FORM 20-F

_________________________



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

(Mark One)



[   ]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR



[ X ]

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



[   ]

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



Commission file number:

0-28874



CANADIAN EMPIRE EXPLORATION CORP.

(Exact name of Registrant as specified in its charter)



CANADIAN EMPIRE EXPLORATION CORP.

(Translation of Registrant's name into English)



PROVINCE OF BRITISH COLUMBIA, CANADA

(Jurisdiction of incorporation or organization)



#1205 - 675 West Hastings Street

Vancouver, British Columbia    V6B 1N2

(Address of principal executive offices)



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



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



Common Shares without par value

(Title of Class)



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



Indicate the number of outstanding Common Shares of each of the Issuer's classes of capital or common stock as of the close of the period covered by this registration statement:



Common Shares without par value:

The Registrant has authorized 250,000,000 Common Shares.

As at December 31, 2004 and May 13, 2005, the Registrant had outstanding 29,144,336 and 36,314,366 Common Shares respectively.

At December 31, 2004, 3,923,000 (May 13, 2005  3,923,000) Common Shares were reserved for issuance on exercise of options, and 820,000 Common Shares (May 13, 2005  820,000 Common Shares) on exercise of warrants.



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Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesXNo.



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

Item 17X Item 18



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes  No _____

N/A



Copies of communications to:



Jeffrey T.K. Fraser, Esq.

Lexas Law Group

1550 - 1185 West Georgia Street

Vancouver, B.C.  V6E 4E6  CANADA

(604) 689-9356 Telephone

(604) 689-7030 Facsimile



and to



John Iino

Reed Smith Crosby Heafey LLP

1901 Avenue of the Stars, Suite 700

Los Angeles, CA  90067

(310) 734-5200  Telephone

(310) 734-5299 Facsimile





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CANADIAN EMPIRE EXPLORATION CORP.

TABLE OF CONTENTS

PART I......................................................................................................................................................

5

ITEM 1

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

5

A)

DIRECTORS AND SENIOR MANAGEMENT

5

B)

AUDITORS

5

ITEM II

OFFER STATISTICS AND EXPECTED TIMETABLE

5

ITEM III

KEY INFORMATION

5

A)

SELECTED FINANCIAL DATA

5

B)

CAPITALIZATION AND INDEBTEDNESS

7

C)

REASON FOR THE OFFER AND USE OF PROCEEDS

7

D)

RISK FACTORS

7

ITEM IV

INFORMATION ON THE COMPANY

12

A)

HISTORY AND DEVELOPMENT OF THE COMPANY

12

B)

BUSINESS OVERVIEW

13

C)

ORGANIZATIONAL STRUCTURE

14

D)

DESCRIPTION OF PROPERTY

14

ITEM V

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

17

A)

OPERATING RESULTS

17

B)

LIQUIDITY AND CAPITAL RESOURCES

19

C)

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

23

D)

TREND INFORMATION

23

E)

OFF-BALANCE SHEET ARRANGEMENTS

23

F)

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

23

G)

OTHER INFORMATION

23

H)

OUTLOOK

23

I)

FORWARD LOOKING STATEMENTS

24

ITEM VI

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

24

A)

DIRECTORS AND SENIOR MANAGEMENT

24

B)

COMPENSATION

24

C)

BOARD PRACTICES

26

D)

EMPLOYEES

27

E)

SHARE OWNERSHIP

27

ITEM VII

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

28

A)

MAJOR SHAREHOLDERS

28

B)

RELATED PARTY TRANSACTIONS

28

ITEM VIII

FINANCIAL INFORMATION

29

A)

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

29

B)

SIGNIFICANT CHANGES

30

ITEM IX

THE OFFER AND LISTING

30

A)

PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK

30

B)

PLAN OF DISTRIBUTION

31

C)

MARKETS

31

D)

SELLING SHAREHOLDERS

31

E)

DILUTION

31

ITEM X

ADDITIONAL INFORMATION

31

A)

SHARE CAPITAL

31

B)

NOTICE OF ARTICLES (formerly "MEMORANDUM") AND ARTICLES

32



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C)

MATERIAL CONTRACTS

32

D)

EXCHANGE CONTROLS

33

E)

TAXATION

34

F)

DIVIDENDS AND PAYING AGENTS

36

G)

STATEMENTS BY EXPERTS

36

H)

DOCUMENTS ON DISPLAY

36

I)

SUBSIDIARY INFORMATION

36

ITEM XI

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

37

ITEM XII

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

37

PART II...................................................................................................................................................

37

ITEM XIII

DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES

37

ITEM XIV

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

37

ITEM XV

CONTROLS AND PROCEDURES

37

ITEM XVI

AUDIT COMMITTEE FINANCIAL EXPERT

37

PART III.................................................................................................................................................

38

ITEM XVII

FINANCIAL STATEMENTS

38

ITEM XVIII

FINANCIAL STATEMENTS

38

ITEM XIX

EXHIBITS

39

INDEX TO FINANCIAL STATEMENTS

42

SIGNATURE

43

CERTIFICATIONS

44





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PART I



Canadian Empire Exploration Corp. (formerly Northern Crown Mines Ltd.) ("Canadian Empire" or the "Registrant" or the "Company")  has one wholly owned subsidiary, Minera Reina Isabel, S.A. de C.V. ("Minera Reina Isabel"), and one 90% owned subsidiary, Minera Tatemas, S.A. de C.V. (Minera Tatemas), both corporations formed under the laws of Mexico to carry out mineral exploration and development programs in Mexico.  The subsidiaries are currently inactive.



ITEM 1

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS



A)

DIRECTORS AND SENIOR MANAGEMENT

John S. BrockPresident
Chief Executive Officer
Director
Audit Committee MemberWest Vancouver, British Columbia, CanadaR.E. Gordon Davis, P. Eng.Director
Audit Committee MemberVancouver, British Columbia, CanadaLawrence Page, LL.B.,  Q.C.Director
Audit Committee MemberWest Vancouver, British Columbia, CanadaWayne J. Roberts, P. Geo.Director
Vice-President, ExplorationCoquitlam, British Columbia, CanadaJeannine P. M. Webb, CGAChief Financial Officer
Corporate SecretaryBurnaby, British Columbia, Canada






Advisors

Principal Bankers of the Company:

Canadian Imperial Bank of Commerce400 Burrard Street
Vancouver, British Columbia
Canada  V6C 3A6




Legal Counsel of the Company:

CanadaLexas Law Group1550  1185 West Georgia Street
Vancouver, British Columbia
Canada  V6E 4E6USReed Smith Crosby Heafey LLP1901 Avenue of the Stars, Suite 700
Los Angeles, CA  90067MexicoGarcia Jimenez y AsociadosSan Francisco No. 656-601
Col Del Valle
Mexico, DF, Mexico  03100






B)

AUDITORS

Since 1991, the independent Auditors of the Company have been PricewaterhouseCoopers LLP "PWC" located at Suite 700, 250 Howe Street, Vancouver, British Columbia, Canada  V6C 3S73



ITEM II

OFFER STATISTICS AND EXPECTED TIMETABLE



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide information under this item.



ITEM III

KEY INFORMATION

A)

SELECTED FINANCIAL DATA





Set forth below is certain selected financial data of the Company for the fiscal years ended December 31, 2004, 2003, 2002, 2001 and 2000.  The selected financial data for the fiscal years ended December 31, 2004, 2003 and 2002, was derived from the audited financial statements of the Company.



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Unless otherwise indicated, all references to dollars herein are to Canadian dollars.  As at December 31, 2004, one United States dollar was equal to 1.2176 Canadian dollar and that value is used in calculations herein, unless otherwise indicated.

Unless otherwise indicated, all references to share capital herein are on a post-consolidated basis. On December 5, 2001, the Registrant consolidated its capital on a ten (10) old Common Shares for one (1) new share basis.

TABLE OF SELECTED CONSOLIDATED FINANCIAL DATA(1)

(Stated in Canadian Dollars)

Presented in Accordance with

Canadian Generally Accepted Accounting Principles Unless Otherwise Stated



FISCAL YEARS ENDED



|                                                                 | Dec. 31, 2004 | Dec. 31, 2003 | Dec. 31, 2002 | Dec. 31, 2001 | Dec. 31, 2000
|---------------------------------------------------------------- | ------------- | ------------- | ------------- | ------------- | -------------
|Income (Loss)  for the Year                                      | ($455,500)    | ($2,096,679)  | ($1,022,609)  | ($388,599)    | ($2,692,574) 
|Income (Loss)  for the Year  US GAAP                            | ($1,400,432)  | ($1,088,027)  | ($2,031,261)  | ($388,599)    | ($1,682,528) 
|Basic and Diluted Earnings (Loss) per common share (2)           | ($0.02)       | ($0.12)       | ($0.12)       | ($0.11)       | ($0.79)      
|Basic and Diluted Earnings (Loss) per common share  US GAAP (2) | ($0.05)       | ($0.06)       | ($0.23)       | ($0.11)       | ($0.50)      
|Weighted Avg. No. Common Shares (net of escrowed)                | 28,922,009    | 17,964,336    | 8,657,892     | 3,531,045     | 3,393,498    
|Working
Capital (deficiency) (3)                                 | ($99,282)     | ($90,767)     | $613,098      | $50,888       | ($533,198)   
|Assets                                                           | $1,452,157    | $1,085,920    | $1,807,957    | $265,271      | $912,732     
|Assets  US GAAP                                                 | $507,225      | $1,085,920    | $799,305      | $265,271      | $56,009      
|Resource Assets                                                  | $944,932      | $0            | $1,008,652    | $0            | $856,723     
|Resource Assets  US GAAP                                        | $0            | $0            | $0            | $0            | $0           
|Write-off of Deferred Exploration Expenses/Resource Properties   | ($102,706)    | ($1,668,119)  | ($394,751)    | ($68,336)     | ($2,389,745) 
|Shareholders Equity                                              | $1,199,914    | $846,724      | $1,621,750    | $53,124       | $326,657     
|Shareholders Equity  US GAAP                                    | $254,982      | $846,724      | $613,098      | $53,124       | $326,657     





(1)

The financial information set forth in this table includes the accounts of Canadian Empire and its subsidiaries, Minera Reina Isabel and Minera Tatemas, on a consolidated basis.

(2)

After taking into effect the consolidation of the capital of the Registrant on December 5, 2001 on a ten (10) old Common Shares for one (1) new share basis.

(3)

At December 31, 2004, the Registrant had cash and cash equivalents of $451,514 (2003: $1,067,042), of which $342,964 (2003: $927,891) is restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital deficiency of $99,282 (2003: $90,767).



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The following table sets out the exchange rates of CDN$ for 1 US$ for the following periods:



PeriodAverageHighLowCloseMay, 20051.25551.26961.23721.2552April, 20051.23601.25851.21511.2585March 20051.21611.24381.20181.2191February, 20051.23971.25591.22491.2335January, 20051.22531.24121.20031.2412December, 20041.21911.24141.18371.2020November, 20041.19611.22431.17591.1860Fiscal Year Ended December 31, 20041.30131.39571.17591.2020Fiscal Year Ended December 31, 20031.40011.56721.29431.2965Fiscal Year Ended December 31, 20021.57021.61251.51221.5776Fiscal Year Ended December 31, 20011.54851.60341.49351.5928Fiscal Year Ended December 31, 20001.48481.55831.43531.4995




B)

CAPITALIZATION AND INDEBTEDNESS



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide information under this item.





C)

REASON FOR THE OFFER AND USE OF PROCEEDS



This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide information under this item.



D)

RISK FACTORS

The securities of the Registrant are highly speculative.  In evaluating the Company, it is important to consider that the Company is a resource exploration enterprise and that it is in the exploratory stage of its operations.  To date, the Company has had no revenues and there is no immediate expectation of revenues.  A prospective investor or other person reviewing the Company should not consider an investment in the Registrant unless the investor is capable of sustaining an economic loss of the entire investment.  All costs have been funded through equity and related party advances.  Certain risks are associated with the Company's business including:



Mineral Exploration and Development

The Companys properties are in the exploration stage and are without a known body of commercial ore. Development of any of the Companys properties will only follow upon obtaining satisfactory exploration results. Mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. There is no assurance that the Companys mineral exploration and development activities will result in the discovery of a body of commercial ore on any of its properties. Several years may pass between the discovery and the development of commercial mineable mineralized deposits.  Most exploration projects do not result in the discovery of commercially mineralized deposits.



Trends

The Company's financial success is dependent upon the discovery of properties which could be economically viable to develop.  Such development could take years to complete and the resulting income, if any, is difficult to determine.  The sales value of any mineralization discovered by the company is largely dependent upon factors beyond the Company's control, such as market value of the products produced.  Other than as disclosed herein, the company is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect on the Company's results or financial position.



Operating Hazards and Risks

Mineral exploration involves many risks. The operations in which the Company has a direct or indirect interest will be



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subject to all the hazards and risks normally incidental to exploration, development and production of resources, any of which could result in work stoppages and damage to persons or property or the environment and possible legal liability for any and all damage. Fires, power outages, labour disruptions, flooding, explosions, cave-ins, land slides and the inability to obtain suitable or adequate machinery, equipment or labour are some of the risks involved in the operation of mines and the conduct of exploration programs.  Although the Company will, when appropriate, secure liability insurance in an amount which it considers adequate, the nature of these risks is such that liabilities might exceed policy limits, the liability and hazards might not be insurable, or the Company might elect not to insure itself against such liabilities due to high premium costs or other reasons, in which event the Company could incur significant costs that could have a material adverse effect upon its financial condition.



Economics of Developing Mineral Properties

Substantial expenditures are required to establish ore reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operation or that the funds required for development can be obtained on a timely basis.



The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond the Companys control and which cannot be predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Depending on the price of minerals produced, the Company may determine that it is impractical to commence or continue commercial production.



Environmental Factors

The Company proposes to conduct exploration activities in various parts of Canada.  Such activities are subject to laws, rules and regulations governing the protection of the environment, including, in some cases, posting of reclamation bonds. In Canada, extensive environmental legislation has been enacted by federal, provincial and territorial governments. All phases of the Companys operations are subject to environmental regulation in the jurisdictions in which it operates. Environmental legislation is evolving in a manner which requires stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Companys operations. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations or to preclude entirely the economic development of a property. Environmental hazards may exist on the Companys properties, which hazards are unknown to the Company at present, which may have been caused by previous or existing owners or operators of the properties. The Company is not aware of any environmental hazards on any of the properties held by the Company.



The approval of new mines on federal lands in Canada is subject to detailed review through a clearly established public hearing process, pursuant to the Federal Canadian Environmental Assessment Act.  In addition, lands under federal jurisdiction are subject to the preparation of a costly environmental impact assessment report prior to commencement of any mining operations.  These reports entail a detailed and scientific assessment as well as a prediction of the impact on the environmental and proposed development. Further, under such review process, there is no assurance that regulatory and environmental approvals will be obtained on a timely basis or at all. Failure to comply with the legislation may have serious consequences. Orders may be issued requiring operations to cease or be curtailed or requiring installation of additional facilities or equipment. Violators may be required to compensate those suffering loss or damage by reason of its mining activities and may be fined if convicted of an offense under such legislation.



Canadian provincial mining legislation establishes requirements for the decommissioning, reclamation and rehabilitation of mining properties in a state of temporary or permanent closure. Such closure requirements relate to the protection and restoration of the environment and the protection of the public safety. Some former mining properties must be managed for long periods of time following closure in order to fulfill closure requirements. The costs of closure of mining properties, and, in particular, the cost of long term management of mining properties can be substantial. The Company intends to progressively rehabilitate its mining properties during their period of operation, should any properties become operational, so as to reduce the cost of fulfilling closure requirements after the termination or suspension of production.



The Company has adopted environmental practices designed to ensure that it continues to comply with or exceeds all environmental regulations currently applicable to it.  All of the Companys activities are in compliance in all material respects with applicable environmental legislation.  The Company is currently engaged in exploration with nil to minimal



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environmental impact.



Uncertainty of Ownership Rights and Boundaries of Resource Properties

There is no assurance that the rights of ownership and other rights in concessions held by the Company are not subject to loss or dispute particularly because such rights may be subject to prior unregistered agreements or transfers or other land claims and may be affected by defects and adverse laws and regulations which have not been identified by the Company.  Notwithstanding that the exploration and exploitation concessions in respect of which the Company may hold various interests have been surveyed, the precise boundary locations thereof may be in dispute. Although the Company has exercised the usual due diligence with respect to title to properties in which it has a material interest, there is no guarantee that title to the properties will not be challenged or impugned. The Company's mineral property interest may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. In addition, certain of the mining claims in which the Company has an interest are not recorded in the name of the Company and cannot be recorded until certain steps are taken by other parties. Before a number of claims under option can be recorded in the Company's name, the underlying title holder has to assign title to the Company once the Company satisfies its option agreement obligations. There are no assurances that the underlying title holder will assign title.



Potential Conflicts of Interest

The Directors of the Company serve as directors of other public and private companies and devote a portion of their time to manage other business interests.  This may result in certain conflicts of interest.  To the extent that such other companies may participate in ventures in which the Company is also participating, such directors and officers of the Company may have a conflict of interest in negotiating and reaching an agreement with respect to the extent of each company's participation.  The laws of British Columbia require the directors and officers to act honestly, in good faith, and in the best interests of the company and its shareholders.  However, in conflict of interest situations, directors of the Registrant may owe the same duty to another company and will need to balance the competing obligations and liabilities of their actions.  There is no assurance that the needs of the Registrant will receive priority in all cases.  From time to time, several companies may participate together in the acquisition, exploration and development of natural resource properties, thereby allowing these companies to:  (i) participate in larger programs; (ii) acquire an interest in a greater number of programs; and (iii) reduce their financial exposure with respect to any one program.  A particular company may assign, at its cost, all or a portion of its interests in a particular program to another affiliated company due to the financial position of the company making the assignment.  In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, it is expected that the directors of the Company will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.



Indemnity and Payment of Expenses of Directors and Officers

Article 19.1 of the Registrant's Articles states:



"Subject to the provisions of the Act [the British Columbia Business Corporations Act], the directors shall cause the Company to indemnify and pay all eligible penalties [judgments, penalties or fines awarded or imposed in, or an amount paid in settlement of, a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer.of, the Company or any associated corporation (a) is or may be joined as a party, or (b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding] and expenses [costs, charges and expenses, including legal and other fees] of an eligible party  [an individual who (a) is or was a director or officer of the Company, (b) is or was a director or officer of another corporation (i) at a time when the corporation is or was an affiliate of the Company, or (ii) at the request of the Company, or (c) at the request of the Company, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity] and, where appropriate, the heirs and personal or other legal representatives of an eligible party in accordance with the provisions of the Act.  Each director, alternate director and officer is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 19.1"



Thus, the Registrant may be required to pay amounts to settle such claims that may arise, if any.  The impact of any such possible future indemnity protection cannot be determined at this time.  Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933 (the "1933 Act") may be permitted to directors or officers pursuant to the foregoing provisions, the Registrant has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable.





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Potential Dilution

Commitments exist which could require the issuance of additional shares of the Registrant, such as by way of the exercise of stock options and the exercise of outstanding share purchase warrants.  Furthermore future equity financings, property transactions, and issuance of additional stock options among other things may require the subsequent issuance of the Registrant's securities.



No U.S. Listing of the Company's Securities

The Registrant's Common Shares are listed on the TSX-Venture Exchange ("TSX").  The Registrant's investor base is located principally outside the United States and therefore, it has no current plans to apply for the listing of its shares or to otherwise qualify its securities on any U. S. stock exchange or the NASDAQ automated quotation system.  As a result, the market on the Registrant's securities is limited, particularly in the United States.  If market interest changes, and the Registrant meets the applicable eligibility requirements of NASDAQ or other U.S. exchanges in the future, it may reconsider this policy.  Investors should recognize that U.S. market liquidity will not be readily available.



Canadian Aboriginal Land Claims

Canadian Aboriginal rights may be claimed on Crown properties or other types of tenure with respect to which mining rights have been conferred.  The Company is aware of the mutual benefits afforded by cooperative relationships with indigenous people in conducting exploration activity and is supportive of measures established to achieve such cooperation. While there is, to the Companys knowledge, no existing claim in respect of any of its properties, the advent of any future aboriginal land claims and the outcome of any aboriginal land claims negotiations cannot be predicted.



Competition

The mineral industry is intensely competitive in all its phases.  The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.  Many of the mining companies with which the Company competes have operations and financial strength many times that of the Company.  Nevertheless, the market for the Company's possible future production of minerals tends to be commodity rather than enterprise oriented since mineral products tend to be fungible.  As a result, the competitive factors are principally impacted by overall market issues rather than by corporate presence and strength.  Accordingly, the Company expects to compete by keeping its production costs low (as yet, the Company does not have any property in the development or production stage) through judicious selection of the property to be developed and by keeping overhead and other charges within industry standards.



Governmental Regulation

Operations, development and exploration on the Companys properties are affected to varying degrees by: (i) government regulations relating to such matters as environmental protection, health, safety and labour; (ii) mining law reform; (iii) restrictions on production, price controls, and tax increases; (iv) maintenance of claims; (v) tenure; and (vi) expropriation of property. There is no assurance that future changes in such regulation, if any, will not adversely affect the Companys operations. Changes in such regulation could result in additional expenses and capital expenditures, availability of capital, competition, reserve uncertainty, potential conflicts of interest, title risks, dilution, and restrictions and delays in operations, the extent of which cannot by predicted.



The Company is at the exploration stage on all of its properties. Exploration on the Companys properties requires responsible best exploration practices to comply with Company policy, government regulations, and maintenance of claims and tenure. The Company is required to be registered to do business and have a valid prospecting license (required to prospect or explore for minerals on Crown Mineral land or to stake a claim) in any Canadian province in which it is carrying out work. Mineral exploration primarily falls under provincial jurisdiction. However, the Company is also required to follow the regulations pertaining to the mineral exploration industry that fall under federal jurisdiction, such as the Fish and Wildlife Act.



If any of the Companys projects are advanced to the development stage, those operations will also be subject to various laws and regulations concerning development, production, taxes, labour standards, environmental protection, mine safety and other matters. In addition, new laws or regulations governing operations and activities of mining companies could have a material adverse impact on any project in the mine development stage that the Company may possess.



Uncertainty of Markets for Metals

The global market price for metals is influenced by numerous factors beyond the control of the Company. Such factors include supply and demand, inflation, imposition of export controls, government regulated ad valorem taxes and royalties that may be imposed on metal production, refining costs and penalties, labor problems experienced by large producers and



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market price fluctuations resulting from speculative and production hedging activity.  The exact effect of these factors cannot be accurately predicted and the combination of these factors may result in the Company not receiving an adequate return on invested capital.



Uncertainty of Establishing Mineral Reserves

Locating mineral deposits depends on a number of factors, including the technical skill of the exploration personnel involved.  Whether a mineral deposit, once discovered, will be commercially viable also depends on a number of factors, including the particular attributes of the deposit (i.e., the size and grade of the deposit and the proximity of the deposit to the mine development infrastructure) as well as the market prices of precious metals and ores, which can be highly volatile.  Factors contributing to the uncertainty of establishing reserves of minerals may be resolved by further exploration for additional mineralization, establishment of infrastructure by non-related entities, development of improved mining technologies and increased market prices for the metals.  In the event that the Company's exploration efforts succeed and established reserves of minerals are identified, but various factors make mining not commercially viable, the Company would postpone mine development until there was an improvement in the factors contributing to commercial viability.  In the event that such commercial viability is never attained, the Company could seek to sell or otherwise realize value or could be required to abandon its business and fail as a "going concern."



Need for Additional Capital

Currently, exploration programs and feasibility studies are pursued by the Company with an objective of establishing mineralization of commercial quantities.  The Company may fund the proposed programs and feasibility studies through equity financing and the possible exercise of outstanding options.  Such funding would be dilutive to current shareholders.  Should sources of equity financing not be available to the Company, the Company would seek a joint venture relationship in which the funding source could become entitled to a shared, negotiated interest in the property or the projects.  If exploration programs carried out by the Company are successful in es­tablishing ore of commercial quantities and/or grade, additional funds will be required to develop the properties and reach commercial production.  In that event, the Company may seek capital through further equity funding, debt instruments, by offering an interest in the property being explored and allowing the party or parties carrying out further exploration or development thereof to earn an interest, or through a combination of funding arrangements.  There can be no assurance of such funding sources.  Furthermore, if the Company is not able to obtain the capital resources necessary to meet property payments or exploration or development obligations which now apply or which would apply in joint ventures with others, its potential as a "going concern" could be seriously affected.



Management and Directors

The Company is dependent on a relatively small number of key directors and officers:  John S. Brock, Wayne J. Roberts and Jeannine P.M. Webb.  Loss of any one of those persons could have an adverse affect on the Company.  The Company does not maintain key-man insurance in respect of any of its management.



Price Fluctuations:  Share Price Volatility

In recent years, the international securities markets have experienced high level of price and volume volatility, and the market price of securities of many mineral exploration companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that the continual fluctuations in price will not occur.  In particular, during the financial year ended December 31, 2004, the per share price of the Companys common shares fluctuated from a high of $0.150 to a low of $0.055.



Business Risks of Mineral Exploration

The Company is engaged in the exploration of mineral resource properties.  To date, any exploration program carried out by the Company has been an exploratory search for ore.  Mineral exploration involves significant operating and investment risks and few properties which are explored are ultimately successfully developed into producing mines.  The Company does not have any interests, direct or indirect, in producing mines or mineral properties which, as of the date hereof, have a known body of commercial ore.  Exploration for mineral resources requires compliance with the laws of the jurisdiction in which the exploration is taking place and potential changes to laws relating to exploration activities, environmental considerations and ownership of the properties being explored can have a significant impact on the Company.



Uninsurable Risks

In the course of exploration and development of, and production from, mineral resource properties, certain risks, and in particular, unexpected or unusual geological formations and engineering operating conditions may occur and may expose the Company to liabilities.  Should such liabilities arise the payment of such liabilities may have a material, adverse effect



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on the Company's financial position.  It is not always possible to fully insure against such risks or the Company may elect not to cover such risks because of the high cost of such insurance.  The Company may become subject to liability for pollution or hazards.  Payment of liabilities for claims for such occurrences could reduce or eliminate any future profitability and could result in increasing costs and a decline in the value of the securities of the Company.  Currently, the Company is a named insured with respect to Commercial General Liability and Excess Liability in a gross amount limited to $10 million (Cdn.) for each occurrence.



Market Risk

The Company is in the business of mineral exploration.  Metal prices and foreign exchange rates may fluctuate widely from time to time.  The Company has not entered into market instruments for trading or other purposes.



Variations in Operating Results

The Registrant was incorporated on February 24, 1987 and since incorporation has not realized net income nor paid dividends.  During the years ended December 31, 2004, 2003 and 2002, the Company had net losses of $455,500, $2,096,679 and $1,022,609 respectively, deficits of $21,076,533, $20,621,033 and $18,524,354 respectively, and per share losses of $0.02, $0.12 and $0.12 respectively. There is no assurance that these trends in operating results will change.



Plan of Operations and Financial Sources and Liquidity

During 2004, the Company issued 415,250 Common Shares for gross proceeds of $123,700. At December 31, 2004, the Registrant had cash and cash equivalents of $451,514, of which $342,964 is restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital of $99,282.



At May 13, 2005, the Registrant had 36,314,366 Common Shares outstanding, outstanding options expiring on various dates until September 17, 2009, entitling the holders to purchase up to 3,923,000 Common Shares at prices ranging from $0.10 to $0.15 per share, and warrants entitling the holder to purchase up to 820,000 shares at $0.15 per share until December 22, 2005.



To date, the Companys mineral exploration activities have been funded through sales of common shares.  The Companys ability to continue operations is dependent on managements ability to secure additional financing.  Management is actively pursuing such additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future.  Because of this uncertainty, there is substantial doubt about the ability of the Company to continue as a going concern.  The Consolidated Financial Statements do not include the adjustments that would be necessary should the Company be unable to continue as a going concern.



Additional Financing

In order to continue exploring its mineral properties and acquiring additional properties, management may be required to pursue additional sources of financing. The Company has limited financial resources and there is no assurance that additional funding will be available to allow the Company to fulfill its obligations on existing exploration properties. Failure to obtain additional financing could result in delay or indefinite postponement of further exploration and the possible, partial or total loss of the Companys interest in certain properties. The Company may, in the future, be unable to meet its share of costs incurred under agreements to which it is a party and the Company may consequently have its interest in the properties subject to such agreements reduced. Furthermore, if other parties to such agreements do not meet their share of such costs, the Company may be unable to finance the cost required to complete recommended programs.





