SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 20 - F

     Registration  Statement  pursuant  to  Section  12(b)  or  12)(g)  of  the
     Securities  Exchange  Act  of  1934
                                       Or
 XX  Annual  Report  pursuant  to Section 13 or 15(d) of the Securities Exchange
     Act  of  1934
     For  the  fiscal  year  ended May  31,  2002
                                       Or
     Transaction  Report  pursuant  to  Section  13  or  15(d) of the Securities
     Exchange  Act  of  1934
     For  the  transition period from __________________ to ____________________

COMMISSION  FILE  NUMBER  0-31096
                          -------

                       INTERNATIONAL TOWER HILL MINES LTD.
                       -----------------------------------
             (Exact name of registrant as specified in its charter)

                            BRITISH COLUMBIA, CANADA
                            ------------------------
                 (Jurisdiction of incorporation or organization)

                         #507 - 837 WEST HASTINGS STREET
                      VANCOUVER, BRITISH COLUMBIA, V6C 3N6
                      ------------------------------------
                    (Address of principal executive offices)

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

Securities  to  be  registered  pursuant  to  section  12(g) of the Act:  COMMON
SHARES,  NO  PAR  VALUE
                                                              (Title  of  Class)

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


Indicate  the  number  of outstanding shares of each of the Company's classes of
capital  or  common  stock  as  of the close of the period covered by the annual
report.

Title  of  Each  Class                           Outstanding  at  May  31,  2002
----------------------                           -------------------------------

COMMON  SHARES,  NO  PAR  VALUE                               9,012,183

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to  file such reports), and (2) has been subject to such filing requirements for
the  past  90  days.

                            YES  ________             NO   _______X_______

Indicate by check mark which financial statement item the Registrant has elected
to  follow:

                            Item  17X                Item  18


                                        2
<PAGE>
                                TABLE OF CONTENTS
PART    ITEM                                                              PAGE
----      ----     ----
        Forward-Looking  Statements                                        3
I       1   Identity of Directors, Senior Management and Advisors          4
        2   Offer  Statistics  and  Expected  Timetable                    4
        3   Key  Information                                               4
               Selected  Financial  Data                                   4
               Exchange  Rate  Data                                        6
               Capitalization  and  Indebtedness                           7
               Reason  for  the  Offer  and  Use  of  Proceeds             7
               Risk  Factors                                               7
        4   Information  on  the  Company                                 12
               History  and  Development  of  the  Company                12
               Business  Overview                                         12
               Property  Plans  and  Equipment                            14
        5   Operating  and  Financial  Review  and  Prospects             22
               Operating  Results                                         23
               Liquidity  and  Capital  Resources                         24
        6   Directors,  Senior  Management  and  Employees                25
               Directors  and  Senior  Management                         25
               Executive  Compensation                                    26
               Board  Practices                                           27
               Employees                                                  28
               Share  Ownership                                           28
               Options  and  Other  Rights  to  Purchase  Securities      28
        7   Major  Shareholders  and  Related  Party  Transactions        28
               Major  Shareholders                                        29
               Related  Party  Transactions                               29
        8   Financial  Information                                        30
               Consolidated Statements and Other Financial Information    30
               Significant  Changes                                       30
        9   The  Offer  and  Listing                                      30
               Listing  Details                                           30
               Markets                                                    32
       10   Additional  Information                                       32
               Share  Capital                                             32
               Memorandum  and  Articles  of  Association                 32
               Material  Contracts                                        32
               Exchange  Controls                                         32
               Taxation                                                   32
               Dividends  and  Paying  Agents                             39
               Statement  By  Experts                                     40
               Documents  on  Display                                     40
       11   Quantitative and Qualitative Disclosure about Market Risk     40
       12   Description of Securities Other than Equity Securities        40
II     13   Default,  Dividend  Arrearages  and  Delinquencies            41
       14   Material Modifications to the Rights of Security Holders
            and Use  of  Proceeds                                         41
III    17   Financial  Statements                                         41
       18   Financial  Statements                                         42
       19   Exhibits                                                      42
       Signatures                                                         44
       Financial  Statements                                              F1


                                        3
<PAGE>
                           FORWARD-LOOKING INFORMATION

This  registration statement contains forward-looking statements and information
relating  to  International Tower Hill Mines Ltd. (the "Company") that are based
on  beliefs  of  its  management  as well as assumptions made by and information
currently  available  to  the  Company.  When  used  in this document, the words
"anticipate,"  "believe,"  "estimate," "expect," "intend," "plan," and "project"
and  similar  expressions,  as they relate to the Company or its management, are
intended  to  identify  forward-looking statements.  Such statements reflect the
current  views  of  the Company with respect to future events and are subject to
certain  risks,  uncertainties  and  assumptions.  Many  factors could cause the
actual  results,  performance  or  achievements  of the Company to be materially
different  from  any  future  results,  performance  or achievements that may be
expressed  or  implied  by  such  forward-looking  statements,  including, among
others, changes in general economic and business conditions, changes in currency
exchange  rates  and  interest  rates,  changes in business strategy and various
other  factors,  both  referenced  and  not  referenced  in  this  registration
statement.  Should  one  or more of these risks or uncertainties materialize, or
should  underlying  assumptions  prove  incorrect,  actual  results  may  vary
materially  from  those  described  herein.


                                        4
<PAGE>
                                     PART I

ITEM  1.   IDENTITY  OF  DIRECTORS,  SENIOR  MANAGEMENT  AND  ADVISORS
           -----------------------------------------------------------

Not applicable.  Refer to "Item 6 - Directors, Senior Management and Employees -
Directors  and  Senior  Management"  herein.

ITEM  2.    OFFER  STATISTICS  AND  EXPECTED  TIMETABLE
            -------------------------------------------

Not  applicable.

ITEM  3.    KEY  INFORMATION
            ----------------

SELECTED  FINANCIAL  DATA
-------------------------

The summary consolidated financial information set forth below should be read in
conjunction  with,  and  is  qualified  in  its  entirety  by  reference to, the
consolidated  financial  statements  as of and for the years ended May 31, 2002,
May  31,  2001  and  May 31, 2000, together with the notes thereto, which appear
elsewhere  in annual report. The consolidated financial statements as of and for
the years ended May 31, 2002, May 31, 2001 and May 31, 2000 have been audited by
MacKay  LLP,  Chartered  Accountants.

The  selected  financial  data set forth in the following tables is expressed in
Canadian  dollars  ("Cdn$").
<TABLE>
<CAPTION>


                                        5
<PAGE>

                                Fiscal Years Ended
                                      May 31
<S>                             <C>                  <C>          <C>          <C>          <C>
                                              2002         2001         2000         1999         1998
                                -------------------  -----------  -----------  -----------  -----------

REVENUE (Interest Income). . .              11,572       24,961        7,516          770          100
LOSS FROM OPERATIONS . . . . .            (153,541)     (77,441)  (181,148)1      (60,922)     (59,413)
GAIN ON SALE OF MARKETABLE                     ---        6,158      238,715          ---          ---
SECURITIES
WRITE-DOWN OF MARKETABLE                       ---      (14,070)         ---          ---          ---
SECURITIES

INCOME (LOSS) FOR THE PERIOD2.            (153,541)     (85,353)      57,567      (60,922)     (59,413)
DEFICIT, BEGINNING OF PERIOD .          (1,963,970)  (1,878,617)  (1,936,184)  (1,875,262)  (1,815,849)
DEFICIT, END OF PERIOD2. . . .          (2,117,511)  (1,963,970)  (1,878,617)  (1,936,184)  (1,875,262)
INCOME (LOSS) PER SHARE2     .               (0.01)       (0.01)        0.01        (0.01)       (0.02)

<FN>

1    A write off of deferred exploration expenses totalling $130,034 is included
     in  this  figure.
2    Under  United  States  generally accepted accounting principles (GAAP), all
     mineral  exploration  and development expenditures are expensed in the year
     incurred  in  an  exploration  stage  company  until  there  is substantial
     evidence that a commercial body of ore has been located. The amounts in the
     table  are expressed under Canadian GAAP, which allows resource exploration
     and  development  property expenditures to be deferred during this process.
</TABLE>

The  weighted  average  outstanding  shares  used to calculate income (loss) per
share  for  the following fiscal periods are: 9,012,183 for the period ended May
31,  2002, 8,882,411 for the period ended May 31, 2001; 8,119,947 for the period
ended  May  31,  2000; 7,153,329 for the period ended May 31, 1999 and 6,693,432
for  the  period  ended  May  31,  1998.

                                        6
<PAGE>

BALANCE  SHEET  DATA:
<TABLE>
<CAPTION>


                           Fiscal Year Ended
                                May 31

<S>                        <C>                <C>        <C>        <C>        <C>
                                        2002       2001       2000       1999       1998
                           -----------------  ---------  ---------  ---------  ---------
CURRENT ASSETS1 . . . . .            351,604    517,322    577,748     36,690     11,177
MINERAL PROPERTIES. . . .          1,059,982  1,043,727    917,809  1,006,191    940,273
TOTAL ASSETS2 . . . . . .          1,563,549  1,563,549  1,498,057  1,142,881    951,450
CURRENT/TOTAL LIABILITIES             15,933     11,855      6,010      8,401     90,215
SHARE CAPITAL . . . . . .          3,515,664  3,515,664  3,370,664  3,070,664  2,736,497
SHAREHOLDERS' EQUITY. . .          1,398,153  1,551,694  1,492,047  1,134,480    861,235
<FN>

1    Under  United  States  GAAP,  the  Company  would  classify  the marketable
     securities  as "Securities available for resale". The carrying value on the
     balance  sheet  at  May  31,  2002 would be $49,600 (2001 - $37,520; 2000 -
     $22,150)  and  the  unrealised gain (loss) would be posted to shareholders'
     equity  $12,080  (2001 - $14,070; 1999 - $77,900). There would be no impact
     on  the  consolidated  statement of operations in 2000, however in 2001 the
     unrealised  loss  would  not  appear  in  the  consolidated  statement  of
     operations  rather  than  as  an adjustment to shareholders' equity, and in
     2002  the  unrealised  gain  would  be  posted  to  shareholder's  equity.
2    Under  United  States  generally accepted accounting principles (GAAP), all
     mineral  exploration  and development expenditures are expensed in the year
     incurred  in  an  exploration  stage  company  until  there  is substantial
     evidence that a commercial body of ore has been located. The amounts in the
     table  are expressed under Canadian GAAP, which allows resource exploration
     and  development  property expenditures to be deferred during this process.
</TABLE>


The  above  financial  information  is  presented  in  accordance  with Canadian
generally  accepted  accounting principles ("GAAP"), which are different in some
respects  from  US  GAAP.  The  effect  of  these  differences  on the Company's
financial  performance  is  summarized  in  the  following  table.
<TABLE>
<CAPTION>



                                 May 31        May 31       May 31,       May 31,
                                  2002          2001          2000          1999
<S>                           <C>           <C>           <C>           <C>
Consolidated statement of
    operations and deficit
Income (loss) for the year .  $  (153,541)  $   (85,353)  $    57,567   $   (60,462)
  under Canadian GAAP
Write off of exploration . .       49,990                     130,034             -
  expenses
Mineral property
  exploration and
  development expenditures .     (34,530)     (102,568)      (18,052)      (53,418)
                              ------------  ------------  ------------  ------------

                                        7
<PAGE>

United States GAAP . . . . .  $  (138,081)  $  (187,921)  $   169,549   $  (113,880)
                              ============  ============  ============  ============


Gain (loss) per share. . . .  $    (0.015)  $     (0.02)  $      0.02   $     (0.02)
                              ============  ============  ============  ============
  - US GAAP


Consolidated balance sheet
Assets
Mineral Properties
  Canadian GAAP. . . . . . .  $ 1,060,550   $ 1,043,727   $   917,809   $ 1,006,191
  Resource property
    expenditures
  Resource property. . . . .     (820,300)     (841,777)     (739,209)     (851,191)
   expenditures (cumulative)
                              ------------  ------------  ------------  ------------

United States GAAP . . . . .  $   240,250   $   201,950   $   178,600   $   155,000


Deficit
  Canadian GAAP. . . . . . .  $(2,117,511)  $(1,963,970)  $(1,878,617)  $(1,936,184)

Resource property
expenditures . . . . . . . .     (820,300)     (841,777)     (739,209)     (851,191)
(cumulative)
United States GAAP . . . . .  $(2,937,811)  $(2,805,747)  $(2,617,826)  $(2,787,375)
                              ============  ============  ============  ============

</TABLE>


EXCHANGE  RATE  DATA
--------------------

The  Company  maintains  its  books  of  account  in  Canadian dollars.  Audited
financial  statements  of  the Company are prepared in accordance with generally
accepted  auditing standards in Canada.  All references to the dollar herein are
to  the  lawful  currency  of  Canada  unless  designated  as  "US$".

The  following  table  sets  forth,  for the periods indicated, certain exchange
rates  based  on  the  noon  buying rate in New York City for cable transfers in
Canadian  dollars.  Such  rates  are the number of Unites States dollars per one
(1)  Canadian  dollar and are the inverse of rates quoted by the Federal Reserve
Bank  of  New  York  for  Canadian dollars per US$1.00.  On October 3, 2002, the
exchange  rate  was US$1.00 per Cdn$1.5903.  The high and low exchange rates for
each  month  during  the  previous  six  months  were  as  follows:

                               High           Low
                               ----          ---

     September  2002          1.5863       1.5545
     August  2002             1.5963       1.5523
     July  2002               1.5880       1.5145
     June  2002               1.5499       1.5108
     May  2002                1.5708       1.5275
     April  2002              1.5995       1.5632

The  average  exchange rate is based on the average of the exchange rates on the
last  day  of  each  month  during  such  periods.
<TABLE>
<CAPTION>


                                                 Year Ended May 31
                                                  -----------------
                               1998      1999      2000      2001      2002
                              ------    ------    ------    ------    ------
<S>                            <C>       <C>       <C>       <C>       <C>


Rate at end of Period. . .     1.4570    1.4740    1.4965    1.5461    1.5275
Average Rate during Period     1.4148    1.5123    1.4700    1.5153    1.5682
Low. . . . . . . . . . . .     1.3805    1.4570    1.4456    1.4639    1.5102
High . . . . . . . . . . .     1.4570    1.5685    1.5063    1.5790    1.6128
                               ------    ------    ------     ------   ------

</TABLE>

                                        8
<PAGE>

CAPITALIZATION  AND  INDEBTEDNESS
---------------------------------

Not  applicable.

REASON  FOR  THE  OFFER  AND  USE  OF  PROCEEDS
-----------------------------------------------

Not  applicable.

RISK  FACTORS
-------------

An  investment  in  the  securities  of  the Company involves significant risks,
including  the  following:

THE  COMPANY'S  COMMON  STOCK  IS  SUBJECT  TO  PENNY  STOCK RULES, WHICH MAKES
INVESTMENT  IN  THE  COMPANY'S  STOCK  SPECULATIVE  OR  RISKY.

The  Company's  common  stock is covered by a Securities and Exchange Commission
rule  that  imposes additional sales practice requirements on broker-dealers who
sell  such securities to persons other than established customers and accredited
investors,  generally  institutions  with  assets  in  excess  of  $5,000,000 or
individuals  with  net  worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse.  For transactions covered by the
rule,  the  broker-dealer  must make a special suitability determination for the
purchaser  and transaction prior to the sale.  Consequently, the rule may affect
the  ability  of  broker-dealers to sell the Company's securities and may affect
the  ability  of  purchasers  of the Company's stock to sell their shares in the
secondary  market.  It  may  also  cause  less  broker dealers willing to make a
market  and  it  may  affect  the  level  of  news  coverage  we  receive.

THE  COMPANY'S  DIRECTORS AND OFFICERS ARE RESIDENT OUTSIDE OF THE UNITED STATES
AND  THEREFORE,  IT  MAY BE DIFFICULT FOR INVESTORS TO EFFECT SERVICE OF PROCESS
UPON  THEM.

Since  certain  of the directors and officers are resident outside of the United
States (the "US"), it may not be possible to effect service of process upon such
directors  and  officers.  All  or  a  substantial portion of the assets of such
directors  and  officers may be located outside of the US, and accordingly there
may  be difficulty or, increased costs involved, in enforcing judgments obtained
in US courts against such directors and officers.  Similarly, essentially all of
the Company's assets are located outside the US and there may be difficulties in
enforcing  judgments obtained in US courts against the Company.  Furthermore, it
would  be  difficult  for  investors  to commence an original action in Canadian
courts  to  enforce  liabilities based upon U.S. federal securities laws against
the  Company or any of the Company's directors and officers resident outside the
U.S.  because  it  is  outside  the  jurisdiction  of Canadian courts to enforce
liabilities  based  upon  U.S.  federal  securities  laws.

THE COMPANY HAS NOT BEEN PROFITABLE AND EXPECTS TO CONTINUE TO INCUR LOSSES AND,
THEREFORE,  REQUIRES SIGNIFICANT OUTSIDE FUNDING TO IMPLEMENT ITS BUSINESS PLAN.

The  Company  has  limited  financial resources, has no source of operating cash
flow  and  has  no assurance that additional funding will be available to it for

                                        9
<PAGE>

further exploration and development of its projects or to fulfil its obligations
under  any  applicable agreements.  Furthermore, the Company reported a net loss
of  $153,541  for  the  period  ended May 31, 2002 and an accumulated deficit of
$2,117,511  for  the  same  period.  There  is  no  guarantee that the Company's
business  will  become  profitable.  Accordingly,  the  purchase of common stock
should  be  considered  a  highly  speculative  investment.

