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, 2004



OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________



SEC File Number: 000-49917



NEVADA GEOTHERMAL POWER INC.

(Formerly Continental Ridge Resources Inc.)

(Exact name of Registrant as specified in its charter)



British Columbia, Canada

(Jurisdiction of incorporation or organization)



409 Granville Street, #900, Vancouver, British Columbia, Canada  V6C 1T2

(Address of principal executive offices)



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

None



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

Common Shares, without par value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:                                                               None



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.                                                             22,189,084



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 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 ninety days.            Yes xxx   No ___



Indicate by check mark which financial statement item the registrant has elected to follow:                                   Item 17 xxx   Item 18 ___



Page 1 of 75

Index to Exhibits on Page 46

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NEVADA GEOTHERMAL POWER INC.

ANNUAL REPORT FISCAL 2004 ENDED 6/30/2004

TABLE OF CONTENTS



|          | Part I                                                                       | Page
|--------- | ---------------------------------------------------------------------------- | ----
|          |                                                                              |     
|Item 1.   | Identity of Directors, Senior Management and Advisors                        | 4   
|Item 2.   | Offer Statistics and Expected Timetable                                      | 4   
|Item 3.   | Key Information                                                              | 4   
|Item 4.   | Information on the Company                                                   | 10  
|Item 5.   | Operating and Financial Review and Prospects                                 | 21  
|Item 6.   | Directors, Senior Management and Employees                                   | 25  
|Item 7.   | Major Shareholders and Related Party Transactions                            | 34  
|Item 8.   | Financial Information                                                        | 36  
|Item 9.   | The Offer and Listing                                                        | 36  
|Item 10.  | Additional Information                                                       | 40  
|Item 11.  | Quantitative and Qualitative Disclosures about Market Risk                   | 42  
|Item 12.  | Description of Other Securities Other Than Equity Securities                 | 42  
|          |                                                                              |     
|          | PART II                                                                      |     
|          |                                                                              |     
|          |                                                                              |     
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | 43  
|Item 14.  | Material Modifications to the Rights of Security
Holders and Use of Proceeds | 43  
|Item 15.  | Controls and Procedures                                                      | 43  
|Item 16.  | Reserved                                                                     | 44  
|Item 16A. | Audit Committee Financial Expert                                             | 44  
|Item 16B. | Code of Ethics                                                               | 44  
|Item 16C. | Principal Accountant Fees and Services                                       | 44  
|Item 16D. | Exemptions from Listing Standards for Audit
Committees                       | 45  
|Item 16E. | Purchase of Equity Securities by the Issuer and
Affiliated Purchasers        | 45  
|          |                                                                              |     
|          | Part III                                                                     |     
|          |                                                                              |     
|Item 17.  | Financial Statements                                                         | 45  
|Item 18.  | Financial Statements                                                         | 45  
|Item 19.  | Exhibits                                                                     | 46  









INTRODUCTION



Nevada Geothermal Power Inc. was incorporated on 4/13/1995 in the Province of British Columbia.  The Companys initial public offering was effective in January 1996.  In this Annual Report, the Company, we, our, and us, refer to Nevada Geothermal Power Inc. and its subsidiaries collectively (unless the context otherwise requires).  Summary discussions of documents referred to in this Annual Report may not be complete, and we refer you to the actual documents for more complete information.  Our principal corporate offices are located at 409 Granville Street #900, Vancouver, British Columbia, Canada  V6C 1T2; our telephone number is 604-688-1553.





BUSINESS OF NEVADA GEOTHERMAL POWER INC.

Nevada Geothermal Power Inc. (the Company") is engaged in the acquisition and exploration of mineral resource and geothermal properties.   Since June 2001, the Companys primary activity has been the exploration of the Blue Mountain Geothermal Project in Nevada, USA.  The Companys interest in the project started as an option to earn a 60% interest; but, in July 2003, the Company completed the acquisition of 100% of Blue Mountain Power Company Inc., the corporation that owned and controlled the project.  In February 2004, the Company acquired its first geothermal lease for the Pumpernickel Valley Geothermal Project in north-central Nevada.  In October 2004, the Company acquired its first geothermal lease for the Black Warrior Peak Project in Washoe County, Nevada.



FINANCIAL AND OTHER INFORMATION

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





FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains forward-looking statements. Forward-looking statements may be identified by the use of words like plans, expects, aims, believes, projects, anticipates, intends, estimates, will, should, could and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends.  Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.  Actual outcomes and results may differ materially from these expectations/assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors.  We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise.



These factors include, but are not limited to, the fact that the Company is in the exploration stage, will need additional financing to develop its properties and will be subject to certain risks since its prospects are located in China, which factors are set forth in more detail in the sections entitled "Risk Factors" in Item #3D, Business Overview in ITEM #4B, and Operating and Financial Review and Prospects at ITEM #5.

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PART I





ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

--- No Disclosure Necessary ---





ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.

--- No Disclosure Necessary ---





ITEM 3.  KEY INFORMATION.



3.A.1.  Selected Financial Data

3.A.2.  Selected Financial Data

The selected financial data of the Company for Fiscal 2004/2003/2002 ended June 30th was derived from the financial statements of the Company that have been audited by Morgan & Company, independent Chartered Accountants, as indicated in their audit report, which is included elsewhere in this Annual Report.  The selected financial data of the Company for Fiscal 2001/2000 ended June 30th was derived from the financial statements of the Company that were audited by Morgan & Company, independent Chartered Accountants; these financial statements are not included herein.



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



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 all available funds for use in its operations and the expansion of its business.



Table No. 1 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.









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Table No. 1

Selected Financial Data

(CDN$ in 000, except per share data)

______________________________________________________________________________

______________________________________________________________________________

|                        | Year
Ended
6/30/04 | Year
Ended
6/30/03 | Year
Ended
6/30/02 | Year
Ended
6/30/01 | Year
Ended
6/30/00
|----------------------- | ------------------ | ------------------ | ------------------ | ------------------ | ------------------
|                        |                    |                    |                    |                    |                   
|CANADIAN GAAP           |                    |                    |                    |                    |                   
|Sales Revenue           | $0                 | $0                 | $0                 | $0                 | $0                
|Loss From Operations    | ($801)             | ($491)             | ($277)             | ($189)             | ($743)            
|Loss for the Period     | ($793)             | ($491)             | ($277)             | ($189)             | ($743)            
|Basic Loss per Share    | ($0.05)            | ($0.05)            | ($0.04)            | ($0.03)            | ($0.23)           
|Dividends Per Share     | $0.00              | $0.00              | $0.00              | $0.00              | $0.00             
|Wtg. Avg. Shares  (000) | 17605              | 9723               | 7588               | 5515               | 3264              
|Period-end Shares O/S   | 22189              | 10273              | 8864               | 6857               | 3438              
|                        |                    |                    |                    |                    |                   
|Working Capital         | $946               | ($120)             | $92                | ($38)              | ($237)            
|Resource Property Costs | $2642              | $477               | $256               | $131               | $90               
|Long-Term Debt, etc.    | $0                 | $0                 | $0                 | $0                 | $0                
|Capital Stock           | $7475              | $3612              | $3215              | $2788              | $2361             
|Shareholders Equity    | $3599              | $388               | $380               | $122               | ($117)            
|Total Assets            | $4004              | $542               | $418               | $202               | $127              
|                        |                    |                    |                    |                    |                   
|US GAAP                 |                    |                    |                    |                    |                   
|Net Loss                | ($2253)            | ($712)             |                    |                    |                   
|Loss Per Share          | ($0.13)            | ($0.07)            |                    |                    |                   
|Wtg. Avg. Shares        | 17605              | 9723               |                    |                    |                   
|Resource Property Costs | $0                 | $0                 |                    |                    |                   
|Shareholders Equity    | $956               | ($89)              |                    |                    |                   
|Total Assets            | $1362              | $64                |                    |                    |                   

------------------------------------------------------------------------------

(1)  Cumulative Net Loss since incorporation through 6/30/2004 under US GAAP

was ($6,868,861).

(2)  a) Under SEC interpretation of US GAAP, all costs related to exploration-

stage properties are expensed in the period incurred.

(b) By a share for share exchange, on 7/31/2003, the Company acquired 10%

of the issued capital of Blue Mountain Power Company Inc., a company

with two common directors.  The value of the shares issued to the

shareholders of Blue Mountain Power Company Inc. has been decreased by

$704,226 from $1,705,000, as determined under Canadian GAAP, as a

result of recording the value of the resource property acquired on a

disbursed cost basis rather than fair value of the shares issued, due

to a common director owning in excess of 10% of the Company and of

Blue Mountain Power Company Inc.  Accordingly, for USGAAP, share

capital has been reduced by $704,226 and deficit has been reduced by

$704,226.

______________________________________________________________________________

______________________________________________________________________________









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3.A.3.  Exchange Rates

In this Annual Report, 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. 2 sets forth the exchange rates for the Canadian Dollar at the end of five most recent fiscal years ended June 30th, the average rates for the period, and the range of high and low rates for the period.  The data for each month during the most recent six months is also provided.



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 Canadian Dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.



Table No. 2

U.S. Dollar/Canadian Dollar

______________________________________________________________________________

______________________________________________________________________________

|                            | Average | High | Low  | Close
|--------------------------- | ------- | ---- | ---- | -----
|                            |         |      |      |      
|December 2004               |         | 1.24 | 1.19 | 1.20 
|November 2004               |         | 1.23 | 1.18 | 1.19 
|October 2004                |         | 1.27 | 1.22 | 1.22 
|September 2004              |         | 1.31 | 1.26 | 1.26 
|August 2004                 |         | 1.33 | 1.30 | 1.31 
|July 2004                   |         | 1.34 | 1.31 | 1.33 
|                            |         |      |      |      
|Fiscal Year Ended 6/30/2004 | 1.34    | 1.41 | 1.33 | 1.34 
|Fiscal Year Ended 6/30/2003 | 1.50    | 1.60 | 1.33 | 1.36 
|Fiscal Year Ended 6/30/2002 | 1.57    | 1.61 | 1.51 | 1.52 
|Fiscal Year Ended 6/30/2001 | 1.62    | 1.58 | 1.46 | 1.52 
|Fiscal Year Ended 6/30/2000 | 1.47    | 1.51 | 1.44 | 1.48 

_    _________________________________________________________________________

______________________________________________________________________________







3.B.  Capitalization and Indebtedness

3.C.  Reasons For The Offer And Use Of Proceeds

--- No Disclosure Necessary ---







#











3.D.  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 geothermal evergy in commercial quantities.  Most exploration projects do not result in the discovery of commercially exploitable geothermal deposits.



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 geothermal energy operations or if it will ever achieve self-sustaining commercial operations.  Historically, the only source of funds available to the company has 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 geothermal reserve.  Properties on which geothermal 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 Properties

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



Energy Prices May Not Support Corporate Profit

The geothermal energy industry is intensely competitive and even if commercial quantities of geothermal energy 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 Federal and State governmental authorities.   Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters.  The permits that the Company may require for construction of geothermal energy facilities and conduct of geothermal 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.





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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 geothermal energy 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 Geothermal Energy Industry Could Result in a Significantly Negative Effect on the Company

Geothermal Energy 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 geothermal energy, any of which could result in work stoppages, damage to or destruction of wells 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.



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 un-issued common shares, or securities convertible into common stock, would result in dilution, possibly substantial, to present and prospective holders of common shares.



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 US$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).  Our shares are quoted on the TSX Venture Exchange, and the price of our common shares ranged from CDN$x.30 (low) to CDN$0.83 (high) during the period from 1/1/2004 to 12/31/2004.  The closing price of our shares on 12/31/2004 was CDN$0.64.







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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 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/CEO/Director, Brian Fairbank.  The Company has no written employment and/or consulting contracts with Mr. 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 US 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 successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities.



As a foreign private issuer, the Company is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.

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ITEM 4.  INFORMATION ON THE COMPANY



4.A. History and Development of the Company



Introduction



The Companys executive office is located at:

409 Granville Street, Suite #900, Vancouver, B.C. V6C 1T2 CANADA

Telephone: (604) 688-1553

Facsimile: (604) 688-5926

Website:  www.nevadageothermal.com

E-Mail:   sfkirk@nevadageothermal.com



The contact person is:  Brian D. Fairbank, President/CEO/Director.



The Company's fiscal year ends June 30th.



The Company's common shares trade on the TSX Venture Exchange in Toronto under the symbol NGP.  The Companys common shares were listed on the NASD Electronic Bulletin Board in July 2003 under the symbol NGLPF.



The Company has 100,000,000 common shares without par value authorized.  At 6/30/2004 and 6/30/2003, respectively, there were 22,189,084 and 10,273,224 common shares issued and outstanding.  Also authorized were 25,000,000 first preferred shares, with no par value; and, 25,000,000 second preferred shares, with no par value, authorized; none of which were outstanding.



In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).



Incorporation and Name Changes

The Company was incorporated on 4/13/1995 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).  On 5/25/2000, the name of the Company was changed to Canada Fluorspar Inc..  On 2/5/2001, the name of the Company was changed to Continental Ridge Resources Inc..  On 5/13/2003, the name of the Company was changed to Nevada Geothermal Power Inc..



The Companys common shares were listed for trading on the Alberta Stock Exchange on 1/31/1996; subsequently the Canadian Venture Exchange and then the Toronto Venture Exchange.



On 5/25/2000, the Company consolidated its share capital on the basis of one new share for three old shares; all references to the number of shares and to per share data refer to post-consolidation data.



The following sets forth the names of the subsidiaries of the Company, their respective jurisdictions of incorporation and the Companys current voting and equity interest therein:

a.  Wholly-Owned Subsidiary

Blue Mountain Power Company, Canada

b.  Wholly-owned Subdidiary

Noramex Corp., Nevada, USA



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4.B.  BUSINESS OVERVIEW



Historical Development

In 1996, the Company acquired option interests in the Nuevo Año and Enero Prospects, in Chile.  In March 1999, the option on the Enero Prospects were allowed to lapse; in February 2000, the Company allowed the option on the Nuevo Año Property to lapse.  The Company has written-off $672,280 of costs associated with these properties.



In 1996 the Company acquired a 100% interest in 53 mineral claims located in Elko County, Nevada, known as the Snowstorm Property.  In October 1999, the claims were allowed to lapse and the Company wrote off costs of $202,462 associated with this property.



