Company Inc.

On April 18, 2002 the Company announced that it had received all of the necessary
  permits to proceed with the next phase of fieldwork Blue Mountain site. At that
  time Blue Mountain Power Company also agreed to extend the first year work commitment
  date under their option agreement with the Company to August 31, 2002.

On April 23, 2002 a drill and test program began at a cost of approximately
  U.S.$450,000. 80% of this amount is being funded by a grant from the United
  States Department of Energy. (See additional disclosure on page 19 of this document.)

Plan of Operations

As of October 1, 2002, the Company had a working capital deficiency of ($6,143).
  The Company subsequently entered into two private placement financings, both
  from sophisticated investors, in the amount of $25,000 each. The
  Company is also raising additional capital through the exercise of existing
  share purchase warrants and share purchase options.

The Companys minimum cash commitments to December 31, 2002 are:

|1. | $10,000 option payment to Blue Mountain Power Company, Inc.;
      and,                   
|-- | ------------------------------------------------------------------------------------------
|   |                                                                                           
|2. | $50,000 work commitment under the option agreement with Blue
      Mountain Power Company.

The Companys additional minimum cash commitments to June 30, 2003 are:

|1. | $10,000 option payment to Blue Mountain Power Company, Inc.;                 
|-- | -----------------------------------------------------------------------------
|   |                                                                              
|2. | $7,064 in geothermal lease payments; and,                                    
|   |                                                                              
|3. | $300,000 work commitment under the Blue Mountain Power Option
      Agreement

The Companies business focus is the development of geothermal
  energy projects and its primary objective for the next year is to complete
  the Blue Mountain Project to the feasibility stage.

14

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The Company may acquire additional geothermal properties as opportunities. Mineral properties in the Companys portfolio are either optioned to other mining companies or will be farmed out to join venture partners.

The Blue Mountain Geothermal Project budget to complete a
  development feasibility study and report is as follows:

|Phase One (Year One)                                                                                                                        |              
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------
|                                                                                                                                            |              
|Lease payments                                                                                                                              | $7,000.00    
|Geological mapping and structure analysis                                                                                                   | 50,000.00    
|Ten 500-foot gradient drill holes, 5000 feet@$50
      per foot, all inclusive.                                                             | 250,000.00   
|Testing Deep Blue No. 1                                                                                                                     | 50,000       
|Drill 3200-foot reservoirtest holeassociated with Deep Blue No. 2                                                                           | 800,000      
|Scoping study (Transmission requirements, power contract parameters, preliminary
      plant engineering for design alternatives and costs. | 50,000       
|                                                                                                                                            |              
|Total for Year One                                                                                                                          | $1,207,000.00
|                                                                                                                                            |              
|Phase Two (Year Two)                                                                                                                        |              
|Lease payments                                                                                                                              | 7,000.00     
|Production Test Wells (2), all-inclusive                                                                                                    | 2,000,000.00 
|Engineering design, costing, feasibility report                                                                                             | 500,000      
|                                                                                                                                            |              
|Total for Year Two                                                                                                                          | $2,507,000.00

**DESCRIPTION OF PROPERTY**

***The Blue Mountain Geothermal Project:***

**Location and Access**

The property is located in Humboldt County of north central
  Nevada about 20 miles west of the town of Winnemucaa.

From Winnemucaa the site is accessible year-round via the
  Jungo Road, an adequately maintained gravel county road that passes south of
  Blue Mountain. From the Jungo Road at a point just west of Blue Mountain a dirt
  road leads north along the eastern edge of the valley providing good access
  to the entire lease area.

15

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The site is at an elevation of about 4300 feet above sea level
  on the western pediment of Blue Mountain and the flat basin of Desert Valley.
  Bedrock outcrops are abundant at the base of the mountain in the eastern parts
  of Sections 12, 14 and 23 but are absent on the desert flat to the west, which
  is mantled in alluvium. Terrain in the principal area of interest is regular
  and most of the property is readily accessible by vehicle.

Local vegetation consists of arid land or desert plants such
  as sagebrush, bunch grass and a few other small shrubs. The climate is typical
  of the Basin and Range Desert: hot dry summers and cold winters with occasional
  snowfalls. The area is also sporadically subject to high winds.

**Ownership**

On June 19, 2001, the Company entered into an option agreement
  with Blue Mountain Power Company Inc. (BMP) to acquire up to a 60%
  interest in certain federal and private geothermal leases located in Humboldt
  County, Nevada knows as the Blue Mountain site. In order to earn a 60% interest
  the Company must pay US$50,000, incur a total of US$1,700,000 in exploration
  expenditures and issue 600,000 common shares to BMP over a three year period.
  The first year commitments are US$10,000 in cash (paid), 200,000 common shares
  (issued) and US$200,000 of exploration expenditures. The Company will vest with
  a 20% interest after satisfying US$30,000 in cash payments, US$500,000 of exploration
  expenditures and issuing 400,000 common shares. The Company and BMP are not
  dealing at arms-length, since Brian D. Fairbank and Jack W. Milligan are directors
  and officers of both companies, and Mr. Fairbank is a substantial shareholder
  of both companies.

The expenditure amounts required for vesting by the Company
  were determined to be fair by a committee of independent directors of the Company
  which was headed by James Yates. The terms are in keeping with normal industrial
  practice.

Blue Mountain Power Company Inc. contributed to the geothermal
  development over the 8-year period previous to the Companys involvement.
  An 18-month regional evaluation including inspection of many geothermal sites
  and determination of land status was conducted throughout northern Nevada prior
  to selecting and successfully negotiating leases for the Blue Mountain geothermal
  area. Approximately $1.5 million worth of technical data from previous gold
  exploration work was acquired Subsequently, approximately $500,000 has been
  expended by Blue

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Mountain and its affiliates on new geology and geohysics to
  assess the geothermal development potential and drilling programs that indicated
  high subsurface temperature gradients. Finally, Blue Mountain/Noramex corp.
  competed for and obtained cost-sharing agreements with the Department of Energy
  prior to entering into the option agreement with the Company.

**History of Previous Work**

The Blue Mountain geothermal prospect was originally discovered
  during the course of drilling undertaken for precious metal exploration on mining
  claims held by Nassau Ltd. (Nassau), a mineral exploration company
  based in Sparks, Nevada. Nassau staked the original claims in 1982 and carried
  out exploration work on the property in 1982 and 1983. During the course of
  the next several years the property was optioned by five different mining and
  exploration companies. The optionees conducted a variety of exploration programs
  including geological mapping; seismic, IP, magnetic and SP surveys and drilling
  at a cost of approximately US$2,000,000.

Hot water was encountered in several of the holes drilled
  between 1985 and 1987 by Billiton Minerals Co. (Billiton) and later
  in additional holes drilled by Placer-Dome, Lac Minerals9 and, most
  recently, by BMP. A total of at least 31 of the 93 holes drilled to date are
  reported to have encountered hot water and artesian flows of 20 to 30 gpm at
  an average temperature of 79oC (175oF) have been observed in six of
  these holes. The holes have now all been plugged and abandoned in compliance
  with BLM requirements and are not accessible for testing.

Neither Nassau nor any of the mineral claim optionees made
  application for the geothermal rights, although a Billiton employee did apply
  for and lease one section for a year. In 1993 Brian Fairbank, the President
  of the Company, acquired the geothermal leases. BMP was formed in October 1993
  to initiate the development work and obtained the rights to the leases from
  Mr. Fairbank. BMPs management subsequently commissioned Martin Booth10
  of Geothermal Development Associates to review the

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17

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existing data and plan a geothermal exploration program. Booth
  concluded that a partially defined geothermal resource underlies parts of sections
  14 and 23 and recommended a drill program to further delineate the resource.
  The proposed program included thirteen shallow temperature-gradient test holes
  and two small diameter test wells to a nominal depth of 3,000 feet (900m) designed
  to intersect the inferred reservoir.

Between 1996 and 1999 BMP drilled eleven holes and, with scientific
  support from the Energy and Geoscience Institute of the University of Utah (EGI)11,
  carried out geophysical and geochemical studies of the project area. These included
  a Self Potential (SP) survey; downhole temperature logging; hydrogeochemical
  sampling and analyses; and geothermometry determinations. On the basis of the
  positive results of this work, BMP entered into negotiations with the U.S. Department
  of Energy (DOE) to cost-share a confirmation-drilling program under DOE Cooperative
  Agreement No. DE-FC04-00AL66972; Amendment No. A001 dated February 21, 2001.

In May 2001 an agreement was reached with the Department of
  Energy (DOE) whereby the DOE will contribute 80% of the funding
  for the drilling and preliminary testing of a 700 metre (2,300 ft) test well.

The DOE contract with Noramex Corp. covers a reservoir test
  well, DEEPBLUE NO. 1, to 2300 feet provides for DOE to pay for 80% of costs
  in three phases. Continental Ridge Resources Inc. manages the project operations
  on behalf of Noramex and is responsible for 20% of the DOE contract costs as
  per its Option Agreement. The overall budget is as follows:

- Phase 1: Summary report and permits for drilling $27,000 (completed)
- Phase 2: Drilling, supervision, logging 450,000 (completed)
- Phase 3: Well tests (pending) 50,000

---

18

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A budget increase of $93,750 was approved by DOE/Noramex/Continental
  for Phase 2 to cover addition costs. To date, the project has received DOE funding
  of $462,000 and Continental's proportionate share has been $115,000. The Phase
  3 well test budget is in preparation and for submittal and approval. Testing
  of DEEPBLUE NO. 1 will be conducted in November-December, 2002. The DOE grant
  or cost share is paid monthly on receipt of progress reports and expenditure
  accounts.

A further award has been announced for DOE cost sharing of
  a second reservoir test well, DEEPBLUE NO. 2, to 3200 feet. Contacts are in
  preparation. As before, the program will be in three phases with a Phase 1 and
  2 approved for a total budget of $822,750. The DOE cost share is $658,200 and
  the Continental cost share on behalf of Noramex is $164,550. Phase 1 (report
  and permitting) is scheduled to start immediately and Phase 2 will commence
  in January 2003.

Information on the project and test results will be released
  to the public through jointly approved scientific papers and or news releases.

**Geology**

Regional Geological Setting

The project area is in the Basin and Range geomorphic province
  of northern Nevada, a region characterized by high terrestrial heat-flows and,
  not incidentally, one of North Americas leading gold-producing areas.
  The high heat-flows are attributed to crustal extension and thinning enabled
  by neogene and recent lateral and normal (block and/or detachment) faulting.
  Many of the gold deposits are considered to be genetically related to these
  heat-flow and structural regimes. Within the Basin and Range terrain the highest
  heat-flows occur in the Battle Mountain Heat-Flow High. This is
  an extensive region of northern Nevada characterized by heat-flows, which are,
  on average, over 50% higher than those elsewhere in the Basin and Range. These
  heat-flow values lie in the 100 to 120 mW/m2 range and, depending
  upon conductivity, they translate to geothermal gradients of between 40o
  and 80oC/km. All Basin and Range geothermal power projects are in or near
  areas with heat-flows in the range of 100 mW/m2 or greater. This
  means that temperatures of 150 to 200oC can occur between 1.5 to 2.5 km
  of the surface. These temperatures are appropriate for power generation and,
  throughout the region, they occur within a maximum acceptable economic drilling
  depth of 4 km.

19

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Blue Mountain lies well within the heat-flow anomaly and temperatures
  up to 81oC have been measured within 125 m of the surface at the project
  site. Observed geothermal gradients vary from 86oC/km to 738oC/km.
  These gradients may be influenced by variations in subsurface conductivity and
  by convective movement of geothermal fluid but they are nevertheless anomalously
  high. A gradient of about 80oC/km for example (consistent with those elsewhere
  in explored Basin and Range geothermal areas), would indicate temperatures in
  the 200oC range at depths of about 1.5km (390oF-4900ft).

Geophysical Surveys

Data from an airborne magnetometer survey of the project area
  completed in 1988 has been used to define structures such as high-angle faults
  and geological contacts. Results are essentially consistent with those obtained
  using other methods such as SP and drilling. The magnetic survey, however, covered
  a larger area and some of the resulting data can be used to extrapolate structures
  to areas not covered by the more detailed studies providing a useful guide for
  future SP and drilling programs.

In 1988 an induced polarization/resistivity survey was carried
  out along five northwest trending lines covering the central part of the project
  area. A narrow north-south trending resistive zone traverses the south-central
  part of the section coinciding approximately with the main zone near the surface
  trace of the central fault. Resistivities drop abruptly on either side of this
  feature. The distribution of the values suggests a west dip to the resistivity
  low. This would be consistent with interpretations of seismic and drilling data
  that indicate that the fault structures associated with geothermal fluids and
  mineralization dip in this direction. The resistivity low regions are most probably
  attributed to the presence of hot saline water in these west-dipping fault structures.

A second resistivity survey was conducted in June 1998 along
  five lines. Numerical modeling of the resistivity data indicates low resistivities
  and high chargeabilities associated with the SP anomalies. A deep region of
  low resistivity encountered on line BM1 is associates with an artesian thermal
  area and is considered to be an expression of a hydrothermal reservoir at depth.

20

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A self potential (SP) survey was carried out in 1996 over
  sections 14, 22, 23 and parts of 11, 15, 26 and 27. The work was done in order
  to define areas of near-surface geothermal activity and obtain information on
  subsurface structures that may control geothermal fluid migration. The survey
  delineated two elongate north-south trending negative SP low anomalies centered
  in sections 14 and 22. SP high amplitudes are confined to a north-south trending
  zone between the two negative anomalies. The negative SP features are interpreted
  as near-surface zones of fluid upflow and have been partially tested by holes
  drilled in 1996 and 1997. The SP data suggest that the distribution of geothermal
  fluids are controlled by prominent north-south trending structures interpreted
  as high-angle normal faults. This appears to be corroborated by seismic and
  drilling data for the Central Fault area where a number of drill holes intersected
  hot water.

Drill hole Temperature Observations

Of the 93 drill holes collared on the property to date 31
  are reported to have produced variable amounts of warm or hot water. The evidence
  of geothermal activity is, in some instances, anecdotal but for most there are
  reliable references in drill logs and 10 of the most recent holes have been
  studied in detail. These studies included temperature logging, gradient determinations,
  water sampling and analyses and geothermometry.

It is important to appreciate that the early drilling was
  done for mineral exploration purposes and, as the geothermal potential of the
  area had not yet been recognized, no specific effort was made to collect geothermal
  data from drill holes BM 001 through BM 078. For this reason many drill holes
  with no reported water or temperatures lie within the geothermally anomalous
  area as it is now known but they do not constrain it. In other cases hot water
  was noted during drilling but no effort was made to obtain any scientific data.
  These drill holes, however, do provide information on the near surface distribution
  of the geothermal fluids and the extent of the possible reservoir.

Hydrogeochemical Sampling and Geothermometry

Geothermometry calculations were done using analytical data
  for drill holes BM 078, BM 085, BM 086 and BM 090. Data from the first three
  were judged to be unreliable as a result of contamination of samples 
  probably by drilling fluid. Three samples from drill hole BM 090, however, consistently
  yielded

21

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temperatures ranging between 94oC and 119oC using
  three different determination methods, which are described in the Report.