Substantial  expenditures  are  required  to  establish  ore  reserves  through
drilling,  to  develop metallurgical processes to extract the metal from the ore
and,  in  the  case  of  new  concessions,  to develop the mining and processing
facilities  and  infrastructure at any site chosen for mining.  If the Company's
exploration  programs  are successful, additional funds will be required for the
development  of  an  economic  ore  body  and  for  placement of a concession or
concessions  into  commercial  production.  The  only  sources  of  future funds
presently  available  to  the  Company  are  the  sale of equity capital, or the
offering  by  the  Company  of  an  interest  in its concessions to be earned by
another  party  or  parties  carrying  out  further  exploration  or development
thereof.  Although  the  Company  has  been  successful in the past in obtaining
financing  through the sale of equity securities, there can be no assurance that
the  Company will be able to obtain adequate financing in the future or that the
terms  of  such financing will be favourable.  In addition, there is currently a
large  number  of  outstanding  common  stock and any additional stock issuances
through  the  sale  of  equity securities will result in further dilution to the
Company's  stockholders.  However,  failure  to obtain such additional financing
could  result  in  delay  or  indefinite postponement of further exploration and
development  of  its  projects  with  the  possible  loss  of  such concessions.

THE  COMPANY  IS  INVOLVED  IN  A  HIGHLY  SPECULATIVE  INDUSTRY  WITH  RESOURCE
PROPERTIES  THAT  ARE  ONLY  IN  THE  EXPLORATION  STAGE  AND,  THEREFORE,  ITS
DEVELOPMENT  ACTIVITIES  MAY  NOT  RESULT  IN ANY DISCOVERIES OF COMMERCIAL ORE.

The  Company  is in the business of exploring natural resource properties, which
is a highly speculative endeavour.  The resource properties in which the Company
holds  interests  are in the exploration stage only and are without a known body
of  commercial  ore.  There  is  no  assurance  the  Company's  exploration  and
development  activities  will  result in any discoveries of commercial ore.  The
long-term  profitability  of  the  Company's operations will be in part directly
related  to  the cost and success of its exploration activities.  If the Company
fails  to  discover any bodies of commercial ore, the Company will have to raise
funds  through the sale of equity securities so that the Company can continue in
the  business  of  exploring  natural  resource  properties.

THE  COMPANY  MAY  EXPERIENCE  CERTAIN  HAZARDS AND RISKS NORMALLY INCIDENTAL TO
EXPLORING  NATURAL  RESOURCE  PROPERTIES.

Operations  in  which  the  Company  has  a  direct or indirect interest will be
subject  to  all  the  hazards  and  risks  normally  incidental to exploration,
development  and  production  of  minerals,  any  of  which could result in work
stoppages,  damage  to  or  destruction of mines and other producing facilities,
damage  to  life and property, environmental damage and possible legal liability
for  all  damage.  The Company has not experienced material losses due to any of

                                       10
<PAGE>

the  foregoing  hazards  because  the  Company's  properties  are  at  an  early
exploration  stage, with no established mineral reserves.  If the Company begins
drilling  operations with large mechanized equipment, the Company may be exposed
to  any of the foregoing hazards.  Given that the Company's operations are at an
early exploration stage, the Company does not maintain liability insurance.  The
Company will have to consider obtaining insurance above any insurance maintained
by  its  subcontractors  providing  exploration  services  if it begins drilling
operations.  If  the  Company  does  not  obtain  insurance,  the  payment  of
liabilities  for  any  such  hazards  may  have a material adverse effect on the
Company's  business.

THE  COMPANY  MAY  FAIL  TO COMPLY WITH ALL OF THE FEDERAL, PROVINCIAL AND LOCAL
GOVERNMENT  REGULATIONS  PERTAINING  TO  ITS  BUSINESS OPERATIONS AND THEREBY BE
SUBJECT  TO  PENALTIES  OR  BE  PREVENTED  FROM  IMPLEMENTING ITS BUSINESS PLAN.

There  can be no guarantee that the Company or any of its joint venture partners
will be able to obtain all necessary permits and approvals from various federal,
provincial  and  local governmental authorities that may be required in order to
undertake  exploration  activity  or  commence construction or operation of mine
facilities  on  the  Company's  properties.  If  the Company or any of its joint
venture  partners are unable to obtain any of the necessary permits, the Company
will  not  be  able to conduct exploration activities on its resource properties
and  will lose the opportunity to discover minerals.  The Company's inability to
conduct  exploration  activities  on  any  of its resource properties may have a
material  adverse  effect  on  the  Company's  business.

THE  COMPANY'S  BUSINESS  IS SUBJECT TO ENVIRONMENTAL REGULATION AND THE COST OF
COMPLIANCE  MAY  HAVE  A MATERIAL ADVERSE EFFECT ON THE COMPANY'S PROFITABILITY.

Currently,  there  are  no  environmental regulations that materially impact the
Company because exploration activities are at an early stage.  Reclamation work,
that  is,  restoring  the  property  to  its  original state, is minimal because
exploration  activities  have  virtually  no environmental impact.  Any remedial
environmental  reclamation  consists  of  slashing  underbrush  so that wildlife
movement  is  not hampered and basic re-seeding operations.  However, all phases
of  the  Company's operations will be subject to environmental regulation in the
jurisdiction  in  which it operates when the Company begins drilling operations.
Environmental  legislation provides for restrictions and prohibitions on spills,
releases or emissions of various substances produced in association with certain
mining  industry operations, such as seepage from tailings disposal areas, which
would  result  in  environmental  pollution.  In  addition,  certain  types  of
operations  require  the  submission  and  approval  of  environmental  impact
assessments.  Environmental  legislation  is  evolving  in a manner, which means
stricter  standards, and enforcement, fines and penalties for non-compliance are
more  stringent.  Environmental  assessments  of  proposed  projects  carry  a
heightened  degree  of  responsibility for companies and directors, officers and
employees.  The cost of compliance with changes in governmental regulation has a
potential to reduce the profitability of operations.  There is no assurance that
future  changes  in  environmental  regulation, if any, will not have an adverse
effect  on  the  Company's  operations.

THE  COMPANY'S  PROPERTIES  MAY  BE  SUBJECT TO ABORIGINAL PEOPLES' LAND CLAIMS,
WHICH  COULD  HAVE  AN  ADVERSE  EFFECT ON THE COMPANY'S EXPLORATION ACTIVITIES.

The  Company's  properties  may in future, be the subject of aboriginal peoples'
land  claims.  The  legal  basis  of  a  land  claim is a matter of considerable
complexity  and  the impact of a land claims settlement cannot be predicted with

                                       11
<PAGE>

any  degree of certainty, and no assurance can be given that a broad recognition
of aboriginal rights by way of a negotiated settlement or judicial pronouncement
would not have an adverse effect on the Company's activities, including the loss
of  the  ability  to  conduct  further  exploration on the Company's properties.

THE COMPANY'S PROPERTIES MAY BE SUBJECT TO UNREGISTERED AGREEMENTS, TRANSFERS OR
CLAIMS  AND  TITLE  MAY  BE  ADVERSELY  AFFECTED  BY  UNDETECTED  DEFECTS.

The  properties  may  be subject to unregistered agreements, transfers or claims
and  title may be adversely affected by undetected defects.  The Company has not
conducted  surveys  of the properties in which it holds interests and therefore,
the  precise  area and location of such properties may be in doubt.  There is no
guarantee  that  title  to  such  property  will  not be challenged or impugned.

THE PRICES OF PRECIOUS AND BASE MINERALS AND METALS FLUCTUATE WIDELY AND MAY NOT
PRODUCE  ENOUGH  REVENUE  TO  COVER  THE  COMPANY'S  COSTS.

The  Company's  revenues,  if any, are expected to be in large part derived from
the  extraction and sale of precious and base minerals and metals.  The price of
such metals or interest related thereto has fluctuated widely and is affected by
numerous  factors  beyond  the  control  of  the Company.  These factors include
international  economic  and  political  conditions,  expectations of inflation,
international  currency  exchange  rates,  interest  rates,  global  or regional
consumption  patterns,  speculative  activities,  levels  of  supply and demand,
increased  production  due  to  new  mine  developments  and improved mining and
production  methods,  availability  and  costs of metal substitutes, metal stock
levels  maintained  by  producers  and others and inventory carrying costs.  The
exact  effect  of  these  factors on the Company's business cannot be accurately
predicted,  but  the  combination of these factors may result in the Company not
receiving  an  adequate return on invested capital as required to cover costs of
operations.

INVOLVEMENT  BY  THE  COMPANY'S  DIRECTORS  AND  OFFICERS  IN  OTHER  COMPETING
ENTERPRISES  MAY  RESULT IN CONFLICTS OF INTEREST THAT COMPROMISE THE SUCCESSFUL
IMPLEMENTATION  OF  THE  COMPANY'S  BUSINESS  PLAN.

Certain  of  the  directors  and  officers of the Company are also directors and
officers  of  other  companies  engaged  in  natural  resource  exploration  and
development,  and  as  a result, conflicts of interest may arise.  Directors and
officers  of  the Company with conflicts of interest will be subject to the laws
of  the  Province  of  British Columbia and will be required to act honestly, in
good faith and in the best interests of the Company.  In addition directors with
a  conflict  of  interest  will  be  required  to disclose such conflicts to the
Company  and  are  prohibited  in  voting  in such circumstances.  Conflicts may
result  in  potential  explorations  opportunities being lost to other competing
enterprises  in  which  a  director  or  officer  is involved, in which case the
Company  may  lose  any  potential  benefit  from  such  exploration  activity.

                                       12
<PAGE>

US  INVESTORS WILL BE SUBJECT TO US TAXATION AT POSSIBLY ADVERSE OR HIGHER RATES
AND  UNDER  A  SYSTEM  THAT  MAY  BE  MORE  COMPLICATED  AND UNFAMILIAR TO THEM.

If  at  any  time  the Company qualifies as a passive foreign investment company
under US tax laws, US investors may be subject to adverse tax consequences.  The
Company  could  be  a  passive  foreign investment company if 75% or more of its
gross  income in any year is considered passive income for US tax purposes.  For
this  purpose, passive income generally includes interest, dividends, some types
of  rents  and  royalties,  and gains from the sale of assets that produce these
types  of  income.  In  addition,  the  Company could be classified as a passive
foreign  investment  company  if the average percentage of its assets during any
year  that produced passive income, or that were held to produce passive income,
is  at  least 50%.  If the Company is classified as a passive foreign investment
company,  and  if  shareholders  sell any of their common shares or receive some
types  of  distributions  from  the Company, they may have to pay taxes that are
higher  than  if  the  Company  were not considered a passive foreign investment
company.  It  is  impossible  to  predict  how  much  shareholders'  taxes would
increase,  if  at  all.

Based  on the nature of its revenue and its anticipated corporate structure, the
Company  may  be  treated as a passive foreign investment company.  To determine
whether the Company is a passive foreign investment company, it will be required
to  examine each year its revenue and expenses and the value of its assets.  The
tests  are  complex  and require, among other things, that the Company determine
how  much  of its income each year will be passive income.  The Company does not
have  the  necessary  data  to determine whether these tests will be met for the
year 2001 or future years, nor can it predict whether the tests are likely to be
met.  Moreover, the manner in which the tests apply to the Company's business is
not  certain.  Each  investor in the Company's common shares is urged to consult
his,  her  or  its own tax advisor to discuss the potential consequences to such
investor  if  at  any time the Company qualifies as a passive foreign investment
company.

VOLATILITY  OF  THE  OVER-THE-COUNTER  BULLETIN  BOARD  ("OTC BB") MAY ADVERSELY
AFFECT  THE  PRICE  OF  THE  COMMON  STOCK.

Certain  stocks listed on the OTC BB have recently experienced significant price
and  volume  fluctuations and decreases which have adversely affected the market
price  of  the Company's stock and other stocks listed on the OTC BB without any
regard  to  the  underlying  fundamentals  of  such  stocks.  These broad market
fluctuations, which may occur in the future, as well as issues more specifically
related  to  the  Company's  business  activities or prospects, or its financial
performance, may continue to adversely affect the market price of  the Company's
common  stock.

NO  CASH  DIVIDENDS  ARE  EXPECTED  TO  BE  PAID  IN  THE  FORESEEABLE  FUTURE.

The  Company  intends  to retain any future earnings to finance its business and
operations  and  any  future  growth. Therefore, the Company does not anticipate
paying  any  cash  dividends  in  the  foreseeable  future.

                                       13
<PAGE>

THERE  IS  A  POTENTIAL  LACK  OF  ATTRACTIVE  INVESTMENT  TARGETS.

Continued  volatility  of stock prices on the OTC BB may have a material adverse
effect  on  the  Company's  ability to raise capital on the OTC BB or by private
investment,  and  the  price  of its common stock could fluctuate substantially.

ITEM  4.    INFORMATION  ON  THE  COMPANY
            -----------------------------

HISTORY  AND  DEVELOPMENT  OF  THE  COMPANY
-------------------------------------------

The  Company  was  incorporated  pursuant  to the Company Act (British Columbia)
under the name Ashnola Mining Company Ltd. on May 26, 1978.  The Company changed
its name to "Tower Hill Mines Ltd." on June 1, 1988, and to "International Tower
Hill  Mines  Ltd."  on  March  15,  1991.

The  Company's  wholly-owned  subsidiary,  813034  Alberta  Ltd.,  an  Alberta
corporation, was incorporated in 1999.  The Company incorporated this subsidiary
because,  pursuant  to  the laws of the Province of Alberta, mineral permits can
only  be registered to either an Alberta resident or corporation.  The Company's
subsidiary  does  not  have  any  operations  except for holding permits for the
Company's  Alberta  properties  in  its  name.

The  Company  is  publicly  traded  on  the  TSX  Venture Exchange (formerly the
Canadian  Venture  Exchange)  under  the trading symbol "ITH".  The Company also
trades  on the OTC BB under the trading symbol "ITHMF", and trades on the Berlin
Stock  Exchange  -- Unofficial Regulated Market and the Frankfurt Stock Exchange
under  the  trading  symbol  "IW9".

The  Company's  head  office  is located at Suite 507, 837 West Hastings Street,
Vancouver,  British  Columbia, Canada.  The phone number is 604.685.1017 and the
fax  number  is  604.685.5777.  The  Company's registered and records office and
address  for  service  is Suite 1750, 750 West Pender Street, Vancouver, British
Columbia,  Canada.

BUSINESS  OVERVIEW
------------------

Since  its inception in 1978, the Company has been in the business of acquiring,
exploring and evaluating interests in mineral properties.  The Company's current
property  interests are held for the purposes of exploration for precious metals
and  diamonds.  Any  exploration  and  sampling  activities that the Company may
conduct  is  generally  carried  out during the months of May through September.
During  the  months  of  October  to  March,  snow  often prevents any effective
exploration  and  sampling activities.  Drilling, however, can be conducted on a
year-round  basis.

In  the  past  five years the Company has held interests and participated in the
exploration  of  mineral  properties  located  in  Venezuela and in the Canadian
provinces  of  British  Columbia,  Alberta  and  Quebec.  In  2000,  the Company
abandoned  its  Venezuelan  mineral  property  interests  because  the Company's
directors  were  unable  to  obtain  satisfactory  confirmation  of proper legal
ownership  of  the  claims  or obtain a title opinion on the property interests.
The  Company  does  not  have  any  further  rights  in  this  property.

                                       14
<PAGE>

The Company's properties in British Columbia, Alberta and Quebec are at an early
exploration  stage,  with no established mineral reserves.  The exploration work
on  these  properties  primarily  consists of airborne surveys, which may reveal
magnetic  anomalies  followed  by  ground  sampling programs, for the purpose of
identifying potential drill targets.  Any drilling operations are conducted with
small scale equipment only.  The Company is only required to obtain permits when
mechanized  equipment is used by the Company's contractors.  The Company obtains
any  permits  that  it  may  require  from  the  provincial  government ministry
responsible  for  mining  operations  in  which  the  property is situated.  The
process  to  obtain  a  permit  involves  filing  an  application  form with the
appropriate  mining  regulatory  authority  in  Alberta  and Quebec.  In British
Columbia,  the  Company  is  required  to  file an application form and mark the
actual  property  with  stakes.  The  Company  currently  has permits in Quebec.

Currently,  there  are  no  environmental  regulations  that  impact the Company
because  exploration  activities  are at an early stage.  Reclamation work, that
is,  restoring the property to its original state, is minimal because operations
have  virtually no environmental impact.  Any remedial environmental reclamation
work  consists  of slashing underbrush so that wildlife movement is not hampered
and  basic  re-seeding  operations.

Over  the  next  year,  the Company intends to evaluate continued exploration of
mineral  properties  that  it  currently  holds  an  interest in and may acquire
additional  properties  for  exploration and development.  The Company currently
holds  interests  in  the  following  properties:  Chinchaga  Property, Alberta;
Torngat  Property,  Quebec;  and  Siwash  Creek  Property,  British  Columbia.

To  date,  cumulative exploration activities that the Company has carried out on
the  Chinchaga Propertyt have not generated results that justify a high level of
ongoing  exploration activities.  The Company has currently placed the Chinchaga
Property  on  hold  in  respect of ongoing exploration.  During fiscal 2002, the
deferred  costs related to the Chinchaga Property were written down to a nominal
amount  as no work is currently planned for the property.  The Company will only
undertake  active  exploration if positive results are encountered on land owned
by  other  mineral  exploration  companies  in  the  Chinchaga  region.

The  Company  completed its 2000 Torngat diamond exploration program in northern
Quebec.  Two helicopter-supported mapping and sampling programs were carried out
in  August  and September. The objective of the 2000 Torngat exploration program
was  to  catalogue  kimberlite  dykes that were visible from the air and to take
samples  for  geochemical analysis.  One large 5-metre wide dyke was discovered.
Its  linear  extent  remains  unknown.  Geochemical  analysis indicates that the
kimberlite  originated in the diamond stability field and is a potential diamond
host.  One  sample  was  submitted  for caustic dissolution and no diamonds were
recovered.  The  Company incurred exploration costs totalling $2,190 (surveying)
during  the  fiscal year ended May 31, 2002.  The Company intends to carry out a
follow-up  sampling  and  mapping  program.  Its  objectives  will  be  to  take
significantly larger samples from various locations on the 5-metre wide dyke and
to  explore  for  additional  dykes  on  the basis of airborne geophysical data.

The  Company  commenced  its Spring 2001 diamond drill program on its 100% owned
Siwash  Property  in  south-central  British  Columbia.  The  Siwash Property is
located  in  close  proximity  to  both Brenda Mines Ltd. (copper and molybdenum
production)  and  Fairfield  Minerals  Ltd.  (gold production) mineral projects.