In November 1997, the Company acquired option interests in the South Midas Property, located in Elko County, Nevada.  The Company terminated its agreement in July 1999, taking a $28,066 write-off.



In December 1998, the Company acquired an option interest in the Portal/Gobi Property in Alaska; also the Sahara Property with was allowed to lapse.  In January 1999, the Company staked the Mohave Property, located adjacent to the Gobi Property.  In January 2000, the Company granted AngloGold (USA) Exploration Inc. an option to earn a 60% joint venture interest in the Portal/Gobi Property.



During 1999/2000, the Company attempted to complete a reverse-take-over of Burin Flourspar Ltd, a firm with mining interests in Newfoundland, Canada.  Due to the inability to complete required financing in a most difficult financial market condition, the agreements were terminated in September 2000.



The Company entered into a 6/19/2001 option agreement, as amended 8/7/2002 and 11/12/2002, with Blue Mountain Power Company Inc. to earn a 60% joint venture interest in the Blue Mountain Geothermal Project.  By an acquisition agreement dated 12/13/2002, the Company acquired 100% of Blue Mountain Power Company Inc. by the issue of 5,500,000 common shares of the Company.  The acquisition was completed 7/30/2003.  The preponderance of the Companys efforts have been directed to this property.



In February 2004, the Company acquired its first geothermal lease for the Pumpernickel Valley Geothermal Project in north-central Nevada.  In October 2004, the Company granted Inovision Solutions Inc. the option to earn a 50% interest by funding $5,000,000 in exploration/development expenditures and other payments. In addition, in October 2004, the Company was awarded a US Department of Energy (DOE) cost-sharing contract whereby DOE will fund 80% of an initial field evaluation program at the Pumpernickel Project.



In October 2004, the Company acquired its first geothermal lease for the Black Warrior Peak Project in Washoe County, Nevada.





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Geothermal Energy

Geothermal heat can be harnessed for clean electrical power generation wherever there is high heat flow in deep fractured rock formations and a shallower, non-fractured or sealed caprock.



[nevadageo200420fannual001.jpg]



Ground water in the deep fractures becomes heated and rises to form a geothermal reservoir under the caprock.  Production wells are typically drilled 1km to 2km deep to bring the hot watter (at least 150°C) up to surface where it flashes to steam..  The steam is then used to drive turbines for generating electricity and the residual water is pumped back down injection wells to recharge the reservoir.



[nevadageo200420fannual003.jpg]



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Blue Mountain Geothermal Project

The Blue Mountain Geothermal Project is located in north-central Nevada.



The encouraging results from on-going development at the Blue Mountain Geothermal Project will provide valuable input for a feasibility study to be completed in 2005.  A second deep well (DB-2) into the resource, in a joint venture with the U.S. Department of Energy, yielded excellent results with 160°C thermal water intersected at shallow depths.  The data confirms a geothermal resource extending over 1000 meters between DB-1 and DB-2.  Measured temperatures of 145°C - 165°C are higher than necessary for commercial power generation using binary production technology.  Flow and injection tests conducted in late November 2004 are still being assessed but indicate good permeability through the high temperature zone.  Eight temperature gradient holes drilled in 2004 nearly doubled the known aerial extent of the shallow temperature anomaly (reflecting the deeper resource) outward to cover ten square kilometers.  The size of the zone is still open to further expansion.  Geothermal water chemistry of samples collected from DB-2 and from five of the gradient wells is highly encouraging for the future development potential of Blue Mountain.



DB-2 well tests in November 2004, five months after the last drilling operations, included new temperature and pressure logs, a flow test and a water injection test.  New equilibrated temperatures are between 150°C -160°C in the well interval between 200-585 meters depth.  The 385-meter thick zone, immediately below cemented surface casing, has heated up to an average of 157°C due either to cross flow in the hole or thermal recovery of the entire zone.



Injection tests were successfully performed at DB-2 in November 2004.  A total of 17,000 gallons of water was injected from storage tanks into the well at a constant rate of 150 gpm.  Pressure build-up and fall-off data was recorded with a high accuracy tool on bottom.  Temperature, pressure and spinner logs were run before, during and after the water injection.  During injection, a large amount of the fluid exited the hole at a depth of 202-288 meters and a lesser amount between 546-587 meters.  The 202-288 meter zone, which measured 155°C before the test, cooled to the temperature of the injected fluid (15 °C) during the test, and then recovered rapidly after the test suggesting a highly permeable zone.  The 546-587 meters zone corresponds to a permeable, high-temperature zone indicated in previous surveys.



The injection results, in conjunction with the temperature results, are interpreted to indicate a shallow, 150°C -165 °C geothermal zone at 200-585 meters depth fed from by deeper and probably higher temperature resource.  According the interpretation by Susan Petty, highly permeable zones were initially cooled by the invasion of circulation fluid during drilling operations and subsequently, temperatures have recovered to reflect the temperature of the geothermal fluids migrating within the zones.  The temperature profile of DB-2 indicates that the shallow 150°C -165 °C zone is an outflow plume moving laterally or upward along faults and permeable fractures.  Further evaluation will be conducted on the potential shallow geothermal production zone.



Testing of DB-2 was under the direction of Susan Petty, an experienced independent geothermal reservoir engineer with over 25 years of geothermal well testing experience.  Ms. Petty obtained a Geology Degree from Princeton University and a Master of Science Degree in Groundwater Hydrology from the University of Hawaii.  She has worked in the geothermal industry in the western United States since 1979 with EG&G, Idaho, Well Production Testing, Caithness Resources LLC, Coso Operating Company LLC, and Black Mountain Technology.  Ms. Petty is a Principal of Black Mountain Technology, based in Seattle, Washington.

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A comprehensive report, summarizing engineering calculations and extrapolating potential production well outputs from the slim well injection test results is expected from Black Mountain Technology in January 2005.



Geothermal fluid samples from DB-1 and DB-2 tests, and from new temperature gradient wells TG-2, TG-3, TG-4, TG-9 and TG-14a have provided high-quality geochemical data about the geothermal system.  The temperature gradient wells were drilled with air to avoid sample contamination by drill fluid.  DB-1 and DB-2 well fluid samples were obtained following prolonged discharge and thus are representative of the thermal waters intersected.



Water analysis results and an interpretive report have been received from Thermochem Laboratory & Consulting Services of Santa Rosa, California.  Thermochem has specialized in geothermal geochemistry for over 20 years and is the leading geothermal laboratory in North America.



According to Thermochem, all waters but TG-2 are alkali-chloride type waters typical of high temperature geothermal waters.  Waters from DB-2, DB-1, TG-9 and TG-14a show very similar chemistry and appear to represent a single parent water altered to a small degree by dilution with fresh ground water.  Na-K and Na-K-Ca geothermometers commonly used to predict source water temperature are in close agreement and suggest a deep reservoir with temperatures of 200°C -240 °C.  Other geothermometers, which are based on ionic concentrations that re-equilibrate faster with near surface conditions (and therefore don't retain the chemical characteristics of the deeper conditions) yield lower temperatures (e.g. 180 °C for DB-2 waters).



The new geochemistry results infer a shallow, moderate-temperature, geothermal resource with temperatures of 140°C -180 °C and a deeper undiscovered reservoir with temperatures of 200°C - 240°C.



Eight widely-spaced holes to depths up to 1020 feet were drilled in September 2004 using air rotary drilling techniques.



Anomalous temperature gradients in the range of 100-150 °C/km or two to three times the regional gradient, extend over 10 square kilometers , with the anomaly open to further expansion to the east, west and south (refer to attached Figure). The high thermal gradients may be caused by hot geothermal fluid below the depths of the wells or by hot rock formations underlying the project area.



BM-78, BM-80, BM-81, BM-84, BM-85, BM-86, BM-91 , BM-93, BM-58 ,BM-90, TG-9 DB-1 and DB-2 have very high temperature gradients (300-500 °C/km) within the broader thermal anomaly, reflecting an extensive shallow zone of 75-80 °C water as well the zone superheated 140-180 °C geothermal water in the vicinity of DB-1 and DB-2.



Based on the temperature gradients gradient data outside the influence of the shallow geothermal water, the inferred 200-240°C reservoir may be approximately 1500-2000 meters below surface.



An independent evaluation report by GeothermEx Inc. is in preparation and expected shortly. The Company expects that this report will support its near-term goal to determine the feasibility of building an initial 30MW power plant. Ultimately, the Company's mandate is to develop significantly more power at Blue Mountain.



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Pumpernickel Geothermal Project

The Company has completed an initial evaluation of its recently acquired Pumpernickel Geothermal Project.  The Company has a 100% interest in private geothermal leases and federal lease applications forming a contiguous package of eight sections (5070 acres/7.92 square miles) in Pumpernickel Valley, Nevada, which have potential for the discovery of a high temperature reservoir suitable for electric power generation.



A near-boiling hot spring occurs on the newly acquired leases.  The chemistry of several hot springs, which occur along a one-mile interval of a prominent fault, predicts deeper geothermal source-water temperature of abut 170°C (340°F).  Geothermal fluids at 150°C - 180°C (300°F - 355°F) are currently used to produce electricity on a commercial basis at other locations in

Nevada.



Previous work on the property dates back to 1974; Magma Power drilled a 920-meter (3071-foot) offsetting the hot springs about 150 metres/492 feet.  The temperature on bottom was reported to be 135°C/275°F with the last 90 meters (300 feet) having a gradient of 160°C per kilometer.  The University of Nevada System (UNS) under contract to the U.S. Department of Energy (No. DE-AC08-81NV10220) completed an aerial assessment at Pumpernickel Valley in 1981  1982.  UNS field work included geologic reconnaissance, satellite imagery, hot spring geochemistry, air photo analysis, 2-metre depth temperature probe survey, gravity survey, soil mercury survey, 35-metre (115-foot) temperature gradient drilling, and additional shallow (65-148 meter (213-485 foot) temperature gradient drilling.  Results of the UNS work provides knowledge of the structural framework; the major North-Northeast trending Pumpernickel fault intersections seen in the UNS surveys and high temperatures predicted at shallow depth by geothermometry and temperature gradients provides impetus for a phased exploration drilling program to further assess the depth and quality of the geothermal resource.



In Phase I, E-SCAN, resistivity survey methods will be utilized to map the deep geothermal source waters.  A series of six 250-meter (820 foot) gradient wells will be drilled to test the interpretation of the E-SCAN survey.  In Phase II,a deep core hole will be drilled to a nominal depth of 1200 meters (3900 feet) to confirm the resource and perform flow and injection tests.



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Black Warrior Project

In October 2004, the Company acquired seven square miles of private land and applied for a one-section federal geothermal lease for a total land area of eight square miles south and east of Black Warrior Peak, Washoe County, Nevada.  The leases are on private land and are subject to a 3.5% royalty on gross revenue from electricity sales; however, NGP can purchase the royalty for US$1,000,000.  Leases include surface and water rights.



The Black Warrior Project is located within a prolific power producing region of Nevada which encompasses the geothermal power plants having an aggregate production capacity of over 100 MWs.  Four separate power transmission lines cross the region with the convenient interconnections for power from Black Warrior at Marble Bluff substation five miles west on a 60 kV line or Brady Hot Springs substation 12 miles southeast along a 120 kV line.



At the Black Warrior Project, potential for the discovery of a geothermal reservoir suitable for electric power generation is indicated by temperature gradients greater than 200°C/km throughout the leased area in ten wide spaced drill holes by Phillips Petroleum in the early 1980.s.  The deepest test hole (NV-ST-1) recorded a temperature of 128°C at its maximum depth of 552 meters (262°F at 1810 feet) with temperatures still increasing at the bottom of the hole.  Thus commercial resource temperatures may occur within 1000 meters (3000 feet) of surface.  The Company has initiated field investigations at the Black Warrior Project.  The geology and regional fault structures appear to permit deep circulating ground water to be heated by anomalously high rock formation temperatures. Further information will be released as results are available.



The acquisition of Black Warrior fits well into the companies strategy of acquiring additional geothermal projects prior to an introduction of a Production Tax Credit for geothermal and other green power technologies such has been already available to the US wind power industry.





Portal/Gobi Claims

The Company has expended minimal funds on these claims in recent years, with AngloGold (USA) Exploration Inc. continuing to expend more significant funds on exploration in its effort to earn its 60% option interest.  Through Fiscal 2004, AngloGold has expended $750,000 on the Gobi Property portion of these claims.





Trends

Company management believes that US 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 US federal government, has been developed with the goal to increase geothermal power production.  Environmentally clean, cost competitive geothermal plants will be encouraged by favorable tax policies, direct funding and other programs.



This past year, the State of Nevada passed Senate Bill 372 defining a renewable portfolio standard for utilities which requires that 15 per cent of total power output come from renewable energy (geothermal, wind and solar). As a direct result, geothermal plant capacity is expected to increase by about 250 megawatts or double the current capacity.  The first new plants contracted to the northern Nevada utility (Sierra Power) are expected on line in 2003.

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Nevada Public Utilities Commission (NPUC), at a symposium on geothermal opportunities in Nevada on 1/11/2002, emphasized that fifteen percent is a significant commitment to purchase reliable geothermal power.  The program goal is not to develop technology, but to diversify the energy portfolio and use geothermal energy as a hedge against future fuel costs and political risk associated with imported energy supplies.  Rural economic development and establishing a lead in energy policy development and green energy credit trading are important economic benefits that will accrue to the state.



The Nevada state legislature introduced a renewable energy credit ("REC") and trading system in 2002 that to enable producers of geothermal and other forms of renewable energy to create RECs for each kWh of energy produced.  Power consumers can purchase RECs as required to conform with the state renewable energy quotas.  Five Las Vegas area utility customers have applied to the Nevada Public Utilities Commission (NPUC) to leave the southern Nevada utility (Nevada Power) system intending to buy gas turbine generated power from Reliant Energy.  These customers would require RECs to meet the standard for renewable energy.



Policy initiatives to facilitate the development of geothermal power and other renewable resources are also being implemented on the federal government side.  Senator Harry Reid of Nevada, a strong proponent of geothermal energy, announced new federal financing for Nevada including $1,000,000 toward a Great Basin Centre for Geothermal Energy at the University of Reno, Nev.  Senator Reid anticipates that a deductible tax credit for geothermal projects, similar to the program already in place for wind power projects, will be implemented.  The "GeoPower the West" program administered by the U.S. Department of Energy (DOE), is mandated to increase geothermal power production through development of favorable tax policies, direct financing, educational and other programs.





