U. S. 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.

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
       ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

[ ]    TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE SECURITIES
       EXCHANGE ACT OF 1934  FOR  THE  TRANSACTION PERIOD FROM ______________ TO
       ___________________

                         Commission File Number 0-18939

                             BERKLEY RESOURCES INC.
               (Exact name of Company as specified in its charter)

         A CORPORATION FORMED UNDER THE LAWS OF BRITISH COLUMBIA, CANADA
                 (Jurisdiction of Incorporation or Organization)

                         455 Granville Street, Suite 400
                       Vancouver, British Columbia V6C 1T1
                                     Canada
                    (Address of principal executive offices)

Securities  registered or to be registered pursuant to Section 12(b) of the Act:
NONE

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

                        Common Shares, without Par Value
                                (Title of Class)

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

The number of outstanding Common Shares as of December 31, 2002 was 6,795,934.

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

Indicate by check mark which financial statement item the Company has elected to
follow.
         Item 17  [X]               Item 18  [   ]

(Applicable only to issuers involved in bankruptcy  proceedings  during the past
five years)

Indicate by check mark whether the Company has filed all  documents  and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities  Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. NOT APPLICABLE


<PAGE>




                           Forward-Looking Statements

     The following  discussion  contains  forward-looking  statements  regarding
events and financial  trends,  which may affect  Berkley  Resources  Inc.'s (the
"Company") future operating results and financial position.  Such statements are
subject to risks and uncertainties that could cause the Company's actual results
and  financial  position  to differ  materially  from those  anticipated  in the
forward-looking  statements.  These factors include, but are not limited to, the
factors  set  forth in the  sections  entitled  "Risk  Factors"  in Item 3.D and
"Operating and Financial Review and Prospects" at Item 5.


                                     Part I

Item 1.  Identity of Directors, Senior Management and Advisors

         Not applicable.

Item 2.  Offer Statistics and Expected Timetable

         Not applicable.

Item 3.  Key Information

A.       Selected Financial Information

     The selected historical financial  information presented in the table below
for each of the years ended December 31, 2002,  2001,  2000,  1999, and 1998, is
derived  from the  audited  financial  statements  of the  Company.  The audited
financial  statements  and notes for the balance  sheets as of December 31, 2002
and December 31, 2001, and the statements of operations for each of the years in
the three year period  ended  December  31,  2002,  are  included in this Annual
Report.  The  selected  historical  financial  information  for the years  ended
December  31,  1999 and 1998,  presented  in the table  below are  derived  from
financial statements of the Company that are not included in this Annual Report.
The selected financial information presented below should be read in conjunction
with the Company's financial  statements and the notes thereto (Item 17) and the
Operating and Financial Review and Prospects (Item 5) included elsewhere in this
Annual Report.

     The selected financial information for each of the years ended December 31,
2002,  2001 and 2000 has been  prepared in accordance  with  Canadian  generally
accepted  accounting  principles  ("Canadian  GAAP") and United States generally
accepted  accounting  principles ("U.S.  GAAP"), and the selected financial data
for each of the years  ended  December  31,  1999 and 1998 has been  prepared in
accordance with Canadian GAAP.


<PAGE>


     In this Annual Report, all dollars are expressed in Canadian dollars unless
otherwise stated.

<TABLE>
<CAPTION>
<S>                                           <C>             <C>           <C>              <C>              <C>

Canadian GAAP                                                         At December 31
                                                                      --------------
                                              2002           2001           2000             1999            1998
                                              ----           ----           ----             ----            ----

Operations

Oil and Gas Revenue                       $  406,138      $ 637,497        $ 678,789       $ 488,022       $ 393,893

Oil and Gas Production Expense
   Amortization and Depletion                 39,900        482,700           97,600          66,700         275,000

Rental Revenue                               241,670        208,592          174,025         177,463         165,140

Rental Operations Expense                    218,318        191,879          186,734         170,973         195,566

Net Income (loss)                          (127,647)      (292,576)          201,165          62,514       (244,439)

Net Income Per Share (loss)                    (.02)         (.051)             .042            .013          (.051)


Balance Sheet

Total Assets                             $ 3,829,235     $3,855,897       $4,367,927      $3,773,678      $3,767,810

Short Term Debt                              758,102        909,017        1,331,171         287,665         286,101

Shareholders' Equity                       3,015,933      2,893,580        2,986,156       2,784,991       2,722,477


U.S. GAAP                                                             At December 31
                                                                      --------------
                                             2002            2001            2000             1999            1998
                                             ----            ----            ----             ----            ----

Operations

Oil and Gas Revenue                       $  406,138      $ 637,497        $ 678,789      $  488,022       $ 393,893

Rental Revenue                               241,670        208,592          174,025         177,463         165,140

Net Income (loss)                          (191,847)      (240,576)          183,965          44,514        (88,839)

Net Income Per Share (loss)                    (.03)         (.042)             .038            .009          (.019)


Balance Sheet

Total Assets                             $ 3,927,035     $4,039,497       $4,499,527     $ 3,922,478      $3,934,610

Total Liabilities                            813,302        962,317        1,381,771         988,687       1,045,333

Shareholders' Equity                       3,113,733      3,077,180        3,117,756       2,933,791       2,889,277

</TABLE>

                                 Exchange Rates

     The following table sets forth  information as to the period end,  average,
the high and the low exchange rate for Canadian Dollars and U.S. Dollars for the
periods  indicated  based on the noon  buying  rate in New York  City for  cable
transfers in Canadian  Dollars as certified for customs  purposes by the Federal
Reserve Bank of New York  (Canadian  dollar = U.S.  $1).

              Year Ended:
              December 31    Average     Period End    High      Low
              -----------    -------     ----------    ----      ---

                 1998         1.4831       1.5305      1.5765    1.4096

                 1999         1.4836       1.5375      1.5770    1.4075

                 2000         1.4855       1.4995      1.5600    1.4350

                 2001         1.5487       1.5925      1.6023    1.4933

                 2002         1.5704       1.5800      1.6128    1.5108
<PAGE>

     The following  table sets forth the high and low exchange rate for the past
six months.  As of May 16, 2003,  the exchange rate was CN $1.3672 for each U.S.
$1.00.


              Month                  High            Low
              -----                  ----            ---

              November 2002          $1.5903         $1.5528

              December 2002          $1.5800         $1.5478

              January 2003           $1.5750         $1.5220

              February 2003          $1.5315         $1.4880

              March 2003             $1.4905         $1.4659

              April 2003             $1.4843         $1.4336

B.       Capitalization and Indebtedness

         Not Applicable.

C.       Reasons for the Offer and Use of Proceeds

         Not Applicable.

D.       Risk Factors

     In addition to the other information  presented in this Annual Report,  the
following  should be  considered  carefully  in  evaluating  the Company and its
business.  This Annual Report contains  forward-looking  statements that involve
risk and uncertainties.  The Company's actual results may differ materially from
the results  discussed  in the  forward-looking  statements.  Factors that might
cause such a difference  include,  but are not limited to, those discussed below
and elsewhere in this Annual Report.

     1. Failure to Locate  Commercial  Quantities of Hydrocarbons and Geological
Risks. There is no assurance that commercial  quantities of hydrocarbons will be
discovered.  Geological  conditions are variable and of limited  predictability.
Even if production is commenced from a well or field, production will inevitably
decline over the course of time,  reducing the  operating  profitability  of the
enterprise and eventually causing its termination.

     2. Oil and  Natural Gas Prices.  The  Company has little  control  over the
price it receives  for its  products.  Prices are  determined  by the  worldwide
supply  of and  demand  for  energy.  Levels  of  production  maintained  by the
Organization of Petroleum  Exporting Countries ("OPEC") member nations and other
major oil producing countries are expected to continue to be a major determinant
of oil price  movements in the future.  As a result,  future oil price movements
cannot be  predicted  with any  certainty.  Similarly,  during the past  several
years,  the  market  price  for  natural  gas has been  subject  to  significant
fluctuations  on a monthly  basis as well as from year to year.  These  frequent
changes  in the  market  price  make it  impossible  for the  Company to predict
natural gas price movements with any certainty. Oil prices started the year 2002
at U.S. $19.80 per barrel,  after hitting a mid-November 2001 low of U.S. $17.40
per barrel for West Texas Intermediate (WTI). Oil prices then steadily increased
throughout 2002 to close at year-end at U.S. $32.23.  The 2002 full year average
price for WTI was U.S.  $26.51  per  barrel  virtually  unchanged  from the 2001
average  price pf $25.95.  Natural gas prices  moved  around  during 2002 from a
mid-year  low of Cdn $2,53 per thousand  cubic feet (mcf) to a year-end  high of
Cdn  $6.18/mcf.  The full year 2002 average price for natural gas at the Alberta
Energy Company trading hub at Suffield, Alberta (AECO) was Cdn $4.07mcf compared
to $6.30 average for year 2001.
<PAGE>

     The Company cannot provide assurance that it will be able to market all oil
or natural gas that the Company  produces  or, if such oil or natural gas can be
marketed, that favorable price and contractual terms can be negotiated.  Changes
in oil and natural gas prices may  significantly  affect the  revenues  and cash
flow of the  Company  and the  value  of its oil  and  natural  gas  properties.
Further,  significant  declines  in the prices of oil and natural gas may have a
material adverse effect on the business and financial condition of the Company.

     3. It May Be Difficult to Enforce  Civil  Liabilities  Against the Company.
Because  all of the assets of the  Company  and its  subsidiary,  as well as the
Company's  jurisdiction of incorporation  and the residences of its officers and
directors,  are located  outside of the United  States,  it may be  difficult or
impossible to enforce  judgments granted by a court in the United States against
the assets of the Company and its  subsidiaries or the directors and officers of
the Company who reside outside the United States.

     4. Penny  Stock  Rules May Make It More  Difficult  to Trade the  Company's
Common Shares.  The Securities and Exchange  Commission has adopted  regulations
which  generally  define a "penny  stock" to be any equity  security  that has a
market price, as defined,  less than U.S.$5.00 per share or an exercise price of
less than U.S.$5.00 per share, subject to certain exceptions. Our securities may
be covered by the penny stock rules,  which  impose  additional  sales  practice
requirements  on  broker-dealers  who sell to  persons  other  than  established
customers and accredited  investors such as,  institutions with assets in excess
of U.S.$5,000,000 or an individual with net worth in excess of U.S.$1,000,000 or
annual income  exceeding  U.S.$200,000 or  U.S.$300,000  jointly with his or her
spouse. For transactions  covered by this rule, the  broker-dealers  must make a
special  suitability  determination for the purchase and receive the purchaser's
written agreement of the transaction prior to the sale.  Consequently,  the rule
may affect the ability of  broker-dealers to sell our securities and also affect
the ability of our investors to sell their shares in the secondary market.

     5. No reliable information regarding reserves.  The Company has not engaged
independent  petroleum  consultants  in order  to  compile  oil and gas  reserve
information and does not have reliable  information  regarding the quantities of
natural gas or oil that it may be  recoverable  in future years,  if any. If any
one of our major properties  stops  producing,  it could have a material adverse
effect on our business, financial condition and operating results.

     6. We are dependent on five properties. The Company currently receives more
than 90% of its income from five major properties.  If any one of the five major
properties  stops  producing,  it could  have a material  adverse  effect on our
business, financial condition and operating results.

Item 4.  Information on the Company

A.       History and Development of the Company

     The Company was organized  under The Company Act of the Province of British
Columbia,  Canada on July 18, 1986 under the name of Berkley Resources,  Inc. by
virtue of a statutory  amalgamation among and between Fortune Island Mines Ltd.,
Kerry Mining Ltd. and Berkley  Resources Inc. The principal  executive office of
the Company is located at 455 Granville Street,  Suite 400,  Vancouver,  British
Columbia  V6C 1T1,  and its  telephone  number is  604-682-3701.  The  principal
business of the Company is that of an investor in various oil and gas properties
principally  located in Alberta,  Canada.  In August 2001, the Company purchased
the  remaining  interest in the office  building that it occupies and became its
the sole owner.  As a result,  the Company now leases the other  offices that it
does not occupy to other businesses.
<PAGE>

B. Business Overview

     The  Company is in the  business  of  participating  in various oil and gas
drilling  ventures  in  Alberta,   Canada.   The  Company's  position  in  these
investments mostly is that of an investor and not that of the operator in charge
of drilling or production  of oil and gas.  Although the Company has in the past
served as operator for the joint account and may do so again in the future.

     The investments made by the Company are chosen on the basis of, among other
things,  (i) the amount of cash available;  (ii) the desired  diversification of
oil as contrasted by natural gas  exploration;  (iii) the  geographical  area in
which  the  property  is  located;  (iv) the  nature  and  extent  of  available
geological and  geophysical  data  concerning the property;  and (v) the time at
which it is desirable to commence drilling  activities,  for reasons such as the
availability  of drilling  equipment and the  provisions of the drilling  rights
agreement and other relevant agreements.

