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OMB APPROVAL





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-KSB/A



[ X ]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2004



[     ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to __________________



Commission File Number: 0-49942



STRATECO RESOURCES INC.

___________________________________________________________

(Name of small business issuer in its charter)



|Quebec, Canada                                                 | N/A                                 
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation
or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|1225 Gay-Lussac street, Boucherville, Quebec                   | J4B 7K1                             
|(Address of principal executive offices)                       | (Zip Code)                          



Issuers telephone number: (450) 641-0775



Securities registered under Section 12(b) of the Exchange Act: None



Title of each class

Name of each exchange on which registered



____________________________

___________________________________



Securities registered under Section 12(g) of the Exchange Act:



Common Shares

(Title of class)



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





DOCUMENTS INCORPORATED BY REFERENCE



Part II Item 7.

Financial Statements



The Company incorporates for reference as exhibit to the present document the Strateco Resources Inc. consolidated audited financial statements for the fiscal year ending December 31, 2004 and audited financial statements for the fiscal year ending December 31, 2003 that include U.S. GAAP reconciliation.  These financial statements follow the signature page of the present document.



Transitional Small Business Disclosure Format (Check one): Yes

[     ]

No

[ X ]





---



Item 10.

Executive Compensation.



(a)

General



During the financial year ended December 31, 2004, the Company did not paid any remuneration to members of the Direction except for Mr. Jean-Pierre Lachance who received an allowance of $200 per month for the use of his personal vehicle in relation with the Companys activities.



During the year ended December 31, 2004, the Company incurred with BBH Géo-Management Inc., general and administrative expenses of $316,000.



Furthermore, the Company paid management fees of $95,000, consultant and subcontractor fees of $213,000, traveling and lodging expenses of $25,000 and shares issue costs amounting to $97,000 to this same company.



BBH Géo-Management Inc. is a company that offers project management and administrative services to the Company pursuant to a services agreement.  Mr. Guy Hébert, the Companys president is the sole director of BBH Géo-Management Inc. and controls another company that is the majority shareholder of BBH Géo-Management Inc.



Services related to the Company rendered by Messrs. Guy Hébert and Jean-Pierre Lachance, Companys executive officers are paid by Géo-Management Inc.:



|                                               |         | Annual Remuneration | Long Term Compensation |                              
|---------------------------------------------- | ------- | ------------------- | ---------------------- | -----------------------------
|                                               |         |                     |                        |                              
|Name and Position                              | Year(1) | Salary
($)          | Bonus
($)              | Other Annual Compensation
($)
|Guy Hébert, Chief Executive Officer            | 2004    | --                  | --                     | --                           
|                                               | 2003    | --                  | --                     | --                           
|                                               | 2002    | --                  | --                     | --                           
|                                               |         |                     |                        |                              
|                                               |         |                     |                        |                              
|Jean-Pierre Lachance, Executive Vice-President | 2004    | --                  | --                     | --                           
|                                               | 2003    | --                  | --                     | --                           
|                                               | 2002    | --                  | --                     | --                           





(1)

The Company did not pay any salary or other form of remuneration directly to the Chief executive officers. The Company paid to BBH Géo-Management Inc. for consultation services of Mr. Guy Hébert the sum of $132,125 in 2004, $112,000 in 2003 and $78,925 in 2002. These sums are not representative of the amounts actually received by Mr. Hébert from BBH Géo-Management Inc. as salary.



The Company paid to BBH Géo-Management Inc. for consultation services of Mr. Jean-Pierre Lachance the sum of $95,678 in 2004, $94,678 in 2003 and $82,625 in 2002. These sums are not representative of the amounts actually received by Mr. Lachance from BBH Géo-Management Inc. as salary.



The Company does not have a long-term incentive plan (LTIP).





Mr. Henri Lanctôt, Secretary is also Partner of Gowling, Lafleur Henderson, LLP, a legal firm which receives payment for legal services and consultations from BBH Géo-Management Inc. on works and duties related to the Companys business in an amount that did not exceed $100,000 for the last fiscal year.





(b)

Stock options granted during the last financial year



|Name                                           | Number of
Shares Underlying Stock Options Granted | Percent of total options granted to consultants and collaborators in fiscal year | Exercise Price | Expiration Date
|---------------------------------------------- | ------------------------------------------------- | -------------------------------------------------------------------------------- | -------------- | ---------------
|                                               |                                                   |                                                                                  |                |                
|GUY HÉBERT,
President and CEO                  | NIL                                               | N/A                                                                              | N/A            | N/A            
|JEAN-PIERRE LACHANCE,
Executive Vice President | NIL                                               | N/A                                                                              | N/A            | N/A            



During the year ended December 31, 2004, the Company has amended its stock options plan and has received the approval from regulatory authorities in Quebec, Canada, to augment the number of common shares reserved for the grant of stock options to Directors and consultants of the Company from 2,200,000 common shares to 3,800,000 common shares. On November 9, 2004, the Company granted stock options for 100,000 common shares to Mr. Robert Desjardins, a director that could be levied at the price of $0.20 per share for a period of 5 years pursuant to the Companys amended stock options plan. The share price of the Company on the TSX Venture Exchange was equal or less than $0.14 per share at the time of the grant. During this period no stock options were exercised.