Plan Of Operations



Source of Funds for Fiscal 2005

The Companys primary source of funds since incorporation has been through the issuance of equity.  Currently the Company does not have operating revenues, and the Company does not anticipate generating any operating revenue until the Blue Mountain Geothermal Project begins production, not expected in the next year.  As of 6/30/2004, the Company had working capital of $945,921.  Since then: Company issued 1,500,000 units of common shares and warrants in a private placement, raising $750,000; issued 445,416 common shares on the exercise of share, raising $178,166; issued 614,845 common shares on the exercise of warrants, raising $264,271; and and issued 100,000 common shares on the exercise of stock options, raising $29,000.  The Company has had discussions with third parties about additional equity offerings and/or loans; but the talks as of 12/31/2004 were preliminary.



Use of Funds for Fiscal 2005

During Fiscal 2005, the Company estimates that it might expend $400,000 on general/administrative expenses.  During Fiscal 2005, the Company estimates that it might expend $2 million on property acquisition/exploration expenses.



Anticipated Changes to Facilities/Employees

The Company has no plans to add any additional personnel.  Management anticipates that any property exploration efforts will be carried out by outside contractors.



United States vs. Foreign Sales/Assets

The Company generated no sales revenue during the last three years.

At 6/30/2004 and 6/30/2003, respectively,

$2,642,000 and $477,000 of the assets were located in the United States, and;

the remainder were located in Canada.

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4.D.  Property, Plant and Equipment



Executive Offices

The Companys executive offices are located in shared, rented premises of approximately 2,100 sq. ft. at 409 Granville Street, Suite 900, Vancouver, British Columbia, Canada.  V6C 1T2.  The Company began occupying these facilities in 4/1/2002.  Monthly rent is $1,850.





Blue Mountain Geothermal Project

Geothermal Energy Exploration, Nevada, USA



Property Acquisition.The Company entered into a 6/19/2001 option agreement, as amended 8/7/2002 and 11/12/2002, with Blue Mountain Power Company Inc. (BMP) a 60% joint venture interest in the Blue Mountain Geothermal Project.  Under this agreement, the Company paid $10,000, issued 200,000 common shares to BMP, and expended funds on exploration.



By an acquisition agreement dated 12/13/2002, the Company acquired 100% of Blue Mountain Power Company Inc. by the issue of 5,500,000 common shares (transaction shares) of the Company.  The acquisition was completed 7/30/2003.  The transaction shares are subject of a four-month hold period and an escrow restriction as determined by the TSX Venture Exchange.  This transaction replaced the earlier option agreement.  The Company and BMP are not dealing at arms length since certain directors and officers of the Company, specifically Brian Fairbank (Company President/Director) and Jack Milligan (Company Director) were also directors/officers and major shareholders of BMP.



Property Description/Location/Access.The geothermal tenure of the property is held by the Company through Noramex Corp., a wholly-owned subsidiary of Blue Mountain Power Company, acquired by the Company in July 2003.  Noramex Corp. is the registered owner of three geothermal leases (L-6805, N57435, and N58196) covering seven sections of land comprising approximately 4,567 acres in Humboldt County, Nevada.



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.



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.



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PumperNickel Geothermal Project

Geothermal Energy Exploration, Nevada, USA

In February 2004, the Company signed a Geothermal Lease Agreement with Newmont USA Limited, d.b.a. Newmont Mining Corporation (NYSE: NEM) (hereafter Newmont), covering five square miles of geothermal lands located in north-central Nevada approximately ten miles from Newmonts Lone Tree Mine.  The Company has filed lease applications on an additional three sections federal land for total leasehold of eight square miles (5120 acres).  The Newmont lease grants the Company the exclusive right to drill for, produce, extract, take and remove all products of geothermal processes including steam and other gases, hot water, hot brines, bi-products and heat energy (collectively referred to as substances) along with surface and water rights, subject to Nevada law.  The Company will pay rentals of $2/acre for the first two years and $3/acre thereafter, with all rental payments creditable to royalties due upon production.  The Company will pay royalties from any geothermal production of: a) 31⁄2% of gross proceeds from electrical power sales (less taxes and transmission costs); b) 5% of the gross proceeds of a sale of any substances in an arms length transaction; c) 2% of the gross proceeds from the sale of or manufacture there-from of bi-products; d) 10% of net profits from the use of substances at a commercial facility other than an electric power generating facility (such as an vegetable drying/processing facility).



Substances or electrical power used by the Company for operations at an on-site electrical generating plant or other commercial facilities are not subject to royalties.



A near-boiling hot spring system occurs on the newly acquired leases.  The chemistry of several hot springs, which occur along a one-mile interval of a prominent fault, predicts deeper geothermal source-water temperatures of about 170°C or 340°F. Geothermal fluids at 170°C are currently used to produce electricity on a commercial basis at other locations in Nevada such as Steamboat, Bradys Hot Springs, Beowawe, and Desert Peak.



Nevadas geothermal output is expected to increase significantly in the next decade to meet burgeoning demand for cheaper power and to comply with renewable portfolio legislation requiring the percentage of renewable electricity produced in the State to increase from a current 5% to 15% in ten years.



In October 2004, Inovision Solutions Inc. (ISI), a Toronto Venture Exchange-listed company, signed an agreement whereby they will fund up to $5,000,000 in exploration and development expenditures for the Pumpernickel Geothermal Project under an option agreement to earn a 50% joint venture interest.  In order to earn its interest, ISI must complete $5,000,000 in project expenditures, make $120,000 in cash payments and issue 600,000 shares to the Comany over a five-year period.  In the first year, ISI must fund a $400,000 work program, issue 100,000 shares and make a $10,000 cash payment to maintain its option.  The Company will be project manager.



In addition, the Company has been awarded a US Department of Energy (DOE) cost sharing contract signed on 10/13/2004 whereby DOE will fund 80% of an initial field evaluation program at the Pumpernickel Project.  The Noramex/DOE joint program will include an advanced technology, three-dimensional E-SCAN resistivity survey to map the deep geothermal resource waters and six temperature gradient drill holes to 250 meters to test the E-SCAN interpretation.  The DOE cost share is US$692,272 of the total budget of US$740,340.  ISI will cover the Companys cost share obligation of US$148,068 out of the first year work commitment.  The Company will manage the DOE sponsored work.  Combined funding to come from ISI and DOE for the 2005 Pumpernickel Project work equals $1,335,000 or US$1,037,000.

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The Pumpernickel Project has the potential for the discovery of a high temperature reservoir suitable for electric power generation.  Hot springs issue from a 1.6 kilometer interval of the Pumpernickel Fault System.  The chemistry of the hot springs indicates probable source water temperatures of 160-200°C.  A production test well by Magma Power drilled in 1974 measured 135°C at the maximum depth reached of 920 meters.  Temperatures near the bottom of the Magma well are increasing at a rate of 16°C/100 meters of depth; therefore the 160-200°C resource temperatures predicted by spring chemistry could occur within 1100-1320 meters of surface near this location.





Black Warrior Geothermal Project

Geothermal Energy Exploration, Nevada, USA

In October 2004, the Company acquired seven square miles of private land and applied for a one-section federal geothermal lease for a total land area of eight square miles south and east of Black Warrior Peak, Washoe County, Nevada.  The leases are on private land and are subject to a 3.5% royalty on gross revenue from electricity sales; however, NGP can purchase the royalty for US$1,000,000.  Leases include surface and water rights.



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ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the fiscal years ended 6/30/2003, 6/30/2002, and 6/30/2001 should be read in conjunction with the financial statements of the Company and the notes thereto.



Overview

Subsequent to the end of Fiscal 204, during September 2004, the Company completed a private placement of 1,500,000 units of common stock and warrants, raising $750,000.  Each warrant entitles the holder to purchase another common share at $0.80 until 9/23/2006.



During the year ended 6/30/2004, the Company raised $91,420 from the issuance of common shares through the exercise of 439,000 stock options and $90,475 from the exercise of 228,000 warrants.



During April 2004, the Company completed a private placement of 4,520,002 units of common stock and warrants, raising $1,582,000.  Each warrant entitles the holder to purchase another common share at $0.40 until 4/14/2006.



During July 2003, the Company completed a private placement of 1,000,000 units of common shares and warrants, raising $300,000.  Two warrants entitle the holder to purchase another common share at $0.35 for six months and at $0.40 for a second six months.



During July 2003, the Company completed a private placement of 228,858 units of common shares and warrants, raising $80,100.  Each unit consisted of one common share and one-half of a share purchase warrant; two warrants plus $0.35 allow the holder to purchase an additional common share until 1/15/2004 and $0.40 until 7/15/2004.



These above referenced funds were used to finance the acquisition and exploration costs associated with the Companys mineral properties and for general working capital.



During Fiscal 2004, the Company issued 5,500,000 common shares in its acquisition of Blue Mountain Power Company



The Company continued to explore the Blue Mountain Geothermal Project; and in February 2004, the Company acquired its first geothermal lease for the Pumpernickel Valley Geothermal Project in north-central Nevada, and in October 2004, the Company acquired its first geothermal lease for the Black Warrior Peak Project in Washoe County, Nevada.



In August 2004, the Company received 450,000 common shares of Running Fox Resource Corp. from the sale of Blue Desert Mining (US) Inc., a Nevada limited company beneficially owned by the Company used to hold the claims for the Gobi-Portal and Mojave properties.  The shares of Running Fox Resource Corp. will be restricted from sale as follows:

a.  100,000 shares with a six-month transfer restriction expiring 3/1/2005;

b.  100,000 shares with a 12-month transfer restriction expiring 9/1/2005;

c.  100,000 shares with a 18-month transfer restriction expiring 3/1/2006; and

d.  150,000 shares with a 24-month transfer restriction expiring 9/1/2006.

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Research and Development and Trend Information

The Company anticipates tightening of the property market as a result of increasing oil and gas costs and an anticipated federal Production Tax Credit for geothermal.



Nevada continues to be the focus of the companys attention for geothermal power development.  Nevadas Renewable Portfolio Standard (RPS) came into effect in 2003 requiring utilities and other independent power producers to increase their relative output of renewable power from 5% to 15% of total output.  Geothermal power aggregates about 200 MW of capacity and accounts for 5% of Nevadas power output; the new legislation is expected to add at least 300 MW of new geothermal plant capacity by 2013.  New plants are presently being constructed and more are needed.



Nevada regulators are again showing their strong support for renewables by removing a financing roadblock for independent renewable power developers contracting power to the states two large regulated utilities, Sierra Pacific Power Co. and Nevada Power Co.  A Temporary Renewable Energy Development Trust will pay renewable energy producers for the power they generate, rather than Nevada Power and Sierra Power to make it easier for the developers to secure construction capital and provide protection if the utilities file for bankruptcy protection (the utilities entered into high-priced, long-term power contracts during the 2001 power crises).  The rules require the utilities to maintain a reserve as a backup source of contract payments.  The Development Trust is seen as a necessary step to help the utilities meet the RPS goals.



Sierra Pacific Power Co. doubled power rates to their large industrial customers in northern Nevada to cover the high-cost supply contracts.  Northern Nevada contains some of the worlds largest gold ore bodies but for the mining companies, the ramped up energy costs markedly decreases ore reserves, mine life and profits.  As a result, mining companies such as Barrick, Newmont and Placer Dome are aggressively assessing other sources for their base load power supplies. The Company is well positioned to supply these mines with secure power.



A Production Tax Credit (PTC) for geothermal and other green power technologies, such as has already been available to the wind power industry, was passed by the U.S. Congress and signed into law by the President in late October 2004.  The PTC provides for a 1.8 cent per kilowatt-hour tax credit which contributes strongly to the bottom line for new geothermal plants on line before 1/1/2006.  The new tax treatment is highly favorable for the economic valuation of new plants and is expected to stimulate investment in new geothermal power facilities, create new jobs, encourage new geothermal technology and create substantial economic, environmental and national security benefits.



The tax program for renewables is expected to be extended on a year by year basis as was done in the past for the wind industry.  In response to the program, the Company will endeavourer to accelerate its feasibility study, permitting and licensing program for Blue Mountain in 2005.



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Results of Operations



Fiscal 2004 Ended 6/30/2004 vs. Fiscal 2003

In July 2003, the Company completed its acquisition of Blue Mountain Power Company (which gave the Company 100% control over the project).  In February 2004, the Company acquired its first geothermal lease for the Pumpernickel Valley Geothermal Project in north-central Nevada; and, in October 2004 (subsequent to fiscal yearend), the Company acquired its first geothermal lease for the Black Warrior Peak Project in Washoe County, Nevada.  In August 2004, the Company received 450,000 common shares of Running Fox Resource Corp. from the sale of Blue Desert Mining (US) Inc., a Nevada limited company beneficially owned by the Company used to hold the claims for the Gobi-Portal and Mojave properties.



Corporate expenses, without property write-offs, rose 50% to $736,605 from $490,602, because of USA regulatory efforts, financing activities, property acquisitions , and increased exploration efforts.  The largest category stock-based compensation at $302,844 versus $57,695, as a result of changed accounting rules.  Investor Relations of $114,717 versus $125,855, with the Company continuing to be active in promoting its story to both Canadian and USA investors.  Consulting costs were $80,676 versus $72,710.



The Company incurred significant non-operating costs this year: $65,239 in write-off of mineral properties.  On the plus side, the Company had a $6,000 gain on sale of investments and $2,998 in interest income.



The Company incurred a ($792,846) Loss for the year versus ($490,602).  Net Loss per share was ($0.05) versus ($0.05), with the weighted average number of shares increasing to 17.6 million from 9.7 million.





Fiscal 2003 Ended 6/30/2003 vs. Fiscal 2002

The Company was increasingly active during the year: completing its first exploration well on the Blue Mountain Geothermal Project; moving toward the acquisition of Blue Mountain Power Company (completed in July 2003) which gave the Company 100% control over the project; consummating significant equity financings to fund its exploration efforts and working capital; and completing the Companys registration with the US Securities & Exchange Commission; and moving toward listing of the Companys common stock on the NASD Electronic Bulletin Board (completed in July 2003).



Corporate expenses nearly doubled to $490,602 from $266,775, because of USA regulatory efforts, acquisitions and increased exploration efforts.  The largest category was Investor Relations of $134,755 versus $113,793, with the Company increasing active in promoting its story to both Canadian and USA investors.  Consulting costs were $117,005 versus $36,360.  Legal costs were $65,570 versus $21,692.  Administrative fees were $61,640 versus $33,300.