     In making an investment, the Company will enter into an Operating Agreement
with other  investors.  The  Operating  Agreement  sets forth the  participating
interest of the parties and incorporates the Operating Procedures Manual adopted
by the Canadian  Association of Petroleum Landmen  ("Manual").  According to the
Manual the parties' interest and liability in each investment is several and not
joint with the other  participants.  The  interest  of the Company in the lands,
wells and  equipment is that of  Tenants-in-Common.  Each investor in a drilling
property is deemed to be a "Joint  Operator" and the "Operator"  means the party
appointed  to carry out the  operations  of the  drilling  program for the joint
account.  The  Company  would be one of the  Joint  Operators  in any  Operating
Agreement in which it chose to participate.  Each Joint Operator owns a share of
the petroleum  substances produced from the wells which is proportionate to that
Joint Operator's ownership interest. Each Joint Owner, at its own expense, takes
in kind and separately disposes of its proportionate share of production. If the
Joint Operator fails or refuses to take his share of the products,  the Operator
has the  authority  to sell on behalf of that  Joint  Operator  its share of the
production.  The Operator is delegated the authority to manage the  exploration,
development  and  operation of the joint lands.  The Operator  typically has the
authority  to commit on behalf of all  Joint  Operators  up to  $25,000  without
written  approval of all Joint  Operators.  Prior to commencement of work on any
well covered by the Operating Agreement,  the Operator must submit to each Joint
Operator  a  program  of  drilling  and an  estimate  of  drilling  costs and an
completion costs for approval by all Joint Operators.

     Any  assignment  or transfer  of the  Company's  interest  in an  Operating
Agreement is subject to the procedures set forth in the Manual.  The Company may
be required to offer its interest to the Joint  Operators  prior to attempting a
sale to a third party. In addition,  the Company may "farm-out" a portion of its
interest and retain an overriding royalty on production.

     The oil and gas industry  deals in two basic forms of  ownership  interests
namely Working Interests and Overriding Royalties:

     (i)  Working Interest (WI): means the percentage of undivided interest held
          by a Joint  Operator  (i.e.  leaseholder)  in a specific tract of land
          (i.e. joint lands).  The Working Interests held by all Joint Operators
          in any specific tract of joint lands must total 100%.  Each W.I. party
          is  responsible  for its WI  percentage  share  of costs  incurred  to
          conduct "work" (i.e. drilling,  seismic, production etc.) on the joint
          lands.  Working  Interests  are  always  considered  to be  an  active
          interest in the costs,  risks and benefits  associated  with the joint
          lands and  operations  conducted  thereon and the oil or gas  produced
          there from.

     (ii) Overriding Royalties (ORR): Overriding Royalties are a specified share
          of oil  and/or gas as and when  produced.  ORR's are free and clear of
          costs,  risk and expense to the holder of the ORR.  Usually  ORR's are
          based  on gross  production  and as such are  referred  to as  "Gross"
          Overriding  Royalties  or  GORR's.  ORR's  are  considered  a  passive
          interest  in as much as the  holder  of an ORR is not  subject  to any
          cost,  risk  or  expense  nor  is  the  ORR  holder  involved  in  any
          decision-making with respect to the royalty lands.
<PAGE>

     The  Company's  program  for  investing  in  drilling  programs is based on
several factors.  The Company endeavors to obtain and review geological opinions
on the property  involved  and since if it is not the  Operator of the well,  it
considers  the  reputation  of the  Operator.  The Company  attempts to identify
drilling programs offering a low to medium risk on its investments.  The Company
also tries to keep a balance  between  investments  in oil and gas.  The Company
attempts to reduce its risks by spreading its investments  over several drilling
ventures.  The Company has not  borrowed  money for purposes of investing in any
oil or gas venture.

     In each  investment,  the  Operator  maintains  its own  staff  or  retains
independent operating personnel (including land men, geologist,  accountants and
engineers) that are employed to conduct the oil and gas operations of each joint
venture,  including  supervision of the drilling and producing activities of the
joint venture,  and therefore the Company does not maintain independent staff or
employees.  The Operator  exercises  general  control over the activities of the
joint  venture and has the  authority  to  determine  the timing of  commencing,
completing or abandoning  any  particular  well  authorized  for drilling by the
Joint Operators.  The Operator  maintains all records which are available to the
Company upon reasonable request and at its expense. All geophysical  information
(such as logs,  geological and geophysical and  interpretative  data) remains in
the possession of the Operator but is available to the Company upon request.

Operating Costs and Special Project Charges

     In Canada,  the relationship of all investors in a drilling program is that
of Joint Operators. The property on which drilling is conducted is deemed "joint
lands" and is held by the  Joint-Operators  as  tenants  in  common.  The "Joint
Operators" are owners of the undeveloped  joint lands and each Joint Operator is
entitled to its  percentage  of the  production  and  disposes of it as it deems
necessary.  Therefore,  the  gross  revenue  from oil or gas  production  is the
percentage  of oil and gas  owned  by the  Company  which it has sold to a buyer
company.  Each Joint  Operator,  such as the Company,  must pay its share of the
expenses  incurred in extracting its share of the production  from the well. The
Company's  investment  in any one  drilling  program  range  approximately  from
$20,000 to $300,000,  the majority of which must be paid prior to any production
revenue being realized.

     The Company's  interest in the various oil wells as a Joint Operator varies
from 0.25% to 50% and covers  approximately  50 oil and gas wells.  Based on its
oil and gas revenues for calendar year 2002, the Company  received more than 90%
of its income from five major  properties;  (i) John Lake; (ii) Skiff; and (iii)
Zama/Virgo leases (iv) Halkirk and (v) Carbon.  These properties are expected to
stay in production during calendar year 2003.

Government Regulation

     On March 28, 1985,  an agreement  regarding  energy  pricing and  taxation,
known as the Western  Accord,  was entered into by the  Government of Canada and
the  Canadian  provinces  of Alberta,  Saskatchewan  and British  Columbia.  The
Western  Accord called for the  deregulation  of Canadian  crude oil pricing and
marketing,  proposed changes to domestic natural gas pricing,  and announced the
elimination  of an amendment  to a number of federal oil and gas taxes,  charges
and  incentives.  Based on the  Western  Accord,  crude oil  pricing,  including
synthetic  oil  pricing,  was  deregulated  June 1, 1985 so that prices would be
negotiated between the buyer and seller.

     The Western  Accord had  maintained the Alberta Border price of natural gas
at $2.95/mcf until a new domestic natural gas pricing policy was introduced.  On
October 31, 1985, the Provinces of Alberta and the Canadian  government  reached

<PAGE>

an  agreement  that  provided a  framework  for natural  gas  deregulation.  The
agreement  established  a mechanism  to allow prices to be  negotiated  directly
between  consumers and  producers.  After November 1, 1985, the price of natural
gas exported to the United States or sold in Canada was deregulated.

     At the present time,  Canadian natural gas is supplied to California by two
pipelines,  (i) a  direct  link  through  the San  Francisco-based  Pacific  Gas
Transmission  Company  or (ii) a  displacement  link via  Pacific  International
Transmission   Company.   Both  lines  are  presently  committed.   Pacific  Gas
Transmission  has  announced a proposed  expansion  of its  pipeline  which will
deliver more Alberta natural gas to California.  In 1998,  construction of a new
pipeline covering  approximately 620 miles was completed,  running from Alberta,
Canada to the Montana border and to Opal Wyoming, connecting with the Kern River
Gas Transmission Co. pipeline which runs to Southern  California.  California is
an important  market for Alberta,  Canada  natural gas producers  because of the
growing  demand for natural gas in that state,  but such  importance has shifted
slightly due to the  integration of U.S.  Midwest  markets  through the seliance
Pipeline system, which commenced operations in 1999.

Alberta Royalty Tax Credit Program

     Since  calendar year 1974,  the Province of Alberta had a program  entitled
"Price-Sensitive Alberta Royalty Tax Credit Program" ("Tax Credit Program"). The
Tax Credit  Program  provided for a refund of portions of the royalties  paid to
the Province of Alberta by the  producers on the sale of oil and gas produced in
Alberta,  Canada.  The  amount  of  refund  to  producers  is based on the price
received for the oil and gas produced.  For financial  statement  purposes,  the
Company  accounts for the tax credit by reducing its  operating  expenses by the
amount of the credit  resulting in an increase in income before  taxes.  For tax
purposes,  since it is  intended  not to be taxed,  the  amount of the credit is
reinstated as an operating expense and thus reduces taxable income. In 2002, the
amount of the tax credit refund to the Company was approximately $15,000.

Reserves

     The Company has engaged  independent  petroleum  consultants to compile oil
and gas reserve information with respect to its two major producing  properties,
Skiff and John Lake.  The  Company  has access to  similar  oil and gas  reserve
information  from other  Joint  Operators  or the  Operator of some of the other
major  properties.  Some  information  was  obtained  from the  unrelated  Joint
Operator's independent petroleum consultants.  Since the Joint Operator for whom
the report was prepared had a different  percentage  ownership  from that of the
Company,  it would be necessary  to adjust the numbers to reflect the  Company's
percentage of ownership. Furthermore, the oil and gas reserve information relied
upon by the  Company in its  financial  statements  ascertains  the  reserves on
pricing  assumptions  which is not  permitted  under SEC rules but is acceptable
under Canadian accounting rules.

Environmental Regulations

     In order to  explore  any  claim or  lease,  it is  necessary  to  obtain a
geophysical  or  drilling  license and it may be  necessary  to post a bond with
notices to several  Canadian  governmental  agencies  including  the  Provincial
Environmental  Agency.  The procurement of drilling licenses has had no material
adverse  impact  on the  Company's  operations.  In  certain  areas  defined  as
"sensitive areas," the Environmental  Agency requires special work permits.  The
Company's  investments  does not  include  property  located  within any defined
"sensitive areas."

C.       Organization Structure

         The Company has no subsidiaries.
<PAGE>

D.       Property, Plants and Equipment

     The  Company is in the  business  of  participating  in various oil and gas
drilling ventures in Alberta Canada by entering into an Operating Agreement with
other investors. The Operating Agreement set forth the participating interest of
the parties and each  investors'  interest in the lands,  wells and equipment is
that of Tenant-in-Common. The following is a description of the various interest
of the Company in the oil and gas lease:
<TABLE>
<CAPTION>
<S>     <C>                 <C>                            <C>           <C>

     LEASE NO.          DESCRIPTION                      INTEREST      STATUS
     ---------          -----------                      --------      ------

     Berry
     -----
     34305              Sec.29-27-13 W4M                 8.92867%      Not Producing


     Carbon
     ------
     047790068          Sec.29-29-22 W4M                 6%WI          Producing - gas
     32443              Sec.32-29-22 W4M                 6.25%WI       Producing - gas
     25906              Sec.28-29-22 W4M                 6.25%WI       Producing - gas
     0477010002         Sec.31-29-22 W4M                 10%WI         Producing - gas


     Economy Creek
     -------------
     5498120007         Sec.3-70-1W6M                    25%WI         Not Producing
     5498120007         Sec .10-70-1W6M                  50%WI         Not Producing
     5498120008         Secs.4, 5, 8&9-70-1W6M           25%WI         Not Producing
     5498120008         Sec.17-70-1W6M                   50%WI         Not Producing
     0598040371         Sec.20&21-70-1 W6M               50%WI         Not Producing


     North Halkirk
     -------------
     34397              Sec.14-39-16 W4M                 6.25%WI       Not Producing
     34398              S1/2 & N1/2 Sec.22 39-16 W4M     6.25%WI       Not Producing
     26457              N/2 Sec.22-39-16 W4M             6.25%WI       Not Producing


     South Halkirk
     -------------
     34282              Sec.16 38-16 W4M                 3.125%WI      Producing - gas
     32298              Sec.20-38-16 W4M                 6.25%WI       Producing - gas
     Freehold           Sec.E/2 19-38-16 W4M             6.25%WI       Producing - gas
     Freehold A-8057    Sec.8-38-16 W4M                  6.25%WI       Producing - gas
     PanCan PNG 16258   NE/4 Sec.17-38-16 W4M            6.25%WI       Producing - gas
     0478020150         S/2&NE/4 Sec.18-38-16 W4M        3.125%WI      Producing - gas
     0478080305         SE/4 Sec.20-38-16 W4M            0.75%WI       Producing - gas


     Haven
     -----
     047939297          Sec.12-25-4 W4M                  0.3%WI        Not Producing
                        Sec.7, 18-25-3 W4M               0.3%WI        Not Producing
     38054              Sec.7, 18&20-25-4 W4M            0.50%WI       Not Producing
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>               <C>                             <C>              <C>

     LEASE NO.          DESCRIPTION                      INTEREST      STATUS
     ---------          -----------                      --------      ------

     John Lake
     ---------
     40852              All Sec.26&27-55-1 W4M             10%WI       Producing - gas
                        Sec.1-56-1 W4M                     10%WI       Producing - gas
     485070102          W/2 36-55-1 W4M                    10%WI       Producing - gas
     487040220          E/2 Sec.36-55-1 W4M                10%WI       Producing - gas
     40854              NW/4 12-56-1 W4M                   10%WI       Producing - gas
                        SE/4 14-56-1-W4M                   10%WI       Producing - gas
     40853A             All Sec.15-56-1-W4M                10%WI       Producing - gas
     40855A             All Sec.24-56-1 W4M                10%WI       Producing - gas
     40856              All Sec.34-56-1 W4M                10%WI       Producing - gas


     Manyberries
     -----------
     35828              SE Sec.23-5-5 W4M                  50%WI       Not Producing
     26592              W/2 Sec.23-5-5 W4M                 50%WI       Not Producing
     01818              NE/4 Sec.23-5-5 W4M                50%WI       Not Producing