Item 13.

Exhibits, Financial Statement Schedules and Reports on Form 8-K.



a)

Exhibits



31.

Certifications

32.

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.









---

SIGNATURE



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



STRATECO RESOURCES INC.

Registrant



Dated: June 6, 2005





/s/ Guy Hébert

_________________________________

Name: Guy Hébert

Title: President and Chief Executive Officer









---

Financial Statements of



STRATECO RESOURCES INC.



For the years ended December 31, 2004 and 2003





---

Managements Report





The management of the Company is responsible for the preparation of the financial statements and the financial information included in this annual report. Management maintains a system of internal control to produce reliable financial statements and to provide reasonable assurance that assets are safeguarded.



The financial statements are prepared in accordance with generally accepted accounting principles in Canada and necessarily include amounts based on estimates and judgments of management. Petrie Raymond LLP, chartered accountants, was appointed by the shareholders as external auditors of the Company. Their report, presented below, expresses an opinion on the financial statements.



The audit committee meets with the external auditors, with management present, to review the financial statements and to discuss audit-related matters.



On the recommendation of the audit committee, the Board of Directors has approved the Corporations financial statements for 2004.











/s/ Guy Hébert

/s/ Francine Bélanger

_______________________________

______________________________

Guy Hébert

Francine Bélanger

President and Chief Executive Officer

Administrator





Boucherville, Canada

June 6, 2005









---

Auditors' Report

To the Directors of

Strateco Resources Inc.:

We have audited the accompanying balance sheet of Strateco Resources Inc. as at December 31, 2004 and the related statements of deferred expenditures, earnings and deficit and cash flows for the year then ended.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance 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.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Canadian generally accepted accounting principles vary in certain respects from the accounting principles generally accepted in the United States of America.  Information relating to the nature and aspect of such difference is presented in Note 14 to the financial statements.

[form10ksbamended002.gif]

Limited Liability Partnership

Chartered Accountants



Montréal, Canada

June 6, 2005

---





[form10ksbamended005.gif]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Directors of Strateco Resources Inc.



We have audited the accompanying balance sheet of Strateco Resources Inc. as of December 31, 2003 and the related statements of deferred expenditures, earnings and deficit and cash flows for the year then ended.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audit in accordance 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.  We believe that our audit provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2003 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.



Canadian generally accepted accounting principles vary in certain respects from the accounting principles generally accepted in the United States of America.  Information relating to the nature and aspect of such difference is presented in Note 14 to the financial statements.





/s/ KPMG LLP





Montréal, Canada

February 6, 2004









---

STRATECO RESOURCES INC.



FINANCIAL STATEMENTS



DECEMBER 31, 2004 AND 2003







Balance Sheets



Statements of Deferred Expenditures



Statements of Earnings and Deficit



Statements of Cash Flows



Notes to Financial Statements









---

STRATECO RESOURCES INC.



Financial Statements

BALANCE SHEETS

DECEMBER 31, 2004 AND 2003



(In Canadian dollars)



|                                               | 2004                      | 2003             
|---------------------------------------------- | ------------------------- | -----------------
|                                               |                           |                  
|ASSETS                                         |                           |                  
|                                               |                           |                  
|CURRENT ASSETS                                 |                           |                  
|                                               |                           |                  
|Cash and cash equivalents                      | $                       - | $         161,417
|Restricted cash (Note 4)                       | 161,574                   | 200,000          
|Tax credits receivable                         | 77,500                    | -                
|Sales tax recoverable                          | 58,563                    | 97,954           
|Subscriptions receivable                       | 356,300                   | -                
|Prepaid expenses                               | 21,756                    | 16,696           
|                                               |                           |                  
|                                               | 675,693                   | 476,067          
|                                               |                           |                  
|MINING PROPERTIES (Note 5)                     | 87,750                    | 68,250           
|                                               |                           |                  
|DEFERRED EXPENDITURES (Note 6)                 | 3,114,957                 | 2,234,543        
|                                               |                           |                  
|TOTAL ASSETS                                   | $        3,878,400        | $     2,778,860  
|                                               |                           |                  
|LIABILITIES AND SHAREHOLDERS EQUITY           |                           |                  
|                                               |                           |                  
|CURRENT LIABILITIES                            |                           |                  
|                                               |                           |                  
|Accounts payable and accrued charges (Note 11) | $           143,603       | $        146,344 
|                                               |                           |                  
|SHAREHOLDERS EQUITY                           |                           |                  
|                                               |                           |                  
|Capital stock (Note 7)                         | 6,826,869                 | 5 196,375        
|Stock options (Notes 3 and 8)                  | 32,070                    | 7,750            
|Warrants (Note 7)                              | 59,005                    | 42,500           
|Deficit                                        | (3,183,147)               | (2,614,109)      
|                                               |                           |                  
|                                               | 3,734,797                 | 2,632,516        
|Commitments and contingencies (Note 10)        |                           |                  
|                                               |                           |                  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY     | $        3,878,400        | $      2,778,860 





See notes to financial statements.