The Company incurred a ($490,602) Loss for the year versus ($277,062).  Net Loss per share was ($0.05) versus ($0.04), with the weighted average number of shares increasing to 9.7 million from 7.6 million.



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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 to its current location.







Liquidity and Capital Resources



Fiscal 2004 Ended 6/30/2004 and Fiscal 2003

The Company had working capital of  $945,921  on 6/30/2004.

The Company had working capital of ($120,279) on 6/30/2003.

The Company had working capital of  $ 92,378  on 6/30/2002.



Cash Used by Fiscal 2004 Operating Activities totaled ($579,087) including the ($792,846) Net Loss; significant adjustments included $302,844 in non-cash stock-based compensation, $151,130 in net changes in non-cash working capital items, and $65,239 in write-off of mineral property.  Cash Used in Fiscal 2004 Investing Activities was ($445,000), predominately for the Blue Mountain Geothermal Project and the acquisition of the PumperNickel Valley Geothermal Project.  Cash Provided by Fiscal 2004 Financing Activities was $1,995,761, from the issuance of equity as detailed above.



Cash Used by Fiscal 2003 Operating Activities totaled ($319,264) including the ($490,602) Net Loss; significant adjustments included $57,695 in non-cash stock-based compensation and $112,014 in net changes in non-cash working capital items.  Cash Used in Fiscal 2003 Investing Activities was ($141,451), predominately for the Blue Mountain Geothermal Project.  Cash Provided by Fiscal 2003 Financing Activities was $440,667, from the issuance of equity as detailed above.



As the Company had not begun revenue on any of its properties, the Company does not have any cash flow from operations.  The Company receives cash for use in operations from issuing common shares and optioning/sale of selected assets





5.E.  Off-Balance Sheet Arrangements.

5.F.  Tabular disclosure of contractual obligations.

--- No Disclosure Necessary ---



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Critical Accounting Policies

Management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  On a regular basis, we evaluate our estimates and assumptions.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



The significant US GAAP versus Canadian GAAP accounting policies that are most critical to aid in fully understanding and evaluating reported financial results include: the expensing of mineral property acquisition/exploration costs until a property has demonstrated proven reserves and production is anticipated; and the expensing of stock-based compensation.









ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES



6.A.  Directors and Senior Management



Table No. 3

Directors and Senior Management

December 31, 2004

______________________________________________________________________________

|Name                       | Position               | Age | Date of
First
Election or
Appointment
|-------------------------- | ---------------------- | --- | -------------------------------------
|                           |                        |     |                                      
|R. Gordon Bloomquist       | Director               | 61  | January 2001                         
|Markus Christen            | Director               | 50  | January 2003                         
|Brian D. Fairbank (1) (3)  | President/CEO/Director | 54  | April 1995                           
|Domenic J. Falcone (1) (2) | Director               | 61  | January 2004                         
|John W. Milligan (4)       | CFO/Secretary/Director | 80  | April 1995                           
|James E. Yates (1) (2)     | Director               | 62  | December 1996                        

------------------------------------------------------------------------------

(1)  Member of Audit Committee.

(2)  Member of Compensation Committee.

(3)  He spends about three-fourths of his time on the affairs of the Company.

(4)  He spends about half of his time on the affairs of the Company.

______________________________________________________________________________





#









R. Gordon Bloomquist, PhD, is a Director of the geothermal and District Energy Program, Washington State Energy Office.  Also, he is involved with Federal committee work for the formulation of USA national geothermal energy policy.



Markus Christen is an independent businessman currently working in an advisoary capacity for Ormat Industries Ltd. And for AA Electrical Investment Company.  From 1992 to 1996, he was a member of Senior Management, Head of Structured Finance with Credit Suisse, New York; from 1997 to 2000, he was Managing Director of Credit Suisse First Boston, New York.



Brian D. Fairbank received his BA 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.  Mr. Fairbank had been President/Director of Blue Mountain Power Company from 1995; acquired by the Company in July 2003.



Domenic J. Falcone has an extensive background in geothermal project finance, acquisitions and business development and a broad knowledge of the independent power and energy industries.  From 1971- 1987, Mr. Falcone was a founder and Senior Vice President Finance of Geothermal Resources International Inc., a pioneering geothermal company which successfully developed several geothermal power plants in California.  As President and Principal of Domenic J. Falcone Associates Inc. from 1987 to 1991 and the Creston Financial Group Inc. from 1991 to 1997, he participated in financings for resource and power development projects in excess of $200 million.  From 1997 to 1998, he was Chief Financial Officer and Vice President of PG&E Energy Services Corp., of San Francisco during its start up phase; from February 2001 to June 2001, he was COO and CFO of NuVant Systems, a California developer of fuel cell technology; and from October 2002 to December 2003, he was National Industry Director  Energy, CBIZ Valuation Group, an international management firm specializing in valuations, mergers and acquisitions.   Since December 2003, Mr. Falcone has been an independent financial consultant.



John W. Milliganhas over fifty years of management and engineering experience.  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 has over fifty years of real estate and management experience.

Since 1964, he has been Founder/President of Hycroft Realty Ltd., which is involved in real estate sales and development projects.  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 Jersey Goldfields Corporation, presently listed on the TSX Venture Exchange.  Since 2003, he has been CFO/Secretary/Director of Oremex Resources Inc. (formerly Blackhorn Gold Mines), presently listed on the TSX Venture Exchange; from June 1996 to 2003, he was President/CEO/Director.

#











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.



The Senior Management serves at the pleasure of the Board of Directors.



Despite the Companys Senior Management spending material portions of their time on businesses other than the Company, the Company believes that they devote sufficient time to the Company to properly carry out their duties.



No Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.



There are no family relationships between any two or more Directors or Senior Management.  There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.



#





6.B.  Compensation



Cash Compensation

Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during Fiscal 2004 ended 6/30/2004 was $30,000, indirectly paid to Brian D. Fairbank, President/CEO/Director.  In addition, during Fiscal 2004, 450,000 stock options were granted to Mr. Fairbanks; and 215,000 stock options were granted to John Mulligan, CFO/Secretary/Director.  Further, during Fiscal 2004, 239,000 stock options were exercised by Mr. Fairbanks, with aggregate realized value of $17,940; and 10,000 stock options were exercised by John Milligan, CFO/Secretary/Director, with aggregate realized value of $2,200.  Below-market stock option grants (refer to Table No. 4) resulted in non-cash compensation of $19,400 to Brian Fairbank, $1,700 to John Milligan, and $11,400 to other Directors.



Director 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.



Stock Options.  The Company may grant stock options to Directors, Senior Management and employees.  During Fiscal 2004, 1,544,000 stock options were granted, 439,000 stock options were exercised, and 175,000 were cancelled.  Refer to ITEM #6.E., Share Ownership, Table No. 4 Stock Option Grants in Fiscal 2004 Ended 6/30/2004 and Table No. 6 for information about stock options outstanding.



Options/SARs Granted/Exercised During The Most Recently Completed Fiscal Year

During the most recently completed fiscal year, the following incentive stock options were granted to Senior Management, Directors and employees.  No SARs (stock appreciation rights) were granted during this period.



Table No. 4

Stock Option Grants in Fiscal 2004 Ended 6/30/2004

______________________________________________________________________________

|                     |                    | Percentage            | Market Value of Securities
|-------------------- | ------------------ | --------------------- | --------------------------
|                     | Number             | of                    | Exer                      
|Name                 | of
Options
Granted | Total
Options
Granted | Price
Per
Share           
|                     |                    |                       |                           
|Markus Christen      | 100,000            | 7%                    | $0.28                     
|Brian D. Fairbank    | 122,000            | 8%                    | $0.28                     
|Brian D. Fairbank    | 162,000            | 10%                   | $0.28                     
|Brian D. Fairbank    | 80,000             | 5%                    | $0.35                     
|John W. Milligan     | 85,000             | 6%                    | $0.28                     
|James E. Yates       | 20,000             | 1%                    | $0.28                     
|Domenic Falcone      | 100,000            | 7%                    | $0.28                     
|Domenic Falcone      | 100,000            | 7%                    | $0.35                     
|R. Gordon Bloomquist | 100,000            | 7%                    | $0.28                     
|Management Total     | 869,000            | 56%                   |                           
|Employees/Others     | 225,000            | 15%                   | $0.28                     
|Employees/Others     | 170,000            | 11%                   | $0.35                     
|Employees/Others     | 280,000            | 18%                   | $0.50                     
|Total                | 1,544,000          | 100%                  |                           

------------------------------------------------------------------------------

(1)  All options granted were vested upon granting.

______________________________________________________________________________

#











Table No. 5 gives certain information concerning stock option exercises during Fiscal 2004 Ended 6/30/2004 by our Executive Officers and Directors (none).  It also gives information concerning stock option values.



Table No. 5

Aggregated Stock Options Exercises in Fiscal 2004 Ended 6/30/2004

Fiscal Yearend Unexercised Stock Options / Stock Option Values

Executive Officers/Directors/Employees/Consultants

________________________________________________________________________________

________________________________________________________________________________

|Name                  | Number of
Shares
Acquired
on
Exercise | Value
Realized | Number of
Unexercised Options
at Fiscal Yearend
Exercisable/
Unexercisable | Value of
Unexercised
In-the Money
Options at
Fiscal Yearend
Exercisable/
Unexercisable
|--------------------- | ------------------------------------- | -------------- | -------------------------------------------------------------------------- | --------------------------------------------------------------------------------------
|                      |                                       |                |                                                                            |                                                                                       
|Brian Fairbank        | 239,000                               | $17,940        | 383,000/nil                                                                | $111,850/$0                                                                           
|James Yates           | 90,000                                | $30,000        | 142,000/nil                                                                | $44,250/$0                                                                            
|Jack W. Milligan      | 10,000                                | $2,200         | 175,000/nil                                                                | $58,050/$0                                                                            
|R. Gordon Bloomquist  |                                       |                | 100,000/nil                                                                | $27,000/$0                                                                            
|Domenic Falcone       |                                       |                | 200,000/nil                                                                | $47,000/$0                                                                            
|Markus Christen       | _______                               | _______        | 200,000/nil                                                                | $54,000/$0                                                                            
|                      | 339,000                               | $50,140        | 1,200,000/nil                                                              | $342,150/$0                                                                           
|Employees/Consultants | 100,000                               | $25,500        | 377,500/257,500                                                            | $77,025/$40,925                                                                       
|Total                 | 439,000                               | $75,640        | 1,577,500/257,500                                                          | $419,175/$40,925                                                                      

________________________________________________________________________________

________________________________________________________________________________



Other Compensation.  No Senior Management/Director received other compensation in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.



Bonus/Profit Sharing/Non-Cash Compensation.  Except for the stock option program discussed in ITEM #6.E., 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 Senior Management.



Pension/Retirement Benefits.  No funds were set aside or accrued by the Company during Fiscal 2004 to provide pension, retirement or similar benefits for Directors or Senior Management.



Change of Control Remuneration.  The Company had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2005 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$100,000 per Senior Management.







#











6.C.  Board Practices

6.C.1.  Terms of Office.  Refer to ITEM 6.A.1.

6.C.2.  Directors Service Contracts.  --- No Disclosure Necessary ---



6.C.3.  Board of Director Committees.

The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Companys audits, the Companys internal accounting controls, and the professional services furnished by the independent auditors to the Company.  The current members of the Audit Committee are: Brian Fairbank, John Milligan and Michael Marchand.  The Audit Committee met six times during Fiscal 2003 and has not yet met during Fiscal 2004.



The Compensation Committee is comprised of James Yates and Domenic Falcone.  None of the members of the compensation committee serve as executive officers of the Company.  The Compensation Committee is responsible for making recommendations to the Board relating to a review of the adequacy and form of compensation of Directors and Senior Management and ensures that compensation realistically reflects the responsibilities and risks involved in being an effective Director and/or a member of Senior Management.  The compensation of executive officers is composed primarily of two elements: namely a base salary and the allocation of incentive stock options.  In establishing levels of remuneration and in granting stock options the compensation committee takes into consideration an individuals performance, level of expertise, responsibilities, length of service to the company and comparable levels of remuneration paid to executives of other companies of comparable size and development within the industry. The individual interested executive does not participate in review, discussions or decisions of the compensation committee regarding this remuneration.  To date, the Company has not paid any direct base salaries nor is there currently any intention by the compensation committee to do so.  The Company pay (or accrues) a management fee of $2,500 per month to Fairbank Engineering Ltd., a non-reporting company controlled by Brian D. Fairbank.





6.D.  Employees

As of 12/31/2004, 6/30/2004, and 6/30/2003, the Company had four, four, and four employees, including the two Senior Management.



#











6.E.  Share Ownership

Table No. 6 lists, as of 12/31/2004, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Frank Diegmann, the only other persons/companies where the Company is aware that a shareholder has 5% or greater beneficial interest in the Companys securities.



Table No. 6

Shareholdings of Directors and Senior Management

Shareholdings of 5% Shareholders

______________________________________________________________________________

______________________________________________________________________________

|Common                                | Name of Beneficial Owner | Amount and Nature
of Beneficial
Ownership | Percent
of
Class#
|------------------------------------- | ------------------------ | ----------------------------------------- | -----------------
|                                      |                          |                                           |                  
|Common                                | Brian D. Fairbank (1)    | 5,821,203                                 | 24.9%            
|Common                                | Frank Diegmann           | 2,758,333                                 | 11.3%            
|Common                                | Jack W. Milligan (2)     | 679,000                                   | 2.8%             
|Common                                | James E. Yates (3)       | 227,333                                   | 0.9%             
|Common                                | Markus Christen (4)      | 200,000                                   | 0.8%             
|Common                                | R. Gordon Bloomquist (5) | 250,000                                   | 1.0%             
|Common                                | Domenic Falcone (6)      | 300,000                                   | 1.2%             
|Total Directors/Management/5% Holders | 10,245,869               | 42.9%                                    

------------------------------------------------------------------------------

(1)    450,000 represent currently exercisable stock options,

held indirectly through Tywell Management Inc.

2,213,500 shares held indirectly through Tywell Management Inc.

1,150,703 shares held indirectly through Fairbank Engineering Ltd.

(2)    215,000 represent currently exercisable stock options.