These estimates suggest that temperatures in the 115 to 120oC
  range would be realistic in the drill hole BM 090 environment. This drill hole,
  however, is in the extreme southwest part of the subject area in the southeast
  quarter of section 22 and may be on the flank of the geothermal anomaly or in
  a second more westerly zone of upwelling. Although the estimates are encouraging,
  they may not represent the high-gradient area to the northeast and could therefore
  be considered minimum values.

Conclusions

Geological evidence obtained from shallow drilling, geological
  mapping and geophysical surveys indicates that the Blue Mountain area is underlain
  by an extensive geothermal system. Downhole temperature observations supported
  by interpretations of reflection seismic data indicate a geothermal reservoir
  with very high fluid temperatures. The reservoir is evidently developed in a
  complex system of permeable faults and fractures related to Neogene tectonism
  and there may be a correlation between high drill hole temperatures and regions
  of anomalously low SP. Temperatures measured in drill holes range up to 81oC
  and geothermal gradients as high as 738oC/km have been observed, although
  an average gradient is found to be 373oC.

This implies that commercially attractive fluid temperatures
  greater than 150oC could occur at a depth of 350m. Minimum reservoir temperature
  estimates of 115 to 120oC have been obtained using chemical geothermometers
  but these represent only one drill hole, BM 090, which lies on the flank of
  the anomalous area.

Exploration work done to date is confined mainly to Section
  14, the eastern part of Section 22 and the northern part of Section 3. Drilling
  and geophysical data from the margins of the explored area suggest, however,
  that the geothermally anomalous terrain extends further to the north, west and
  south. Continued exploration is considered warranted by the current results.

Recommendations

A drill program intended to confirm and delineate a commercially
  viable geothermal resource is proposed. The initial emphasis

22

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will be on the drilling of a deep test well in the central
  part of the known heat flow anomaly area. Provision is therefore recommended
  for drilling to target depth of 2300 ft and for follow-up logging and testing
  to establish reservoir characteristics such as temperatures, permeability and
  discharge rates. The well would be intended to intersect fracture permeability
  associated with high-angle range front faulting at a depth consistent with temperatures
  on the order of 220oC. The principal target structures are the Central
  and Graben fault system that strike north-south and dip westerly
  at between 60 and 80o.

Seismic and drilling data indicate that a hole drilled at
  the approximate site of drill hole BM 059 would intersect the major west-dipping
  faults in a region where they appear to be converging. Assuming a geothermal
  gradient of 373oC/km, a target depth of about 700m is proposed but a decision
  on the actual completion depth should depend upon results and drilling conditions
  encountered. The proposed site is in the southwest quarter of section 14 at
  UTM co-ordinates 404700E and 4538000N. The well, to be designated Deep
  Blue No. 1, can be drilled with UDR equipment using diamond coring methods.
  A UDR 1500 drill rig equipped with a blow-out preventer has been recommended
  as an appropriate drilling rig.

Cost Estimate

The cost of the proposed drilling project is estimated by
  management to be US $450,000 with an additional US $124,500 required for well
  testing and other long-term non-drilling project expenditures. Indirect expenditures
  including lease payments, bonding, and regulatory and consulting fees are estimated
  to cost an additional US$55,000. Drilling contractors costs totaling $300,000
  are based on figures from a detailed proposal provided by Dynatec Drilling Inc.,
  the intended contractor. Other figures are estimates based on reasonable prevailing
  rates assuming a field project duration of 50 days plus appropriate allowances
  for data evaluation and reporting.

Under the terms of the DOE agreement, the DOE has undertaken
  to contribute 80% of the US$450,000 drilling project cost or US $360,000 as
  well as 80% of a contingent long-term testing program estimated to cost US$124,500.
  The Company will be responsible for the remaining 20% of the direct drilling
  and post drilling costs of $90,000 and US $24,900, respectively, plus the non
  cost-shared expenditures of US$55,500.

23

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**Other Properties**

***The Pogo Area Project***

The Pogo Area Project consists of the Portal/Gobi Claims and
  the Mohave Claims

**Location, Access and Ownership**

On December 10, 1998, the Company entered into a letter agreement
  with Lawrence Barry, acting on behalf of the Hunter Exploration Group, an unrelated
  party, (the Hunter Group) whereby the Company was granted the option
  to earn up to a 100% interest in the Gobi Property located in the Goodpaster
  Mining District of Alaska.

The Gobi Property is contiguous with the Pogo Property owned
  by Teck/Sumitomo, which has a geological resource of 10,770,000 tons grading
  0.52 oz/ton or 5.6 million ounces of contained gold. The Gobi Property initially
  encompassed approximately 7,700 acres, however the Company has staked additional
  claims and abandoned other claims such that the combined package currently totals
  7,700 acres.

The Gobi agreement provides that in order for the Company
  to earn a 100% interest in the property, subject to a 2% net smelter return
  royalty retained by the Hunter Group, the Company must:

|(a) | make cash payments of $17,500 (paid);                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                               
|(b) | issue 200,000 shares in the capital
        of the Company in tranches of 50,000 shares each in the first, second,
        third and fourth anniversary dates of the agreement; and,                                                                                                          
|    |                                                                                                                                                                                                                                                                                               
|(c) | conduct a total of $250,000 of exploration
        work on the prospect of which $50,000 must be expended on or before the
        first anniversary of the agreement, and a further $100,000 each must be
        spent on or before the second and third anniversary dates of the agreement.

The Hunter Group has retained a 2% net smelter return royalty
  on the Gobi property which requires that the Company pay advance minimum royalties
  of $10,000 per year commencing on the first anniversary date of the agreement.

24

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In the event that the Company should sell all or any portion
  of its interest in each agreement prior to becoming vested with a 100% interest
  in the particular prospect, the Hunter Group is entitled to receive from the
  Company 30% of net cash and 30% of any stock which may be received by the Company
  pursuant to such assignment.

In May, 1999, the Company staked the Mojave Property consisting
  of claims covering approximately 10,560 acres of prospective land immediately
  south of the Companys Gobi Property, and six miles southwest of the Pogo
  Property

**History and Recent Work**

In July and August, 1999, the Company completed a helicopter
  supported stream sediment sampling program with samples taken at approximately
  200 metre intervals along all streams draining the Gobi, Sahara and Mojave properties.
  Anomalous gold (10-1700 ppb) and trace element (bismuth, arsenic, and telurium)
  values were reported at each of the properties. Further work is required to
  determine the significance of the anomalous stream sediment results.

In January, 2000, the Company granted AngloGold (U.S.A.) Exploration
  Inc. (AngloGold) an option to earn a 60% joint venture interest
  in each of the Gobi, Mojave and Sahara properties by paying $52,000 U.S., and
  for each property making annual cash payments of $10,000 Cdn., paying $50,000
  U.S. on vesting and incurring $750,000 U.S. on exploration over a period of
  five (5) years. To date, AngloGold has incurred approximately $251,936 U.S.
  on exploration of the Gobi, Mojave and Sahara properties.

AngloGold terminated its option on the Sahara Property in
  June, 2001 and on the Mojave Property in October, 2001. The Company subsequently
  abandoned the Sahara Property and has retained a 100% interest in the Mojave
  Property.

***The Plateau Property (formerly the Dot Com Property)***

**Location, Access and Ownership**

On September 25, 2000, the Company entered into an Option
  Agreement to acquire a 100% interest, subject to a 2% net

25

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smelter royalty12 (NSR) retained by
  the owners, in 106 mineral claims located in the Val dOr Mining Division
  of Quebec, known as the Plateau Property. Under the terms of the agreement the
  Company is required to make cash payments of $55,000 ($25,000 paid), issue 200,000
  special warrants (issued)and incur $250,000 of exploration expenditures on the
  property over a period of three years. After the three year earn-in period,
  the property is subject to a $10,000 annual advance royalty payment.

The Company acquired the Plateau property to determine the
  extent of certain platinum and paladium mineralization on the property. To date,
  the Company has issued 200,000 special warrants and incurred $34,852 of costs
  for option payments and exploration expenditures on the property.

On February 23, 2001, the Company granted Denstone Ventures
  Ltd., a public company the share of which trade on the Canadian Venture Exchange,
  (Denstone) an option to acquire 50% of the Companys interest
  in the property. In order to exercise the option Denstone has paid $40,000 to
  the Company, has issued 100,000 special warrants to the Company, must incur
  $450,000 of exploration expenditures over 3 years and issue 100,000 common shares
  to the Company before completion of the exploration expenditures.

**Recent Work**

Denstone has completed grid soil sampling, magnetic induced
  polarization surveys, prospecting and rock sampling on the Plateau Property
  at a cost of approximately $85,000.

**Item 5.     Operating and Financial
  Review and Prospects**

**Overview**

During the fiscal year ended June 30, 1997, the Company issued,
  by private placement, 1,200,000 special warrants at $0.70 each for proceeds
  of $840,000. In addition, 85,507 special warrants were issued to the agent as
  fees and commission. Each special warrant entitled the holder to acquire, for
  no additional cost, one common share of the Company and one share purchase warrant
  entitling the holder to purchase one additional common share at a price of $0.87
  per share exercisable up to February 19, 1998. The Company also issued 75,000
  shares at $1.00 per share under a

---

26

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private placement agreement. Warrants for 37,500 shares at
  $1.25 per share, exercisable on or before November 8, 1998 were issued in connection
  with this private placement. Also, during the year, options were exercised for
  a further 244,000 common shares at $0.30 per share. The net effect of this was
  the addition of $988,200 to the treasury of the Company. As of June 30, 1997
  the working capital position of the Company was $231,124. During this period
  the Company spent $631,160 on activities relating to its various properties.
  Cash and term deposits as of June 30, 1997 were $301,161, which represented
  an increase of $163,615 as compared to the cash and term deposits of the Company
  of $149,376 at June 30, 1996. This increase was primarily the result of the
  capital which was raised during Fiscal 1997.

During the year ended June 30, 1998, the Company issued 845,000
  shares at $0.30 per share under a private placement agreement. Warrants for
  845,000 shares at $0.30 per share in the first year and $0.35 in the second
  year, exercisable on or before January 15, 2000, were issued in connection with
  the private placement. During this fiscal year, options were exercised for 5,000
  common shares at $0.30 per share. Proceeds to the Company from these share issuances
  totaled $255,000. As of June 30, 1998 the Company had a working capital deficit
  of ($80,317) as the cash position was only $11,316 and accounts receivable were
  $34,209. During Fiscal 1998, ended June 30th, expenses increased
  roughly $20,000 as compared to Fiscal 1997, ended June 30th, and
  the Company spent roughly $408,000 on its mineral properties. These activities
  resulted in the working capital deficit reported at June 30, 1998.

During the year ended June 30, 1999, the Company issued 2,320,000
  shares through two private placement financings of common shares and warrants.
  The first financing consisted of 1,040,000 units at a price of $0.20 per unit
  and the second consisted of 1,280,000 units at a price of $0.10 per unit. In
  the case of both financings each unit was convertible into one common share
  for no additional consideration and one share purchase warrants. Each warrant
  was exercisable into one common share at a price of $0.10 until January 6, 2000.
  The proceeds from these financings were used to carry-out limited exploration
  work on the Companys mineral properties; to fund the acquisition of additional
  properties; and, for general working capital.

During the year ended June 30, 2000, the Company consolidated
  its common share capital on a basis of one new share for three

27

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old shares. Share purchase warrants were also exercised during
  this time resulting in the issuance of 376,667 common shares the proceeds of
  which were $113,000. The Company had a working capital deficit of ($236,554)
  at June 30, 2000.

During the year ended June 30, 2001, the Company raised $187,040
  from the issuance of common shares through a private placement in the amount
  of $146,000 and the exercise of incentive stock options in the amount of $41,040.
  These funds were used to finance the acquisition and exploration costs associated
  with the Companys mineral properties and for general working capital.
  During Fiscal 2001, the Company also issued 234,667 common shares as partial
  consideration for the acquisition of mineral properties and 1,626,000 in settlement
  of debt in the amount of $212,063.

During the year ended June 30, 2002, the Company raised $298,750
  pursuant to a private placement, which consisted of the issuance of 1,195,000
  units. Each unit sold for $0.25 and consisted of one common share and two share
  purchase warrants. Two share purchase warrants plus $0.25 allowed the holder
  to purchase an additional share until April 17, 2003. The Company also raised
  $17,000 pursuant to the exercise of share purchase options. Each share purchase
  option allowed the holder to purchase a share for $0.10. The Company also raised
  $76,500 pursuant to the conversion of special warrants. (425,000 shares were
  issued as a result of this conversion.)

Subsequent to the June 30, 2002, the Company has raised $219,650
  as follows:

| | a. | $17,000 was pursuant to the exercise of share purchase options;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | b. | $95,375 was pursuant to the exercise of share purchase warrants;
      and,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | c. | $131,400 was pursuant to two private
        placements. The first of these was for 304,000 units each selling for
        $0.35. Each unit consisted of one common share and one half share purchase
        warrant. Each whole warrant plus $0.35 enables the holder to purchase
        one additional common share until September 18, 2003. The second of these
        was for 55,555 units each selling for $0.45. Each unit consisted of one
        common share and one half share purchase warrant. Each whole warrant plus
        $0.60 enables the holder to purchase one additional common share until
        September 18, 2003.

28

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**Research and Development and Trend Information**

Management believes that U.S. federal government policy will
  increasingly be directed toward energy security and the development of North
  American energy supplies over the next decade. A program called GeoPower
  West, sponsored by the U.S. federal government, has been developed with
  the goal to increase geothermal power production.

The State of Nevada has recently imposed a 15% portfolio standard
  for renewable resources on utilities operating in the State. This requirement
  is expected by management to significantly increase utilization of geothermal
  resources for power production.

**Results of Operations**

Fiscal 2002 Ended 6/30/2002 vs. Fiscal 2001 Ended 6/30/2001

The Company incurred a net loss of ($277,062) or ($0.04) per
  share for Fiscal 2002 as compared to a net loss of ($188,612) or ($0.03) per
  share for Fiscal 2001. Among the more significant expenses making up this loss
  were legal fees of $21,692 (2001 - $56,189); consulting fees of $36,360 (2001
  - $25,000); accounting and audit fees of $12,622 (2001 - $9,567); administration
  fees of $33,300 (2001 - $23,400); office and miscellaneous costs of $12,043
  (2001 - $7,536); rent and telephone costs of $11,144 (2001 - $9,612); regulatory
  and transfer agent fees of $13,200 (2001 - $24,165); travel and related costs
  of $9,829 (2001 - $3,220); site investigation costs of $806 (2001 - $14,107);
  and, investor relations costs of $113,793 (2001 - $204). Legal fees were lower
  during Fiscal 2002 because the Company did not acquire any additional properties
  and only engaged in two small private financings resulting in less legal work
  than was required in the prior year. Administration costs increased due to the
  larger staff required by the Companys increased activities associated
  with the geothermal project in Nevada. Office expenses, rent and telephone costs
  were higher due to a physical move in the Companys office.

Fiscal 2001 Ended 6/30/2001 vs. Fiscal 2000

For the fiscal year ended June 30, 2001 the Company incurred
  a net loss of ($188,612) or ($0.26) per share as compared to a net loss of ($742,619)
  or ($0.23) per share for the year ended June 30, 2000. The smaller loss in the
  2001 fiscal year is the result

29

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of substantial write-offs recorded in the 2000 fiscal year
  or acquisition and exploration costs incurred by the Company in connection with
  various mineral properties located in Nevada and Chile.