ON BEHALF OF THE BOARD





Guy Hébert

____________________________________
Guy Hébert, Director



Francine Bélanger

____________________________________

Francine Bélanger, Treasurer





---

STRATECO RESOURCES INC.



STATEMENTS OF DEFERED EXPENDITURES

YEARS ENDED DECEMBER 31, 2004 AND 2003



(In Canadian dollars)



|                                                            | 2004            | 2003           
|----------------------------------------------------------- | --------------- | ---------------
|                                                            |                 |                
|EXPLORATION EXPENSES                                        |                 |                
|                                                            |                 |                
|Consultants and subcontractors                              | $       799,742 | $     1,282,483
|Professional fees                                           | 6,683           | 44,878         
|Management fees                                             | 94,855          | 168,919        
|Travelling expenses                                         | 36,979          | 41,440         
|Supplies and equipment rental                               | 14,648          | 15,201         
|General exploration expenses                                | 5,007           | 32,102         
|                                                            |                 |                
|                                                            | 957,914         | 1,585,023      
|Mining duties credits and other related exploration credits | (77,500)        | -              
|Write-off of deferred expenditures                          | -               | (243,867)      
|                                                            |                 |                
|INCREASE IN DEFERRED EXPENDITURES                           | 880,414         | 1,341,156      
|                                                            |                 |                
|BALANCE, BEGINNING OF YEAR                                  | 2,234,543       | 893,387        
|                                                            |                 |                
|BALANCE, END OF YEAR                                        | $     3,114,957 | $     2,234,543





See notes to financial statements.









---

STRATECO RESOURCES INC.



STATEMENTS OF EARNINGS AND DEFICIT

YEARS ENDED DECEMBER 31, 2004 AND 2003



(In Canadian dollars)



|                                                         | 2004                | 2003               
|-------------------------------------------------------- | ------------------- | -------------------
|                                                         |                     |                    
|                                                         |                     |                    
|INTEREST INCOME                                          | $            4,886  | $        19,584    
|                                                         |                     |                    
|GENERAL AND ADMINISTRATIVE EXPENSES                      |                     |                    
|                                                         |                     |                    
|Professional fees                                        | 193,717             | 211,241            
|Legal and audit expenses                                 | 101,572             | 162,263            
|Stock-based compensation                                 | 11,520              | 5,600              
|Directors fees                                          | 9,900               | -                  
|Shareholder communications                               | 37,981              | 24,386             
|Investor relations                                       | 110,297             | 20,000             
|Listing and registrar fees                               | 20,970              | 20,767             
|Travelling expenses                                      | 3,024               | 3,829              
|Rent                                                     | 36,000              | 36,000             
|Insurance                                                | 17,264              | 18,291             
|Office expenses                                          | 23,779              | 22,603             
|Taxes, permits and restoration                           | 930                 | 21,676             
|Interest and bank charges                                | 495                 | 1,035              
|                                                         |                     |                    
|                                                         | 567,449             | 547,691            
|                                                         |                     |                    
|Write-off of deferred expenditures and mining properties | -                   | 251,367            
|                                                         |                     |                    
|                                                         | 567,449             | 799,058            
|                                                         |                     |                    
|INCOME TAX CREDITS AND MINING DUTIES                     | (6,325)             | -                  
|                                                         |                     |                    
|NET LOSS                                                 | 556,238             | 779,474            
|                                                         |                     |                    
|DEFICIT, BEGINNING OF YEAR                               | 2,614,109           | 1,834,635          
|                                                         |                     |                    
|ADJUSTMENT ARISING FROM AN ACCOUNTING CHANGE (Note 3)    | 12,800              | -                  
|                                                         |                     |                    
|DEFICIT, END OF YEAR                                     | $     3,183,147     | $     2,614,109    
|                                                         |                     |                    
|NET LOSS PER SHARE                                       | $              0.01 | $              0.02
|                                                         |                     |                    
|WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUSTANDING      | 41,631,253          | 32,768,288         







See notes to financial statements.



---

STRATECO RESOURCES INC.



STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2004 AND 2003



(In Canadian dollars)