(3)    225,000 represent currently exercisable stock options,

held indirectly through Sudden Valley Holdings Inc.

2,333 shares held indirectly through Sudden Valley Holdings Inc.

(4)    200,000 represent currently exercisable stock options.

(5)    150,000 represent currently exercisable stock options.

(6)    200,000 represent currently exercisable stock options.



# Based on 24,393,928 shares outstanding as of 12/15/2004.

______________________________________________________________________________

______________________________________________________________________________



#









Stock Options.  The terms of incentive options grantable by the Company are done in accordance with the rules and policies of the TSX Venture Exchange and the British Columbia Securities Commission, including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto.  The Company adopted a formal written stock option plan (the Plan) on 9/8/2002.



Such terms and conditions, including the pricing of the options, expiry and the eligibility of personnel for such stock options; and are described below.



The principal purposes of the Companys stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.



Pursuant to the Plan, the Company has authorized the reservation of up to 10% of the issued and outstanding common shares of the Company for the grant of options from time to time.  Under the Plan, the Board may from time to time grant to directors, officers, employees and consultants of the Company, as the Board shall designate, options to purchase from the Company such number of its

common shares as the Board shall designate.  Some of the significant terms of the Plan are as follows:



1. Options may be granted on authorized but unissued common shares up to but not exceeding 10% of the issued and outstanding common shares of the Company at the time of any such grant of options.

2. The total number of common shares to be reserved for issuance over the previous 12-month period for any optionee shall not exceed 5% of the issued common shares of the Company at the time of grant with the exception that, as long as the Companys common shares are listed on Tier 2 of the TSX Venture Exchange, the total number of common shares that may be reserved for issuance over the previous 12 month period for individuals engaged in an investor relations capacity shall not exceed 2% of the issued common  shares of the Company at the time of grant. In addition, the total number of common shares to be reserved for issuance over the previous 12 month period for any one consultant, shall not exceed 2% of the issued common  shares of the Company at the time of grant.

3. While the Companys common shares are listed on the TSX Venture Exchange, the purchase price per common share for any option granted under the Plan shall not be less than the discounted market price of the Companys common shares in accordance with the policies of the TSX Venture Exchange.  At such time as the Companys common shares are listed on the Toronto Stock

Exchange the purchase price per common share for any option granted under the Plan shall be not less than the fair market value in accordance with the policies of the Toronto Stock Exchange.

4. Options granted must expire not later than a maximum of five years from the date of the grant while the Companys common shares are listed on Tier 2 of the TSX Venture Exchange.  At such time as the Companys common shares are listed on Tier 1 of the TSX Venture Exchange or the Toronto Stock Exchange options granted must expire not later than a maximum of 10 years from the date of grant.

5. In the event that the Plan is amended to permit the number of common shares reserved for issue under the Plan to exceed of 10% of the outstanding shares of the Company, then, provided the Companys common shares are listed on Tier 2 of the TSX Venture Echange all options will vest in equal amounts over consecutive quarterly periods for a period of no less than 18 months from the date of grant.  At such time as the Companys common shares are listed on Tier 1 of the TSX Venture Exchange or the Toronto Stock Exchange, options will vest at the discretion of the board of directors.

#











6. All options granted pursuant to the Plan shall be non-assignable and non- transferable.

7. Subject to the receipt of disinterested shareholder approval for the grant of options under the Plan, the Plan will allow:

(i) the number of Common Shares reserved for issuance under stock options

granted to insiders to exceed 10% of the outstanding common shares of

the Company;

(ii) the issuance to insiders, within a one year period of a number of

shares exceeding 10% of the outstanding common shares of the Company;

(iii) the issuance to any one insider and such insiders associates, within

a one year period, of a number of Common Shares exceeding 5% of the

outstanding common shares; and

(iv) the Company to have the ability to decrease the exercise price of

stock options previously granted to insiders.





The names and titles of the Directors/Executive Officers of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in Table No. 7 as of 12/31/2004, as well as the number of options granted to Directors and independent contractors.



Table No. 7

Stock Options Outstanding

______________________________________________________________________________

______________________________________________________________________________

|Name                     | Number of
Common
Shares | CDN$
Exer.
Price | Grant
Date | Expirn
Date
|------------------------ | ----------------------- | ---------------- | ---------- | ------------
|                         |                         |                  |            |             
|R. Gordon Bloomquist     | 100,000                 | $0.28            | 8/13/2003  | 8/13/2008   
|R. Gordon Bloomquist     | 50,000                  | $0.54            | 10/9/2004  | 10/9/2009   
|Brian D. Fairbank        | 78,000                  | $0.10            | 6/22/2001  | 6/22/2006   
|                         | 18,000                  | $0.28            | 1/15/2003  | 1/15/2008   
|                         | 45,000                  | $0.28            | 8/13/2003  | 8/13/2008   
|                         | 162,000                 | $0.28            | 1/20/2004  | 1/20/2009   
|                         | 80,000                  | $0.35            | 2/27/2004  | 2/27/2009   
|                         | 67,000                  | $0.54            | 10/4/2004  | 10/4/2009   
|Jack W. Milligan         | 60,000                  | $0.10            | 6/22/2001  | 6/22/2006   
|                         | 30,000                  | $0.28            | 1/15/2003  | 1/15/2008   
|                         | 85,000                  | $0.28            | 8/13/2003  | 8/13/2008   
|                         | 40,000                  | $0.54            | 10/4/2004  | 10/4/2009   
|James E. Yates           | 22,000                  | $0.10            | 6/22/2001  | 5/22/2006   
|                         | 65,000                  | $0.25            | 4/19/2002  | 4/19/2007   
|                         | 35,000                  | $0.28            | 1/15/2003  | 1/15/2008   
|                         | 20,000                  | $0.28            | 8/13/2003  | 8/13/2008   
|                         | 83,000                  | $0.54            | 10/4/2004  | 10/4/2009   
|Domenic Falcone          | 100,000                 | $0.28            | 8/13/2003  | 8/13/2008   
|                         | 100,000                 | $0.35            | 2/27/2004  | 2/27/2009   
|Markus Christen          | 100,000                 | $0.28            | 1/15/2003  | 1/15/2008   
|                         | 100,000                 | $0.28            | 8/13/2003  | 8/13/2008   
|Total Officers/Directors | 1,440,000               |                  |            |             
|Total Other              | 795,000                 |                  |            |             
|Total                    | 2,235,000               |                  |            |             

______________________________________________________________________________

______________________________________________________________________________



#











ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



7.A.  Major Shareholders.



7.A.1.a.  Holdings By Major Shareholders.

Refer to ITEM #6.E; and Table No. 5, No. 6, and No. 7.



7.A.1.b.  Significant Changes in Major Shareholders Holdings.

The participation in private placements of equity by the Company and exercise of stock options/share purchase warrants has lead over the last several year to some significant changes in the holdings of major shareholders (5% or greater) direct/indirect holdings of common shares, refer to Table No. 6 for additional information.

______________________________________________________________________________

______________________________________________________________________________

|               | Shares
Owned
6/30/2004 | Shares
Owned
6/30/2003 | Shares
Owned
6/30/2002
|-------------- | ---------------------- | ---------------------- | ----------------------
|Brian Fairbank | 5,371,203              | 1,506,333              | 1,480,333             
|Frank Diegmann | 2,750,333              | 2,351,333              | 2,223,833             

______________________________________________________________________________

______________________________________________________________________________



7.A.1.c.  Different Voting Rights.  The Companys major shareholders do not have different voting rights.



7.A.2.  Canadian Share Ownership.

On 12/31/2004, the Companys shareholders list showed 24,403,931 common shares outstanding and 298 registered shareholders.  47 registered shareholders were resident in Canada holding 18,813,578 common shares; 51 registered shareholders were resident in the United States holding 5,502,020 common shares; and four registered shareholders were resident in four other countries held 88,333 common shares.



The Company has researched the indirect holding by depository institutions and other financial institutions; based on this research and other research into the indirect 1000 beneficial owners of its common shares.



7.A.3.  Control of Company.  The Company is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents.  The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., History and Growth of the Company, and ITEM #6.E., Share Ownership.



7.A.4.  Change of Control of Company Arrangements.   No Disclosure Necessary







#











7.B.  Related Party Transactions

In July 2003, the Company completed the acquisition of Blue Mountain Power Company (BMP); this supercedes a 5/30/2001 option agreement.  Pursuant to the earlier agreement, the Company agreed to pay cash, issued common shares and expend significant funds on the Blue Mountain Geothermal Project; and pursuant to the recent agreement, the Company issued 5,500,000 million shares to BMP shareholders upon the complete acquisition of BMP.  Brian D. Fairbank (President/CEO/Director of the Company) was President/Director of BMP and a significant shareholder of BMP (receiving 3,932,000 shares in the acquisition).  Jack W. Milligan (CFO/Secretary/Director of the Company) was Secretary/Director of BMP and a significant shareholder of BMP (receiving 510,000 shares in the acquisition).  Frank Diegmann (major shareholder of the Company) was a major shareholder of BMP (receiving 407,000 shares in the acquisition).



Transactions of business with companies controlled by Officers/Directors or companies with common Officers/Directors in common were as follows during Fiscal 2004, Fiscal 2003 and Fiscal 2002:

______________________________________________________________________________

|                                              | Fiscal 2004 | Fiscal 2003 | Fiscal 2002
|--------------------------------------------- | ----------- | ----------- | -----------
|                                              |             |             |            
|Fees for administrative/professional services | $ 98,484    | $127,577    | $82,382    
|Fees for geological services                  | $398,644    | $30,143     | $7,789     
|Payments for office rent                      | $nil        | $3,246      | $5,762     
|Amounts included in accounts payable          | $237,698    | $92,446     | $15,439    
|Exploration Advances                          | $nil        | $6,307      | $86,902    
|Acquisition of Capital Assets                 | $nil        | $721        | $5,000     

______________________________________________________________________________



|Administration/professional services: | Fairbank Engineering              
|------------------------------------- | ----------------------------------
|Geological services:                  | Fairbank Engineering              
|Office Rent:                          | International Choice Ventures Inc.
|Accounts Payable:                     | International Choice Ventures Inc.
|Exploration Advances:                 | Fairbank Engineering              
|Acquisition of Capital Assets:        | Fairbank Engineering              



Fairbank Engineering is a private company owned by Brian Fairbank.  International Choice Ventures Inc. is a public company where James Yates is the President/Director and Brian Fairbank is a Director.



Included in accounts payable for Fiscal 2004 and Fiscal 203, respectively, was $237,698 and $92,446 owed to officers/directors.



Other than as disclosed above and in prior Annual Reports on Form 20-F, there have been no transactions since 6/30/2001, or proposed transactions, which have materially affected or will materially affect the Company 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.





7.C.  Interests of Experts and Counsel   --- No Disclosure Necessary ---



#











ITEM 8.  FINANCIAL INFORMATION



8.A.  Consolidated Statements and Other Financial Information

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 discussed in footnotes to the financial statements.



The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Morgan & Company, independent Chartered Accountants, are included herein immediately preceding the financial statements.



Audited Financial Statements:

Fiscal 2004/2003/2002 Ended June 30th





8.A.7.  Legal/Arbitration Proceedings

The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.



The Directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.





8.B.  Significant Changes

No undisclosed significant change has occurred since the date of the annual financial statements, and/or since the date of the most recent interim financial statements.





ITEM 9.  THE OFFER AND LISTING



9.A.4.  Common Share Trading Information

The Company's common shares trade on the TSX Venture Exchange in Toronto, Ontario, Canada, under the symbol "NGP".  The initial public offering was effective on the Alberta Stock Exchange (now the TSX Venture Exchange) in 1/31/1996, under a former name, "Blue Desert Mining Inc.  In late June 2003, the Companys common shares were listed for trading on the OTC Bulletin Board, under the symbol NGLPF.



Table No. 7 lists the volume of trading and high, low and closing sales prices on the TSX Venture Exchange (Canadian Venture Exchange prior to 8/2/2002 and the Alberta Stock Exchange prior to November 1999) for actual trades of common shares of the Company for the last six months, last eight fiscal quarters, and last five fiscal years.





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The TSX Venture Exchange



The TSX Venture Exchange is a result of the acquisition by the Toronto Stock Exchange of the Canadian Venture Exchange (CDNX) from its member firms on 8/1/2001.  The CDNX resulted from the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange that took place on 11/29/1999, to form the CDNX.  The TSX Venture Exchange currently operates as a complementary but independent exchange from its parent, the Toronto Stock Exchange.



The initial roster of the CDNX was made up of venture companies previously listed on the Vancouver Stock Exchange or the Alberta Stock Exchange and later incorporated junior listings from the Montreal Stock Exchange, the Winnipeg Stock Exchange, and the CDN Over-The-Counter Market.  The TSX Venture Exchange is a venture market as compared to the TSX Stock Exchange that is Canadas senior market and the Montreal Exchange that is Canadas market for derivatives products.



The TSX Venture Exchange currently has five service centers: Calgary, Toronto, Vancouver, Winnipeg and Montreal.  These service centers provide corporate finance, surveillance and marketing expertise.  The corporate office for the TSX Venture Exchange is located in Calgary and the operations office is located in Vancouver.



The TSX Venture Exchange is a self-regulating organization owned and operated by the Toronto Stock Exchange, which in turn is owned by its member brokerage firms.  It is governed by representatives of member firms and the public.



Organizationally, the TSX Venture Exchange is comprised of seven business areas: Corporate Finance Services, Trading Services and Market Information Services, Compliance, Marketing, Technology, Corporate Affairs and Human Resources.



The TSX Venture Exchange acts as a business link between TSX members, listed companies and investors.  TSX Venture Exchange policies and procedures are designed to accommodate companies still in their formative stages and recognize those that are more established.  Listings are predominately small and medium sized companies.



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Investors in Canada are protected by the Canadian Investor Protection Fund (CIPF). The CIPF is a private trust fund established to protect customers in the event of the insolvency of a member of any of the following self-regulatory organizations: the TSX Venture Exchange; the Montreal Exchange; the Toronto Stock Exchange; the Toronto Futures Exchange; and the Investment Dealers Association of Canada.



Post-trade monitoring of market activity occurs in the market surveillance department.  Sophisticated software analyses trade data from TRADETSX to detect possible market improprieties.  A variety of surveillance and investigative tools allow the TSX Venture Exchange to perform electronic market monitoring and trade reviews.