The Company received no revenue for the fiscal years ended
  June 30, 2001 and 2000. All of its resource properties were in the exploration
  state. The Company did receive $40,148 of option proceeds in excess of its acquisition
  costs incurred with respect to the Plateau property in Fiscal 2001.

Total expenses were $174,148 in Fiscal 2001 as compared to
  $159,507 in Fiscal 2000. Accounting, administration, office and sundry expenses
  remained at approximately the same level in each of the two years. Legal fees
  increased from $13,189 in Fiscal 2000 to $56,189 in Fiscal 2001, and regulatory
  fees increased from $15,642 in Fiscal 2000 to $24,165 in Fiscal 2001 due to
  additional costs associated with the proposed acquisition of Burin Fluorspar.
  Site evaluation fees declined from $52,039 in Fiscal 2000 to $14,107 in Fiscal
  2001 due to reduced activity by the Company in the mineral exploration sector.
  Consulting fees increased from $15,000 in Fiscal 2000 to $25,000 in Fiscal 2001
  due to the acquisition of the Plateau property. Travel and business development
  declined from $8,303 in Fiscal 2000 to $3,220 in Fiscal 2001 and investor relations
  costs declined from $4,019 in Fiscal 2000 to ($204) in fiscal 2001 as a result
  of the implementation of cost cutting measures by the Company.

After termination of the Burin transaction in September 2000,
  the Company became somewhat more active in acquiring resource properties and
  incurred a total of $15,250 on exploration costs, as compared to $3,322 of exploration
  costs incurred in Fiscal 2000. In Fiscal 2001, the Company abandoned the Sahara
  property in Alaska and wrote off $14,112 of associated costs, as compared to
  Fiscal 2000 during which the Company terminated its interests in the Snowstorm
  property in Nevada and the Nuevo Ano properties in Chile and wrote-off $583,112
  of associated costs.

Fiscal 2000 Ended 6/30/2000 vs. Fiscal 1999

The loss for Fiscal 2000, ended June 30th, was
  ($742,619) or ($0.23) per share compared to ($544,664) or ($0.20) per share
  for fiscal 1999, ended June 30th. The greater loss resulted from
  the write down of mineral properties during Fiscal 2000 in the amount of $583,112.
  During Fiscal 2000, the Company wrote off its interests in the Snowstorm Property
  in the amount of ($202,462) and its interests in the Nuevo Ano and Enero Projects

30

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in the amount of ($379,741). The Nuevo Ano and Enero Project
  and the Snowstorm Property were abandoned due to low metal prices.

General and administrative costs for Fiscal 2000 were $159,507
  which was lower by $7,583 than Fiscal 1999 when general and administrative costs
  were $167,090. The major expense components of general and administrative costs
  were administrative fees; accounting and audit; consulting; legal fees; rent
  and telephone; property investigation; and, transfer agent and regulatory fees.

During Fiscal 2000, expenditures of $89,826 were made on the
  Companys mineral properties which was considerably lower than the $611,940
  of expenditures made in Fiscal 1999. These expenditures reflect decreased exploration
  activity as evidenced by the abandonment of both the Nuevo Ano project in Chile
  and the Midas project in Elko County, Nevada.

**Liquidity and Capital Resources**

Fiscal 2002 Ended 6/30/2002

The working capital of the Company at June 30, 2002 was $92,738.
  This compares to a working capital deficit of ($37,712) at June 30, 2001. The
  Company had no long term debt as of either of these dates.

Cash Flows From Operations in the Twelve Months Ended 6/30/2002
  totaled ($266,775) including the Net Loss of ($277,062). Significant adjustment
  included the write down of investments in the amount of $10,287; amortization
  in the amount of $1,523; and, stock based compensation in the amount of $23,000.

Cash Flows From Investing Activities in Twelve Months Ended
  6/30/2002 ($170,410), consisting of option interests and deferred expenditures
  in the amount of ($90,720); proceeds on the sale of an investment in the amount
  of $12,212; exploration advances in the amount of ($86,902); and, the acquisition
  of capital assets in the amount of ($5,000).

Cash Flows From Financing Activities in Twelve Months Ended
  6/30/2002 totaled $478,350 consisting of $315,750 from the issuance of units
  pursuant to a private placement; $76,500 from the sale of special warrants;
  and, $86,100 from share subscriptions received.

31

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Fiscal 2001 Ended 6/30/2001

The working capital deficit of the Company at June 30, 2001
  was ($37,712). This compares with a working capital deficit of ($236,554) at
  June 30, 2000. The Company had no long term debt as of either of these dates.

Cash Flows From Operations in the Twelve Months Ended 6/30/2001
  totaled ($172,710) including the Net Loss of ($188,612). Significant adjustments
  included investments written down in the amount of $40,500; amortization of
  $1,438; the excess of option receipts over property acquisition costs in the
  amount of ($40,148); and, mineral property costs written off in the amount of
  $14,112.

Cash Flows From Investing Activities in Twelve Months Ended
  6/30/2001 totaled ($50,501), consisting of expenditures on mineral properties
  totaling ($100,051) and option income received in the amount of $50,000.

Cash Flows From Financing Activities in Twelve Months Ended
  6/30/2001 totaled $187,040 consisting entirely of the issuance of common stock.

Fiscal 2000 Ended 6/30/2000

The working capital deficit of the Company at the end of Fiscal
  2000 (June 30th) was ($236,554) as compared to a working capital
  deficit of ($149,403) at the end of Fiscal 1999. The Company had no long term
  debt as of either date.

Cash Flows From Operation in the Twelve Months Ended 6/30/2000
  totaled ($157,484) including the Net Loss of ($742,619). Significant adjustments
  included Mineral properties written off in the amount of $583,112 and depreciation
  of $2,023.

Cash From Investing Activities in the Twelve Months Ended
  6/30/2000 totaled ($42,667), consisting of the following items. Mineral property
  costs were ($55,998) and exploration advances were reduced by $13,331.

Cash Provided by Twelve Months Ended 6/30/2000 Financing Activities
  totaled $113,000, consisting entirely of the issuance of common stock.

32

---

Fiscal 1999 Ended 6/30/1999

The Company had a working capital deficit of ($149,403) at 6/30/1999.

Cash Flows From Operations in the Twelve Months Ended 6/30/1999
  totaled ($158,878), including the Net Loss of ($544,664). Significant adjustments
  included Depreciation of $3,909; a loss on the disposal of capital assets in
  the amount of $4,303; and, mineral property costs written off in the amount
  of $377,574.

Cash Flows From Investing Activities in the Twelve Months
  Ended 6/30/1999 totaled ($79,608), consisting of mineral property costs of ($105,745);
  proceeds from the disposal of capital assets in the amount of $13,465; and,
  the reduction of exploration advances in the amount of $12,672.

Cash Provided By Twelve Months Ended 6/30/1999 Financing Activities
  totaled $169,400 consisting entirely of the issuance of common stock.

**US GAAP Reconciliation with Canadian GAAP**

| | i)  | Under Canadian GAAP, companies have the option to
        defer exploration expenditures on prospective properties until such time
        as it is determined that further work is not warranted, at which point
        property costs would be written off. Under US GAAP, all exploration expenditures
        are expensed until an independent feasibility study has determined that
        the property is capable of commercial production. At this stage, the Company
        has not yet identified economically recoverable reserves on any of its
        properties. Accordingly, under US GAAP, all exploration costs incurred
        are expensed.                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ii) | The Company accounts for options granted according
        to requirements of Canadian GAAP, and those requirements are similar to
        the accounting prescribed in Accounting Principles Board Opinion No. 25
        (APB 25). Under APB 25, because the exercise price of the
        Companys employee stock options equals the market price of the underlying
        stock on the date of grant, no compensation expense is recognized. An
        alternative method under US GAAP is the fair value accounting provided
        for under FASB Statement No. 123 (SFAS No. 123), which requires
        the use of option valuation models. Pro-forma information regarding net
        income and earnings per share is required by SFAS No. 123, and has been
        determined as if the Company had accounted for its options granted under
        the fair value method of that

33

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| |  | Statement. The fair value for these options was estimated
        at the date of the grant using a Black-Scholes option pricing model with
        the following weighted average assumptions for 2001 and 2000: risk free
        rate of 5.25%; no dividends; volatility factor of the expected life of
        the Companys common stock of 212%; and weighted average expected
        life of the options granted in each year of four years.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**Variation in Operating Results**

The Company is presently exploring its properties for sufficient
  reserves to justify production. None of its properties are yet in production
  and consequently, the properties do not produce any revenue. As a result there
  is little variation expected in operating results from year to year and little
  is to be expected until such time, if any, as a production decision is made
  on one of its properties.

The Company derives interest income on its bank deposits,
  which depend on the Company's ability to raise funds.

Management periodically through the exploration process, reviews
  results both internally and externally through mining related professionals.
  Decisions to abandon, reduce or expand exploration efforts is based upon many
  factors including general and specific assessments of mineral deposits, the
  likelihood of increasing or decreasing those deposits, land costs, estimates
  of future mineral prices, potential extraction methods and costs, the likelihood
  of positive or negative changes to the environment, permitting, taxation, labor
  and capital costs. There cannot be a predetermined hold period for any property
  as geological or economic circumstances render each property unique.

The Company's financial statements are stated in Canadian
  Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted
  Accounting Principles (GAAP), the application of which, in the case of the Company,
  conforms in all material respects for the periods presented with United States
  GAAP except as noted in Footnote x to the financial statements. The value of
  the Canadian Dollar in relationship to the U.S. Dollar was 1.56 on 11/30/02.

The Company has financed its activities through the distribution
  of equity capital. The timing of such distributions was dependent on the requirements
  of the Company and the economic climate. The Company anticipates having to raise
  additional funds by equity issuance in the next several years, as the Company
  does not expect

34

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to generate material revenue from mining operations or to
  achieve self-sustaining commercial mining operations for several years.

**Item 6.     Directors, Senior
  Management and Employees**

Table No. 5 lists as of 12/15/2002 the names of the Directors
  of the Company. The Directors have served in their respective capacities since
  their election and/or appointment and will serve until the next Annual General
  Meeting or until a successor is duly elected, unless the office is vacated in
  accordance with the Articles/By-Laws of the Company. All Directors are residents
  and citizens of Canada.

Table No. 5 
  Directors

|Name              |     |  | Age |  | Date First Elected/Appointed
|----------------- | --- |  | --- |  | ----------------------------
|                  |     |  |     |  |                             
|Brian D. Fairbank | (1) |  | 52  |  | April 1995                  
|John W. Milligan  | (1) |  | 78  |  | April 1995                  
|James E. Yates    | (1) |  | 60  |  | December 1996               
|Michael Marchand  | (1) |  | 57  |  | August 1995                 

(1) Member of Audit Committee. The Audit Committee is composed
  of four Directors, two of whom are non-officers of the Company. The Audit Committee
  meets at once a year to review the annual audited financial statements and make
  appropriate recommendations to the Board of Directors based upon their review.

Table No. 6 lists, as of 12/15/2002, the names of the Executive
  Officers of the Company. The Executive Officers serve at the pleasure of the
  Board of Directors. All Executive Officers are citizens and residents of Canada.

Table No. 6 
  Executive Officers

|                  |     |                   |     |  | Date of    
|----------------- | --- | ----------------- | --- |  | -----------
|Name              |     | Position          | Age |  | Appointment
|                  |     |                   |     |  |            
|Brian D. Fairbank | (1) | President and CEO | 52  |  | April 1995 
|John W. Milligan  | (2) | Secretary and CFO | 78  |  | April 1995 

(1) He spends 80% of his time on the affairs of the Company.
  (2) He spends 25% of his time on the affairs of the Company.

**Brian D. Fairbank** has been the President and
  CEO of the Company since April 1995. He has been a director of the Company since

35

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1995. Mr. Fairbank received his B.A.Sc. in Geological Engineering
  from the University of British Columbia. He is a registered engineer of the
  Association of Professional Engineers & Geoscientists of British Columbia,
  Fellow of the Geological Association of Canada, member of the British Columbia
  & Yukon Chamber of Mines and member, past Chairman of Geothermal Energy
  Association. Mr. Fairbank currently is the President of Fairbank Engineering
  Ltd., responsible for corporate planning, fiscal controls, project management
  and operations, staffing, contract management, and reporting to clients and
  government agencies. He is also the President and CEO of Blue Desert Mining
  Inc., responsible for corporate development, financial and regulatory reporting,
  and property acquisition. From 1984 to 1993 Mr. Fairbank has been director or
  President for Noramex Minerals Inc., responsible for corporate management, property
  acquisitions, project development, financial and regulatory reporting. From
  1982 to 1992 he has been Director and President for Desert Gold Resources Inc.,
  responsible for corporate management, property acquisitions, project development,
  financial and regulatory reporting. Mr. Fairbank has been Project Engineer (1978-1980)
  and Partner and Exploration Manager (1981-1986) to Nevin Sadlier-Brown Goodbrand,
  responsible for new project development and implementing mineral and geothermal
  exploration programs.

**John W. Milligan** has been the Secretary and
  CFO for the Company since April 1995. He has been a director of the Company
  since April 1995. From 1982 to 1994 he was a construction consultant for the
  Royal Bank of Canada on the Walden North Power Project, investigating the developments
  and construction of geothermal power projects in Nevada and a hydroelectric
  project, and an engineering consultant for various mining companies listed on
  the Vancouver and Montreal stock exchanges. From 1988 to 1991 Mr. Milligan served
  as Commissioner and Chairman for the Advisory Planning Commission Municipality
  of West Vancouver. In 1982 he retired from British Columbia Hydro having served
  34 years with the company and its predecessor companies. From 1979 to 1980 Mr.
  Milligan served a construction manager for Pier B.C. Development Board successfully
  handling a large number of labor relation issues, serving on a variety of committees,
  and directing the selection, organization, training and motivation of the staff.

**James E. Yates** is a Director of the Company.
  In 1964 he become the Founder and President of Hycroft Realty Ltd. To this day,
  he has remained President of the company, which is involved in real estate sales
  and development projects. Mr. Yates was the

36

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Founder, President and a Director of Vancouver Stock Exchange
  listed Hycroft Resources and Developments Corp. from 1982 to 1988. He was the
  President and a Director of Vancouver Stock Exchange listed International Baron,
  from 1987 to 1990. From 1990 to May 1997 he was involved with American Bullion
  Minerals, having served as President and a Director. Since 1994 Mr. Yates has
  been the President and a Director of Hersey Goldfields Corporation, which is
  currently listed on the Canadian Venture Exchange. He is President and a Director
  of Blackhorn Gold Mines presently applying for listing on the Canadian Venture
  Exchange. Mr. Yates is also a Director of Future Mining Corp. and Excam Developments
  Inc.

**Michael Marchand** serves as a Director for
  the Company. He received his B.Sc with honors in Geology from McGill University,
  M.Sc. in Geology and Petrology from McGill University, and his Ph.D. in Geology
  and Geochemistry from McMaster University. Mr. Marchand is currently involved
  with the Diamond and Mineral Exploration Consulting and Management Consultancy
  for technical computer systems, technology assessment, Data Management and Strategic
  Planning as a consultant. From 1982 to 1991 he was the Senior Exploration Geologist
  and Group Leader, computer applications for Canterra Energy Ltd., responsible
  for geological computer applications in the exploration department; exploration
  data bases, mapping, data analysis, data presentation including development
  of comprehensive strategic plans for exploration computing and technology transfer.