     Oyen
     ----
     30364              S/2 Sec.16-29-4 W4M                 1%WI       Not Producing
     30365              SW/4 Sec 24-29-5 W4M            0.750%WI       Not Producing
     29517              N/2 Sec.24-29-5 W4M             0.750%WI       Not Producing


     Sibbald
     -------
     39367              Sec.2,4, E/2 9&10-28-1 W4M        .50%WI       Producing - gas
     0476122257         W/2 9-28-1 W4M                    .25%WI       Not Producing
                        Sec. 3-28-1 W4M                   .25%WI       Not Producing
     29513              S/2 Sec.15-28-1 W4M              1.00%WI       Producing - gas
     6359A              N/2 Sec. 15&S/2 Sec.22-28-1      1.00%WI       Not Producing


     Skiff
     -----
     Sawtooth           NW1/4Sec.16,SE1/4Sec.20;Lsds 2,
                        7&8 & SW1/4Sec.21-5-14 W4M       7.67%WI       Producing - oil
     0484080300         NW1/4Sec.29-4-14 W4M           10.526%WI       Producing - oil
                        W1/2Sec.32-4-14 W4M             5.26315%       Producing - oil
     048307070286       Lsds.3,4&5 of Sec.5-5-14         5.50%WI       Producing - oil
                        Lsds.6 of Sec.5-5 14 W4M         5.50%WI       Producing - oil
                        NW1/4 of Sec.9-5-14 W4M          5.50%WI       Producing - oil
     32596              Lsd.5 of Sec.16-5-14 W4M           10%WI       Producing - oil
     0483030060         NW1/4 of Sec.16-5-14-W4M           10%WI       Producing - oil
     0496100384         W1/2&Lsd.10,15-5-14 W4M            10%WI       Producing - oil
     36854              Lsd.1&NW1/4 of Sec.21-5-14         10%WI       Producing - oil
                        Lsds.2,7&8 & SW1/4 of Sec.21-5-    10%WI       Producing - oil
                        14 W4M
<PAGE>
     LEASE NO.          DESCRIPTION                      INTEREST      STATUS
     ---------          -----------                      --------      ------
     7865A              NE1/4 of Sec.21-5-14 W4M           10%WI       Producing - oil
     0486070002         NW1/4 of Sec.22-5-14 W4M         6.30%WI       Producing - oil
     0477080167         SW1/4 of Sec.28-5-14 W4M           10%WI       Producing - oil


     Sturgeon Lake
     -------------
     5495080092         Sec.23,26,27,34,35-70-24 W5M     27.5%WI       Not Producing


     Zama Virgo
     ----------
     0591080261         N/2 Sec.20-114-5 W6M              5.00%        Producing - oil
                                                           GORR
     091120175          NW/4 Sec.26-114-5 W6M             5.00%        Producing - oil
                                                           GORR
     092020380          W/2 Sec.22-115-5 W6M       Sliding Scal        Producing - oil
                                                            ORR
     093020449          SE/4 Sec.27-114-5 W6M        50% of 10%        Producing - oil
                                                           GORR
</TABLE>

     Office Building
     ---------------
     455 Granville Street  Lot B, Block 22, District       100%        N/A
     Vancouver, Canada     Lot 541, Plan 8227

Item 5.  Operating and Financial Review and Prospects

     This  discussion  and analysis of the  operating  results and the financial
position  of the Company for the years  ended  December  31, 2002 and 2001,  and
should be read in  conjunction  with the  financial  statements  and the related
notes attached hereto.

A.       Operation Results

     The Company's principal business is in the participating in various oil and
gas  drilling  ventures in Alberta.  The Company has  interest in various  wells
which  vary from  0.25% to 50% and  covers  approximately  50 oil and gas wells.
Based on its oil and gas revenues for year ended  December 31, 2002, the Company
received  more than 90% of its income from five  properties:  (i) the John Lake,
(ii) the Skiff,  (iii) the  Zama/Virgo,  (iv)  Halkirk,  and (v)  Carbon.  These
properties are expected to stay in production during year 2003.

Results of Operations

     The  Company's  balance  sheet as at  December  31,  2002,  as  compared to
December  31, 2001,  reflects its  expenditures  on oil and gas  properties  and
equipment  and rental  income for the period  ended  December  31,  2002 and the
results of its  operations  for fiscal year  December 31, 2002.  Overall,  total
assets  decreased by $26,662 and total  liabilities  decreased by $149,015.  The
Company's  working  capital  increased  from  $294,732 at  December  31, 2001 to
$431,740 at December 31, 2002.
<PAGE>

Revenues

     Oil and gas revenues decreased by approximately $231,000 from 2001 to 2002,
and decreased by  approximately  $41,000 from 2000 to 2001. Of the total oil and
gas revenues of $406,138 in 2002,  the Company  received  $135,122 from the John
Lake leases;  $107,695 from the Skiff leases;  $67,200 from the Halkirk  leases;
$46,153  from the Carbon  leases;  and $42,762  from the Zama Virgo  leases.  In
general, factors affecting the oil and gas revenues are a combination of oil and
gas production and price  fluctuations.  The decrease in revenue in 2002 was due
to a reduction in both oil and gas production.

     Oil revenues  decreased  by  approximately  $122,000  from 2000 to 2001 and
decreased by approximately  $59,000 from 2001 to 2002. Oil production  decreased
by approximately  22% from 2000 to 2001 and decreased by approximately  40% from
2001 and 2002. The Company's  average oil prices decreased 24% from 2000 to 2001
and increased 12% from 2001 to 2002.

     Natural gas revenues increased by approximately  $119,000 from 2000 to 2001
and decreased by approximately  $178,000 from 2001 to 2002. The price of natural
gas increased by 50% and  production  decreased by 7% in 2001.  During 2002, the
price  received  by the  Company  for its  natural  gas  deceased by 30% and the
production decreased by 16%.

     The  company's  oil and gas  operating  costs  increased  by  approximately
$74,000 from 2000 to 2001 and  decreased by  approximately  $68,000 from 2001 to
2002.  The decrease in operating  costs was primarily due to the decrease in oil
and gas revenues.

     Amortization and depletion  expense is determined by the unit of production
method. Accordingly, depletion fluctuates with levels of production and reserves
and is not  directly  related to oil and gas revenues  which are also  dependent
upon price fluctuations.

     Interest income decreased from $56,961 for the year ended December 31, 2001
to $23,506 for the year ended  December 31, 2002.  This decrease was caused by a
lowering of interest rates and a reduction of monies held on deposit.

     Rental  revenue for 2002 was $241,670,  an increase of $33,078  compared to
2001.  The increase was  primarily due to rental rate  increases.  Rental profit
before interest and  amortization  was $73,062  compared to $75,549 for 2001 and
$45,845 for 2000.

Expenses

     The Company's  administration expenses for the year ended December 31, 2002
of $351,062  shows an increase of  approximately  $88,000  from the December 31,
2001 amount of $263,185. The increase in administration expenses arose primarily
from an increase of $87,000 for consulting  and management  fees, an increase of
$20,940 for professional  fees and a decrease of $30,632 for wages. The increase
of $87,000 in consulting and management fees arose primarily from the management
contact with a former director and related individual ($30,000 for the year) and
$30,000 in fees to the  President  of the  Company.  The  decrease of $30,632 in
wages was due to a reduction in employees during the later part of the year. The
increase of $20,940 in professional  fees was due to increased legal fees due to
changes of officers and directors and management contracts.

     Account payable and accrued liabilities decreased by approximately $553,000
from  December  31, 2000 to December  31, 2001 and  decreased  by  approximately
$150,915 from December 31, 2001 to December 31, 2002.

<PAGE>

     Accounts receivable  fluctuate from year to year depending on the timing of
production  receipts from operators and amounts due from participants in oil and
gas activities.  Accounts  receivable  decreased by approximately  $387,000 from
December 31, 2000 to December 31, 2001 and  decreased  by  approximately  $7,000
from December 31, 2001 to December 31, 2002.

Impact of Inflation

     The primary  inflationary  factor  related to the  Company's  operations is
reflected in the world price of oil and natural gas.

B.       Liquidity and Capital Resources

     In 2001, the Company issued 1,000,000 units at a price of $0.20.  Each unit
consisted of one share and one non-transferable share purchase warrant entitling
the investor to purchase an additional  common shares on or before  November 23,
2002 at a price of $0.25 per share.  Included in this issuance was a Director of
the Company as to 500,000 units. The securities issued to the director contain a
hold period and may not be traded  until May 11,  2002,  the  remaining  500,000
shares are not be tradable  until  November 23, 2002.  In  November,  2002,  the
investors  exercised their warrants to purchase  1,000,000  common shares of the
Company at $0.25 per share.

     As of December  31, 2002,  the Company had  $431,740 in working  capital as
compared  with $294,732 as of December 31, 2001.  For the upcoming  fiscal year,
the  Company  believes  that it has  sufficient  capital to satisfy  its present
requirements and to continue its operations.

C.       Research and Development, Patents and License, etc.

         Not Applicable.

D.       Trend Information

     The year 2002 saw steady to strong oil prices,  however  natural gas prices
showed  significant  decline from the strong 2001 with a year opening  price for
oil of  U.S.$19.78  per barrel for West Texas  Intermediate  (WTI) to a year-end
close  of   U.S.$32.23.   The  2002  full  year   average   price  for  WTI  was
U.S.$26.15/barrel,   virtually   unchanged   from  the  2001  average  price  of
U.S.$25.95.

     Natural gas prices  moved  around  during 2002 from a mid-year low of $2.53
per thousand  cubic feet (mcf) to a year-end  high of  $6.18/mcf.  The full year
2002 average price for natural gas at the Alberta Energy Company  trading hub at
Suffield,  Alberta (AECO) was $4.07/mcf compared to $6.30 average for year 2001.
During the first  quarter of 2003  natural  gas prices  have  continued  to gain
strength  due to cold winter  weather and the decline of Canadian  and U.S.  gas
production.  At the same time,  oil prices were higher due to the Iraq situation
and the general strike in Venezuela.

     Regardless  of these and other  specific  influences  on oil and gas prices
from time to time, the management of the Company believes that U.S.$25.00/barrel
for WTI oil is a  reasonable,  Industry  accepted  benchmark  on  which  to base
investment  decisions.  This benchmark price for oil will translate into natural
gas prices within the range of Cdn. $3.75 to $6.00/mcf.  Near record low storage
of natural  gas across  North  America at the end of the first  quarter  2003 is
expected  to keep  natural  gas prices at the high end of that range  throughout
most of 2003.

     The oil and gas  Industry  will view the year 2002 as one of  recovery  and
stabilization.  The events of September 11, 2001 and the Enron debacle  resulted
in increased  government  presence in all businesses  throughout  North America.

<PAGE>

Canada  had  the  added  issue  of  the  Kyoto  protocol  which  relates  to  an
international  agreement to reduce  greenhouse gas emissions..  All three issues
are  finding  perspective  with time.  Overall,  security  of supply,  corporate
transparency and environmental  awareness will drive and guide the activities of
Industry throughout 2003.

     Income  Trust Funds  continued to dominate the purchase and sale of on-line
production in Canada in 2002. Income Trust Funds provide preferred tax treatment
to unit investors and are by design a harvesting process,  returning very little
capital to  Industry  for the  development  of new  prospects.  The  company has
responded to this  situation by  partnering  with other  smaller  operators  and
developing its own prospects.  The Company  developed the Economy Creek Triassic
oil  prospect  jointly  (50-50)  with an  Industry  partner  then farmed out the
drilling of this prospect to other parties on terms that were very  favorable to
the Company.  Although the initial test well "Real et al Cornwall  8-8-70-1 W6M"
was not successful, the process exposed the Company to a significant opportunity
at a good investment ratio. The company is repeating this process in other areas
in Western  Canada.  We expect to have  drillable  prospects  ready to market by
mid-to-late 2003.

     The Company continues to work with its operating partner Suncor Energy Inc.
to farm out the drilling of the  Sturgeon  Lake Leduc (D-3) oil  prospect.  This
prospect is located in central  Alberta at township 71 range 23 W5M. The Company
holds a 27.50% working interest in this high opportunity but costly prospect.

     Major oil producers had a very profitable year in 2002. Gas producers had a
strong  fourth  quarter  in 2002 and an even  stronger  first  quarter  in 2003.
Large-scale projects such as new oil sands plants and major gas pipelines,  such
as the  Mackenzie  Valley  line,  are  again on the front  burner as the  larger
producers seek ways to invest their  unbudgeted  cash. The  combination of large
projects and a robust  conventional  oil and gas Industry  should  provide for a
dynamic but orderly business environment throughout 2003 and beyond. The company
will continue to adjust its  operating  practices in response to these and other
influences experienced by Industry throughout 2003.

Item 6.  Directors, Senior Management and Employees

A.       Directors and Senior Management

     The  following  is a list of the  Company's  directors  and  officers as of
December 31, 2002.
<TABLE>
<CAPTION>
<S>                             <C>                              <C>                                <C>

                                                       Principal Occupation, Business or          Director
Name                      Position Held                Employment for the Last Five Years         Since
----                      -------------                ----------------------------------         --------
Louis Wolfin              Secretary, Director and      Mining Executive; Director of               1990 -
                          Former Chief Executive       Coral Gold Corp.                            Present
                          Officer

Matt Wayrynen(1)          President and Director       Retired Real Estate and Investment          June 2002 -
                                                       Adviser; and President and Director         Present
                                                       of Coral Gold Corp.