                                       15
<PAGE>

During May 2001 and continuing through December 2001, the Company incurred total
exploration  expenses  of  $85,237.  British  Columbia  mining  exploration  tax
credits  of  $2,838  have  been received on these expenditures and an additional
$14,670  has  been  recorded as a receivable.  In addition, a payment of $12,500
was  made  to  an  optioner  to maintain an option on a portion of the Company's
Siwash  Creek  claim.  The  Company made its final payment of $12,500 on October
3rd,  2002.

The  Company's  working  capital reserve of $297,249 as of October 31st, 2002 is
sufficient to undertake any exploration activities in the near future.  When the
Company's  working  capital  reserve  begins  to  deplete,  it will have to seek
financing, most likely through the issuance of equity securities, so that it may
undertake  further  exploration  of  its  mineral properties or possibly acquire
additional  properties.  The  Company  may  experience  obstacles  in  obtaining
additional  financing  unless  investor  interest in junior resource exploration
companies improves.  The Company may enter into joint venture agreements as part
of  its acquisition or development strategy, and may dispose of current property
interests  on  completion  of  its  evaluation.

Currently,  the Company's operations are administrative and financial in nature.
The  Company  has  no  full-time  or  part-time  employees.  The Company engages
Harbour  Pacific  Capital Corp., a company owned by Anton J. Drescher, President
and  a  director  of  the  Company,  to  provide  administrative  and accounting
services.  The  Company  pays  Harbour Pacific Capital Corp. a management fee of
Cdn$2,500  per month.  The Company does not have a written contract with Harbour
Pacific  Capital  Corp.  Exploration work on the Company's property interests is
performed  by  contractors  engaged  directly by the Company or by the Company's
joint venture partners.  The Company has not earned revenues from operations and
is  conducting  only  minimal  business  operations.

PROPERTY,  PLANTS  AND  EQUIPMENT
---------------------------------

The Company currently holds interests in three mineral properties located in the
Provinces  of  British  Columbia,  Alberta  and  Quebec.  The  Company's mineral
properties  are currently in the exploration stage and accordingly, there are no
known  reserves  of  commercial  minerals  on  any  of the Company's properties.

The  following  table  identifies  these  properties,  the  interest  owned  and
acquisition  and exploration costs incurred over the preceding two fiscal years.
A  more  detailed  description  of  each  property  follows  below.
<TABLE>
<CAPTION>

                                                EXPLORATION                     TOTAL COSTS
                                EXPLORATION    COSTS JUNE 1,    EXPLORATION      INCURRED
                    INTEREST   COSTS JUNE 1,      2000 TO      COSTS JUNE 1,    (INCLUDING
PROPERTY              OWNED     2001 TO MAY     MAY 31, 2001      1999 TO       ACQUISITION
                                  31, 2002                      MAY 31, 2000     COSTS) TO
                                                                               MAY 31, 2002
                                                                               -------------
<S>                 <C>        <C>             <C>             <C>             <C>

Siwash Creek
 Property, . . . .  100%        $  38,255      $  41,974       $     51        $  931,437
British Columbia

                                       16
<PAGE>

Torngat Property,
 Quebec. . . . . .  100%        $  7,990       $  60,594       $  18,001        $ 108,535
Chinchaga
 Property, Alberta   50%           Nil             Nil             Nil          $   50,000
<FN>

**   During  fiscal  2002,  the deferred costs related to the Chinchaga Property
     were  written  down to a nominal amount as no work is currently planned for
     the  property.  The  Company  will  only  undertake  active  exploration if
     positive results are encountered on land owned by other mineral exploration
     companies  in  the  Chinchaga  region.
</TABLE>


Figure  1  is  a  location  map  of  the Siwash Creek Property and the Chinchaga
Property.  Figure  2  is  a location map of the Torngat Property.  The Company's
properties  are  accessible  by  both  roads  and  helicopters.

                                    FIGURE 1

                               [GRAPHIC  OMITTED]

                                       17
<PAGE>

CHINCHAGA  PROPERTY,  ALBERTA
-----------------------------

LOCATION,  DESCRIPTION  AND  ACQUISITION

On  January  29,  1999,  the Company entered into a joint venture agreement (the
"Marum  Agreement")  with  Marum  Resources  Inc.  ("Marum")  for the purpose of
exploring  diamonds, gold or other precious metal minerals in the Chinchaga area
of  northwestern  Alberta,  Canada  (the  "Chinchaga  Property").  The Chinchaga
Property  comprises 70,000 acres (the "Chinchaga Property").  Marum holds a 100%
interest  in  two  townships  and  a  50%  interest  in  the remaining township.

The terms of the Marum Agreement provide that the Company must spend $300,000 to
earn  a  50% interest in the Chinchaga Property.  Pursuant to the Agreement, the
Company  earned a 25% interest in the Chinchaga Property by spending $150,000 in
the  following  manner:

1.   On  March  3,  1999 and on March 12, 1999, the Company purchased a total of
     1,000,000  units in the capital stock of Marum at a price of $0.10 per unit
     for  total  consideration  of  $100,000.  Each unit consisted of one common
     share and one non-transferable share purchase warrant (the "Warrant"). Each
     Warrant  entitled the Company to purchase one additional common share for a
     period  of  two  years  at  a  price  of  $0.12  per  share;  and

2.   On  January  22,  1999,  the  Company advanced a cash payment of $30,000 to
     Marum  towards  exploration expenditures. On February 22, 1999, the Company
     contributed  an  additional  cash  payment  of  $20,000  to  Marum  towards
     exploration  expenditures.

Pursuant to the Marum Agreement, Marum agreed to act as operator for exploration
programs  on  the  Chinchaga  Property.

The  Marum  Agreement  was  subsequently  amended  by  amendment agreement dated
December 5, 2000.  The amendment reduced the total acquisition price to $270,000
and  allowed  the Company to acquire its remaining 25% interest in the Chinchaga
Property  by  exercising  the Warrants to acquire an additional 1,000,000 common
shares.  The  total  exercise  price  of the Warrants was $120,000.  The Company
exercised  200,000  Warrants  on June 3, 1999, 625,000 Warrants on March 2, 2000
and  175,000  Warrants  on  April  20,  2000.

During  fiscal  2002,  the deferred costs related to the Chinchaga Property were
written  down  to  a  nominal  amount  as  no  work is currently planned for the
property.  The  Company  will  only  undertake  active  exploration  if positive
results  are encountered on land owned by other mineral exploration companies in
the  Chinchaga  region.

EXPLORATION  HISTORY

In  March  1998,  prior  to  the  involvement  of the Company, Marum undertook a
reconnaissance  drill  program that identified volcanic ash layers indicative of
diamonds.  In  April  of  1998 Marum obtained an airborne survey, which revealed
magnetic  anomalies  followed  by  ground sampling programs, for the purposes of
identifying  potential  drill  targets.

During  the  winter  of 1999 Marum conducted a drill program on six drill target
locations that had been identified.  Subsequent laboratory analysis of the drill

                                       18
<PAGE>

cores  resulted  in a decision to pursue exploration for base metals in addition
to  diamonds.  During  the  summer of 1999 Marum conducted structural studies to
identify  geological fault line intersections for the purpose of locating higher
concentrations  of metallic minerals.  These studies included review of archived
exploration  data and satellite and air photo data.  Subsequent field operations
consisting  of  rock  sampling and shallow drilling were conducted in the summer
and  fall  of  1999.  Laboratory analysis of the rock samples received in May of
2000  did not indicate the presence of economic mineralization.  The Company and
Marum  filed  assessment reports with Provincial mining regulators in Alberta to
maintain  the  mineral permits in good standing pending a review of the project.
The  Company has currently put on hold any further exploration activities on the
Chinchaga  Property.  The  Company  will  only  undertake  active exploration if
positive  results  are  encountered  on  land owned by other mineral exploration
companies  located  near  the  Chinchaga  Property.

For  the  fiscal  year  ended  May  31,  2002,  the  Company  did  not incur any
exploration  costs.  During  the  fiscal year ended May 31, 2001 the Company did
not  incur  any  exploration  costs.

                                    FIGURE 2

                               [GRAPHIC  OMITED]


                                       19
<PAGE>
------
TORNGAT  PROPERTY,  QUEBEC
--------------------------

LOCATION,  DESCRIPTION  AND  ACQUISITION

In November 1999, the Company acquired two exploration permits covering property
totalling  108.5  square  kilometres  in  northern  Quebec,  referred  to as the
"Torngat  Property".  The  Company  paid  to  the  Quebec  provincial government
$10,100 on September 30, 1999, $1,000 on October 28, 1999 and $10,850 in October
2000  for the two permits.  During fiscal 2002, the Company made a lease payment
in  the  amount  of  $5,800  on  the Torngat Property.  The Company acquired the
Torngat  Property  for the purposes of conducting a diamond exploration program.
The  Torngat  Property  lies  adjacent  to a property with geological formations
suggesting  possible  diamond  deposits.  The  permits  were  obtained  based on
structural  similarities  with  the adjoining and nearby properties held by Twin
Gold  Corporation.

EXPLORATION  HISTORY

In  March  and  April  of  2000 the Company participated in an airborne magnetic
survey  and  satellite-based  structural  analysis  in the region, including the
Torngat  Property,  in  order  to  produce  geological  maps  of  the  area.

In  August  and  September  of  2000,  the  Company  participated  in  a  two
helicopter-supported  mapping  and  sampling  program.  The  objective  of  this
program  was  to  catalogue possible diamond formations visible from the air and
obtain  samples  for  geochemical  analysis.  One  large  five  metre  dyke  was
discovered.  The  samples  indicated  geological  formations suggesting possible
diamond  deposits.  One  sample  was submitted for analysis but no diamonds were
revealed.  The  Company  had  planned a two week re-sampling and mapping program
for  the  summer  of  2001;  however, the lack of interest by other companies in
exploring  the  area did not allow the Company to share transportation and other
infrastructure costs that would have lowered the cost of the re-sampling program
to  an acceptable level.  Work performed during the summer of 2000 is sufficient
to  maintain  the  property  in  good  standing  for  several  years.

The  Company  has  commenced  aerial exploration and surveying of the kimberlite
dike  area  under  an arrangement with four other companies whereby common costs
are  shared.  As  part  of  the  permits,  the  Quebec  government has agreed to
reimburse  50% of the exploration expenditures to a maximum of $220,000.  During
fiscal  2001,  the  Company  received  $26,300  in reimbursement from the Quebec
government.

For  the  fiscal year ended May 31, 2002, the Company incurred exploration costs
of  $2,190  (surveying).  For  the  fiscal  year ended May 31, 2001, the Company
incurred  exploration  costs  of  $60,594  on  the  Torngat  Property.

As  part  of  the  Company's  acquisition  of the permits, the government of the
Province  of  Quebec  has an assistance program that provides exploration grants
equal  to  50%  of  the  exploration  expenses  approved by the government.  The
exploration  expenses  covered by the grant are subject to a limit of $50,000 to
$75,000  per  company.  The grants are available on a yearly basis.  In order to
obtain  a  grant,  the  Company  must  fill  out an application form and perform
exploration work that qualifies to be reimbursed pursuant to the requirements of
the  assistance  program.  Such  work  includes  that  work  which  the  Company

                                       20
<PAGE>

performed,  such  as the airborne surveys, mapping and sampling program.  During
the year 2001, the Company qualified for a refund of 50% on exploration expenses
of  $52,600, for a grant totalling $26,300.  No exploration grant was awarded to
the  Company  during  2001.  There is no guarantee that the Government of Quebec
will make any such funds available, or that the Company will receive any grants.
If  the  Company applies for grants and is awarded grant assistance, there is no
guarantee  that the Company will be in a logistical position to perform the work
needed  to  claim  any  exploration  grant  refund.

SIWASH  CREEK  PROPERTY,  BRITISH  COLUMBIA
-------------------------------------------

LOCATION,  DESCRIPTION  AND  ACQUISITION

On  October 27, 1987, the Company acquired an option (the "Option Agreement") to
purchase  from  Patricia  Mullin ("Mullin") a 100% interest in 34 mineral claims
located  near  the  Siwash  Creek situated in the Similkameen Mining Division of
British  Columbia  (the  "Siwash Creek Property").  The Siwash Creek Property is
located  in the Okanagan region of British Columbia between Merritt and Okanagan
Lake.

The  Option Agreement provided that the Company would pay to Mullin an aggregate
purchase  price  of  $160,000  as  follows:  $6,000 upon execution of the Option
Agreement,  $4,000  on  or before April 3, 1988, $10,000 on or before October 3,
1988  and  $10,000  on or before October 3 of each year for a period to 14 years
until  October  3,  2002.

Following  a dispute over the terms of the Option Agreement, the Company entered
into  a  settlement  agreement dated March 18, 1991 (the "Settlement Agreement")
with  Mullin.  Pursuant  to  the  terms of the Settlement Agreement, the Company
agreed  to  issue  37,500  common shares in the capital stock of the Company and
increase  its  yearly  option  payment  to  $12,500  commencing  in  1991.

The  Company  has  satisfied  all  option payments up to and including its final
October  3,  2002  payment  and  all  prior  payments.

EXPLORATION  HISTORY

During the 1960s and 1970s, Brenda Mines Ltd. ("BML") explored the area near the
Siwash  Creek  Property  for  copper  deposits.  BML  made  a  significant
mineralization  discovery  referred to as the Brenda Copper-Molybdenum Discovery
about  twenty-five  kilometres  northeast  of  the  Siwash  Creek Property.  BML
undertook  an  extensive  exploration  program  in 1970, but was unsuccessful in
locating  any economic deposits.  In 1979, BML explored part of the Siwash Creek
Property.

On November 17, 1987, pursuant to a Letter of Intent between the Company and BML
(the "BML Option"), the Company paid $1,000 to BML to obtain certain information
on  the  Siwash Creek Property.  The Company also gave BML the option to provide
production  financing  should  the Siwash Creek Property come into production in
the  future.  Pursuant  to  the  BML Option, BML has the option to acquire a 51%
interest  in  the Siwash Creek Property for a 90-day period following a positive
production recommendation by an independent consulting firm.  There has not been
any  production  on  the  Siwash  Creek  Property  and  accordingly, BML has not
exercised  its  option.  However, the BML Option still remains in force.  In the

                                       21
<PAGE>

event  that the property generates a positive cash flow, the BML Option provides
that  BML  will  retain  80%  of  profits  until  all  development capital, plus
interest, is repaid by the Company.  Thereafter, proceeds will be distributed to
BML on a 51% basis.  The BML Option further provides that if the Company decides
to  sell  any  or  all  of  its interest in the Siwash Creek Property to a third
party,  the  Company  is  obligated to offer that interest to BML under the same
terms,  and  BML  has  60  days  to  advise  the  Company  of  its  decision.

The  Company  carried  out  exploration  of the Siwash Creek Property during the
period  between 1988 and 1991.  The exploration included soil and rock sampling,
relogging  and  resampling  the  core samples obtained by BML.  It also included
geological  mapping,  petrographics  and  prospecting.  Results  from  the  1991
exploration  program  indicated  only  trace  amounts  of  gold.

In 1993, the Company contracted Pamicon Developments Ltd. ("Pamicon") to prepare
grids  and  conduct  soil,  stream  sediments  and rock sampling programs on the
Siwash  Creek Property.  Pamicon also conducted geological mapping and trenching
in  selected  areas.  Pamicon's  exploration  work resulted in locating numerous
anomalies  throughout  the  Siwash Creek Property, including gold, copper, zinc,
lead,  silver,  arsenic  and  bismuth.

The  Company carried out a subsequent exploration program in 1994.  Results from
the final phase of this program indicated the potential for the discovery of two
different types of ore deposits: gold and porphyry copper mineralization similar
to  the  BML Copper-Molybdenum Discovery.  Based upon these results, the Company
developed  its  1995  exploration  program,  including  additional  geophysical
surveying  followed  by  diamond  drill  testing.

In November 1995, the Company contracted RMW Mine Evaluations ("RMW") to conduct
a six hole drill program totalling 378 metres of drilling.  The drilling program
focussed  on  exploring  the  existence  of  porphyry  copper  deposits.  RMW
encountered  low  grade  copper,  zinc, silver, lead and minor molybdenum in the
deeper  portion  of  all  holes.

On  September  18, 1996, the Company acquired a 100% interest in certain mineral
claims situated adjacent to the Similkameen Mining Division of British Columbia.
The  Company paid a purchase price of $15,000 for the claims.  Upon commencement
of  production  for  minerals, the vendor would receive a royalty of 1% based on
payments  received  from  the  production  of  minerals.

The  Company  contracted  RMW  to  carry out a drill program consisting of three
targets  in  late  1996.  The  drilling  focussed  on investigating the veining,
alterations,  intrusives  and other structural and geological controls.  Results
from  two  of  the  holes intersected showed signs of copper veins.  The results
from  this exploration program and the 1995 exploration program formed the basis
for  the  Company's decision to proceed with a subsequent drill program in 1997.
In  1998,  the Company received the results of the analysis of 125 diamond drill
core  samples  taken  during  the  1997  drill  program  from  RMW.  The results
indicated  large zones of low grade copper in the three holes that were drilled.
Molybdenum was also detected in all samples.  As a result of these findings, the
Company  proposed  an exploration program for 1998, but subsequently decided not
to  proceed  with  this  program.

The  Company commenced its Spring 2001 diamond drill program on the Siwash Creek
Property,  which  program was designed to further delineate the gold, silver and

                                       22
<PAGE>

copper  values  intersected  in  the  northeastern  portion  of the Siwash Creek
Property.  The  drill  program was composed of five drill holes varying from 150
meters to 250 meters, AZ 00 dip varying from -550 to 650 and was concentrated in
the area north and east of holes 96-3, 97-1 and 97-5.  All holes were drilled in
the  mineralized  granodiorite.