**COMPENSATION**

The Company has no formal plan for compensating its Directors
  for their service in their capacity as Directors. Directors are entitled to
  reimbursement for reasonable travel and other out-of-pocket expenses incurred
  in connection with attendance at meetings of the Board of Directors. The Board
  of Directors may award special remuneration to any Director undertaking any
  special services on behalf of the Company other than services ordinarily required
  of a Director. Other than indicated below no Director received any compensation
  for his services as a Director, including committee participation and/or special
  assignments.

The Company grants stock options to Directors, Executive Officers
  and employees; refer to ITEM #10, "Stock Options".

37

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Total compensation accrued and/or paid (directly and/or indirectly)
  to all Officers/Directors during Fiscal 2002 ended 6/30/2002 was $30,000.

Table No. 7 
  Summary Compensation Table

All Figures in Canadian Dollars unless otherwise noted

|                  |        |                     |        |              | Long-Term Compensation |           
|----------------- | ------ | ------------------- | ------ | ------------ | ---------------------- | ----------
|                  |        |                     |        |              |                        |           
|                  |        | Annual Compensation | Awards |              |                       
|                  |        |                     |        |              |                        |           
|Name and          |        |                     |        |              | Restricted Options/    |           
|Principal         | Fiscal |                     |        | Other Annual | Stock                  | SARS      
|Position          | Year   | Salary              | Bonus  | Compensation | Award(s)               | Granted(#)
|                  |        |                     |        |              |                        |           
|                  |        |                     |        |              |                        |           
|Brian D. Faribank | 2002   | $30,00013           | nil    | nil          | nil                    | 234,00014 
|President , CEO & | 2001   | $30,00015           | nil    | nil          | nil16                  | 180,00017 
|Director          | 2000   | $30,00018           | nil    | nil          | 29,60019               | 120,00020 
|                  |        |                     |        |              |                        |           
|John W. Milligan  | 2002   | nil                 | nil    | nil          | nil                    | 125,000   
|Director, CFO &   | 2001   | nil                 | nil    | nil          | nil21                  | 100,000   
|Secretary         | 2000   | nil                 | nil    | nil          | 1,67522                | 65,000    

The Company pays (or accrues) a management fee of $2,500 per
  month to Fairbank Engineering Ltd., a non-reporting company controlled by Brian
  D. Fairbank

Except for the stock option program discussed in ITEM #12,
  the Company has no material bonus or profit sharing plans pursuant to which
  cash or non-cash compensation is or may be paid to the Company's Directors or
  Executive Officers.

No funds were set aside or accrued by the Company during Fiscal
  2001 to provide pension, retirement or similar benefits for Directors or Executive
  Officers.

**Staffing**

The Company currently has four employees.23The
  name, location and job title of each employee is listed below:

---

38

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|Name              | Location        | Job Title       
|----------------- | --------------- | ----------------
|                  |                 |                 
|Brian D. Fairbank | Vancouver, B.C. | President & CEO 
|John W. Milligan  | Vancouver, B.C. | Secretary & CFO 
|Ed Low            | Vancouver, B.C. | Chief Accountant
|Beth Connell      | Vancouver, B.c. | Office Manager  

**Share Ownership**

The Registrant is a publicly-owned Canadian corporation, the
  shares of which are owned by U.S. residents, Canadian residents and other foreign
  residents. The Registrant is not controlled by another corporation as described
  below.

Table No. 8 lists, as of 12/15/2002, Directors and Executive
  Officers who beneficially own the Registrant's voting securities and the amount
  of the Registrant's voting securities owned by the Directors and Executive Officers
  as a group.

Table No. 8 
  Shareholdings of Directors and Executive Officers

|Title                        |                          |               | Amount and Nature | Percent
|---------------------------- | ------------------------ | ------------- | ----------------- | -------
|of                           |                          |               | of Beneficial     | of     
|Class                        | Name of Beneficial Owner |               | Ownership         | Class #
|                             |                          |               |                   |        
|Common                       | Brian D. Fairbank        | (1)           | 1,702,333         | 17.3%  
|Common                       | John W. Milligan         | (2)           | 105,000           | 1.2%   
|Common                       | James E. Yates           | (3)           | 248,333           | 2.5%   
|Common                       | Michael Marchand         | (4)           | 50,000            | <1%    
|                             |                          |               |                   |        
|**Total Directors/Officers** |                          | **2,105,666** | **21.0%**        

|(1) | Of these shares 78,000 represent currently
        exercisable share purchase options and 107,000 represent currently exercisable
        share purchase warrants.              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Of these shares 105,000 represent currently
        exercisable share purchase options.                                                                                         
|(3) | Of these shares 177,000 represent currently
        exercisable share purchase options and 29,000 represent currently exercisable
        share purchase warrants.              
|(4) | Of these shares 50,000 represent currently
        exercisable share purchase options.                                                                                          
|    |                                                                                                                                                                                 
|#   | Based on 9,644,725 shares outstanding
        as of 12/15/02 and stock options and share purchase warrants held by each
        beneficial holder exercisable within sixty days.



---

39

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**Item 7.    Major Shareholders and Related Party
  Transactions**

The Company is aware of two persons/company who beneficially
  owns 5% or more of the Registrant's voting securities. Table No. 9 lists as
  of 12/15/2002, persons and/or companies holding 5% or more beneficial interest
  in the Companys outstanding common stock.

Table No. 9 
  5% or Greater Shareholders

|Title of | Name and Address of      | Amount and | Percent of Class
|-------- | ------------------------ | ---------- | ----------------
|Class    | Owner                    | Nature of  |                 
|         |                          | Beneficial |                 
|         |                          | Ownership  |                 
|         |                          |            |                 
|Common   | Brian D. Fairbank,       | 1,702,333  | 17.3%           
|         | 900-409 Granville Street |            |                 
|         | Vancouver, B.C.          |            |                 
|Common   | Frank Diegmann,          | 2,351,333  | 25.5%           
|         | 1986 East Foothill Blvd. |            |                 
|         | Pasadena, Ca 91107       |            |                 

Based on 9,644,725 shares outstanding as of 12/10/2002 and
  stock options and share purchase warrants held by each beneficial holder exercisable
  within sixty days.

|(1) | Of these shares 108,000 represent currently
        exercisable share purchase options and 107,000 represent currently exercisable
        share purchase warrants.         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Of these shares 127,500 represent currently
        exercisable share purchase warrants and 212,500 represent currently exercisable
        special share purchase warrants.

**INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS**

Transactions of business with companies controlled by Directors
  or companies with common Directors in common were as follows during Fiscal 2001,
  Fiscal 2000 and Fiscal 1999:

|                                                  | Fiscal 2002 | Fiscal 2001 | Fiscal 2000
|------------------------------------------------- | ----------- | ----------- | -----------
|Fees for administrative and professional services | 82,382      | 53,150      | 38,400     
|Fees for geological services                      | 7,789       | 24,346      | 44,083     
|Payments for office rent                          | 5,762       | 10,271      | 6,112      
|Amounts included in accounts payable              | 16,150      | 9,202       | 158,076    
|Amounts included in accounts receivable           | 87,613      | 6,994       | 3,033      
|Acquisition of Capital Assets                     | 5,000       |             |            

40

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|Administration and professional services | -Fairbank Engineering
|---------------------------------------- | ---------------------
|Geological services                      | -Fairbank Engineering
|Office Rent and Accounts Payable         | -International Choice
|                                         | Ventures Inc.        
|Accounts Receivable                      | -Fairbank Engineering
|Acquisition of Capital Assets            | -Fairbank Engineering

Fairbank Engineering is a private company owned by Brian Fairbank,
  the President of Continental Ridge Resources and International Choice Ventures
  Inc. is a public company the President and Director of which is James Yates,
  a Director of Continental Ridge Resources and the Director of which is Brian
  Fairbank, the President and a Director of Continental Ridge Resources.

Other than as disclosed above, there have been no transactions
  or proposed transactions, which have materially affected or will materially
  affect the Registrant in which any director, executive officer, or beneficial
  holder of more than 10% of the outstanding common stock, or any of their respective
  relatives, spouses, associates or affiliates has had or will have any direct
  or material indirect interest. Management believes the transactions referenced
  above were on terms at least as favorable to the Company as the Company could
  have obtained from unaffiliated parties.

**Item 8.    Financial Information**

The financial statements as required under ITEM #8 are attached
  hereto and found immediately following the text of this Registration Statement.
  The audit report of Morgan and Company, independent Chartered Accountants, is
  included herein immediately preceding the financial statements and schedules.

**Item 9.     Offer and Listing of Securities**

As of 6/30/2002, the authorized capital of the Company was
  100,000,000 common shares with no par value; 25,000,000 first preferred shares
  with no par value; and, 25,000,000 second preferred shares with no par value
  and there were 8,863,669 common shares outstanding and no first or second preferred
  shares outstanding.

All of the authorized common shares of the Company are of
  the same class and, once issued, rank equally as to dividends,

41

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voting powers, and participation in assets. Holders of common
  stock are entitled to one vote for each share held of record on all matters
  to be acted upon by the shareholders. Holders of common stock are entitled to
  receive such dividends as may be declared from time to time by the Board of
  Directors, in its discretion, out of funds legally available therefore.

Upon liquidation, dissolution or winding up of the Company,
  holders of common stock are entitled to receive pro rata the assets of Company,
  if any, remaining after payments of all debts and liabilities. No shares have
  been issued subject to call or assessment. There are no pre-emptive or conversion
  rights and no provisions for redemption or purchase for cancellation, surrender,
  or sinking or purchase funds.

Provisions as to the modification, amendment or variation
  of such shareholder rights or provisions are contained in the Company
  Act of British Columbia. Unless the Company Act or the Company's
  Articles or Memorandum otherwise provide, any action to be taken by a resolution
  of the members may be taken by an ordinary resolution or by a vote of a majority
  or more of the shares represented at the shareholders' meeting.

The Company's Articles and the British Columbia Company Act
  contain provisions, which require a "special resolution" for effecting certain
  corporate actions. Such a "special resolution" requires a three-quarters vote
  of shareholders rather than a simple majority for passage. The principle corporate
  actions that require a "special resolution" include:

|a. | Transferring the Company's jurisdiction from British Columbia
      to another jurisdiction;
|-- | --------------------------------------------------------------------------------------------
|b. | Giving financial assistance under certain circumstances;                                    
|c. | Certain conflicts of interest by Directors;                                                 
|d. | Disposing of all/substantially all of Company's undertakings;                               
|e. | Removing Director before expiration of his term of office;                                  
|f. | Certain alterations of share capital;                                                       
|g. | Changing the Company name;                                                                  
|h. | Altering any restrictions on the Company's business; and                                    
|i. | Certain reorganizations of the Company.                                                     

There are no restrictions on the repurchase or redemption of common shares
  of the Company while there is any arrearage in the payment of dividends or sinking
  fund installments.

42

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The Company's common shares began trading on the Alberta Stock
  Exchange in Calgary, Alberta, Canada, under its former name Blue Desert
  Mining Inc. on January 31, 1996. The current stock symbol is KRI.
  The CUSIP number is #212017107.

**NATURE OF TRADING MARKET**

The Company's common shares are issued in registered form
  and the following information is taken from the records of Computershare, the
  Companys transfer agent.

On 12/10/02, the shareholders' list for the Company's common
  shares showed 45 registered shareholders and 9,644,725 shares issued and outstanding.

The Company has researched the indirect holding by depository
  institutions and estimates that there are 700 holders of record in Canada and
  22 holders of record resident in the United States. The U.S. shareholders own
  2,279,629 shares of common stock which represents 24% of the Companys
  outstanding shares. Refer to discussion below regarding holders of record of
  the Companys warrants.

Based on this research and other research into the indirect
  holdings of other financial institutions, the Company believes that it has in
  excess of 720 beneficial owners of its common shares.

The Companys common shares are not registered to trade
  in the United States in the form of American Depository Receipts (ADRs)
  or similar certificates.

The Company has not declared any dividends on its common shares
  for the last five years and does not anticipate that it will do so in the foreseeable
  future. The present policy of the Company is to retain future earnings for use
  in its operations and the expansion of its business.

Table No. 10 lists the high and low sales prices on the Alberta
  Stock Exchange and then the Canadian Venture Exchange and then the TSX Venture
  Exchange for the Companys common shares for the last five full financial
  years; the two most recent full financial years for each full financial quarter
  and for the most recent six months: the high and low market prices for each
  month.

43

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Table No. 10 
  Alberta Stock Exchange and Canadian Venture Exchange Common Shares Trading Activity

- Sales  
  Canadian Dollars

|Period                      |   | High          |  |   | Low  | 
|--------------------------- | - | ------------- |  | - | ---- | 
|                            |   |               |  |   |      | 
|Fiscal Year Ended 6/30/2002 | $ | 0.44          |  | $ | 0.10 | 
|Fiscal Year Ended 6/30/2001 | $ | 0.28          |  | $ | 0.10 | 
|Fiscal Year Ended 6/30/2000 |   | Did Not Trade | 
|Fiscal Year Ended 6/30/1999 | $ | 0.15          |  | $ | 0.00 | 
|Fiscal Year Ended 6/30/1998 |   | Did Not Trade | 
|                            |   |               |  |   |      | 
|Quarter Ended 6/30/2002     |   |               |  |   |      | 
|Quarter Ended 3/31/2002     | $ | 0.28          |  | $ | 0.21 | 
|Quarter Ended 12/31/2001    | $ | 0.28          |  | $ | 0.10 | 
|Quarter Ended 9/30/2001     | $ | 0.20          |  | $ | 0.10 | 
|                            |   |               |  |   |      | 
|Quarter Ended 6/30/2001     | $ | 0.17          |  | $ | 0.10 | 
|Quarter Ended 3/31/2001     | $ | 0.15          |  | $ | 0.10 | 
|Quarter Ended 12/31/2000    |   | Did Not Trade | 
|Quarter Ended 9/30/2000     |   | Did Not Trade | 
|                            |   |               |  |   |      | 
|Month Ended 9/30/2002       | $ | 0.45          |  | $ | 0.27 | 
|Month Ended 8/31/2002       | $ | 0.45          |  | $ | 0.39 | 
|Month Ended 7/31/2002       | $ | 0.46          |  | $ | 0.38 | 
|Month Ended 6/30/2002       | $ | 0.44          |  | $ | 0.34 | 
|Month Ended 5/31/2002       | $ | 0.39          |  | $ | 0.30 | 
|Month Ended 4/30/2002       | $ | 0.39          |  | $ | 0.25 | 

Table No. 11 lists, as of 6/30/2002 share purchase warrants
  outstanding, the date the share purchase warrants were issued, the exercise
  price, and the expiration date of the share purchase warrants.