Lloyd Andrews             Director and Chairman        Businessman; Director of Smith              June 2002 -
                                                       Barney Mutual Fund; Director of             Present
                                                       Coral Gold Corp.; and Senior
                                                       Consultant to Chem Nuclear Systems
                                                       and Flow International.

   (1) Mr. Matt Wayrynen is the son-in-law of Mr. Louis Wolfin.
</TABLE>

<PAGE>

B.       Compensation

     The following table sets forth  particulars  concerning the compensation of
the executive  directors as defined in Form 41  prescribed by the  "Regulations"
under the Securities  Act of the Province of British  Columbia for the Company's
calendar year ended December 31, 2002.

     The Company has three executive officers,  namely Lloyd Andrews, a Director
and Chairman,  and Matt Wayrynen,  a Director and President of the Company,  and
Louis Wolfin, a Director and Secretary.
<TABLE>
<CAPTION>
<S>                            <C>         <C>           <C>            <C>            <C>                <C>             <C>


                                                    Summary Compensation Table
                                                    --------------------------

                             Annual Compensation                                     Long-Term Compensation Awards
                             -------------------                                     -----------------------------
                                                                                       Securities     Restricted
                                                        Bonus for    Other Annual        Under       Shares/Units      All Other
Name/Principal                            Salary(1)     the Year     Compensation     Options/SARs      Awarded      Compensation
                                          ------        --------     ------------                       -------      ------------
Position                       Year           $             $              $         Granted (#)(2)        $               $
--------                       ----                                                  -----------

Matt Wayrynen                 2002(3)      $30,000         NIl            NIl             NIL             NIl             NIl
President

Lloyd Andrews                 2002(4)        NIL           NIL            NIl             NIL             NIl             NIL
Chairman


Louis Wolfin                   2002          NIL           NIL            Nil           195,000           NIl             NIl
Secretary and Former Chief     2001          NIL           NIL            NIl           195,000           NIl             NIl
Executive Officer              2000          NIL           NIL            NIl           195,000           NIl             NIl

Ernest Calvert                 2002(5)     $60,000         NIL            Nil           195,000           NIl             NIl
Former President               2001        $60,000         NIL            NIL           195,000           NIl             NIL
                               2000        $60,000         NIL            NIL           195,000           NIl             NIL
</TABLE>

        (1)  No executive officer earned in excess of $100,000.
        (2)  Represents  total  common  shares under option as of the end of the
             calendar year.
        (3)  Became the president on July, 2002.
        (4)  Became the chairman on June, 2002.
        (5)  Resigned as president on June, 2002.

C. Board Practices

     The  Board  of  Directors  of  the  Company  presently  consists  of  three
directors,  Matt Wayrynen, Lloyd Andrews and Louis Wolfin. Each of the directors
will serve until the next Annual General Meeting of  shareholders.  The officers
of the Company are elected by the Board and serve at the pleasure of the Board.

     The Company has no standard  arrangement  pursuant to which  directors  are
compensated  by the Company for their  services in their  capacity as directors.
Further, the Company has no contracts with any of its directors that provide for
payments upon termination.

     The Company has an audit  committee  consisting  of Matt Wayrynen and Louis
Wolfin.  The  roles  and  responsibilities  of the  audit  committee  have  been
specifically  defined and include  responsibilities  for  overseeing  management
reporting on internal  control.  The audit  committee  has direct  communication
channels with the external auditors.
<PAGE>


D.       Employees

         The Company has no full time employee.

E.       Share Ownership

         The  following table sets for  the share ownership of the directors and
officers of the Company as of December 31, 2002.

        Name of Beneficial Owner            Number of Shares          Percent
        ------------------------            ----------------          -------

        Louis Wolfin                               967,683              14.0%

        Matt Wayrynen*                           1,723,256              25.4%

        Lloyd Andrews                              140,000               2.0%

        All Officers and Directors as a
        Group (3 in number)                      2,830,939                42%

        ------------
        *  1,718,256 shares are held by his spouse.

Options Granted to Officers During the Fiscal Year

<TABLE>
<CAPTION>
<S>                             <C>                        <C>                  <C>                      <C>

Name of Officer            Securities Under Option     Exercise Price   Purchase Price, if any    Expiration Date
---------------            -----------------------     --------------   ----------------------    ---------------
Nil
</TABLE>

Outstanding Options

     The following  information  as of December 31, 2002,  reflects  outstanding
options held by directors and employees of the Company.
<TABLE>
<CAPTION>
<S>                                         <C>                  <C>               <C>                    <C>

                                                                                                    Expiration Date
Name                                   No. of Shares        Date of Grant     Exercise Price              of Option
----                                   -------------        -------------     --------------        ---------------

Ernest Calvert                               195,000             04/25/00             $$0.34               04/25/05

Louis Wolfin                                 195,000             04/25/00              $0.34               04/25/05

Jim O'Byrne                                   20,000             04/25/00              $0.34               04/25/05

Andrea Regnier                                10,000             04/25/00              $0.34               04/25/05

David Wolfin                                   5,000             04/25/00              $0.34               04/25/05

Jim Baylis                                     5,000             04/25/00              $0.34               04/25/05

E. M. Freddie Chapel                           2,500             04/25/00              $0.34               04/25/05

Sandy Roy                                      5,000             04/25/00              $0.34               04/25/05

George Scott                                  20,000             04/25/00              $0.34               04/25/05

Options  held by officers and                390,000
directors as a group

</TABLE>

<PAGE>




Item 7.  Major Shareholders and Related Party Transactions

A.       Major Shareholders

     As far as it is known to the  Company,  it is not  directly  or  indirectly
owned or controlled by any other corporation or by the Canadian  Government,  or
any foreign government.

     As of December 31, 2002,  the  following  persons  known to the Company own
beneficially  five percent (5%) or more of the outstanding  shares of each class
of the Company's voting securities:


                                      Number of Shares of         Percent of
Name                                  Common Stock Owned            Class
-----                                 -------------------         ----------

Matt Wayrynen                                 5,000                   *

Lisa Wayrynen**                           1,718,256                  25.3%

Gibralt Capital Corporation               1,700,000                   25%

Louis Wolfin                                967,683                  14.2%

---------------------------
*     Less than 1%.
**    Spouse of Matt Wayrynen, the Company's president.

     Pursuant to a private  placement in February 2001, Lisa Wayrynen  purchased
500,000 units consisting of 500,000 common shares of the Company and warrants to
purchase an additional  500,000 common shares of the Company.  In November 2002,
Ms.  Wayrynen  exercised her warrants and received an additional  500,000 common
shares of the Company.

     In June 2002, Ms. Wayrynen purchased an additional  1,618,256 common shares
of the Company  from  Ernest  Calvert,  a former  director  of the  Company.  To
purchase the 1,618,256 common shares, Lisa Wayrynen arranged debt financing from
a third party lender, and these shares have been pledged as collateral  security
to the lender until the loan is repaid.

     In December  2002,  Lisa Wayrynen sold  1,700,000  common shares to Gibralt
Capital Corporation. Gibralt purchased the Shares for investment purposes.

B.       Related Party Transactions

     The Company owns a certain office  building  located in Vancouver,  British
Columbia.  Tenants in this office building  include  several  companies in which
Messrs.  Wolfin and Calvert have an interest.  For the year 2002, 2001 and 2000,
these related companies paid annual rent to the Company of $31,200,  $31,200 and
$31,200, respectively. The Company believes such rent was comparable to the rent
that would have been charged to an unaffiliated third party.

     For the year 2002, 2001 and 2000, the Company paid to other companies whose
shareholders  are  shareholders  of the Company  $48,291,  $46,969 and  $55,805,
respectively,   for  accounting,   administrative  and  premises  expenses,  and
$117,000, $36,000 and 36,000,  respectively,  for consulting and management fees
expenses.

     On May 1, 2002 the Company  entered into an  employment  contract  with the
former  President/CEO  Mr.  Ernest  Calvert that  terminates  June 1, 2006.  The
agreement  provides  for an annual  salary of $60,000  payable  monthly  for Mr.
Calvert's continued services as a Consultant to the Company. In addition, on May

<PAGE>

1, 2002 the company  entered into an  employment  contract with the named former
executive  officer's  wife,  namely Janie Calvert for accounting  services.  The
agreement  provides  for  an  annual  salary  of  $36,000  payable  monthly  and
terminates June 1, 2006.

C.       Interest of Experts and Counsel.

         Not Applicable.

Item 8.  Financial Statements

A.       Consolidated Statements and Other Financial Information

         1.       The following financial statements of the Company are attached
                  to this Annual Report:
                  - Auditors' Report.
                  - Balance Sheet for years ended December 31, 2002 and 2001.
                  - Statement  of  Operations  for  the years ended December 31,
                    2002, 2001 and 2000.
                  - Statement of Retained Earnings (Deficit) for the years ended
                    December 31, 2002, 2001 and 2000.
                  - Statement  of  Cash  flows  for the years ended December 31,
                    2002, 2001 and 2000.
                  - Notes to the Financial Statements

         2.       The Company  has  never paid any dividends and does not intend
                  to in the near future.

B.       Significant Changes

         None.



<PAGE>


Item 9.  The Offering and Listing

A4.      Price History of Stock

     The Common  stock of the  Company  are listed on the TSX  Venture  Exchange
under the symbol "BKS."

     As of December 31, 2002,  2.19% of the Company's  outstanding  common stock
were  registered  in the names of United  States  residents.  There were,  as of
December 31, 2002, 26 record holders in the United States.  The Company's Common
stock is issued in registered  form and the percentage of shares  reported to be
held by record  holders  in the United  States is taken from the  records of the
Computershare  Trust Company of Canada in the City of  Vancouver,  the registrar
and transfer agent for the common stock.

     The high and low prices  expressed  in Canadian  dollars on the TSX Venture
Exchange  for the  Company's  common  stock  for the last six  months,  for each
quarter  for the last two  fiscal  years,  and for the five most  recent  fiscal
years.


                                                               TSX Venture
                                                                 Exchange
                                                            (Canadian Dollars)
                                                            ------------------
          Last Six Months                                   High           Low
          ---------------                                   ----           ---

          April 2003                                        0.50          0.44

          March 2003                                        0.53          0.43

          February 2003                                     0.51          0.41

          January 2003                                      0.46          0.45

          December 2002                                     0.48          0.40

          November 2002                                     0.51          0.46

          2002                                              High           Low
          ----                                              ----           ---

          Fourth Quarter (Oct.1 - Dec.31)                   0.54          0.40

          Third Quarter (July 1 - Sept. 30)                 0.60          0.42

          Second Quarter (Apr. 1 - June 30)                 0.50          0.29

          First Quarter (Jan. 1 - Mar. 30)                  0.39          0.28

          2001                                              High           Low
          ----                                              ----           ---

          Fourth Quarter                                    0.36          0.30

          Third Quarter                                     0.39          0.28

          Second Quarter                                    0.40          0.30

          First Quarter                                     0.45          0.31


<PAGE>


                                                               TSX Venture
                                                                 Exchange
                                                            (Canadian Dollars)
                                                            ------------------
          Five Most Recent Fiscal Year                      High           Low
          ----------------------------                      ----           ---
          December 31, 2002                                 0.60          0.28

          December 31, 2001                                 0.45          0.28

          December 31, 2000                                 0.51          0.20

          December 31, 1999                                 0.52          0.28

          December 31, 1998                                 0.79          0.35

B.       Plan of Distribution

         Not Applicable.

C.       Markets

     The  Company's  common  stock,  are  listed in  Canada  on the TSX  Venture
Exchange under the symbol "BKS".

D.       Selling Shareholders

         Not Applicable.

E.       Dilution

         Not Applicable.

F.       Expenses of the Issue.

         Not Applicable.


Item 10.  Additional Information

A.       Share Capital

     The Company has 20,000,000 common shares authorized,  without par value, of
which 6,795,934 shares were issued and outstanding as of December 31, 2002.

     Each of the  common  shares  has equal  dividend,  liquidation  and  voting
rights.  Voters of the common  shares are  entitled to one vote per share on all
matters  that may be brought  before  them.  Holders  of the  common  shares are
entitled to receive dividends when declared by the Board of Directors from funds
legally  available  therefor.  The  common  shares are not  redeemable,  have no
conversion  rights and carry no  pre-emptive  or other rights to  subscribe  for
additional   shares.   The   outstanding   common  shares  are  fully  paid  and
non-assessable.


<PAGE>

B.       Memorandum and Articles of Association

     Fortune  Island  Mines  Ltd.,  which was  incorporated  on the first day of
February,  1966,  under the name  Fortune  Island  Mines  Ltd.  (N.P.L.),  under
Certificate No. 68018, which converted to a limited company Fortune Island Mines
Ltd.,  on the  eight  day of July,  1982,  and  Kerry  Mining  Ltd.,  which  was
incorporated on the  twenty-sixth  day of February,  1973,  under the name Kerry
Mining Ltd. (N.P.L.),under  Certificate No. 116112, which converted to a limited
company  Kerry Mining Ltd., on the seventh day of July,  1982,  and the Company,
which was incorporated on the twenty-ninth day of January,  1974, under the name
Trevlac Resources,  Inc., under Certificate No. 124754 and subsequently  changed
its name to Berkley  Resources  Inc., on the thirtieth day of July,  1976,  were
amalgamated  on July 18,  1986,  pursuant to the Company Act as one company with
the name Berkley Resources Inc.