|                                                         | 2004             | 2003          
|-------------------------------------------------------- | ---------------- | --------------
|                                                         |                  |               
|                                                         |                  |               
|CASH FLOW FROM OPERATING ACTIVITIES:                     |                  |               
|                                                         |                  |               
|Net loss                                                 | $      (556,238) | $    (779,474)
|                                                         |                  |               
|Stock-based compensation                                 | 11,520           | 5,600         
|Write-off of deferred expenditures and mining properties | -                | 251,367       
|Changes in non-cash working capital items:               |                  |               
|Tax credits receivable                                   | (77,500)         | -             
|Sales tax recoverable                                    | 39,391           | (7,789)       
|Prepaid expenses                                         | (5,060)          | (5,396)       
|Accounts payable and accrued charges                     | 14,815           | (35,725)      
|                                                         |                  |               
|                                                         | (573,072)        | (571,417)     
|                                                         |                  |               
|CASH FLOW FROM INVESTING ACTIVITIES:                     |                  |               
|                                                         |                  |               
|Increase in deferred expenditures                        | (897,970)        | (1,542,271)   
|                                                         |                  |               
|                                                         |                  |               
|CASH FLOW FROM FINANCING ACTIVITIES:                     |                  |               
|                                                         |                  |               
|Common share issuance                                    | 1,656,850        | 709,000       
|Common share issue costs                                 | (385,651)        | (154,115)     
|                                                         |                  |               
|                                                         | 1,271,199        | 554,885       
|                                                         |                  |               
|DECREASE IN CASH AND CASH EQUIVALENTS                    | (199,843)        | (1,558,803)   
|                                                         |                  |               
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR             | 361,417          | 1,920,220     
|                                                         |                  |               
|CASH AND CASH EQUIVALENTS, END OF YEAR                   | $        161,574 | $     361,417 





|Additional information related to cash flows                         | 2004                | 2003             
|-------------------------------------------------------------------- | ------------------- | -----------------
|Non related cash operating, financing and investing activity items:  |                     |                  
|Corporate finance service agreement in exchange for common shares    | $                 - | $     28,000     
|Deferred expenditures financed through increases in accounts payable | 67,811              | 85,367           
|Acquisition of mining properties in exchange for common shares       | 19,500              | 20,250           
|Common share issue costs paid through the issuance of warrants       | 16,505              | 2,250            
|Subscriptions receivable                                             | $     356,300       | $               -





See notes to financial statements.

---

STRATECO RESOURCES INC.



Notes to Financial Statements

YEARS ENDED DECEMBER 31, 2004 AND 2003



(In Canadian dollars)





1.

INCORPORATION AND NATURE OF OPERATIONS



The Company, incorporated under the Canadian Business Corporations Act, is engaged in the exploration of properties.



Recovery of amounts indicated under mining properties and the related deferred expenditures are subject to the discovery of economically recoverable reserves, the Companys ability to obtain the financing required to complete development and profitable future production or the proceeds from the sale of such assets. At December 31, 2004, management determined the net accounting value of mining properties to be the best estimate of their net recoverable value. This value may nonetheless be reduced in the future.





2.

SIGNIFICANT ACCOUNTING POLICIES



CASH AND CASH EQUIVALENTS



The Company considers cash, restricted cash and short-term investments maturing within three months of their acquisition date as cash and cash equivalents, the value of which is not likely to change significantly.



MINING PROPERTIES AND DEFERRED EXPENDITURES



Mining properties are recorded at cost. Exploration and development costs are deferred, net of government assistance received. However, when a project is abandoned, the corresponding costs are charged against earnings.



STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS



The Company charges against earnings stock-based compensation paid to its employees and directors as well as other stock-based payments made to non-employees, based on the fair value method for all grants made or amended since July 31, 2002. The fair value of stock options on the grant date is determined using an option pricing model.  The compensation charge is recognized over the stock option vesting period.



INCOME TAXES



The Company records its income taxes using the balance sheet method. Future income tax assets and liabilities are recorded to take into account the impact on income taxes of variances between the accounting value of certain assets and liabilities shown on the balance sheet and their respective fiscal values. A valuation allowance is recorded as required to reflect the income tax assets that is more likely to be realized than not. The impact of any changes in income tax rates is recorded in the year in which the rates change.



LOSS PER SHARE



The loss per share is calculated based on the weighted-average number of common shares outstanding during the year.



USE OF ESTIMATES



The preparation of consolidated financial statements in conformity with generally recognized accounting principles requires management to make estimates and assumptions that affect the assets and liabilities reported, amounts related to revenue and expenses, recoverable values for mining property and deferred exploration expenses,environmental liability provisions and the presentation of future liabilities. Actual results could differ from these estimates.





3.

CHANGES IN ACCOUNTING POLICY



Prior to January 1, 2004, the Company applied the accounting method recommended by the Canadian Institute of Chartered Accountants (CICA), Section 3870, Stock-based Compensation and Other Stock-based Payments for the accounting of stock-based compensation granted to directors and employees. Section 3870 was amended to require that the fair value-based method be applied to options granted to directors and employees as of January 1, 2004. Under this method, compensation costs are measured at the grant date based on the fair value of the options and recognized over the related service period. In accordance with one of the transactional alternatives permitted under the revised version of Section 3870, the Company applied, retroactively and without adjustment, the fair value method to all stock options granted to directors and employees since January 1, 2002. Therefore an adjustment was made to the deficit at January 1, 2004 to reflect the cumulative effect on the prior year, resulting in a $12,800 increase in the deficit and in shareholders equity for stock options. Prior years were not restated to reflect this change in accounting standard.





4.