44

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Table No. 11 
  Share Purchase Warrants Outstanding

|          |  |            |  |             |  |                |         |        |           
|--------- |  | ---------- |  | ----------- |  | -------------- | ------- | ------ | ----------
|          |  | Number of  |  | Number of   |  |                |         |        |           
|          |  | Share      |  | Share       |  |                |         |        | Expiration
|          |  | Purchase   |  | Purchase    |  | Exercise Price | Date of
|Effective |  | Warrants   |  | Warrants    |  |                |         |        | Share     
|Date of   |  | Originally |  | Still       |  | First          |         | Second | Purchase  
|Issuance  |  | Granted    |  | Outstanding |  | Year           |         | Year   | Warrants  
|          |  |            |  |             |  |                |         |        |           
|4/17/02   |  | 597,500    |  | 584,500     |  | $0.25          |         |        | 4/17/03   
|9/18/02   |  | 152,000    |  | 152,000     |  | $0.35          |         |        | 9/18/03   
|9/18/02   |  | 55,000     |  | 55,000      |  | $0.60          |         |        | 9/18/03   

Debt Securities to be Registered. Not applicable. American Depository Receipts. Not applicable. Other Securities to be Registered. Not applicable

**LEGAL PROCEEDINGS**

The Company knows of no material, active or pending, legal
  proceedings against them; nor is the Company involved as a plaintiff in any
  material proceeding or pending litigation.

The Company knows of no active or pending proceedings against
  anyone that might materially adversely affect an interest of the Company.

**Item 10.    Additional Information**

As of June 24, 2002 there were 100,000,000 common shares, with no par value, authorized and 8,863,669 common shares issued and fully paid. There were also 25,000,000 first preferred shares, with no par value, and 25,000,000 second preferred shares,
with no par value, authorized. No first preferred or second preferred shares were issued.

The Company has financed its operations through the issuance of common shares through private placement, the exercise of warrants issued in the private placements, and the exercise of stock options. Private placements included:

|Fiscal 1997: | 1,200,000 special warrants
        at $0.70 per special warrant, raising $840,000.24 The Company
        also issued 75,000 shares at $ 1.00 per share pursuant to a private placement.
        Warrants for 37,500 shares at 41.25 per share, exercisable on or
|------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

45

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|             | before November 8, 1998 were issued in connection
        with this private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 1998: | The company issued 845,000 shares at $0.30 per share
        under a private placement agreement. Warrants for 845,000 shares exercisable
        at $0.30 per share in the first year and $0.35 per share in the second
        year, exercisable on or before January 15, 2000, were issued in connection
        with this private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 1999: | During the year ended June 30, 1999, the Company
        Completed two private placement financings. The first financing consisted
        of 1,040,000 units at a price of $0.20 per unit. Each unit was convertible
        into one common share for no additional consideration and one share purchase
        warrant. Each share purchase warrant allowed the holder to purchase one
        additional common share at a price of $0.20 per share, expiring July 8,
        2000. The second financing consisted of 1,280,000 units at a price of
        $0.10 per unit. Each unit was convertible into one common share for no
        additional consideration and one share purchase warrant. Each share purchase
        warrant allowed the holder to purchase one additional common share at
        a price of $0.10 per share, expiring February 9, 2000.
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 2000: | The Company issued 376,667 common shares through
        the exercise of share purchase warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 2001: | During the year ended June 30, 2001, the Company
        issued 1,216,666 common shares at $0.12 per share through a private placement
        financing for proceeds of $146,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 2002: | On April 23, 2002, the Company issued 1,195,000 common
        shares at $0.25 per share and on June 23, 2002, the Company issued 304,000
        common shares at $0.35 per share through private placement financings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

**Stock Options**

Stock Options to purchase securities from Registrant can be
  granted to Directors and Employees of the Company on terms and conditions acceptable
  to the regulatory authorities in Canada,

46

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notably the Canadian Venture Exchange and the British Columbia Securities Commission.

Stock options for up to 10% of the number of issued and outstanding
  common shares may be granted from time to time, provided that stock options
  in favor of any one individual may not exceed 5% of the issued and outstanding
  common shares. No stock option granted under the stock option program is transferable
  by the optionee other than by will or the laws of descent and distribution,
  and each stock option is exercisable during the lifetime of the optionee only
  by such optionee.

The exercise prices for stock options are determined in accordance
  with Canadian Venture Exchange guidelines and reflect the average closing price
  of the Registrant's common shares immediately preceding the day on which the
  Directors grant and publicly announce the stock options (subject to an regulatory-acceptable
  discount), and/or at a price no lower than $0.10 exercise price per share; and
  the maximum term of each stock option may not exceed five years.

The names and titles of the Directors/Executive Officers of
  the Registrant to whom outstanding stock options have been granted and the number
  of common shares subject to such options are set forth in Table No. 12 as of
  6/24/2002, as well as the number of options granted to Directors and all employees
  as a group.

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Table No. 12 
  Stock Options Outstanding

|                          | Number of |  |       |  |           
|------------------------- | --------- |  | ----- |  | ----------
|                          | Shares of |  | CDN$  |  |           
|                          | Common    |  | Exer. |  | Expiration
|Name                      | Stock     |  | Price |  | Date      
|                          |           |  |       |  |           
|Brian D. Fairbank,        | 78,000    |  | $0.10 |  | 06/22/06  
|President, CEO & Director |           |  |       |  |           
|                          |           |  |       |  |           
|Jack W. Milligan,         | 80,000    |  | $0.10 |  | 06/22/06  
|Secretary, CFO & Director | 25,000    |  | $0.25 |  | 04/19/07  
|                          |           |  |       |  |           
|James E. Yates,           | 112,000   |  | $0.10 |  | 06/22/06  
|Director                  | 65,000    |  | $0.25 |  | 04/19/07  
|                          |           |  |       |  |           
|Domenic Falcone,          | 100,000   |  | $0.10 |  | 06/22/06  
|Consultant                |           |  |       |  |           
|                          |           |  |       |  |           
|Michael Marchard,         | 50,000    |  | $0.10 |  | 06/22/06  
|Director                  |           |  |       |  |           
|                          |           |  |       |  |           
|Ed Low,                   | 25,000    |  | $0.10 |  | 06/22/06  
|Employee                  |           |  |       |  |           
|                          |           |  |       |  |           
|Greg Wilson               | 100,000   |  | $0.25 |  | 04/19/04  

|Total Officers and/or Directors        |             | 
|-------------------------------------- | ----------- | 
|(5 persons)                            | **410,000** | 
|Total Employees and/or Consultants     |             | 
|(2 persons)                            | **225,000** | 
|                                       |             | 
|**Total Officers/Directors/Employees** | **635,000** | 

Memorandum and Articles of Association

The Memorandum and Articles of the Company do not address the Companys
  objects and purposes.

A Director shall not vote in respect of the approval of any
  contract or transaction with the Company in which he is interested and if he
  shall do so his vote shall not be counted, but he shall be counted in the quorum
  present at the meeting at which the vote is taken.

The Directors may from time to time in behalf of the Company:

| | (a) | borrow money in a manner and amount, on any security, from any source
      and upon any terms and conditions;
| | --- | --------------------------------------------------------------------------------------------------------------

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| | (b) | issue bonds, debentures, and other debt obligations either
      outright or as security for any liability or obligation of the Company or
      any other person; and                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | mortgage, charge, whether by way of
        specific or floating charge, or give other security on the undertaking,
        or on the whole or any part of the property and assets, of the Company
        (both present and future).

There are no age considerations pertaining to the retirement
  or non-retirement of directors.

A Director shall not be required to hold a share in the capital
  of the Company as qualification for his office but shall be qualified as required
  by The Act, to become or act as a Director.

All of the authorized common shares of the Company are of
  the same class and, once issued, rank equally as to dividends, voting powers,
  and participation in assets. Holders of common stock are entitled to one vote
  for each share held of record on all matters to be acted upon by the shareholders.
  Holders of common stock are entitled to receive such dividends as may be declared
  from time to time by the Board of Directors, in its discretion, out of funds
  legally available therefore.

Upon liquidation, dissolution or winding up of the Company,
  holders of common stock are entitled to receive pro rata the assets of Company,
  if any, remaining after payments of all debts and liabilities. No shares have
  been issued subject to call or assessment. There are no pre-emptive or conversion
  rights and no provisions for redemption or purchase for cancellation, surrender,
  or sinking or purchase funds.

Provisions as to the modification, amendment or variation
  of such shareholder rights or provisions are contained in the Company
  Act of British Columbia. Unless the Company Act or the Company's
  Articles or Memorandum otherwise provide, any action to be taken by a resolution
  of the members may be taken by an ordinary resolution or by a vote of a majority
  or more of the shares represented at the shareholders' meeting.

The Company's Articles and the Company Act of British Columbia
  contain provisions which require a "special resolution" for effecting certain
  corporate actions. Such a "special resolution" requires a three-quarters vote
  of shareholders

49

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rather than a simple majority for passage. The principle corporate actions
  that require a "special resolution" include:

|a. | Transferring the Company's jurisdiction from British Columbia
      to another jurisdiction;
|-- | --------------------------------------------------------------------------------------------
|b. | Giving financial assistance under certain circumstances;                                    
|c. | Certain conflicts of interest by Directors;                                                 
|d. | Disposing of all/substantially all of Company's undertakings;                               
|e. | Removing Director before expiration of his term of office;                                  
|f. | Certain alterations of share capital;                                                       
|g. | Changing the Company name;                                                                  
|h. | Altering any restrictions on the Company's business; and                                    
|i. | Certain reorganizations of the Company.                                                     

There are no restrictions on the repurchase or redemption of
  common shares of the Company while there is any arrearage in the payment of
  dividends or sinking fund installments.

There is no liability to further capital calls by the Company.

There are no provisions discriminating against any existing
  or prospective holder of securities as a result of such shareholder owning a
  substantial number of shares.

The rights of holders of the Companys stock can only
  be altered by a Special Shareholders meeting.

Subject to Article 9.2 and to The Act, the first annual general
  meeting shall be held within 15 months from the date of incorporation and the
  following annual general meetings shall be held once in every calendar year
  at a time, not being more than 13 months after the holding of the last preceding
  annual general meeting, and at a place as the Directors shall appoint. In default
  of the meeting being held, the meeting shall be called by any two members in
  the same manner as nearly as possible as that in which meetings are to be called
  by the Directors.

The Directors may, whenever they think fit, convene a general
  meeting. A general meeting, if requisitioned in accordance with The Act, shall
  be convened by the Directors or, if not convened by the Directors, may be convened
  by the requisitionists as provided in The Act.

Not less than 21 days notice of any general meeting
  specifying the time and place of meeting and in case of special business, the
  general nature of that business shall be given in the manner mentioned in Article
  22, or in such other manner, if any, as may

50

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be prescribed by ordinary resolution whether previous notice
  has been given or not, to any person as may by law or under these Articles or
  other regulations of the Company entitled to receive the notice from the Company.
  But the accidental omission to give notice of any meeting to, or the non-receipt
  of any notice, by any person shall not invalidate any proceedings at that meeting.

Persons entitled to notice of a general meeting may waive
  or reduce the period of notice convening the meeting, by unanimous consent in
  writing, and may give such waiver before, during or after the meeting.

There are no limitations on the rights to own securities.

There is no provision of the Companys articles of association,
  charter or bylaws that would have an effect of delaying, deferring or preventing
  a change in control of the Company and that would operate only with respect
  to a merger, acquisition or corporate restructuring involving the Company (or
  any of its subsidiaries).

Shareholder ownership must be disclosed to the British Columbia
  Securities Commission and the Canadian Venture Exchange by any shareholder who
  owns more than 10% of the Companys common stock.

**Material Contracts**

There are no material contracts other than those entered into
  through the normal course of business. All required contracts are included as
  exhibits.

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**EXCHANGE CONTROLS AND OTHER LIMITATIONS 
  AFFECTING SECURITY HOLDERS**

Except as discussed in ITEM #9, the Company is not aware of
  any Canadian federal or provincial laws, decrees, or regulations that restrict
  the export or import of capital, including foreign exchange controls, or that
  affect the remittance of dividends, interest or other payments to non-Canadian
  holders of the common shares. There are no limitations on the right of non-Canadian
  owners to hold or vote the common shares imposed by Canadian federal or provincial
  law or by the charter or other constituent documents of the Company.

The Investment Canada Act (the "IC Act") governs acquisitions
  of Canadian business by a non-Canadian person or entity. The IC Act requires
  a non-Canadian (as defined in the IC Act) making an investment to acquire control
  of a Canadian business, the gross assets of which exceed certain defined threshold
  levels, to file an application for review with the Investment Review Division
  of Industry Canada. The IC Act provides, among other things, for a review of
  an investment in the event of acquisition of "control" in certain Canadian businesses
  in the following circumstances:

| | 1. If the investor is a non-Canadian and is a national
        of a country belonging to the North American Free Trade Agreement ("NAFTA")
        and/or the World Trade Organization ("WTO") ("NAFTA or WTO National"),
        any direct acquisition having an asset value exceeding $179,000,000 is
        reviewable. This amount is subject to an annual adjustment on the basis
        of a prescribed formula in the IC Act to reflect inflation and real growth
        within Canada. This threshold level does not apply in certain sections
        of Canadian industry, such as 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 on audio or video music recordings), to which
        lower thresholds as prescribed in the IC Act are applicable.
      2. If the investor is a non-Canadian and is not
        a NAFTA or WTO National, any direct acquisition having an asset value
        exceeding $5,000,000 and any indirect acquisition having an asset value
        exceeding $50,000,000 is reviewable.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 3. If the investor is a non-Canadian and is
        NAFTA or WTO National, an indirect acquisition of control is reviewable
        if the value of the assets of the business located in Canada represents
        more than 50% of the asset value of the transaction or the business is
        involved in uranium, financial services, transportation services or cultural
        services (as set forth above).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Finally, certain transactions prescribed in the IC Act are
  exempted from review altogether.

In the context of the Company, in essence, three methods of
  acquiring control of a Canadian business are regulated by the IC Act: (i) the
  acquisition of all or substantially all of the assets used in carrying on business
  in Canada; (ii) the acquisition, directly or indirectly, of voting shares of
  a Canadian corporation carrying on business in Canada; or (iii) the acquisition
  of voting shares of an entity which controls, directly or indirectly, another
  entity carrying on business in Canada.

An acquisition of a majority of the voting shares of a Canadian
  entity, including a corporation, is deemed to be an acquisition of control under
  the IC Act. However, under the IC Act, there is a rebuttable presumption that
  control is acquired if one-third of the voting shares of a Canadian corporation
  or an equivalent undivided interest in the voting shares of such corporation
  are held by a non-Canadian person or entity. An acquisition of less than one-third
  of the voting shares of a Canadian corporation is deemed not to be an acquisition
  of control. An acquisition of less than a majority, but one-third or more, of
  the voting shares of a Canadian corporation is presumed to be an acquisition
  of control unless it can be established that, on the acquisition, the Canadian
  corporation is not, in fact, controlled by the acquirer through the ownership
  of voting shares. For partnerships, trusts, joint ventures or other unincorporated
  Canadian entities, an acquisition of less than a majority of the voting interests
  is deemed not to be an acquisition of control.

In addition, if a Canadian corporation is controlled by a
  non-Canadian, the acquisition of control of any other Canadian corporation by
  such corporation may be subject to the prior approval of the Investment Review
  Division, unless it can be established that the Canadian corporation is not
  in fact controlled by the acquirer through the ownership of voting shares.

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Where an investment is reviewable under the IC Act, the investment
  may not be implemented unless it is likely to be of net benefit to Canada. If
  an applicant is unable to satisfy the Minister responsible for Industry Canada
  that the investment is likely to be of net benefit to Canada, the applicant
  may not proceed with the investment. Alternatively, an acquirer may be required
  to divest control of the Canadian business that is the subject of the investment.