Common Shares

     All issued and outstanding common shares are fully paid and non-assessable.
Each  holder of record of common  shares is entitled to one vote for each common
share so held on all matters  requiring a vote of  shareholders,  including  the
election  of  directors.  The  holders  of common  shares  will be  entitled  to
dividends  on a  pro-rata  basis,  if and  when  as  declared  by the  board  of
directors.  There are no  preferences,  conversion  rights,  preemptive  rights,
subscription rights, or restrictions or transfers attached to the common shares.
In the event of  liquidation,  dissolution,  or winding up of the  Company,  the
holders  of common  shares  are  entitled  to  participate  in the assets of the
Company  available  for  distribution   after  satisfaction  of  the  claims  of
creditors.

Powers and Duties of Directors

     The directors  shall manage or supervise the  management of the affairs and
business of the Company and shall have  authority to exercise all such powers of
the Company as are not, by the Company Act or by the  Memorandum or the Article,
required to be exercised  by the Company in a general  meeting.

     Directors will serve as such until the next annual meeting.  In general,  a
director who is, in any way, directly or indirectly interested in an existing or
proposed  contract or  transaction  with the Company  whereby a duty or interest
might be created to conflict with his duty or interest  director,  shall declare
the nature and extent of his  interest in such  contract or  transaction  or the
conflict or potential  conflict  with his duty and interest as a director.  Such
director shall not vote in respect of any such contract or transaction  with the
Company in which he is interested  and if he shall do so, his vote shall note be
counted,  but he shall be counted in the quorum  present at the meeting at which
such vote is taken. However, notwithstanding the foregoing, directors shall have
the right to vote on determining the remuneration of the directors.

     The  directors  may from time to time on behalf of the Company:  (a) borrow
money in such  manner  and  amount  from such  sources  and upon such  terms and
conditions  as they  think  fit;  (b) issue  bonds,  debentures  and other  debt
obligations;  or (c) mortgage, charge or give other security on the whole or any
part of the property and assets of the Company.

     The majority of the  directors  of the Company  must be persons  ordinarily
resident in Canada and one director of the Company must be  ordinarily  resident
in British Columbia. There is no age limitation, or minimum share ownership, for
the Company's directors.

Shareholders

     An annual general meeting shall be held once in every calendar year at such
time and  place as may be  determined  by the  directors.  A quorum at an annual
general  meeting and special  meeting shall be two  shareholders  or one or more
proxy holder  representing  two  shareholders,  or one  shareholder  and a proxy
holder representing another  shareholder.  There is no limitation imposed by the

<PAGE>

laws of Canada or by the charter or other  constituent  documents of the Company
on the right of a non-resident to hold or vote the common shares,  other than as
provided in the Investment  Canada Act, (the  "Investment  Act") discussed below
under "Item 10. Additional Information, D. Exchange Controls."

     In accordance with British  Columbia law,  directors shall be elected by an
"ordinary resolution" which means (a) a resolution passed by the shareholders of
the Company in general  meeting by a simple majority of the votes cast in person
or by proxy, or (b) a resolution that has been submitted to the  shareholders of
the Company who would have been  entitled to vote on it in person or by proxy at
a general  meeting of the Company and that has been  consented  to in writing by
such  shareholders  of the Company  holding shares carrying not less than 3/4 of
the votes entitled to be cast on it.

     Under  British  Columbia  law  certain  items such as an  amendment  to the
Company's  articles or entering  into a merger,  requires  approval by a special
resolution  which shall mean (a) a  resolution  passed by a majority of not less
than  3/4 of the  votes  cast by the  shareholders  of the  Company  who,  being
entitled  to do so,  vote in  person  or by proxy at a  general  meeting  of the
company (b) a  resolution  consented to in writing by every  shareholder  of the
Company who would have been  entitled to vote in person or by proxy at a general
meeting of the  Company,  and a  resolution  so  consented  to is deemed to be a
special resolution passed at a general meeting of the Company.

C.       Material Contracts

         None.

D.       Exchange Controls

     There is no law, governmental decree or regulation in Canada that restricts
the export or import of capital or affects the remittance of dividends, interest
or  other  payments  to a  non-resident  holder  of  common  shares  other  than
withholding tax  requirements.  Any such  remittances to United States residents
are subject to withholding tax. See "Taxation."

     There is no  limitation  imposed by the laws of Canada or by the charter or
other  constituent  documents of the Company on the right of a  non-resident  to
hold or vote the common shares,  other than as provided in the  Investment  Act.
The following discussion summarizes the principal features of the Investment Act
for a non-resident who proposes to acquire the common shares.

     The  Investment  Act  generally  prohibits  implementation  of a reviewable
investment  by  an  individual,   government  or  agency  thereof,  corporation,
partnership,  trust or joint venture (each an "entity") that is not a "Canadian"
as defined in the Investment Act (a  "non-Canadian"),  unless after review,  the
Director of Investments appointed by the minister responsible for the Investment
Act is satisfied  that the  investment is likely to be of net benefit to Canada.
An investment in the common shares by a non-Canadian other than a "WTO Investor"
(as that term is defined by the Investment Act, and which term includes entities
which are  nationals of or are  controlled  by nationals of member states of the
World Trade Organization) when the Company was not controlled by a WTO Investor,
would be reviewable  under the Investment Act if it was an investment to acquire
control of the Company and the value of the assets of the Company, as determined
in accordance with the regulations  promulgated under the Investment Act, equals
or exceeds $5 million for direct  acquisition  and over $50 million for indirect
acquisition,  or if an order for review was made by the  federal  cabinet on the
grounds that the investment  related to Canada's  cultural  heritage or national
identity, regardless of the value of the assets of the Company. An investment in
the common shares by a WTO Investor,  or by a non-Canadian  when the Company was
controlled by a WTO Investor, would be reviewable under the Investment Act if it
was an investment to acquire  control of the Company and the value of the assets
of the Company,  as determined in accordance  with the  regulations  promulgated
under the Investment Act was not less than a specified amount, which for 2003 is
any amount in excess of $223 million.  A non-Canadian  would acquire  control of
the Company for the purposes of the Investment Act if the non-Canadian  acquired

<PAGE>

a majority of the common shares.  The acquisition of one third or more, but less
than a majority of the common shares would be presumed to be an  acquisition  of
control of the Company unless it could be established  that, on the acquisition,
the Company was not controlled in fact by the acquirer  through the ownership of
the common shares.

     Certain transactions relating to the common shares would be exempt from the
Investment Act,  including:  (a) an acquisition of the common shares by a person
in the  ordinary  course  of that  person's  business  as a trader  or dealer in
securities;  (b) an acquisition of control of the Company in connection with the
realization of security granted for a loan or other financial assistance and not
for a purpose  related  to the  provisions  of the  Investment  Act;  and (c) an
acquisition  of control of the  Company  by reason of an  amalgamation,  merger,
consolidation or corporate reorganization following which the ultimate direct or
indirect  control in fact of the  Company,  through the  ownership of the common
shares, remained unchanged.

E.       Taxation

Canadian Federal Income Tax Consequences

     The  following   summarizes  the  principal  Canadian  federal  income  tax
consequences  applicable to the holding and  disposition of common shares in the
capital of the Company by a United States resident,  and who holds common shares
solely as  capital  property  (a "U.S.  Holder").  This  summary is based on the
current  provisions  of the  Income  Tax  Act  (Canada)  (the  "Tax  Act"),  the
regulations  thereunder,   all  amendments  thereto  publicly  proposed  by  the
government of Canada, the published  administrative practices of Revenue Canada,
Customs, Excise and Taxation, and on the current provisions of the Canada-United
States  Income Tax  Convention,  1980,  as  amended  (the  "Treaty").  Except as
otherwise  expressly  provided,  this  summary  does not take into  account  any
provincial,  territorial or foreign (including without limitation, any U.S.) tax
law or treaty. It has been assumed that all currently  proposed  amendments will
be enacted  substantially as proposed and that there is no other relevant change
in any  governing  law or practice,  although no assurance can be given in these
respects.

     Each U.S.  Holder is advised to obtain tax and legal advice  applicable  to
such U.S. Holder's particular circumstances.

     Every  U.S.  Holder is liable to pay a  Canadian  withholding  tax on every
dividend  that is or is deemed to be paid or credited to the U.S.  Holder on the
U.S. Holder's common shares. The statutory rate of withholding tax is 25% of the
gross amount of the dividend  paid.  The Treaty  reduces the statutory rate with
respect to dividends paid to a U.S. Holder for the purposes of the Treaty. Where
applicable,  the general rate of withholding  tax under the Treaty is 15% of the
gross amount of the dividend,  but if the U.S.  Holder is a company that owns at
least 10% of the voting stock of the Company and beneficially owns the dividend,
the rate of  withholding  tax is 5% for dividends paid or credited after 1996 to
such corporate U.S.  Holder.  The Company is required to withhold the applicable
tax from the dividend  payable to the U.S.  Holder,  and to remit the tax to the
Receiver General of Canada for the account of the U. S. Holder.

     Pursuant  to the Tax Act, a U.S.  Holder  will not be  subject to  Canadian
capital  gains  tax  on  any  capital  gain  realized  on an  actual  or  deemed
disposition of a common share, including a deemed disposition on death, provided
that the U.S.  Holder did not hold the common share as capital  property used in
carrying on a business in Canada,  and that neither the U. S. Holder nor persons
with whom the U.S.  Holder did not deal a arms length (alone or together)  owned
or had the right or an option to acquire 25% or more of the issued shares of any
class of the  Company at any time in the five years  immediately  preceding  the
disposition.
<PAGE>



United States Tax Consequences

Passive Foreign Investment Companies

     The  Treaty   essentially   calls  for  taxation  of  shareholders  by  the
shareholder's  country of  residence.  In those  instances in which a tax may be
assessed by the other country,  a  corresponding  credit against the tax owed in
the country of residence is generally available, subject to limitations.

Under Section 1296, of the Internal Revenue Code of the United States, a foreign
investment  corporation is treated as a passive  foreign  investment  company (a
"PFIC") if it earns 75% or more of its gross income from  passive  sources or if
50% or more of the value of its assets produce passive  income.  The Company has
not been a PFIC for United States  federal income tax purposes for prior taxable
years and  believes  that it will not be treated as a PFIC for the  current  and
future  taxable  years,  but this  conclusion  is a factual  determination  made
annually and subject to change.

Controlled Foreign Corporations.

     Sections 951 through 964 and Section 1248 of the Code relate to  controlled
foreign  corporations  ("CFCs").  A foreign  corporation that qualifies as a CFC
will not be treated as a PFIC with respect to a  shareholder  during the portion
of the  shareholder's  holding period after December 31, 1997,  during which the
shareholder is a 10% United States shareholder and the corporation is a CFC. The
PFIC  provisions  continue  to apply in the case of PFIC that is also a CFC with
respect to shareholders that are less than 10% United States shareholders.

     The 10% United States shareholders of a CFC are subject to current U.S. tax
on their pro rata shares of certain  income of the CFC and their pro rata shares
of the CFC's earnings invested in certain U.S. property.  The effect is that the
CFC  provisions  may impute some portion of such a  corporation's  undistributed
income to certain  shareholders  on a current  basis and convert  into  dividend
income some  portion of gains on  dispositions  of stock  which would  otherwise
qualify for capital gains treatment.

     The  Company  does not believe  that it will be a CFC.  Even if the Company
were  classified as a CFC in a future year,  however,  the CFC rules referred to
above would apply only with respect to 10% shareholders.

Personal Holding  Company/Foreign  Personal Holding  Company/Foreign  Investment
Company.

     A corporation will be classified as a personal holding company (a "PHC") if
at any time  during  the last  half of a tax year (i) five or fewer  individuals
(without regard to their citizenship or residence)  directly or indirectly or by
attribution  own more than 50% in value of the  corporation's  stock and (ii) at
least 60% of its  ordinary  gross  income,  as specially  adjusted,  consists of
personal  holding  company  income  (defined  generally  to  include  dividends,
interest,  royalties, rents and certain other types of passive income). A PHC is
subject to a United  States  federal  income  tax of 39.6% on its  undistributed
personal  holding company income  (generally  limited,  in the case of a foreign
corporation, to United States source income).

     A corporation  will be classified as a foreign personal holding company (an
"FPHC")  and not a PHC if at any  time  during  a tax  year  (i)  five or  fewer
individual  United  States  citizens or residents  directly or  indirectly or by
attribution own more than 50% of the total combined voting power or value of the
corporation's  stock  and (ii) at least  60% of its  gross  income  consists  of
foreign personal holding company income (defined generally to include dividends,
interest,  royalties,  rents and certain  other types of passive  income).  Each
United States shareholder in a FPHC is required to include in gross income, as a
dividend,  an  allocable  share of the  FPHC's  undistributed  foreign  personal
holding  company income  (generally the taxable income of the FPHC, as specially
adjusted).
<PAGE>

     A corporation will be classified as a foreign investment company (an "FIC")
if for any taxable year it (i) is registered under the Investment Company Act of
1940,  as  amended,  as a  management  company or share  investment  trust or is
engaged  primarily  in the business of  investing  or trading in  securities  or
commodities  (or any interest  therein) and (ii) 50% or more of the value or the
total combined voting power of all the corporation's  stock is owned directly or
indirectly  (including stock owned through the application of attribution rules)
by United States persons. In general,  unless an FIC elects to distribute 90% or
more of its taxable  income  (determined  under United States tax  principles as
specially  adjusted)  to its  shareholders,  gain on the sale or exchange of FIC
stock is treated as ordinary  income (rather than capital gain) to the extent of
such shareholder's  ratable share of the corporation's  earnings and profits for
the period during which such stock was held.