RESTRICTED CASH



Pursuant to the flow-through financing and private placements for which closings took place on June 23, July 23, September 30 and December 30, 2004, the Company undertook to incur $1,171,500 in exploration expenses before December 31, 2005 primarily for exploration on the Discovery and Cameron projects. Of this amount, $556,194 has been engaged as at December 31, 2004.





5.

MINING PROPERTIES



|                      | 2004             | 2003           
|--------------------- | ---------------- | ---------------
|                      |                  |                
|                      |                  |                
|Discovery and Cameron | $         87,750 | $        68,250







6.

DEFERRED EXPENDITURES



|                  | Balance at
December
31, 2003 | Exploration
expenses | Balance at
December 31,
2004
|----------------- | ---------------------------- | -------------------- | ----------------------------
|                  |                              |                      |                             
|Mining properties |                              |                      |                             
|                  |                              |                      |                             
|Discovery         | $        1,496,340           | $        579,307     | $       2,075,647           
|Cardinal          | 554,855                      | 4,150                | 559,005                     
|Cameron           | 183,101                      | 292,710              | 475,811                     
|Prospecting       | 247                          | 4,247                | 4,494                       
|                  |                              |                      |                             
|                  | $        2,234,543           | $        880,414     | $       3,114,957           







7.

CAPITAL STOCK



AUTHORIZED



Unlimited number of common shares without par value.



Unlimited number of preferred shares without par value issuable in series with rights, privileges, restrictions and conditions to be determined by the board of directors.



|                                        | December 31, 2004 | December 31, 2003
|--------------------------------------- | ----------------- | -----------------
|                                        |                   |                  
|                                        | Common shares     |                  
|                                        |                   |                  
|ISSUED AND FULLY PAID                   |                   |                  
|Balance, beginning of year              | 36,813,402        | $                
|                                        |                   |                  
|In consideration of consulting services | -                 |                  
|                                        |                   |                  
|In consideration of mining properties   | 150,000           |                  
|                                        |                   |                  
|Flow-through and other financings       | 11,322,717        |                  
|                                        |                   |                  
|Common share issue costs                | -                 |                  
|                                        |                   |                  
|Balance, end of year (a)                | 48,286,119        | $                



(a)

187,500 common shares are escrowed and cannot be transferred, mortgaged, pledged or otherwise disposed of without the consent of the Autorité des Marchés financiers (Québec Securities Commission).



WARRANTS



At December 31, 2004, there were 4,005,816 warrants outstanding (4,708,333 in 2003), each entitling its holder to purchase one share of the Company. Changes to the warrants are shown in the following table:





|                                        | 2004        |                               | 2003
|--------------------------------------- | ----------- | ----------------------------- | ----
|                                        |             |                               |     
|                                        |             |                               |     
|                                        | Number      | Weighted-average strike price |     
|Balance, beginning of year              | 4,708,333   | $0.21                         |     
|Issued (4) (5)(6) (7) (8) (9) (10) (11) | 2,597,483   | $0.23                         |     
|Expired                                 | (3,300,000) |                               |     
|Balance, end of year                    | 4,005,816   |                               |     



See notes following next table.





The strike prices and the expiry dates of the warrants are shown in the following table:



|Strike price | Number | Term          
|------------ | ------ | --------------
|$0.21        |        | 75,000(1)     
|$0.16        |        | 75,000(1)     
|$0.25        |        | 833,333(2)    
|$0.25        |        | 500,000(3)    
|$0.22        |        | 518,750(4) (5)
|$0.20        |        | 600,333(6) (7)
|$0.25        |        |               
|$0.15        |        | 53,400(6)     
|$0.15        |        | 170,500(8) (9)
|$0.20        |        | 852,500(8) (9)
|$0.25        |        |               
|$0.20        |        | 150,000(10)   
|$0.20        |        | 177,000(11)   
|             |        | 4,005,816     



(1)

Pursuant to a formal agreement between the Company and GéoNova Explorations Inc. (GéoNova), the Company issued 150,000 common shares and 75,000 warrants worth $20,250 on October 8, 2003, as consideration for the partial acquisition of the Discovery and Cameron projects. On October 8, 2004, the Company issued 150,000 common shares and 75,000 warrants worth $19,500 to GéoNova pursuant to the same agreement.

(2)

On December 12, 2003, the Company issued 1,666,667 common shares and 833,333 warrants pursuant to a subscription agreement with Société de développement de la Baie-James (SDBJ) for $250,000. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until December 11, 2004 and at $0.25 at any time from December 12, 2004 until December 11, 2005.

(3)

On December 4, 2003, the Company issued 1,000,000 flow-through common shares and 500,000 warrants for $150,000 to Fonds régional Solidarité FTQ Nord-du-Québec pursuant to a private placement. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until December 3, 2004, and at $0.25 at any time from December 4, 2004 until December 3, 2005.

(4)

Pursuant to a public offering dated April 20, 2004, the Company issued 937,500 common shares at $0.16 per share and 468,750 warrants for $150,000 on June 23, 2004. Each warrant entitles its holder to subscribe to one common share at $0.22 at any time until October 20, 2005.