The  2001  drill program composed of five drill holes varying from 150 meters to
250  meters, AZ 00 dip varying from -550 to 650 and are concentrated in the area
north  and  east  of  holes  96-3, 97-1 and 97-5.  All holes were drilled in the
mineralized  granodiorite.  This  5-hole  program  further  extended the area of
copper/silver/gold mineralization in the north-east corner of the property.  All
5  holes  intersected copper mineralization with the best assays concentrated in
the  areas  of highly fractured host rock.  All the significant intersections of
sulphide  mineralization  were  assayed for gold and the ratio of gold to copper
was  found  to  be 1: 30700, with the best intersection containing 3.56 grams of
gold  per  tonne  over an intersected width of 0.9 metres in DDH 01-5.  The most
significant  results  are  as  follows:

DDH       N        E       AZ     DIP     L     FROM     TO           DIST
         CU%
01-1     5000     5400     0     -57     150     64.0     125.5     61.5  M
         0.297
01-2     4900     5600     0     -57     194     29.9      36.5     6.6  M
         0.186
01-3     4850     5800     0     -57     200     54.6      56.9     2.3  M
         2.073
01-4     5000     5800     0     -57     161     37.5      38.6     1.1  M
         0.209
01-5     4780     6000     0     -57     186     91.3      94.0     2.7  M
         1.295
                                                118.5     119.4    0.9  M
         7.870
                                                Gold       0.9  M  3.56  Gr/T
01-6     4780     6000     180    -57    163     71.3     75.5     4.2  M
         0.810

Further  exploration  programs will depend upon evaluation of all information to
date.  Known  mineralization has been located within an area 800 M east-west and
200  M north-south for a total of approximately 160,000 squares metres and still
open.

During May 2001 and continuing through December 2001, the Company incurred total
exploration  expenses  of  $85,237.  British  Columbia  mining  exploration  tax
credits  of  $2,838  have  been received on these expenditures and an additional
$14,670  has  been recorded as a receivable.  During the fiscal period ended May
31,  2000,  the Company incurred total exploration costs of $51.  In addition, a
payment of $12,500 was made to an optioner to maintain an option on a portion of
the Company's Siwash Creek Property.  The Company made payments of $12,500 to an
optioner  in  fiscal  2001  and fiscal 2002 and the final payment of $12,500 was
made  as  of  October  3rd,  2002.

                                       23
<PAGE>

ITEM  5.    OPERATING  AND  FINANCIAL  REVIEW  AND  PROSPECTS
            -------------------------------------------------

The  Company is in the business of acquiring, exploring and evaluating interests
in  mineral  properties.  The  Company's current property interests are held for
the  purposes  of  exploration  for  precious  metals  and  diamonds.

For  the  year  ended  May  31,  2002, the Company reported income of $11,572 as
compared  to  $24,961 for the year ended May 31, 2001.  The decrease in interest
income is a result of lower interest being earned on the Company's cash and cash
equivalent.  For  the  year  ended  May  31, 2002, the Company had net losses of
$153,541  as  compared to net losses of $85,353 for the year ended May 31, 2001.
The  increase  of  net  losses  in  2002  was  due  to the write off of deferred
exploration  expenditures  on  the  Chinchaga  Property.

For  the  year  ended  May  31,  2001, the Company reported income of $24,961 as
compared  to  $7,516  for the year ended May 31, 2000.  The increase in interest
income  is  attributable to the Company having an increase in cash on hand.  The
increase in cash is the result of the exercise of 483,333 warrants ($145,000) in
fiscal  2001  and  the  issue  from  treasury  of 750,000 shares ($225,000), the
exercise  of  250,000  warrants  ($75,000) and the sale of marketable securities
($316,265)  in  fiscal  2000 provided the Company with cash, which generated the
increase  in  interest.   For  the  year ended May 31, 2001, the Company had net
losses  of $85,353 as compared to a net income of $57,567 for the year ended May
31,  2000.  The  Company  earned  a  profit  during  the year ended May 31, 2000
because  of  a  gain  on  the  sale  of  marketable  securities in the amount of
$238,715.

During  the  fiscal year ended May 31, 2002, no share purchase warrants or stock
options  were  exercised.  During  the  fiscal  year ended May 31, 2001, 483,333
warrants  were  exercised  by their holders at $0.30 per warrant for proceeds of
$145,000.  The  Company  used  the cash proceeds raised to maintain its property
payments,  continue  exploration  activities  and  general  working  capital.

General  and  Administrative  (Operating) expenses for the fiscal year ended May
31,  2002  consisted  of  management  fees,  office, professional fees and other
expenses  that  support  the  daily  operations  of  the  Company.  General  and
Administrative  expenses for the year ended May 31, 2002 were $115,123, being an
increase  of $12,721 compared to General and Administrative expenses of $102,402
during  the  fiscal  year  ended  May 31, 2001.  The majority of the increase in
General  and  Administrative  costs was due to an increase in stock exchange and
filing  fees of $16,581 to $21,338 for the fiscal year ended May 31, 2002 (2001:
$14,757).  This  increase  in  stock  exchange  and  filing  fees was due to the
Company's  listing on the Berlin Stock Exchange and the Frankfurt Stock Exchange
-  the  unofficial  regulated  markets.  Interest  income  decreased  $13,389 to
$11,572  for the year ended May 31, 2002 from $24,961 for the year ended May 31,
2001.  The  decrease  in  interest  income  is  a result of lower interest being
earned  on  the  Company's  cash  and  cash  equivalents.

General  and  Administrative  (Operating) expenses for the fiscal year ended May
31,  2001  consisted  of  management  fees,  office, professional fees and other
expenses  that  support  the  daily  operations  of  the  Company.  General  and
Administrative  expenses for the year ended May 31, 2001 increased by $43,772 to
$102,402  as  compared  to General and Administrative expenses of $58,630 during

                                       24
<PAGE>

the  fiscal year ended May 31, 2000.  The increase in General and Administrative
costs  is mainly due to professional fees which increased $44,291 to $51,620 for
the  fiscal year ended May 31, 2001 from $7,329 for the year ended May 31, 2000.
The  increase  in professional fees are the result of legal and accounting costs
incurred  with  respect  to the Company's Form 20F filing with the US Securities
and  Exchange  Commission and costs related to a continuous disclosure review by
the  British  Columbia Securities Commission.  Interest income increased $17,445
to  $24,961  for  the year ended May 31, 2001 from $7,516 for the year ended May
31,  2000.  The  exercise  of 483,333 warrants ($145,000) in fiscal 2001 and the
issue  from  treasury  of  750,000  shares  ($225,000),  the exercise of 250,000
warrants  ($75,000)  and  the sale of marketable securities ($316,265) in fiscal
2000  provided  the  Company  with  cash.  The  increase in interest income is a
result  of the increase of cash and cash equivalents and a guaranteed investment
certificate.

OPERATING  RESULTS
------------------

During  the year ended May 31, 2002, exploration and development costs decreased
by  $74,623  or 267% to $27,945 as compared to exploration and development costs
of  $102,568  for  the  year  ended  May  31,  2001.

During  the year ended May 31, 2001, exploration and development costs increased
by  $84,516 or 468% to $102,568 as compared to exploration and development costs
of  $18,052  for  the  year  ended  May  31,  2000.

The  two  material  differences  between  Canadian generally accepted accounting
principles  ("GAAP") and United States GAAP that are applicable to the Company's
financial  results  are  as  follows:  (i) Under United States GAAP, all mineral
exploration  and  development  property  expenditures  are  expensed in the year
incurred  in  an  exploration  stage company until there is substantial evidence
that  a  commercial body of ore has been located.  Canadian GAAP allows resource
exploration  and  development  property  expenditures to be deferred during this
process;  and  (ii)  Under  United  States  GAAP,  the marketable securities are
carried at market with an adjustment to shareholders equity as they are held for
resale.

Siwash  Creek  Property  -  British  Columbia

For  the  year  ended May 31, 2002, exploration and development costs related to
the Siwash Creek Property decreased $3,719 to $38,255 as compared to $41,974 for
the  year  ended  May  31,  2001.

For  the  year  ended May 31, 2001, exploration and development costs related to
the  Siwash  Creek  Property increased $41,923 to $41,974 as compared to $51 for
the  year  ended  May 31, 2000.  The Company carried out its Spring 2001 diamond
drill  program,  which program was composed of five drill holes varying from 150
meters  to  250  meters,  AZ  00  dip  varying  from  -550  to  650.

Torngat  Property  -  Quebec

For  the  year  ended May 31, 2002, exploration and development costs related to
the  Torngat  Property  were  $2,190.  For  the  year  ended  May  31, 2001, the
Company's  exploration  and  development  costs  were  $60,594.

                                       25
<PAGE>

For  the  year  ended May 31, 2001, exploration and development costs related to
the  Torngat  Property  were  $60,594.  For  the  year  ended  May 31, 2000, the
Company's exploration and development costs were $18,001.  The Company completed
its  2000  sampling  programs  in  August  and  September.  The objective of the
exploration program was to catalogue kimberlite dykes that were visible from the
air  and  to  take  samples  for  geochemical  analysis.

Chinchaga  Property  -  Alberta

For the year ended May 31, 2002, the Company's exploration and development costs
related to the Chinchaga Property were nil as compared to nil for the year ended
May 31, 2001.  The Company has fulfilled its obligations under its joint venture
agreement  with  Marum.  During  fiscal  2002, the deferred costs related to the
Chinchaga Property were written down to a nominal amount as no work is currently
planned for the property.  The Company will only undertake active exploration if
positive  results  are  encountered  on  land owned by other mineral exploration
companies  in  the  Chinchaga  region.

For the year ended May 31, 2001, the Company's exploration and development costs
related to the Chinchaga Property were nil as compared to nil for the year ended
May  31,  2000.

LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------

At  May  31, 2002, the Company reported cash and cash equivalents of $296,849 as
compared  to  $366,527 for the year ended May 31, 2001.  The Company derived its
source  of  cash  from the exercise of warrants ($145,000) in the year ended May
31,  2001.  This  amount  was  offset  by  $107,505  representing  cash  used in
operating  activities.  The Company's unused sources of liquidity arise from its
unallocated working capital.  The Company has historically satisfied its capital
needs  by  issuing  securities.

At  May  31, 2001, the Company reported cash and cash equivalents of $366,527 as
compared  to  $307,659 for the year ended May 31, 2000.  The Company derived its
source  of  cash  for  the year ended May 31, 2001 from the exercise of warrants
($145,000).  This  amount  was  offset  by  $53,160  representing  cash  used in
operating  activities.

The  Company  did  not  carry  out  any exploration work on the Torngat Property
during  2002.  The  Company  has  sufficient  cash  on  hand  to  complete  the
exploration work on the Torngat Property, if the Company decides to proceed with
the  proposed  project  on  the  Torngat Property.  In the event that a proposed
exploration  program  is  successful  and  yields  results  meriting  further
exploration  work, the Company proposes to finance such additional work from its
working  capital  reserve.

The  Company's decision to undertake additional exploration programs will depend
upon  the  Company  or  other mineral exploration companies in the region of the
Siwash  Creek  Property encountering positive mineral results and an increase in
base  metal  prices.

The  Company's  only  plans  over  the  next  12  months are to proceed with the
exploration  programs  on  the  Torngat  Property  and possibly the Siwash Creek
Property.  While  it  may  evaluate properties for acquisition, the Company does

                                       26
<PAGE>

not  have  any  specific  plans  to  purchase any additional properties over the
following  12  months.  Therefore,  the Company does not have any plans to raise
funds  through  the issuance of equity securities in the foreseeable future.  In
the  event  that  the Company decides to purchase additional properties, it will
finance  such  a  purchase  from  its  working capital reserve and if necessary,
through  the  sale  of  marketable  securities.

The  Company  estimates that its working capital reserve will last approximately
12  months.

ITEM  6.    DIRECTORS,  SENIOR  MANAGEMENT  AND  EMPLOYEES
            ----------------------------------------------

DIRECTORS  AND  SENIOR  MANAGEMENT

The following table sets out the directors and executive officers of the Company
and  all  positions  and  offices  held  with  the  Company.
<TABLE>
<CAPTION>



NAME                  POSITION HELD     POSITION HELD   PRINCIPAL OCCUPATION
                        WITH THE          SINCE
                        COMPANY
<S>                  <C>                <C>             <C>

Anton J. Drescher    President,         1991            Chief Financial Officer of USA Video
                     Chief                              Interactive Corp. since 1993 and Director
                     Executive                          from 1994 to present; Secretary/Director of
                     Officer and                        Cal-Star Inc. from 2001 to present;
                     and Director                       Secretary Treasurer/ Director of iQuest
                                                        Networks Inc.  from 1996 to present;
                                                        President/Director and Chief Executive
                                                        Officer of International Tower Hill Mines
                                                        Ltd. from 1990 to present; President of
                                                        Westpoint Management Consultants Limited
                                                        of Vancouver, BC since 1979; President of
                                                        Harbour Pacific Capital Corp. since 1998;
                                                        Certified Management Accountant since
                                                        1981.

Norman J. Bonin .    Director and       1987            President/Director of Direct Disposal Corp.
                     Chief Financial                    since 1993; Director of Cal-Star Inc.  from
                     Officer                            2000 to present; Director of International
                                                        Tower Hill Mines Ltd. from 1988 to present
                                                        and Chief Financial Officer since 2002;
                                                        director of iQuest Networks Inc. from 2000
                                                        to present; former Director of USA Video
                                                        Interactive Corp. from 1998 to 2000

Rowland Perkins .    Director           1998            President of ebackup Inc. Since 2001.
                                                        Alberta Regional Manager for Securitinet
                                                        Storage Solutions 1999-2001; Vice President
                                                        of Simul Corp. 1997-1999 President of
                                                        Franchise Network from 1994-1997

Donna M. Moroney.    Secretary          1997            Consultant to public companies since 1992

</TABLE>


There  is  no  family  relationship  between any of the above named directors or
officers.

                                       27
<PAGE>

ANTON  J.  DRESCHER  -  PRESIDENT  AND  DIRECTOR
------------------------------------------------

Mr.  Drescher  has  been  the Company's President, Chief Executive Officer and a
Director  since  1991.  He  is  responsible for overall management and strategic
planning.  He devotes 50% of his time during a typical work week to the business
and  affairs  of the Company.  Mr. Drescher has served as President of Westpoint
Management  Consultants  Limited  since  1980  and Harbour Pacific Capital Corp.
since  1998,  providing  administrative  and  accounting  services  to  listed
companies.  He  has  also  served  as  a Director on the following listed public
companies:  USA  Video  Interactive Corp. since 1995; iQuest Networks Inc. since
1993;  and  Cal-Star  Inc.  since  1997.

NORMAN  J.  BONIN  -  DIRECTOR  AND  CHIEF  FINANCIAL  OFFICER
--------------------------------------------------------------

Mr.  Bonin  has  been  a  Director of the Company since 1997 and Chief Financial
Officer since 2002. He devotes 25% of his time during a typical work week to the
business and affairs of the Company. He has served as the President and Director
of Direct Disposal Corp. since 1993. Direct Disposal Corp. is a waste management
and recycling company. Mr. Bonin's public company experience includes serving as
a Director of Cal-Star Inc. from 1998 to present, iQuest Networks Inc. from 2000
to  present  and  USA  Video  Interactive  Corp.  from  1998  to  2000.

ROWLAND  PERKINS  -  DIRECTOR
-----------------------------

Mr.  Perkins  has  been a Director of the Company since 1998.  He devotes 25% of
his  time during a typical work week to the business and affairs of the Company.
He  currently  serves  as President of ebackup Inc. an online remote data backup
and  archival  company. He has previously served as Alberta Regional Manager for
Securitinet  Storage Solutions Inc. (formerly Intellisave Datavaults Inc.) (1999
to  2001),  a  consulting  company that provides backup and archiving of data on
personal  computers  and  network  servers; Vice-President for Simul Corporation
(1997  to  1999),  a consulting and training company; and President of Franchise
Networks (1994 to 1997), an international franchise consulting organization that
assists prospective franchisees find businesses.  Mr. Perkins has also served as
a  Director  for  several  public companies including: Future Media Technologies
Corp.  (1990  to  1992);  Powertech  Industries (1992); Rugby Resources (1991 to
1992);  A.C.T.  Industrial Corp. (1991 to 1992); Fastlane International (1990 to
1992);  Force  Resources  (1990  to 1992); Carolina Gold (1991 to 1992); and USA
Video  Interactive  Corp.  (1990  to  1992).

DONNA  M.  MORONEY  -  SECRETARY
--------------------------------

Ms. Moroney has been a Secretary for the Company since 1997.  She devotes 25% of
her  time during a typical work week to the business and affairs of the Company.
Ms.  Moroney has been a consultant to public companies assisting with regulatory
compliance  and  administration matters since 1992 and has been an instructor of
corporate/securities  law  for  legal  assistants.

COMPENSATION
------------

For  the  fiscal  year  ending  May  31,  2002, the Company paid an aggregate of
$34,902  in  cash  compensation  to  the  directors  and  officers  as  a group.

                                       28
<PAGE>

The following table sets out compensation information for the fiscal years ended
May  31,  2002,  May  31,  2001 and May 31, 2000 for the Company's directors and
members  of  its  administrative,  supervisory  or  management  bodies.
<TABLE>
<CAPTION>



NAME AND PRINCIPAL                     ANNUAL COMPENSATION               LONG TERM COMPENSATION
POSITION
                                                      OTHER         AWARDS          PAYOUTS
                     YEAR     SALARY     BONUS       ANNUAL
                              (CDN$)     (CDN$)    COMPENSATION
                                                      (CDN$)

                                                                  SECURITIES   RESTRICTED SHARES
                                                                     UNDER             OR
                                                                   OPTIONS/        RESTRICTED             ALL OTHER COMPEN-
                                                                     SARS         SHARE UNITS      LTIP        SATION
                                                                   GRANTED          (CDN$)        PAYOUTS      (CDN$)
                                                                     (#)                           (CDN$)
<S>                 <C>        <C>       <C>     <C>                <C>             <C>            <C>       <C>
Anton J. Drescher.  5/31/02    Nil       Nil     $ 34,902 (1)       Nil             Nil            Nil       Nil
President. . . . .  5/31/01    Nil       Nil     $ 33,250 (1)       Nil             Nil            Nil       Nil
                    5/31/00    Nil       Nil     $ 32,900 (1)       Nil             Nil            Nil       Nil

Donna Moroney. . .  5/31/02    Nil       Nil     Nil                Nil             Nil            Nil       Nil
Secretary. . . . .  5/31/01    Nil       Nil     Nil                Nil             Nil            Nil       Nil
                    5/31/00    Nil       Nil     $    450 (2)       Nil             Nil            Nil       Nil
<FN>

(1)  These  annual  payments  were  for  consulting  and accounting fees paid to
     Harbour  Pacific  Capital  Corp.