The surveillance department is also responsible for monitoring and reviewing listed company activities and detecting breaches of the listing policies or the listing agreement.  Market surveillance and listed company surveillance activities are closely coordinated.



Enforcement action taken by the surveillance department may include the following:



1) forcing companies to correct misleading or inaccurate disclosure which

includes new releases or internet postings:

2) requiring the resignation of unacceptable directors and officers;

3) requiring cancellation and return shares to treasury;

4) requiring undertakings from directors and officers that they

will ensure compliance with the listing agreement and listings policies in

the future;

5) requiring the termination of unacceptable investor relations services;

6) halting and suspending trading in the shares of companies;

7) de-listing companies that have contravened exchange by-laws, rules or

policies.



The market surveillance department issues TSX notices to inform the public of halts, suspensions, de-lists and other enforcement actions.  All TSX notices can be found on the TSX website or INFOTSX.  In the public interest, trading halts or suspensions are maintained until the surveillance department is satisfied that there is adequate disclosure of the companys affairs and a level playing field for investors.



In addition to market surveillance, the TSX Venture Exchanges compliance department is comprised of an investigative services team that conducts investigations into alleged violations of securities trading.  The TSX Venture Exchange Conduct Review Committee determines whether a case for discipline exists.  Disciplinary cases either result in a settlement reached between TSX Venture Exchange and the respondent or they proceed to a disciplinary hearing.  The public can attend disciplinary hearings, view the exhibits filed and obtain copies of the decisions issued by the panel.  If the hearing panels decision is not acceptable to either TSX Venture Exchange or the respondent, an appeal process may be initiated.



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Table No. 8

TSX Venture Exchange

Common Shares Trading Activity

______________________________________________________________________________

|Period     | - Sales-
Canadian Dollars
|---------- | -------------------------
|Ended      | Volume                   
|           |                          
|Monthly    |                          
|12/31/2004 | 524,400                  
|11/30/2004 | 1,256,500                
|10/31/2004 | 488,500                  
|9/30/2004  | 604,700                  
|8/31/2004  | 470,900                  
|7/31/2004  | 590,800                  
|           |                          
|Quarterly  |                          
|6/30/2004  | 1,317,700                
|3/31/2004  | 1,814,000                
|12/31/2003 | 568,203                  
|9/30/2003  | 465,874                  
|           |                          
|6/30/2003  | 166,300                  
|3/31/2003  | 294,100                  
|12/31/2002 | 624,200                  
|9/30/2002  | 780,600                  
|           |                          
|Yearly     |                          
|6/30/2004  | 4,165,777                
|6/30/2003  | 1,865,200                
|6/30/2002  | 3,968,600                
|6/30/2001  | 479,500                  
|6/30/2000  | 30,000                   

______________________________________________________________________________



Table No. 9 lists the volume of trading and high, low and closing sales prices on the OTC Bulletin Board for the Company's common shares for the last six months, the last four fiscal quarters, and the last fiscal year.



Table No. 9

OTC Bulletin Board

Common Shares Trading Activity

______________________________________________________________________________

|Period     | - Sales-
US Dollars
|---------- | -------------------
|Ended      | Volume             
|           |                    
|Monthly    |                    
|12/31/2004 | 419,933            
|11/30/2004 | 617,220            
|10/31/2004 | 301,847            
|9/30/2004  | 144,735            
|8/31/2004  | 101,432            
|7/31/2004  | 148,083            
|           |                    
|Quarterly  |                    
|6/30/2004  | 598,563            
|3/31/2004  | 1,283,426          
|12/31/2003 | 164,184            
|9/30/2003  | 47,500             
|           |                    
|Yearly     |                    
|6/30/2004  | 2,093,673          



__________  __________________________________________________________________

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Stock Options

Refer to ITEM 6.E. and Table No. 4 and No. 6 for additional information.



Share Purchase Warrants

Table No. 10 lists, as of 12/31/2004, share purchase warrants outstanding, the date the share purchase warrants were issued, the exercise price, and the expiration date of the share purchase warrants.  There were 98 holders of the 5,850,573 share purchase warrants, 57 of whom were resident in Canada. 34 of whom were resident in the United States, and seven international holder.  These warrants were issued in conjunction with private placements and are non-transferable.



Table No. 10

Share Purchase Warrants Outstanding

______________________________________________________________________________

______________________________________________________________________________

|Effective
Date of
Issuance | Number of
Share
Purchase
Warrants
Originally
Issued | Number of
Share
Purchase
Warrants
Still
Outstanding | Year #1 | Year #2 | Expiration
Date of
Share
Purchase
Warrants
|-------------------------- | --------------------------------------------------- | --------------------------------------------------- | ------- | ------- | ------------------------------------------
|                           |                                                     |                                                     |         |         |                                           
|4/14/2004                  | 4,520,002                                           | 4,350,573                                           | $0.50   | n/a     | 4/14/2005                                 
|9/23/2004                  | 1,500,000                                           | 1,500,000                                           | $0.80   | $0.80   | 9/23/2006                                 

______________________________________________________________________________

______________________________________________________________________________





9.A.6.  Differing Rights

9.A.7.a.  Subscription Warrants/Right

9.A.7.b.  Convertible Securities/Warrants

--- No Disclosure Necessary ---



9.C.  Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange in Toronto, Ontario.

The common shares trade on the OTC Bulletin Board in the USA.







ITEM 10.  ADDITIONAL INFORMATION



10.A.  Share Capital

10.B.  Memorandum and Articles of Association

10.C.  Material Contracts

--- No Disclosure Necessary ---

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10.D.  Exchange Controls

Canada has no system of exchange controls.  There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors.  There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10, Taxation below.



Restrictions on Share Ownership by Non-Canadians

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of control of the Company by a non-Canadian.  The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company.  Non-Canadian generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.



10.E  Taxation

The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a U.S. Holder) who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the Act) and the Canada  United States Income Tax Convention (the Treaty), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.



This summary is of a general nature only and is not, and should not be interpreted as, legal or tax advice to any particular U.S. Holder and no representation is made with respect to the Canadian income tax consequences to any particular person.  Accordingly, U.S. Holders are urged to consult their own tax advisors with respect to their particular circumstances.



Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares.  The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.



In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada.  For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.

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The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.  The Company believes that it was not a passive foreign investment company for the taxable year ended 6/30/2003 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.





10.F.  Dividends and Paying Agents

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.



Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders.  The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.



10.G.  Statement by Experts   --- No Disclosure Necessary ---

10.H.  Document on Display   --- No Disclosure Necessary ---



10.I.  Subsidiaries

The following sets forth the names of the subsidiaries of the Company, their respective jurisdictions of incorporation and the Companys current voting and equity interest therein:

a.  Wholly-Owned Subsidiary

Blue Mountain Power Company, Canada

b.  Wholly-owned subsidiary

Noramex Corp.; Nevada, USA







ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

--- No Disclosure Necessary ---





ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A.  Debt Securities            --- No Disclosure Necessary ---

12.B.  Warrants and Rights        --- No Disclosure Necessary ---

12.C.  Other Securities           --- No Disclosure Necessary ---

12.D.  American Depository Shares  -- No Disclosure Necessary ---



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PART II



ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

--- No Disclosure Necessary ---





ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY

HOLDERS AND USE OF PROCEEDS   --- No Disclosure Necessary ---





ITEM 15.  CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys President and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures [as defined in the Exchange Act Rule 13a-15(e)] as of the end of the period covered by this report.  Based upon that evaluation, the President and Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Companys periodic SEC filings, and that information is recorded, processed, summarized and reported as and when required.



There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.



There was no significant change in the Companys internal control over financial reporting that occurred during the Companys most recently completed fiscal period ended 10/31/2004 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.  Nor were there any significant deficiencies or material weaknesses in the Company's internal controls requiring corrective actions.





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ITEM 16.  RESERVED



ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

The Company does not have an audit committee financial expert serving on its audit committee.  The Companys Audit Committee consists of one Senior Management/Director and two independent Directors of the Company, all of whom are both financially literate and very knowledgeable about the Companys affairs.  Because the Companys structure and operations are straightforward, the Company does not find it necessary to augment its Board with a financial expert.



ITEM 16B.  CODE OF ETHICS

The Company has not adopted a written code of ethics that meets the new United States' Sarbanes-Oxley standards; the Board of Directors believes that existing Canadian standards and procedures is adequate for its purposes.  The Company has not seen any need to adopt a written code of ethics on the basis that its corporate culture effectively deters wrongdoing and promotes honest and ethical conduct, full, fair and accurate, timely, and understandable disclosure in reports and documents, the compliance with applicable governmental laws, rules and regulations; the prompt internal reporting.



Item 16C. PRINCIPAL ACCOUNTIING FEES AND SERVICES

The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.



The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy and procedure.  The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.



In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by Morgan & Company, including audit services, audit related services, tax services and other services.  The procedure requires that all proposed engagements of Morgan & Company for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.



Fees, including reimbursements for expenses, for professional services rendered by Morgan & Company to the Company were:

_____________________________________________________________________________

|Fiscal Year ended June 30, 2004 and 2003
Principal Accountant Fees and Services | Fiscal Year
2004 | Fiscal Year
2003
|------------------------------------------------------------------------------- | ---------------- | ----------------
|                                                                                |                  |                 
|Audit Fees                                                                      | $12,990          | $ 7,460         
|Audit Related Fees                                                              | 3,800            | 5,035           
|Tax Fees (1)                                                                    | 3,710            | 500             
|All Other Fees                                                                  | -                | -               
|Total                                                                           | $20,500          | $12,995         

_____________________________________________________________________________



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ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

--- No Disclosure Necessary ---



ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

--- No Disclosure Necessary ---





ITEM 16.  RESERVED

ITEM 16A.  Audit Committee Financial Expert   ---Not Applicable ---

ITEM 16B.  Code of Ethics   ---Not Applicable ---

ITEM 16C.  Principal Accountant Fees and Services   ---Not Applicable ---

ITEM 16D.  Exemptions from the Listing Standards for Audit Committees

--- 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 discussed in footnotes to the financial statements.



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



Audited Financial Statements

Auditor's Report, dated 9/10/2004

Consolidated Balance Sheets at 6/30/2004 and 6/30/2003

Consolidated Statements of Loss and Deficit

for the years ended 6/30/2004, 6/30/2003, and 6/30/2002

Consolidated Statements of Cash Flows

for the years ended 6/30/2004, 6/30/2003 and 6/30/2002

Notes to Consolidated Financial Statements





ITEM 18.  FINANCIAL STATEMENTS

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









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ITEM 19.  EXHIBITS







1. Articles of Incorporation/Bylaws as currently in effect:

Incorporated by reference to Form 20-F Registration Statement and Form 6-Ks



2.  Instruments defining the rights of holders of equity or

debt securities being registered.

--- Refer to Exhibit No. 1 ---



3.  Voting Trust Agreements:             No Disclosure Necessary



4.  Material Contracts:

Incorporated by reference to Form 20-F Registration Statement and Form 6-Ks



5.  Foreign Patents:                     No Disclosure Necessary

6.  Earnings Per Share Calculation:      No Disclosure Necessary

7.  Ratio of Earnings To Fixed Charges:  No Disclosure Necessary



8.  List of Subsidiaries:  Refer to ITEM #4, Information on the Company



9.   Statement Regarding Date of Financial Statements: No Disclosure Necessary

10.  Notice Required by Rul3e 104 of Regulation BTR:   No Disclosure Necessary

11.  Code of Ethics as required by ITEM No. 16:        No Disclosure Necessary



12:  The certifications required by Rule 13a-14(a) or Rule 15d-14(a)



13. The certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

Section 1350 of Chapter 63 of Title 18 of the United States Code:



14.  Legal Opinion required by Instruction 3 of ITEM 7B:

--- No Disclosure Necessary ---



15.  Additional Exhibits:

Incorporated by reference to Form 20-F Registration Statement and Form 6-Ks





Signature Page











































NEVADA GEOTHERMAL POWER INC.





CONSOLIDATED FINANCIAL STATEMENTS





JUNE 30, 2004 AND 2003

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[nevadageo200420fannual005.jpg]





INDEPENDENT AUDITORS' REPORT





To the Shareholders of

Nevada Geothermal Power Inc.





We have audited the consolidated balance sheets of Nevada Geothermal Power Inc.  as at June 30, 2004 and 2003, and the consolidated statements of loss and deficit, and cash flows for the years ended June 30, 2004, 2003 and 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (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, 2004 and 2003, and the results of its operations and cash flows for each of the years ended June 30, 2004, 2003 and 2002, in accordance with Canadian generally accepted accounting principles.



Vancouver, Canada

Morgan & Company



September 10, 2004

Chartered Accountants



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



In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by going concern considerations such as described in Note 1 to the financial statements.  Our report to the shareholders, dated September 10, 2004, is expressed in accordance with Canadian reporting standards which do not permit a reference to such considerations in the Auditors Report when the consideration is adequately disclosed in the financial statements.





Vancouver, Canada

Morgan & Company



September 10, 2004

Chartered Accountants



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NEVADA GEOTHERMAL POWER INC.



CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian Dollars)







|                                                                                           | JUNE 30
|------------------------------------------------------------------------------------------ | -------
|                                                                                           |        
|                                                                                           |        
|ASSETS                                                                                     |        
|                                                                                           |        
|Current                                                                                    |        
|Cash                                                                                       | $      
|Accounts receivable and GST recoverable                                                    |        
|Prepaid expenses                                                                           |        
|Exploration advances (Note 3)                                                              |        
|                                                                                           |        
|                                                                                           |        
|Gobi Project  Unpatented Claims And Option Interests, unproven properties (Note 4(a))     |        
|Blue Mountain Geothermal Option Interest, unproven properties (Note 4(b))                  |        
|Pumpernickel Valley Geothermal option and claims Interests,unproven properties (Note 4(c)) |        
|Deferred Exploration Expenditures                                                          |        
|Investment(Note 5)                                                                         |        
|Capital Assets(Note 6)                                                                     |        
|                                                                                           |        
|                                                                                           | $      
|                                                                                           |        
|LIABILITIES                                                                                |        
|                                                                                           |        
|Current                                                                                    |        
|Accounts payable and accrued liabilities                                                   | $      
|                                                                                           |        
|SHAREHOLDERS EQUITY                                                                       |        
|                                                                                           |        
|Share Capital(Note 7)                                                                      |        
|                                                                                           |        
|Share Subscriptions                                                                        |        
|                                                                                           |        
|Contributed Surplus                                                                        |        
|                                                                                           |        
|Deficit                                                                                    |        
|                                                                                           |        
|                                                                                           |        
|                                                                                           | $      







See accompanying notes to the consolidated financial statements

#





NEVADA GEOTHERMAL POWER INC.



CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT

(Expressed in Canadian Dollars)







|                                              | YEARS ENDED JUNE 30
|--------------------------------------------- | -------------------
|                                              |                    
|                                              |                    
|Expenses                                      |                    
|Accounting and audit                          | $                  
|Administration fees                           |                    
|Amortization                                  |                    
|Bank charges and interest                     |                    
|Consulting                                    |                    
|Financing costs                               |                    
|Foreign exchange                              |                    
|Investor relations                            |                    
|Legal                                         |                    
|Office and sundry                             |                    
|Rent and telephone                            |                    
|Site evaluation                               |                    
|Stock-based compensation                      |                    
|Transfer agent and regulatory fees            |                    
|Travel and business development               |                    
|Write off of mineral property                 |                    
|                                              |                    
|Loss Before The Following                     |                    
|                                              |                    
|Interest Income                               |                    
|Loss (Gain) On Sale Of Investments            |                    
|                                              |                    
|Loss For The Year                             |                    
|                                              |                    
|Deficit, Beginning Of Year                    |                    
|                                              |                    
|Deficit, End Of Year                          | $                  
|                                              |                    
|                                              |                    
|Loss Per Share                                | $                  
|                                              |                    
|                                              |                    
|Weighted Average Number Of Shares Outstanding |                    















See accompanying notes to the consolidated financial statements

#





NEVADA GEOTHERMAL POWER INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)





|                                                               | YEARS ENDED JUNE 30
|-------------------------------------------------------------- | -------------------
|                                                               |                    
|                                                               |                    
|Cash Flows From Operating Activities                           |                    
|Loss for the year                                              | $                  
|Items not involving cash flows:                                |                    
|Loss (Gain) on sale of investments                             |                    
|Amortization                                                   |                    
|Stock based compensation                                       |                    
|Write off of mineral property                                  |                    
|                                                               |                    
|Change in non-cash working capital items:                      |                    
|Decrease (Increase) in accounts receivable and GST recoverable |                    
|Decrease in exploration advances                               |                    
|(Increase) in prepaid expense                                  |                    
|(Decrease) Increase in accounts payable                        |                    
|                                                               |                    
|                                                               |                    
|Cash Flows From Investing Activities                           |                    
|Option interests and deferred expenditures                     |                    
|Exploration advances                                           |                    
|Acquisition of capital assets                                  |                    
|Cash acquired on acquisition                                   |                    
|Proceeds on sale of investments                                |                    
|                                                               |                    
|                                                               |                    
|Cash Flows From Financing Activities                           |                    
|Shares issued for cash                                         |                    
|Special warrants issued for cash                               |                    
|Share subscriptions received                                   |                    
|                                                               |                    
|                                                               |                    
|Increase (Decrease) In Cash                                    |                    
|                                                               |                    
|Cash, Beginning Of Year                                        |                    
|                                                               |                    
|Cash, End Of Year                                              | $                  
|                                                               |                    
|Supplementary Cash Flow Information                            |                    
|Shares issued for option interests (Note 4(b))                 | $                  
|Shares transferred (Note 5)                                    | $                  



See accompanying notes to the consolidated financial statements

#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)





1.

NATURE OF OPERATIONS



The Company is in the process of exploring its resource properties and has not yet determined whether these properties contain economically recoverable ore reserves.  The recoverability of the amounts shown for resource properties and related deferred costs 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.



These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern which assume the realization of assets and discharge of liabilities in the normal course of business.  As at June 30, 2004, the Company has a working capital of $945,921, and has incurred losses totalling $4,226,794



The Companys ability to continue as a going concern is dependent upon successful completion of additional financing, continuing support of creditors and upon its ability to attain profitable operations.  These consolidated financial statements do not give effect to any adjustments that would be necessary should the Company not be able to continue as a going concern.





2.

SIGNIFICANT ACCOUNTING POLICIES



a)

Consolidation



These financial statements include the accounts of the Company and its wholly-owned subsidiary, Blue Desert Mining (U.S.) Inc. and Noramex Corp., incorporated in the State of Nevada, U.S.A. and Blue Mountain Power Company Inc., incorporated in the Province of British Columbia, Canada.  All significant inter-company balances and transactions have been eliminated.



Accounting for companies acquired by the purchase method of accounting include the results of those companies from the date of acquisition.



b)

Exploration Expenses



The Company defers the costs of its option interests and unpatented mineral claims on an area of interest basis.  The Canadian Institute of Chartered Accountants (CICA) Handbook Section 3061  Property, Plant and Equipment states that for a mineral property, the cost of the asset includes exploration costs if the enterprise considers that such costs have the characteristics of property, plant and equipment, and, accordingly, defers such costs.



The Company has not established that its option interests or its unpatented mineral claims have any known or probable reserves.

#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







2.

SIGNIFICANT ACCOUNTING POLICIES(Continued)



b)

Exploration Expenses (Continued)



In March 2002, the CICA Emerging Issue Committee issued EIC126  Accounting by Mining Enterprises for Exploration Costs.  In this abstract, the CICA concluded that a mining enterprise that has not established mineral reserves objectively and, therefore, does not have a basis for preparing a projection of the estimated future net cash flow from the property is not precluded from considering exploration costs to have the characteristics of property, plant and equipment.



Amortization of these costs will be on a unit-of-production basis, based on estimated proven reserves of minerals of the areas should such reserves be found.  If an area of interest is abandoned the costs thereof are charged to income in the year of abandonment.



The Company does not accrue the estimated future costs of maintaining its claims and option interests in good standing.  The amounts shown for unpatented claims, option interests and deferred exploration expenditures represent costs to date and do not necessarily reflect present or future values.



c)

Option Payments Received



Option payments received are treated as a reduction of the carrying value of the related mineral properties and deferred exploration costs and the balance, if any, is taken into income.



d)

Investments



Investments in which the Company owns up to 20% of the issued common shares are accounted for at cost, unless a permanent impairment in value has been determined, at which time they are written down to market value.



e)

Capital Assets



Capital assets are recorded at cost and are depreciated over their useful lives by the declining balance method at the following rates:



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







#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







2.

SIGNIFICANT ACCOUNTING POLICIES(Continued)



f)

Stock Based Compensation



In September 2003, the CICA issued an amendment to Section 3870  Stock Based Compensation and Other Stock Based Payments.  The amended section is effective for fiscal years beginning on or after January 1, 2004.  The amendment requires that companies measure all stock based payments using the fair value method of accounting and recognize the compensation expense in their financial statements.  The Company implemented this amended standard in their fiscal year ended June 30, 2004 on a prospective basis in accordance with the early adoption provisions of the standard.  According to the transitional provisions, early adoption requires that compensation expense be calculated and recorded in the statement of operations for options granted on or after July 1, 2003.



Under this amended standard, the Company must account for compensation expense based on the fair value of rights granted under its stock based compensation plan.  Under this method, compensation costs attributable to share options granted to employees or directors is measured at fair value at the grant date, and expensed over the expected exercise time frame with a corresponding increase to contributed surplus.  Upon exercise of the stock options, consideration paid by the option holder, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital.



Previously, the Company accounted for its stock based compensation using the intrinsic value method.



The following table presents pro-forma information related to loss and loss per share as if the fair value method had been used to account for stock based compensation costs arising from stock options granted to employees during the year ended June 30, 2003 and 2002:



|                                                                                 | 2003 | 2002     
|-------------------------------------------------------------------------------- | ---- | ---------
|                                                                                 |      |          
|Loss for the year                                                                | $    | (490,602)
|Compensation expense related to fair value of stock options granted to employees |      | (78,182) 
|                                                                                 |      |          
|Pro-forma loss for the year                                                      | $    | (568,784)
|                                                                                 |      |          
|Pro-forma basic loss per share                                                   | $    | (0.06)   







NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







2.

SIGNIFICANT ACCOUNTING POLICIES(Continued)



g)

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.



h)

Earnings (Loss) Per Share



The Company calculates earnings per share using the treasury stock method.  Under the treasury stock method, only instruments with exercise amounts less than market prices impact the diluted calculations.  In computing diluted earnings per share, no shares were added to the weighted average number of common shares outstanding during the years ended June 30, 2004 and 2003 as the effect of potentially issuable common shares is anti-dilutive.



i)

Income Taxes



Income taxes are calculated using the liability method of accounting.  Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax liabilities or assets.  Future tax assets are recognized to the extent that they are considered more likely than not to be realized.  Future income tax liabilities or assets are calculated using the tax rates anticipated to apply in the periods that the temporary differences are expected to reverse.



j)

Foreign Currency Translation



The financial statements of the 100% owned U.S. subsidiaries have been translated using the temporal method whereby the assets and liabilities are translated at the year end exchange rate, capital accounts at the historical exchange rate, and revenues and expenses at the average exchange rate for the period.  Foreign exchange gains and losses resulting from these transactions are reflected in the consolidated statement of loss and deficit.









#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







3.

EXPLORATION ADVANCES



The Company advanced $ nil (2003 - $6,307) to Blue Mountain Power Company Inc., a company with two common directors, for exploration expenditures to be incurred in the subsequent year.





4.

UNPATENTED CLAIMS AND OPTION INTERESTS



a)

Gobi Project  Unpatented Claims and Option Interests



The Company has an option to acquire 100% interest in a number of claims located southeast of Fairbanks, Alaska, by the issue of 66,667 shares (66,667 issued), by cash payments of $17,500 (paid) and by the payment of an annual advance royalty of $10,000.  The optionor retains a 2% Net Smelter Royalty of which 1% may be purchased by the Company for $1,000,000.



In addition, the Company has staked a number of unpatented claims adjacent to the Gobi option interests.



The Company has entered into agreements on certain of its properties with an unrelated company whereby that company will earn a 60% interest in the Portal/Gobi property.  Total expenditures of US$750,000 (including $50,000 cash payments due by the Company) are required on the claims over a five year earn-in period ending January 1, 2005.



After the earn-in period, the Company will have a 40% participating interest in the joint venture.



Mohave



The Company has acquired, by staking, a 100% interest in the Mohave claims, located in the Pogo area.



b)

Blue Mountain Geothermal Project Option Interest



By an agreement dated December 13, 2002, the Company acquired 100% of the issued capital of Blue Mountain Power Company Inc. (Blue Mountain), a company with two common directors, by the issue of 5,500,000 common shares of the Company.  The acquisition closed on July 30, 2003.







#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







3.

UNPATENTED CLAIMS AND OPTION INTERESTS(Continued)



b)

Blue Mountain Geothermal Project, Nevada, U.S.A. (Continued)



Blue Mountain (incorporated in British Columbia) owns 100% of the issued capital of Noramex Inc. (incorporated in Nevada, USA).  Noramex holds a 100% leasehold interest on certain lands located in Humboldt County, Nevada.  The leasehold interest entitles the Company to explore, develop and produce any geothermal resources located on the properties.  The Company also has the option to purchase the freehold interest, consisting of four square miles out of a total of the eleven square miles of the leasehold interest.  The property interests are subject to production royalties ranging from 1.5% to 3.5% on sales of electrical power, and 5% to 10% from sale proceeds of direct energy.



The components of the purchase price and allocation are as follows:



|Purchase price                                                                                              |   |          
|----------------------------------------------------------------------------------------------------------- | - | ---------
|5,500,000 shares issued                                                                                     | $ | 1,705,000
|100,000 shares transferred (Note 4)                                                                         |   | 31,000   
|Acquisition costs and deferred expenditures incurred by the Company on the Blue Mountain Geothermal Project |   | 383,567  
|                                                                                                            |   |          
|                                                                                                            | $ | 2,119,567



|Allocation of purchase price |   |          
|---------------------------- | - | ---------
|Current assets               | $ | 840      
|Resource properties          |   | 2,175,489
|Capital assets               |   | 437      
|Current liabilities          |   | (57,199) 
|                             |   |          
|                             | $ | 2,119,567



a)

Pumpernickel Valley Geothermal Project, Nevada



On February 20, 2004, the Company entered into a geothermal lease agreement with Newmont USA Limited, covering five square miles of geothermal land located in north-central Nevada approximately 10 miles from Newmonts Lone Tree Mine.  The Company has also filed lease applications on an additional three sections of federal land for total leasehold of eight square miles (5,120 acres).



#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







4.

UNPATENTED CLAIMS AND OPTION INTERESTS(Continued)



c)

Pumpernickel Valley Geothermal Project, Nevada (Continued)



The Newmont lease grants the Company the exclusive right to drill for, produce extract, take and remove all products of geothermal processes including steam and other gases, hot water, hot brines, bi-products and heat energy (collectively referred to as substances) along with surface and water rights, subject to Nevada law.  The Company will pay rentals of $2/acre for the first two years and $3/acre thereafter, with all rental payments creditable to royalties due upon production.  The Company will pay royalties from any geothermal production of:



•

31⁄2% of gross proceeds from electrical power sales (less taxes and transmission costs),

•

5% of the gross proceeds of a sale of any substances in an arms length transaction,

•

2% of the gross proceeds from the sale of or manufacture there-from of bi-products,

•

10% of net profits from the use of substances at a commercial facility other than an electric power generating facility (such as an vegetable drying/processing facility),

•

Substances or electrical power used by the Company for operations at an on-site electrical generating plant or other commercial facilities are not subject to royalties.





5.

INVESTMENT



|                                                                                                 | 2004 | 2003
|------------------------------------------------------------------------------------------------ | ---- | ----
|                                                                                                 |      |     
|100,000 shares in Blue Mountain Power Company Inc., a company with two common directors, at cost | $    | -   



Due to the acquisition of Blue Mountain Power Company Inc. (Note 4(b)), the Company disposed of its holding.  The shares were transferred to a company controlled by a director of the Company as an incentive to settle debt owed by Blue Mountain to that company.  The shares were transferred at a fair value of $31,000, resulting in a gain of $6,000.



















NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







6.