In addition to the foregoing, the IC Act provides for formal
  notification under the IC Act of all other acquisitions of control by Canadian
  businesses by non-Canadian investors. The notification process consists of filing
  a notification within 30 days following the implementation of an investment,
  which notification is for information, as opposed to review, purposes.

**TAXATION**

The tax consequences to any particular holder of common stock
  will vary according to the status of that holder as an individual, trust, corporation
  or member of a partnership, the jurisdiction in which that holder is subject
  to taxation, the place where that holder is resident and, generally, according
  to that holders particular circumstances. This summary is applicable only
  to holders who are resident in the United States, have never been resident in
  Canada, deal at arms length with the Company, hold their common stock
  as capital property and who will not use or hold the common stock in carrying
  on business in Canada. Special rules, which are not discussed in this summary,
  may apply to a United States holder that is an issuer that carries on business
  in Canada and elsewhere.

This summary is based upon the provisions of the Income Tax
  Act of Canada and the regulations thereunder (collectively, the "Tax Act" or
  ITA)and the Canada-United States Tax Convention (the Tax Convention)
  as at the date of the Registration Statement and the current administrative
  practices of Canada Customs and Revenue Agency. This summary does not take into
  account provincial income tax consequences.

Management urges each holder to consult his own tax advisor
  with respect to the income tax consequences applicable to him in his own particular
  circumstances.

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**CANADIAN INCOME TAX CONSEQUENCES 
  Disposition of Common Stock.**

The summary below is restricted to the case of a holder (a
  Holder) of one or more common shares (Common Shares)
  who for the purposes of the Tax Act is a non-resident of Canada, holds his Common
  Shares as capital property and deals at arms length with the Company.

*Dividends*

A Holder will be subject to Canadian withholding tax (Part
  XIII Tax) equal to 25%, or such lower rates as may be available under
  an applicable tax treaty, of the gross amount of any dividend paid or deemed
  to be paid on his Common Shares. Under the Tax Convention, the rate of Part
  XIII Tax applicable to a dividend on Common Shares paid to a Holder who is a
  resident of the United States is, if the Holder is a company that beneficially
  owns at least 10% of the voting stock of the Company, 5% and, in any other case,
  15% of the gross amount of the dividend. The Company will be required to withhold
  the applicable amount of Part XIII Tax from each dividend so paid and remit
  the withheld amount directly to the Receiver General for Canada for the account
  of the Holder.

**Disposition of Common Shares**

A Holder who disposes of Common Shares, including by deemed
  disposition on death, will not be subject to Canadian tax on any capital gain
  thereby realized unless the common Share constituted taxable Canadian
  property as defined by the Tax Act. Generally, a common share of a public
  corporation will not constitute taxable Canadian property of a Holder unless
  he held the common share as capital property used by him carrying on a business
  in Canada, or he or persons with whom he did not deal at arms length alone
  or together held or held options to acquire, at any time within the 60 months
  preceding the disposition, 25% or more of the issued shares of any class of
  the capital stock of the Company.

A Holder who is a resident of the United States and realizes
  a capital gain on disposition of Common Shares that was taxable Canadian property
  will nevertheless, by virtue of the Treaty, generally be exempt from Canadian
  tax thereon unless (a) more than 50% of the value of the Common Shares is derived
  from, or from an interest in, Canadian real estate, including Canadian mineral
  resources properties, (b) the Common Shares formed part of the business property
  of a permanent establishment that the Holder has or had in Canada within the
  12 months preceding disposition, or

55

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(c) the Holder (i) was a resident of Canada at any time within
  the ten years immediately preceding the disposition, and for a total of 120
  months during any period of 20 consecutive years, preceding the disposition,
  and (ii) owned the Common Shares when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital
  gain realized on disposition of Common Shares must include three quarters (two
  thirds for dispositions after February 27, 2000 and before October 18, 2000
  and one half after October 18, 2000) of the capital gain (taxable capital
  gain) in computing his taxable income earned in Canada. The Holder may,
  subject to certain limitations, deduct three quarters (two thirds for disposition
  after February 27, 2000) of any capital loss (allowable capital loss)
  arising on disposition of taxable Canadian property from taxable capital gains
  realized in the year of disposition in respect to taxable Canadian property
  and, to the extent not so deductible, from such taxable capital gains of any
  of the three preceding years or any subsequent year.

**UNITED STATES FEDERAL INCOME TAX CONSEQUENCES**

The following is a discussion of material United States Federal
  income tax consequences, under the law, generally applicable to a U.S. Holder
  (as defined below) of common shares of the Company. This discussion does not
  cover any state, local or foreign 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, possible on a retroactive
  basis, at any time. In addition, the discussion does not consider the potential
  effects, both adverse and beneficial, or recently proposed legislation which,
  if enacted, could be applied, possibly on a retroactive basis, at any time.
  Management urges holders and prospective holders of common shares of the Company
  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) includes a holder
  of common shares of the Company who is a citizen or resident of the United

56

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States, a corporation created or organized in or under the
  laws of the United States or of any political subdivision thereof, an estate
  whose income is taxable in the United States irrespective of source or a trust
  subject to the primary supervision of a court within the United States and control
  of a United States fiduciary as described in Section 7701(a)(30) of the Code.
  This summary does not address the tax consequences to, and U.S. Holder does
  not include, persons subject to special provisions of Federal income tax law,
  such as tax-exempt organizations, qualified retirement plans, financial institutions,
  insurance companies, real estate investment trusts, regulated investment companies,
  broker-dealers, non-resident alien individuals, persons or entities that have
  a functional currency other than the U.S. dollar, shareholders who
  hold common shares as part of a straddle, hedging or conversion transaction,
  and shareholders who acquired their common shares through the exercise of employee
  stock options or otherwise as compensation for services. 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**

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 distributions 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 United States Federal Income tax liability or, alternatively,
  individuals may be deducted in computing the U.S. Holders United States
  Federal taxable income by those individuals 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. Dividend income will be taxed at marginal tax
  rates applicable to ordinary income while preferential tax rates for long-term
  capital gains are applicable to a U.S. Holder which is an individual, estate
  or

57

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trust. There are currently no preferential tax rates for long-term
  capital gains for a U.S. Holder which is a corporation.

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 of other disposition of the foreign currency, including the
  exchange for U.S. dollars, will be ordinary income or loss.

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 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.

Under current Treasury Regulations, dividends paid on the
  Companys common shares, if any, generally will not be subject to information
  reporting and generally will not be subject to U.S. backup withholding tax.
  However, dividends and the proceeds from a sale of the Companys common
  shares paid in the U.S. through a U.S. or U.S. related paying agent (including
  a broker) will be subject to U.S. information reporting requirements and may
  also be subject to the 31% U.S. backup withholding tax, unless the paying agent
  is furnished with a duly completed and signed Form W-9. Any amounts withheld
  under the U.S. backup withholding tax rules will be allowed as a refund or a
  credit against the U.S. Holders U.S. federal income tax liability, provided
  the required information is furnished to the IRS.

**Foreign Tax Credit**

For individuals whose entire income from sources outside the
  United States consists of qualified passive income, the total amount of creditable
  foreign taxes paid or accrued during the taxable year does not exceed $300 ($600
  in the case of a joint return) and an election is made under section 904(j),
  the limitation on credit does not apply.

58

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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 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 income taxes (or taxes in lieu of income tax)
  paid by (or withheld from) the U.S. Holder during the year. There are significant
  and complex limitations which apply to the credit, among which is the general
  limitation that the credit cannot exceed the proportionate share of the U.S.
  Holders United States income tax liability that the U.S. Holders
  foreign source income bears to his/her 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 management
  urges holders and prospective holders of common shares of the Company to 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 which are individuals,
  estates or trusts. This gain or loss will be capital gain or loss if the common
  shares are capital assets in the hands of the U.S. Holder, which will be a short-term
  or long-term capital gain or loss depending upon the holding period of the U.S.
  Holder. Gains and losses are netted and combined according to special rules
  in arriving at the overall capital gain or loss for a particular tax year. Deductions
  for net capital losses are subject to significant limitations. For U.S. Holders
  which are not

59

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corporations, any unused portion of such net capital loss
  may be carried over to be used in later tax years until such net capital loss
  is thereby exhausted, but individuals may not carry back capital losses. For
  U.S. Holders which are corporations (other than corporations subject to Subchapter
  S of the Code), an unused net capital loss may be carried back three years from
  the loss year and carried 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 the
  discussion may not describe the United States Federal income tax consequences
  resulting from the holding and disposition of common shares of the Company.

**Foreign Personal Holding Company**

If at any time during a taxable year more than 50% of the
  total combined voting power or the total value of the Companys outstanding
  shares is owned, actually or constructively, by five or fewer individuals who
  are citizens or residents of the United States and 60% (50% after the first
  tax year) or more of the Companys gross income for such year was derived
  from certain passive sources (e.g. from interest income received from its subsidiaries),
  the Company would be treated as a foreign personal holding company.
  In that event, U.S. Holders that hold common shares of the Company would be
  required to include in gross income for such year their allocable portions of
  such passive income to the extent the Company does not actually distribute such
  income.

The Company does not believe that it currently has the status
  of a foreign personal holding company. However, there can be no
  assurance that the Company will not be considered a foreign personal holding
  company for the current or any future taxable year.

**Foreign Investment Company**

If 50% or more of the combined voting power or total value
  of the Companys outstanding shares are held, actually or constructively,
  by citizens or residents of the United States, United States domestic partnerships
  or corporations, or estates or trusts other than foreign estates or trusts (as
  defined by the Code Section 7701(a)(31), and the Company is found to be engaged
  primarily in the business of investing, reinvesting, or trading in securities,

60

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commodities, or any interest therein, it is possible that
  the Company might be treated as a foreign investment company as
  defined in Section 1246 of the Code, causing all or part of any gain realized
  by a U.S. Holder selling or exchanging common shares of the Company to be treated
  as ordinary income rather than capital gains.

**Passive Foreign Investment Company**

As a foreign corporation with U.S. Holders, the Company could
  potentially be treated as a passive foreign investment company (PFIC),
  as defined in Section 1297 of the Code, depending upon the percentage of the
  Companys income which is passive, or the percentage of the Companys
  assets which is held for the purpose of producing passive income.

Certain United States income tax legislation contains rules
  governing PFICs which can have significant tax effects on U.S. shareholders
  of foreign corporations. These rules do not apply to non-U.S. shareholders.
  Section 1297 (a) 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 is a controlled foreign corporation or makes an election,
  by adjusted tax basis), of its assets that produce or are held for the production
  of passive income is 50% or more. The taxation of a US shareholder
  who owns stock in a PFIC is extremely complex and is therefore beyond the scope
  of this discussion. Management urges US persons to consult with their own tax
  advisors with regards to the impact of these rules.

**Controlled Foreign Corporation**

A Controlled Foreign Corporation (CFC) is a foreign corporation
  more than 50% of whose stock by vote or value is, on any day in the corporations
  tax year, owned (directly or indirectly) by U.S. Shareholders. If more than
  50% of the voting power of all classes of stock entitled to vote is owned, actually
  or constructively, by citizens or residents of the United States, United States
  domestic partnerships and corporations or estates or trusts other than foreign
  estates or trusts, each of whom own actually or constructively 10% or more of
  the total combined voting power of all classes of stock of the Company could
  be treated as a controlled foreign corporation under Subpart F of
  the Code. This classification would effect many complex results, one of

61

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which is the inclusion of certain income of a CFC which is
  subject to current U.S. tax. The United States generally taxes United States
  Shareholders of a CFC currently on their pro rata shares of the Subpart F income
  of the CFC. Such United States Shareholders are generally treated as having
  received a current distribution out of the CFCs Subpart F income and are
  also subject to current U.S. tax on their pro rata shares of the CFCs
  earnings invested in U.S. property. The foreign tax credit described above may
  reduce the U.S. tax on these amounts. In addition, under Section 1248 of the
  Code, gain from the sale or exchange of shares by a U.S. Holder of common shares
  of the Corporation which is or was a United States Shareholder at any time during
  the five-year period ending with the sale or exchange is treated as ordinary
  income to the extent of earnings and profits of the Company (accumulated in
  corporate tax years beginning after 1962, but only while the shares were held
  and while the Company was controlled) attributable to the shares
  sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign
  corporation generally will not be treated as a PFIC with respect to the United
  States Shareholders of the CFC. This rule generally will be effective for taxable
  years of United States Shareholders beginning after 1997 and for taxable years
  of foreign corporations ending with or within such taxable years of United States
  Shareholders. The PFIC provisions continue to apply in the case of PFIC that
  is also a CFC with respect to the U.S. Holders that are less than 10% shareholders.
  Because of the complexity of Subpart F, a more detailed review of these rules
  is outside of the scope of this discussion.

The amount of any backup withholding will not constitute additional
  tax and will be allowed as a credit against the U.S. Holders federal income
  tax liability.

***Filing of Information Returns.*** Under
  a number of circumstances, United States Investor acquiring shares of the Company
  may be required to file an information return with the Internal Revenue Service
  Center where they are required to file their tax returns with a duplicate copy
  to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular,
  any United States Investor who becomes the owner, directly or indirectly, of
  10% or more of the shares of the Company will be required to file such a return.
  Other filing requirements may apply, and management urges United States Investors
  to consult their own tax advisors concerning these requirements.

62

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**Statements by Experts**

George Booth is quoted earlier in the disclosure relating
  to the Blue Mountain Project. His qualifications are disclosed in a footnote
  in that section and his consent to use this material is included as an exhibit
  to this document.

**Document Inspection**

All of the documents referred to in this Registration Statement
  may be inspected at the head office of the Company, the address of which is
  indicated on the Cover Sheet of this Registration Statement.

**Item 11.     Disclosures about Market Risk**

Not Applicable

**Item 12.     Description of Other Securities**

Not Applicable

**Part II**

**Item 13.     Defaults, Dividend Arrearages
  and Delinquencies**

Not Applicable

**Item 14.     Modifications of Rights of Securities
  Holders and Use of Proceeds**

Not Applicable

**Part III**

**Item 17.     Financial Statements**

The Company's financial statements are stated in Canadian
  Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted
  Accounting Principles (GAAP), the application of which, in the case of the Company,
  conforms in all material respects for the periods presented with United States
  GAAP, except as disclosed in a footnote to the financial statements.

63

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The financial statements as required under ITEM #17 are attached
  hereto and found immediately following the text of this Registration Statement.
  The audit report of Morgan and Company, independent Chartered Accountants, is
  included herein immediately preceding the financial statements and schedules.

**Item 18.     Financial Statements**

The Company has elected to provide financial statements pursuant to ITEM #17.

**Item 19.     Exhibits**

(A1) The financial statements thereto as required under ITEM
  17 are attached hereto and found immediately following the text of this Registration
  Statement. The report of Morgan and Company, independent Chartered Accountants,
  for the audited financial statements are included herein immediately preceding
  the audited financial statements.

Auditor's Report dated October 17, 2002 except for Note 4,
  which is dated November 12, 2002.

Consolidated Balance Sheets at June 30, 2002 and June 30,
  2001

Consolidated Statements of Loss and Deficit for the Years
  ended June 30, 2002; June 30, 2001; and, June 30, 2000

Consolidated Statements of Cash Flows for the Years ended
  June 30, 2002; June 30, 2001; and, June 30, 2000.