(5)

Pursuant to a public offering dated April 20, 2004, the Company issued 100,000 common shares at $0.16 per share and 50,000 warrants for $16,000 on July 23, 2004. Each warrant entitles its holder to subscribe to one common share at $0.22 at any time until October 20, 2005.

(6)

During the year ended December 31, 2004, pursuant to a private placement with brokerage firm Union Securities Ltd. (Union), the Company issued 534,000 common shares at $0.15 per share and 267,000 warrants for $80,100. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until January 13, 2005 and at $0.25 between January 14, 2005 and January 13, 2006.

During the year, the Company also issued to Union, as partial compensation, 53,400 broker warrants to purchase shares at $0.15 per share for a 24-month period.

(7)

During the year ended December 31, 2004, pursuant to a private placement with three Québec investors, the Company issued 666,667 common shares priced at $0.15 per share and 333,333 warrants for $100,000. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until January 13, 2005 and at $0.25 between January 14, 2005 and January 13, 2006.

(8)

During the year ended December 31, 2004, pursuant to a private placement through Union, the Company issued 1,705,000 common shares at $0.15 per share and 852,500 warrants for $255,750. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until February 16, 2005 and at $0.25 between February 17, 2005 and February 16, 2006.

During the year ended December 31, 2004, the Company issued to Union, as partial compensation, 170,500 broker warrants to purchase common shares at $0.15 per share for a 24-month period.

(9)

For the three placements described in notes 6, 7 and 8, if during the term of the warrants the common shares trade for 30 consecutive days at an weighted-average price of more than $0.28 per share in the first year following the closing or more than $0.35 per share in the second year following the closing, the warrants will expire within 30 days following notice to this effect given by the Company to the warrant holders.

(10)

During the year ended December 31, 2004, pursuant to a private placement through the brokerage firm Research Capital Corporation (Research), the Company issued 300,000 common shares and 150,000 warrants for $36,000. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until December 30, 2006.

(11)

During the year ended December 31, 2004, the Company granted to Research 177,000 warrants as brokers fee. Each warrant entitles its holder to subscribe to one common share at $0.20 at any time until December 30, 2006.



No warrants were exercised during the year ended December 31, 2004.



During the year ended December 31, 2004, the Company granted 400,900 brokers warrants (34,063 brokers warrants in 2003). These warrants vest immediately. The fair value of each warrant granted was determined using the Black-Scholes option pricing model. At the date of the grant, the weighted-average fair value of the warrants granted was $0.04 per warrant. The following weighted-average assumptions were used in the calculations:



|Risk-free interest rate | 2.3%     
|----------------------- | ---------
|Expected life           | 21 months
|Volatility              | 76%      
|Expected dividend yield | $0.00    



An amount of $ 16,505 ($2,250 in 2003) was recognized in the share issue costs for the year.





8.

STOCK OPTION PLAN



The Company has a stock option plan for its officers, directors and consultants. A total of 3,800,000 common shares are reserved for issuance under the plan. The maximum number of options that can be granted to any participant cannot exceed 5% of the issued and outstanding shares of the capital stock. The price of the options granted may not be less than the market price of the common shares on the TSX Venture Exchange at the time the options are granted. The options granted are valid for a period established by the board of directors, not to exceed five years from the date the options are granted.



During the year ended December 31, 2004, 100,000 stock options were granted to a director.



Changes to the stock options under the plan are shown in the following table:

|                           | 2004              | 2003                         
|-------------------------- | ----------------- | -----------------------------
|                           |                   |                              
|                           |                   |                              
|                           | Number of options | Weighted-average strike price
|Balance, beginning of year | 2,198,000         | $ 0.19                       
|Granted                    | 100,000(1)        | $ 0.20                       
|Balance, end of year       | 2,298,000         | $ 0.19                       



(1)

100,000 stock options were granted on November 9, 2004 at $0.20 per share. These options must be exercised within five years of the grant date, or no later than November 8, 2009.



The outstanding stock options and the stock options exercisable as at December 31, 2004 are shown in the following table:



|Options outstanding           |           | Options exercisable              
|----------------------------- | --------- | ---------------------------------
|Weighted-average strike price | Number    | Weighted-average lifespan (years)
|$0.20                         | 1,248,000 | 1.2                              
|$0.15                         | 750,000   | 0.8                              
|$0.25                         | 100,000   | 1.8                              
|$0.35                         | 100,000   | 1.8                              
|$0.20                         | 100,000   | 4.8                              
|$0.23                         | 2,298,000 | 1.3                              



During the year ended December 31, 2004, the Company granted 100,000 stock options to a director. These options vest immediately. The fair value of each option granted was determined using the Black-Scholes option pricing model. At the date of the grant, the weighted-average fair value of the stock options granted was $0.0372 per option ($0.052 per option in 2003).



The following weighted-average assumptions were used in the calculations:



|                        | 2004    | 2003   
|----------------------- | ------- | -------
|                        |         |        
|                        |         |        
|Risk-free interest rate | 1.5%    | 3.4%   
|Expected life           | 2 years | 2 years
|Volatility              | 67%     | 95%    
|Expected dividend yield | $0.00   | $0.00  



An amount of $11,520 ($5,600 in 2003) was recognized in earnings for the year.