(2)  These  payments  were  for  legal  and  administrative  fees  paid to Donna
     Moroney.  Ms. Moroney is paid when services are performed on an "as needed"
     basis.
</TABLE>

BOARD  PRACTICES
----------------

The  Board of Directors of the Company is elected at the annual general meetings
of  the  shareholders  of  the  Company.  Each director elected will hold office
until  the  next  annual  meeting,  or  until  his  successor is duly elected or
appointed,  unless  his office is earlier vacated in accordance with the Company
Act  (British  Columbia).

The  members  of  the  audit  committee  are  Anton  J.  Drescher, President and
Director;  Norman  J.  Bonin,  Director;  and  Rowland  Perkins,  Director.

At  their  first meeting following each annual general meeting, the directors of
the  Company must elect an audit committee consisting of no fewer than three (3)
directors,  of  whom a majority must not be officers or employees of the Company
or  an  affiliate  of  the Company, to hold office until the next annual general
meeting.

Before  a  financial  statement  that  is  to  be submitted to an annual general
meeting  is  considered  by  the  directors,  it  must be submitted to the audit
committee  for review with the auditor, and the report of the audit committee on
the  financial  statements  must  be  submitted  to  the  directors  thereafter.

                                       29
<PAGE>

EMPLOYEES
---------

The Company has no employees.  The Company uses Harbour Pacific Capital Corp., a
management company, wholly owned by Anton J. Drescher, a director and officer of
the  Company,  for  day  to day operations.  The Company does not have a written
contract  with  Harbour  Pacific  Capital  Corp.

SHARE  OWNERSHIP
----------------

The  following  table  sets  out  the  number  of  shares  held by the Company's
directors and members of its administrative, supervisory or management bodies as
of  September 17, 2002 and percentage of those shares outstanding of that class.
<TABLE>
<CAPTION>

NAME                       NUMBER OF COMMON SHARES OWNED    PERCENTAGE OF OUTSTANDING COMMON SHARES
-------------------------  -----------------------------  ----------------------------------------
<S>                                  <C>                              <C>

Anton J. Drescher . . . .            6,139,218                        68.12%
Norman J. Bonin . . . . .               65,160                         0.72%
Rowland Perkins . . . . .                  200                         0.02%
Donna Moroney . . . . . .                 Nil                            Nil
ALL DIRECTORS AND SENIOR.            6,204,578                        68.85%
OFFICERS AS A GROUP
(4 persons)
</TABLE>


OPTIONS  AND  OTHER  RIGHTS  TO  PURCHASE  SECURITIES
-----------------------------------------------------

The Company is permitted to grant up to 10% of its issued and outstanding shares
for  issuance to Directors, Senior Officers and key employees and consultants at
prices  set  in  accordance  with  the policies of the TSX Venture Exchange. The
granting  of  options  is  subject  to  regulatory  approval  by the TSX Venture
Exchange.  Options  are  typically exercisable for a period of up to 5 years and
terminate  within  90  days  of  the  optionee  ceasing  to  be  in a qualifying
relationship  with  the  Company. As of the date of this registration statement,
there  were no options outstanding; however, the Company may in the future grant
options  to  key  individuals.

ITEM  7.    MAJOR  SHAREHOLDERS  AND  RELATED  PARTY  TRANSACTIONS
            ------------------------------------------------------

The  Company  is  not,  directly  or  indirectly, owned or controlled by another
corporation  or  by  any  foreign  government,  or by any other natural or legal
person.

As of the date of this registration statement, the aggregate number of shares of
common  stock  beneficially  owned, directly or indirectly, by the directors and
senior  officers  of  the  Company  as  a  group  is  6,204,578  common  shares,
representing  68.85%  of  the  total issued and outstanding common shares of the
Company.  "Beneficial  ownership"  means  sole or shared power to vote or direct
the  voting  of  the  common  shares, or the sole or shared power to dispose, or
direct  a disposition, of the common shares.  More than one person may be deemed
to  have  beneficial  ownership  of  the  same  securities.

                                       30
<PAGE>

All  of the Company's shares, both issued and unissued, are common shares of the
same  class and rank equally as to dividends, voting powers and participation of
powers.  Accordingly,  there  are no special voting powers held by the Company's
major  shareholders.

MAJOR  SHAREHOLDERS
-------------------

As  of October 31st, 2002, to the knowledge of the Company, the following is the
only  person  who  beneficially  owns  5%  or more of the issued and outstanding
common  stock  of  the  Company:
<TABLE>
<CAPTION>



                                        AMOUNT OF    PERCENTAGE OF
TITLE OF CLASS OF       NAME OF       COMMON SHARES   OUTSTANDING
SECURITY              STOCKHOLDER         OWNED      COMMON SHARES
-----------------  -----------------  -------------  --------------
<S>                <C>                <C>            <C>


Common Shares . .  Anton J. Drescher      6,139,218          68.12%
-----------------  -----------------  -------------  --------------
</TABLE>

As of September 17th, 2002, there were 321 registered and non-registered holders
of record of the common shares of the Company.  85 registered and non-registered
holders  of  record  are  resident  in  the  United  States.

During the fiscal year ended May 31, 1998, Anton J. Drescher advanced $42,000 to
the  Company  and Norman Bonin advanced $42,500.  Mr. Drescher and Mr. Bonin are
directors  of  the  Company.

During  the  fiscal year ended May 31, 1999, Mr. Drescher made a cash advance in
the amount of $6,000 to the Company.  The Company issued 235,418 shares at $0.40
per  share to settle a total debt of $94,167 owed to Mr. Drescher, Mr. Bonin and
Westpoint  Management Consultants Limited, a company owned by Anton J. Drescher.
Mr.  Bonin  was  repaid  completely for the cash advanced during the fiscal year
ended  May  31,  1998.  The  Company  continued  to  owe $5,000 to Mr. Drescher.

During  the fiscal year ended May 31, 2000, the Company repaid the balance owing
of  $5,000  to  Mr.  Drescher.

During  fiscal  2002,  Mr. Drescher advanced $1,500 to the Company, which amount
has  been  subsequently  fully  repaid.

RELATED  PARTY  TRANSACTIONS
----------------------------

The  business  of  the  Company is managed by its directors and officers and the
Company  has no employment agreements.  The Company currently pays Cdn$2,500 per
month  to a management company, Harbour Pacific Capital Corp., owned by Anton J.
Drescher,  for  management and administrative services.  The Company also pays a
consulting  fee  to  Donna  Moroney  when  legal and administrative services are
performed  on  an  "as  needed"  basis.

It  is  the  opinion  of  management  that  the  terms  of  this transaction are
favourable  to  the  Company and in its best interest.  Management also believes

                                       31
<PAGE>

that  the  Company  could not have obtained, through arms-length negotiations, a
more  favourable  arrangement  from  an  unrelated  third  party.

With the exception of Anton J. Drescher who holds 6,139,218 common shares in the
capital  stock  of  the  Company  representing  68.12% of the outstanding common
shares,  there  are  no  material  interests,  direct or indirect, of directors,
senior officers or shareholders of the Company who beneficially own, directly or
indirectly, more than 5% of the outstanding Common Shares or any known associate
or  affiliates  of  such  persons,  in any transaction since May, 1998 or in any
proposed transaction which has materially affected or will materially affect the
Company.

INTERESTS  OF  EXPERTS  AND  COUNSEL
------------------------------------

Not  applicable.

ITEM  8.   FINANCIAL  INFORMATION
           ----------------------

CONSOLIDATED  STATEMENTS  AND  OTHER  FINANCIAL  INFORMATION
------------------------------------------------------------

See  the Company's audited consolidated financial statements for the fiscal year
ended  May  31,  2002  attached  hereto.

The Company is not aware of any current or pending material legal or arbitration
proceeding to which the Company is or is likely to be a party or of which any of
its  property  is  or  is  likely  to  be  the  subject.

The  Company  is  not  aware  of  any material proceeding in which any director,
senior  manager  or  affiliate  is  either a party adverse to the Company or its
subsidiaries  or  has  a  material  interest  adverse  to  the  Company.

The  Company  has  not declared or paid any cash dividends on its capital stock.
The  Company  does not currently expect to pay cash dividends in the foreseeable
future.

SIGNIFICANT  CHANGES
--------------------

There  have  been  no significant changes since the date of the Company's annual
financial  statements  or  since  the  date of the Company's most recent interim
financial  statements.

ITEM  9.    THE  OFFER  AND  LISTING
            ------------------------

LISTING  DETAILS
----------------

The  following  table discloses the annual high and low sales prices in Canadian
dollars  for  the Company's common shares for the five (5) most recent financial
years  as  traded  on  the  TSX  Venture  Exchange:

                                       32
<PAGE>
<TABLE>
<CAPTION>

YEAR  HIGH  LOW
----  ----  ----
<S>   <C>   <C>

2002  2.10  0.85
----  ----  ----
2001  3.10  1.75
----  ----  ----
2000  3.10  0.70
----  ----  ----
1999  1.90  0.30
----  ----  ----
1998  1.20  0.40
----  ----  ----
</TABLE>

The  following table discloses the high and low sales prices in Canadian dollars
for  the  Company's  common shares for each quarterly period within the two most
recent  fiscal  years  as  traded  on  the  TSX  Venture  Exchange:
<TABLE>
<CAPTION>

QUARTER ENDED      HIGH  LOW
-----------------  ----  ----
<S>                <C>   <C>

May 31, 2002. . .  1.50  0.85
-----------------  ----  ----
February 28, 2002  1.84  1.00
-----------------  ----  ----
November 30, 2001  1.84  1.30
-----------------  ----  ----
August 31, 2001 .  2.10  1.50
-----------------  ----  ----
May 31, 2001. . .  2.10  1.95
-----------------  ----  ----
February 28, 2001  2.30  1.75
-----------------  ----  ----
November 30, 2000  2.90  2.10
-----------------  ----  ----
August 31, 2000 .  3.10  2.10
-----------------  ----  ----
May 31, 2000. . .  3.10  1.30
-----------------  ----  ----
</TABLE>

The  following table discloses the monthly high and low sales prices in Canadian
dollars for the Company's common shares for the most recent six months as traded
on  the  TSX  Venture  Exchange:
<TABLE>
<CAPTION>

MONTH           HIGH    LOW
--------------  -----  -----
<S>             <C>    <C>

October 2002 .   0.95   0.80
--------------  -----  -----
September 2002   1.04   0.95
--------------  -----  -----
August 2002. .   1.08   0.95
--------------  -----  -----
July 2002. . .   0.92   0.92
--------------  -----  -----
June 2002. . .   1.05   1.05
--------------  -----  -----
May 2002 . . .  *0.95  *1.25
--------------  -----  -----
<FN>

*  No  trades  -  prices  listed  are  bid  and  ask  prices.
</TABLE>

The  following  table  discloses the high and low sales prices in US dollars for
the  Company's  common shares for each quarterly period since its listing on the
OTC  BB  as  of  October  5th,  2001:
<TABLE>
<CAPTION>

QUARTER ENDED      HIGH  LOW
-----------------  ----  ----
<S>                <C>   <C>

May 31, 2002. . .  0.70  0.52
-----------------  ----  ----
February 28, 2002  0.75  0.75
-----------------  ----  ----
November 30, 2001  1.11  0.75
-----------------  ----  ----
</TABLE>

The  following  table  discloses  the  monthly  high  and low sales prices in US
dollars for the Company's common shares for the most recent six months as traded
on  the  OTC  BB:

                                       33
<PAGE>

<TABLE>
<CAPTION>

MONTH           HIGH    LOW
--------------  -----  -----
<S>             <C>    <C>

October 2002 .  *0.60  *0.20
--------------  -----  -----
September 2002  *0.60  *0.20
--------------  -----  -----
August 2002. .   0.60   0.20
--------------  -----  -----
July 2002. . .  *0.55  *0.52
--------------  -----  -----
June 2002. . .  *0.55  *0.52
--------------  -----  -----
May 2002 . . .  *0.55  *0.52
--------------  -----  -----
<FN>

*  No  trades  -  prices  listed  are  bid  and  ask  prices.
</TABLE>

As  of  September 17th, 2002, there are 9,012,183 shares of the Company's common
stock  (without  par  value)  issued and outstanding.  The Company's stockholder
list  as  provided  by ComputerShare Investor Services, Inc. (formerly, Montreal
Trust  Company of Canada), the Company's registrar and transfer agent, indicated
that  the  Company  had  202 registered stockholders owning its common stock, of
which  59  (29%)  of  these  registered stockholders are residents of the United
States,  owning  815,703  (9.1%)  of  the  shares  issued  and  outstanding.

MARKETS
-------

The  Company's  common  shares  are listed on the TSX Venture Exchange under the
trading  symbol  "ITH."  There  are  currently  no  restrictions  on  the
transferability  of  these  shares  under Canadian securities laws.  The Company
also  trades  on  the OTC BB under the trading symbol "ITHMF", and trades on the
Berlin  Stock  Exchange  --  Unofficial Regulated Market and the Frankfurt Stock
Exchange  under  the  trading  symbol  "IW9".

The  Company,  as a foreign private issuer, will not be subject to the reporting
obligations  of  the  proxy  rules  of the Section 14 of the Exchange Act or the
insider  short-swing  profit  rules  of  Section  16  of  the  Exchange  Act.

ITEM  10.    ADDITIONAL  INFORMATION
             -----------------------

SHARE  CAPITAL
--------------

Not  applicable.

MEMORANDUM  AND  ARTICLES  OF  ASSOCIATION
------------------------------------------

The  Memorandum and Articles of the Company are incorporated by reference to the
information in our registration statement on Form 20-F filed with the Securities
and  Exchange  Commission, in Washington, D.C. on February 6, 2001, which became
effective  April  6,  2001,  to which the Company's Memorandum and Articles were
filed  as  exhibits.

MATERIAL  CONTRACTS
-------------------

The  Company  entered  into  a joint venture agreement with Marum Resources Inc.
("Marum")  on  January 29, 1999 to explore for diamonds in the Chinchaga area of
northern  Alberta,  Canada.  Pursuant  to  this  agreement  the  Company  was to
contribute  $300,000  by  way  of  cash  or cash equivalents, of which a maximum

                                       34
<PAGE>

contribution  of  $100,000 could be made through private placement for shares in
Marum.  The Company was to receive a 50% interest in Marum's working interest in
the  three  townships  of  the  Chinchaga area.  This agreement was subsequently
amended  on December 5, 2000.  The amendment reduced the total acquisition price
to $270,000 and allowed the Company to acquire its remaining 25% interest in the
Chinchaga  area by exercising warrants to acquire an additional 1,000,000 common
shares.  During  fiscal  2002,  the  deferred  costs  related  to  the Chinchaga
Property  were  written down to a nominal amount as no work is currently planned
for  the  property.  The  Company  will  only  undertake  active  exploration if
positive  results  are  encountered  on  land owned by other mineral exploration
companies  in  the  Chinchaga  region.

EXCHANGE  CONTROLS
------------------

There  are  no  governmental  laws, decrees or regulations in Canada relating to
restrictions  on the export or import of capital, or affecting the remittance of
interest,  dividends  or other payments to non-resident holders of the Company's
common  stock.  See  "Taxation"  below.

The  Investment  Canada  Act  requires a non-Canadian making an investment which
would  result  in  the  acquisition of control of a Canadian business, the gross
value  of  the  assets  of which exceed certain threshold levels or the business
activity of which is related to Canada's cultural heritage or national identity,
to either notify, or file an application for review with, Investment Canada, the
federal  agency  created  by  the  Investment  Canada  Act.

The  notification  procedure involves a brief statement of information about the
investment  on  a prescribed form, which is required to be filed with Investment
Canada by the investor at any time up to 30 days following implementation of the
investment.  It  is  intended  that investments requiring only notification will
proceed  without  government intervention unless the investment is in a specific
type  of  business  activity  related to Canada's cultural heritage and national
identity.

If  an  investment is reviewable under the Act, an application for review in the
form prescribed is normally required to be filed with Investment Canada prior to
the  investment taking place and the investment may not be implemented until the
review  has been completed and the Minister responsible for Investment Canada is
satisfied  that the investment is likely to be of net benefit to Canada.  If the
Minister  is not satisfied that the investment is likely to be of net benefit to
Canada, the non-Canadian must not implement the investment or, if the investment
has been implemented, must divest himself of control of the business that is the
subject  of  the  investment.

TAXATION
--------

The  following  is  a summary of the material anticipated tax consequences of an
investment  by  an  investor  not  resident  in Canada, under Canadian tax laws.

The  discussion  of  Canadian federal income considerations is not exhaustive of
all  possible  Canadian federal income tax considerations and does not take into
account  provincial,  territorial  or  foreign  tax  considerations.  It  is not
intended  to  be,  nor  should it be construed to be, legal or tax advice to any
particular  holder  of  common  shares.  Prospective purchasers of the Company's

                                       35
<PAGE>

common  shares,  including non-resident insurers carrying on business in Canada,
are  advised to consult with their advisors about the income tax consequences to
them  of  an  acquisition  of common shares.  The discussion of Canadian federal
income  considerations  assumes  that holders of common shares hold their common
shares  as  capital  property,  deal  at  arm's length with the Company, are not
"financial  institutions"  as defined in the Income Tax Act (Canada), and do not
use  or hold their common shares in, or in the course of, carrying on a business
in Canada.  The discussion of Canadian federal income considerations is based on
the  current  provisions  of  the  Income  Tax Act and the regulations under the
Income Tax Act, all proposed amendments to the Income Tax Act and the Income Tax
Act  regulations  announced  by  the  Minister  of  Finance, Canada, the current
administrative  and assessing policies of the Canada Customs and Revenue Agency,
and  the  provisions  of  the Canada-U.S. Income Tax Treaty (1980).  It has been
assumed  that  any  proposed amendments to the Income Tax Act and the Income Tax
Act  regulations  will  be  enacted  in  substantially  their  present  form.