ITEM IV

INFORMATION ON THE COMPANY



A)

HISTORY AND DEVELOPMENT OF THE COMPANY



Canadian Empire is a British Columbia corporation incorporated as Progressive Minerals Ltd. on February 24, 1987 by registration of its British Columbia Company Act Memorandum and Articles.  On February 10, 1989, the name was changed to Northern Crown Mines Ltd. On August 14, 2002, the name was changed to Canadian Empire Exploration Corp.



Canadian Empire's head office and principal place of business is located at #1205 - 675 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1N2 (telephone:  (604) 687-4951; facsimile:  (604) 687-4991).  The principal contact person is John S. Brock, President, Chief Executive Officer and a Director.  Minera Reina Isabels and Minera Tatemas registered offices are at San Francisco No. 656-601, Col. Del Valle, C.P. 03100, Mexico, D.F.





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Canadian Empire maintains a calendar fiscal year.  The Company's financial statements are stated in Canadian Dollars and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for periods presented with U.S. GAAP except as noted in the notes to the Company's financial statements.  See "Item XVII Financial Statements".



The Registrant's Common Shares are listed on the TSX Venture Exchange  (formerly the Canadian Venture Exchange) and trade on the facilities of the TSX Venture Exchange under the symbol "CXP."  On December 5, 2001, the Registrant consolidated its capital on a ten (10) old Common Shares for one (1) new share basis, changed its trading symbol from NCW to CXP, and received a new CUSIP number (664903 50 7). The Registrant is a reporting issuer and an exchange issuer under the Securities Act, R.S.B.C. 1993, c.418 (the "BC Act"), is a reporting issuer under the Securities Act, R.S.A. 2000, c S-4 (the "Alberta Act"), is a reporting issuer under the Securities Act of Manitoba, ccsm c.S50 (the "Manitoba Act") is a reporting issuer under the Securities Act R.S.O. 1990, c. S5 (the "Ontario Act") and is not in default of any requirements of the BC Act, the Alberta Act, the Manitoba Act or the Ontario Act or the rules and regulations pertaining to those acts.



During the year 2001, the Company abandoned its mineral interests in Mexico and accordingly has no further right, title and obligation in respect of those interests.  During 2002 and 2003, the Company entered into various agreements to acquire the right to various mineral properties located in Canada.   At December 31, 2003, the Company determined that, results not meeting expectations, it would no longer maintain its interests in these mineral properties and wrote off all costs associated with the properties.  During 2004, the Company entered into various agreements to acquire the right to various mineral properties located in Canada.  .See Item V  Operating and Financial Review and Prospects and Description of Property.





B)

BUSINESS OVERVIEW



TO DATE, THE COMPANY HAS FOCUSED ON ACQUIRING EXPLORATION RIGHTS AND DETERMINING WHETHER THE PROPERTIES HAVE SUFFICIENT MINERALIZATION TO SUPPORT FULL DEVELOPMENT.  TO DATE, THE COMPANY HAS NOT GENERATED REVENUES FROM ITS EXPLORATION OPERATIONS AND THERE IS NO IMMEDIATE EXPECTATION OF ANY SUCH REVENUES.

During 2004, the Company acquired the right to earn an 80% interest in the Atikokan West Property in Ontario, entered into an option agreement to acquire a 100% interest in the Barrington copper-gold porphyry property located in northwestern British Columbia, entered into an agreement to earn a 65% interest in the Silver Hope property in British Columbia and entered into the McBride grubstake agreement.



Atikokan West

The Atikokan West property in northwestern Ontario hosts several zones of structurally controlled gold mineralization where prior drilling intersected intervals to 6.2 g/t Au over 10.4 metres.  During 2004, the Company drilled 5 holes.  Continued drilling is contemplated in 2005.



Barrington

The Barrington property, located in northwestern British Columbia, covers several zones of porphyry copper-gold mineralization.  During 2004, the Company conducted an initial surface sampling program and determined the attractive copper-gold values to be hosted in narrower zones than anticipated.



Silver Hope

The Silver Hope property, located in central British Columbia, covers 3 zones of copper-silver mineralization.  During 2004, the Company conducted an eight-hole drilling program to test for high-grade feeder zones at depth below the known zones.  The program was successful in intersecting  high-grade copper-silver mineralization at the Hope Zone.



McBride Grubstake

During 2004, the Company entered into a grubstake agreement with prospectors to fund grassroots exploration for shale hosted stratabound nickel-copper-precious metals mineralization in the McBride area of British Columbia.  A large block of claims were subsequently acquired in 2005.



During 2003, the Company continued to work under a strategic alliance with Teck Cominco in the acquisition of Canadian exploration projects with drill targets indicating large metal systems.



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Yukon Olympic

The Yukon Olympic Property, located in the Yukon, has an iron oxide copper gold system with a 2.0 milligal gravity anomaly and magnetic anomaly over a length of 8 kilometres and a width of 1 kilometre.  Copper-bearing hematitic breccia was discovered near the eastern end of the geophysical anomalies.  A drilling program conducted in 2002 failed to intersect significant mineralization and the property was relinquished in 2003 to an underlying vendor.



Big Bulk and VMS

During 2003, the Company completed 1664 metres of diamond drilling in 11 holes on the Big Bulk copper-gold property located in northwestern B.C.    Surface exploration work was conducted on the adjacent VMS property.  With exploration results failing to meet expectations, the Big Bulk and VMS properties were relinquished to underlying vendors.



Hemlo West

During 2002, seven drill holes were completed at the Hemlo West property, located in the western portion of Ontarios Hemlo Gold Camp, to test continuity of gold mineralization in a 1200 metre by 300 metre section of the Hemlo-Heron Bay Shear.  Although most of the holes intersected alteration, sulphides, quartz veining and anomalous gold values characteristic of the Hemlo Camp host rocks, exploration results did not meet expectations and the property was relinquished  to its vendor in 2003.



Amos

Six gold-enriched massive sulphide VMS targets were drill tested during 2002 at the Amos Project, located near Amos, Quebec.  Drill results did not meet expectations and during 2003 the property was relinquished  to its vendor.



Meridian

In 2002, five drill holes were completed on the Meridian massive sulphide project in Northern Manitoba with inconclusive drilling results.  The option was relinquished to the propertys underlying vendor in 2003.



During 2002, the Company acquired the rights to the Hemlo West, Amos, Meridian, Yukon Olympic, Big Bulk and VMS Properties. Additional mineral properties were considered.



TO THE COMPANY'S KNOWLEDGE, THE MINERAL PROPERTIES CANNOT BE PROVEN TO CONTAIN A BODY OF COMMERCIAL ORE UNTIL A POSITIVE FEASIBILITY STUDY DEMONSTRATING COMMERCIAL PRODUCTION HAS BEEN PREPARED BY INDEPENDENT CONSULTING ENGINEERS.



C)

ORGANIZATIONAL STRUCTURE



Canadian Empire has one wholly owned subsidiary, Minera Reina Isabel and 90% ownership in another subsidiary, Minera Tatemas, both corporations formed under the laws of Mexico on March 27, 1991, and February 13, 1997 respectively.  The remaining 10% of Minera Tatemas is owned by Enrique Gaitan Enriquez.  As the Company no longer holds any mineral property interest in Mexico, Minera Tatemas and Minera Reina Isabel are currently inactive.  During 1999, the Company sold its shareholdings in one of its Mexican subsidiaries, Minera Sierra Pacifico, S.A. de C.V. ("Minera Sierra") to an arms length purchaser. Minera Sierra was incorporated under the laws of Mexico on March 27, 1991.



D)

DESCRIPTION OF PROPERTY



Exploration and Mineral Property Expenditures for Fiscal 2004:





ATIKOKANBARRINGTONSILVER HOPEYUKON OLYMPICMC BRIDEHEMLO WESTBIG BULKGENERALTOTALACCOMMODATION2,1122,0064,720-2,748--1,70913,295ASSAYS & GEOCHEMICAL ANALYSIS19,5081,6125,558-4,108--7,59438,379CONSULTING49,92818,14628,223-32,620--15,494144,411DRILLING200,686-180,386----5,912386,984ENVIRONMENTAL & MINE PERMIT4,500-------4,500




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EXPEDITING984958181-4-119932FIELD SUPPLIES7,9793546,816102,679-151,74919,602FUEL--609-124---732MAPS, PRINTING & DRAFTING1,6951271,899-3,019-(109)1,1827,813MINERAL PROPERTY EXPENDITURES-14,30094,000-----108,300PROJECT MANAGEMENT FEES29,8964,31621,141628,74688657,42471,739SALARIES & WAGES30,0367,73823,99060718,276-91046,937128,493TRANSPORTATION56,80023,92211,4837416,950866-11,035121,130TRENCHING & ROADS----448--8801,328TOTAL403,23772,570379,40683389,718958881100,0331,047,637




ATIKOKAN WEST PROPERTY

On February 17, 2004, the Company announced the agreement with Teck Cominco Limited (Teck Cominco), whereby the Company may earn an 80% interest in the Atikokan West Property by making staged exploration expenditures in the aggregate amount of $1,000,000 by December 31, 2008 and then maintaining that interest by funding ongoing exploration through pre-feasibility.  After the completion of a pre-feasibility study, Teck Cominco may back-in for a 60.8% interest in the project by funding a minimum of 200% of the Companys prior expenditures and completing a feasibility study.  During the currency of the agreement, Teck Cominco will be responsible for making all cash and advance royalty payments to an underlying vendor.  Under the terms of the underlying agreement, Teck Cominco has the right to earn a 100% property interest subject to a 2% NSR royalty.



The Atikokan West Property, located near Atikokan, Ontario, consists of 162 claim units located along a length of 8 kilometres that cover 7 structurally controlled gold occurrences in favourable volcanic rocks geologically analogous to high-grade gold systems in the Red Lake camp.  Six of these gold occurrences have not seen prior drilling.  Work to date has outlined targets ready for drill testing, including the depth extensions of mineralization identified by prior drill holes with grades of 6.2 g/t gold over 10.4 metres, as reported by the Ontario Ministry of Northern Development and Mines.



During 2004, the Company conducted a detailed prospecting program and the completion of 5 diamond drill holes for a total footage of 1561 metres testing the Zephyr gold zone.  Prospecting of additional zones on the property did not yield encouraging results.  The 2004 exploration expenditures on the Atikokan West Property totaled $403,237.



Assay results of the altered and mineralized drill hole intercepts yielded low gold values.  A compilation of historic and current results will be conducted in early 2005 with a focus to establishing targets warranting continued drilling in 2005.



BARRINGTON PROPERTY

On July 29, 2004, the Company announced the acquisition of the Barrington Property whereby the Company has the option to earn a 100% interest by making staged cash payments totaling $150,000 ($10,000 paid in 2004), issuing in stages 250,000 shares (50,000 shares issued in 2004 at fair value of $3,000), and completing exploration expenditures of $500,000 on or before June 1, 2008.  The property vendor will retain a 2% NSR, of which the Company will have the right to buy down 1% for $1.0 million.  Effective June 1, 2009, the underlying vendor will receive the greater of an advance royalty of $5,000 annually or the specified NSR.  In accordance with TSX-Venture Exchange (the "Exchange") Policy 5.1, the Company paid a finders fee of $1,800 and 5,000 shares in the capital of the Company to an arms length individual.  In connection with the acquisition of the Barrington Property, the Company paid $1,000 and issued 5,000 shares at fair value of $300 to a finder.



The Barrington Property, located in northwestern British Columbia, measures approximately 8 kilometres by 3 kilometres, and covers 7 known prospects of copper-gold mineralization associated with the border phase of a six-kilometre oval-shaped alkaline porphyry intrusion.  Chip sampling by the vendor over a 90 by 100 metre area yielded average assay values of 0.63% copper, 0.68 g/t gold and 12 g/t silver within a quartz sheeted vein system at the Discovery Prospect.  Chip sampling of quartz veins in the Bonanza Prospect reported grades to 29.0 g/t gold over 1.0 metre.  A single drill hole collared at the Discovery Prospect by a prior worker did not reach target depth.  All other prospects within the Barrington Property have not seen prior drilling.  The combination of widespread porphyry copper-gold style mineralization associated with a multi-phase alkaline intrusion suggests opportunity for drill-defining zones of copper-gold mineralization.





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During 2004, the Company conducted a preliminary mapping and sampling program to define drill targets and expended $72,570 on the acquisition and exploration of the Barrington Property.  The results of the field program suggested the attractive higher copper-gold grades were limited to narrower zones than originally anticipated and did not warrant drill testing.



SILVER HOPE PROPERTY

On October 21, 2004, the Company announced entering into an agreement with Sci-Tek Resources Ltd. (Sci-Tek), a private B.C. company, whereby the Company may earn a 65% interest in the Silver Hope Property by making cash payments of $315,000 ($45,000 paid in 2004) and share payments of 1,000,000 shares (200,000 shares issued in 2004 at fair value of $19,000) by December 31, 2008 to Sci-Tek and completing $5.0 million in exploration expenditures by December 31, 2009.  The Company and Sci-Tek may then form a joint venture, with each party providing pro-rata funding of ongoing exploration.  Non-contribution by either party to the joint venture will result in pro-rata dilution of interest, convertible to a 2% NSR subject to a buy-down provision from the relinquishing party for $2.0 million.



The Silver Hope Property is contiguous with the southern boundary of the past producing Equity Silver Mines Property located in central British Columbia and covers prospective stratigraphy for discovery of stratabound copper-silver-gold mineralization.  Prior workers conducted several drilling programs along a two-kilometre strike length of favourable geology that partially outlined 3 near-surface bulk tonnage copper-silver zones.  The zones, named Hope, Superstition and Gaul by prior workers, occur along a favourable horizon in pyroclastic volcanics that have been tested by approximately 40 holes.  No resources were calculated although drill holes intersected reported grades to 0.71% copper and 12.9 g/t silver over 65.4 metres that included high-grade zones that assayed 7.9% copper and 105 g/t silver over 4.0 meters.



A re-interpretation of this style of mineralization along a four-kilometre length that includes two deposits that saw production by Equity Silver Mines and 3 zones on the Silver Hope Property suggests opportunity for re-classification of the deposits as stratabound with a hydrothermal overprint.



During 2004, the Company completed 2141 metres of diamond drilling in 8 holes on the Hope and Gaul Zones that tested for higher-grade copper-silver mineralization at depth.  The program was successful in confirming the presence of higher-grade mineralization at depth at the Hope Zone where a breccia feeder zone was outlined.  No such feeder zone was found at the Gaul Zone.



The Companys 2004 acquisition and exploration expenditures on the Silver Hope Property totaled $379,406.



In 2005, the Company plans a 2000-metre follow-up drilling program at the Hope Zone to test the ultimate size of the high-grade copper-silver feeder system.



MCBRIDE GRUBSTAKE AGREEMENT

On July 1, 2004, the Company entered into the McBride Grubstake Agreement with two prospectors whereby the Company may earn 90% interest in any mineral claims acquired by the prospectors by making exploration expenditures of $1.0 million, cash payments of $140,000 and 250,000 unit payments on or before December 31, 2008.  Each unit shall consist of one common share of the Company and one 12-month share purchase warrant.  The Company has the right to purchase the remaining 10% interest in the project mineral claims for $100,000 and 1.5 million shares of the Company to be paid to the prospectors.  The prospectors retain a 1% NSR which the Company can buy down 0.5% for $1.0 million.



The McBride project includes a program of initial geochemical silt sampling and prospecting of a Proterozoic shale basin hosting a 50-kilometre long metal-rich horizon.  The exploration objective is discovery of Sedex-style nickel-copper-precious metal mineralization.



During 2004, the Company expended $89,718 on the McBride project.



Wayne J. Roberts, P.Geo, Vice-President, Exploration of the Company, a Qualified Person, has reviewed and compiled the mineral projects technical information presented in this document.



TO THE COMPANY'S KNOWLEDGE, THE MINERAL PROPERTIES CANNOT BE PROVEN TO CONTAIN A BODY OF COMMERCIAL ORE UNTIL A POSITIVE FEASIBILITY STUDY DEMONSTRATING COMMERCIAL PRODUCTION HAS BEEN PREPARED BY INDEPENDENT CONSULTING ENGINEERS.







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ITEM V

OPERATING AND FINANCIAL REVIEW AND PROSPECTS



The following discussion of the financial condition, changes in financial condition and results of operations of the Company for the years ended December 31, 2004, 2003, and 2002 should be read in conjunction with the Consolidated Financial Statements of the Company for the years ended December 31, 2004, 2003, and 2002. Except as otherwise indicated, all dollar amounts contained in this discussion and analysis and the Consolidated Financial Statements are in Canadian dollars.  The financial information presented in the Consolidated Financial Statements was prepared in accordance with generally accepted accounting principles (GAAP) in Canada.  Note 9 of these Consolidated Financial Statements of the Company sets forth the material differences between Canadian and U.S. GAAP.  The Company capitalizes property acquisition and exploration expenditures relating to mineral properties in which the Company has an active interest.  In the event that such properties become inactive or prove uneconomic, they are written off.   For a more detailed description of the properties, see Item IV - Information of the Company - Description of Property.



A)

OPERATING RESULTS



OVERALL PERFORMANCE



RESULTS OF OPERATION OF FISCAL 2004 VS FISCAL 2003

For the fiscal year ended December 31, 2004, the Company had total assets of $1,452,157 as compared with $1,085,920 for the fiscal year ended December 31, 2003.  Resource assets at December 31, 2004 were $944,932 as compared with $nil at December 31, 2003.  The increase in resource assets at December 31, 2004 results from agreements entered into to earn interests in the various mineral properties.  At December 31, 2004 the Company had cash and cash equivalents of $451,514 (2003: $1,067,042) of which $342,964 (2003: $927,891) is restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital deficiency of $99,282 (2003: $90,767).  Current liabilities remained relatively unchanged at December 31, 2004 and 2003, as to $252,243 at December 31, 2004, and $239,196 at December 31, 2003.  During 2003, the Company was advanced $30,000 by a related party owned by Directors of the Company and charged interest in the amount of $412.  The interest was paid during 2003 and the principal was repaid in 2004.



During 2004, the Company incurred administrative expenses of $398,841 (2003: $439,041).  The overall decrease relates to the proration of costs between companies managed within the facilites housing the Company.  Management and administrative services and Office operation and facilities are provided by Badger & Co. Management Corp. ("Badger & Co.") (see "Related Party Transactions"), and are established on the basis of the time expended on management of the Company.  Stock-based compensation is a non-cash item, resulting from the application of the Black-Scholes Option Pricing Model using assumptions in respect of expected dividend yield, average risk-free interest rates, expected life of the options and expected volatility.  The $137,732 (2003: $145,509) represents the fair value of the vested portion of options for the year.   The tax penalty of $30,106 (2003: $14,309) results from an amount due to Canada Revenue Agency ("CRA") on the renunciation of flow-through funds to the participants in the year 2003 for funds expended in 2004.  During 2004, the Company earned interest income of $14,212 as compared with $9,144 for the year 2003, due to increased cash balances available during the year.



During 2004, under the Company's Stock Option Plan, incentive stock options allowing for the purchase in the aggregate of up to 2,458,000 shares in the capital of the Company at $0.10 per share until September 17, 2009 were granted to directors, officers and employees.



Exploration and mineral property expenditures in fiscal 2004 increased to $1,047,638 as compared with $659,467 for 2003 relating primarily to the Atikokan West and Silver Hope properties.  The Company wrote off exploration expenditures of $2,680 relating to disposition costs of the Yukon Olympic, Hemlo West, Meridian, VMS and Big Bulk properties, as compared with $1,475,505 for 2003.  The Company did not write off any mineral property acquisition costs in 2004, as compared with $113,814 in 2003.





RESULTS OF OPERATIONS OF FISCAL 2003 VS FISCAL 2002

For the fiscal year ended December 31, 2003, the Company had total assets of $1,085,920 as compared with $1,807,957 for the fiscal year ended December 31, 2002.  Resource assets at December 31, 2003 were $nil as compared with $1,008,652 at December 31, 2002.  The decrease in resource assets at December 31, 2003 resulted from the return of all properties to



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the vendors during the year.  As a result of the financings completed during 2003, at December 31, 2003, the Registrant had cash and cash equivalents of $1,067,042 (2002: $729,735), of which $927,891 was restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital of $90,767.  Current liabilities remained relatively unchanged at December 31, 2003 and 2002, as to $239,196 at December 31, 2003, and $186,207 at December 31, 2002.  During 2003, the Company was advanced $30,000 by a related party owned by Directors of the Company and charged interest in the amount of $412.  The interest was paid during 2003 and the principal was repaid in 2004.



Exploration and mineral property expenditures in fiscal 2003 were of $659,467, as compared with $1,403,403 for fiscal 2002, when funds were expended primarily on the Hemlo West, Amos, Yukon Olympic, Big Bulk and VMS Properties. The decrease from $1,403,403 in fiscal 2002 to $659,467 in fiscal 2003 resulted from the abandonment of properties during 2003 and reduced activity at the Hemlo West, Amos, Yukon Olympic, Big Bulk and VMS Properties prior to their return to the vendors.



Due to the reduced activity in fiscal 2003, the administrative expenses remained relatively unchanged in fiscal 2003 ($439,041) as compared with fiscal 2002 ($432,836). Audit and related services increased to $35,458 as compared with $14,887 for 2002 as a result of increased regulatory requirements.  The tax penalty of $14,309 for 2003 (2002- $nil) results from the penaly due to CRA on the renunciation of flow-through funds to the participants in the year 2002 for funds not expended until 2003.  Legal fees reduced in 2003 to $16,046 as compared with $78,474 in 2002 due to the Short-Form Offering Document completed in 2002 to raise gross proceeds of $1,620,000, agreements entered into with Teck Cominco Limited, amendment to existing warrants to make them transferable, the change of name of the Registrant from Northern Crown Mines Ltd. to Canadian Empire Exploration Corp.  Stock-based compensation is a non-cash item, resulting from the application of the Black-Scholes Option Pricing Model using assumptions in respect of expected dividend yield average risk-free interest rates, expected life of the options and expected volatility.  The $145,509 (2003: $nil) represents the fair value of the vested portion of options for the year.   During 2003, the Company earned interest income of $9,144 as compared with $4,650 for the year 2002, due to the higher cash balances available during the year.



Shareholder communications in fiscal 2003 decreased to $44,201 as compares with $136,145 for fiscal 2002, as a result of the realignment of projects and the return of properties to the vendors. Interest expenses for fiscal 2003 were $412 as compared with $nil in fiscal 2002.  Fiscal 2003 saw an advance of $30,000 made to the Company by a related party owned by Directors of the Company.  Interest of $412 was paid in connection with the advance and the principal was repaid in the 2004.



During fiscal 2003, the Company wrote off exploration expenditures of $1,475,505 and property acquisition expenditures of $113,814  previously capitalized as resource assets relating to the relinquished properties, as compared with $349,104 and $nil respectively for fiscal 2002 relating primarily to the disposition of the Meridian Property.



RESULTS OF OPERATIONS OF FISCAL 2002 VS FISCAL 2001

For the fiscal year ended December 31, 2002, the Company had total assets of $1,807,957 as compared with $265,271 for the fiscal year ended December 31, 2001.  Resource assets at December 31, 2002 were $1,008,652 as compared with $nil at December 31, 2001.  The increase in resource assets at December 31, 2002 results from agreements entered into to earn interests in the Hemlo West, Amos, Yukon Olympic, Big Bulk and VMS Properties.  The reduction in resource assets at December 31, 2001 results from the relinquishing of the Guadalupe Property to the vendors.



During fiscal 2002, the Company wrote off exploration expenditures of $394,751 and property acquisition expenditures of $nil previously capitalized as resource assets relating primarily to the Meridian Property, as compared with $63,245 and $5,091 respectively for fiscal 2001, relating primarily to the disposition of the Guadalupe Property.



Exploration and mineral property expenditures in fiscal 2002 were of $1,403,403, as compared with $68,336 for fiscal 2001 as a result of funds expended funds for review of properties under consideration. Due to the increased activity, administrative expenditures increased in fiscal 2002 ($432,836) as compared with fiscal 2001 ($323,350).



Shareholder communications in fiscal 2002 increased to $136,145 as compared with $455 for fiscal 2001, due to increased communication with shareholders relating to the exploration programs and the attendant costs. Interest expenses decreased to $nil in fiscal 2002 as compared with $4,013 in fiscal 2001 due to the repayment of advances made to the Company by John S. Brock Limited during 2001. Office operations and facilities reduced from $113,309 in 2001 to $67,350 in 2002 due to the proration of costs between companies managed within the facilites housing the Company.





18



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SUMMARY OF QUARTERLY RESULTS



The following table sets forth a comparison of revenues and earnings for the previous eight quarters ending with December 31, 2004.





SUMMARY QUARTERLY INFORMATION

Quarter Ended:December 31,  2004
($)September 30, 2004
($)June 30, 2004
($)March 31, 2004
($)December 31,  2003
($)September 30, 2003
($)June 30, 2003
($)March 31, 2003
($)Current Assets495,925727,480859,9601,083,8831,076,320887,916529,683614,108Resource Assets944,932164,63592,6086,15901,213,5601,109,5221,045,546Current Liabilities252,243157,386137,100174,122239,196255,491177,563121,612Shareholders Equity
Capital Stock
Allotted but not Issued
Special Warrants
Contributed Surplus
Stock Options and Warrants
Deficit21,403,422
525,000
0
64,784

283,241
(21,076,533)21,384,423
0
0
64,784

276,802
(20,970,514)21,381,165
0
0
64,784

175,262
(20,784,978)21,381,165
0
0
64,784

175,262
(20,695,690)21,257,464
0
0
64,784

145,509
(20,621,033)20,436,413
0
0
64,784

0
(19,116,912)20,076,182
0
0
64,784

0
(18,679,325)20,076,182
0
0
64,784

0
(18,602,924)Loss for the period(106,020)(185,535)(89,288)(74,657)(1,504,121)(437,587)(76,401)(78,570)Working Capital (Deficit)243,682(1)(135,668)(65,188)5,614837,124(1)632,425352,120492,496Basic and diluted loss per share(0.005)(0.012)(0.003)(0.003)(0.084)(0.028)(0.005)(0.005)


(1)

At December 31, 2004 the Company had cash and cash equivalent of $451,514 (2003: $1,067,042) of which $342,964 (2003: $927,891) is restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital deficiency of $99,282 (2003: $90,767).



Variations in annual and quarterly loss and loss per shares are affected by the administration costs and by the write down or write offs of mineral property carrying costs.  In accordance with its policies, management reviews the carrying value of the deferred mineral property acquisiton and exploration expenditures to assess whether there has been any impairment in value.  In the event that mineral deposits are determined to be insufficient to recover the carrying value of any property, the carrying value is written down or written off, as appropriate.



No dividends have been paid by the Company, and the Company has no present intention of paying dividends on its Common Shares as it anticipates that all available funds will be invested to finance the growth of its business.





B)

LIQUIDITY AND CAPITAL RESOURCES



LIQUIDITY

FISCAL 2004 VS FISCAL 2003

As a result of the financings completed during 2004, at December 31, 2004, the Company had cash and cash equivalents of $451,514 (2003: $1,067,042), of which $342,964 (2003: $927,891) is restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital of $99,282 (2003: $90,767). Accounts receivable at December 31, 2004 of $44,411 (2003: $9,278) were comprised of Goods and Services Tax credits.  Accounts payable at December 31, 2004 of $252,243 (2003: $239,196) were comprised of an accrual for audit services for the year 2004 of approximately $30,000 (2003: $24,000), a penalty in respect of the renunciation of flow-through funds of approximately $30,000 (2003: $14,000), an amount owing for legal services of approximately $15,000 (2003: $18,000) and an amount owing for taxes on the disposition of the Guadaupe property of approximately $96,000 (2003: $96,000), payment due for the acquisition of the Silver Hope Property ($30,000) and amounts owing to Badger & Co. Management Corp. ("Badger & Co.") for cost of administrative and exploration services provided (see "Related Party Transactions") in the amount of $50,612 (2003: $46,394).  In addition, at December 31, 2003, the Company owed $30,000 to John S. Brock Limited, a company owned by the CEO and President of the Company, and the Vice-President, Exploration of the Company, for an advance made to the Company during the year.  The advance was repaid in 2004.

During 2004, the Company issued 415,250 common shares in connection with the exercise of 420,500 warrants for total proceeds of $123,700, of which 3,500 common shares were issued in relation to flow-through warrants for proceeds of $525.  The Company received, in connection with a private placement, gross proceeds of $525,000, of which $350,000 were flow-through funds. The shares were issued in 2005.  During 2003, the Company issued 11,750,000 common shares in connection with private placements for total gross proceeds of $1,266,000 (8,744,000 common shares issued for flow-through funds of $924,400), issued 820,000 common shares on the exercise of special warrants  for gross proceeds of $246,000, issued 63,000 shares for share issue costs valued at $6,300 and paid $96,156 for share issue costs.