     The  Company  believes  that it is not and will not be a PHC,  FPHC or FIC.
However, no assurance can be given as to the Company's future status.

Other Consequences

     To the extent a  shareholder  is not  subject to the tax  regimes  outlined
above with respect to foreign  corporations that are PFIC, PHC, FPHC or FIC, the
following discussion describes the United States federal income tax consequences
arising from the holding and disposition of the Company's Common Shares.

U.S. Holders

     As used herein, a "U.S.  Holder," includes a holder of Common Shares who is
a citizen or resident of the United States,  a corporation  created or organized
in or under  the  laws of the  United  States  or of any  political  subdivision
thereof  and any other  person or entity  whose  ownership  of Common  Shares is
effectively  connected  with the  conduct of a trade or  business  in the United
States. A U.S. Holder does not include persons subject to special  provisions of
federal income tax laws, such as tax exempt organizations,  qualified retirement
plans,  financial  institutions,  insurance  companies,  real estate  investment
trusts,  regulated  investment  companies,  broker-dealers,  non-resident  alien
individuals  or foreign  corporations  whose  ownership of common  shares is not
effectively  connected  with the  conduct of a trade or  business  in the United
States and  shareholders  who  acquired  their  stock  through  the  exercise of
employee stock options or otherwise as compensation.

Distribution of Common Shares

     U.S.  Holders  receiving  dividend  distributions  (including  constructive
dividends)  with respect to the Company's  common shares are required to include
in gross income for United States  federal  income tax purposes the gross amount
of such  distribution  to the extent that the Company has current or accumulated
earnings or profits, without reduction for any Canadian income tax withheld from
such  distributions.  Such  Canadian tax  withheld  may be credited,  subject to
certain limitations,  against the U.S. Holder's United States federal income tax
liability  or,  alternatively,  may be deducted in computing  the U.S.  Holder's
United  States  federal  income tax by those who itemize  deductions.  (See more
detailed  discussions  at  "Foreign  Tax  Credit"  below).  To the  extent  that
distributions exceed current or accumulated earnings and profits of the Company,
they  will be  treated  first as a return  of  capital  up to the U.S.  Holder's
adjusted  basis in the  common  shares and  thereafter  as gain from the sale or
exchange of such shares.  Preferential tax rates for the long-term capital gains
are applicable to a U.S. Holder which is an individual,  estate or trust.  There
are currently no preferential  tax rates for long-term  capital gains for a U.S.
Holder which is a corporation.

     Dividends  paid on the  Company's  common  shares  will  not  generally  be
eligible for the dividends received deduction provided to corporations receiving
dividends  from certain  United States  corporations.  A U.S.  Holder which is a
corporation  may, under certain circumstances, be entitled to a 70% deduction of
<PAGE>

the United States source portion of dividends  received from the Company if such
U.S. Holder owns shares  representing at least 10% of the voting power and value
of the Company.

Foreign Tax Credit

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

Disposition of Common Shares

     A U.S.  Holder  will  recognize  gain and loss upon the sale of the  common
shares equal to the difference,  if any, between (i) the amount of cash plus the
fair market value of any property  received and (ii) the shareholder's tax basis
in the  common  shares.  The gain or loss  will be  capital  gain or loss if the
shares  are a  capital  asset in the  hands of the  U.S.  Holder,  and will be a
short-term  or long-term  capital gain or loss  depending on each U.S.  Holder's
holding  period.  Gains and losses are netted and combined  according to special
rules in arriving at the overall capital gain or loss for a particular tax year.
Deductions for net capital losses are subject to  significant  limitations.  For
U.S.  Holders who are  individuals,  any unused portion of such net capital loss
may be carried over to be used in later tax years until such net capital loss is
thereby  exhausted.   For  U.S.  Holders  which  are  corporations  (other  than
corporations subject to Subchapter S of the Code), an unused capital loss may be
carried back three years from the loss year and carried  forward five years from
the loss year to be offset against  capital gains until such net capital loss is
thereby exhausted.

     The foregoing  discussion is based upon the sections of the Code,  Treasury
Regulations,    published   Internal   Revenue   Service   rulings,    published
administrative  positions of the Internal  Revenue  Service and court  decisions
that are currently applicable, any or all of which could be materially adversely
changed,  possibly  on a  retroactive  basis,  at any time.  In  addition,  this
discussion does not consider the potential effects, both adverse and beneficial,
of recently proposed legislation which, if enacted could be applied, possibly on
a  retroactive  basis,  at any  time.  A holder  or  prospective  holder  of the
Company's  common  shares  should  consult  his or her  own tax  advisors  about
federal,  state local and foreign tax  consequences  of  purchasing,  owning and
disposing of the common shares of the Company.

F.       Expenses of the Issue

         Not Applicable.

G.       Dividends and Paying Agents

         Not Applicable.
<PAGE>

H.       Documents on Display

     The Company files annual reports and other  information with the Securities
and Exchange Commission.  You may read and copy any document that we file at the
Commission's  Public  Reference  Room at 450  Fifth  Street,  N.W.,  Room  1024,
Washington,  D.C.  20549,  and at its regional  offices located at 7 World Trade
Center,  13th Floor, New York, New York 10048 and Northwest  Atrium Center,  500
Madison Street, Suite 1400, Chicago,  Illinois 60661. Please call the Securities
and Exchange  Commission at 1-800-SEC-0330 for more information about the Public
Reference Rooms.

     Copies  of the  Company's  material  contracts  are  kept in the  Company's
administrative headquarters.

I.       Subsidiary Information

         Not Applicable.

Item 11.  Quantitative and Qualitative Disclosures About Market Risk

     Because  the  Company  is  a  small  business   issuer,   this  section  is
inapplicable.

Item 12.  Description of Securities Other than Equity Securities

         Not Applicable.

Item 13.  Defaults, Dividend Arrearages and Delinquencies

         None.


                                     Part II

Item 14.  Material  Modifications  to  the Rights of Security Holders and Use of
          Proceeds

         None.

ITEM 15. Controls and Procedures

     Within the 90 days prior to the date of this Form 20-F, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's  management,  of the design and operation of the Company's  disclosure
and internal controls and procedures  pursuant to Exchange Act Rule 13a-14.  The
review  identified  a number  of areas  where  there  could be  improvements  to
increase  the  effectiveness  of controls  and the Company is  currently  in the
process of improving the controls and procedures in these areas. Notwithstanding
the above, the Company's  president along with the Company's principal financial
officer have concluded that the Company's disclosure controls and procedures are
sufficient  enough to ensure  adequate and  appropriate  disclosure  of material
information  relating to the Company  (including its consolidated  subsidiaries)
required to be included in this Form 20-F.

     There have been no significant  changes in the Company's  internal controls
or  in  other  factors,  which  could  significantly  affect  internal  controls
subsequent to the date the Company carried out its evaluation,  other than those
being undertaken to increase the effectiveness of controls as discussed above.

Item 16.  [Reserved]
<PAGE>


                                    Part III

Item 17.  Financial Statements

     The following Financial  Statements  pertaining to the Company are filed as
part of this annual report:

         Auditors' Report ........................................F-1
         Balance Sheets...........................................F-2
         Statement of Operations..................................F-3
         Statement of Retained Earnings (Deficit).................F-4
         Statement of Cash Flows..................................F-5
         Notes to Financial Statements............................F-6 thru F-15

Item 18.  Financial Statements

         See Item 17.

Item 19.  Exhibits

     Exhibit Number        Name
     --------------        ----

         1.                Memorandum of Berkley Resources Inc.*

         2.                Articles of Berkley Resources Inc.*

         99.1              Certificate under section 906.
---------------------------
*  Previously filed.



<PAGE>



                                    SIGNATURE

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

Dated: 7/11/03                          BERKLEY RESOURCES INC.



                                        By: /s/ Matt Wayrynen
                                           -------------------------------------
                                           Matt Wayrynen, President



<PAGE>



                  CERTIFICATION FOR ANNUAL REPORT ON FORM 20-F

I, Matt Wayrynen, certify that:

1.  I have  reviewed  this  annual  on  Form  20-F  of  Berkley  Resources  Inc.
("Registrant");

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4.  The  Registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

        a)     designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the Registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;

        b)     evaluated  the  effectiveness  of  the  Registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

        c)     presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function):

        a)     all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the Registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  Registrant's  auditors any material
               weaknesses in internal controls; and

        b)     any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  Registrant's
               internal controls; and

6. The Registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.



Date:  7/11/03                       /s/ Matt Wayrynen
                                     -------------------------------------------
                                     Matt Wayrynen, President
                                     (Principal Executive and Financial Officer)



<PAGE>

                             BERKLEY RESOURCES INC.

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2002


<PAGE>
[GRAPHIC OMITTED]


                                AUDITORS' REPORT
                                ----------------

To the Shareholders of
Berkley Resources Inc.

We have audited the balance sheets of Berkley  Resources Inc. as at December 31,
2002 and 2001 and the statements of operations and retained  earnings  (deficit)
and cash flows for each of the years in the three year period ended December 31,
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 and United States  generally
accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable  assurance whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.

In our opinion,  these  financial  statements  present  fairly,  in all material
respects, the financial position of the company as at December 31, 2002 and 2001
and the  results of its  operations  and cash flows for each of the years in the
three year period ended December 31, 2002 in accordance with Canadian  generally
accepted  accounting  principles.  As  required  by the  Company  Act of British
Columbia, we report that, in our opinion,  these principles have been applied on
a consistent basis.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
the  schedules is presented  for  purposes of  additional  analysis and is not a
required part of the basic financial statements.  Such supplementary information
has been  subjected to the auditing  procedures  applied in the basic  financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.



                                                          /S/ COLLINS BARROW

                                                          CHARTERED  ACCOUNTANTS
Vancouver, Canada
April 11, 2003

                                      F-1
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------
                (Incorporated under the laws of British Columbia)

                                 BALANCE SHEETS
                                 --------------
                              (In Canadian Dollars)



<TABLE>
<CAPTION>
<S>                                                                                <C>                <C>

                                                                                        December 31,
                                                                            ------------------------------------
                                    ASSETS                                        2002               2001
                                    ------                                  -----------------  -----------------
Current assets
     Cash                                                                   $          36,230  $          32,653
     Bankers' acceptances and treasury bills                                          950,730          1,037,370
     Accounts receivable                                                              125,280            132,235
     Prepaid expenses                                                                  26,622              1,491
     Computer software held for resale                                                 50,980                ---
                                                                            -----------------  -----------------

                                                                                    1,189,842          1,203,749

Oil and gas properties and equipment (note 2)                                         529,651            542,193

Rental property (note 3)                                                            2,089,386          2,103,986

Other capital assets (note 4)                                                          20,356              5,969
                                                                            -----------------  -----------------

                                                                            $       3,829,235  $       3,855,897
                                                                            =================  =================

                                   LIABILITIES
                                   -----------
Current liabilities
     Accounts payable and accrued liabilities                               $          82,869  $         126,094
     Bank loan (note 5)                                                               675,233            782,923
                                                                            -----------------  -----------------

                                                                                      758,102            909,017

Future removal and site restoration costs                                              55,200             53,300
                                                                            -----------------  -----------------

                                                                                      813,302            962,317
                                                                            -----------------  -----------------

                              SHAREHOLDERS' EQUITY
                              --------------------

Share capital (note 6)                                                              3,249,326          2,999,326

Contributed surplus (note 7)                                                           75,000             75,000

Deficit                                                                              (308,393)          (180,746)
                                                                            ------------------ ------------------

                                                                                    3,015,933          2,893,580
                                                                            -----------------  -----------------

                                                                            $       3,829,235  $       3,855,897
                                                                            =================  =================
</TABLE>

Approved by the Directors

"Matt Wayrynen"            , Director
---------------------------


Louis Wolfin"              , Director
---------------------------

               See accompanying notes to the financial statements.