The anticipated tax consequences may change, and any change may be retroactively
effective.  If  so,  this  summary  may  be affected.  Further, any variation or
difference from the facts or representations recited here, for any reason, might
affect  the  following  discussion,  perhaps in an adverse manner, and make this
summary  inapplicable.

CANADIAN  FEDERAL  INCOME  TAX  CONSIDERATIONS
----------------------------------------------

DIVIDENDS  ON  THE  COMPANY'S  COMMON  SHARES

Under  the  Income  Tax  Act,  amounts paid or credited on account or instead of
payment  of,  or  in  satisfaction  of, dividends, including stock dividends, to
holders of the Company's common shares that are resident in a country other than
Canada  will be reduced by withholding tax of 25% of the amount of the dividend.
The  rate  of  withholding  tax may be reduced in accordance with the terms of a
bilateral  income tax treaty between Canada and the country in which a holder of
common  shares  is  resident.

Under the Canada-U.S. Income Tax Treaty, when the recipient of a dividend on the
common  shares  is  the  beneficial  owner  of  the  dividend,  does  not have a
"permanent  establishment"  or "fixed base" in Canada, and is considered to be a
resident  of the United States under the Canada-U.S. Income Tax Treaty, the rate
of Canadian withholding tax on the dividends will generally be reduced to 15% of
the  amount of the dividends or, if the recipient is a corporation which owns at
least  10%  of  the  voting  stock  of  the  Company, to 5% of the amount of the
dividends.  Dividends  paid  or  credited  to  a  holder that is a United States
tax-exempt  organization,  as described in Article XXI of the Canada-U.S. Income
Tax  Treaty,  will  not  have  to  pay  the  Canadian  withholding  tax.

DISPOSITION  OF  COMMON  SHARES

A  holder of common shares will not be required to pay tax for a capital gain on
the  disposition  of a common share unless the common share is "taxable Canadian
property"  of  the  holder  as  defined  by the Income Tax Act, and no relief is
afforded under the Canada-U.S. Income Tax Treaty.  A common share will generally
not  be  taxable Canadian property to a holder provided that the common share is
listed  on  a prescribed stock exchange within the meaning of the Income Tax Act
on  the  date  of disposition, and provided the holder, or persons with whom the
holder  did not deal at arm's length (within the meaning of the Income Tax Act),
or  any  combination  of  these  parties,  did not own 25% or more of the issued

                                       36
<PAGE>

shares  of  any  of the Company's classes or series of shares at any time within
five  years immediately preceding the date of disposition.  Where a common share
is  taxable  Canadian property to a U.S. resident holder, the Canada-U.S. Income
Tax  Treaty will generally exempt such holder from tax on the disposition of the
common  share provided its value is not, at the time of the disposition, derived
principally  from  real  property  situated  in  Canada.  This  relief under the
Canada-U.S. Income Tax Treaty may not be available to a U.S. resident holder who
had  a  "permanent establishment" or "fixed base" available in Canada during the
12  months  immediately  preceding the disposition of the common share where the
common share constitutes business property and where any gain on the disposition
of  the  share  is  attributable  to such permanent establishment or fixed base.

Under  the  Income  Tax  Act,  the disposition of a common share by a holder may
occur  in  a number of circumstances including on a sale or gift of the share or
upon  the  death  of  the  holder.  There are no Canadian federal estate or gift
taxes  on  the  purchase  or  ownership  of  the  common  shares.

All  non-Canadian  stockholders  who  dispose of "taxable Canadian property" are
required  to  file  a  Canadian  tax  return reporting their gain or loss on the
disposition and, subject to an applicable tax treaty exemption, pay the Canadian
federal  tax  due on the disposition.  The purchaser is obligated to withhold 33
1/3%  of  the  gross  proceeds  on  the  acquisition of the common shares from a
non-Canadian  stockholder  except  to  the  extent of the certificate limit on a
clearance  certificate  obtained  by  the  stockholder  under Section 116 of the
Income  Tax  Act.

A  Section  116  clearance certificate is required even where the gain is exempt
from  Canadian income tax under a provision of an income tax treaty with Canada.
If  the  non-Canadian  stockholder  does  not  provide  a  Section 116 clearance
certificate  to  the  purchaser, then the purchaser will be required to withhold
and  remit  to  the Canada Customs and Revenue Agency 33 1/3% of the proceeds on
account  of  the non-Canadian stockholder's tax obligation, on or before the end
of  the  month  following  the  date  of  sale.  The stockholder may then file a
Canadian  tax  return  to  obtain  a  refund  of excess withholding tax, if any.

REPURCHASE  OF  THE  COMMON  SHARES  BY  THE  COMPANY

If  the Company repurchases its common shares from a holder of its common shares
(other  than a purchase of common shares on the open market in a manner in which
shares  would  be purchased by any member of the public in the open market), the
amount  paid  by  the  Company  that exceeds the "paid-up capital" of the shares
purchased  will  be  deemed  by  the Income Tax Act to be a dividend paid by the
Company  to  the  holder  of  its  common  shares.  The  paid-up  capital of the
Company's common shares may be less than the holder's cost of its common shares.
The  tax  treatment of any dividend received by a holder of the Company's common
shares  has  been  described  above  under  "Dividends  on  Our  Common Shares."

A holder of the Company's common shares will also be considered to have disposed
of  its common shares purchased by the Company for proceeds of disposition equal
to  the  amount  received  or receivable by the holder on the purchase, less the
amount  of  any  dividend  as  described  above. As a result, this holder of the
Company's  common shares will generally realize a capital gain (or capital loss)
equal  to  the  amount by which the proceeds of disposition, net of any costs of
disposition  and  adjusted for any deemed dividends, exceed (or are exceeded by)

                                       37
<PAGE>

the  adjusted  cost base of these shares.  The tax treatment of any capital gain
or  capital  loss  has  been described above under "Disposition of the Company's
Common  Shares."

U.S.  FEDERAL  INCOME  TAX  CONSIDERATIONS
------------------------------------------

The  following  is a summary of the material anticipated U.S. federal income tax
consequences  of  an  investment by a U.S. citizen or resident ("U.S. Taxpayer")
under  U.S.  tax laws.  The discussion of U.S. federal income tax considerations
is  not  exhaustive  of  all possible U.S. federal income tax considerations and
does  not  take  into account state, local or foreign tax considerations.  It is
not intended to be, nor should it be construed to be, legal or tax advice to any
particular  holder  of  common  shares.  Prospective purchasers of the Company's
common  shares  are  advised to consult with their advisors about the income tax
consequences to them of an acquisition of common shares.  The discussion of U.S.
federal income tax considerations assumes that the holders of common shares hold
their common shares for investment, deal at arms length with the Company, do not
use  or hold their common shares in, or in the course of, carrying on a business
such  as  a  dealer  in  securities,  and own less than 10% of the shares of the
Company.  The  discussion  of U.S. federal income tax considerations is based on
the  current  provisions  of  the  Internal  Revenue  Code of 1986 ("Code"), the
Treasury  Department  Regulations  under  the  Code,  the current administrative
pronouncements  of  the  Internal Revenue Service, and court decisions which are
currently  applicable.

The anticipated tax consequences may change, and any change may be retroactively
effective.  If  so,  this  summary  may  be affected.  Further, any variation or
difference from the facts or representations recited here, for any reason, might
affect  the  following  discussion,  perhaps in an adverse manner, and make this
summary  inapplicable.

     GENERAL  RULES  OF  U.S.  TAXATION
     ----------------------------------

Except  as  discussed  below  in  the  section  on  passive  foreign  investment
companies,  the  mere  acquisition  and  holding of Company shares is not a U.S.
taxable  event.  Major  U.S.  taxable  events  are  the  receipt of dividends on
Company shares, the sale or exchange of common shares and the purchase of common
shares  by  the  Company.

     DIVIDENDS

Dividends  paid  on  common  shares  to  U.S.  Taxpayers will be subject to U.S.
federal  income  tax  as ordinary income.  U.S. Taxpayers can reduce U.S. tax on
dividends  by  claiming  a foreign tax credit for Canadian and any other foreign
taxes  incurred  on such dividends.  The amount of foreign tax credit allowed is
generally  the lower of the foreign taxes incurred or the amount of U.S. federal
income  tax  imposed on the dividend.  Unused foreign tax credits can be carried
back  two  years  and  carried  forward five years to reduce U.S. tax on similar
foreign source income.  U.S. taxpayers can forego foreign tax credits on foreign
taxes  and  instead  take  a  deduction  for  foreign taxes in computing taxable
income.  For  individuals,  such  a deduction constitutes an itemized deduction.


                                       38
<PAGE>

     SELL  OR  EXCHANGE  OF  COMMON  SHARES  TO  THIRD  PARTIES

The sale or exchange of common shares to third parties ("Sale") produces capital
gain  income  or  loss  equal to the difference between the proceeds received on
Sale  and  the original purchase cost to the holder of the shares.  Capital gain
will  be classified and taxed in one of three ways - Sale of stock held for less
than  a  year  will  produce  short-term  capital gain that is taxed as ordinary
income  except  to  the  extent  reduced by other capital losses or capital loss
carry  forwards.  Gain  from  the  Sale  of  shares held more than one year will
constitute long-term capital gain, except to the extent reduced by other capital
losses  and  capital  loss  carryovers.  Long-term  capital  gains  are taxed to
individuals  at  a  separate  20%  tax  rate, or for individuals in very low tax
brackets,  at  a  special 10% tax rate.  Corporations pay tax at ordinary income
rates  on  long-term capital gains.  The special long-term capital gain tax rate
for individuals is reduced to 18% for shares purchased after January 1, 2001 and
held  for  more  than  five  years,  and  for  similarly  situated low bracketed
taxpayers  the  capital  gain  rate is reduced to 8%.  Credits or deductions for
foreign  taxes  incurred  on such Sales can be used to reduce U.S. income tax on
capital  gains  in  a  manner similar to that discussed in the dividend section.
Capital  losses are generally deductible only against capital gains.  Individual
U.S.  taxpayers may deduct against ordinary income $3,000 per year of any unused
capital  losses  or  capital  loss  carryovers.  An individual may carry forward
indefinitely  any  capital  losses  not  deducted  in  the  year  incurred.  A
corporation  may carry back capital losses three years and carry forward capital
losses  five years.  Any corporate capital losses not used during the carry back
and  carry  forward  years  expires.

     REPURCHASE  OF  COMMON  SHARES  BY  THE  COMPANY

If  the  Company  repurchases the entire shareholdings of a holder of its common
shares  in  a single transaction, the transaction will be taxed as a Sale in the
same  manner  as  described  above  for  sales  and  exchanges to third parties.
Complex  attribution  rules  apply in determining whether a transaction involves
the  entire shareholdings of a holder.  If the Company repurchases less than the
entire  holdings  of  a holder of its common shares, complicated rules determine
whether  or  not  the  transaction  will  be taxed as a sale or exchange or as a
dividend  from the Company.  Holders of common shares in these situations should
consult  their  own  tax  advisors  to  determine  how the transaction should be
treated  for  U.S.  tax  purposes.

     PASSIVE  FOREIGN  INVESTMENT  COMPANY  CONSIDERATIONS
     -----------------------------------------------------

It  is  highly  likely  that the Company will be classified as a passive foreign
investment  company  ("PFIC")  from  time  to  time  for U.S. federal income tax
purposes.  A  non-U.S. corporation is classified as a PFIC whenever it satisfies
either  the  asset  test  or  the  income  test.

A  non-U.S.  corporation  satisfies  the  PFIC  asset test if 50% or more of the
average value of its assets consists of assets that produce, or are held for the
production  of,  passive  income.  Mineral  property  held for the production of
royalty  income  is held for the production of passive income.  Mineral property
held  for  the active development and extinction of mineral deposits is not held
for the production of passive income.  Because the Company has not yet committed
to  the  method of realizing profit from mineral discoveries, application of the
asset  test  is  problematic.

                                       39
<PAGE>

A  non-U.S.  corporation  satisfies  the  PFIC income test if 75% or more of its
gross  income  is  passive  income.  Interest  income and gains from the sale of
marketable  securities  generally  constitutes passive income.  Because the PFIC
income  test  is  a  gross income test, losses from operations or administrative
expenses do not reduce passive income for purposes of the PFIC income test.  The
Company  has  had,  in  past  years,  interest  income and gain from the sale of
marketable  securities  and  no  other  operating  income,  and  may  have  such
situations  in  the  future.  Thus,  it  is  highly likely that the Company will
satisfy  the  gross income test and be classified as a PFIC from time to time in
the  future  for  U.S.  federal  income  tax  purposes.

U.S.  Taxpayers  holding  shares  classified as PFIC stock are subject to one of
three special tax regimes with respect to the PFIC stock.  Such shareholders can
elect  to  be  taxed  under  either  the  Market  to  Market Regime or under the
Qualified Electing Fund ("QEF") Regime.  Failure to qualify for and elect either
of  these  two  regimes  results  in  being  taxed under the Excess Distribution
Regime.

Under  the  Excess  Distribution Regime, shares are considered PFIC stock in the
first  year  that  the  Company  becomes  a PFIC with respect to that particular
holder  and  all  subsequent  years.  Actual  distributions from the Company are
classified  as  regular  distributions  or  excess  distributions.  An  actual
distribution  is  an  excess  distribution  to  the  extent  the total of actual
distributions  during  a  taxable  year  exceeds  125%  of the average of actual
distributions received in the three preceding years.  All gain recognized on the
disposition  of  shares  considered  PFIC  stock  are  classified  as  excess
distributions.  Total  excess  distributions  for any year are allocated ratably
over all the days during which the holder held the shares.  Amounts allocated to
prior  years  during  which  the Company was a PFIC are subject to a special tax
calculation  consisting  of  the  highest  rate  of  tax  for  the year to which
allocated  and  an  interest charge as if such tax were an underpayment of taxes
for  the year allocated.  This special tax, known as the Deferred Tax Amount, is
added  to  the holder's regular tax liability.  All other portions of the excess
distributions  are  added  to  the  regular  distributions and taxed as dividend
income  according  to  the  general  rules  above.  Foreign  taxes incurred with
respect to an excess distribution are allocated in the same manner as the excess
distributions.  Foreign  taxes  allocable  to  excess  distributions  used  to
determine  the  Deferred  Tax  Amount  can  be credited against the Deferred Tax
Amount  otherwise  payable,  but any foreign taxes in excess of the Deferred Tax
Amount  are  permanently  lost  rather  than generating foreign tax credit carry
forwards.  Foreign  taxes allocable to the remainder of the excess distributions
are  subject  to  the  general  rules  for  foreign tax credits discussed above.

A U.S. Taxpayer can avoid the Excess Distribution Regime by electing to be taxed
under  the QEF Regime in the first year in which the Company qualifies as a PFIC
while  its shares are held by such holder.  The Company must have agreed to make
available to holders the information necessary to determine the inclusions under
the  QEF  rules  and  to assure compliance in order for the holder to be able to
make  a  QEF  election.  Under  a  QEF  election, the holder must include in its
taxable  income  its  pro  rata share of the earnings and profits of the Company
divided  into  ordinary  income and net capital gain.  Actual distributions from
the Company paid out of earnings and profits previously included as income under
the  QEF  election  are  treated as a tax-free return of capital.  Under the QEF
election,  a  holder's  basis  in  the  Company stock is increased by any amount
included  in  the  holder's  income  under  the  QEF  rules and decreased by any

                                       40
<PAGE>

distributed  amount  treated as a tax free return of capital.  Gains on sales or
other  dispositions  of PFIC stock under the QEF regime are generally taxable as
capital  gain  income  under  the  general  rules  discussed  above.

A  holder  electing to be taxed under the QEF Regime may make a further election
to  defer  paying  taxes due under the QEF Regime until actual distributions are
made from the PFIC to the holder.  Interest will be charged on such deferred tax
liability  until  the  liability  is  actually  paid  at  the  normal  rate  for
underpayments  of  tax.

U.S.  Taxpayers  holding shares can also avoid the Excess Distribution Regime by
electing to be taxed under the Market to Market Regime as long as the shares are
publicly  traded.  Under  the  Market  to  Market  Regime,  a holder includes in
taxable  income an amount equal to the appreciation of the stock for the taxable
year.  A  deduction  for  losses  is  allowed  equal  to  the lesser of the loss
incurred  on the stock in the taxable year or the amount of the unreversed prior
inclusions with respect to the same stock.  Such gains and losses are treated as
ordinary.  Basis  in  shares  is adjusted for such income and loss recognitions.
Gain  and  most  loss  on  sale  of  shares  is  ordinary  rather  than capital.

Use  of  PFIC  shares  as  security  for a loan constitutes a disposition of the
shares  for tax purposes.  Holders are advised to consult their own personal tax
advisors  before  entering  into  such  transactions.

     HOLDERS  OF  10%  OR  MORE  OF  COMPANY  STOCK
     ----------------------------------------------

U.S. Taxpayers holding, directly or indirectly, 10% or more of Company stock may
be subject to other overlapping special rules of U.S. taxation involving foreign
stock  that may supplement and/or supercede the PFIC rules.  Complex attribution
rules exist for determining direct and indirect ownership of shares.  Holders of
Company  shares  in these situations should consult their own tax advisors about
these  more  complicated  situations.