19



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At December 31, 2004, the Company had outstanding 820,000 warrants allowing for the purchase of up to 820,000 common shares at $0.15 per share until December 22, 2005, and stock options allowing  for the purchase of up to 1,365,000 common shares at $0.15 per share until January 3, 2008, 100,000 common shares at $0.15 per share until August 21, 2008, and 2,458,000 common shares at $0.10 per share until September 17, 2009.  At December 31, 2003, the Company had stock options outstanding allowing for the purchase of up to 1,580,000 common shares at $0.15 per share until January 3, 2008 and 100,000 common shares at $0.15 per share until August 21, 2008.  At December 31, 2003, the Company had warrants outstanding as follows:

Number of warrantsNumber of common shares issuable on the exercise of warrantsExercise price ($)Expiry date1,500,000 (1)1,500,0000.15May 22/044,050,000 (2)2,025,0000.15June 18/041,080,000 (1)1,080,0000.35June 18/04820,000 (3)820,0000.30June 30/04973,000 (4)486,5000.10Sept 15/04200,000 (1)200,0000.20Sept 20/041,624,000 (1)1,624,0000.14Oct 12/04100,000 (1)100,0000.20Oct 22/04820,000820,0000.15Dec 22/0511,167,0008,655,500




(1)

Expired unexercised

(2)

3,500 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised

(3)

410,000 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised

(4)

1,750 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised



The company has no contractual obligations at December 31, 2004.  All property option payments are made at the election of the Company.



FISCAL 2003 VS FISCAL 2002

As a result of the financings completed during 2003, at December 31, 2003, the Company had cash and cash equivalents of $1,067,042 (2002: $729,735), of which $927,891 (2002: $nil) was restricted to flow-through expenditures on Canadian mineral properties, resulting in an unrestricted working capital of $90,767 (2002: $613,098).  Accounts receivable at December 31, 2003 of $9,275 (2002: $69,570) were comprised of Goods and Services Tax credits.  Accounts payable at December 31, 2003 of $239,196 (2002: $186,207) were comprised of an accrual for audit services for the year 2004 of approximately $24,000 (2002: $16,000), a penalty in respect of the renunciation of flow-through funds of approximately $14,000 (2002: $nil), an amount owing for legal services of approximately $18,000 (2002: $27,000) and an amount owing for taxes on the disposition of the Guadalupe property of approximately $96,000 (2002: $96,000), payment due for the acquisition of mineral property $nil (2002: $2,000) and amounts owing to Badger & Co. for cost of administrative and exploration services provided (see "Related Party Transactions") in the amount of $46,394 (2002: $30,566).  In addition, at December 31, 2003, the Company owed $30,000 to John S. Brock Limited, a company owned by the CEO and President of the Company, and the Vice-President, Exploration of the Company, for an advance made to the Company during the year.  The advance was repaid in 2004.

During 2003, the Company issued 820,000 special warrants for funds in the amount of $246,000 received in 2002.  The special warrants were converted during 2003 and the Registrant issued 820,000 units, with each unit comprised of one Common Share in the capital of the Registrant and one Common Share purchase warrants entitling the holder to acquire one Common Share in the capital of the Registrant at $0.30 per Common Share until June 30, 2004.



20



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In connection with private placements, the Registrant issued Common Shares and warrants as follows:



Number of flow-through  Common SharesNumber of non-flow-through Common SharesTotal Common SharesPrice per Common Share
($)Total
($)Number of non-flow-through warrants6,244,0002,186,0008,430,0000.10843,0002,186,0002,500,00002,500,0000.12300,00000820,000820,0000.15123,000820,0008,744,0003,006,00011,750,0001,266,0003,006,000




In respect of the above private placements, the Registrant also issued to agents who introduced arms-length purchasers to the Registrant 63,000 units, each unit comprised of one Common Share and one Common Share purchase warrant, with two Common Share purchase warrants entitling the holder to acquire one Common Share at $0.10 per Common Share until September 14, 2004 and 348,000 warrants, each warrant entitling the holder to acquire one Common Share at $0.14 per Common Share until October 12, 2004.  At December 31, 2003 all of the warrants remained unexercised.

In connection with financings completed in 2002, the Registrant amended the terms of warrants as follows:

i.

the expiry date of 1,500,000 warrants allowing for the purchase of 1,500,000 Common Shares at $0.15 per Common Share was extended from May 23, 2003 to May 22, 2004

ii.

the expiry date of 1,080,000 agents warrants allowing for the purchase of 1,080,000 Common Shares at $0.35 per Common Share was extended from June 18, 2003 to June 18, 2004

iii.

the exercise price of 4,050,000 warrants allowing for the purchase of 2,025,000 Common Shares was amended from $0.35 per Common Share to $0.15 per Common Share and the expiry date was extended from June 18, 2003 to June 18, 2004.

During 2003, 2,985,903 warrants allowing for the purchase of 1,635,903 Common Shares expired unexercised.





During 2002, the Company issued 9,841,666 common shares for gross proceeds of $ 2,198,000, issued 200,000 shares for share issue costs valued at $60,000 and paid $422,765 for share issue costs.  The Company also issued 390,000 common shares on the exercise of warrants for proceeds of $117,000.

At December 31, 2003, the Company had stock options outstanding allowing for the purchase of up to 1,580,000 common shares at $0.15 per share until January 3, 2008 and 100,000 common shares at $0.15 per share until August 21, 2008.  At December 31, 2003, the Company had warrants outstanding as follows:

Number of warrantsNumber of common shares issuable on the exercise of warrantsExercise price ($)Expiry date1,500,000 (1)1,500,0000.15May 22/044,050,000 (2)2,025,0000.15June 18/041,080,000 (1)1,080,0000.35June 18/04820,000 (3)820,0000.30June 30/04973,000 (4)486,5000.10Sept 15/04200,000 (1)200,0000.20Sept 20/041,624,000 (1)1,624,0000.14Oct 12/04100,000 (1)100,0000.20Oct 22/04820,000820,0000.15Dec 22/0511,167,0008,655,500




(1)

Expired unexercised

(2)

3,500 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised

(3)

410,000 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised

(4)

1,750 common shares issued on exercise of warrants; the remainder of the warrants expired unexercised





21



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At December 31, 2002, the Company had outstading stock options allowing for the purchase of up to 200,000 common shares at $0.36 per share until May 22 2007, which options expired unexercised.  The Company also had warrants outstanding as follows:



Number of warrantsNumber of common shares issuable on the exercise of warrantsExercise price ($)Expiry date1,500,0001,500,0000.15May 22/037,830,0004,455,0000.35June 18/037,5707,5700.90Dec 20/03258,333258,3330.12Dec 20/0320,00020,0000.12Dec 30/03200,000200,0000.20Sept 20/04100,000100,0000.20Oct 22/049,915,903(1)6,540,903




(1)     All of the warrants expired unexercised



CAPITAL RESOURCES

The Company's continuing operations are dependent on its ability to secure additional financing.  There can be no assurance that the Company will be successful in this regard.  The exploration and subsequent development of the Company's properties therefore depends on the Company's ability to obtain additional required financing.  The Company has limited financial resources and there is no assurance that additional financing will be available to allow the Company to fulfill its obligations on its existing exploration properties.  Failure to obtain additional financing could result in the delay or indefinite postponement of further exploration and the possible, partial or total loss of the Company's interest in the properties.  The Company may in the future be unable to meet its obligations under agreements to which it is a party and the Company may consequently have its interest in the properties subject to such agreement jeopardized.  Furthermore, the Company may be unable to finance the cost required to complete recommended programs.  The Company is dependent on raising funds by the issuance of shares or disposing of interests in its mineral properties (by option, joint ventures or sales) in order to finance further acquisitions, undertake exploration and development of other mineral properties and meet general and administrative expenses in the immediate and long term.  There can be no assurance that the Company will be successful in raising the required financing.



To date, the Companys mineral exploration activities have been funded through sales of common shares.  The Companys ability to continue operations is dependent on managements ability to secure additional financing.  Management is actively pursuing such additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future.  Because of this uncertainty, there is doubt about the ability of the Company to continue as a going concern.  The Consolidated Financial Statements do not include the adjustments that would be necessary should the Company be unable to continue as a going concern.





OUTSTANDING SHARE DATA AS AT MAY 13, 2005

Authorized - 250,000,000 no par value common shares

Issued - 36,314,366



Warrants outstanding:

820,000 warrants allowing for the purchase of up to 820,000 common shares at $0.15 per share until December 22, 2005



Stock Options outstanding:



Number of shares outstandingNumber of shares exercisableExercise Price ($)Expiry Date100,000100,0000.15Aug 21/081,365,0001,365,0000.15Jan 3/08




22



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2,458,0001,229,0000.10Sept 17/093,923,0002,694,000




Escrowed or pooled shares: nil shares.



Property option payments:



In order to keep its current properties in good standing, the Company is required to make the following option payments:



PropertyDateCashSharesWarrantsSilver HopeDecember 31/0560,000200,0000December 31/0660,000200,0000December 31/0760,000200,0000December 31/0860,000200,0000McBrideDecember 31/0520,00050,00050,000December 31/0630,00050,00050,000December 31/0740,00050,00050,000December 31/0850,00050,00050,000




All option payments are made at the election of the Company.



C)

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.



The Company is not involved in any research, development, patenting or licensing activities.



D)

TREND INFORMATION



The Company is in the business of mineral exploration.  The Company is affected by operating trends and uncertainties which are dependent on the extraction of minerals.



E)

OFF-BALANCE SHEET ARRANGEMENTS



The Company has no off-balance sheet arrangements.



F)

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS



The Company has no contractual obligations other than those included under Liquidity or Capital Resources.





G)

OTHER INFORMATION



The Company's web address is www.canadianempire.com.  Other information relating to the Company may be found on the SEDAR website (www. SEDAR.com).



H)

OUTLOOK



The Company looks forward to an active mineral exploration season in British Columbia, where further drilling is proposed at the silver-copper Silver Hope Property, and exploration leading to drill target definition is planned at the McBride Project, where potential exists for discovery of copper-nickel-zinc deposits within a 500 square kilometre area recently staked by the Company.



During the past year the mineral exploration climate in British Columbia has vastly improved over past years with a combination of improved metals prices and the provincial government providing tax-driven incentives to qualifying exploration companies such as Canadian Empire.  Forecasts for base and precious metals exploration activity in British Columbia approximate a six-fold increase over that seen two or three years ago.





23



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I)

FORWARD LOOKING STATEMENTS



This discussion includes certain statements that may be deemed "forward-looking statements".  All statements in this discussion, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploration activities and events or developments that the Company expects, are forward-looking statements.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.  Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.  Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially form those projected in the forward-looking statements.



ITEM VI

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A)

DIRECTORS AND SENIOR MANAGEMENT



John S. Brock (age 63) has been President and a Director of the Registrant since March 8, 1990.  Mr. Brock is a Geologist and the President and controlling shareholder of John S. Brock Ltd. (JSB) from 1966 to present.  Mr. Brock was employed by JSB from 1990 to March 31, 2001, and by Badger & Co. Management Corp. (Badger & Co.) from April 1, 2001 to present.  Badger & Co. is a private company owned by Mr. Brock, Mr. Roberts and Ms. Webb, as to 40%, 30% and 30% respectively.  Mr. Brock was a governor of the Vancouver Stock Exchange from June 1990 to June 1995 and a director of the CDNX Venture Exchange from November 1999 to July 2001. Mr. Brock currently serves on the Boards of Directors of the Registrant, Pacific Ridge Exploration Ltd., Western Prospector Group Ltd., Bravo Venture Group Inc. and Canadian Resources House Limited.



R.E. Gordon Davis, P. Eng. (age 67), has been a Director of the Registrant since June 8, 1994.  Mr. Davis is a Professional Geological Engineer and Businessman.  Mr. Davis serves on the Boards of Directors of the Registrant, Pacific Ridge Exploration Ltd., Western Prospector Group Ltd., Canadian Resources House Limited, and Silver Standard Resources Inc. President and Director of Canplats Resources Corporation.



Lawrence Page, LL. B., Q.C. (age 66) has been a Director of the Registrant since October 31, 1989.  Mr. Page is a Barrister and Solicitor who practised with the Vancouver, British Columbia law firm of Worrall Scott and Page from 1981 to April 30, 1995.  Since 1995, Mr. Page has practised with Lawrence Page, Q.C. Law Corporation.  Mr. Page is the President and serves on the Boards of Directors of Bravo Venture Group Inc.., Newcoast Silver Mines Ltd., is a Director and the Secretary of Western Silver Corporation., is the Chairman and a Director of Rio Fortuna Exploration Corp.,  Quaterra Resources Inc. and Avalon Venture Corporation.



Wayne J. Roberts, P. Geo. (age 59),  has been a Director of the Registrant since March 8, 1990 and its Vice-President, Exploration since June 14, 1995.  Mr. Roberts is a minority shareholder (30%) of JSB, was employed by JSB from 1990 to March 31, 2001, and by Badger & Co. from April 1, 2001 to present.  Badger & Co. is a private company owned by Mr. Brock, Mr. Roberts and Ms. Webb, as to 40%, 30% and 30% respectively.  Mr. Roberts is a Registered Professional Geoscientist in the Province of British Columbia.  Mr. Roberts serves on the Board of Directors of the Registrant, Western Prospector Group Ltd. and Canadian Resources House Limited, and is Vice-President, Exploration of the Registrant, Pacific Ridge Exploration Ltd., Western Prospector Group Ltd. and  Canadian Resources House Limited.



Jeannine P.M. Webb, CGA (age 45), has been the Chief Financial Officer of the Registrant since October 31, 1995, the Corporate Secretary of the Registrant since October 16, 1997, and an employee of JSB from 1991 to March 31, 2001.  Ms. Webb  has been employed by Badger & Co. from April 1, 2001 to present.  Badger & Co. is a private company owned by Mr. Brock, Mr. Roberts and Ms. Webb, as to 40%, 30% and 30% respectively.  Ms. Webb is the Chief Financial Officer and Corporate Secretary of the Registrant, Pacific Ridge Exploration Ltd., Canadian Resources House Limited, and Western Prospector Group Ltd.



There are no family relationships between any of the directors, senior management and employees of the Company.



B)

COMPENSATION





24



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The Registrant does not compensate its directors or senior management (or executive officers) for their services as directors or senior management.  Directors and senior management are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with corporate matters pertaining to the Company.  The Board of Directors may award special remuneration to any director or senior management undertaking any special services on behalf of the Company other than services ordinarily required of a director or senior management.  Other than indicated below no director or senior management received any compensation for his services as a director or senior management, including committee participation and/or special assignments.



The Registrant grants stock options to directors, senior management and employees - see "Options to Purchase Securities from Registrant".



The following table sets forth details of the compensation paid during the Registrant's fiscal year ended December 31, 2004 to directors and senior management:





|Directors/Executive Officers       | Salary/Bonus | Stock Option Exercise Net Market Value(a) | Other Compensation | Total Compensation
|---------------------------------- | ------------ | ----------------------------------------- | ------------------ | ------------------
|John Brock                         | $0           | $0                                        | $31,122(b)         | $31,122           
|Wayne J. Roberts                   | $0           | $0                                        | $56,438 (c)        | $56,438           
|Jeannine P. M. Webb                | $0           | $0                                        | $23,087 (d)        | $23,087           
|Other Directors/ Senior Management | $0           | $0                                        | $0                 | $0                



(a)

Stock Option Exercise Net Market Value represents the aggregate difference between the exercise price of stock options exercised during fiscal 2003 and the market value of the common stock on the date of exercise.

(b)

The $31,122 in other compensation represents payments to John S. Brock made by Badger & Co. for services provided by John S. Brock to the Company under an Administrative Agreement and an Exploration Services Agreement between the Company and Badger & Co..  In addition, Badger & Co., which is owned 40% by John S. Brock and 30% each by Wayne J. Roberts and Jeannine P.M. Webb, received compensation from the Company for services under the Administrative Agreement and the Exploration Services Agreement.  The $31,122 includes a 10% mark-up retained by Badger & Co..

(c)

The $56,438 in other compensation represents payments to Wayne J. Roberts made by Badger & Co. for services provided by Wayne J. Roberts to the Company under an Administrative Agreement  and an Exploration Services Agreement between the Company and Badger & Co..  In addition, Badger & Co., which is owned 40% by John S. Brock and 30% each by Wayne J. Roberts and Jeannine P.M. Webb, received compensation from the Company for services under the Administrative Agreement and the Exploration Services Agreement.  The $56,438 includes a 10% mark-up retained by Badger & Co..

(d)

The $23,087 in other compensation represents payments to Jeannine P. M. Webb made by Badger & Co. for services provided by Jeannine P. M. Webb to the Company under an Administrative Agreement and an Exploration Services Agreement between the Company and Badger & Co..  In addition, Badger & Co., which is owned 40% by John S. Brock and 30% each by Wayne J. Roberts and Jeannine P.M. Webb, received compensation from the Company for services under the Administrative Agreement and the Exploration Services Agreement.  The $23,087 includes a 10% mark-up retained by Badger & Co..



Under the Administrative Agreement, the Company is charged for the cost of corporate and administrative wages of Badger & Co. employees incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, as well as office facilities and operations expenses incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up.  For the year ended December 31, 2004, the Company was charged as follows:



Cost ($)Mark-up ($)Corporate and administrative wages(1)71,9317,193Office facilities and operations35,1504,622Total in respect of the Administrative Agreement107,08111,815




(1)

Includes $31,122 for services provided by John S. Brock as President and Chief Executive Officer (CEO) of the Company and $23,087 for services provided by Jeannine P.M. Webb, Chief Financial Officer and Corporate Secretary, of the Company, respectively.





Under the Exploration Agreement, the Company is charged for the cost of exploration and field wages of Badger & Co.



25



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employees incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, and exploration project management fees charged by Badger & Co. calculated at 8% of all exploration costs incurred by the Company.  For the year ended December 31, 2004, the Company was charged as follows:



Cost ($)Mark-up ($)Exploration and field wages(1)70,1394,918Exploration Project Management FeesNone71,739Total in respect of the Exploration Agreement70,19376,657




(1)

Includes $56,438 for services provided by Wayne J. Roberts as Vice-President, Exploration of the Company.



No amounts have been set aside or accrued by the Registrant during fiscal 2003 to provide for pension, retirement or similar benefits for directors or senior management of the Company pursuant to any plan provided for or contributed to by the Registrant.  Except as discussed in "Options to Purchase Securities From Registrant", the Registrant has no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's directors, senior management or employees.



The Registrant has no plans or arrangements in respect of remuneration received or that may be received by executive officers of the Registrant in fiscal 2002 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 U.S. per executive officer.



No director or executive officer of the Registrant received other compensation in excess of the lesser of $25,000 U.S. or 10% of such officer's cash compensation as reported in the above table and all directors and executive officers as a group did not receive other compensation which exceeded $25,000 U.S. times the number of persons in the group or 10% of the compensation reported in the table set forth above.



C)

BOARD PRACTICES



The Board of Directors of the Registrant is divided into three classes, designated as Class I, Class II, and Class III, to provide for a rotation of the terms of office for the directors on the Board of Directors.  Directors are, except for those directors initially classified as Class I or II directors, appointed for three-year terms and placed in Class I, II or III as determined by the Board of Directors.  The expiry of the term of a director is determined by the Class in which he is placed at the time of his election or appointment, with the term of all directors in one Class expiring at the end of the appropriate annual general meeting.  Accordingly, at each annual general meeting, directors to replace those directors whose terms have expired are to be elected to hold office until the third succeeding  annual general meeting, unless they resign sooner or cease to be directors in accordance with the Registrants Articles.  Any director whose term expires will be eligible for re-election. The Company's last annual general meeting was held on May 31, 2005 and the next meeting will be held within 13 months of that date as specified in the Registrant's Articles.  The Registrant's executive officers are appointed by and serve at the pleasure of the Board of Directors.  Currently, the directors are classified as follows, and have their terms of office expire accordingly.



The following sets out the name of each Director and the expiry of their term:



DirectorClassDate Began Serving as a DirectorExpiry DateJohn S. BrockIII1990Annual General Meeting in the year 2007Wayne J. RobertsIII1990Annual General Meeting in the year 2007R. E. Gordon DavisII1994Annual General Meeting in the year 2006Lawrence PageI1989Annual General Meeting in the year 2008




The following sets out the name of the senior management (executive officers) and the term of their position:

OfficersOfficershipSinceExpiry DateJohn S. BrockPresident
Chief Executive Officer1990
1990At the discretion of the Board of DirectorsWayne J. RobertsVice-President, Exploration1990At the discretion of the Board of Directors




26



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Jeannine P. M. WebbChief Financial Officer
Corporate Secretary1995
1997At the discretion of the Board of Directors




Service Contracts

The Companys administrative and exploration requirements are being provided by Badger & Co. Management Corp (Badger & Co.), a private company owned 40% by John S. Brock and 30% each by Wayne J. Roberts and Jeannine P. M. Webb.  Under the Badger & Co. administrative services arrangement, the Company is charged for the cost of corporate and administrative wages of Badger & Co. employees incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, as well as office facilities and operations expenses incurred by Badger & Co.s on behalf of the Company at Badger & Co.s cost plus a 10% mark-up. Under the Badger & Co. exploration services arrangement, the Company is charged for the cost of exploration and field wages of Badger & Co. employees incurred by Badger & Co.s on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, and exploration project management fees charged by Badger & Co. calculated at 8% of all exploration costs incurred by the Company.



Audit Committee

The majority of the Companys Audit Committee is composed of unrelated Directors.  The Audit Committee members of the Company at May 13, 2005  are Lawrence Page, R. E. Gordon Davis and John S. Brock.  The committee is responsible for reviewing the Companys financial reporting procedures, internal controls, and the performance of the Companys external auditors.  The committee is also responsible fore reviewing the annual financial statements prior to their approval by the Board of Directors.



Compensation Committee

The Company does not have a Compensation Committee.





D)

EMPLOYEES



The Company has no employees.  Services for the year 2004 were provided by 3 management personnel located in Vancouver, British Columbia, Canada.



E)

SHARE OWNERSHIP



At May 13, 2005, directors and senior management of the Company beneficially owned directly or indirectly or exercised control or discretion over Common Shares of the Registrant as follows:



NamePositionShares% of Shares OutstandingJohn S. BrockPresident, Chief Executive Officer and Director1,116,416(1)3.07%Wayne J. RobertsVice-President, Exploration and Director272,8600.75%Lawrence PageDirector199,0000.55%R.E. Gordon DavisDirector450,0001.24%Jeannine P.M. WebbChief Financial Officer and Corporate Secretary1,0000.00%




(1)

The 1,116,416 Common Shares include 810,806 Common Shares held by John S. Brock Limited, a British Columbia company owned by John S. Brock as to 70% and Wayne J. Roberts as to 30%.





Options to Purchase Securities from the Registrant



Stock Options

At December 31, 2004, stock options to purchase up to 3,923,000 Common Shares from the Registrant had been granted to directors, officers, members of senior management of the Company or of Badger & Co. on the terms and conditions acceptable to the regulatory authorities in Canada.



The Registrant also has a stock option plan, as amended  (the Plan) that was approved by the Registrants shareholders , and is administered by the Registrants board of directors.  Under the terms of the Plan, at December 31, 2004, the aggregate number of Common Shares issuable under the Plan is 5,777,867 Common shares, provided that stock options in



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favor of any one individual may not exceed 5% of the issued and outstanding Common shares.  No stock option granted under the Plan is transferable by the optionee other than by will or the laws of descent and distribution, and each stock option is exercisable during the lifetime of the optionee and only by such optionee.  The exercise price of the stock options shall be the closing price of the Common Shares on the TSX on the trading day immediately preceding the date on which the option is granted.  The term of each stock option shall not exceed 5 years from the date of grant.  Under the policies of the TSX, upon the Registrants adoption of the Plan, stock options may thereafter only be granted under the Plan.



The names and titles of the directors, officers and senior management of the Registrant to whom outstanding stock options have been granted and the number of Common Shares subject to such stock options are set forth below as at December 31, 2004 and May 13, 2005  The exercise price of the stock options is stated in Canadian dollars.



OptioneeNumberExercise Price ($)Date of GrantExpiry DateJohn S. Brock560,0000.15Jan. 3/03Jan. 3/081,000,0000.10Sept 17/04Sept 17/09Lawrence Page75,0000.15Jan. 3/03Jan. 3/08124,0000.10Sept 17/04Sept 17/09R. E. Gordon Davis75,0000.15Jan. 3/03Jan. 3/08124,0000.10Sept 17/04Sept 17/09Wayne J. Roberts430,0000.15Jan. 3/03Jan. 3/08600,0000.10Sept 17/04Sept 17/09Jeannine P. M. Webb200,0000.15Jan. 3/03Jan. 3/08300,0000.10Sept 17/04Sept 17/093,488,000




Share Purchase Warrants

At December 31, 2004 and May 13, 2005, warrants allowing for the purchase of up 820,000 Common shares were outstanding as follows:





Exercise Price ($)Number of WarrantsNumber of SharesExpiry DatePrivate Placement0.15820,000820,000Dec 22/05










ITEM VII

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A)

MAJOR SHAREHOLDERS



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

At May 13, 2005, there were no persons or company who beneficially owned directly or indirectly or exercised control or discretion over Common Shares carrying more than 5% of the voting rights attached to all outstanding Common Shares of the Company.



The information as to shares beneficially owned, not being within the knowledge of the Company, has been furnished by the respective individuals.  The Companys major shareholders do not have different voting rights.  There are no arrangements known to the Company which may at a subsequent date result in a change n control of the Company.





B)

RELATED PARTY TRANSACTIONS



Except as described below and as noted earlier herein, no executive officer or senior management of the Registrant, nor any spouse, relative, associate or affiliate of the foregoing persons, has any interest in any material transactions which occurred during the Company's last three fiscal years and involved the Registrant or any of its subsidiaries; or any presently proposed transaction involving the Registrant or any of its subsidiaries.  Except as noted below, during the last three years and through the date of this Annual Report, no senior management or director, nor any associate thereof, was or is indebted to



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the Registrant or any of its subsidiaries.



Services Provided by Badger & Co. Management Corp.

Effective April 1, 2001, the Registrant entered into an administrative services agreement (the "Badger Administrative Agreement") with Badger & Co., a British Columbia company owned by John S. Brock (40%), Wayne J. Roberts (30%), and Jeannine P. M. Webb (30%) directors and/or officers of the Registrant.  Badger & Co. received from the Registrant its pro rata share of corporate and administrative wages of Badger & Co. employees incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, as well as office facilities and operations expenses incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up.



Effective April 1, 2001, the Registrant entered into an exploration management agreement (the "Badger Exploration Agreement") with Badger & Co. pursuant to which Badger & Co. would implement exploration programs on certain properties of the Company.  Under the Badger Exploration Agreement, the Company was charged for the cost of exploration and field wages of Badger & Co. employees incurred by Badger & Co. on behalf of the Company at Badger & Co.s cost plus a 10% mark-up, and exploration project management fees charged by Badger & Co. calculated at 8% of all exploration costs.



During 2004, the Company was charged, by Badger & Co., $64,686 (2003: $91,675; 2002: $65,767) for cost of operations and administration, $110,647 (2003: $154,082; 2002: $141,700) for professional services and $90,414 (2003: $140,729; 2002: $53,207) for exploration salaries and wages and project management fees.  These transactions are in the normal course of operations and are consistent with industry standards.





ITEM VIII

FINANCIAL INFORMATION



A)

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION



This Annual Report contains the consolidated financial statements for the Company for the fiscal years ended December 31, 2004, 2003 and 2002 which contain an Auditors Report dated April 1, 2005, Consolidated Balance Sheets as at December 31, 2004 and 2003, Consolidated Statements of Loss and Deficit, Consolidated Statements of Deferred Exploration and Mineral Property Expenditures, and Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002, and Notes to Consolidated Financial Statements.



INDEBTEDNESS TO COMPANY OF DIRECTORS AND SENIOR MANAGEMENT

No directors or senior management of the Company are indebted to the Company or have been indebted to the Company since the beginning of the last completed financial year of the Company.