9.

INCOME TAXES



The income tax impact of temporary variances giving rise to material future income tax assets or liabilities at December 31, 2004 and 2003 are as follows:



|                                            | 2004               | 2003             
|------------------------------------------- | ------------------ | -----------------
|                                            |                    |                  
|Future income tax asset:                    |                    |                  
|                                            |                    |                  
|Net operating losses                        | $     797,800      | $     553,602    
|Financial expenses                          | 147,600            | 125,693          
|                                            |                    |                  
|                                            | 945,400            | 679,295          
|                                            |                    |                  
|Less: valuation allowance                   | (311,600)          | (235,635)        
|                                            |                    |                  
|Total future income tax asset               | $     633,800      | $     443,660    
|                                            |                    |                  
|Future income tax liability:                |                    |                  
|                                            |                    |                  
|Mining properties and deferred expenditures | 633,800            | 443,660          
|                                            |                    |                  
|Future income taxes                         | $                - | $               -



At December 31, 2004, the Company had losses other than capital losses and unused share issue costs that could be deferred to later periods and used to reduce future taxable income. These losses and share issue costs expire as follows:



|                                  | Federal         | Provincial    
|--------------------------------- | --------------- | --------------
|Losses other than capital losses: |                 |               
|2007                              | $       168,682 | $      168,682
|2008                              | 341,930         | 317,930       
|2009                              | 678,122         | 630,122       
|2010                              | 660,071         | 639,953       
|2011                              | 749,491         | 749,491       
|Share issue costs:                |                 |               
|2005                              | 177,980         | 177,980       
|2006                              | 147,701         | 147,701       
|2007                              | 93,558          | 93,558        
|2008                              | 56,685          | 56,685        





10.

COMMITMENTS AND CONTINGENCIES



Quénonisca Property



On February 26, 1996, Altavista Mines Inc. signed an agreement with SOQUEM pursuant to which it owns a 50% undivided interest in the 78 claims making up the Quénonisca property in the Quénonisca and Salamandre Lake district north of Matagami, Québec.



Work is financed in proportion to the respective interests, failing which the undivided interest of the non-participating party is diluted. Any dilution of an interest to 10% entails the loss of that interest in consideration of a 1% net profits royalty (as defined in the agreement) from commercial production on the property.



In April 2000, the Company entered into an agreement whereby it will respect all Altavista Mines Inc.s rights and obligations in relation to the Quénonisca agreement with SOQUEM dated February 26, 1996.



Discovery Project



On June 4, 2002, the Company signed a letter of intent with Campbell, amended on June 14, 2002 with GéoNova, for an option to acquire a 50% interest in the Discovery project.



This letter of intent was subject to a formal agreement, signed on October 8, 2002 and amended on September 3, 2003 to add the Cameron project and redefine the property covered by the option retroactively to October 8, 2002. The property now consists of the Discovery and Cameron projects.



Pursuant to the formal agreement, the Company can earn its interest by incurring exploration expenses of $4,500,000 over a four-year period, including $750,000 the first year, $1,000,000 the second year, $1,250,000 the third year and $1,500,000 the fourth year. The Company must also issue 600,000 shares of its share capital to GéoNova, including 300,000 issued upon signature of the agreement. Of these 300,000 shares, 150,000 are subject to an 18-month hold and 150,000 are subject to a 12-month hold. On the first anniversary of the agreement, 150,000 shares issued are subject to a 12-month hold and the 150,000 shares issued on the second anniversary are subject to an 8-month hold. All 600,000 shares have already been issued pursuant to the agreement.



In addition, each share issued to GéoNova was accompanied by half a warrant. Valid for a 24-month period, each full warrant entitles GéoNova to purchase one share at a price equal to the weighted-average price of the shares on the TSX Venture Exchange for the 10 days preceding their issuance, plus a 20% premium. All of the 300,000 warrants have been issued.



Once the option is exercised, a joint venture will be formed and each party will finance any subsequent work in accordance with their interest.



SERVICES AGREEMENT



Effective August 1, 2002, the Company and BBH Géo-Management Inc. (BBH) signed an agreement whereby BBH renders the Company the following services: office space, secretarial, management, administration, accounting, legal, geological consulting, relations with investors and regulatory authorities, exploration and development program management and financing-related services. This agreement covers a three-year period ending August 1, 2005.



PRIVATE PLACEMENTS



The Company completed a private placement of flow-through shares with Northern Precious Metals 2004 Limited Partnership (Northern 2004) for $150,500. The proceeds of this placement will be applied to exploration on the Discovery and Cameron projects. The Company has undertaken to renounce the exploration expense credits in favour of Northern 2004.



The Company completed a private placement of flow-through shares through  Research Capital Corporation for $205,800. The proceeds of this placement will be applied to exploration on the Discovery and Cameron projects. The Company has undertaken to renounce the exploration expense credits in favour of subscribers in the province of Ontario..