Notes to Consolidated Financial Statements

64

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**ITEM 19.     FINANCIAL STATEMENTS AND EXHIBITS
  (cont.)**

(B) Index to Exhibits:

|Page  
|------
|Number

|1.  | Certificate of Incorporation, Certificates of Name Change,
      Articles of Incorporation, By-Laws, incorporated by reference to Form 20-F
      and Form 6-Ks                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.  | Instruments defining the rights of holders of the securities
      being registered                                                                                                  
|    | ***See Exhibit Number 1***                                                                                                                                                           
|3.  | Voting Trust Agreements  NA                                                                                                                                                         
|4.  | Material Contracts  N/A                                                                                                                                                             
|5.  | List of Foreign Patents  N/A                                                                                                                                                        
|6.  | Calculation of earnings per share  N/A                                                                                                                                              
|7.  | Explanation of calculation of ratios  N/A                                                                                                                                           
|8.  | List of Subsidiaries  Not Applicable                                                                                                                                                
|9.  | Statement pursuant to the instructions to Item 8.A.4, regarding
      the financial statements filed in registration statements for initial public
      offerings of securities N/A
|10. | Other Documents  Incorporated by reference to Form
      20-F and Form 6-Ks                                                                                                        







65(a)

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SIGNATURE PAGE

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

Continental Ridge Resources, Inc. 
  Registrant

|Dated: January 22, 2003 | By: /s/ Brian D. Fairbank, President
|----------------------- | ------------------------------------

---







CONTINENTAL RIDGE RESOURCES INC.

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001









---



AUDITORS' REPORT

To the Shareholders of 
  Continental Ridge Resources Inc.

We have audited the consolidated balance sheets of Continental
  Ridge Resources Inc. as at June 30, 2002 and 2001, and the consolidated statements
  of loss and deficit, and cash flows for the years ended June 30, 2002, 2001
  and 2000. 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 generally accepted
  auditing standards in Canada and the United States. Those standards require
  that we plan and perform an audit to obtain reasonable assurance whether the
  financial statements are free of material misstatement. An audit includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  June 30, 2002, 2001 and 2000, and the results of its operations and cash flows
  for the years then ended 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.

|Vancouver, Canada                   | /s/ Morgan & Company 
|----------------------------------- | ---------------------
|                                    |                      
|October 17, 2002, except for Note 4 | Chartered Accountants
|which is as of November 12, 2002    |                      

|Tel: (604) 687-5841
      Fax: (604) 687-0075
      www.morgan-cas.com |  | P.O. Box 10007 Pacific Centre
      Suite 1488 - 700 West Georgia Street
      Vancouver, B.C. V7Y 1A1
|---------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------

---

CONTINENTAL RIDGE RESOURCES INC.

CONSOLIDATED BALANCE SHEETS

|                                                       |         |           
|------------------------------------------------------ | ------- | ----------
|                                                       | JUNE 30 |           
|                                                       | 2002    |           
|                                                       |         |           
|                                                       |         |           
|ASSETS                                                 |         |           
|                                                       |         |           
|Current                                                |         |           
|Cash                                                   | $       | 32,803    
|Accounts receivable                                    |         | 4,429     
|Prepaid expenses                                       |         | 6,581     
|Exploration advances
      (Note 3)                    |         | 86,902    
|Short term investments                                 |         | -         
|                                                       |         |           
|                                                       |         | 130,715   
|                                                       |         |           
|Gobi Project  Unpatented Claims And Option Interests, |         |           
|unproven properties (Note 4(a))                        |         | 69,960    
|Blue Mountain Geothermal Option Interest, unproven     |         |           
|properties (Note 4(b))                                 |         | 60,885    
|Deferred Exploration Expenditures                      |         | 125,155   
|Investment(Note 5)                                     |         | 25,000    
|Capital Assets(Note 6)                                 |         | 7,109     
|                                                       |         |           
|                                                       |         |           
|                                                       | $       | 418,824   
|                                                       |         |           
|                                                       |         |           
|LIABILITIES                                            |         |           
|                                                       |         |           
|Current                                                |         |           
|Accounts payable                                       | $       | 38,337    
|                                                       |         |           
|                                                       |         |           
|SHAREHOLDERS EQUITY                                   |         |           
|                                                       |         |           
|Share Capital(Note 7)                                  |         | 3,214,733 
|                                                       |         |           
|Share Subscriptions(Note 7)                            |         | 86,100    
|                                                       |         |           
|Contributed Surplus                                    |         | 23,000    
|                                                       |         |           
|Deficit                                                |         | (2,943,346
|                                                       |         |           
|                                                       |         | 380,487   
|                                                       |         |           
|                                                       |         |           
|                                                       | $       | 418,824   
|                                                       |         |           

---

CONTINENTAL RIDGE RESOURCES INC.

CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT

|                                         |                           |          
|---------------------------------------- | ------------------------- | ---------
|                                         | YEARS ENDED JUNE
      30 |          
|                                         | 2002                      |          
|                                         |                           |          
|                                         |                           |          
|Expenses                                 |                           |          
|Accounting and audit                     | $                         | 12,622   
|Administration fees                      |                           | 33,300   
|Amortization                             |                           | 1,523    
|Bank charges and interest                |                           | 463      
|Consulting                               |                           | 36,360   
|Investor relations                       |                           | 113,793  
|Foreign exchange                         |                           | -        
|Legal                                    |                           | 21,692   
|Office and sundry                        |                           | 12,043   
|Rent and telephone                       |                           | 11,144   
|Site evaluation                          |                           | 806      
|Transfer agent and
      regulatory fees |                           | 13,200   
|Travel and business
      development    |                           | 9,829    
|                                         |                           |          
|                                         |                           |          
|Loss Before The Following                |                           | 266,775  
|                                         |                           |          
|Write Off Of Option Interests            |                           | -        
|Loss On Sale Of Investments              |                           | 10,287   
|Excess Of Option Receipts Over Costs Of  |                           |          
|Option Interests                         |                           | -        
|Write Down Of Investments                |                           | -        
|                                         |                           |          
|                                         |                           |          
|Loss For The Year                        |                           | 277,062  
|                                         |                           |          
|Deficit, Beginning Of Year               |                           | 2,666,284
|                                         |                           |          
|                                         |                           |          
|Deficit, End Of Year                     | $                         | 2,943,346
|                                         |                           |          
|                                         |                           |          
|                                         |                           |          
|Loss Per Share                           | $                         | 0.04     
|                                         |                           |          

---

CONTINENTAL RIDGE RESOURCES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                  |                           |         
|------------------------------------------------- | ------------------------- | --------
|                                                  | YEARS ENDED JUNE
      30 |         
|                                                  | 2002                      |         
|                                                  |                           |         
|                                                  |                           |         
|Cash Flows From Operating Activities              |                           |         
|Loss for the year                                 | $                         | (277,062
|Items not involving cash flows:                   |                           |         
|Write down of investments                         |                           | -       
|Loss on sale of investments                       |                           | 10,287  
|Amortization                                      |                           | 1,523   
|Stock based compensation                          |                           | 23,000  
|Excess of option receipts
      over costs of     |                           |         
|option
      interests                            |                           | -       
|Write off of option
      interests               |                           | -       
|                                                  |                           |         
|                                                  |                           | (242,252
|Increase in non-cash working capital
      items: |                           |         
|Decrease (Increase)
      in accounts             |                           |         
|receivable                                        |                           | 4,220   
|(Increase) in prepaid
      expense               |                           | (6,581  
|(Decrease) Increase
      in accounts payable     |                           | (41,639 
|                                                  |                           |         
|                                                  |                           | (286,252
|                                                  |                           |         
|                                                  |                           |         
|Cash Flows From Investing Activities              |                           |         
|Option interests and deferred expenditures        |                           | (90,720 
|Proceeds on sale of investment                    |                           | 12,212  
|Exploration advances                              |                           | (86,902 
|Acquisition of capital assets                     |                           | (5,000  
|Option income received                            |                           | -       
|                                                  |                           |         
|                                                  |                           | (170,410
|                                                  |                           |         
|                                                  |                           |         
|Cash Flows From Financing Activities              |                           |         
|Shares issued for cash                            |                           | 315,750 
|Special warrants issued for cash                  |                           | 76,500  
|Share subscriptions received                      |                           | 86,100  
|                                                  |                           |         
|                                                  |                           | 478,350 
|                                                  |                           |         
|                                                  |                           |         
|Increase (Decrease) In Cash                       |                           | 21,688  
|                                                  |                           |         
|Cash, Beginning Of Year                           |                           | 11,115  
|                                                  |                           |         
|                                                  |                           |         
|Cash, End Of Year                                 | $                         | 32,803  
|                                                  |                           |         
|                                                  |                           |         
|Supplementary Cash Flow Information               |                           |         
|Shares issued for option interests                | $                         | 34,167  
|Shares issued for debt                            |                           | -       
|                                                  |                           |         

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|1. | NATURE OF OPERATIONS
      The Company is in the process of exploring its option
        interests and unpatented claims, and has not yet determined whether these
        interests contain economically recoverable ore reserves. The recoverability
        of the amounts shown for option interests and unpatented claims, and related
        deferred exploration expenditures is dependent upon the existence of economically
        recoverable reserves, the ability of the Company to obtain necessary financing
        to complete the development of the properties, and upon future profitable
        production.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**2.** | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|------ | ------------------------------------------
|       |                                           
|       | c)                                        
|       |                                           
|       | d)                                        
|       |                                           
|       | e)                                        
|       |                                           
|       | f)                                        

| | Computer equipment | 30%
| | ------------------ | ---
| | Office equipment   | 20%

| | g) | Stock Based Compensation
      Employee and director stock options granted by the Company
        are not recognized in the accounts until exercised, and then are recorded
        only as a credit to share capital to the extent of the exercise price.
        No remuneration expense is recorded by the Company on the excess, if any,
        of the trading price of the stock over the exercise price.                                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | h) | Use of Estimates
      The preparation of financial statements in accordance
        with generally accepted accounting principles requires management to make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities at the date of the financial statements, and the reported
        amounts of revenues and expenses during the reporting period. Actual results
        could differ from managements best estimates as additional information
        becomes available in the future.

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                        
|   | i)                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                        
|   | j)                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                        
|3. | EXPLORATION ADVANCES
      The Company advanced $86,902 to Blue Mountain Power
        Company Inc., a company with two common directors, for exploration expenditures
        to be incurred in the subsequent period.
|   |                                                                                                                                                                                                                        
|4. | UNPATENTED CLAIMS AND OPTION INTERESTS                                                                                                                                                                                 
|   |                                                                                                                                                                                                                        
|   | a)                                                                                                                                                                                                                     

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**4.** | MINERAL PROPERTY COSTS(Continued)
|------ | ---------------------------------
|       |                                  
|       | a)                               
|       |                                  
|       | b)                               
|       |                                  
|       | c)                               

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001



|5. | INVESTMENT
|-- | ----------

| |                                                       | 2002 |        | 2001 |  
| | ----------------------------------------------------- | ---- | ------ | ---- | -
| |                                                       |      |        |      |  
| | 100,000 shares in Blue Mountain Power Company Inc., a |      |        |      |  
| | company with two common directors, at
      cost      | $    | 25,000 |      | $
| |                                                       |      |        |      |  

|6. | CAPITAL ASSETS
|-- | --------------

|                         | 2002 |        | 2001 |  
|------------------------ | ---- | ------ | ---- | -
|                         |      |        |      |  
|Computer equipment       | $    | 14,011 |      | $
|Office equipment         |      | 6,995  |      |  
|                         |      |        |      |  
|                         |      | 21,006 |      |  
|Accumulated depreciation |      | 13,897 |      |  
|                         |      |        |      |  
|                         |      |        |      |  
|Net book value           | $    | 7,109  |      | $
|                         |      |        |      |  

|7. | SHARE CAPITAL
|-- | -------------
|   |              
|   | a)           
|   |              
|   | b)           

|                                           | SHARES    |  | AMOUNT |          
|------------------------------------------ | --------- |  | ------ | ---------
|                                           |           |  |        |          
|                                           |           |  |        |          
|Balance, June 30, 2000                     | 3,437,669 |  | $      | 2,361,013
|                                           |           |  |        |          
|                                           |           |  |        |          
|Issued during the year ended June 30, 2001 |           |  |        |          
|For cash                                   |           |  |        |          
|Private placement                          | 1,216,666 |  |        | 146,000  
|Options exercised                          | 342,000   |  |        | 41,040   
|For debt                                   | 1,626,000 |  |        | 212,063  
|For option interests                       | 234,667   |  |        | 28,200   
|                                           |           |  |        |          
|                                           | 3,419,333 |  |        | 427,303  
|                                           |           |  |        |          
|                                           |           |  |        |          
|Balance, June 30, 2001                     | 6,857,002 |  |        | 2,788,316
|                                           |           |  |        |          

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001



|7. | SHARE CAPITAL (Continued)
|-- | -------------------------
|   |                          
|   | b)                       

|                           | SHARES    |  |   | AMOUNT    | 
|-------------------------- | --------- |  | - | --------- | 
|                           |           |  |   |           | 
|                           |           |  |   |           | 
|Balance, June 30, 2001     | 6,857,002 |  | $ | 2,788,316 | 
|                           |           |  |   |           | 
|For cash                   |           |  |   |           | 
|Private placement          | 1,195,000 |  |   | 298,750   | 
|Options exercised          | 170,000   |  |   | 17,000    | 
|Special warrants converted | 425,000   |  |   | 76,500    | 
|For option interests       | 216,667   |  |   | 34,167    | 
|                           |           |  |   |           | 
|                           |           |  |   |           | 
|Balance, June 30, 2002     | 8,863,669 |  | $ | 3,214,733 | 
|                           |           |  |   |           | 

| | c) | Special Warrants
| | -- | ----------------

|                                | NUMBER   |   |   | AMOUNT  |  
|------------------------------- | -------- | - | - | ------- | -
|                                |          |   |   |         |  
|                                |          |   |   |         |  
|Balance, June 30, 2000 and 2001 | -        |   | $ | -       |  
|                                |          |   |   |         |  
|Issued for cash                 | 425,000  |   |   | 76,500  |  
|Converted to common shares      | (425,000 | ) |   | (76,500 | )
|                                |          |   |   |         |  
|                                |          |   |   |         |  
|Balance, June 30, 2002          | -        |   | $ | -       |  
|                                |          |   |   |         |  

| | d) | Stock Options
      As at June 30, 2002, the following share purchase options were outstanding:
| | -- | -----------------------------------------------------------------------------------------------

| |          | NUMBER      |             |          | 
| | -------- | ----------- | ----------- | -------- | 
| |          | OUTSTANDING |             | WEIGHTED | 
| |          | AT          | REMAINING   | AVERAGE  | 
| | EXERCISE | JUNE 30     | CONTRACTUAL | EXERCISE | 
| | PRICE    | 2002        | LIFE        | PRICE    | 
| |          |             |             |          | 
| | $0.10    | 515,000     | 3.48 years  | $0.10    | 
| | 0.25     | 316,000     | 3.35 years  | 0.25     | 
| |          |             |             |          | 
| |          | 831,000     | 3.43 years  | $0.16    | 
| |          |             |             |          | 