LEGAL OR ARBITRATION PROCEEDINGS

As of the date hereof, the Company is not party to any active or pending legal proceedings initiated by it and, to the best of its knowledge, the Company is not subject to any active or pending legal proceedings or claims against it or any of its properties.  However, from time to time, the Company may become subject to claims and litigation generally associated with any business venture.  In addition, the operations of the Company are subject to risks of accident and injury, possible violations of environmental and other regulations, and claims associated with the risks of exploration operations in foreign areas some of which cannot be covered by insurance or other risk reduction strategies.  Since the Registrant is a Canadian corporation and the officers, directors and certain of the persons involved with the Company as professional advisors are resident in Canada, it may be difficult to effect service within the United States upon such persons or to realize on any judgment by a court of the United States which is predicated on civil liabilities under the 1933 Act.  The Registrant's Canadian counsel have advised that there is doubt as to the enforceability in Canada, either in original actions or through enforcement of United States judgments, of liabilities predicated solely upon violations of the 1933 Act or the rules and regulations promulgated thereunder.



DIVIDEND DISTRIBUTION POLICY

The Registrant has not paid any cash dividends on its Common Stock and has no present intention of paying any dividends.  The current policy of the Registrant is to retain earnings, if any, for use in operations and in the development of its business.  The future dividend policy of the Registrant will be determined from time to time by the Board of Directors.



CHANGES IN ACCOUNTING POLICIES, INCLUDING INITIAL ADOPTION

Impairment of Long-Lived Assets



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The Accounting Standards Board of the CICA has issued CICA 3063, Impairment of Long-Lived Assets, which will be effective for years beginning on or after April 1, 2003. This statement establishes standards for the recognition, measurement and disclosure of the impairment of non-monetary long-lived assets, including property, plant and equipment, intangible assets with finite useful lives, deferred pre-operating costs and long-term prepaid assets. The Company adopted the new standard on January 1, 2004. The implementation of this new standard did not have a material impact on its financial position or results of operations.   Management of the Company reviews the net carrying value of resource assets when event or changes in circumstances indicate that the carrying amount may not be recoverable.



Variable Interest Entities

The CICA has issued Accounting Guideline 15, Consolidation of Variable Interest Entities, which will be effective for annual and interim periods beginning on or after November 1, 2004. This guideline addresses the application of consolidation principles to entities that are subject to control on a basis other than ownership of voting interests. The Company adopted the guideline on January 1, 2005. The adoption of this guideline will not have any impact on the companys consolidated financial statements.



AUDIT COMMITTEE

The Companys Audit Committee is composed of a majority of non-executive Directors.  The Audit Committee members of the Company at April 15, 2005 are Lawrence Page, R. E. Gordon Davis and John S. Brock.  The committee is responsible for reviewing the Companys financial reporting procedures, internal controls, and the performance of the Companys external auditors.  The committee is also responsible for reviewing the Company's annual financial statements prior to their approval by the Board of Directors.



COMPENSATION COMMITTEE

The Company does not have a Compensation Committee



CRITICAL ACCOUNTING ESTIMATES

The detailed accounting policies are listed in Note 2 to the Financial Statements for the year ended December 31, 2004.  The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, stock-based compensation and disclosure of contingent liabilities at the date of the financial statements and the reported amount of income and expenses during the year.  Actual results could differ from those estimates.  Management uses its best estimates for recording mineral property carrying values based on expenditures incurred, the results of any exploration conducted, prevailing market conditions and future plans for the projects.



FINANCIAL INSTRUMENTS

The Company only invests its cash in bank term deposits and/or instruments that are deemed to be very low risk.



B)

SIGNIFICANT CHANGES



There have been no significant changes from January 1 to May 13, 2005.





ITEM IX

THE OFFER AND LISTING



A)

PRICE RANGE AND VOLUME OF SHARES OF COMMON STOCK



The following table sets forth the price ranges of the Registrants shares on the Vancouver Stock Exchange, the Toronto Stock Exchange , the Canadian Venture Exchange and the TSX-Venture Exchange for each of the most current five years, each of the quarters for the most current two years and each of the most current six months, after taking into effect the consolidation of the Registrants capital on a ten (10) old shares for one (1) new share basis on December 5, 2001:

For each of the most current five years:

|Year | High  | Low   
|---- | ----- | ------
|2004 | $0.15 | $0.055
|2003 | $0.17 | $0.08 
|2002 | $0.40 | $0.09 
|2001 | $0.40 | $0.10 
|2000 | $1.10 | $0.40 



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For each of the quarters for the most current two years:

|Quarter                   | High   | Low   
|------------------------- | ------ | ------
|October to December, 2004 | $0.105 | $0.055
|July to September, 2004   | $0.10  | $0.055
|April to June, 2004       | $0.09  | $0.055
|January to March, 2004    | $0.15  | $0.08 
|October to December, 2003 | $0.15  | $0.09 
|July to September, 2003   | $0.17  | $0.08 
|April to June, 2003       | $0.12  | $0.08 
|January to March, 2003    | $0.17  | $0.10 



For each of most current six months:

|Month          | High   | Low   
|-------------- | ------ | ------
|April, 2005    | $0.08  | $0.06 
|March, 2005    | $0.095 | $0.07 
|February, 2005 | $0.10  | $0.06 
|January, 2005  | $0.09  | $0.07 
|December, 2004 | $0.09  | $0.055
|November, 2004 | $0.09  | $0.06 



B)

PLAN OF DISTRIBUTION



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



C)

MARKETS



The Registrant's Common Shares commenced trading on the Canadian Venture Exchange (CDNX) (now the TSX Venture Exchange) of British Columbia and Alberta, Canada under the symbol "CXP" and CUSIP No. 664903 50 7 on December 5, 2001.  The Registrants transferable non-flow-through share purchase warrants commenced trading on the TSX Venture Exchange of British Columbia and Alberta, Canada under the symbol "CXP-WT" and CUSIP No. 135660 11 6 on June 18, 2002.  The Registrant's Common Shares traded on The Toronto Stock Exchange (TSE) in Ontario, Canada from April 18, 1997 to September 11, 2000, on the Canadian Venture Exchange ("CDNX") in British Columbia and Alberta, Canada under the symbol "NCW" from December 8, 2000 to December 4, 2001, and on the Vancouver Stock Exchange (VSE) in British Columbia, Canada from November 18, 1987 to December 31, 1997.  The Registrants Common Shares were suspended from trading on the TSE effective September 11, 2000 for failure to meet minimum listing requirements through those facilities.  The Registrant applied and was granted trading privileges on the CDNX to commence trading on December 8, 2000.  The Company has no current plans to seek a listing on any U. S. exchange or on NASDAQ.



D)

SELLING SHAREHOLDERS



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



E)

DILUTION



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.





ITEM X

ADDITIONAL INFORMATION





A)

SHARE CAPITAL



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide



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any information under this section.



B)

NOTICE OF ARTICLES (formerly "MEMORANDUM") AND ARTICLES



The information called for by this item is contained in Exhibits filed herewith.  In particular:

1.

The Companys Notice of Articles (formerly, "Memorandum") is on file with the Office of the British Columbia Registrar of Companies under Certificate of Incorporation No. 0322353.  Under the provisions of the Business Corporations Act (BC), the Company has the capacity and the rights, powers and privileges of an individual of full capacity.   There are no further restrictions in the Companys Notice of Articles or Articles, on the business that the Company can carry on nor on the powers the Company can exercise.

2.

Part 15 of the Companys Articles sets out the circumstances whereby a director must not vote on a proposal, arrangement or contract in which the director is materially interested, Article 12.2 sets out the directors powers to determine their compensation, Part 8 of the Companys Articles outlines the Companys borrowing powers exercisable by the directors and Article 12.3 sets out that no shares are required to be held for directors qualification.

3.

The Companys common shares rank equally as to dividend rights, voting rights (even though the Companys directors stand for re-election at staggered intervals), rights to share in the Companys profits and liquidation rights.  The Companys common shares are not, under the Companys Notice of Articles and Articles, subject to redemption or sinking fund provisions, liability to further capital calls, nor any provisions discriminating against any existing or prospective holder of such shares as a result of such shareholder owning a substantial number of shares.

4.

In accordance with the Business Corporations Act (BC) and Article 6.2 of the Companys Articles, an ordinary resolution is required to change the rights of holders of the Companys common shares.  An ordinary resolution is a resolution:

a)

passed at a general meeting by a simple majority of the votes cast by shareholders voting shares that carry the right to vote at general meetings, or

b)

passed, after being submitted to all of the shareholders holding shares that carry the right to vote at general meetings, by being consented to in writing by shareholders holding shares that carry the right to vote at general meetings who, in the aggregate, hold shares carrying at least 2/3 of the votes entitled to be cast on the resolution.

5.

Part 9 of the Companys Articles together with applicable corporate and securities laws contain the conditions governing the manner in which annual and extraordinary general meetings of shareholders are called including Notice of Meeting/Proxy Solicitation requirements.  Part 10 of the Companys Articles deals with proceedings at such meetings including quorum requirements.

6.

To the Companys knowledge, there are no limitations on the rights to own securities.

7.

There are no provisions of the Companys Notice of Articles or Articles that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company or any of its subsidiaries.

8.

There are no bylaw provisions governing the ownership threshold above which shareholder ownership must be disclosed.

9.

There are no conditions imposed by the Notice of Articles and Articles of the Company governing changes in the capital of the Company that are more stringent than is required by law.





C)

MATERIAL CONTRACTS



During 2001, the Company and Teck Cominco entered into the Teck Cominco Agreement, whereby Teck Cominco is a strategic partner in the Companys CEEx Program.  The Company's CEEx Program will incur mineral exploration expenses qualifying as CEE as defined in the Income Tax Act (Canada) on mineral properties. The CEEx Program is structured so that CEE funds will be expended on activities on selected mineral properties in consideration for the Company having the right to initially earn majority interests in those properties. The program is being directed towards a number of properties and a range of mineral commodities.  The CEEx Program operates under the direction of the Advisory Committee comprised of two representatives each from Teck Cominco and the Company.   The CEEx Program is dependent on the Companys acquisition of mineral properties on which a program of mineral exploration is warranted. Under the direction of the Advisory Committee mineral properties may be sourced by the Company from Teck Cominco or third parties.  Acquisition criteria places emphasis on the building of a portfolio of properties.  Approximately 70% of the portfolio is intended to contain properties sufficiently advanced to warrant immediate diamond drilling, approximately 20% of the portfolio is intended to contain properties that require additional exploration to develop drill targets and approximately 10% of the portfolio is intended to contain properties that are considered as early stage exploration projects.  Metal commodities of choice include: precious metals (gold, silver), base metals (copper and zinc), diamonds and industrial minerals (including tantalum and rare-earths).  Properties are intended to be acquired by way of option agreements whereby the Company may



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elect to earn an initial majority interest in a property by making scheduled exploration expenditures that qualify as CEE.





D)

EXCHANGE CONTROLS



There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital or that affect the remittance of dividends, interest or other payments to non- resident holders of the Registrants securities.  However, any such remittance to a resident of the United States may be subject to a withholding tax pursuant to the reciprocal tax treaty between Canada and the Unites States.  For further information concerning such withholding tax see Item X Taxation below.



There are no limitations under the laws of Canada, the Province of British Columbia, or in the charter or other constituent documents of the Registrant with respect to the right of non-resident or foreign owners to hold and/or vote shares of the Registrants common stock.  However, the Investment Canada Act(the Act) enacted on June 20, 1985, as amended, requires the prior notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a non-Canadian of control of a Canadian business, all as defined in the Act.  For the purposes of the Act, Control can be acquired through the acquisition of all or substantially all of the assets used in the Canadian business or the direct or indirect acquisition of interests in an entity that carries on a Canadian business, or which controls the entity which carries on the Canadian business.  Under the Act, control of a corporation, is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where more than one-third, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact through the ownership of voting shares.  Other rules apply with respect to the acquisition of non-corporate entities.



Investments requiring review and approval include direct acquisitions of Canadian businesses with assets with a gross book value of Cdn. $5,000,000 or more; indirect acquisitions of Canadian businesses with assets of Cdn. $50,000,000 or more; and indirect acquisitions of Canadian businesses where the value of assets of the entity or entities carrying on business in Canada, control of which is indirectly being acquired, is greater than Cdn. $5,000,000 and represents greater than 50% of the total value of the assets of all the entities, control of which is being acquired.



Pursuant to the World Trade Organization Agreement Implementation Act, the Act was amended to provide that the value of the business acquisition threshold (the Threshold) above described is increased from those levels outlined where the acquisition is by a World Trade Organization Investor or by a non-Canadian other than a World Trade Organization Investor where the Canadian business that is the subject of the investment is immediately before the investment controlled by a World Trade Organization Investor.  The Threshold is to be determined yearly in accordance with a formula set forth in the Act.  For 1997, for example, the Threshold was determined to be Cdn. $172,000,000.



A World Trade Organization Investor includes an individual, other than a Canadian, who is a national of a World Trade Organization Member, or who has the right of permanent residence in relation to that World Trade Organization Member.



Different provisions and considerations apply with respect to investment to acquire control of a Canadian business that, as defined in the Act or regulations:



1.

Engages in production of uranium and owns an interest in producing uranium property in Canada;

2.

Provides financial services;

3.

Provides transportation services;

4.

Is a cultural business.



If an investment is reviewable, an application for review in the form prescribed by regulation is normally required to be filed with the Ministry of Industry, Director of Investment prior to the investment taking place and the investment may not be consummated until the review has been completed and ministerial approval obtained.  Applications for review concerning indirect acquisitions may be filed up to 30 days after the investment is consummated.  Applications concerning reviewable investments in culturally sensitive and other specified activities referred to in the preceding paragraph are required upon receipt of a notice for review.  There is, moreover, provision for the Minister (a person designated as such under the Act) to permit an investment to be consummated prior to completion of review if he is satisfied that delay would cause undue hardship to the acquirer or jeopardize the operation of the Canadian business that is being acquired.





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E)

TAXATION



The discussions summarize the material tax considerations relevant to an investment in shares by individuals and corporations who, for income tax purposes, are resident in the U.S. for purposes of the Convention (as hereinafter defined) and are not resident in Canada, who hold shares as a capital asset, and who do not use or hold the shares in carrying on a business through a permanent establishment in Canada or in connection with a fixed base in Canada (collectively, unconnected U.S. Shareholders or Holders).  The tax consequences of an investment in the shares by investors who are not Unconnected U.S. Shareholders may differ substantially from the tax consequences discussed herein.  The discussion of U.S. tax considerations is addressed only to Unconnected U.S. Shareholders whose functional currency within the meaning of section 985 of the Internal Revenue Code of 1986, as mended (the Code), is the U.S. dollar, and to U.S. citizens who are not residents in the U.S. for purposes of the Convention, but who otherwise meet the definition of Unconnected U.S. Shareholders.  Furthermore, the discussion of U.S. tax considerations does not address the tax treatment of Unconnected U.S. Shareholders that own, or are deemed for U.S. federal income tax purposes to own, 10% or more of the total combined voting power of all classes of voting stock of the Registrant.  The discussion of Canadian tax considerations does not address the tax treatment of a trust, company, organization or other arrangement that is a resident of the U.S. and that is generally exempt from U.S. tax.



This discussion does not address all of the income tax consequences that may be applicable to any particular Holder subject to special treatment under the U.S. federal income tax law or to any particular Holder in light of such Holders particular facts and circumstances.  Some Holders, including tax-exempt entities, banks, insurance companies and persons who hold the shares as part of a synthetic security, conversion transaction or straddle or hedging transactions may be subject to special and/or different rules not discussed below.  Statements of legal conclusion of U.S. tax considerations as to the material U.S. federal income tax consequences of the acquisition, ownership and disposition of the shares by Unconnected U.S. Shareholders do not purport to be a complete analysis or listing of all possible tax considerations.  The discussion of U.S. tax considerations is based upon the provisions of the Code, and of published administrative practices of the Internal Revenue Service and judicial decisions, all of which are subject to change possibly with retroactive effect.  Statements of legal conclusions of Canadian tax considerations as to the material Canadian federal income tax consequences of the acquisition, ownership and disposition of the shares by Unconnected U.S. Shareholders do not purport to be a complete analysis or listing of all possible tax consequences.  The discussion of Canadian tax considerations is based upon the provisions of the Income Tax Act (Canada) (the Tax Act), the Convention between Canada and the U.S. of America with Respect to Taxes on Income and on Capital, as amended from time to time (the Convention), and our understanding of published administrative practices of Canada Customs and Revenue Agency (formerly, Revenue Canada) and judicial decisions, all of which are subject to change.  The discussion does not take into account the tax laws of the various provinces or territories of Canada or the tax laws of the various state and local jurisdictions in the U.S.



This discussion is not intended to be nor should it be construed as legal or tax advice to any particular investor.  Therefore, prospective investors should consult their own tax advisors with respect to the tax consequences of an investment in the shares.



U.S. Federal Income Tax Considerations

Unconnected U.S. Shareholders generally will treat the gross amount of distributions paid by the Registrant, including the amount of any Canadian tax withheld, as foreign source dividend income for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits, as computed for U.S. federal income tax purposes.  Distributions in excess of that amount will reduce an Unconnected U.S. Shareholders tax basis in the shares, but not below zero, and the remainder, if any, will be treated as taxable capital gain.  In general, in computing its U.S. federal income tax liability, an Unconnected U.S. Shareholder may elect for each taxable year whether to claim a deduction or, subject to the limitations described below, a credit for Canadian taxes withheld from dividends paid on its shares.  If the Unconnected U.S. Shareholder elects to claim a credit for such Canadian taxes, the election will be binding for all foreign taxes paid or accrued by the Unconnected U.S. Shareholder for such taxable year.  The Code applies various limitations on the amount of the foreign tax credit that may be available to a U.S. taxpayer based upon the segregation of foreign source income into separate categories, or baskets, of income.  For purposes of applying the foreign tax credit limitation, dividends are generally included in the passive income basket or the financial services income basket if received by a financial services entity.  The amount of credit that may be claimed with respect to the basket of income to which the dividend is allocated, and to which the foreign taxes are attributable, generally may not exceed the same proportion of the U.S. tax on worldwide taxable income, before applying the foreign tax credit as the U.S. holders foreign source taxable income allocable to such basket bears to such U.S. holders entire taxable income.  The foreign tax credit is disallowed for dividends on stock unless a minimum holding period requirement is satisfied and additional limitations may restrict the ability of some individuals to claim the foreign tax credit.  Accordingly, investors should consult their own tax advisors with respect to the potential



34



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consequences to them of the foreign tax credit limitations.  Dividends paid by the Registrant generally will constitute portfolio income for purposes of the limitation on the use of passive activity losses by investors and investment income for purposes of the limitation on investors investment interest expense.  Dividends paid by the Registrant will not be eligible for the dividends received deduction generally allowed with respect to dividends paid by U.S. corporations under Section 243 of the Code, but may be eligible for the dividends received deduction which may be claimed by 10% corporate shareholders under Section 245 of the Code.



For U.S. federal income tax purposes, the amount of any distributions made on shares to an Unconnected U.S. Shareholder in Canadian dollars will equal the U.S. dollar value of the Canadian dollars calculated by reference to the appropriate exchange rate in effect on the date of receipt of the distribution, regardless of whether the Canadian dollars are actually converted into U.S. dollars upon receipt.  Unconnected U.S. Shareholders should consult their own tax advisors regarding the treatment of foreign currency gain or loss, if any, on any Canadian dollars which are converted into U.S. dollars subsequent to receipt by the Unconnected U.S. Shareholder.



The sale of shares generally will result in the recognition of gain or loss to the Holder in an amount equal to the difference between the amount realized and the Holders adjusted basis in the shares.  Provided the Holder is not considered a dealer in the shares sold, gain or loss upon the sale of shares will generally be capital gain or loss.



Capital losses are deductible to the extent of capital gains.  Individual taxpayers may deduct excess capital losses up to $3,000 a year, $1,500 in the case of a married individual filing separately, from ordinary income.  Non-corporate taxpayers may carry forward unused capital losses indefinitely.  Unused capital losses of a corporation may be carried back three years and carried forward five years.



In the case of individuals, net capital gain from the disposition of property held for investment is excluded from investment income for purposes of computing the limitation on the deduction for investment interest applicable.  An individual may, however, elect to include such net capital gain in investment income if such taxpayer reduces the amount of its net capital gain that is otherwise eligible for preferential capital gains tax treatment by such amount.  In that event, such investment income would be taxable at ordinary income rates.



For any taxable year of the Registrant, if at least 75% of our gross income is passive income, as defined in the Code, or if at least 50% of our assets, by average fair market value, or, prior to fiscal year 1998, possibly by adjusted tax basis, are assets that produce or are held for the production of passive income, the Registrant will be a passive foreign investment company (PFIC).  If the Registrant is a PFIC for any taxable year during which an Unconnected U.S. Shareholder owns any shares, the Unconnected U.S. Shareholder will be subject to special U.S. federal income tax rules, set forth in Sections 1291 to 1298 of the Code, with respect to all of such Unconnected U.S. Shareholders shares.  If the Registrant were treated as a PFIC at any time during an Unconnected U.S. Shareholders holding period for shares, such Unconnected U.S. Shareholder generally would be subject to additional tax as well as interest charges with respect to the deferral of tax for the period during which such shares were held.  Any such additional tax and interest charges would apply upon the disposition of shares or the receipt of dividends.  Additionally, any gain realized on the disposition of shares would be treated as ordinary income or taxable at ordinary income rates rather than as capital gain or taxable at capital gains rates, and the tax basis of the shares held by an Unconnected U.S. Shareholder generally would not be stepped up to fair market value at death.  Under some circumstances, shareholders of a PFIC may elect to be taxed currently on their pro rata shares of PFIC income and capital gain or, in accordance with recently enacted legislation, report income currently on a mark to market basis with respect to their shares of stock in the PFIC.



The Registrant does not believe that it is likely to be a PFIC in the current or future taxable years; however, because the PFIC determination is made annually on the basis of facts and circumstances that may be beyond its control and because the principles and methodology for determining the fair market values of its assets are unclear, there can be no assurance that the Registrant will not be a PFIC for such years.  Special rules not described herein will also apply if the Registrant becomes a controlled foreign corporation for U.S. federal income tax purposes.  The Registrant would be treated as a controlled foreign corporation if U.S. Shareholders were to own, actually or constructively, more than 50% of the total combined voting power or total value of the Registrant.  For this purpose, the term U.S. Shareholder means a U.S. person who owns, actually or constructively, ten percent or more of the total combined voting power of the Registrant.  In light of the ownership requirements necessary for our productions to constitute Canadian-content productions and for the Registrant to claim Canadian tax benefits, it is not anticipated that the Registrant will become a controlled foreign corporation for U.S. federal income tax purposes.



U.S. Information Reporting and Backup Withholding



35



---

Under U.S. treasury regulations that are generally effective with respect to payments made after December 31, 2000 (the new withholding Regulations), the proceeds of a sale of shares through a U.S. or U.S. related broker will be subject to U.S. information reporting and may be subject to the 30% (for tax year 2002) U.S. backup withholding requirements.  Unconnected U.S. Shareholders generally can avoid the imposition of U.S. non-resident withholding tax by reporting their taxpayer identification number on an Internal Revenue Service Form W-9.  Non-U.S. shareholders generally can avoid the imposition of U.S. backup withholding tax by providing to their broker or paying agent a duly completed Internal Revenue Service Form W-8 BEN.  Any amounts withheld under the backup/non-resident withholding rules will be allowed as a refund or a credit against the shareholders U.S. Federal income tax, provided the required information is furnished to the Internal Revenue Service.



Dividends paid in the U.S. on the shares to Unconnected U.S. Shareholders or to non-U.S. shareholders through a U.S. or U.S. related person may be subject to the 30% (for tax year 2002) U.S. backup/non-resident withholding tax unless certification requirements are satisfied.



The New Withholding Regulations consolidate and modify the pre-2001 certification requirements and means by which a holder may claim exemption from U.S. federal income tax withholding and provide presumptions regarding the status of holders when payments to the holders cannot be reliably associated with appropriate documentation provided to the payor.  All holders should consult their tax advisors regarding the application of the New Withholding Regulations.



Canadian Tax Considerations

Dividends paid or credited, or that the Registrant deems to pay or credit, on the shares to Unconnected U.S. Shareholders will be subject to Canadian withholding tax.  Under the Convention, the maximum rate of withholding tax on dividends paid or credited on the shares is 15% if the beneficial owner of such dividends is an Unconnected U.S. Shareholder.  However, that rate is reduced to 5% under the Convention if the beneficial owner of such dividends is an Unconnected U.S. Shareholder that is a corporation that owns at least 10% of the voting stock of the Registrant.



An Unconnected U.S. Shareholder will not be subject to tax in Canada on any capital gain realized upon a disposition or deemed disposition of the shares, provided that the shares do not constitute taxable Canadian property of the Unconnected U.S. Shareholder within the meaning of the Tax Act.  The shares will not generally constitute taxable Canadian property of the Unconnected U.S. Shareholder unless, at any time in the five-year period that ends at the time of the disposition, the Unconnected U.S. Shareholder, either alone or together with persons with whom the Unconnected U.S. Shareholder did not deal at arms length, owned, had an interest in or the right to acquire 25% or more of the issued shares or any series or class of our capital stock.  Even if the shares are taxable Canadian property, under the Convention, gains derived by an Unconnected U.S. Shareholder would generally not be taxable in Canada unless the value of the shares is derived principally from real property situated in Canada.  The Registrant believe that the value of our shares is not currently principally derived, directly, or indirectly, from real property situated in Canada and do not expect this to change in the foreseeable future.



Canada does not currently impose any estate taxes or succession duties.



F)

DIVIDENDS AND PAYING AGENTS



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



G)

STATEMENTS BY EXPERTS



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



H)

DOCUMENTS ON DISPLAY



Any documents referred to in this document may be inspected at the head office of the Company, #1205  675 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1N2 during normal business hours.



I)

SUBSIDIARY INFORMATION



There is no information relating to the Registrants subsidiaries which must be provided in Canada and which is not



36



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otherwise called for by the body of generally accepted accounting principles used in preparing the consolidated financial statements.





ITEM XI

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



The Company is in the business of mineral exploration.  Metals prices and foreign exchange rates may fluctuate widely from time to time.  The Company has not entered into market instruments for trading or other purposes.  The Company has limited exposure to such risk at the present time.



ITEM XII

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



PART II



ITEM XIII

DEFAULTS, DIVIDENDS, ARREARS AND DELINQUENCIES

There has not been a material default in the payment of principal, interest, a sinking fund or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company.  There are no payments of dividend by the Registrant in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Registrant.





ITEM XIV

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Material modification to the rights of security holders

There have been no material modifications to the rights of security holders during the most current fiscal year.



Use of proceeds

This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



ITEM XV

CONTROLS AND PROCEDURES



Evaluation and disclosure controls and procedures

Under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of a date (the Evaluation Date) being December 31, 2004.  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Companys disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company (or the Companys consolidated subsidiaries) required to be included in the Companys periodic SEC filings.



Changes in internal controls

There were no significant changes made in the Companys internal controls or, to the Companys knowledge, in other factors that could significantly affect these controls subsequent to the date of their evaluation.



ITEM XVI

AUDIT COMMITTEE FINANCIAL EXPERT



Audit Committee Financial Expert

The Registrant has an Audit Committee established by the Board of Directors. The members of the Audit Committee are C. Lawrence Page, QC., R.E. Gordon Davis, P. Eng., and John S. Brock. The Board does not currently have an audit committee financial expert, as that term is defined in Form 20-F.



Code of Ethics



37



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The Registrant does not have a formal Code of Ethics.  The Registrant operates in compliance with regulations as applied by the TSX, the British Columbia Securities Commission, the Alberta Securities Commission, the Manitoba Securities Commission, the Ontario Securities Commission and the Securities and Exchange Commission.



Principal Accountant Fees and Services

For the years ended December 31, 2004 and 2003, the Registrant was invoiced by PWC, the Company's independent auditors, for fees as set for below:



Audit FeesAudit Related FeesTax Fees (1)Read and Comment Fees (2)All Other Fees (3)2004$24,000N/AN/A$500$3,0002003$24,000N/A$7,250N/AN/A




(1)

Fees related to the preparation of the Company's T-2 corporate income tax return and the General Index of Financial Information required by CRA.

(2)

Fees in respect of read and comment procedures for the interim financial statements.

(3)

Fees in respect of Sarbanes-Oxley Act, Section 404.



The Audit Committee has adopted procedures requiring Audit Committee review and approval in advance of all particular engagements for services to be provided by PWC.  Consitent with applicable laws, the procedures permit limited amounts of services, other than audit, review and attest services, to be approved by one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided the Audit Committee is informed of each particular service.   All of the engagements and fees for the year ended December 31, 2003 were approved by the Audit Committee.  The Audit Committee reviews with PWC whether the non-audit services to be provided are compatible with maintaining the auditors' independence.  The Board has determined that, beginning with January 1, 2004, fees paid to the independent auditors for non-audit related services in any year will not exceed the fees paid for audit services during the year.  Permissible non-audit services will be limited to fees for tax services, accounting assistance or audits in connection with acquisitions, and other services specifically related to accounting or audit matters such as registration statements filings or private placements or public offerings.