                                      F-2
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------
                              (In Canadian Dollars)




<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>               <C>

                                                                             Year Ended December 31,
                                                              --------------------------------------------------
                                                                     2002              2001             2000
                                                              ---------------   ---------------  ---------------

Oil and gas revenue                                           $       406,138   $       637,497  $       678,789
                                                              ---------------   ---------------  ---------------

Oil and gas production expenses
     Operating costs and taxes                                        189,681           257,862          184,168
     Amortization and depletion                                        39,900           482,700           97,600
                                                              ---------------   ---------------  ---------------

                                                                      229,581           740,562          281,768
                                                              ---------------   ---------------  ---------------

                                                                      176,557          (103,065)         397,021
                                                              ---------------   ---------------- ---------------

Rental revenue                                                        241,670           208,592          174,025
                                                              ---------------   ---------------  ---------------

Rental operations expenses
     Operating costs and taxes                                        168,608           133,043          128,180
     Interest on bank loan                                             35,110            46,536           47,183
     Amortization                                                      14,600            12,300           11,371
                                                              ---------------   ---------------  ---------------

                                                                      218,318           191,879          186,734
                                                              ---------------   ---------------  ---------------

                                                                       23,352            16,713          (12,709)
                                                              ---------------   ---------------  ----------------

Interest income                                                        23,506            56,961           64,622
                                                              ---------------   ---------------  ---------------

                                                                      223,415           (29,391)         448,934
                                                              ---------------   ---------------- ---------------

Administration expenses
     Accounting, administrative and premises                           61,749            56,943           56,814
     Amortization                                                       3,413             2,277            3,182
     Consulting and management fees                                   159,000            72,000           72,000
     Office and general                                                20,873            19,559           12,500
     Professional fees                                                 65,959            45,019           32,204
     Transfer agent's fees and expenses                                 9,467             6,154            9,758
     Wages                                                             30,601            61,233           61,311
                                                              ---------------   ---------------  ---------------

                                                                      351,062           263,185          247,769
                                                              ---------------   ---------------  ---------------

Net income (loss) for the year                                $      (127,647)  $      (292,576) $       201,165
                                                              ================  ===============  ===============

Basic and diluted income (loss) per share                           (2.0 cent)        (5.1 cent)        4.2 cent
                                                              ================  ===============  ===============
</TABLE>


               See accompanying notes to the financial statements.

                                      F-3
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------

                    STATEMENTS OF RETAINED EARNINGS (DEFICIT)
                    -----------------------------------------
                              (In Canadian Dollars)




<TABLE>
<CAPTION>
<S>                                                                   <C>             <C>               <C>

                                                                             Year Ended December 31,
                                                              --------------------------------------------------
                                                                     2002              2001             2000
                                                              ---------------   ---------------  ---------------

Retained earnings (deficit), beginning of the year            $      (180,746)  $       111,830  $       (89,335)

Net income (loss) for the year                                       (127,647)         (292,576)         201,165
                                                              ----------------  ---------------- ---------------

Retained earnings (deficit), end of the year                  $      (308,393)  $      (180,746) $       111,830
                                                              ================  ================ ===============
</TABLE>

              See accompanying notes to the financial statements.

                                      F-4
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------
                              (In Canadian Dollars)



<TABLE>
<CAPTION>
<S>                                                                  <C>               <C>              <C>

                                                                             Year Ended December 31,
                                                              --------------------------------------------------
                                                                     2002              2001             2000
                                                              ---------------   ---------------  ---------------
Cash from (used in) operating activities
     Net income (loss) for the year                           $      (127,647)  $      (292,576) $       201,165
     Items not requiring cash
         Amortization and depletion                                    57,913           497,277          112,153
                                                              ---------------   ---------------  ---------------

                                                                      (69,734)          204,701          313,318
     Net change in non-cash working capital balances
         Decrease (increase) in accounts receivable                     6,955           105,388          (62,796)
         Decrease (increase) in prepaid expenses                      (25,131)              261             (339)
         Increase in computer software held for resale                (50,980)              ---              ---
         Decrease in accounts payable and
              accrued liabilities                                     (43,225)          (80,124)         (62,918)
                                                              ----------------  ---------------- ----------------

                                                                     (182,115)          230,226          187,265
                                                              ----------------  ---------------  ---------------

Cash from (used in) investment activities
     Decrease in treasury bills                                           ---           150,000              ---
     Additions to oil and gas properties
         and equipment, net                                           (25,458)         (201,915)         (81,731)
     Additions to rental property                                         ---          (444,854)             ---
     Additions to other capital assets                                (17,800)              ---              ---
                                                              ----------------  ---------------  ---------------

                                                                      (43,258)         (496,769)         (81,731)
                                                              ----------------  ---------------- ----------------

Cash from (used in) financing activities
     Repayment of bank loan                                          (107,690)          (73,653)         (59,910)
     Issuance of common shares                                        250,000           200,000              ---
                                                              ---------------   ---------------  ---------------

                                                                      142,310           126,347          (59,910)
                                                              ---------------   ---------------  ----------------

Increase (decrease) in cash during the year                           (83,063)         (140,196)          45,624

Cash, beginning of the year                                         1,070,023         1,210,219        1,164,595
                                                              ---------------   ---------------  ---------------

Cash, end of the year                                         $       986,960   $     1,070,023  $     1,210,219
                                                              ===============   ===============  ===============

Cash is comprised of:
     Cash                                                     $        36,230   $        32,653  $        12,913
     Bankers' acceptances and treasury bills                          950,730         1,037,370        1,197,306
                                                              ---------------   ---------------  ---------------

                                                              $       986,960   $     1,070,023  $     1,210,219
                                                              ===============   ===============  ===============
</TABLE>

              See accompanying notes to the financial statements.

                                      F-5
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------
                              (In Canadian Dollars)


1.   General information and accounting policies

     These  financial  statements  are prepared in  accordance  with  accounting
     principles  generally  accepted  in Canada  which do not differ  from those
     established in the United States, except as disclosed in note 9.

     a) Oil and gas properties and equipment - The company follows the full cost
        method of accounting for oil and  gas  properties and equipment  whereby
        all  costs  of  acquiring,  exploring  for  and  developing  oil and gas
        reserves are capitalized.

        Capitalized  costs of proven reserves and equipment are depleted using a
        unit of  production  method based upon estimated proven reserves (energy
        content) net of royalties.

        Unless  a  significant amount of reserves is involved, proceeds received
        from  the  disposition  of  oil  and  gas properties are credited to the
        relevant  cost centre. In the event of a significant sale of reserves, a
        proportionate  amount  of cost and accumulated depletion, based upon the
        ratio  of  reserves  sold  to  total  reserves,  is  removed  from   the
        appropriate  cost  centre  and  the  resultant profit or loss taken into
        income.

        In  accordance  with  guidelines  published by the Canadian Institute of
        Chartered  Accountants,  the company applies an annual "ceiling test" by
        cost  centre  to  ensure  that  capitalized  costs  net  of  accumulated
        depletion  do  not  exceed  the  estimated  future  net  revenues   from
        production  of  proven  reserves  (based on current prices and operating
        costs)  plus  unproven  reserves at cost less provisions for impairment.
        The  aggregate  future value for all cost centres is further reduced for
        recurring  general  and administrative costs, future financing costs and
        income taxes.  Capitalized  costs  in  excess of this ceiling test limit
        are  written  off  as  additional  depletion.   Where  the  cost  of   a
        significant  property  acquisition  exceeds  the corresponding amount in
        the  ceiling  test,  and  such  excess  is not considered to represent a
        permanent impairment in the recoverable amount, no write off is recorded
        for 24 months.

        Estimated  future  removal  and  site  restoration costs, net of salvage
        values,  are  provided  for using the unit of production method based on
        remaining  proven  reserves.   Costs  are  estimated  based  on  current
        regulations, costs, technology and industry standards. The annual charge
        is included in the provision for depletion and amortization. Removal and
        site restoration expenditures are charged to the  accumulated  provision
        for future removal and site restoration costs as incurred.

        Substantially  all  of  the  company's  exploration,   development   and
        production  activities related to oil and gas are conducted jointly with
        others  and,  accordingly,  the  financial  statements  reflect only the
        company's proportionate interest in such activities.

                                      F-6
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)


1.   General information and accounting policies - continued

     b) Rental property and other capital assets - Amortization is provided on a
        declining balance basis at the following annual rates:

                      Building                         -     4%
                      Computer equipment               -    30%
                      Furniture and fixtures           -    20%
                      Truck                            -    30%

     c) Computer software held for resale - Computer software held for resale is
        valued at the lower of cost or net realizable value.

     d) Future  income  taxes - The  company  follows  the  liability  method of
        accounting for income taxes. Under this method, current income taxes are
        recognized for the estimated income taxes  payable for the current year.
        Future income tax assets and liabilities are  recognized  for  temporary
        differences  between  the  tax  and  accounting  bases  of  assets   and
        liabilities  and  for unused tax  losses.  Future  income tax assets are
        recorded in the  financial  statements if realization is considered more
        likely than not.

     e) Stock options - The company records  compensation  expense when stock or
        stock options are issued to employees.  Prior to 2002,  no  compensation
        expense  was  recorded  when  stock  or  stock  options  were  issued to
        employees.

     f) Use of estimates - The preparation of financial statements in conformity
        with   Canadian   generally   accepted  accounting  principles  requires
        management to make estimates and  assumptions  that affect the  reported
        amounts of  assets  and liabilities and disclosure of contingent  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 those estimates.  Significant areas  requiring
        the use of management estimates  relate to the valuation of its accounts
        receivable, computer  software held for resale, and the determination of
        useful lives of oil and gas properties and equipment,  rental  property,
        and other capital  assets  for purposes  of calculating amortization and
        depletion.

2.   Oil and gas properties and equipment
                                                             2002        2001
                                                             ----        ----

     Oil and gas properties and equipment                 $3,379,078  $3,353,620
        Less:    Accumulated amortization and depletion    2,849,427   2,811,427
                                                          ----------  ----------

                                                          $  529,651  $  542,193
                                                          ==========  ==========

     Oil and  gas  properties  and  equipment  includes  the  cost  of  unproven
     properties of approximately $373,000 (2001 - $350,000).

                                      F-7
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)

<TABLE>
<CAPTION>
<S>                                                                                   <C>               <C>

3.   Rental property
                                                                                      2002              2001
                                                                                      ----              ----

     Building, at cost                                                          $       447,652  $       447,652
          Less:    Accumulated amortization                                              97,260           82,660
                                                                                ---------------  ---------------

                                                                                        350,392          364,992

     Land, at cost                                                                    1,738,994        1,738,994
                                                                                ---------------  ---------------

                                                                                $     2,089,386  $     2,103,986
                                                                                ===============  ===============
</TABLE>


     See note 5.


4.   Other capital assets
<TABLE>
<CAPTION>
<S>                                                                <C>               <C>                 <C>
                                                                                     2002
                                                              --------------------------------------------------
                                                                                   Accumulated
                                                                    Cost          Amortization          Net
                                                              ---------------   ---------------  ---------------
     Computer equipment                                       $        30,636   $        13,463  $        17,173
     Furniture and fixtures                                             5,585             5,136              449
     Truck                                                             39,040            36,306            2,734
                                                              ---------------   ---------------  ---------------

                                                              $        75,261   $        54,905  $        20,356
                                                              ===============   ===============  ===============

                                                                                     2001
                                                              --------------------------------------------------
                                                                                   Accumulated
                                                                    Cost          Amortization          Net
                                                              ---------------   ---------------  ---------------
     Computer equipment                                       $        12,836   $        11,333  $         1,503
     Furniture and fixtures                                             5,585             5,024              561
     Truck                                                             39,040            35,135            3,905
                                                              ---------------   ---------------  ---------------

                                                              $        57,461   $        51,492  $         5,969
                                                              ===============   ===============  ===============
</TABLE>


5.   Bank loan

     The bank loan is payable to the Canadian  Imperial Bank of Commerce,  bears
     interest at prime plus 0.50% per annum, is due on demand, however, the bank
     has agreed to accept  monthly  payments of $11,900  principal and interest,
     and is  secured  by a  first  mortgage  over  the  rental  property  and an
     assignment of rents.

                                      F-8
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)

<TABLE>
<CAPTION>
<S>                                                                                    <C>               <C>

6.   Share capital
                                                                                     Number of
                                                                                      Shares           Amount
         Authorized                                                             ---------------  ---------------
              20,000,000 common shares, without par value
         Issued and fully paid
              Balance at December 31, 2000
                  For cash                                                            1,710,600  $       822,228
                  For natural resource properties                                       750,000            1,000
                  For land and building                                                 587,000          352,200
                                                                                ---------------  ---------------

                                                                                      3,047,600        1,175,428
                  Add:    Value assigned to shares issued to former
                             shareholders of predecessor companies
                             on amalgamation                                          1,748,334        1,623,898
                                                                                ---------------  ---------------

                                                                                      4,795,934        2,799,326
                  Issued during 2001 for cash                                         1,000,000          200,000
                                                                                ---------------  ---------------

                                                                                      5,795,934        2,999,326
                  Issued during 2002 for cash                                         1,000,000          250,000
                                                                                ---------------  ---------------

              Balance at December 31, 2002                                            6,795,934  $     3,249,326
                                                                                ===============  ===============
</TABLE>

     During 2001 the company issued  1,000,000  common shares at $0.20 per share
     together with 1,000,000  share purchase  warrants which entitled the holder
     to purchase an additional common share at $0.25 per share.  During 2002 the
     company issued 1,000,000 common shares at $0.25 per share upon the exercise
     of the share purchase warrants.

     Directors' and employees'  stock options for 457,500 shares  exercisable at
     $.34 per  share to April  25,  2005  were  issued  during  2000 and  remain
     outstanding at December 31, 2002.


7.   Contributed surplus

     Contributed  surplus represents the value ascribed to 150,000 common shares
     issued for natural resource properties and subsequently  surrendered to the
     company  by way of  gift,  for  cancellation.  There  were  no  changes  in
     contributed surplus between January 1, 2000 and December 31, 2002.