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|7. | SHARE CAPITAL (Continued)
|-- | -------------------------
|   |                          
|   | d)                       

| |                        |          |   | WEIGHTED |     
| | ---------------------- | -------- | - | -------- | ----
| |                        | NUMBER   |   | AVERAGE  |     
| |                        | OF       |   | EXERCISE |     
| |                        | SHARES   |   | PRICE    |     
| |                        |          |   |          |     
| |                        |          |   |          |     
| | Balance, June 30, 2000 | 225,333  |   | $        | 0.30
| |                        |          |   |          |     
| | Granted                | 995,000  |   |          | 0.11
| | Exercised              | (342,000 | ) |          | 0.10
| | Cancelled              | (193,333 | ) |          | 0.12
| |                        |          |   |          |     
| |                        |          |   |          |     
| | Balance, June 30, 2001 | 685,000  |   |          | 0.12
| |                        |          |   |          |     
| | Granted                | 316,000  |   |          | 0.25
| | Exercised              | (170,000 | ) |          | 0.10
| |                        |          |   |          |     
| |                        |          |   |          |     
| | Balance, June 30, 2002 | 831,000  |   | $        | 0.16
| |                        |          |   |          |     

| | e) | Share Purchase Warrants
      A summary of changes in share purchase warrants for the years ended June
        30, 2001 and 2002 is presented below:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |                        | NUMBER OF |   | EXERCISE |     
| | ---------------------- | --------- | - | -------- | ----
| |                        | WARRANTS  |   | PRICE    |     
| |                        |           |   |          |     
| |                        |           |   |          |     
| | Balance, June 30, 2000 | 346,667   |   | $        | 0.20
| |                        |           |   |          |     
| | Expired                | (346,667  | ) |          | 0.20
| |                        |           |   |          |     
| |                        |           |   |          |     
| | Balance, June 30, 2001 | -         |   |          | -   
| |                        |           |   |          |     
| | Granted                | 810,000   |   |          | 0.25
| |                        |           |   |          |     
| |                        |           |   |          |     
| | Balance, June 30, 2002 | 810,000   |   | $        | 0.25
| |                        |           |   |          |     

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|7. | SHARE CAPITAL (Continued)
|-- | -------------------------
|   |                          
|   | e)                       

| | NUMBER OF | EXERCISE | EXPRIRY |                
| | --------- | -------- | ------- | ---------------
| | SHARES    | PRICE    | DATE    |                
| |           |          |         |                
| |           |          |         |                
| |           |          |         |                
| | 597,500   | $        | 0.25    | April 17, 2003 
| | 212,500   |          | 0.25    | August 28, 2002
| |           |          |         |                
| |           |          |         |                
| | 810,000   |          |         |                
| |           |          |         |                

|       | f)                                                                                                                                                                                                                                                                                                                                                                                                                          | Subsequent to June 30, 2002, the Company:
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             | i)                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             | ii)                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             | iii)                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             | iv)                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                          
|**8.** | FINANCIAL INSTRUMENTS
      The Companys financial instruments consist of
        accounts receivable, short term investments, and accounts payable. It
        is managements opinion that the Company is not exposed to significant
        interest, currency, or credit risk arising from these financial instruments.
        The fair value of the financial instruments approximates their carrying
        value.

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**9.** | RELATED PARTY TRANSACTIONS
      Transactions in the normal course of business with companies
        controlled by directors or companies with common directors in common were
        as follows:
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                   |   | 2002   |  |   | 2001   |  |   | 2000    | 
| | ------------------------------------------------- | - | ------ |  | - | ------ |  | - | ------- | 
| |                                                   |   |        |  |   |        |  |   |         | 
| | Fees for administrative and professional services | $ | 82,382 |  | $ | 53,150 |  | $ | 38,400  | 
| | Fees for geological services                      | $ | 7,789  |  | $ | 24,346 |  | $ | 44,083  | 
| | Acquisition of capital assets                     | $ | 5,000  |  | $ | -      |  | $ | -       | 
| | Payments for office rent                          | $ | 5,762  |  | $ | 10,271 |  | $ | 6,112   | 
| | Amounts included in accounts payable              | $ | 16,150 |  | $ | 9,202  |  | $ | 158,076 | 
| | Amounts included in accounts receivable           | $ | 87,613 |  | $ | 6,994  |  | $ | 3,033   | 

During the year ending June 30, 2001, the Company issued 1,000,000
  shares to settle a debt of $120,000 with a private company with one common director,
  and issued 240,500 shares to another private company with one common director
  for a settlement of debt of $28,860.

INCOME TAXES

The Company has non-capital loss carry forwards of approximately
  CDN$1,637,000 and US$507,000 that may be available for tax purposes.

Losses for Canadian tax purposes expire as follows:

| | 2003 |  | $ | 149,000   | 
| | ---- |  | - | --------- | 
| | 2004 |  |   | 278,000   | 
| | 2005 |  |   | 308,000   | 
| | 2006 |  |   | 215,000   | 
| | 2007 |  |   | 238,000   | 
| | 2008 |  |   | 184,000   | 
| | 2009 |  |   | 265,000   | 
| |      |  |   |           | 
| |      |  |   |           | 
| |      |  | $ | 1,637,000 | 
| |      |  |   |           | 

Losses for US tax purposes commence to expire in 2017.

The potential tax benefits of these items have not been recognized as realization
  is not considered more likely than not.

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**12.** | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
      The Company prepares its financial statements in accordance
        with accounting principles generally accepted in Canada (Canadian
        GAAP), which differ in certain respects from those principles that
        the Company would have followed had its financial statements been prepared
        in accordance with accounting principles generally accepted in the United
        States (US GAAP). The major differences between Canadian and
        US GAAP, which affect the Companys financial statements, are described
        below, and their effect on the financial statements is summarized as follows:
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                  |   | 2002      |   | 2001 |           | 2000 |  
| | ------------------------------------------------ | - | --------- | - | ---- | --------- | ---- | -
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| | Loss in accordance with Canadian GAAP            | $ | (277,062  | ) | $    | (188,612  | )    | $
| |                                                  |   |           |   |      |           |      |  
| | Deduct:                                          |   |           |   |      |           |      |  
| | Unproven property interests                      |   |           |   |      |           |      |  
| | expenditures
      incurred in the year and      |   |           |   |      |           |      |  
| | capitalized                                      |   | (90,720   | ) |      | (55,399   | )    |  
| | Stock based compensation                         |   | (6,480    | ) |      | (554      | )    |  
| | Compensation expense
      on contingent         |   |           |   |      |           |      |  
| | shares                                           |   | -         |   |      | (14,287   | )    |  
| |                                                  |   |           |   |      |           |      |  
| | Add:                                             |   |           |   |      |           |      |  
| | Option interests written
      off in the period |   |           |   |      |           |      |  
| | that
      would have been expensed in a         |   |           |   |      |           |      |  
| | prior
      period                               |   | -         |   |      | 14,112    |      |  
| | Write down of investments                        |   | -         |   |      | 40,500    |      |  
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| | Loss in accordance with US GAAP                  |   | (374,262  | ) |      | (204,240  | )    |  
| | Unrealized loss on available for sale            |   |           |   |      |           |      |  
| | securities                                       |   | -         |   |      | (40,500   | )    |  
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| | Comprehensive income (loss)                      | $ | (374,262  | ) | $    | (244,740  | )    | $
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   | 2002      |   |      | 2001      |      |  
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| | Loss per share (US GAAP)                         | $ | (0.05)    |   | $    | (0.04     | )    | $
| |                                                  |   |           |   |      |           |      |  
| |                                                  |   |           |   |      |           |      |  
| | Weighted average shares outstanding              |   |           |   |      |           |      |  
| | (US GAAP)                                        |   | 7,588,458 |   |      | 5,514,585 |      |  
| |                                                  |   |           |   |      |           |      |  

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**12.** | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
        STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)(Continued)
      Statement of Cash Flows in Accordance with US GAAP
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                           | 2002 |          | 2001 |   | 2000     |  
| | ----------------------------------------- | ---- | -------- | ---- | - | -------- | -
| |                                           |      |          |      |   |          |  
| | Cash flows from operating activities      |      |          |      |   |          |  
| | Loss in accordance
      with US GAAP     | $    | (408,429 | )    | $ | (204,240 | )
| |                                           |      |          |      |   |          |  
| | Adjustments to reconcile loss to net cash |      |          |      |   |          |  
| | used by operating activities              |      |          |      |   |          |  
| | Stock issued for other
      than cash    |      | 40,647   |      |   | 43,041   |  
| | Non-cash option proceeds                  |      | -        |      |   | (63,000  | )
| | Loss on sale of investments               |      | 10,287   |      |   | -        |  
| | Amortization                              |      | 1,523    |      |   | 1,438    |  
| | Stock based compensation                  |      | 23,000   |      |   | -        |  
| | Change in accounts
      receivable       |      | 4,220    |      |   | (3,548   | )
| | Change in prepaid expenses                |      | (6,581   | )    |   | -        |  
| | Change in accounts
      payable          |      | (41,639  | )    |   | 48,124   |  
| |                                           |      |          |      |   |          |  
| |                                           |      | (376,972 | )    |   | (178,185 | )
| |                                           |      |          |      |   |          |  
| |                                           |      |          |      |   |          |  
| | Cash flows from investing activities      |      |          |      |   |          |  
| | Proceeds on sale of
      investments     |      | 12,212   |      |   | -        |  
| | Exploration advances                      |      | (86,902  | )    |   | -        |  
| | Acquisition of capital
      assets       |      | (5,000   | )    |   | -        |  
| |                                           |      |          |      |   |          |  
| |                                           |      | (79,690  | )    |   | -        |  
| |                                           |      |          |      |   |          |  
| |                                           |      |          |      |   |          |  
| | Cash flows from financing activities      |      |          |      |   |          |  
| | Shares issued for cash                    |      | 315,750  |      |   | 187,040  |  
| | Special warrants issued
      for cash    |      | 76,500   |      |   | -        |  
| | Share subscriptions
      received        |      | 86,100   |      |   | -        |  
| |                                           |      |          |      |   |          |  
| |                                           |      | 478,350  |      |   | 187,040  |  
| |                                           |      |          |      |   |          |  
| |                                           |      |          |      |   |          |  
| | Increase (Decrease) in cash               | $    | 21,688   |      | $ | 8,855    |  
| |                                           |      |          |      |   |          |  

---

CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**12.** | MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED
        STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)(Continued)
|------- | --------------------------------------------------------------------------------------------------------------------------

| |                                              | 2002 |          | 2001 |   | 2000     |  
| | -------------------------------------------- | ---- | -------- | ---- | - | -------- | -
| |                                              |      |          |      |   |          |  
| | Shareholders equity (deficiency)  Canadian |      |          |      |   |          |  
| | GAAP                                         | $    | 380,487  |      | $ | 122,032  |  
| | Option interests and deferred exploration    |      |          |      |   |          |  
| | expenditures                                 |      | (256,000 | )    |   | (131,113 | )
| | Write down of investments                    |      | -        |      |   | 40,500   |  
| |                                              |      |          |      |   |          |  
| |                                              |      |          |      |   |          |  
| | Shareholders equity (deficiency)  US GAAP  | $    | 124,487  |      | $ | 31,419   |  
| |                                              |      |          |      |   |          |  
| |                                              |      |          |      |   |          |  
| | Option interests and deferred exploration    |      |          |      |   |          |  
| | expenditures  Canadian GAAP                 | $    | 256,000  |      | $ | 131,113  |  
| | Option interests and deferred exploration    |      |          |      |   |          |  
| | expenditures expensed per US GAAP            |      | (256,000 | )    |   | (131,113 | )
| |                                              |      |          |      |   |          |  
| |                                              |      |          |      |   |          |  
| | Option interests and deferred exploration    |      |          |      |   |          |  
| | expenditures  US GAAP                       | $    | -        |      | $ | -        |  
| |                                              |      |          |      |   |          |  

| | i)  | Under Canadian GAAP, companies have the option to
        defer exploration expenditures on prospective properties until such time
        as it is determined that further work is not warranted, at which point
        capitalized costs would be written off. Under US GAAP, all exploration
        expenditures are expensed until an independent feasibility study has determined
        that the property is capable of commercial production. At this stage,
        the Company has not yet identified economically recoverable reserves on
        any of its interests. Accordingly, under US GAAP, all exploration costs
        incurred are expensed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ii) | The Company accounts for options granted according
        to requirements of Canadian GAAP, and those requirements are similar to
        the accounting prescribed in Accounting Principles Board Opinion No. 25
        (APB 25). Under APB 25, because the exercise price of the
        Companys employee stock options equals the market price of the underlying
        stock on the date of grant, no compensation expense is recognized. An
        alternative method under US GAAP is the fair value accounting provided
        for under FASB Statement No. 123 (SFAS No. 123), which requires
        the use of option valuation models. Pro-forma information regarding net
        income and earnings per share is required by SFAS No. 123, and has been
        determined as if the Company had accounted for its options granted under
        the fair value method of that Statement. The fair value for these options
        was estimated at the date of the grant using a Black-Scholes option pricing
        model with the following weighted average assumptions for 2002 and 2001:
        risk free rate of 4.75%; no dividends; volatility factor of the expected
        life of the Companys common stock of 146%; and weighted average
        expected life of the options granted in each year of four years.

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CONTINENTAL RIDGE RESOURCES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2002 AND 2001

|**12.** | MATERIAL DIFFERENCES BETWEEN CANADIAN
        AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)(Continued)
|------- | --------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                           
|        |                                                                                                                           

| | June 30, 2002               |   |          |  
| | --------------------------- | - | -------- | -
| | Loss for the year  US GAAP | $ | (479,871 | )
| | Loss per share              |   | (0.06    | )
| |                             |   |          |  
| | June 30, 2001               |   |          |  
| | Loss for the year  US GAAP |   | (306,591 | )
| | Loss per share              |   | (0.06    | )
| |                             |   |          |  
| | June 30, 2000               |   |          |  
| | Loss for the year  US GAAP |   | (291,121 | )
| | Loss per share              |   | (0.09    | )

| | iii) | SFAS No. 115 requires investments to be classified
        with respect to holding period, as determined by management, as either
        held-to-maturity debt securities, trading securities or available-for-sale
        investments.
      The Company has no held-to-maturity debt securities or
        trading securities. The Companys investments are classified as available-for-sale
        investments and carried at cost for Canadian GAAP purposes. Such investments
        are not actively traded on short term differences in price, and for US
        GAAP purposes, must have holding gains and losses reported as a component
        of comprehensive income.                                                                                                                                                                                                                                                                                                                                                                                                             
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | iv)  | Of the Companys issued and outstanding shares,
        there are no shares held in escrow at June 30, 2002 (2001  Nil;
        2000  95,250), to be released in accordance with a formula based
        on exploration expenditures incurred during the year and upon regulatory
        approval. A total of 95,250 shares were released from escrow during fiscal
        2001. For US GAAP purposes, when the shares are released from escrow,
        a compensation expense is recognized for shares issued to those shareholders
        who have held or then hold positions that could affect the financial results
        of the Company including employees, officers, directors and others. The
        amount of compensation expense to be recognized will be calculated based
        upon the difference between the price of the shares at the time they were
        placed in escrow and the fair value of the shares at the time of release
        of the shares from escrow. Canadian GAAP does not require the recognition
        of this additional compensation expense.

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