PART III





ITEM XVII

FINANCIAL STATEMENTS



See the Financial Statements and Exhibits listed in Item XIX hereof and filed as part of this Annual Report.



These financial statements were prepared in accordance with Canadian GAAP and are expressed in Canadian dollars.  Such financial statements have been reconciled to U.S. GAAP (see note 10 therein).  For a history of exchange rates in effect for Canadian dollars as against U.S. dollars, see Item III - Key Information, Selected Financial Data  Exchange Rate Data.



ITEM XVIII

FINANCIAL STATEMENTS



Not applicable.



38



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ITEM XIX

EXHIBITS



Financial Statements

(i)

Managements Responsibility to Financial Reporting

(ii)

Auditors Report dated April 11, 2005

(iii)

Consolidated Balance Sheets as at December 31, 2004 and 2003

(iv)

Consolidated Statements of Loss and Deficit for the years ended December 31, 2004, 2003 and 2002

(v)

Consolidated Statements of Deferred Exploration and Mineral Property Expenditures for the years ended December 31, 2004, 2003 and 2002

(vi)

Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002

(vii)

Notes to the Consolidated Financial Statements for the years ended December 31, 2004, 2003 and 2002 Financial Statements Schedules are omitted because they are not applicable, not required or because the required information is included in the consolidated financial statement or notes thereto filed within.



|1.1   | * | Certificate of Incorporation of Progressive Minerals Ltd., dated February 24, 1987                                                                                                                  
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.2   | * | Certificate of Name Change to change corporate name to Northern Crown Mines Ltd. ("Registrant"), dated February 10, 1989                                                                            
|1.2.1 | * | Altered Memorandum as filed on June 18, 1997                                                                                                                                                        
|1.2.2 | * | Altered Memorandum as filed on August 23, 2000                                                                                                                                                      
|1.3   | * | Restated Articles of Registrant, as filed on May 4, 1990                                                                                                                                            
|1.3.1 | * | Amendment to Restated Articles of Registrant as filed on July 21, 1998                                                                                                                              
|1.3.2 | * | Amendment to Restated Articles of Registrant as filed on July 21, 1998                                                                                                                              
|2.1   | * | Warrant Transfer Agency Agreement between Registrant and Montreal Trust Company of Canada with respect to B Warrants, dated January 15, 1996                                                        
|2.2   | * | Amending Warrant Transfer Agency Agreement between Registrant and Montreal Trust Company of Canada with respect to B Warrants, dated January 31, 1996                                               
|2.3   | * | Agent's Warrant (Non-Transferable) for Purchase of Shares between Registrant and Canaccord Capital Corporation, dated January 15, 1996.                                                             
|2.4   | * | Form of Stock Option with respect to Common Shares without par value                                                                                                                                
|2.5   | * | Special Warrant Indenture between the Registrant and Montreal Trust Company of Canada dated as of November 28, 1996                                                                                 
|2.6   | * | Warrant Indenture between the Registrant and Montreal Trust Company of Canada dated as of November 28, 1996                                                                                         
|2.7   | * | Escrow and Custodial Agreement among Montreal Trust Company of Canada, Newcrest Capital, Inc., CIBC Wood Gundy Securities, Inc., and First Marathon Securities Limited dated as of November 28, 1996
|2.8   | * | Agent's Special Warrants to Acquire Agent's Warrants of Northern
Crown Mines Ltd. dated as of November 28, 1996                                                                                     
|2.9   | * | Agent's Compensation Warrants to Purchase Shares of Northern Crown Mines Ltd. dated as of November 28, 1996                                                                                         
|2.10  | * | Agency Agreement dated as of November 28, 1996                                                                                                                                                      
|3.1   | * | Administrative Services Agreement between Registrant and John S. Brock, dated January 1, 1996                                                                                                       
|3.2   | * | Exploration Program Management Agreement between John S. Brock Limited and Registrant, dated January 1, 1996                                                                                        
|3.3   | * | Letter of Understanding to Mr. Roy A. Martin from Registrant, dated June 3, 1991                                                                                                                    
|3.4   | * | Engagement Agreement among Registrant, Mr. Don Cross and Ms. Francine Quevillon, dated January 17, 1992                                                                                             
|3.5   | * | Declaration of Concession (Zamora), dated February 23, 1995 (in Spanish)                                                                                                                            



39



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|3.6    | * | Declaration of Concession (Alcaraz), dated February 16, 1995 (in Spanish)                                                                                                                                                                                                       
|------ | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.7    | * | Declaration of Concession (Ruiz), dated February 16, 1995 (in Spanish)                                                                                                                                                                                                          
|3.8    | * | Engagement Agreement between Registrant and Mr. Peter Risby, dated April 16, 1996                                                                                                                                                                                               
|3.9    | * | Option To Purchase Agreement between Registrant and Pan Atlantic Group Holdings Inc., dated March 25, 1996                                                                                                                                                                      
|3.10   | * | Agreement for Exploration and Unilateral Promise To Sell Agreement between Minera Campanillas, S.A. de C.V. and Minera Sierra Pacifico, S.A. de C.V., dated July 10, 1992, as amended December 15, 1993 (amendment in Spanish and English; underlying agreement in Spanish only)
|3.10.1 | * | Amending agreement between Minera Campanillas, S.A. de C.V. and Minera Tatemas, S.A. de C.V., dated July 14, 1997                                                                                                                                                               
|3.10.2 | * | Amending agreement between Minera Campanillas, S.A. de C.V. and Minera Tatemas, S.A. de C.V., dated September 29, 1998                                                                                                                                                          
|3.11   | * | Option Agreement between Minera Sierra Pacifico, S.A. de C.V. and Desarrollos Mineros Del Pacifico, S.A. de C.V., dated as of October 20, 1993, as amended by correspondence dated January 15, 1995, December 6, 1994, November 30, 1994 and September 15, 1994.                
|3.11.1 | * | Option Agreement amendment between Minera Sierra Pacifico, S.A. de C.V. and Desarrollos Mineros Del Pacifico, S.A. de C.V., dated April 15, 1998 and March 15, 1999                                                                                                             
|3.12   | * | Agreement with respect to the acquisition of the Mariposa Properties by the Company (for exploration and development) among certain individuals, Pan Atlantic Group Holdings Inc. and Northern Crown Mines Ltd. dated October 25, 1996.                                         
|3.12.1 | * | Agreement with respect to the settlement of debt for the acquisition of the Mariposa Properties by the Company (for exploration and development) among certain individuals, Pan Atlantic Group Holdings Inc. and Northern Crown Mines Ltd. dated January 17, 1997.              
|3.13   | * | Exploration Services and Program Management Agreement between the Registrant and John S. Brock Limited dated January 1, 1997.                                                                                                                                                   
|3.14   | * | Administrative Services Agreement with John S. Brock Limited dated January 1, 1997.                                                                                                                                                                                             
|3.15   | * | Corporate Development Services letter Agreement with Rescom Consultants Ltd. dated April 1, 1997                                                                                                                                                                                
|3.16   | * | Stock Option Plan effective May 7, 1997.                                                                                                                                                                                                                                        
|3.17   | * | Minera Tatemas incorporation document (in Spanish) dated February 13, 1997.                                                                                                                                                                                                     
|3.18   | * | Northern Crown Mines Ltd. Shareholders Rights Plan dated March 20, 1998.                                                                                                                                                                                                        
|3.19   | * | Minera Reina Isabel incorporation document (in Spanish) dated December 15, 1999.                                                                                                                                                                                                
|3.20   | * | Supplementary agreement (in Spanish) with respect to the sale of the shares of Minera Sierra Pacifico, dated December 3, 1999.                                                                                                                                                  
|3.21   | * | Option agreement (in Spanish) with respect to the sale of the shares of Minera Sierra Pacifico, dated November 10, 1999.                                                                                                                                                        
|3.22   | * | Sale of shares of Minera Sierra Pacifico agreement (in Spanish), dated November 10, 1999.                                                                                                                                                                                       
|3.23   | * | Exploration and option agreement between Minera Reina Isabel and Meridian, dated December 29, 2000.                                                                                                                                                                             
|3.24   | * | Exploration and option purchase agreement between Minera Tatemas and Meridian, dated December 29, 2000.                                                                                                                                                                         
|3.25   | * | Form of Stock Option agreement with respect to Common Shares without par value                                                                                                                                                                                                  
|3.26   | * | Funding and participation agreement with Teck Cominco dated December 4, 2001                                                                                                                                                                                                    
|3.27   | * | Amendment to the Funding and participation agreement with Teck Cominco dated February 20, 2002                                                                                                                                                                                  
|3.28   | * | Amendment to the Funding and participation agreement with Teck Cominco dated April 30, 2002                                                                                                                                                                                     
|3.29   | * | Amendment to the Funding and participation agreement with Teck Cominco September 15, 2002                                                                                                                                                                                       



40



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|3.30 | * | Yukon Olympic property Assignment and assumption agreement between Western Prospector Group Ltd., Canadian Empire Exploration Corp. and Copper Ridge Exploration Inc. dated September 20, 2002
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.31 | * | VMS property Assignment and assumption agreement between Western Prospector Group Ltd., Canadian Empire Exploration Corp. and Fayz Yacoub dated October 22, 2002                              
|3.32 | * | Big Bulk property agreement dated August 15, 2002                                                                                                                                             
|3.33 | * | Amos Property Option Agreement with Wheaton River Minerals Ltd. dated June 5, 2002                                                                                                            
|3.34 | * | Hemlo West and Amos properties agreement with Teck Cominco dated March 5, 2002                                                                                                                
|3.35 | * | Certificate of Name Change to change corporate name to Canadian Empire Exploration Corp. ("Registrant"), dated August 14, 2002                                                                
|3.36 | * | Atikokan West Property Option Agreement with Teck Cominco dated January 19, 2004                                                                                                              
|3.37 |   | Barrington Propety agreement with Dan Ethier dated June 16, 2004                                                                                                                              
|3.38 |   | Grubstake and McBride Property agreement with Mark Kilby dated July 1, 2004                                                                                                                   
|3.39 |   | Silver Hope Property agreement  with Sci-Tek Resources Ltd. dated October 4, 2004                                                                                                             
|3.40 |   | Notice of Articles issued October 27, 2004                                                                                                                                                    
|3.41 |   | Articles of Canadian Empire Exploration Corp. as filed on October 27, 2004                                                                                                                    
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               
|     |   |                                                                                                                                                                                               

*Previously filed



41



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INDEX TO FINANCIAL STATEMENTS





|Managements Responsibility to Financial Reporting dated April 1, 2005                                                                
|--------------------------------------------------------------------------------------------------------------------------------------
|Auditors Report dated April 1, 2005                                                                                                  
|Consolidated Balance Sheets as at December 31, 2004 and 2003                                                                          
|Consolidated Statements of Loss and Deficit for the years ended December 31, 2004, 2003 and 2002                                      
|Consolidated Statements of Deferred Exploration and Mineral Property Expenditures for the years ended December 31, 2004, 2003 and 2002
|Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002                                            
|Notes to the Consolidated Financial Statements for the years December 31, 2004, 2003 and 2002                                         







42



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SIGNATURE



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





CANADIAN EMPIRE EXPLORATION CORP.







> By:

John S. Brock



John S. Brock, President









By:



Jeannine P. M. Webb





Jeannine P.M. Webb, Secretary





DATED:  May 13, 2005







43



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CERTIFICATIONS

CERTIFICATION





I, John S. Brock, certify that:



1.

I have reviewed this annual report on Form 20-F of Canadian Empire Exploration Corp.;



2.

Based on my knowledge, this 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 report;



3.

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



4.

The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [omitted pursuant to Transition Period provisions at Section III of Release 34-47986 of the Securities and Exchange Commission entitled Managements Reports on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports] for the company and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and



5.

The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.



"John S. Brock"

John S. Brock

Chief Executive Officer

May 13, 2005



44



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CERTIFICATION





I, Jeannine P M Webb, certify that:



1.

I have reviewed this annual report on Form 20-F of Canadian Empire Exploration Corp.;



2.

Based on my knowledge, this 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 report;



3.

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



4.

The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [omitted pursuant to Transition Period provisions at Section III of Release 34-47986 of the Securities and Exchange Commission entitled Managements Reports on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports] for the company and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and



5.

The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.



Jeannine P. M. Webb

Jeannine P. M. Webb,

Chief Financial Officer
May 13, 2005









45



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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 20-F of Canadian Empire Exploration Corp. ("Company") for the year ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), John S. Brock, as Chief Executive Officer and Jeannine P. M. Webb as Chief Financial Officer of the Company, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, hereby certify, to the best of their respective knowledge, that:

(1) The Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

John S. Brock

John S. Brock,
Chief Executive Officer

May 13, 2005







Jeannine P. M. Webb

Jeannine P. M. Webb,

Chief Financial Officer
May 13, 2005



This certification accompanies this Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.



46







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Canadian Empire Exploration Corp.

(an exploration stage company)



Consolidated Financial Statements

December 31, 2004, 2003 and 2002

(expressed in Canadian dollars)

























---













April
1, 2005







Management's
Responsibility for Financial Reporting





The
accompanying consolidated financial statements of the company have been prepared
by management in accordance with Canadian generally accepted accounting
principles, and contain summary prepared by management reconciling significant
differences between Canadian and U.S. GAAP as they affect these financial
statements. The financial statements contain estimates based on management's
judgement. Management maintains an appropriate system of internal controls to
provide reasonable assurance that transactions are authorized, assets
safeguarded, and proper records maintained.



The
Audit Committee of the Board of Directors has met with the company's
independent auditors to review the scope and results of the annual audit and to
review the consolidated financial statements and related financial reporting
matters prior to submitting the consolidated financial statements to the Board
for approval.



The
company's independent auditors, PricewaterhouseCoopers LLP, are appointed by
the shareholders to conduct an audit in accordance with generally accepted
auditing standards in Canada and the standards of the Public Accounting
Oversight Board (United States), and their report follows.





(signed)
Jeannine P.M. Webb

(signed)
John S. Brock





Jeannine
P.M. Webb

John
S. Brock

Chief
Financial Officer

President





|
|





---







Independent
Auditors' Report



To
the Shareholders of

Canadian
Empire Exploration Corp.



We
have audited the consolidated balance sheets of Canadian Empire Exploration
Corp. as at December 31, 2004 and 2003 and the consolidated statements of
loss and deficit, deferred exploration and mineral property expenditures and
cash flows for the years ended December 31, 2004, 2003 and 2002. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.



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



In
our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 2004
and 2003 and the results of its operations and its cash flows for the years
ended
December 31, 2004, 2003 and 2002 in accordance with Canadian generally accepted
accounting principles.





(signed)
PricewaterhouseCoopers LLP





Chartered
Accountants

Vancouver,
Canada

April
1, 2005

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



In
the United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by significant conditions and events that cast
substantial doubt on the company's ability to continue as a going concern,
such as those described in note 1 to the consolidated financial statements. Our
report to the shareholders dated April 1, 2005 is expressed in accordance with
Canadian reporting standards which do not permit a reference to such events and
conditions in the auditors' report when these are adequately disclosed in the
financial statements.





(signed)
PricewaterhouseCoopers LLP





Chartered
Accountants

Vancouver,
Canada

April
1, 2005



|
|





---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Consolidated
Balance Sheets

As
at December 31, 2004 and 2003



(expressed
in Canadian dollars)







2004
        $
      
      2003
        $AssetsCurrent
        assetsCash
        and cash equivalents (note 1)
      
      451,514
      
      1,067,042Accounts
        receivable
      
      44,411
      
      9,278495,925
      
      1,076,320Reclamation
        deposits(note 3)
      
      11,300
      
      9,600Resource
        assets (note 4)
      
      944,932
      
      -1,452,157
      
      1,085,920LiabilitiesCurrent
        liabilitiesAccounts
        payable and accrued liabilities
      
      201,631
      
      192,802Due
        to management company (note 6)
      
      50,612
      
      46,394252,243
      
      239,196Shareholders'
        EquityCapital
        stock (note 5)Authorized250,000,000
        common shares without par valueIssued29,144,336
        common shares (2003 - 28,474,086)
      
      21,403,422
      
      21,257,464Allotted
        but not issued(note 5)
      
      525,000
      
      -Stock
        options and warrants(notes 5 and 10)
      
      283,241
      
      145,509Contributed
        surplus
      
      64,784
      
      64,784Deficit
      
      (21,076,533)
      
      (20,621,033)1,199,914
      
      846,7241,452,157
      
      1,085,920Nature of operations and going concern(note 1)Subsequent
        events(note 10)




Approved by the Board of Directors



(signed) John S. BrockDirector          (signed) R.E. Gordon
DavisDirector



The
accompanying notes are an integral part of these consolidated financial
statements.





---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Consolidated
Statements of Loss and Deficit

For
the years ended December 31, 2004, 2003 and 2002



(expressed
in Canadian dollars)







2004
        $
      
      2003
        $
      
      2002
        $Administration
        expensesAudit
        and related services
      
      28,717
      
      35,458
      
      14,887Bank
        charges
      
      503
      
      1,178
      
      1,070Tax
        penalty on flow-through shares renounced
      
      30,106
      
      14,309
      
      -Consulting
      
      3,750
      
      7,250
      
      14,805Insurance
      
      3,052
      
      2,873
      
      2,369Interest
        on promissory note (note 6)
      
      -
      
      412
      
      -Legal
      
      41,134
      
      16,046
      
      78,474Loss
        on foreign exchange
      
      786
      
      2,475
      
      173Management
        and administrative services
      
      51,756
      
      67,521
      
      71,206Office
        operations and facilities
      
      41,403
      
      58,745
      
      67,350Shareholder
        communication
      
      19,991
      
      44,201
      
      136,145Stock
        option compensation
      
      137,732
      
      145,509
      
      -Transfer
        agent and filing fees
      
      39,911
      
      43,064
      
      45,206Travel
      
      -
      
      -
      
      1,151398,841
      
      439,041
      
      432,836Other
        expenses (income)Interest
        income
      
      (14,212)
      
      (9,144)
      
      (4,650)Expenses
        recovered
      
      -
      
      (1,337)
      
      -Other
        income
      
      (11,165)
      
      -
      
      -Gain
        on disposal of investment
      
      (670)
      
      -
      
      -Government
        grant recovery
      
      (20,000)
      
      -
      
      -Write-off
        of account receivable (note 4)
      
      -
      
      -
      
      199,672Write-off
        of exploration expenditures (note 4)
      
      2,680
      
      1,475,505
      
      349,104Write-off
        of property acquisition costs (note 4)
      
      -
      
      113,814
      
      -General
        exploration expenditures
      
      100,026
      
      78,800
      
      45,64756,659
      
      1,657,638
      
      589,773Loss
        for the year
      
      455,500
      
      2,096,679
      
      1,022,609Deficit
        - Beginning of year
      
      20,621,033
      
      18,524,354
      
      17,501,745Deficit
        - End of year
      
      21,076,533
      
      20,621,033
      
      18,524,354Basic
        and diluted loss per common share
      
      0.02
      
      0.12
      
      0.12Weighted
        average number of common shares outstanding
      
      28,922,009
      
      17,964,336
      
      8,657,892












The
accompanying notes are an integral part of these consolidated financial
statements.





---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Consolidated
Statements of Deferred Exploration and Mineral Property Expenditures

For
the years ended December 31, 2004, 2003 and 2002



(expressed
in Canadian dollars)







2004
        $
      
      2003
        $
      
      2002
        $Exploration
        and mineral property expendituresAccommodation
      
      13,295
      
      32,260
      
      38,458Assay
        and geochemical analysis
      
      38,379
      
      12,918
      
      29,305Consulting
      
      144,411
      
      31,563
      
      92,265Depreciation
      
      -
      
      -
      
      2,236Drilling
      
      386,984
      
      110,483
      
      581,627Environmental
        and permitting
      
      4,500
      
      -
      
      100Expediting
      
      932
      
      6,422
      
      7,032Field
        supplies
      
      19,602
      
      9,421
      
      15,772Fuel
      
      732
      
      14,810
      
      9,965Maps,
        printing and drafting
      
      7,813
      
      5,053
      
      4,900Project
        management fees
      
      71,739
      
      52,041
      
      27,053Property
        acquisition costs
      
      108,300
      
      22,555
      
      91,159Salaries
        and wages
      
      128,493
      
      212,663
      
      201,904Surveys
      
      -
      
      48,302
      
      92,627Transportation
      
      121,130
      
      100,976
      
      209,000Trenching
        and roads
      
      1,328
      
      -
      
      -1,047,638
      
      659,467
      
      1,403,403Write-off
        of exploration expenditures
      
      (2,680)
      
      (1,475,505)
      
      (349,104)Write-off
        of property acquisition costs
      
      -
      
      (113,814)
      
      -General
        exploration expenditures
      
      (100,026)
      
      (78,800)
      
      (45,647)(102,706)
      
      (1,668,119)
      
      (394,751)Increase
        (decrease) in exploration and mineral property expenditures
      
      944,932
      
      (1,008,652)
      
      1,008,652Balance
        - Beginning of year
      
      -
      
      1,008,652
      
      -Balance
        - End of year(note 4)
      
      944,932
      
      -
      
      1,008,652












The
accompanying notes are an integral part of these consolidated financial
statements.





---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Consolidated
Statements of Cash Flows

For
the years ended December 31, 2004, 2003 and 2002



(expressed
in Canadian dollars)







2004
        $
      
      2003
        $
      
      2002
        $Cash
        flows from operating activitiesLoss
        for the year
      
      (455,500)
      
      (2,096,679)
      
      (1,022,609)Items
        not affecting cashWrite-off
        of account receivable
      
      -
      
      -
      
      199,672Stock
        option compensation
      
      137,732
      
      145,509
      
      -Write-off
        of exploration expenditures
      
      2,680
      
      1,475,505
      
      349,104Write-off
        of property acquisition costs
      
      -
      
      113,814
      
      -(315,088)
      
      (361,851)
      
      (473,833)Changes
        in non-cash working capital items(Increase)
        decrease in accounts receivable
      
      (35,133)
      
      60,292
      
      (60,444)Increase
        (decrease) in current liabilities
      
      13,047
      
      52,989
      
      (25,940)(337,174)
      
      (248,570)
      
      (560,217)Cash
        flows from financing activitiesIssue
        of common shares
      
      123,700
      
      1,266,000
      
      2,315,000Funds
        received for shares allotted but not issued
      
      525,000
      
      -
      
      -Special
        warrants
      
      -
      
      -
      
      246,000Share
        issue costs
      
      (42)
      
      (89,856)
      
      (362,765)648,658
      
      1,176,144
      
      2,198,235Cash
        flows from investing activitiesProperty
        acquisition costs
      
      (86,000)
      
      (22,555)
      
      (13,159)Deposit
        for reclamation bonds
      
      (1,700)
      
      (9,600)
      
      -Exploration
        expenditures - net of depreciation
      
      (839,312)
      
      (558,112)
      
      (949,361)(927,012)
      
      (590,267)
      
      (962,520)(Decrease)
        increase in cash and cash equivalents
      
      (615,528)
      
      337,307
      
      675,498Cash
        and cash equivalents - Beginning of year
      
      1,067,042
      
      729,735
      
      54,237Cash
        and cash equivalents - End of year(note 1)
      
      451,514
      
      1,067,042
      
      729,735Supplemental
        cash flow informationNon-cash
        operating and financing activitiesIssue
        of shares for share issue costs
      
      -
      
      6,300
      
      60,000Issue
        of shares for mineral property costs
      
      22,300
      
      -
      
      393,00022,300
      
      6,300
      
      453,000








The
accompanying notes are an integral part of these consolidated financial
statements.





---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





1

Nature
of operations and going concern

Canadian
Empire Exploration Corp. (the company) is in the business of acquiring and
exploring mineral properties.

The
company has not yet determined whether its properties contain mineral deposits
that are economically recoverable. All of the company's mineral property
interests are currently located in Canada. The recoverability of the amounts
shown for resource assets is dependent upon the existence of economically
recoverable mineral deposits, the ability of the company to obtain the necessary
financing to complete the exploration and development of its properties, and
upon future profitable production or proceeds from the disposition of the
properties.

As
at December 31, 2004, the company had cash and cash equivalents of $451,514
(2003 - $1,067,042), of which $342,964 (2003 - $927,891) is restricted to
flow-through expenditures on Canadian mineral properties. As at
December 31, 2004, the company has an unrestricted working capital
deficiency of $99,282 (2003 - $90,767).

The
company's ability to continue operations is dependent on management's
ability to secure additional financing. Management is actively pursuing such
additional sources of financing, and while it has been successful in doing so in
the past, there can be no assurance it will be able to do so in the future.
Because of this uncertainty, there is substantial doubt about the ability of the
company to continue as a going concern.

These
consolidated financial statements do not include the adjustments that would be
necessary should the company be unable to continue as a going concern. Such
adjustments could be material.



2

Significant
accounting policies

Accounting
principles

These
consolidated financial statements are prepared in accordance with generally
accepted accounting principles (GAAP) applicable in Canada. Except as disclosed
in note 9, these consolidated financial statements conform in all material
respects with U.S. GAAP.

Principles
of consolidation

These
consolidated financial statements include the accounts of the company and its
fully integrated foreign subsidiaries, Minera Reina Isabel, S.A. de C.V. (Minera
Reina) and Minera Tatemas, S.A. de C.V. (Minera Tatemas), which were
incorporated to carry out mineral exploration and development programs in Mexico
and which are inactive.



(1)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Use
of estimates

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

Cash
and cash equivalents

Cash
and cash equivalents includes cash and short-term deposits maturing within 90
days of the original date of acquisition.

Resource
assets

The
company records its interests in mineral properties and areas of geological
interest at cost less option payments received and other recoveries. Exploration
and development costs and royalties relating to these interests and projects are
capitalized on the basis of specific claim blocks or areas of geological
interest until the properties to which they relate are placed into production,
sold or allowed to lapse. The company expenses all administration costs incurred
during the year. Effective January 1, 2004, the company has adopted the Canadian
Institute of Chartered Accountants (CICA) standard on impairment of long-lived
assets on a prospective basis. Management of the company reviews the net
carrying value of resource assets when events or changes in circumstances
indicate that the carrying amount may not be recoverable.

The
carrying value may be estimated by quantifiable evidence of a geological
resource or the company's assessment of its ability to sell the property for
an amount greater than the carrying value.

On
a quarterly basis, senior management reviews the carrying value of deferred
mineral property acquisition and exploration expenditures to assess whether
there has been any impairment in value. In the event that mineral deposits are
determined to be insufficient to recover the carrying value of any property, the
carrying value will be written down or written off, as appropriate.

Although
management 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 be in
non-compliance with regulatory requirements.

Mineral
property option agreements

Option
payments are made at the discretion of the optionee and, accordingly, are
accounted for when received. Option payments received will be treated as a
reduction of the carrying value of the related mineral property and deferred
costs until the company's costs are recovered. Option payments received in
excess of costs incurred will be credited to income.



(2)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Income
taxes

Future
income tax assets and liabilities are determined based on the differences
between the tax basis of assets and liabilities and those reported in the
financial statements. The future tax assets or liabilities are calculated using
substantively enacted tax rates and laws that are expected to be in effect in
the periods in which the future income tax assets or liabilities are expected to
be settled or realized. Future tax assets are recognized to the extent that they
are considered more likely than not to be realized.

Translation
of foreign currencies

Monetary
assets and liabilities are translated at the exchange rates in effect at the
balance sheet date and non-monetary assets and liabilities at the exchange rates
in effect at the time of acquisition or issue. Income and expenses are
translated at rates approximating exchange rates in effect at the time of the
transactions. Exchange gains and losses arising on translation are included in
loss for the year.

Loss
per common share

Loss
per common share is calculated using the weighted average number of common
shares issued and outstanding during each year. The effect of exercise of share
options and warrants would be anti-dilutive.

Stock-based
compensation

Effective
January 1, 2003, the company elected to apply the fair value method of
accounting for stock options granted to directors, officers and employees on a
prospective basis in accordance with the recommendations of the CICA.
Accordingly, the fair value of all stock options granted is recorded as a charge
to administration expenses and a credit to shareholders' equity. Consideration
received on exercise of stock options is credited to capital stock.

Financial
instruments

Cash
and cash equivalents, accounts receivable, accounts payable and accrued
liabilities and due to management company are valued at their carrying amounts
which are reasonable estimates of fair value due to the relatively short period
to maturity.