                                      F-9
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)


8.   Income taxes

     Significant components of the company's future tax assets are as follows:
<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>               <C>

                                                                     2002             2001              2000
                                                                     ----             ----              ----

     Oil and gas properties and equipment                     $       223,000   $       245,000  $       160,000
     Rental property                                                  (20,000)          (33,000)         (34,000)
     Future removal and site restoration costs                         21,000            21,000           22,000
                                                              ---------------   ---------------  ---------------

     Future income tax assets before loss carryforwards               224,000           233,000          148,000
     Loss carryforwards                                                27,000               ---              ---
                                                              ---------------   ---------------  ---------------

     Net future income tax assets before valuation
          allowance                                                   251,000           233,000          148,000
     Valuation allowance                                             (251,000)         (233,000)        (148,000)
                                                              ----------------  ---------------- ----------------

     Future income tax assets                                 $           ---   $           ---  $           ---
                                                              ===============   ===============  ===============
</TABLE>


     The company has determined that realization is not more likely than not and
     therefore a valuation  allowance  against the future  income tax assets has
     been recorded.

     The following  schedule details the main  differences  between the combined
     Canadian federal and provincial statutory tax rate of 40% (2001 - 44%; 2000
     - 45%) and the effective tax rate:
<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>                <C>

                                                                     2002             2001              2000
                                                                     ----             ----              ----
     Anticipated income tax recovery (expense)
          at statutory rates                                  $        51,000   $       128,700  $       (90,500)
              Add (deduct) the tax effect of:
                   Non-deductible crown royalties                     (27,400)          (39,300)         (30,000)
                   Rate reductions
                      Resource allowance                                  200            21,000           33,400
                      Earned depletion                                    ---               ---           16,000
                   Alberta royalty tax credit                           6,000             9,700            7,700
                   Tax benefit of future tax assets
                      not recognized                                  (28,200)         (117,100)          64,800
                   Other                                               (1,600)           (3,000)          (1,400)
                                                              ----------------  ---------------- ----------------

     Actual income tax provision                              $           ---   $           ---  $           ---
                                                              ===============   ===============  ===============
</TABLE>

                                      F-10
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)


9.   United States accounting principles

     Differences  in accounting  policies  between  Canada and the United States
     which would have a significant  effect on the financial  statements  are as
     follows:

     a) Under  United  States  generally  accepted  accounting  principles,  the
        ceiling   test used in the full cost  method of  accounting  for oil and
        gas properties  requires  the  discounting  of  future net revenues from
        proven oil and gas reserves using a rate of 10%, but without taking into
        account deductions from revenue for general and administrative expenses.
        For 2002, 2001,  1998, 1994 and 1992 this results in $80,000,  $157,000,
        $70,000 and $69,000 respectively less amortization and depletion expense
        and for 2002 $50,000 more amortization and depletion expense pursuant to
        the ceiling test than that required under  Canadian  generally  accepted
        accounting principles.  As a result,  amortization and depletion expense
        for 2002, 2001  and  2000 are $14,200 higher,  $52,000 lower and $17,200
        higher  respectively  than  under Canadian generally accepted accounting
        principles.

     b) Under  United  States generally accepted accounting principles, granting
        of  stock  options to directors, officers and employees may give rise to
        a  charge  to  income  for  compensation.   The company has prepared its
        financial statements in accordance with APB 25 under which stock options
        are measured by the intrinsic value method whereby  directors,  officers
        and employee compensation cost is  limited  to  the excess of the quoted
        market price at date of grant over the option  exercise  price  and  the
        excess  of  the  quoted  market  price  at December 31st over the quoted
        market  price  at  the  date  of grant. At December 31, 2002, the quoted
        market  price  exceeded  the  option  exercise  price which results in a
        charge  to  income  of  $50,000.   Since  the  option   exercise   price
        approximated  the quoted market price at the date the stock options were
        granted  and  immediatel y prior to December 31, 2001 and 2000, there is
        no compensation cost to be recognized for those years.

     c) Under  United  States  generally accepted accounting principles, certain
        bankers'  acceptances and treasury bills held at December 31, 2002, 2001
        and 2000 would be classified as marketable securities rather than cash.

     d) Certain  unaudited supplementary information with respect to oil and gas
        producing  activities  as  required  by United States generally accepted
        accounting principles has been omitted.


                                      F-11
<PAGE>

                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)



9.   United States accounting principles - continued

     Under United States generally  accepted  accounting  principles,  net loss,
     loss per  share,  assets,  shareholders'  equity,  and change in cash is as
     follows:
<TABLE>
<CAPTION>
<S>                                                                   <C>             <C>                <C>

                                                                     2002             2001              2000
                                                                     ----             ----              ----
         Net income (loss) under Canadian generally
              accepted accounting principles                  $      (127,647)  $      (292,576) $       201,165
         Differences arising on application of
              United States generally accepted
              accounting principles
                  Differences in depletion of oil
                       and gas properties arising
                       from ceiling test calculation                  (14,200)           52,000          (17,200)
                  Increase in compensation expense
                       arising from stock options                     (50,000)              ---              ---
                                                              ----------------  ---------------  ---------------

         Net income (loss) under United States
              generally accepted accounting principles        $      (191,847)  $      (240,576) $       183,965
                                                              ================  ================ ===============

         Basic and diluted income (loss) per share                  (3.0 cent)        (4.2 cent)        3.8 cent
                                                                    ==========        ==========        ========

         Total assets                                         $     3,927,035   $     4,039,497  $     4,499,527
                                                              ===============   ===============  ===============

         Shareholders' equity                                 $     3,113,733   $     3,077,180  $     3,117,756
                                                              ===============   ===============  ===============

         Increase (decrease) in cash during the year
              under Canadian generally accepted
              accounting principles                           $       (83,063)  $      (140,196) $        45,624

         Decease (increase) in marketable securities                 (240,022)          567,270          (19,988)
                                                              ----------------  ---------------  ----------------

         Increase (decrease) in cash during the year
              under United States generally accepted
              accounting principles                           $      (323,085)  $       427,074  $        25,636
                                                              ================  ===============  ===============
</TABLE>

     Income per share figures are based on the weighted average number of shares
outstanding.

                                      F-12
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)


9.   United States accounting principles - continued

     Had the company  fully adopted the  recommendations  of SFAS 123 and valued
     the options  using a fair  market  value  method such as the  Black-Scholes
     option pricing  model,  there would be an increase in employee and director
     compensation  costs  charged  to income  of $NIL in 2002,  $NIL in 2001 and
     $45,000 in 2000.  The  weighted  average  grant date fair  market  value of
     options granted was determined using the Black-Scholes option pricing model
     assuming a risk-free  interest  rate of 7%; an option  life of 5 years;  an
     expected  volatility of 7% and that no dividends  would be paid until after
     the expiry date of the options.
<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>               <C>

                                                                     2002             2001              2000
                                                                     ----             ----              ----
     Net income (loss) under United States
          generally accepted accounting principles            $      (191,847)  $      (240,576) $       183,965

     Decrease (increase) in compensation expense                       50,000               ---          (45,000)
                                                              ---------------   ---------------  ----------------

                                                              $      (141,847)  $      (240,576) $       138,965
                                                              ================  ================ ===============
     Basic and diluted net income (loss) per
          share if SFAS 123 adopted                                 (2.2 cent)        (4.2 cent)        2.9 cent)
                                                                    ===========       ==========        =========
</TABLE>

10.  Other information

     a) Segmented information - The company operates in the oil and gas and real
        estate rental segments.  All of the company's activities  and assets are
        within Canada.

     b) Related party transactions - In addition to amounts disclosed  elsewhere
        in  the  financial  statements,  the  financial  statements  include the
        following transactions with related parties. Accounting,  administrative
        and premises expense includes  $48,291 (2001 - $46,969;  2000 - $55,805)
        and consulting and management  fees expense  includes  $117,000  (2001 -
        $36,000;  2000 - $36,000)  paid  to a director and officer and companies
        whose shareholders are shareholders of the company.

     c) Financial instruments -  The  company's financial instruments consist of
        cash,  bankers'  acceptances  and  treasury  bills, accounts receivable,
        accounts  payable,  and  bank  loan.   Unless  otherwise  noted,  it  is
        management's  opinion  that  the  company  is not exposed to significant
        interest,  currency  or  credit  risks  arising  from  these   financial
        instruments.  The fair values of these financial instruments approximate
        their carrying values, unless otherwise noted.

     d) Statement of cash flows
<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>               <C>
                                                                     2002             2001              2000
                                                                     ----             ----              ----
         Cash from operating activities includes:
              Interest paid                                   $        35,110   $        46,536  $        62,911
              Interest received                               $        22,329   $        75,370  $        53,273
</TABLE>

                                      F-13
<PAGE>
                             BERKLEY RESOURCES INC.
                             ----------------------

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------

                                DECEMBER 31, 2002
                                -----------------

                              (In Canadian Dollars)


10.  Other information

     e)  Commitments

         The  company  is committed to making the following  payments  under the
         terms of two consulting contracts with related individuals:

                  2003                              $        96,000
                  2004                                       96,000
                  2005                                       96,000
                  2006                                       96,000
                                                    ---------------

                                                    $       384,000
                                                    ===============
     f)  Comparative figures

         The  2001 and 2000 figures have been reclassified, where applicable, to
         conform with the presentation used in the current year.


                                      F-14
<PAGE>




                             BERKLEY RESOURCES INC.
                             ----------------------
         SCHEDULE OF ADDITIONS TO OIL AND GAS PROPERTIES AND EQUIPMENT,
         --------------------------------------------------------------
                    RENTAL PROPERTY, AND OTHER CAPITAL ASSETS
                    -----------------------------------------
                                DECEMBER 31, 2002
                                -----------------
                              (In Canadian Dollars)


<TABLE>
<CAPTION>
<S>                                               <C>                 <C>              <C>            <C>


                                                Balance,                                             Balance,
                                                Beginning                                               End
                                                 of the          Additions,                           of the
                                                  Year             at Cost         Retirements         Year
Year ended December 31, 2002                ---------------   ---------------   ---------------  ---------------
     Oil and gas properties
         and equipment                      $     3,353,620   $        25,458   $           ---  $     3,379,078
     Rental property                              2,186,646               ---               ---        2,186,646
     Other capital assets                            57,461            17,800               ---           75,261
                                            ---------------   ---------------   ---------------  ---------------

                                            $     5,597,727   $        43,258   $           ---  $     5,640,985
                                            ===============   ===============   ===============  ===============

Year ended December 31, 2001
     Oil and gas properties
         and equipment                      $     3,343,154   $        10,466   $           ---  $     3,353,620
     Rental property                              1,537,328           649,318               ---        2,186,646
     Other capital assets                            57,461               ---               ---           57,461
                                            ---------------   ---------------   ---------------  ---------------

                                            $     4,937,943   $       659,784   $           ---  $     5,597,727
                                            ===============   ===============   ===============  ===============

Year ended December 31, 2000
     Oil and gas properties
         and equipment                      $     3,043,957   $       299,197   $           ---  $     3,343,154
     Rental property                              1,537,328               ---               ---        1,537,328
     Other capital assets                            57,461               ---               ---           57,461
                                            ---------------   ---------------   ---------------  ---------------

                                            $     4,638,746   $       299,197   $           ---  $     4,937,943
                                            ===============   ===============   ===============  ===============
</TABLE>

                                      F-15
<PAGE>


                             BERKLEY RESOURCES INC.
                             ----------------------
              SCHEDULE OF ACCUMULATED AMORTIZATION AND DEPLETION OF
              -----------------------------------------------------
                      OIL AND GAS PROPERTIES AND EQUIPMENT,
                      -------------------------------------
                   RENTAL PROPERTIES, AND OTHER CAPITAL ASSETS
                   -------------------------------------------
                                DECEMBER 31, 2002
                                -----------------
                              (In Canadian Dollars)



<TABLE>
<CAPTION>
<S>                                                <C>              <C>               <C>             <C>

                                                                Amortization
                                                                     and
                                                Balance,          Depletion                          Balance,
                                                Beginning          Expense                              End
                                                 of the            for the                            of the
                                                  Year              Year           Retirements         Year
Year ended December 31, 2002                ---------------   ---------------   ---------------  ---------------
     Oil and gas properties
         and equipment                      $     2,811,427   $        38,000   $           ---  $     2,849,427
     Rental property                                 82,660            14,600               ---           97,260
     Other capital assets                            51,492             3,413               ---           54,905
                                            ---------------   ---------------   ---------------  ---------------

                                            $     2,945,579   $        56,013   $           ---  $     3,001,592
                                            ===============   ===============   ===============  ===============

Year ended December 31, 2001
     Oil and gas properties
         and equipment                      $     2,331,427   $       480,000   $           ---  $     2,811,427
     Rental property                                 70,360            12,300               ---           82,660
     Other capital assets                            49,215             2,277               ---           51,492
                                            ---------------   ---------------   ---------------  ---------------

                                            $     2,451,002   $       494,577   $           ---  $     2,945,579
                                            ===============   ===============   ===============  ===============

Year ended December 31, 2000
     Oil and gas properties
         and equipment                      $     2,235,427   $        96,000   $           ---  $     2,331,427
     Rental properties                               58,989            11,371               ---           70,360
     Other capital assets                            46,033             3,182               ---           49,215
                                            ---------------   ---------------   ---------------  ---------------

                                            $     2,340,449   $       110,553   $           ---  $     2,451,002
                                            ===============   ===============   ===============  ===============
</TABLE>


                                      F-16