     FOREIGN  INVESTMENT  COMPANY  CONSIDERATIONS
     --------------------------------------------

It  is  currently  unlikely but possible that the Company may be classified as a
foreign  investment  company  for  U.S.  federal income tax purposes.  A foreign
investment  company  includes  any  foreign corporation engaged primarily in the
business  of  investing,  reinvesting  or  trading in securities or commodities,
including  a  fractional undivided interest in oil, gas or other mineral rights,
at  a time when 50% or more of the total combined voting power of all classes of
stock  entitled  to  vote  or  the  total value of all classes of stock are held
directly  or  indirectly  by U.S. Taxpayers.  It is difficult to predict whether
the  Company's  mineral activities will be mere holding and investing as opposed
to  actual development activities at a time when, if ever, U.S. Taxpayer holders
acquire  the  requisite  percentage  ownership  of  the Company.  The PFIC rules
overlap  with,  and  to a great extent, supercede the foreign investment company
U.S.  tax  rules.  Holders should consult their own tax advisors when and if the
Company  ever becomes a foreign investment company to determine how to reconcile
the  PFIC  and  foreign  investment  company  rules in determining their own tax
situations.

DIVIDENDS  AND  PAYING  AGENTS
------------------------------

Not  applicable.

                                       41
<PAGE>

STATEMENT  BY  EXPERTS
----------------------

Not  applicable.

DOCUMENTS  ON  DISPLAY
----------------------

Data  on  the Company's mineral properties may be viewed at the Company's office
located  at  #507  -  837  West  Hastings  Street,  Vancouver,  B.C.,  V6C  3N6.

Material contracts and publicly available corporate records may be viewed at the
Company's  registered  and  records  office  located  at  1750 - 750 West Pender
Street,  Vancouver,  B.C.,  V6C  2T8.

We  filed a registration statement on Form 20-F with the Securities and Exchange
Commission in Washington, D.C. (Registration No. 000-30084) on February 6, 2001,
which  became  effective  April  6,  2001.  The  Registration Statement contains
exhibits  and  schedules.  Any  statement in this annual report about any of our
contracts  or  other  documents is not necessarily complete.  If the contract or
document  is  filed as an exhibit to the Registration Statement, the contract or
document  is  deemed  to modify the description contained in this annual report.
You  must  review  the  exhibits  themselves  for  a complete description of the
contract  or  documents.

You  may  inspect and copy our registration statements, including their exhibits
and schedules, and the reports and other information we file with the Securities
and  Exchange  Commission  in  accordance  with  the  Exchange Act at the public
reference  facilities  maintained  by  the Securities and Exchange Commission at
Judiciary  Plaza,  450  Fifth  Street,  Room 1024, N.W., Washington, D.C. 20549.
Copies  of  such material may also be obtained from the Public Reference Section
of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington,
D.C.  20549,  at  prescribed  rates.  You  may  obtain information regarding the
Washington  D.C.  Public  Reference  Room by calling the Securities and Exchange
Commission  at  1-800-SEC-0330  or  by  contacting  the  Securities and Exchange
Commission  over  the  Internet  at  its  website  at  http://www.sec.gov.

ITEM  11.    QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK
             ----------------------------------------------------------------

The  Company is a small business issuer as defined in Rule 405 of the Securities
Act  of 1933, as amended, and Rule 12b-2 of the Securities Exchange Act of 1934,
as  amended,  and  therefore  need not provide the information requested by this
item.

ITEM  12.    DESCRIPTION  OF  SECURITIES  OTHER  THAN  EQUITY  SECURITIES
             ------------------------------------------------------------

Not  applicable.

                                       42
<PAGE>

                                     PART II

ITEM  13.    DEFAULTS,  DIVIDEND  ARREARAGES  AND  DELINQUENCIES
             ---------------------------------------------------

Not  applicable.


ITEM  14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
             HOLDERS AND USE OF PROCEEDS
             --------------------------------------------------

MATERIAL  MODIFICATIONS  TO  THE  RIGHTS  OF  SECURITY  HOLDERS
---------------------------------------------------------------

None.

USE  OF  PROCEEDS
-----------------

Not  applicable

ITEM  15.      [RESERVED]

ITEM  16.       [RESERVED]


                                       43
<PAGE>

                                    PART III

ITEM  17.    FINANCIAL  STATEMENTS
             ---------------------
                                                                            Page
                                                                            ----

Auditors'  Report  dated  July  16,  2002                                    F1

Consolidated  Balance  Sheet  at
May  31,  2002,  2001  and  2000                                             F2

Consolidated  Statement  of  Operations  and  Deficit  for
the  years  ended  May  31,  2002,  2001  and  2000                          F3

Consolidated  Statement  of  Cash  Flows  for
the  years  ended  May  31,  2002,  2001  and  2000                          F4

Notes  to  the  Consolidated  Financial  Statements
for  the  years  ended  May  31,  2002,  2001  and  2000                     F5

ITEM  18.    FINANCIAL  STATEMENTS
             ----------------------

Not  applicable.


                                       44
<PAGE>

ITEM  19.    EXHIBITS
             ---------

1.1* The  Articles  of  Incorporation  of  the  Company  dated  May  26,  1978

1.2* The  Memorandum  of  the  Company  dated  May  26,  1978

1.3* Amended  Articles  of  Incorporation  of the Company dated October 23, 1978

1.4* Amendment to the Memorandum dated June 1, 1998 (Change of name from Ashnola
     Mining  Company  Ltd.  to  Tower  Hill  Mines  Ltd.)

1.5* Amendment to the Memorandum dated March 15, 1991 (Change of name from Tower
     Hill  Mines  Ltd.  to  International  Tower  Hill  Mines  Ltd.)

4.1* Joint  Venture  Agreement  dated  January  29, 1999 between the Company and
     Marum  Resources  Inc.

4.2* Amending  Agreement (to the Joint Venture Agreement dated January 29, 1999)
     dated  December  5,  2000  between  the  Company  and  Marum  Resources

4.3* Option  Agreement  dated  October 27, 1987 between the Company and Patricia
     Mullin

4.4* Settlement  Agreement dated March 18, 1991 between the Company and Patricia
     Mullin

4.5* Letter  of  Intent  dated  November 17, 1987 between the Company and Brenda
     Mines  Ltd.

8.1**  Subsidiaries  of  the  Company

*    Incorporated by reference from the Company's Registration Statement on Form
     20-F filed on February 6, 2001 with the Securities and Exchange Commission.

**   Incorporated  by  reference  from  the  Company's  Amendment  No.  2 to the
     Registration  Statement  dated  April  11,  2001.

                                       45
<PAGE>
                                   SIGNATURES

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.

INTERNATIONAL  TOWER  HILL  MINES  LTD.


       /s/  Anton  (Tony)  J.  Drescher
---------------------------------------
By:     Anton  (Tony)  J.  Drescher
        ----------------------------
     Its:      President
          --------------

Date:      November  11th      ,  2002
      -------------------------------



                                       46
<PAGE>

                                 CERTIFICATIONS
                                 --------------

I,  Anton  J.  Drescher,  certify  that:

1.   I have reviewed this annual report on Form 20-F of International Tower Hill
     Mines  Ltd.;

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;  and

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.

Date:     November  11th,  2002

By:     /s/  Anton  J.  Drescher
----------------------------------------------
        Anton  J.  Drescher
        President  and  Chief  Executive  Officer


I,  Norman  J.  Bonin,  certify  that:

1.   I have reviewed this annual report on Form 20-F of International Tower Hill
     Mines  Ltd.;

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;  and

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.

Date:     November  11th,  2002

By:     /s/  Norman  J.  Bonin
----------------------------------------------
        Norman  J.  Bonin
        Chief  Financial  Officer

                                       F1
<PAGE>














                       INTERNATIONAL TOWER HILL MINES LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS

                         (EXPRESSED IN CANADIAN DOLLARS)

                                  MAY 31, 2002



                                       F2
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.

CONSOLIDATED  FINANCIAL  STATEMENTS
-----------------------------------

MAY  31,  2002                                               PAGE
--------------







Auditors'  Report                                             3

Consolidated  Balance  Sheets                                 4

Consolidated  Statements  of  Operations  and  Deficit        5

Consolidated  Statements  of  Cash  Flows                     6

Notes  to  the  Consolidated  Financial  Statements        7-13



















                                       F3
<PAGE>



                               [GRAPHIC  OMITED]



                                                   1000  -  1190  Hornby  Street
                                                   Vancouver,  BC   V6Z  2W2
                                                   Tel:  604-687-4511
                                                   Fax:  604-687-5617
                                                   Toll  Free:  1-800-351-0426
                                                   www.MacKayLLP.ca

CHARTERED
ACCOUNTANTS

MacKay  LLP

AUDITORS'  REPORT

TO  THE  SHAREHOLDERS  OF
INTERNATIONAL  TOWER  HILL  MINES  LTD.

We  have  audited  the  consolidated  balance sheets of International Tower Hill
Mines  Ltd.  as  at  May  31,  2002  and 2001 and the consolidated statements of
operations  and deficit and cash flows for the years then ended. These financial
statements  are  the  responsibility  of  the  company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

We  conducted our audit in accordance with generally accepted auditing standards
in  Canada  and  the  United  States.  Those  standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are  free  of  material  misstatement.  An  audit  includes examining, on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in  the  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.

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




VANCOUVER,  CANADA                                                 "MACKAY  LLP"
JULY  16,  2002                                           CHARTERED  ACCOUNTANTS


COMMENTS  BY  AUDITORS  FOR  U.S.  READERS  ON  CANADA - UNITED STATES REPORTING
DIFFERENCES

Canadian  generally  accepted  accounting principles vary in certain significant
respects  from  accounting  principles  generally accepted in the United States.
Application  of  accounting  principles  generally accepted in the United States
would  have  affected  results  of operations for each of the years in the three
year period ended May 31, 2002 and shareholders' equity as at May 31, 2002, 2001
and  2000  to  the  extent  summarized  in  note 9 to the consolidated financial
statements.



VANCOUVER,  CANADA                                                "MACKAY  LLP"
JULY  16,  2002                                          CHARTERED  ACCOUNTANTS


                                       F4
<PAGE>
INTERNATIONAL  TOWER  HILL  MINES  LTD.

CONSOLIDATED  BALANCE  SHEETS
-----------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)
<TABLE>
<CAPTION>

                                                                   May 31
                                                      2002          2001          2000
ASSETS
<S>                                               <C>           <C>           <C>
CURRENT
    Cash and cash equivalents. . . . . . . . . .  $   296,849   $   366,527   $   307,659
    Guaranteed investment certificate. . . . . .            -       104,072       100,000
    Marketable securities (note 3) . . . . . . .       37,520        37,520       142,450
    BC mining exploration tax credit receivable.       14,670             -             -
    Accounts receivable. . . . . . . . . . . . .        1,304         6,937        25,430
    Prepaid expenses . . . . . . . . . . . . . .        1,261         2,266         2,209
                                                  ------------  ------------  ------------

                                                      351,604       517,322       577,748

TERM DEPOSIT (note 4a) . . . . . . . . . . . . .        2,500         2,500         2,500

MINERAL PROPERTIES (note 4). . . . . . . . . . .    1,059,982     1,043,727       917,809
                                                  ------------  ------------  ------------

                                                  $ 1,414,086   $ 1,563,549   $ 1,498,057
                                                  ============  ============  ============


Liabilities
------------

CURRENT
    Accounts payable and accrued liabilities . .  $    14,433   $    11,855   $     6,010
    Due to directors . . . . . . . . . . . . . .        1,500             -             -
                                                  ------------  ------------  ------------

                                                       15,933        11,855         6,010
                                                  ------------  ------------  ------------

Share Capital and Deficit
-------------------------

SHARE CAPITAL (note 5) . . . . . . . . . . . . .    3,515,664     3,515,664     3,370,664

DEFICIT. . . . . . . . . . . . . . . . . . . . .   (2,117,511)   (1,963,970)   (1,878,617)
                                                  ------------  ------------  ------------

                                                    1,398,153     1,551,694     1,492,047
                                                  ------------  ------------  ------------

                                                  $ 1,414,086   $ 1,563,549   $ 1,498,057
                                                  ============  ============  ============
</TABLE>

COMMITMENTS  (note  4)

APPROVED  BY  THE  DIRECTORS:

"ANTON  J.  DRESCHER"
           Director

"NORM  J.  BONIN"
          Director

                                       F5
<PAGE>
INTERNATIONAL  TOWER  HILL  MINES  LTD.

CONSOLIDATED  STATEMENT  OF  OPERATIONS  AND  DEFICIT
-----------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

<TABLE>
<CAPTION>

                                                            For the year ended May 31
                                                         2002          2001          200o
<S>                                                  <C>           <C>           <C>
INCOME
    Interest. . . . . . . . . . . . . . . . . . . .  $    11,572   $    24,961   $     7,516
                                                     ------------  ------------  ------------

EXPENSES
    Bank charges. . . . . . . . . . . . . . . . . .          575           427           287
    Foreign exchange loss (gain). . . . . . . . . .            -             -            34
    Management fees . . . . . . . . . . . . . . . .       30,000        30,000        30,000
    Office and miscellaneous. . . . . . . . . . . .        3,751         1,623         1,275
    Professional fees . . . . . . . . . . . . . . .       46,184        51,620         7,329
    Rent. . . . . . . . . . . . . . . . . . . . . .        7,200         7,200         7,200
    Stock exchange and filing fees. . . . . . . . .       21,338         4,757         5,933
    Transfer agent fees . . . . . . . . . . . . . .        3,634         4,355         4,157
    Travel and promotion. . . . . . . . . . . . . .        2,441         2,420         2,415
    Write off of deferred exploration expenditures.       49,990             -       130,034
                                                     ------------  ------------  ------------

                                                         165,113       102,402       188,664
                                                     ------------  ------------  ------------

LOSS FROM OPERATIONS. . . . . . . . . . . . . . . .     (153,541)      (77,441)     (181,148)
                                                     ------------  ------------  ------------

OTHER ITEMS
    Gain on sale of marketable securities . . . . .            -         6,158       238,715
    Write-down of marketable securities . . . . . .            -       (14,070)            -
                                                     ------------  ------------  ------------

                                                               -        (7,912)      238,715
                                                     ------------  ------------  ------------

INCOME (LOSS) FOR THE YEAR. . . . . . . . . . . . .     (153,541)      (85,353)       57,567

DEFICIT, BEGINNING OF YEAR. . . . . . . . . . . . .   (1,963,970)   (1,878,617)   (1,936,184)
                                                     ------------  ------------  ------------

DEFICIT, END OF YEAR. . . . . . . . . . . . . . . .  $(2,117,511)  $(1,963,970)  $(1,878,617)
                                                     ============  ============  ============

INCOME (LOSS) PER SHARE (note 6). . . . . . . . . .  $     (0.01)  $     (0.01)  $      0.01
                                                     ============  ============  ============

WEIGHTED AVERAGE NUMBER OF SHARES . . . . . . . . .    9,012,183     8,882,411     8,119,947
OUTSTANDING                                          ============  ============  ============

</TABLE>


                                       F6
<PAGE>


INTERNATIONAL  TOWER  HILL  MINES  LTD.

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
-----------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)
<TABLE>
<CAPTION>



                                                             For the year ended May 31
                                                          2002         2001         2000
<S>                                                    <C>         <C>           <C>
CASH PROVIDED BY (USED FOR)

OPERATING ACTIVITIES
    Income (loss) for the year. . . . . . . . . . . .  $(153,541)  $   (85,353)  $  57,567

    Add (deduct) items not affecting cash

        Gain on sale of marketable securities . . . .          -        (6,158)   (238,715)
        Write-down of marketable securities . . . . .          -        14,070           -
        Write off of deferred exploration expenses. .     49,990             -     130,034
                                                       ----------  ------------  ----------

                                                        (103,551)      (77,441)    (51,114)

    Changes in non-cash items:
        BC mining exploration tax credit receivable .    (14,670)            -           -
        Accounts receivable . . . . . . . . . . . . .      5,633        18,493     (23,034)
        Accounts payable and accrued liabilities. . .      2,578         5,845       2,609
        Prepaid expenses. . . . . . . . . . . . . . .      1,005           (57)      2,661
        Due to directors. . . . . . . . . . . . . . .      1,500             -      (5,000)
                                                       ----------  ------------  ----------

                                                        (107,505)      (53,160)    (73,878)
                                                       ----------  ------------  ----------

FINANCING ACTIVITY
    Shares issued for cash. . . . . . . . . . . . . .          -       145,000     300,000
                                                       ----------  ------------  ----------

INVESTING ACTIVITIES
    Purchase of marketable securities . . . . . . . .          -             -    (120,000)
    Proceeds of disposition of marketable securities.          -        97,018     316,265
    Purchase of guaranteed investment certificate . .          -      (104,072)   (175,000)
    Proceeds on sale of guaranteed investment cert. .    104,072       100,000      75,000
    Mineral property acquisition costs. . . . . . . .    (38,300)      (23,350)    (23,600)
    Mineral property exploration costs. . . . . . . .    (27,945)     (102,568)    (18,052)
                                                       ----------  ------------  ----------

                                                          37,827       (32,972)     54,613
                                                       ----------  ------------  ----------

INCREASE (DECREASE) IN CASH AND CASH. . . . . . . . .    (69,678)       58,868     280,735
 EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR. . . . .    366,527       307,659      26,924
                                                       ----------  ------------  ----------

CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . . .  $ 296,849   $   366,527   $ 307,659
                                                       ==========  ============  ==========

</TABLE>


                                       F7
<PAGE>
INTERNATIONAL  TOWER  HILL  MINES  LTD.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

MAY  31,  2002
--------------

1.   NATURE  OF  OPERATIONS

     The  Company  is  in  the  business  of acquiring, exploring and evaluating
     mineral  properties,  and  either  joint  venturing  or  developing  these
     properties  further  or disposing of them when the evaluation is completed.
     At May 31, 2002, the Company was in the exploration stage and had interests
     in  properties  in  British  Columbia,  Alberta  and  Quebec,  Canada.

     The  recoverability  of  amounts  shown  as mineral properties and deferred
     exploration  costs  is  dependent  upon  the  existence  of  economically
     recoverable  reserves,  the  ability  of  the  Company  to obtain necessary
     financing  to  complete their development, and future profitable production
     or  disposition  thereof.

     Although  the Company has taken steps to verify title to mineral properties
     in  which it has an interest, in accordance with industry standards for the
     current  stage  of  exploration of such properties, these procedures do not
     guarantee  the  Company's  title.  Property  title  may  be  subject  to
     unregistered  prior  agreements  and  non-compliance  with  regulatory
     requirements.