3

Reclamation
deposits

At
December 31, 2003, $9,600 was pledged to the British Columbia Ministry of Energy
and Mines as security for reclamation costs of the Big Bulk property. The funds
were returned to the company on January 12, 2004. During 2004, $11,300 was
pledged to the British Columbia Ministry of Energy and Mines as security for
reclamation cost of the Silver Hope Property.



(3)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





4

Resource
assets

2004
      
      2003Property
        acquisition
        expenditures
        $
      
      Deferred
        exploration
        expenditures
        $
      
      Total
        $
      
      Total
        $Atikokan
        West
      
      -
      
      403,238
      
      403,238
      
      -Silver
        Hope
      
      94,000
      
      285,406
      
      379,406
      
      -McBride
      
      -
      
      89,718
      
      89,718
      
      -Barrington
      
      14,300
      
      58,270
      
      72,570
      
      -108,300
      
      836,632
      
      944,932
      
      -




a)

Atikokan
West property

During
2004, the company acquired the right to earn an 80% interest in the Atikokan
West property by making staged exploration expenditures in the aggregate amount
of $1,000,000 by December 31, 2008 and then maintaining that interest by funding
ongoing exploration through pre-feasibility. After the completion of a
pre-feasibility study, the vendor may back-in for a 60.8% interest in the
project by funding a minimum of 200% of the company's prior expenditures and
completing a feasibility study.

b)

Silver
Hope property

During
2004, the company entered into an agreement to earn 65% interest in the Silver
Hope property by making cash payments of $315,000 ($45,000 paid) and common
share payments of 1,000,000 common shares (200,000 shares issued at a fair value
of $19,000 prior to December 31, 2004) by December 31, 2008 and completing $5.0
million in exploration expenditures by December 31, 2009. The company and the
vendor may then form a joint venture, with each party providing pro rata funding
of ongoing exploration. Non-contribution by either party to the joint venture
will result in pro rata dilution of interest, convertible to a 2% NSR subject to
a buy-down provision from the relinquishing party for $2.0 million.

c)

McBride
property

During
2004, the company entered into a grubstake agreement with two prospectors.
Pursuant to the grubstake agreement, the company in 2005 entered into agreement
to earn an initial 90% interest in the McBride property by spending $1.0 million
in exploration costs on the property, making staged cash payments totalling
$140,000 and issuing in stages a total of 250,000 units by December 31, 2008 to
the prospectors. Each unit will comprise of one common share and one 12-month
warrant, priced in accordance with market at the time of issuance, allowing for
the acquisition of one common share. The company holds the option to acquire the
remaining 10% for cash payment of $100,000 and the issuance of 1.5 million
common shares to the prospectors. The prospectors will hold a 1% NSR on future
production, of which the company has the right to buy down 0.5% NSR for $1.0
million.



(4)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





d)

Barrington
property

During
2004, the company entered into an option agreement to earn a 100% interest in
the Barrington property by making staged cash payments totalling $150,000
($10,000 paid), issuing in stages 250,000 common shares (50,000 issued at fair
value of $3,000), and completing exploration expenditures of $500,000 on or
before June 1, 2008. The vendor will retain a 2% NSR, of which the company will
have the right to buy down 1% for $1.0 million. Effective June 1, 2009, the
underlying vendor will receive the greater of an advance royalty of $5,000
annually or the specified NSR. Pursuant to a separate agreement, the company
paid a finder's fee of $1,000 and issued 5,000 common shares at a fair value
of $300, to an arm's-length individual. These amounts have been treated as
acquisition costs.

e)

During
2002, the company entered into agreements to acquire or earn interests in the
Hemlo West, Amos, Yukon Olympic, Big Bulk and VMS properties. The company
subsequently relinquished all of its interests in these properties, and in 2004,
wrote off $2,680 (2003 - $1,475,505) of deferred exploration expenditures, and
$nil (2003 - $113,814) of property acquisition costs.

f)

During
2002, the company determined that it was not financially practicable to continue
pursuing collection of a value-added tax amount receivable of $199,672, and
accordingly, the amount was written off.





(5)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





5

Capital
stock

Authorized

250,000,000
common shares without par value



Issued
and outstanding

Number
        of
        shares
      
      Amount
        $December
        31, 2001
      
      3,919,420
      
      17,490,085For
        cashPrivate
        placements
      
      4,441,666
      
      578,000Public
        offering
      
      5,400,000
      
      1,620,000Warrants
      
      390,000
      
      117,000For
        share issue costs
      
      200,000
      
      60,000For
        mineral properties
      
      1,490,000
      
      393,000Less:
         Share issue costs
      
      -
      
      (422,765)December
        31, 2002
      
      15,841,086
      
      19,835,320For
        cashPrivate
        placement
      
      11,750,000
      
      1,266,000On
        conversion of special warrants
      
      820,000
      
      246,000For
        share issue costs
      
      63,000
      
      6,300Less:
         Share issue costs
      
      -
      
      (96,156)December
        31, 2003
      
      28,474,086
      
      21,257,464For
        cashOn
        exercise of warrants
      
      415,250
      
      123,700For
        mineral properties
      
      255,000
      
      22,300Less:
         Share issue costs
      
      -
      
      (42)December
        31, 2004
      
      29,144,336
      
      21,403,422




a)

During
2004:

i)

The
company issued 415,250 common shares on the exercise of 420,500 warrants for
proceeds of $123,700, of which 3,500 common shares were issued in relation to
flow-through warrants for proceeds of $525, and 410,000 common shares were
issued in relation to an agreement with Teck Cominco Limited (Teck Cominco) for
proceeds of $123,000.

ii)

The
company received, in connection with a private placement, gross proceeds of
$525,000, of which $350,000 were flow-through funds. The shares were issued in
2005 (note 10).



(6)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





iii)

In
connection with the Barrington property, the company issued 50,000 common shares
to the vendor at a fair value of $3,000 and 5,000 common shares to a finder at a
fair value of $300.

iv)

In
connection with the Silver Hope property, the company issued 200,000 common
shares to the vendor at a fair value of $19,000.

v)

Incentive
stock options allowing for the purchase of up to 2,458,000 common shares in the
aggregate at $0.10 per share until September 17, 2009 were granted. The fair
value of options granted, vested and expired unexercised in 2004 was $137,731.

b)

During
2003:

i)

In
connection with an agreement with Teck Cominco, the company issued 820,000
special warrants for funds in the amount of $246,000 received in 2002. The
special warrants were converted to 820,000 units, with each unit comprising one
common share in the capital of the company and one share purchase warrant
entitling the holder to acquire one common share in the capital of the company
at $0.30 per share until December 13, 2004. Warrants allowing for the purchase
of up to 410,000 common shares were exercised during 2004 and the remainder
expired unexercised.

ii)

In
connection with private placements, the company issued shares and warrants as
follows:

Number
        of
        flow-
        through
        shares
      
      Number
        of non-flow-
        through
        shares
      
      Total
        shares
      
      Price
        per share
        $
      
      Total
        $
      
      Number
        of non-flow-
        through
        warrants6,244,000
      
      2,186,000
      
      8,430,000
      
      0.10
      
      843,000
      
      2,186,000
    
    (1)2,500,000
    
    -
    
    2,500,000
    
    0.12
    
    300,000
    
    --
    
    820,000
    
    820,000
    
    0.15
    
    123,000
    
    820,0008,744,000
    
    3,006,000
    
    11,750,000
    
    
    
    1,266,000
    
    3,006,000




In
respect of the above private placements, the company also issued to agents who
introduced arm's-length purchasers to the company 63,000 units, each unit
comprising one common share and one share purchase warrant, with two share
purchase warrants entitling the holder to acquire one common share at $0.10 per
share until September 14, 2004 (3,500 warrants exercised during 2004); and
348,000 warrants, each warrant entitling the holder to acquire one common share
at $0.14 per share until October 12, 2004. All of the remaining warrants expired
unexercised.

(1)

All
of the warrants expired unexercised during 2004.



(7)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





iii)

In
connection with financing completed in 2002, the company amended the terms of
warrants as follows:

- the
    expiry date of 1,500,000 warrants allowing for the purchase of 1,500,000
    shares at $0.15 per share was extended from May 23, 2003 to May 22, 2004.
    All of the warrants expired unexercised.
- the
    expiry date of 1,080,000 agents' warrants allowing for the purchase of
    1,080,000 shares at $0.35 per share was extended from June 18, 2003 to June
    18, 2004. All of the warrants expired unexercised.
- the
    exercise price of 4,050,000 warrants allowing for the purchase of 2,025,000
    shares was amended from $0.35 per share to $0.15 per share and the expiry
    date was extended from June 18, 2003 to June 18, 2004. Of these,
    3,500 shares were issued on exercised of warrants during 2004 and the
    remainder expired unexercised.

iv)

In
connection with incentive stock options granted during 2003, the company valued
such options at $145,509 and credited that amount to stock options and warrants.

c)

During
2002

i)

In
connection with an agreement with Teck Cominco, the company issued 390,000
shares at $0.30 per share on the exercise of warrants.

ii)

In
connection with financings, the company issued shares and warrants as follows:

Number
        of
        shares
      
      Number
        of
        warrants
      
      Price
        per
        share
        $
      
      Total
        $1,500,000
      
      1,500,000
      
      0.15
      
      225,0005,400,000
      
      7,830,000
      
      0.35
      
      1,620,0002,941,666
      
      278,333
      
      0.12
      
      353,0009,841,666
      
      9,608,333
      
      
      
      2,198,000




In
respect of the public offering, the company issued 4,050,000 flow-through units,
comprising one flow-through share and one flow-through share purchase warrant.
Each two flow-through share purchase warrants entitle the holder to purchase one
share of the company at $0.35 per share. During 2004, 7,000 warrants were
exercised. The company also issued 1,350,000 non-flow-through units, comprising
one non-flow-through share and two non-flow-through share purchase warrants.
Each two non-flow-through share purchase warrants entitle the holder to purchase
one share of the company at $0.35 per share. In addition, the company issued
1,080,000 non-flow-through agents' warrants, each one entitling the holder to
purchase one share of the company for $0.35 per share.



(8)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





During
2003, 2,985,903 warrants allowing for the purchase of 1,635,903 shares expired
unexercised, and during 2004, all of the remaining warrants expired unexercised.

iii)

In
connection with property agreements (note 4), the company issued shares as
follows

Number
        of shares
      
      Total
        value
        $VMS
      
      150,000
      
      18,000Yukon
        Olympic
      
      500,000
      
      60,000Amos
      
      840,000
      
      315,0001,490,000
      
      393,000




The
company also issued a total of 300,000 warrants allowing for the purchase of
200,000 shares at $0.20 per share until September 20, 2004 and 100,000 shares at
$0.20 per share until October 22, 2004. During 2004, all of the warrants
expired unexercised.

iv)

The
company received $246,000 for 820,000 special warrants allowing for the purchase
of 820,000 units convertible until October 16, 2003, for no further
consideration, into one share and one underlying share purchase warrant
exercisable into one share at $0.30 per share for a period of one year from the
exercise of the special warrant. The special warrants were issued in 2003
(note 5(a)).

Stock
options

In
2002, the company adopted a stock option plan (the Plan) as amended authorizing
the granting of stock options to qualified optionees to purchase a total of up
to 5,777,867 common shares of the company.

Under
the terms of the Plan, the term of stock options granted may not exceed five
years following the date of grant, and the stock options must vest for a period
of not less than 18 months from the date of grant, to be released and available
for exercise at a rate of 25% of the number of options at the beginning of the
first quarter commending on the date of grant and at a rate of 12.5% at the
beginning of each quarter thereafter.



(9)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Common
shares under option are as follows:

Number
        of shares
      
      Weighted
        average price
        $Outstanding
        at December 31, 2002
      
      200,000
      
      0.36Granted
        during the year
      
      1,680,000
      
      0.15Expired
        during the year
      
      (200,000)
      
      0.36Outstanding
        at December 31, 2003
      
      1,680,000
      
      0.15Granted
        during the year
      
      2,458,000
      
      0.10Expired
        during the year
      
      (215,000)
      
      0.15Outstanding
        at December 31, 2004
      
      3,923,000
      
      0.12




Stock
options outstanding and exercisable at December 31, 2004 are as follows:

Number
        of shares outstanding
      
      Number
        of shares exercisable
      
      Exercise
        price
        $
      
      Expiry
        date100,000
      
      87,500
      
      0.15
      
      August
        21, 20081,365,000
      
      1,365,000
      
      0.15
      
      January
        3, 20082,458,000
      
      921,750
      
      0.10
      
      September
        17, 20093,923,000
      
      2,374,250






(10)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Stock
option information

Effective
January 1, 2002, the company adopted the new accounting standard for stock-based
compensation. As permitted under the standard, for income statement purposes,
the company elected in 2002 not to follow the fair value-based method of
accounting for share options granted to employees and directors. Had the company
followed the fair value method of accounting, the company would have recorded a
compensation expense of $54,000 in 2002 in respect of the 200,000 options it
granted to its employees and directors. Pro forma earnings information
determined under the fair value method of accounting for stock options is as
follows:

Stock
option pro forma information for the year 2002:

$Loss
        for the yearAs
        reported
      
      1,022,609Compensation
        expense
      
      54,000Pro
        forma loss
      
      1,076,609Basic
        and diluted loss per common shareAs
        reported
      
      0.12Pro
        forma
      
      0.12




Effective
January 1, 2003, the company elected to apply the fair value method of
accounting for stock options on a prospective basis and, accordingly, the fair
value of the vested portion of stock options granted in 2003 of $145,509 and in
2004 of $137,732 has been included in administrative expenses.

The
fair value of stock options granted in 2002, 2003 and 2004 was estimated at the
grant date based on the Black-Scholes option pricing model, using the following
assumptions:

2004
      
      2003
      
      2002Expected
        dividend yield
      
      nil
      
      nil
      
      nilAverage
        risk-free interest rate
      
      4.0%
      
      3.25%
        - 4.9%
      
      4.9%Expected
        life
      
      5
        years
      
      5
        years
      
      5
        yearsExpected
        volatility
      
      114%
      
      94%
        - 171%
      
      94%




Option
pricing models require the input of highly subjective assumptions including the
expected price volatility. Changes in the subjective input assumptions can
materially affect the fair value estimate, and therefore, the existing models do
not necessarily provide a reliable measure of the fair value of the company's
stock options.



(11)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Warrants

The
changes in warrants outstanding are as follows:

Number
        of warrants
      
      Number
        of shares issuable on exercise of warrants
      
      Weighted
        average exercise price per share
        $Outstanding
        at December 31, 2002
      
      9,915,903
      
      6,540,903
      
      0.28Issued
        during the year
      
      4,237,000
      
      3,750,500
      
      0.17Expired
        during the year
      
      (2,985,903)
      
      (1,635,903)
      
      0.31Outstanding
        at December 31, 2003
      
      11,167,000
      
      8,655,500
      
      0.19Expired
        during the year
      
      (9,926,500)
      
      (7,420,250)
      
      0.18Exercised
        during the year
      
      (420,500)
      
      (415,250)
      
      0.30Outstanding
        at December 31, 2004
      
      820,000
      
      820,000
      
      0.15




At
December 31, 2004, there were 820,000 warrants outstanding and exercisable into
820,000 common shares at $0.15 per share until December 22, 2005.



6

Related
party transactions

John
S. Brock Limited

During
2003, the company was advanced $30,000 by John S Brock Limited, a company owned
by John S. Brock, the CEO and President of the company and Wayne J. Roberts, the
Vice-President, Exploration of the company, and was charged interest in the
amount of $412. During 2003, the interest was paid, and the principal was repaid
in 2004.



(12)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





Badger
& Co. Management Corp.

During
the year ended December 31, 2004, the company was charged $64,686 (2003 -
$91,675; 2002 - $65,767) for office operations and facilities, $110,647 (2003 -
$154,082; 2002 - $141,700) for professional services, and $90,414 (2003 -
$140,729; 2002 - $53,207) for exploration salaries and wages and project
management fees, by Badger & Co. Management Corp., a company owned by three
of the directors or officers of the company. At December 31, 2004, the company
owed $50,612 (2003 - $46,394) to Badger & Co. Management Corp.



7

Income
taxes

A
reconciliation of the combined Canadian federal and provincial income taxes at
statutory rates and the company's effective income tax expense is as follows:

2004
        $
      
      2003
        $
      
      2002
        $Income
        tax recovery at statutory rates
      
      (162,158)
      
      (788,771)
      
      (388,062)Increase
        in taxes fromWritedown
        of resource assets
      
      36,563
      
      627,546
      
      156,400Benefit
        of losses not recognized
      
      125,595
      
      161,225
      
      231,662-
      
      -
      
      -




The
components of future tax assets are as follows:

2004
        $
      
      2003
        $Resource
        assets
      
      460,000
      
      493,000Non-capital
        loss carry-forwards
      
      960,000
      
      1,298,000Capital
        loss carry-forward
      
      1,810,000
      
      1,912,0003,230,000
      
      3,703,000Less:
         Valuation allowance
      
      (3,230,000)
      
      (3,703,000)Future
        income tax asset
      
      -
      
      -






(13)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





At
December 31, 2004, the company had approximately $2,712,000 of losses available
for carry-forward. The loss carry-forwards can be offset against income for
Canadian income tax purposes in future years and expire as follows:

$2005
      
      543,0002006
      
      511,0002007
      
      408,0002008
      
      263,0002009
      
      489,0002010
      
      386,0002011
      
      112,0002,712,000






8

Shareholder
rights plan

The
company has in place a shareholder rights plan (the Plan) which is designed to
encourage the fair treatment of the company's shareholders in connection with
any take-over offer and, in particular, any unsolicited take-over bid for the
company.

Pursuant
to the Plan, rights have been created and attached to the common shares of the
company. If a person (the Bidder) acquires 20% or more of the outstanding voting
shares of the company without complying with the Plan, each right, other than
the rights held by the Bidder, will entitle the shareholder, other than the
Bidder, to purchase for $30, common shares of the company having a market value
of $60.



9

Differences
between Canadian and U.S. generally accepted accounting principles

The
company's consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in Canada. The material
measurement differences between GAAP in Canada and the United States that would
have an effect on these financial statements are as follows:

a)

Accounting
for stock-based compensation

For
U.S. GAAP purposes, the company has prospectively adopted the fair value based
method of accounting for stock based compensation in accordance with FAS 148.
This resulted in no differences between Canadian and U.S. GAAP.



(14)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





b)

Mineral
property exploration expenditures

For
U.S. GAAP purposes, the company expenses as incurred exploration and acquisition
expenditures relating to early stage mineral properties.

c)

Flow-through
shares

As
described in note 5, the company allotted by way of private placement 3,500,000
flow-through common shares at $0.10. The company received a net premium to
market on this allotment of $70,000 which was recorded in shareholder's equity
as part of the transaction. For U.S. GAAP purposes, SFAS 109, "Accounting for
Income Taxes" (SFAS 109), the proceeds should be allocated between the
offering of the shares and the sale of tax benefits when the shares are offered.
The allocation is made based on the difference between the quoted price of the
shares and the amount the investor pays for the flow-through shares. A future
income tax liability is recognized for the premium paid by the investors.

d)

For
U.S. GAAP cash flow statement purposes:

i)

exploration
expenditures would be shown under operating activities rather than under
investing activities

ii)

restricted
flow-through funding would not be included in the cash and cash equivalents
balance.

e)

If
these consolidated financial statements were prepared in accordance with U.S.
GAAP, the impact on the consolidated balance sheets would be as follows:

2004
        $
      
      2003
        $Resource
        assets - under Canadian GAAP
      
      944,932
      
      -Exploration
        expenditures (b)
      
      (944,932)
      
      -Resource
        assets - under U.S. GAAP
      
      -
      
      -FIT
        - under Canadian GAAP
      
      -
      
      -Flow-through
        premium (c)
      
      70,000
      
      -FIT
        - under U.S. GAAP
      
      70,000
      
      -Deficit
        - under Canadian GAAP
      
      (21,076,533)
      
      (20,621,033)Exploration
        expenditures (b)
      
      (944,932)
      
      -Deficit
        - under U.S. GAAP
      
      (22,021,465)
      
      (20,621,033)






(15)







---

Canadian
Empire Exploration Corp.

(an
exploration stage company)

Notes
to Consolidated Financial Statements

December
31, 2004, 2003 and 2002



(expressed
in Canadian dollars)





In
addition, the impact on the consolidated statements of loss would be as follows:

2004
        $
      
      2003
        $
      
      2002
        $Loss
        for the year - under
        Canadian GAAP
      
      (455,500)
      
      (2,096,679)
      
      (1,022,609)Exploration
        expenditures - net of write-downs
      
      (944,932)
      
      1,008,652
      
      (1,008,652)Loss
        for the year - under
        U.S. GAAP
      
      (1,400,432)
      
      (1,088,027)
      
      (2,031,261)Loss
        per common share - under
        U.S. GAAP
      
      (0.05)
      
      (0.06)
      
      (0.23)




f)

New
Accounting Pronouncements

The
CICA has issued Accounting Guideline 15, "Consolidation of Variable Interest
Entities," which will be effective for annual and interim periods beginning on
or after November 1, 2004. This guideline addresses the application of
consolidation principles to entities that are subject to control on a basis
other than ownership of voting interests. The adoption of this guideline did not
have any impact on the company's consolidated financial statements because the
company determined it does not have any variable interest entities.

In
December 2004, the FASB issued SFAS 153, "Exchanges of Non-Monetary Assets -
An amendment of APB 29". This statement amends APB 29, which is based on the
principle that exchanges of non-monetary assets should be measured at the fair
value of the assets exchanged with certain exceptions. SFAS 153 eliminates the
exception for non-monetary exchanges of similar productive assets and replaces
it with a general exception for exchanges of non-monetary assets that do not
have commercial substance. A non-monetary exchange has commercial substance if
the future cash flows of the entity are expected to change significantly as a
result of the exchange. This statement is effective for non-monetary asset
exchanges occurring in fiscal periods beginning on or after June 15, 2005.



10

Subsequent
events

On
February 4, 2005, in connection with a private placement, the company issued
3,500,000 common shares and 3,500,000 flow-through common shares. Funds in
respect of the private placement were received in 2004 (note 5). The company
also issued 170,030 common shares in payment of finders' fees related to the
private placement.







(16)







---



Exhibit
3.37



|[f337letteragreement002.gif] | Canadian Empire Exploration Corp


1205
- 675 West Hastings
St.
Vancouver, B.C. V6B 1N2
Ph:  604-687-4951, Fax: 604-687-4991
|---------------------------- | ----------------------------------------------------------------------------------------------------------------------------











June 16, 2004





Mr. Dan Ethier

Box 12, RR1,
Woodcock Road

South Hazelton, BC

V0J 2R0





Dear Dan:



Re:
Agreement
between Canadian Empire Exploration Corp. (the "Company") and Dan Ethier ("Owner")
for an Option to Acquire the Bob Property (the "Property")



This Letter Agreement
(the "Agreement") contains the principal terms under which the Owner grants
the Company the sole and exclusive option (the "Option") to earn a 100%
interest in the Property as defined in Schedule A.  The Agreement is
subject to completion of a satisfactory field examination on or before July 5,
2004.















1.      
Payments



Date





Cash

Shares*



On
signing Letter of Agreement

and
completion of Field
Examination                   
$
   5,000                        
-------

Receipt
of Regulatory Approval                           
$
   5,000                      
 50,000
June 1,
2005                                                     
$
 20,000                       
50,000

June
1,
2006                                                     
$
 30,000                       
50,000



June
1,
2007                                                     
$
 40,000                     
  50,000







June
1,
2008                                                     
$  50,000                  
  50,000





TOTAL

$150,000
                        250,000
 Shares





*  Common shares in the capital
of the Company (the "Shares")



2.      Exploration
Expenditures



The Company will have
the right and option to complete cumulative exploration expenditures ("Exploration
Expenditures") in the amount of $500,000 on or before June 1, 2008 (the "Option
Period").









---

Exhibit
3.37



Exploration
Expenditures to be defined as all "Property-related Expenditures", which
expenditures will include all costs related to mineral exploration, property
acquisitions, mineral titles maintenance, including lease fees and property
taxes and Operator's Management Fees.



3.      Interest
Earned



Upon the Company
making Exploration Expenditures in the amount of $500,000 and paying the Owner a
total of $150,000 and making share payments to the Owner totaling 250,000 Shares
during the Option Period, the Company will earn a 100% interest in the Property.





4.     Termination
of Option



The Agreement will
terminate within 30 days of the Company having received notice from the Owner
advising that the Company is delinquent in the making of any payments and the
Company's failure to remedy the making of any payments as specified in
Paragraph 1 above.



5. 
Assessment
Work



During
the Option Period, the Company will file sufficient assessment work to maintain
all claims comprising the Property in good standing.



6.       
Net
Smelter Return Interest ("NSR")





Upon the Company
having earned its 100% interest in the Property, the Owner will be granted a 2%
NSR for which the Company will have the right to buy down 1% NSR for $1.0
million.  Effective June 1, 2009 and thereafter, the Owner will receive the
greater of an advance royalty of $5,000 annually or the specified NSR.



7.    
Property



The Property, known as the Bob
Property, is defined in accordance with Schedule A attached.



8.    
Area of Interest



The Area of Interest
is defined as the area within one kilometre of the outer boundary of the
Property, excluding third party properties.



9.    
Assignment



Either party has the
right to assign interests to a third party as long as the incoming third party
interest will be maintained in accordance with this Agreement and such third
party agrees in writing to be bound by the terms of this Agreement.



10.    
Regulatory
Approval



The Agreement is subject to Regulatory
Approval by the TSX Venture Exchange.



11.    
Applicable
Contract Work



The Owner will be
given opportunity to bid on contracts for work on the Property including but not
limited to staking, linecutting and/or prospecting as may be contemplated by the
Company.



12.    
The Company







---

Exhibit
3.37





The Company is a
reporting issuer in British Columbia, Alberta, Manitoba and Ontario, with its
shares listed for trading on TSX Venture Exchange.







13.    
Governing Laws



This Agreement shall
be governed by the laws of British Columbia.



14.    
Effective Date



This Agreement is made
and entered into effective as of the date first appearing on this Agreement (the
"Effective Date").





Your acceptance of the
terms as presented above is to be indicated by signing a copy of this Agreement,
and returning it to the Company.



Yours truly,







Wayne J. Roberts

Vice-President, Exploration

| | 
| | 







Hereby
Acknowledged and Agreed this ____ day of June, 2004





_______________________________

DAN
ETHIER









---

Exhibit
3.38



|[f337letteragreement002.gif] | Canadian Empire Exploration Corp


1205
- 675 West Hastings
St.
Vancouver, B.C. V6B 1N2
Ph:  604-687-4951, Fax: 604-687-4991
|---------------------------- | ----------------------------------------------------------------------------------------------------------------------------

















July
1, 2004





Mark
Kilby

Suite
308 - 2352 West Broadway

Vancouver,
BC  V6K 2E5





Proposal
for Prospector's Grubstake Agreement and

Acquisition
of the McBride Copper-Nickel Project (the "Project")



Between: 
Canadian
Empire Exploration Corp. ("Empire")



and



Mark
Kilby ("Kilby")



hereinafter
called the ("Parties")





Dear
Mark:



By
way of this Letter of Agreement, Empire proposes the following terms of a
Prospector's Grubstake Agreement, which at Empire's option would be followed
by an option (the "Option Agreement") to earn a majority interest in the
Project.



This
Letter of Understanding does not contain all of the details that would be
expected in a definitive agreement, but provides the principal terms as
presented below that would be incorporated in a more formal and comprehensive
agreement.



A.

Prospector's
Grubstake Agreement



1.

Kilby
warrants that he has the sole right and authority to enter into this Grubstake
Agreement.



2.

Kilby
will provide his exclusive services to Empire during the period July 1, 2004 to
December 31, 2004, which services will be directed to exploration of the Project
(the "Initial Program") within an area as defined in Schedule A attached
(the "Area of Mutual Interest").



3.

The
Initial Program will be operated by Kilby and carried out in accordance with a
budget and work plan approved by the Parties.



1

---



4.

Upon
receipt of evidence of approved expenditures, Empire will reimburse to Kilby,
Project-related exploration expenses incurred by Kilby during the period July 1,
2004 to December 31, 2004.



5.

All
Project-related data obtained by Kilby will be for the exclusive benefit of
Empire.



6.

On
or before March 1, 2005, Empire may elect to either:



a)

relinquish
all rights to the Project to Kilby; or



b)

enter
into an Option Agreement in accordance with the principal terms presented below.