CAPITAL ASSETS



|                         | 2004 | 2003  
|------------------------ | ---- | ------
|                         |      |       
|Computer equipment       | $    | 22,969
|Office equipment         |      | 10,319
|                         |      | 33,288
|Accumulated depreciation |      | 22,270
|                         |      |       
|Net book value           | $    | 11,018





7.

SHARE CAPITAL



a)

Authorized



100,000,000 common shares - no par value

25,000,000 first preferred shares - no par value

25,000,000 second preferred shares - no par value



a)

Common Shares Issued



|                                           | SHARES     | AMOUNT
|------------------------------------------ | ---------- | ------
|                                           |            |       
|Balance, June 30, 2002                     | 8,863,669  | $     
|                                           |            |       
|For cash                                   |            |       
|Private placement                          | 554,555    |       
|Options exercised                          | 361,000    |       
|Warrants exercised                         | 494,000    |       
|                                           |            |       
|                                           |            |       
|Balance, June 30, 2003                     | 10,273,224 |       
|                                           |            |       
|For cash                                   |            |       
|Private placement , net of financing costs | 5,748,860  |       
|Options exercised                          | 439,000    |       
|Warrants exercised                         | 228,000    |       
|For Blue Mountain Power Company Inc.       | 5,500,000  |       
|Options exercised  stock option valuation | -          |       
|                                           |            |       
|Balance, June 30, 2004                     | 22,189,084 | $     



NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







7.

SHARE CAPITAL(Continued)



c)

Stock Options



As at June 30, 2004, the following share purchase options were outstanding:



|         | NUMBER      |             |            | NUMBER     
|-------- | ----------- | ----------- | ---------- | -----------
|         | OUTSTANDING |             | WEIGHTED   | EXERCISABLE
|         | AT          | REMAINING   | AVERAGE    | AT         
|EXERCISE | JUNE 30     | CONTRACTUAL | EXERCISE   | JUNE 30    
|PRICE    | 2004        | LIFE        | PRICE      | 2004       
|         |             |             |            |            
|$        | 0.10        | 170,000     | 1.98 years | $          
|         | 0.25        | 65,000      | 2.90 years |            
|         | 0.28        | 970,000     | 4.06 years |            
|         | 0.35        | 350,000     | 4.67 years |            
|         | 0.50        | 280,000     | 4.97 years |            
|         |             |             |            |            
|         |             | 1,835,000   | 4.01 years | $          



A summary of the changes in stock options for the years ended June 30, 2003 and 2004 is presented below:



|                       |           | WEIGHTED
|---------------------- | --------- | --------
|                       | NUMBER    | AVERAGE 
|                       | OF        | EXERCISE
|                       | SHARES    | PRICE   
|                       |           |         
|Balance, June 30, 2002 | 831,000   | $       
|                       |           |         
|Granted                | 435,000   |         
|Exercised              | (361,000) |         
|                       |           |         
|Balance, June 30, 2003 | 905,000   |         
|                       |           |         
|Grant                  | 1,544,000 |         
|Exercised              | (439,000) |         
|Cancelled              | (175,000) |         
|                       |           |         
|                       |           |         
|Balance, June 30, 2004 | 1,835,000 | $       





#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)





7.

SHARE CAPITAL(Continued)



c)

Stock Options (Continued)



The fair value for options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:  risk-free interest rate of 3.08% (2003  5%), dividend yield of nil, volatility factor of 114% (2003  144%), and a weighted average expected life of the options of 2 years.  The weighted average fair value per share of options granted during 2004 was $0.22 (2003 - $0.28).



d)

Share Purchase Warrants



A summary of changes in share purchase warrants for the years ended June 30, 2003 and 2004 is presented below:



|                       |           | WEIGHTED
|---------------------- | --------- | --------
|                       |           | AVERAGE 
|                       | NUMBER OF | EXERCISE
|                       | WARRANTS  | PRICE   
|                       |           |         
|Balance, June 30, 2002 | 810,000   | $       
|                       |           |         
|Issued                 | 277,277   |         
|Exercised              | (494,000) |         
|Expired                | (316,000) |         
|                       |           |         
|Balance, June 30, 2003 | 277,277   |         
|                       |           |         
|Issued                 | 5,139,431 |         
|Exercised              | (228,000) |         
|Expired                | (97,500)  |         
|                       |           |         
|Balance, June 30, 2004 | 5,091,208 | $       



Share purchase warrants outstanding at June 30, 2004:



|NUMBER OF | EXERCISE | EXPRIRY
|--------- | -------- | -------
|SHARES    | PRICE    | DATE   
|          |          |        
|71,429    | $        | 0.40   
|137,500   |          | 0.40   
|27,777    |          | 0.45   
|334,500   |          | 0.40   
|4,520,002 |          | 0.50   
|          |          |        
|5,091,208 |          |        







NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







8.

CONTRIBUTED SURPLUS



|                             | 2004 | 2003    
|---------------------------- | ---- | --------
|                             |      |         
|Balance, beginning of year   | $    | 80,695  
|                             |      |         
|Compensation options granted |      | 302,844 
|Stock options exercised      |      | (32,267)
|                             |      |         
|Balance, end of year         | $    | 351,272 





9.

FINANCIAL INSTRUMENTS



The Companys financial instruments consist of cash, accounts receivable, Goods and Services Tax recoverable, prepaid expenses, exploration advances 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.





10.

RELATED PARTY TRANSACTIONS



Transactions in the normal course of business with companies controlled by directors or companies with directors in common were as follows:



|                                                  | 2004 | 2003    | 2002
|------------------------------------------------- | ---- | ------- | ----
|                                                  |      |         |     
|Fees for administrative and professional services | $    | 98,484  | $   
|Fees for geological services                      | $    | 389,644 | $   
|Acquisition of capital asset                      | $    | -       | $   
|Payments for office rent                          | $    | -       | $   
|Amounts included in accounts payable              | $    | 237,698 | $   
|Exploration advances                              | $    | -       | $   



#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







11.

INCOME TAXES



The recovery of income taxes shown in the statements of operations and deficit differs from the amounts obtained by applying statutory rates due to the following:



|                                                                                                 | 2004 | 2003     
|------------------------------------------------------------------------------------------------ | ---- | ---------
|                                                                                                 |      |          
|Statutory tax rate                                                                               |      | 37%      
|                                                                                                 |      |          
|Loss for the year                                                                                | $    | (792,846)
|                                                                                                 |      |          
|Provision for income taxes based on statutory Canadian combined federal and provincial tax rates |      | (293,353)
|Non-deductible differences                                                                       |      | 135,009  
|Resource property costs                                                                          |      | (147,680)
|Unrecognised tax losses                                                                          |      | 306,025  
|                                                                                                 |      |          
|Income tax expense                                                                               | $    | -        



The significant components of the Companys future tax assets (liability) are as follows:



|                                          | 2004 | 2003     
|----------------------------------------- | ---- | ---------
|                                          |      |          
|Operating losses                          | $    | 954,022  
|Mineral properties                        |      | -        
|                                          |      | 954,022  
|Valuation allowance for future tax assets |      | (800,093)
|                                          |      |          
|Net future income tax assets              |      | 153,929  
|Resource properties                       |      | (153,929)
|                                          |      |          
|Net future income tax liability           | $    | -        



The Company has Canadian non-capital losses carried forward of $2,115,000 and US$760,000 available for tax purposes.  The losses expire as follows:



|2005 | $ | 308,000
|---- | - | -------
|2006 | $ | 215,000
|2007 | $ | 238,000
|2008 | $ | 184,000
|2009 | $ | 293,000
|2010 | $ | 431,000
|2011 | $ | 421,000
|     |   |        

NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







11.

INCOME TAXES (Continued)



Losses for US tax purposes commence to expire in 2017.



|2023 | US$ | 52,000 
|---- | --- | -------
|2025 | US$ | 324,000





12.

SUBSEQUENT EVENTS



Subsequent to June 30, 2004, the Company:



i)

issued 1,500,000 units comprised on one common share and one non-transferable share purchase warrant at a price of $0.50 per unit.  One warrant entitles the holder to purchase one additional common share for a period of 24 months  at a price of 80 cents per warrant share. The offering includes an accelerator such that if after six months (March 23, 2005) the closing price per share of the issuer on the TSX Venture Exchange is $1.10 or higher for 20 consecutive trading days, then the company will give investors notice that the warrants must be exercised or they expire within 30 days.



ii)

issued 445,416 common shares at a price of $0.40 per share on the exercise of share   purchase warrants.



iii)

received 450,000 common shares of Running Fox Resource Corp. from the sale of         Blue Desert Mining (US) Inc., a Nevada limited company beneficially owned by the          Company used to hold the claims for the Gobi-Portal and Mojave properties.  The           shares of Running Fox Resource Corp. will be restricted from sale as follows:



-

100,000 shares with a six-month transfer restriction expiring March 1, 2005;

-

100,000 shares with a 12-month transfer restriction expiring September 1, 2005;

-

100,000 shares with a 18-month transfer restriction expiring March 1, 2006; and

-

150,000 shares with a 24-month transfer restriction expiring September 1, 2006.



#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







13.

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:



|                                                                                           | 2004 | 2003        | 2002
|------------------------------------------------------------------------------------------ | ---- | ----------- | ----
|                                                                                           |      |             |     
|Loss in accordance with Canadian GAAP                                                      | $    | (792,846)   | $   
|                                                                                           |      |             |     
|Deduct:                                                                                    |      |             |     
|Unproven property interests and deferred expenditures incurred in the year and capitalized |      | (428,742)   |     
|Shares issued for non-cash                                                                 |      | (1,000,774) |     
|Investments transferred for non-cash consideration                                         |      | (31,000)    |     
|Stock based compensation                                                                   |      | -           |     
|                                                                                           |      |             |     
|Loss in accordance with US GAAP                                                            | $    | (2,253,362) | $   



|                                              | 2004 | 2003       | 2002
|--------------------------------------------- | ---- | ---------- | ----
|                                              |      |            |     
|Loss per share (US GAAP)                      | $    | (0.13)     | $   
|                                              |      |            |     
|Weighted average shares outstanding (US GAAP) |      | 17,605,345 |     

#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







13.

MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Continued)



Statement of Cash Flows in Accordance with US GAAP



|                                                                             | 2004 | 2003        | 2002
|---------------------------------------------------------------------------- | ---- | ----------- | ----
|                                                                             |      |             |     
|Cash flows from operating activities                                         |      |             |     
|Loss in accordance with US GAAP                                              | $    | (2,253,362) | $   
|                                                                             |      |             |     
|Adjustments to reconcile loss to net cash used by operating activities       |      |             |     
|Shares issued and investments transferred for other than cash (Note 13(iii)) |      | 1,031,774   |     
|Write off of mineral property costs                                          |      | 55,922      |     
|Loss (Gain) on sale of investments                                           |      | (6,000)     |     
|Amortization                                                                 |      | 2,806       |     
|Stock based compensation                                                     |      | 302,844     |     
|Change in accounts receivable, and Goods and Services Tax recoverable        |      | (330,293)   |     
|Change in prepaid expenses                                                   |      | (21,294)    |     
|Change in accounts payable                                                   |      | 194,150     |     
|                                                                             |      | (1,023,453) |     
|                                                                             |      |             |     
|Cash flows from investing activities                                         |      |             |     
|Proceeds on sale of investments                                              |      | 245         |     
|Exploration advances                                                         |      | 6,307       |     
|Acquisition of capital assets                                                |      | (7,186)     |     
|                                                                             |      | (634)       |     
|                                                                             |      |             |     
|Cash flows from financing activities                                         |      |             |     
|Shares issued for cash                                                       |      | 1,995,761   |     
|Special warrants issued for cash                                             |      | -           |     
|Share subscriptions received                                                 |      | -           |     
|                                                                             |      | 1,995,761   |     
|                                                                             |      |             |     
|Increase (Decrease) in cash                                                  | $    | 971,674     | $   



#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







13.

MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Continued)



|                                                                            | 2004 | 2003        | 2002
|--------------------------------------------------------------------------- | ---- | ----------- | ----
|                                                                            |      |             |     
|Shareholders equity (deficiency)  Canadian GAAP                           | $    | 3,599,006   | $   
|Option interests and deferred exploration expenditures                      |      | (2,642,067) |     
|                                                                            |      |             |     
|Shareholders equity (deficiency)  US GAAP                                 | $    | 956,939     | $   
|                                                                            |      |             |     
|Option interests and deferred exploration expenditures  Canadian GAAP      | $    | 2,642,067   | $   
|Option interests and deferred exploration expenditures expensed per US GAAP |      | (2,642,067) |     
|                                                                            |      |             |     
|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)

Effective July 31, 2003, the Company adopted the fair value method of accounting for stock options granted to directors and employees, according to Section 3870 of the CICA Handbook  Stock Based Compensation and Other Stock Based Payments.  This standard is substantially identical to United States GAAP.



#





NEVADA GEOTHERMAL POWER INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE 30, 2004 AND 2003

(Expressed in Canadian Dollars)







13.

MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (Continued)





ii)

Previously, in fiscal 2003, the Company had accounted for stock based compensation using the intrinsic value method.  The following table presents pro-forma information related to loss and loss per share, under United States GAAP, as if the fair value method had been used:



|June 30, 2003               |               
|--------------------------- | --------------
|Loss for the year  US GAAP | $ (790,109)   
|Loss per share              | $       (0.08)
|                            |               
|June 30, 2002               |               
|Loss for the year  US GAAP | $ (479,871)   
|Loss per share              | $       (0.06)



iii)

By a share for share exchange, on July 31, 2003, the Company acquired 10% of the issued capital of Blue Mountain Power Company Inc., a company with two common directors.



The value of the shares issued to the shareholders of Blue Mountain Power Company Inc. has been decreased by $704,226 from $1,705,000, as determined under Canadian GAAP, as a result of recording the value of the resource property acquired on a disbursed cost basis rather than fair value of the shares issued, due to a common director owning in excess of 10% of the Company and of Blue Mountain Power Company Inc.  Accordingly, for United States GAAP, share capital has been reduced by $704,226 and deficit has been reduced by $704,226.















SIGNATURE PAGE











Pursuant to the requirements of Section 12g 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.



Nevada Geothermal Power Inc.; SEC File No. 000-49917

Registrant











Dated: January 13, 2005



By /s/ Brian D. Fairbank_________________

Brian D. Fairbank, President/CEO/Director





Dated: January 13, 2005



By /s/ Jack W. Milligan__________________

Jack W. Milligan, CFO/Secretary/Director





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