2.   SIGNIFICANT  ACCOUNTING  POLICIES

     The  following  is a summary of the significant accounting policies used by
     management in the preparation of these consolidated financial statements in
     accordance  with  Canadian  generally  accepted  accounting  principles.

     A)   BASIS  OF  CONSOLIDATION

          These  consolidated  financial  statements  include  the  accounts  of
          International  Tower  Hill  Mines Ltd. and its wholly owned subsidiary
          813034  Alberta  Ltd  ("813034"),  an  Alberta  corporation.

     B)   MARKETABLE  SECURITIES

          Marketable  securities  are  valued  at  the  lower of cost or market.

     C)   MINERAL  PROPERTIES

          Mineral  properties  consist  of  exploration  and mining concessions,
          options and contracts. Acquisition and leasehold costs and exploration
          costs  are capitalized and deferred until such time as the property is
          put  into  production or the properties are disposed of either through
          sale  or abandonment. If put into production, the costs of acquisition
          and  exploration  will  be  written off over the life of the property,
          based  on estimated economic reserves. Proceeds received from the sale
          of  any  interest  in  a  property  will first be credited against the
          carrying value of the property, with any excess included in operations
          for  the period. If a property is abandoned, the property and deferred
          exploration  costs  will  be  written  off  to  operations.

     D)   INCOME  (LOSS)  PER  SHARE

          Income  (loss)  per  share  amounts  have been calculated based on the
          weighted  average  number  of  shares outstanding during the year. The
          weighted  average  number  of  shares  outstanding during the year was
          9,012,183  (2001  -  8,882,411;  2000  -  8,119,947).

          The  company  has  retroactively  applied  the  Canadian  Institute of
          Chartered  Accountants' new accounting standard for earnings per share
          calculation and disclosure. Under the new standard, the treasury stock
          method  of calculating fully diluted per share amounts is used whereby
          any  proceeds  from  the  exercise  of stock options or other dilutive
          instruments  are  assumed  to be used to purchase common shares at the
          average  market  price  during  the  period. The assumed conversion of
          outstanding  common  share  options  has  an  immaterial effect in the
          presented  years.

                                       F8
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

MAY  31,  2002
--------------


2.   SIGNIFICANT  ACCOUNTING  POLICIES  (cont'd)

     E)   CASH  EQUIVALENTS

          The  company  considers  cash  equivalents to consist of highly liquid
          investments  with  a  remaining  maturity of three months or less when
          purchased.

     F)   FOREIGN  CURRENCY  TRANSLATION

          Monetary  assets  and  liabilities  resulting  from  foreign  currency
          transactions  are  translated into Canadian dollars using the year end
          conversion  rates.  Acquisition  and  exploration  costs  have  been
          translated  at  the  dates  of  occurrence.

     G)   FINANCIAL  INSTRUMENTS

          The  fair  value  of  cash,  guaranteed  investment certificates, term
          deposits,  accounts  receivable,  accounts  payable  and  accrued
          liabilities  and  amounts  due to directors approximate their carrying
          value  due  to  the  relatively  short  periods  to  maturity of these
          financial  instruments.

     H)   ESTIMATES

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amount  of  assets  and
          liabilities  and  disclosure  of contingent liabilities at the date of
          the  financial  statements,  and  the reported amounts of revenues and
          expenditures  during the reporting period. Actual results could differ
          from  those  reported.

     I)   INCOME  TAX

          Income  taxes  are  accounted  for using the future income tax method.
          Under this method income taxes are recognized for the estimated income
          taxes  payable  for  the  current  year  and  future  income taxes are
          recognized  for  temporary  differences between the tax and accounting
          bases  of  assets  and  liabilities  and  for  the  benefit  of losses
          available to be carried forward for tax purposes that are likely to be
          realized.  Future  income  taxes  assets  and liabilities are measured
          using  tax rates expected to apply in the years in which the temporary
          differences  are  expected  to  be  recovered  or  settled.

          Tax  benefits  arising from past losses and unused resource pools have
          not  been  recorded  due  to  uncertainty regarding their utilization.

     J)   JOINT  VENTURE  ACCOUNTING

          Where  the  company's  exploration  and  development  activities  are
          conducted  with  others,  the  accounts  reflect  only  the  company's
          proportionate  interest  in  such  activities.

3.   MARKETABLE  SECURITIES
<TABLE>
<CAPTION>

                                              2002     2001      2000
<S>                                          <C>      <C>      <C>
Marum Resources Inc. (market value $46,900)  $37,520  $37,520  $142,450
                                             =======  =======  ========
</TABLE>

     At  May  31,  2002  the Company held 469,000 shares of Marum Resources Inc.
     (2001  -  469,000  shares;  market  value $37,520), acquired as part of the
     investment  in  the  Chinchaga  joint  venture,  with an historical cost of
     $51,590.

                                       F9
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

MAY  31,  2002
--------------

4.   MINERAL  PROPERTIES

     Accumulated  costs  in  respect  of  mineral  claims owned, leased or under
     option,  consist  of  the  following:
<TABLE>
<CAPTION>

                       Siwash
                       Silver     Chinchaga     Torngat       Fort         2002         2001       2000
                       Leases     Property    Properties   Vermillion      Total       Total      Total
                      ---------  -----------  -----------  -----------  -----------  ----------  --------
<S>                   <C>        <C>          <C>          <C>          <C>          <C>         <C>

ACQUISITION COSTS
--------------------
 Beginning balance .  $180,000   $        -   $    21,950  $         -  $  201,950   $  178,600  $155,000
 Lease costs . . . .    12,500            -         5,800       20,000      38,300       23,350    23,600
                      ---------  -----------  -----------  -----------  -----------  ----------  --------

  Ending balance . .   192,500            -        27,750       20,000     240,250      201,950   178,600
                      ---------  -----------  -----------  -----------  -----------  ----------  --------

Deferred exploration
 Beginning balance .   713,182       50,000        78,595            -     841,777      739,209   721,157
 Drilling. . . . . .    26,977            -             -            -      26,977       40,000         -
 Mapping & sampling.         -            -             -            -                   11,445         -
 Miscellaneous . . .     3,378            -             -            -       3,378            -        51
 Surveying . . . . .    12,908            -         2,190            -      15,098       51,123    18,001
 Tax credits . . . .   (17,508)                                      -     (17,508)
 Write-down. . . . .         -      (49,990)            -            -     (49,990)
                      ---------  -----------  -----------  -----------  -----------

   Ending balance. .   738,937           10        80,785            -     819,732      841,777   739,209
                      ---------  -----------  -----------  -----------  -----------  ----------  --------

Total deferred costs  $931,437   $       10   $   108,535  $    20,000  $1,059,982   $1,043,727  $917,809
                      =========  ===========  ===========  ===========  ===========  ==========  ========
</TABLE>

     A)   SIWASH  SILVER  LEASES

          i)   On October 27, 1987, the Company was granted an option to acquire
               a  100%  interest  in  certain  mineral  claims  situated  in the
               Similkameen  Mining  Division  of  British  Columbia.

               The agreement required total consideration of $160,000 to be paid
               as  follows:

                    $6,000  upon  closing  (paid);
                    $4,000  on  or  before  April  3,  1988  (paid);
                    $10,000  on  or  before  October  3,  1988  (paid);
                    $10,000  on  or  before  October  3,  1989  (paid);  and
                    $10,000  each  subsequent year thereafter until October 3,
                    2002

               On  March  18,1991,  an amendment was made to the agreement dated
               October  27,  1987  to  change  the  payments  to  be made to the
               optionor.  The  amended  payments  are  as  follows:
                    $10,000  on  or  before  October  3,  1990  (paid)
                    $12,500  each  subsequent  year  thereafter until October 3,
                    2002.
                    (October  3,  2001  and  prior  payments  were  made)

               On  November  17,  1987,  the Company paid $1,000 to Brenda Mines
               Ltd.  (Brenda) to obtain certain information on this property and
               gave Brenda the option to provide production financing should the
               property  come  into  production  in  the future. The Company has
               granted  Brenda  an  option  to  acquire  a  51%  interest in the
               property  for  90  days  following  a  positive  production
               recommendation  by  an  independent consulting firm. Terms of the
               option  include reimbursing all exploration and feasibility study
               expenditures  incurred  to  that date up to a total of $2 million
               and  providing  all  capital  required to bring the property into
               production.  In  the event that the property generates a positive
               cash  flow,  Brenda  will  retain  80%  of  profits  until  all
               development  capital plus interest has been repaid, at which time
               proceeds  will  be  distributed based on interest in the project.

                                      F10
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

MAY  31,  2002
--------------

4.   MINERAL  PROPERTIES  (cont'd)

               If  the Company decides to sell any or all of its interest in the
               property  to  a third party, it must first offer that interest to
               Brenda  on the same terms and Brenda shall have 60 days to advise
               the  company  of  its  decision.

               The  Company  has  pledged  a  $2,500 term deposit as reclamation
               security  as  required  by  the  Province  of  British  Columbia.

          ii)  On  September  18,  1996, the Company acquired a 100% interest in
               certain  mineral  claims  situated  adjacent  to  the Similkameen
               Mining  Division  of  British Columbia. The purchase price of the
               claims  was $15,000 (paid) and upon commencement of production of
               valuable  minerals  from  the  claims,  the vendor will receive a
               royalty  of  1%  of  net  smelter  returns.

               During May 2001 and continuing through December 2001, the Company
               commenced  a  drilling  program  on the leases. Total exploration
               expenses  of  $85,237 were incurred during this period, BC mining
               exploration  tax  credits  of  $2,838 have been received on these
               expenditures  and  an  additional  $14,670  have been recorded as
               receivable.

     B)   CHINCHAGA  PROPERTY

          On  January  29,  1999,  the company entered a joint venture agreement
          with  Marum  Resources  Inc.  to explore for diamonds in the Chinchaga
          area of northern Alberta, Canada. The company must contribute $300,000
          by  way of cash or cash equivalents, whereby a maximum contribution of
          $100,000  can  be  made  through private placement for shares in Marum
          Resources  Inc.  The  company  will  receive  50%  interest in Marum's
          working  interest  in  the  three  townships  of  the  Chinchaga area.


          The  agreement  required total consideration of $300,000 to be paid as
          follows
               $150,000  before  June  30,  1999  for  first  25%  interest
               $150,000  (amended) before September 30, 2000 for remaining 25%
               interest

          During  1999,  the  Company  exercised  its  option  to  purchase  the
          1,000,000 private placement units of Marum Resources Inc. for $100,000
          and  expended  $50,000  for the development of the Chinchaga Property.
          Each  private  placement  unit  contains  one  common  share  and  one
          non-transferable  share  purchase  warrant  to purchase one additional
          common  share  at a price of $0.12 per share, exercisable for a period
          of  two  years  from  the date of payment for the units. During fiscal
          2000  the  Company  exercised  the  1,000,000  warrants  and purchased
          1,000,000  shares  of  Marum  for  $120,000.

          During  fiscal  2001,  the  Company  and  Marum  amended the agreement
          whereby  the  Company  has  now earned its 50% interest in the project
          through  the advance of $270,000 as detailed above. At May 31, 2002 no
          further  activity  had  transpired  and  no  adjustments  to the joint
          venture  contribution  have  been  recorded.  During  fiscal 2002, the
          deferred  costs related to the property were written down to a nominal
          amount  as  no  work  is  currently  planned  on  the  property.

     C)   TORNGAT  PROPERTY

          During  November  1999,  the  Company  was granted two (2) exploration
          permits  totalling 108.5 square kilometers in northern Quebec, know as
          the Torngat property. The Company has commenced aerial exploration and
          surveying  of  the kimberlite dike area under an arrangement with four
          other  companies  whereby  common  costs  are  shared.  As part of the
          permits,  the  Quebec  government  has  agreed  to  reimburse  50%  of
          exploration  expenditures  up  to a maximum of $220,000. During fiscal
          2001,  the Company received $26,300 in reimbursement for expenses from
          the  Quebec  government.

                                      F11
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

                                  MAY 31, 2002

4.   MINERAL  PROPERTIES  (cont'd)

     D)   FORT  VERMILLION  PROPERTY

          During  fiscal 2002, the company applied for and received metallic and
          industrial  mineral  permits  covering  40  sections  of  land,  9,216
          hectares  each,  in  the  Province  of  Alberta.

5.   SHARE  CAPITAL

     Authorized:
          20,000,000  common  shares  without  par  value
<TABLE>
<CAPTION>

                                    2002                    2001                 2000
                             Number                 Number                 Number
Issued                      of Shares    Amount    of Shares    Amount    of Shares    Amount
--------------------------  ---------  ----------  ---------  ----------  ---------  ----------
<S>                         <C>        <C>         <C>        <C>         <C>        <C>

Balance, beginning of. . .  9,012,183  $3,515,664  8,528,850  $3,370,664  7,528,850  $3,070,664
year

Issued for debt settlement          -           -          -           -          -           -

Issued for cash:
    Private placement. . .          -           -          -           -    750,000     225,000
    Exercise of warrants .          -           -    483,333     145,000    250,000      75,000
                            ---------  ----------  ---------  ----------  ---------  ----------

Balance, end of year . . .  9,012,183  $3,515,664  9,012,183  $3,515,664  8,528,850  $3,370,664
                            =========  ==========  =========  ==========  =========  ==========
</TABLE>

     A)   During  2000 the company issued 733,333 units and 16,667 common shares
          through  a  private placement. Each unit consisted of one common share
          and  one  non-transferrable  warrant  to purchase an additional common
          share exercisable until September 16, 2000 at $0.30 or until September
          30,  2001  at  $0.35. At May 31, 2001 all warrants had been exercised.

6.   EARNINGS  PER  SHARE

     Fully  diluted earnings per share has not been disclosed in 2001 or 2002 as
     the results are not materially dilutive. The effect of potentially dilutive
     securities  are  not  included in the calculation of fully diluted earnings
     per  share  for  fiscal  2001as  the  result  would  be  anti-dilutive.

7.   RELATED  PARTY  TRANSACTIONS

     During  the  year  the  company paid $30,000 (2001 - $30,000) in management
     fees  $  4,902 (2001 - $3,250) in professional fees to a company controlled
     by  an  individual  who  is  a  director  of  the  company.

8.     INCOME  TAXES

     The  Company  has  resource deduction tax pools of approximately $2,411,572
     available  to  offset  future  taxable  income.

                                      F12
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.

NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

                                  MAY 31, 2002

9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")

     These  financial statements are prepared in accordance with GAAP in Canada,
     which  differed  in  some  respects  from  GAAP  in  the United States. The
     material differences between Canadian and United States GAAP, in respect of
     these  financial  statements,  are  as  follows:

     A)   MINERAL  PROPERTY  EXPLORATION  AND  DEVELOPMENT

     Under  United States GAAP, all mineral exploration and development property
     expenditures  are  expensed  in  the  year incurred in an exploration stage
     company  until  there is substantial evidence that a commercial body of ore
     has been located. Canadian GAAP allows resource exploration and development
     property expenditures to be deferred during this process. The effect on the
     Company's  financial  statements  is  summarized  below:
<TABLE>
<CAPTION>

                                                         For the years ended
                                                May 31,           May 31,       May 31,
                                                 2002               2001          2000
<S>                                      <C>                    <C>           <C>
Consolidated statement of
    operations and deficit
Income (loss) for the year under
     Canadian GAAP. . . . . . . . . . .  $           (153,541)  $   (85,353)  $    57,567
     Write off of exploration expenses.                49,990             -       130,034
     Mineral property exploration and
     development  expenditures. . . . .               (34,530)     (102,568)      (18,052)
                                          --------------------  ------------  ------------

United States GAAP. . . . . . . . . . .  $           (138,081)  $  (187,921)  $   169,549
                                          --------------------  ------------  ------------

Gain (loss) per share - US GAAP . . . .  $             (0.015)  $     (0.02)  $      0.02
                                          --------------------  ------------  ------------

Consolidated balance sheet
Assets
Mineral Properties
     Canadian GAAP. . . . . . . . . . .  $          1,060,550   $ 1,043,727   $   917,809
     Resource property expenditures
     (cumulative) . . . . . . . . . . .              (820,300)     (841,777)     (739,209)
                                          --------------------  ------------  ------------

United States GAAP. . . . . . . . . . .  $            240,250   $   201,950   $   178,600
                                          --------------------  ------------  ------------

Deficit
      Canadian GAAP . . . . . . . . . .  $         (2,117,511)  $(1,963,970)  $(1,878,617)
      Resource property expenditures
      (cumulative). . . . . . . . . . .              (820,300)     (841,777)     (739,209)
                                          --------------------  ------------  ------------

United States GAAP. . . . . . . . . . .  $         (2,937,811)  $(2,805,747)  $(2,617,826)
                                          ====================  ============  =============
</TABLE>

                                      F13
<PAGE>

INTERNATIONAL  TOWER  HILL  MINES  LTD.

NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
---------------------------------------------------
(EXPRESSED  IN  CANADIAN  DOLLARS)

                                  MAY 31, 2002


9.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY  ACCEPTED
     ACCOUNTING  PRINCIPLES  ("GAAP")  CONTINUED

     B)   MARKETABLE  SECURITIES

     Under  United  States  GAAP,  the  Company  would  classify  the marketable
     securities  as "Securities available for resale". The carrying value on the
     balance  sheet  at  May  31,  2001  would be $49,600 (2000 -$37,520; 2000 -
     $22,150)  and  the  unrealized gain (loss) would be posted to shareholder's
     equity  $12,080  (2001 - $14,070; 2000 - $77,900). There would be no impact
     on  the  consolidated  statement of operations in 2000, however in 2001 the
     unrealized  loss  would  not  appear  in  the  consolidated  statement  of
     operations rather as an adjustment to shareholders' equity, and in 2002 the
     unrealized  gain  would  be  posted  to  shareholder's  equity.

     C)   INCOME  TAXES

     Under  United  States  GAAP,  the  Company would have initially recorded an
     income tax asset for the benefit of the resource deduction pools and losses
     carried  forward. This asset would have been reduced to $nil by a valuation
     allowance.