B.
      The Option Agreement



1.       
Joint
Prospectors



Kilby
warrants that he has the right and authority to enter into this Option Agreement
with the provision that the Option Agreement will recognize both Kilby and J. R.
Woodcock hereinafter defined as "Joint Prospectors".  The Joint
Prospectors will each receive 50% of all option payments including shares and
cash and all payable royalties or monies from the purchase by Empire of such
royalties in accordance with the Option Agreement.



2.    
Indemnification
of Joint Prospectors



Empire
will hold the Joint Prospectors harmless and fully indemnify them against all
claims or demands of any kind or nature which may be made upon them or against
any property subject to this Agreement.



3.    
Option
Payments

Cash

Units



March
1, 2005

50,000

December
31, 2005

$
 20,000



50,000

December
31, 2006

$
 30,000



50,000

December
31, 2007

$
 40,000

50,000

December
31, 2008

$
 50,000

50,000



TOTAL                    
$
140,000                          
250,000  Units



Each
unit ("Unit") will consist of one common share ("Share") and one
12-month share purchase warrant.  Each share purchase warrant will allow
for the purchase of one share at a price set in accordance with market at the
time of issuance of the Unit.  Shares will be free trading common shares in
the capital of Empire, which Shares, subject to Regulatory Approval, may be
subject to a four-month hold period.

2

---









4.    
Exploration
Expenditures





cumulative



On
or before:

December
31, 2005

100,000

December
31, 2006

200,000

December
31, 2007

400,000

December
31, 2008

1,000,000



Exploration
Expenditures to be defined as all Project-related expenditures, which
expenditures will include all costs related to mineral exploration, acquisition
of mineral titles and maintenance thereof and Operator's Management Fees as
defined hereunder.



Regardless
of minimum cumulative Exploration Expenditures having been met in any one year,
Empire acknowledges that mineral claims maintenance fees must be paid on an
annual basis.



5.

Employment



On
a year-to-year basis during the currency of the Option, Empire may employ Kilby
on terms and conditions satisfactory to the Parties.



6.
       Initial Interest Earned





Upon
Empire making Exploration Expenditures in the amount of $1,000,000, cash
payments totaling $140,000 and payments totaling 250,000 Units, in accordance
with the schedules above, Empire will have earned a 90% interest in the Project,
with the Joint Prospectors holding a non-assessable 10% carried interest.



7.

Option
to earn Additional Interest



At
any time after Empire having earned a 90% interest in the Project, Empire will
have the option to acquire the Joint Prospectors' remaining 10% interest in
the Project for a $100,000 cash payment and a further 1,500,000 shares in the
capital of Empire. The Joint Prospectors will retain a Royalty subject to the
provisions of Section 9 hereunder.



8.    
Back-In





Upon
completion of pre-feasibility, Teck Cominco Limited may have a one-time election
to fund feasibility and take the Project through to a production notice and
become mine operator and earn a 51% interest in the Project leaving Empire with
a 49% interest in the Project.



9.    
Project





The
Project, generally known as the McBride Copper-Nickel Project, is defined in
accordance with Schedule 'A' attached.



10.

Area
of Mutual Interest



The
Area of Mutual Interest more fully described in Schedule "A", includes an
approximate area measuring 60 kilometres by 20 kilometres centered on Cushing
Creek.  All staking or acquisition of claims by either party within the
Area of Mutual Interest will be to the benefit of the Project.







3



---























11.

Net
Smelter Return Royalty





Net
Smelter Return Royalty ("NSR") is defined within Schedule 'B' attached.
The Joint Prospectors will retain a 1% NSR interest on future production on all
mineral claims acquired by the Parties within the Area of Mutual Interest.
 Empire will have the right to buy down 0.5% of the NSR for $1.0 million.



12.

Operator





Empire
will be the Operator during the currency of the Option and will charge an
Operator's Management Fee not to exceed 10% of actual Exploration Expenditures
incurred.



13.

Assignment





Empire
has the right to assign its interests in this Agreement to a third party as long
as the third party interest will be maintained in accordance with this Agreement
and such third party agrees in writing to be bound by the terms of this
Agreement.



14.

Successors
and Assigns





The
Option Agreement shall be binding upon the parties, their respective heirs,
devisees, administrators, legal representatives, successors and assigns.



15.

Results
and Reporting





At
all times, the Joint Prospectors will have access to the Project, receive copies
of all exploration results on an annual basis and receive copies of all
Project-related information generated by Empire.



16.

Environmental
Compliance





Compliance
with environmental law, rules and regulations are the sole responsibility of
Empire.



17.

Termination
of Option





The
Option will terminate within 30 days of Empire having received notice from the
Joint Prospectors advising that Empire is delinquent in the making of any
payments and exploration expenditures as scheduled above.  Upon
termination, all mineral claims comprising the Project and all Project
exploration data will be delivered to the Joint Prospectors.



18.

Definitive
Agreement





The
terms and conditions of this Agreement will remain binding and in force and
effect unless, at the request of either party, a formal and definitive agreement
is entered into.



19.

Arbitration





Disputes
arising from this Agreement are to be resolved and shall be submitted for
binding arbitration in Vancouver, British Columbia in an arbitration proceeding
that shall be conducted in accordance with applicable local arbitration rules.



4



---

20.

Approval





Upon
Empire entering into the Option Agreement, this Agreement will be submitted for
filing with the TSX Venture Exchange.



21.

Representations





The
Joint Prospectors represent to the best of their belief and knowledge that they
have supplied all material information on the Project without limitation
including exploration data, property agreements, title information and any
related and known encumbrances to Empire and the Joint Prospectors acknowledge
that Empire has relied on such representations prior to entering into this
Agreement.



22.

Governing
Laws







This
Agreement shall be governed by the laws of British Columbia.



23.

Acknowledgment
- Personal Information





"Personal
Information" means any information about an identifiable individual, and
includes the information contained in this Agreement.



The
undersigned hereby acknowledges and agrees that it has obtained the express
written consent of each individual to:



(a)

the
disclosure of Personal Information by the undersigned to the Exchange (as
defined in Appendix 6A) pursuant to Form 5B of the Exchange; and



(b)

the
collection, use and disclosure of Personal Information by the Exchange for the
purposes described in Appendix 6A or as otherwise identified by the Exchange,
from time to time.



24.

Notices





Any
notice, direction or other communication required or permitted to be given under
this Agreement shall be in writing and may be given by personal delivery or by
mail (first class postage prepaid) or by sending it by facsimile transfer or
other similar form of telecommunication (if one has been provided), in each case
addressed as follows:



If
        to Empire:
      If
        to the Joint Prospectors:Canadian
        Empire Exploration Corp.
      Mark
        Kilby1205
        - 675 West Hastings Street
      Suite
        308 - 2352 West BroadwayVancouver,
        BC  V6B 1N2
      Vancouver,
        BC  V6K 2E5Tel.:
         604-687-4951
      Tel.:
         604-734-1840Fax:
         604-687-4991Attention:
         John S. Brock, President




5



---







Acknowledged
and agreed this ____ day of July, 2004 (the "Effective Date")









_______________________________                   
____________________________

Canadian
Empire Exploration Corp.                
Mark
Kilby
                                                                                        
(on
behalf of the Joint Prospectors)





1



---

Exhibit
3.39

|[f337letteragreement002.gif] | Canadian Empire Exploration Corp


1205
- 675 West Hastings
St.
Vancouver, B.C. V6B 1N2
Ph:  604-687-4951, Fax: 604-687-4991
|---------------------------- | ----------------------------------------------------------------------------------------------------------------------------













October
4, 2004





Sci
- Tek Resources Ltd.

912
- 510 West Hastings Street

Vancouver,
BC



Attention:
 John Barakso







Proposal
for Acquisition of the Silver Hope Property



Between:  
Canadian
Empire Exploration Corp. ("Empire")



and



Sci
- Tek Resources Ltd. ("SiTek")



hereinafter
called the ("Parties")



Amendment
to original letter of October 4, 2004





Dear
John:



For
the purpose of gaining maximum market exposure in the event of exploration
success at the Silver Hope Property, we offer an alternative form of option
agreement for your consideration.



Contingent
on meeting exploration objectives and subject to the mutual agreement of the
Parties, this offer considers formation of a Specific Purpose Public Company ("SPPC")
in which Empire and SiTek would be significant shareholders. SiTek would also
retain an NSR in the Property.  Should SPPC be formed, SPPC would assume
all further obligations under this agreement.



The
Agreement does not contain all of the details that would be expected in a
definitive agreement, and will provide the basis of a more formal and
comprehensive definitive agreement as contemplated below.



---

Exhibit
3.39



1.

Option
Payments

Cash

Shares



On
signing Letter of Agreement:

$
 45,000

200,000

December
31, 2004

$
 30,000





December
31, 2005

$
 60,000



200,000

December
31, 2006

$
 60,000



200,000

December
31, 2007

$
 60,000

200,000

December
31, 2008

$
 60,000

200,000



GRAND
TOTAL
                $
315,000                          
1,000,000  shares





"Shares"
will be free trading common shares in the capital of Empire (the "Shares")
as scheduled above, which Shares, contingent to Regulatory Approval, may be
subject to a four-month hold period.



2.

Exploration
Expenditures





cumulative



On
or before:

December
31, 2004

$
   200,000

December
31, 2005

500,000

December
31, 2006

1,000,000

December
31, 2007

2,000,000

December
31, 2008

3,000,000

December
31, 2009

5,000,000



Exploration
Expenditures to be defined as all "Property-related Expenditures", which
expenditures will include all costs related to mineral exploration, mineral
titles maintenance including lease fees and property taxes and Operator's
Management Fees as defined hereunder.



Regardless
of minimum cumulative Exploration Expenditures having been met in any one year,
Empire acknowledges that lease fees and taxes must be paid on an annual basis.



3.

Initial
Interest Earned





Upon
Empire making Exploration Expenditures in the amount of $5,000,000, cash
payments totaling $315,000 and share payments totaling 1,000,000 Shares, in
accordance with the schedules above, Empire will earn a 65% interest in the
Property.



4.      
Option
to earn Additional Interest



Upon
having earned a 65% interest in the Property, Empire will have the option to
acquire SiTek's remaining 35% interest in the Property for 35% of the share
capital of Empire or forming a Joint Venture.







---

Exhibit
3.39



5.    
Joint
Venture



Should
a Joint Venture be formed, the Joint Venture will provide, among other things,
that either party will be responsible for its pro-rata funding of ongoing work.
 Non-contribution by either party to the Joint Venture will result in
pro-rata dilution of interest, which if reduced to 10% or less will then be
convertible to a 2% NSR.  The surviving party will have the right to buy
back 1% of the NSR from the relinquishing party for $2.0 million.  If the
relinquishing party elects to sell the remaining 1% NSR, the surviving party
will have a right of first refusal to match a third party offer.



The
Joint Venture Agreement shall be in accordance with terms standard to the
industry.  If the parties are unable to reach agreement on the standard
industry terms for the joint venture, the matter will be referred to arbitration
referred to in paragraph 17.



6.       
Back-In



Upon
completion of pre-feasibility, Teck Cominco Limited will have a one-time
election to fund feasibility and take the Property through to a production
notice and become mine operator and earn a 51% interest in the Property leaving
Empire with either a 49% interest in the Property or, should a Joint Venture
having been formed, leaving Empire and SiTek with their prescribed pro rata
amounts of the 49% interest.



7.    
Property





Property,
generally known as the Silver Hope Property, is defined in accordance with
Schedule 'A' attached.



SiTek
warrants that SiTek has full right title and interest in the property either
through direct ownership or underlying agreements.



SiTek
warrants that the Property and the mineral claims comprising the Property are in
good standing.



8.    
Area
of Mutual Interest



An
Area of Mutual Interest more fully described in Schedule "C" includes a 5
kilometre perimeter around the Property and includes all claims and leases held
by the neighbouring Equity Silver Mines past producing property.  All
staking or acquisition of third party claims by either party within the Area of
Mutual Interest will be to the benefit of Empire or the Empire/ SiTek Joint
Venture as the case may be.  It is an objective of Empire and/or SPPC to
acquire the mineral rights of the Equity Silver Mines property.



9.

Royalties





Net
Smelter Return Royalty ("NSR") is defined within Schedule 'B' attached.







---

Exhibit
3.39



10.

Operator





Empire
and/or SPPC will be the Operator during the currency of the Option and will
charge an Operator's Management Fee not to exceed 10% of actual Exploration
Expenditures incurred.



11.

Consent





SiTek
will obtain written consent from all SiTek shareholders for the assignment of
the Property to Empire, subject to the terms of this Agreement.



12.

Assignment





Either
party has the right to assign interests to a third party as long as the incoming
third party interest will be maintained in accordance with this Agreement and
such third party agrees in writing to be bound by the terms of this Agreement.



13.

Results
and Reporting





At
all times, representatives of SiTek will have access to the Property, receive
copies of all exploration results on an annual basis and receive copies of all
Property-related information generated by Empire on a timely basis.  News
releases by Empire regarding the Property will be subject to reasonable
consultation with SiTek.  All available assessment credit is to be applied
to the claims.



14.

Termination
of Option





The
Option will terminate within 30 days of Empire or SPPC having received notice
from SiTek advising that Empire is delinquent in the making of any payments and
exploration expenditures as scheduled above.  Upon termination, the
Property will be returned to SiTek for a minimum of 3 months in good standing
and all exploration data will be delivered to SiTek.



15.

Definitive
Agreement





The
terms and conditions of this Agreement will remain binding and in force and
effect unless, at the request of either party, a formal and definitive agreement
is entered into.



16.

Arbitration





Disputes
arising from this Agreement are to be resolved and shall be submitted for
binding arbitration in Vancouver, British Columbia in an arbitration proceeding
that shall be conducted in accordance with applicable local arbitration rules.



17.

Approval





Upon
signing, this Agreement will be submitted for filing with the TSX Venture
Exchange within 30 days of the Effective Date.



---

Exhibit
3.39





18.

Representations





SiTek
represents to the best of its belief and knowledge that it has supplied all
material information on the Property without limitation including exploration
data, property agreements, title information and any known encumbrances to
Empire and SiTek acknowledges that Empire has relied on this in entering into
this Agreement.



19.

Governing
Laws





This
Agreement shall be governed by the laws of British Columbia.



20.

Notices





Any
notice, direction or other communication required or permitted to be given under
this Agreement shall be in writing and may be given by personal delivery or by
mail (first class postage prepaid) or by sending it by facsimile transfer or
other similar form of telecommunication (if one has been provided), in each case
addressed as follows:



If
        to Empire
      If
        to SiTek:Canadian
        Empire Exploration Corp.
      Sci
        - Tek Resources Ltd.1205
        - 675 West Hastings Street
      912
        - 510 West Hastings StreetVancouver,
        BC  V6B 1N2
      Vancouver,
        BC  V6B 1L8Tel.:
         604-687-4951
      Tel.:
         604-684-5133Fax:
         604-687-4991
      Fax:
         604-692-5720Attention:
         John S. Brock, President
      Attention:
         John Barakso, President










Acknowledged
and agreed this ____ day of October, 2004 (the "Effective Date")









_______________________________        ____________________________

Canadian
Empire Exploration Corp.     Sci
- Tek Resources Ltd.



---

Exhibit 3.40



BRITISH                                 Ministry
of
Finance                                       
Mailing
Address:                                     
 Location:

COLUMBIA

Corporate
and Personal                                 
PO Box 9431 Stn Prov Govt                        
2nd Floor - 940 Blanshard St

Property
Registries                                         
Victoria BC V8W 9V3                                 Victoria BC

250 356-8626

www.corporateonline.gov.bc.ca





Notice of Articles



BUSINESS CORPORATIONS ACT





CERTIFIED COPY

Of a Document filed with the Province of British Columbia Registrar of Companies



"J S Powell"



J S Powell

October 27, 2004







|This
Notice of Articles was issued by the Registrar on:  October 27, 2004 03:57
PM Pacific Time
Incorporation
Number:                
BC0322353

Recognition
Date:                   
Incorporated on February 24, 2987
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------









NOTICE
OF ARTICLES



Name of Company:



CANADIAN EMPIRE EXPLORATION CORP.







REGISTERED OFFICE INFORMATION



Mailing
Address:

Delivery Address:

1550 1185 W
GEORGIA ST

1550 1185 W GEORGIA
ST

VANCOUVER BC
V6E 4E6

VANCOUVER BC V6E 4E6













RECORDS OFFICE INFORMATION



Mailing
Address:

Delivery Address:

1550 1185 W
GEORGIA ST

1550 1185 W GEORGIA
ST

VANCOUVER BC
V6E 4E6

VANCOUVER BC V6E 4E6







---

Exhibit
3.40





DIRECTOR INFORMATION



Last Name, First Name Middle Name:

DAVIS, R.E. GORDON





Mailing
Address:

Delivery Address:

5555 NEWTON
WYND

5555 NEWTON WYND

VANCOUVER BC
V6T 1H6

VANCOUVER BC V6T 1H6











Last Name, First Name Middle Name:

ROBERTS, WAYNE J.





Mailing
Address:

Delivery Address:

1205 - 675
WEST HASTINGS STREET

1205 - 675 WEST
HASTINGS STREET

VANCOUVER BC
V6B 1N2

VANCOUVER BC V6B 1N2





Last Name, First Name Middle Name:

PAGE, LAWRENCE





Mailing
Address:

Delivery Address:

1550 - 1185
WEST GEORGIA STREET

1550 - 1185 WEST
GEORGIA STREET

VANCOUVER BC
V6E 4E6

VANCOUVER BC V6E 4E6









Last Name, First Name Middle Name:

BROCK, JOHN S.





Mailing
Address:

Delivery Address:

1205 - 675
WEST HASTINGS STREET

1205 - 675 WEST
HASTINGS STREET

VANCOUVER BC
V6B 1N2

VANCOUVER BC V6B 1N2





















---

Exhibit
3.40







AUTHORIZED SHARE STRUCTURE



1.
 250,000,000

Common
Shares

Without
Par Value



Without
Special Rights or

Restrictions
attached









---

Exhibit 3.41



A
R T I C L E S



O
F



CANADIAN
EMPIRE EXPLORATION CORP.

(the
"Company")





INCORPORATION
NUMBER: BCO322353





T
A B L E   O F   C O N T E N T S





PART
1

INTERPRETATION



1.1

Definitions,
Construction of Words

1.2

Definitions
Same as Business Corporations Act

1.3

Interpretation
Act Rules of Construction Apply

1.4

Conflict
Interpretation Act/Business Corporations Act

1.5

Majority
Required for Special/Special Separate Resolution



PART
2

SHARES



2.1

Authorized
Share Structure

2.2

Shareholder
Entitled to Certificate

2.3

Replacement
of Lost or Defaced Certificate

2.4

Execution
of Certificates

2.5

Non-Recognition
of Trusts



PART
3

ISSUE
OF SHARES



3.1

Directors
Authorized

3.2

No
Pro-rata Offer

3.3

Commissions
and Brokerage

3.4

Conditions
of Issue



PART
4

SHARE
REGISTERS



4.1

Central
Securities Register

4.2

Branch
Registers

4.3

No
Closing of Central Securities Register



PART
5

TRANSFER
AND TRANSMISSION OF SHARES



5.1

Transfer
of Shares

5.2

Execution
of Instrument of Transfer

5.3

Enquiry
as to Title not Required







---

-
ii-





5.4

Submission
of Instruments of Transfer

5.5

Transfer
Fee

5.6

Personal
Representative Recognized on Death

5.7

Death
or Bankruptcy

5.8

Persons
in Representative Capacity



PART
6

ALTERATIONS



6.1

Changes
in Authorized Share Structure and Name

6.2

Creation
& Variation of Special Rights and Restrictions

6.3

Consent
of Class Required

6.4

Class
Meetings

6.5

Other
Alterations



PART
7

PURCHASE
AND REDEMPTION OF SHARES



7.1

Company
Authorized to Purchase or Redeem its Shares

7.2

Selection
of Shares to be Redeemed

7.3

Purchased
or Redeemed Shares Not Voted



PART
8

BORROWING
POWERS



8.1

Powers
of Directors

8.2

Special
Rights Attached to and Negotiability of Debt Obligations

8.3

Execution
of Debt Obligations



PART
9

MEETINGS
OF SHAREHOLDERS



9.1

Annual
General Meetings

9.2

Waiver
of Annual General Meeting

9.3

Classification
of General Meetings

9.4

Calling
of Meetings

9.5

Notice
of General Meeting

9.6

Waiver
or Reduction of Notice

9.7

Notice
of Special Business at General Meeting



PART
10

PROCEEDINGS
AT MEETINGS OF SHAREHOLDERS



10.1

Special
Business

10.2

Requirement
of Quorum

10.3

Quorum

10.4

Lack
of Quorum

10.5

Chairman

10.6

Alternate
Chairman

10.7

Adjournments

10.8

Resolutions
Need Not be Seconded

10.9

Decisions
by Show of Hands or Poll

10.10

Casting
Vote







---

-
iii -





10.11

Manner
of Taking Poll

10.12

Retention
of Ballots Cast on a Poll

10.13

Casting
of Votes

10.14

Ordinary
Resolution Sufficient



PART
11

VOTES
OF SHAREHOLDERS



11.1

Number
of Votes per Share or Shareholder

11.2

Votes
of Persons in Representative Capacity

11.3

Representative
of a Corporate Shareholder

11.4

Votes
by Joint Holders

11.5

Votes
by Committee for a Shareholder

11.6

Appointment
of Proxyholders

11.7

Execution
of Form of Proxy

11.8

Deposit
of Proxy

11.9

Validity
of Proxy Note

11.10

Acceptance
of Proxy in Substituted Form

11.11

Directors
May Make Regulations for Deposit of Proxy

11.12

Death
or Incapacity of Shareholder Giving Proxy

11.13

Revocation
of Proxy



PART
12

DIRECTORS



12.1

Number
of Directors

12.2

Remuneration
and Expenses of Directors

12.3

Qualification
of Directors



PART
13

ELECTION
AND REMOVAL OF DIRECTORS



13.1

Classes
of Directors

13.2

Term
of Office

13.3

Continuance
of Directors

13.4

Election
of Less Than Required Number of Directors

13.5

Filling
a Casual Vacancy

13.6

Additional
Directors

13.7

Alternate
Directors

13.8

Termination
of Directorship

13.9

Removal
of Directors

13.10

Prior
Written Consent to Act



PART
14

POWERS
AND DUTIES OF DIRECTORS



14.1

Management
of Business and Affairs

14.2

Appointment
of Attorney

14.3

Setting
Auditors' Remuneration



---

-iv-

















PART
15

CONFLICTS
OF INTEREST - DIRECTORS & OFFICERS



15.1

Liability
to Account

15.2

Voting
re Proposed Contract

15.3

Quorum
in case of Disclosable Interest

15.4

Obligation
to Disclose Creation of Duty or Interest

15.5

Voting
of Alternate Director not Affected

15.6

Director
May Hold Office or Place of Profit with Company

15.7

Director
Acting in Professional Capacity

15.8

Director
Receiving Remuneration from Other Interests



PART
16

PROCEEDINGS
OF DIRECTORS



16.1

Chairman
and Alternate

16.2

Meetings
- Procedure

16.3

Meetings
by Conference Telephone

16.4

Notice
of Meeting

16.5

Waiver
of Notice of Meetings

16.6

Quorum

16.7

Continuing
Directors May Act During Vacancy

16.8

Validity
of Acts of Directors

16.9

Resolution
in Writing Effective



PART
17

EXECUTIVE
AND OTHER COMMITTEES



17.1

Appointment
of Executive Committee

17.2

Appointment
of Committees

17.3

Procedure
at Meetings



PART
18

OFFICERS



18.1

Appointment
of Officers

18.2

Remuneration



PART
19

INDEMNITY
AND PAYMENT OF EXPENSES OF DIRECTORS AND OFFICERS



19.1

Indemnification
of Eligible Parties

19.2

Indemnification
Not Invalidated by Non-compliance

19.3

Company
May Purchase Insurance



PART
20

DIVIDENDS
AND RESERVES



20.1

Declaration
of Dividends

20.2

Declaration
of Dividend Rate

20.3

Proportionate
to Number of Shares Held

20.4

Reserves









20.5

Receipts
from Joint Holders











20.6

No
Interest on Dividends

20.7

Payment
of Dividends

20.8

Capitalization
of Undistributed Surplus

---

-v-



PART
21

DOCUMENTS,
RECORDS AND REPORTS



21.1

Documents
to be Kept

21.2

Accounts
to be Kept

21.3

Inspection
of Accounts

21.4

Financial
Statements and Reports for General Meeting



PART
22

NOTICES



22.1

Method
of Giving Notice

22.2

Notice
to Joint Holder

22.3

Notice
to Personal Representative

22.4

Persons
to Receive Notice

22.5

Public
Company Notices



PART
23

RECORD
DATES



23.1

Record
Date Fixed

23.2

No
Record Date



PART
24

SEAL



24.1

Affixation
of Seal to Documents

24.2

Reproduction
of Seal

24.3

Official
Seal for Other Jurisdictions



PART
25

MECHANICAL
REPRODUCTION OF SIGNATURES



25.1

Instruments
may be Mechanically Signed

25.2

Definition
of Instruments



PART
26

PROHIBITIONS



26.1

Restriction
on Transfer of Shares









---

PROVINCE
OF BRITISH COLUMBIA



BUSINESS
CORPORATIONS ACT

ARTICLES



OF

CANADIAN
EMPIRE EXPLORATION CORP.

(the
"Company")





INCORPORATION
NUMBER: BCO322353







PART
1



INTERPRETATION



1.1

In
these Articles, unless there is something in the subject or context inconsistent
therewith:



"Act"
means the Business Corporations Act, S.B.C. 2002, c. 57, and all
amendments thereto and includes regulations made pursuant thereto.



"Board",
"Board of Directors" or "the directors" means the directors or
sole director and includes alternate directors, if any, of the Company for the
time being.



"seal"
means the common seal of the Company, if any.



"month"
means a calendar month.



"registered
address" of a shareholder means the shareholder's address as recorded in the
central securities register.



"registered
holder", "registered owner" or "registered shareholder", when
used with respect to a share means the person registered in the central
securities register in respect of such share.



"personal
representative" shall include executors, administrators,
trustees-in-bankruptcy and duly constituted representatives in lunacy.



Expressions
referring to writing shall be construed as including references to printing,
lithography, typewriting, photography, photocopy, telecopying, telexing,
telegraphing, electronic mailing and other modes of representing, reproducing or
transmitting words in a visible form.



---

2



Words
importing the singular include the plural and vice versa; and words importing
male persons include female persons and words importing persons shall include
corporations.



1.2

The
meaning of any words or phrases defined in the Act shall, if not inconsistent
with the subject or context, bear the same meaning in these Articles.



1.3

The
Rules of Construction contained in the Interpretation Act shall apply,
mutatis mutandis, to the interpretation of these Articles.



1.4

If
there is a conflict between a definition in the Act and a definition or rule in
the Interpretation Act relating to a term in these Articles, the
definition in the Act will prevail. If there is a conflict between these
Articles and the Act, the Act will prevail.



1.5

The
majority required for the passage of a special resolution or a special separate
resolution shall be 2/3 of the votes cast on the resolution.





PART
2



SHARES
AND SHARE CERTIFICATES



2.1

The
authorized share structure of the Company consists of 250,000,000 common shares
without par value.



2.2

Every
shareholder is entitled, without charge, to one certificate representing the
share or shares of each class or series registered in his name; provided that,
in respect of a share or shares held jointly by several persons, the Company
shall not be bound to issue more than one certificate, and delivery of a
certificate for a share to the first named of several joint registered holders
or to his duly authorized agent shall be sufficient delivery to all; and
provided further that the Company shall not be bound to issue certificates
representing redeemable shares, if such shares are to be redeemed within one
month of the date on which they were allotted.  Any share certificate may
be sent through the mail by registered prepaid mail to the shareholder entitled
thereto at the shareholder's registered address, and neither the Company nor
any transfer agent shall be liable for any loss occasioned to the shareholder
owing to any such share certificate so sent being lost in the mail or stolen.



2.3

If
a share certificate



(a)

is
worn out or defaced, the directors shall, upon production to them of the said
certificate and upon such other terms, if any, as they may think fit, order the
said certificate to be cancelled and shall issue a new certificate in lieu
thereof;



(b)

is
lost, stolen or destroyed, then upon proof thereof to the satisfaction of the
directors and upon such indemnity, if any, as the directors deem adequate being
given, a new share certificate in lieu thereof shall be issued to the person
entitled to such lost, stolen or destroyed certificate; or



---

(c)

3



represents
more than one share and the registered owner thereof surrenders it to the
Company with a written request that the Company issue in his name two or more
certificates, each representing a specified number of shares and, in the
aggregate, representing the same number of shares as the certificate so
surrendered, the Company shall cancel the certificate so surrendered and issue
in lieu thereof certificates in accordance with such request;



provided
that there must be paid to the Company, in relation to the issue of any share
certificate under this Article 2.3, the amount, if any and which must not exceed
the amount prescribed under the Act, determined from time to time by the
directors.