The Company completed a private placement of flow-through shares pursuant to a public offering dated April 20, 2004 for $815,200. The proceeds of this placement will be applied to exploration on the Discovery and Cameron projects. The Company has undertaken to renounce the exploration expense credits in favour of its subscribers.



ROYALTIES



The Company is subject to royalty payments on commercial production from certain properties.



ENVIRONMENT



The Company's exploration activities are subject to various laws and regulations governing environmental protection. These laws and regulations are continually changing and generally tend to impose increasing restrictions. The Company conducts its operations so as to provide adequate protection for public health and the environment.





11.

RELATED PARTY TRANSACTIONS



During the year, general and administrative expenses of $316,000 ($322,000 in 2003), discussed under Related Party Transactions on page 11 of the management discussion and analysis, were paid to a company whose officer is also officer of the Company.



Management fees of $95,000 ($169,000 in 2003), consultant and subcontractor fees of $213,000 ($242,000 in 2003) and travelling expenses of $25,000 ($22,000 in 2003) shown in the statement of deferred expenditures were paid to the same company.



In addition, share issue costs of $97,000 ($84,000 in 2003) were paid to the same company. (Note 7)



At December 31, 2004, accounts payable and accrued charges included an amount of $29,000 ($40,000 in 2003) payable to the same company.





12.

FINANCIAL INSTRUMENTS



CREDIT RISK



The financial instruments that expose the Company to market risk and concentrations of credit risk include cash and accounts receivable. The Company invests its cash and short-term investments in high quality securities issued by financial institutions, government agencies and large corporations, and diversifies its investments so as to limit its exposure to credit risk.



FAIR VALUE



The accounting value of cash and cash equivalent, sales tax recoverable, subscriptions receivable, accounts payable and accrued charges approximate their fair value as the related instruments have a relatively short term.





13.

COMPARATIVE FIGURES



Certain comparative figures have been reclassified to conform with the financial statements presentation adopted in the current year.





14.

THE EFFECT OF APPLYING UNITED STATES ACCEPTED ACCOUNTING PRINCIPLES



These financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in Canada. The effect of applying United States generally accepted accounting principles (U.S. GAAP) on net earnings would be as follows:



|                                                                       | 2004                  | 2003                
|---------------------------------------------------------------------- | --------------------- | --------------------
|                                                                       |                       |                     
|                                                                       |                       |                     
|Net loss per Canadian GAAP, as reported                                | $          556,238    | $         779,474   
|                                                                       |                       |                     
|Properties and deferred expenditures (1)                               | 899,914               | 1,353,906           
|Deferred tax recovery (2)                                              | (200,489)             | (640,000)           
|                                                                       |                       |                     
|Net loss and comprehensive income for the year, according to U.S. GAAP | $       1,255,663     | $      1,493,380    
|                                                                       |                       |                     
|Net loss per share per Canadian GAAP, as reported                      | 0.01                  | 0.02                
|                                                                       |                       |                     
|Effect of adjustments:                                                 |                       |                     
|Properties and deferred expenditures (1)                               | 0.02                  | 0.04                
|Deferred tax expenses (recovery) (2)                                   | -                     | (0.02)              
|                                                                       |                       |                     
|Loss per share, according to U.S. GAAP                                 | $                0.03 | $               0.04



(1)

Properties and deferred expenditures are accounted for in accordance with Canadian GAAP as disclosed in note 2. Under Canadian GAAP, the propertys potential for development is sufficient to permit the capitalization of exploration expenditures incurred as property acquisition costs and deferred expenditures and the management intends to pursue the development. Under U.S. GAAP, a final feasibility study showing economically recoverable proven and probable reserves is required for capitalization of property acquisition costs and exploration expenditures. Accordingly, the property related costs must be expended as incurred.



(2)

Under Canadian GAAP, shares issued as flow-through shares are recorded at their face value when issued. When the entity acquires assets the carrying value may exceed the tax basis as a result of the enterprise renouncing the deductions to the investors. The tax effect of the temporary difference is recorded as a share issue cost. Under US GAAP, the proceeds from issuance should be allocated between the offering of shares and the sale of tax benefits. The allocation is made based on the difference between the quoted price of the existing shares and the amount the investor pays for the shares. A liability is recognized for this difference. The liability is reversed when tax benefits are renounced and a deferred tax liability is recognized at that time. Income tax expense is the difference between the amount of the deferred tax liability and the liability recognized on issuance.



The effect of the application of the above adjustments on the balance sheet of the Company at December 31, 2004 would be to decrease properties by $87,750 to $0 ($68,250 in 2003 to $0), decrease deferred expenditures by $3,114,957 to $0 ($2,234,543 in 2003 to $0), increase long-term liability by $92,983 ($0 in 2003) and decrease shareholders equity by $3,295,690 ($2,302,793 in 2003).



The effect on the statement of cash flows would be a further decrease of $897,970 ($1,542,271 in 2003) in cash flows from operating activities and a decrease of $897,970 ($1,542,271 in 2003) in cash flows used in investing activities.







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