2.4

Every
share certificate shall be signed manually by at least one officer or director
of the Company, or by or on behalf of a registrar, branch registrar, transfer
agent or branch transfer agent of the Company and any additional signatures may
be printed, lithographed, engraved or otherwise mechanically reproduced in
accordance with these Articles.



2.5

Except
as required by law, statute or these Articles, no person shall be recognized by
the Company as holding any share upon any trust, and the Company shall not be
bound by or compelled in any way to recognize (even when having notice thereof)
any equitable, contingent, future or partial interest in any share or in any
fractional part of a share or (except only as by law, statute or these Articles
provided or as ordered by a court of competent jurisdiction) any other rights in
respect of any share except an absolute right to the entirety thereof in its
registered holder.





PART
3



ISSUE
OF SHARES



3.1

Subject
to the Act, the shares shall be under the control of the directors who may,
subject to the rights of the registered holders of the shares of the Company for
the time being issued, issue, allot, sell or otherwise dispose of, and/or grant
options, share purchase warrants or rights on or otherwise deal in, shares
authorized but not issued at such times, to such persons (including directors),
in such manner, upon such terms and conditions, and at such issue price
(including any premium at which shares with par value may be issued) as they, in
their absolute discretion, may determine.  The issue price for a share with
par value must be equal to or greater than the par value of the share.



3.2

The
Company is not required to offer shares pro rata to shareholders before
allotting further shares of the Company.



3.3

Subject
to the provisions of the Act, the Company or the directors on behalf of the
Company, may pay a reasonable commission or allow a reasonable discount to any
person in consideration of his purchasing or agreeing to purchase, whether
absolutely or conditionally, any shares, debentures, share rights, warrants or
debenture stock in the Company, or procuring or agreeing to procure purchasers,
whether absolutely or conditionally, for any such shares, debentures, share
rights, warrants or debenture stock. The Company may also pay such brokerage as
may be lawful.

---

4

3.4

Except
as provided in the Act, no share may be issued until it is fully paid and the
Company shall have received the consideration therefor in money, property or
past services performed for the Company and the value of such consideration
equals or exceeds the issue price set for the share under Article 3.1 as
determined by the directors.



PART
4



SHARE
REGISTERS



4.1

The
Company shall keep or cause to be kept at its records office or such other
location in British Columbia as may be designated from time to time by the
directors, a central securities register as required by the Act.  The
directors, on behalf of the Company, may appoint an agent to keep any registry
which may be the same agent that acts as transfer agent for its shares or such
class thereof, as the case may be, and the same or another agent that acts as
registrar for its shares or such class thereof, as the case may be.  The
directors may terminate the appointment of any such agent at any time and may
appoint another agent in its place.



4.2

Unless
prohibited by the Act, the Company may keep or cause to be kept one or
more branch registries at such place or places as the directors may from time to
time determine.



4.3

The
Company must not at any time close its central securities register.





PART
5



TRANSFER
AND TRANSMISSION OF SHARES



5.1

Subject
to the provisions of these Articles that may be applicable, any shareholder may
transfer any of his shares by instrument in writing executed by or on behalf of
such shareholder and delivered to the Company or its transfer agent or other
agent maintaining a securities register.  The instrument of transfer of any
share of the Company shall be in the form, if any, on the back of the Company's
share certificates or in such other form as the directors may from time to time
approve.  Except to the extent that the Act may otherwise provide, the
transferor shall be deemed to remain the holder of the shares until the name of
the transferee is entered in a securities register of the Company in respect of
the transfer.



5.2

The
signature of the registered holder of any shares, or of his duly authorized
attorney, upon an authorized instrument of transfer shall constitute a complete
and sufficient authority to the Company, its directors, officers and agents to
register, in the name of the transferee as named in the instrument of transfer,
the number of shares specified therein or, if no number is specified, all the
shares of the registered holder represented by share certificates deposited with
the instrument of transfer.  If no transferee is named in the instrument of
transfer, the instrument of transfer shall constitute a complete and sufficient
authority to the Company, its directors, officers and agents to register, in the
name of the person in whose behalf any certificate for the shares to be
transferred is deposited with the Company for the purpose of having the transfer
registered, the number of shares specified in the instrument of transfer, or if
no number is specified, all the shares represented by all share certificates
deposited with the instrument of transfer.



---

5.3

5



Neither
the Company nor any director, officer or agent thereof shall be bound to inquire
into the title of the person named in the form of transfer as transferee, or if
no person is named therein as transferee, of the person on whose behalf the
certificate is deposited with the Company for the purpose of having the transfer
registered or be liable to any claim by such registered holder or by any
intermediate holder of the certificate or of any of the shares represented
thereby or any interest therein for registering the transfer, and the transfer,
when registered, shall confer upon the person in whose name the shares have been
registered, a valid title to such shares.



5.4

Every
instrument of transfer shall be executed by the transferor and left at the
 records office of the Company or at the office of its transfer agent or
registrar for registration or other securities register together with the share
certificate for the shares to be transferred and such other evidence, if any, as
the directors or the transfer agent or registrar or securities register may
require to prove the title of the transferor or his right to transfer the shares
and the right of the transferee to have the transfer registered.  All
instruments of transfer where the transfer is registered shall be retained by
the Company or its transfer agent or registrar or securities register and any
instrument of transfer where the transfer is not registered shall be returned to
the person depositing the same together with the share certificate which
accompanied the same when tendered for registration.



5.5

There
shall be paid to the Company in respect of the registration of any transfer,
such sum, if any, as the directors may from time to time determine.



5.6

In
the case of the death of a shareholder, the survivor, or survivors where the
deceased was a joint registered holder, and the legal personal representative of
the deceased where he was the sole holder, shall be the only persons recognized
by the Company as having any title to his interest in the shares.  Before
recognizing any legal personal representative, the directors may require him to
obtain a grant of probate or letters of administration in British Columbia.



5.7

Upon
the death or bankruptcy of a shareholder, his personal representative or trustee
in bankruptcy, although not a shareholder, shall have the same rights,
privileges and obligations that attach to the shares formerly held by the
deceased or bankrupt shareholder if the documents required by the Act shall have
been deposited at the Company's records office.



5.8

Any
person becoming entitled to a share in consequence of the death or bankruptcy of
a shareholder shall, upon such documents and evidence being produced to the
Company as the Act requires or who becomes entitled to a share as a result of an
order of a court

---

6



of
competent jurisdiction or a statute, has the right either to be registered as a
shareholder in his representative capacity in respect of such share or, if he is
a personal representative, instead of being registered himself, to make such
transfer of the share as the deceased or bankrupt person could have made; but
the directors shall, as regards a transfer by a personal representative or
trustee in bankruptcy, have the same right, if any, to decline or suspend
registration of a transferee as they would have in the case of a transfer of a
share by the deceased or bankrupt person before the death or bankruptcy.





PART
6



ALTERATIONS



6.1

The
Company may by resolution of its directors make any changes in the authorized
share structure as may be permitted under Section 54 of the Act, or in its name
as may be permitted under Section 263 of the Act, and may by resolution of its
directors make or authorize the making of any alterations to these Articles and
the notice of articles as may be required by such changes.



6.2

The
Company may by ordinary resolution create or vary special rights and
restrictions as provided in Section 58 of the Act.



6.3

No
alteration  as provided in Article 6.2 will be valid as to any part of the
issued shares of any class unless the holders of all the issued shares of that
class consent to the alteration in writing or consent by special separate
resolution.



6.4

Unless
these Articles otherwise provide, the provisions of these Articles relating to
general meetings will apply, with necessary changes and so far as applicable, to
a class meeting of shareholders.



6.5

If
the Act does not specify the type of resolution and these Articles do not
specify another type of resolution, the Company may by ordinary resolution alter
these Articles.





PART
7



PURCHASE
AND REDEMPTION OF SHARES



7.1

Subject
to the special rights and restrictions attached to any class of shares, the
Company may, if authorized by a resolution of the directors and in compliance
with the Act, purchase any of its shares at the price and upon the terms
specified in such resolution or redeem any class of its shares in accordance
with the special rights and restrictions attaching thereto.  No such
purchase or redemption shall be made if the Company is insolvent at the time of
the proposed purchase or redemption, or if the proposed purchase or redemption
would render the Company insolvent.



---

7.2

7



If
the Company proposes, at its option, to redeem some but not all of the shares of
any class, the directors may, subject to the special rights and restrictions
attached to such class of shares, decide the manner in which the shares to be
redeemed shall be selected.



7.3

Subject
to the provisions of the Act, any shares purchased, redeemed or otherwise
acquired by the Company may be sold, gifted or otherwise disposed of by it, but
while such shares are held by the Company, it shall not exercise any vote, pay
any dividend nor make any other distribution in respect of such shares.





PART
8



BORROWING
POWERS



8.1

The
Company, if authorized by the directors, may from time to time:



(a)

borrow
money in such manner and amount, on such security, from such sources and upon
such terms and conditions as the directors think fit;



(b)

issue
bonds, debentures and other debt obligations, either outright or as security for
any liability or obligation of the Company, or any other person;



(c)

guarantee
the repayment of money by any other person or the performance of any obligation
of any other person; and



(d)

mortgage,
charge, whether by way of specific or floating charge, grant a security interest
in, or give other security on, the whole or any part of the undertaking,
property and assets of the Company (both present and future).



8.2

Any
bonds, debentures or other debt obligations of the Company may be issued at a
discount, premium or otherwise, and with any special privileges as to
redemption, surrender, drawings, allotment of or conversion into or exchange for
shares or other securities, attending and voting at general meetings of the
Company, appointment of directors and otherwise, and may, by their terms, be
assignable free from any equities between the Company and the person to whom
they were issued or any subsequent holder thereof, all as the directors may
determine.



8.3

Every
bond, debenture or other debt obligation of the Company shall be signed manually
by at least one director or officer of the Company or by or on behalf of a
trustee, registrar, branch registrar, transfer agent or branch transfer agent
for the bond, debenture or other debt obligation appointed by the Company or
under any instrument under which the bond, debenture or other debt obligation is
issued and any additional signatures may be printed or otherwise mechanically
reproduced thereon and, in such event, a bond, debenture or other debt
obligation so signed is as valid as if signed manually notwithstanding that any
person whose signature is so printed or mechanically reproduced shall have
ceased to hold the office that is stated on such bond, debenture or other debt
obligation to be held at the date of the issue thereof.

---

8



PART
9



MEETINGS
OF SHAREHOLDERS



9.1

Subject
to any extensions of time permitted pursuant to theAct, the first annual
general meeting of shareholders shall be held within eighteen months from the
date the Company is recognized, and thereafter, an annual general meeting shall
be held once in every calendar year at such time (being not more than fifteen
months after the annual reference date for the preceding calendar year) and
place as may be determined by the directors.



9.2

If
all the shareholders entitled to vote at an annual general meeting consent by a
unanimous resolution under the Act to all the business which is required or
desired to be transacted at the meeting, the meeting is deemed to have been held
on the date of the unanimous resolution.



9.3

All
general meetings, other than annual general meetings, are herein referred to as
and may be called extraordinary general meetings.



9.4

The
directors may, whenever they think fit, convene an extraordinary general
meeting.  An extraordinary general meeting if requisitioned in accordance
with the Act shall be convened by the directors or, if not convened by the
directors, may be convened by the requisitionists as provided in the Act.



9.5

A
notice convening a general meeting specifying the place, the day and the hour of
the meeting, and in the case of special business, the general nature of that
business, shall be given as provided in the Act and in the manner hereinafter in
these Articles mentioned, or in such other manner (if any) as may be prescribed
by ordinary resolution, whether previous notice thereof has been given or not,
to each shareholder entitled to attend the meeting, to each director, to the
auditor of the Company and to such other persons as are entitled by law or under
these Articles to receive such notice from the Company.  Accidental
omission to give notice of a meeting to, or the non-receipt of notice of a
meeting by, any person shall not invalidate the proceedings at that meeting.



9.6

All
the shareholders of the Company entitled to attend and vote at a general meeting
may, by unanimous consent in writing given before, during or after the meeting,
or if they are present at the meeting, by a unanimous vote, waive or reduce the
period of notice of such meeting and an entry in the company records of such
waiver or reduction shall be sufficient evidence of the due convening of the
meeting.



9.7

Except
as otherwise provided by the Act, where any special business at a general
meeting includes considering, approving, ratifying, adopting or authorizing any
document or the execution thereof or the giving of effect thereto, the notice
convening the meeting shall, with respect to such document, be sufficient if it
states that a copy of the document or proposed document is or will be available
for inspection by members at the records office of the Company or at some other
place in British Columbia designated in the notice during usual business hours
up to the date of such general meeting.



---

9



PART
10



PROCEEDINGS
AT MEETINGS OF SHAREHOLDERS



10.1

All
business shall be deemed special business which is transacted at:



(a)

an
extraordinary general meeting, other than the conduct of and voting at such
meeting; and



(b)

an
annual general meeting, with the exception of the conduct of and voting at such
meeting, the consideration of the financial statements and the respective
reports of the directors and auditors, fixing or changing the number of
directors, approving a motion to elect two or more directors by a single
resolution, the election of directors, the appointment of the Auditor, the
fixing of the remuneration of the Auditor, and such other business as by these
Articles or the Act may be transacted at a general meeting without prior notice
thereof being given to the shareholders or any business which is brought under
consideration by the report of the directors.



10.2

No
business, other than election of the chairman or the adjournment of the meeting
shall be transacted at any general meeting unless a quorum of shareholders
entitled to attend and vote is present at the commencement of the meeting, but
the quorum need not be present throughout the meeting.



10.3

Save
as herein otherwise provided, a quorum shall be two shareholders or one or more
proxyholder(s) representing two shareholders, or one shareholder and a
proxyholder representing another shareholder.  The directors, the
president, if any, the secretary, if any, or in his absence, an
assistant-secretary, if any, the auditor for the Company, the solicitor for the
Company and any other person invited by the directors shall be entitled to
attend at any general meeting but no such person shall be counted in the quorum
or be entitled to vote at any general meeting unless he shall be a shareholder
or proxyholder entitled to vote thereat.



10.4

If
within half an hour from the time appointed for a general meeting, a quorum is
not present, the meeting, if convened upon requisition by the shareholders shall
be dissolved.  In any other case, it shall stand adjourned to the same day
in the next week, at the same time and place, and if at the adjourned meeting a
quorum is not present within half an hour from the time appointed for the
meeting, the shareholder or shareholders present or being represented by proxy
shall be a quorum.



---

10.5

10



The
chair of the Board, if any, or in his absence, the president, if any, of the
Company, or in his absence, a vice-president of the Company, if any, shall be
entitled to preside as chair at every general meeting of the Company.



10.6

If
at any general meeting neither the chair of the Board nor the president or a
vice-president is present within fifteen minutes after the time appointed for
holding the meeting or is unwilling to act as chair, the directors present shall
choose one of their number to be chair, or if all the directors present decline
to take the chair or shall fail to do so, or if no director be present, the
shareholders present shall choose some other person in attendance, who need not
be a shareholder, to be chair.



10.7

The
chair may and shall, if so directed by the meeting, adjourn the meeting from
time to time and from place to place, but no business shall be transacted at any
adjourned meeting other than the business left unfinished at the meeting from
which the adjournment took place.  When a meeting is adjourned for thirty
days or more, notice, but not advance notice of the adjourned meeting shall be
given as in the case of an original meeting.  Save as aforesaid, it shall
not be necessary to give any notice of an adjourned meeting or of the business
to be transacted at an adjourned meeting.



10.8

No
motion proposed at a general meeting need be seconded and the chair may propose
or second a motion.



10.9

Subject
to the provisions of the Act, at any general meeting a resolution put to the
vote of the meeting shall be decided on a show of hands, unless (before or on
the declaration of the result of the show of hands) a poll is directed by the
chair or demanded by at least one shareholder entitled to vote who is present in
person or by proxy.  The chair shall declare to the meeting, the decision
on every question in accordance with the result of the show of hands or the
poll, and such decision shall be entered in the book of proceedings of the
Company.  A declaration by the chair that a resolution has been carried, or
carried unanimously, or by a particular majority, or lost or not carried by a
particular majority and an entry to that effect in the book of the proceedings
of the Company shall be conclusive evidence of the fact, without proof of the
number or proportion of the votes recorded in favour of or against that
resolution.



10.10

In
the case of an equality of votes, whether on a show of hands or on a poll, the
chair of the meeting at which the show of hands takes place or at which the poll
is demanded shall not be entitled to a casting vote in addition to the vote or
votes to which he may be entitled as a shareholder or proxyholder and this
provision shall apply notwithstanding the chair is interested in the subject
matter of the resolution.



10.11

No
poll may be demanded on the election of the chair.  A poll demanded on a
question of adjournment shall be taken forthwith.  A poll demanded on any
other question shall be taken as soon as, in the opinion of the chair, is
reasonably convenient, but in no event later than seven days after the meeting
and at such time and place and in such manner as the chair of the meeting
directs.  The result of the poll shall be deemed to be the resolution of
and passed at the meeting upon which the poll was demanded.  Any business
other than that upon which, the poll has been demanded may be proceeded with
pending the taking of the poll.  A demand for a poll may be withdrawn.
 In any dispute as to the admission or rejection of a vote, the decision of
the chairman made in good faith shall be final and conclusive.

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11



10.12

Every
ballot cast upon a poll and every proxy appointing a proxyholder who casts a
ballot upon a poll shall be retained by the secretary or such other person
designated by the chair for such period and subject to such inspection as the
Act may provide.



10.13

On
a poll a person entitled to cast more than one vote need not, if he votes, use
all his votes or cast all the votes he uses in the same way.



10.14

Unless
the Act or these Articles otherwise provide, any action to be taken by a
resolution of the shareholders may be taken by an ordinary resolution.





PART
11



VOTES
OF SHAREHOLDERS



11.1

Subject
to any special voting rights or restrictions attaching to any class of shares
and the restrictions on joint registered holders of shares



(a)

on
a show of hands



(i)

every
shareholder who is present in person and entitled to vote shall have one vote,
and



(ii)

a
proxyholder duly appointed by a holder of a share who would have been entitled
to vote shall have one vote,



(b)

on
a poll, every shareholder entitled to vote on the matter shall have one vote for
each share of which he is the registered holder and may exercise such vote
either in person or by proxyholder.



11.2

Any
person who is not registered as a shareholder but is entitled to vote at any
general meeting in respect of a share, may vote the share in the same manner as
if he were a shareholder; but unless the directors have previously admitted his
right to vote at that meeting in respect of the share, he shall satisfy the
chair of his right to vote the share before the time for holding the meeting or
adjourned meeting, as the case may be, at which he proposes to vote.



11.3

Any
corporation (other than a subsidiary of the Company) which is a shareholder of
the Company may, by a document signed by two of its directors, or two of its
officers, or any one of its directors and one of its officers, or any one member
of an executive or other committee, or by resolution of its directors or other
governing body, authorize such person as it thinks fit to act as its
representative at any general meeting or class meeting.  The



---

12



person
so authorized shall be entitled to exercise in respect of and at such meeting,
the same powers on behalf of the corporation which he represents as that
corporation could exercise if it were an individual shareholder of the Company
personally present, including without limitation, the right, unless restricted
by such resolution, to appoint a proxyholder to represent such corporation, and
shall be counted for the purpose of forming a quorum if present at the meeting.
 Evidence of the appointment of any such representative may be sent to the
Company by written instrument.  Notwithstanding the foregoing, a
corporation being a shareholder may appoint a proxyholder.



11.4

In
the case of joint registered holders of a share, the vote of the senior who
exercises a vote, whether in person or by proxyholder, shall be accepted to the
exclusion of the votes of the other joint registered holders; and for this
purpose, seniority shall be determined by the order in which the names stand in
the central securities register of the Company. Several legal personal
representatives of a deceased shareholder whose shares are registered in his
sole name shall, for the purpose of this Article, be deemed joint registered
holders.



11.5

A
shareholder of unsound mind entitled to attend and vote in respect of whom an
order has been made by any court having jurisdiction, may vote, whether on a
show of hands or on a poll, by his committee, curator bonis or other person in
the nature of a committee or curator bonis appointed by that court, and any such
committee, curator bonis or other person may appoint a proxyholder.



11.6

A
 shareholder holding more than one share in respect of which he is entitled
to vote shall be entitled to appoint one or more (but not more than five)
proxyholders to attend, act and vote for him on the same occasion.  If such
shareholder should appoint more than one proxyholder for the same occasion, he
shall specify the number of shares each proxyholder shall be entitled to vote.
 A shareholder may also appoint one or more alternate proxyholders to act
in the place and stead of an absent proxyholder.



11.7

A
form of proxy shall be in writing executed by the appointor or his attorney
authorized in writing, or if the appointor is a corporation, by a duly
authorized officer or attorney of such corporation.



11.8

A
proxy shall be deposited in the manner hereinafter specified.  Unless the
Act otherwise requires, a proxyholder need not be a shareholder of the Company.



11.9

Subject
as herein provided, a proxy shall be deposited at such place as is specified for
that purpose in the notice convening the meeting not less than 48 hours
(excluding Saturdays, Sundays and holidays) before the time for holding the
meeting or such other time as is specified in the notice calling the meeting.



11.10

The
chair, in his absolute and unfettered discretion may, but is not bound to accept
a proxy in substituted form and in his absolute and unfettered discretion may,
but is not bound to accept in substituted form, evidence of authority by a
corporation to vote or a power of attorney or evidence of other authority under
which a proxy is executed.  The chairman may, in his unfettered discretion
waive the requirement to deposit evidence of the authority under which a proxy
or authority by a corporation to vote is executed.  In this Article 11.10,
"substituted form" shall mean a document produced by means of
photocopy, telegraph, telex, telecopy, electronic or any other means of
transmission or production which creates a legibly recorded message or copy of a
document.

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13

11.11

In
addition to any other method of depositing proxies provided for in these
Articles, the directors may, from time to time, by resolution make regulations
relating to the depositing of proxies at any place or places and fixing the time
or times for depositing the proxies not exceeding 48 hours (excluding Saturdays,
Sundays and holidays) preceding the meeting or adjourned meeting specified in
the notice calling a meeting of shareholders and providing for particulars of
such proxies to be sent to the Company or any agent of the Company in writing so
as to arrive before the commencement of the meeting or adjourned meeting at the
office of the Company or any agent of the Company appointed for the purpose of
receiving such particulars and providing that proxies so deposited as required
by this Part 11 and votes given in accordance with such regulations shall be
valid and counted.



11.12

A
vote given in accordance with the terms of a proxy is valid notwithstanding the
previous death or incapacity of the shareholder  giving the proxy or the
authority under which the form of proxy was executed or the transfer of the
share in respect of which the proxy is given, provided that no notification in
writing of such death, incapacity, revocation or transfer shall have been
received at the registered office of the Company or by the chairman of the
meeting or adjourned meeting for which the proxy was given before the vote is
taken.



11.13

Every
proxy may be revoked by instrument in writing



(a)

executed
by the shareholder giving the same or by his attorney authorized in writing or,
where the shareholder is a corporation, by a duly authorized officer or attorney
of the corporation; and



(b)

delivered
either to the registered office of the Company at any time up to and including
the last business day preceding the day of the meeting or any adjournment
thereof at which the proxy is to be used, or to the chair of the meeting on the
day of the meeting or any adjournment thereof before any vote in respect of
which the proxy is to be used shall have been taken



or
in any other manner provided by law.





PART
12



DIRECTORS



12.1

The
number of directors, excluding additional directors, may be set or changed from
time to time by special resolution, but notwithstanding anything contained in
these Articles, the number of directors shall never be less than three.



---

12.2

14



The
remuneration of the directors, as such, may from time to time be determined by
the directors or, if the directors shall so decide, by the shareholders.
 Such remuneration may be in addition to any salary or other remuneration
paid to any officer or employee of the Company as such who is also a director.
 The directors shall be paid such reasonable travelling, hotel and other
expenses as they incur in and about the business of the Company and if any
director shall perform any professional or other services for the Company that
in the opinion of the directors are outside the ordinary duties of a director or
shall otherwise be specially occupied in or about the Company's business, he may
be paid a remuneration to be fixed by the Board or, at the option of such
director, by the Company in general meeting, and such remuneration may be either
in addition to or in substitution for any other remuneration that he may be
entitled to receive.  The directors, on behalf of the Company, unless
otherwise determined by ordinary resolution, may pay a gratuity, a pension or an
allowance on retirement to any director who has held any salaried office or
place of profit with the Company or to his spouse or dependents and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance.



12.3

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





PART
13



ELECTION
AND REMOVAL OF DIRECTORS



13.1

Unless
otherwise determined by special resolution, the Board shall be divided into
three classes of directors, to be respectively designated as Class I, Class II
and Class III.



13.2

Unless
otherwise determined by special resolution, the terms of office of the directors
initially classified shall be as follows:



that
of Class I shall expire at the annual general meeting to be held in 1999,



that
of Class II shall expire at the annual general meeting to be held in 2000;



that
of Class III shall expire at the annual general meeting to be held in 2001.



At
each annual general meeting after such initial classification, directors to
replace those whose terms expire at such annual general meeting shall be elected
to hold office until the third succeeding annual general meeting.
 Notwithstanding the foregoing, every director shall hold office until his
successor shall be elected.  Any director whose office has expired shall be
eligible for re-election.



13.3

Where
the Company fails to hold an annual general meeting in accordance with the Act,
the directors then in office shall be deemed to have been elected or appointed
as directors on the last day on which the annual general meeting could have been
held pursuant to these Articles and they may hold office until other directors
are appointed or elected or until the day on which the next annual general
meeting is held.



---

13.4

15



If,
at any annual general meeting at which there should be an election of directors,
the places of the retiring directors are not filled by such an election, such
retiring directors as may be requested by the newly-elected directors shall, if
willing to do so, continue in office to complete the number of directors for the
time being set pursuant to these Articles until further new directors are
elected at a general meeting convened for that purpose or at the annual general
meeting in the next or some subsequent year, unless it is determined to reduce
the number of directors.



13.5

The
directors shall have power at any time and from time to time to appoint any
person as a director to fill a casual vacancy on the Board.  Any director
so appointed shall hold office only so long as the vacating director would have
retained the same if no vacancy had occurred.



13.6

Between
successive annual general meetings the directors shall have power to appoint one
or more additional directors but not more than one-third of the number of
directors set pursuant to these Articles and in effect at the last general
meeting at which directors were elected.  Any director so appointed shall
hold office only until the next following annual general meeting of the Company,
but shall be eligible for election at such meeting and so long as he is an
additional director the number of directors shall be increased accordingly.



13.7

Any
director may, by instrument in writing delivered to the Company, appoint any
person who is qualified to act as a director to be his alternate to act in his
place at meetings of the directors at which he is not present unless the
directors shall have reasonably disapproved the appointment of such person as an
alternate director and shall have given notice to that effect to the director
appointing the alternate director within a reasonable time after delivery of
such instrument to the Company.  Every such alternate shall be entitled to
notice of the meetings of the directors and to attend and vote as a director at
a meeting at which the person appointing him is not personally present, and if
he is a director, to have a separate vote on behalf of the director he is
representing in addition to his own vote.  A person may be appointed as an
alternate for more than one director and shall have a separate vote for each
director so represented.  A director may, at any time, by instrument in
writing delivered to the Company, revoke the appointment of an alternate
appointed by him.  The remuneration payable to such alternate shall be
payable out of the remuneration of the director appointing him.  Every
alternate director shall have a direct and personal duty to the Company arising
from his alternate directorship, independent of the duties of the director who
appointed him.



13.8

The
office of director shall be vacated if the director:



(a)

dies
or resigns his office by notice in writing delivered in accordance with the Act
or his term of office expires; or

---

(b)

16



is
convicted of an indictable offence and the other directors shall have resolved
to remove him; or



(c)

ceases
to be qualified as a director pursuant to the Act whereupon, if he does not
promptly resign, the other directors may resolve to remove him; or



(d)

an
order is made pursuant to Section 129 of the Act.



13.9

The
Company may, by special resolution, remove any director before the expiration of
his term of office, and may, by an ordinary resolution, appoint another person
in his stead.  If the shareholders do not appoint a director to fill the
resulting vacancy contemporaneously with the removal, the directors may appoint,
or the shareholders may elect, a director to fill that vacancy.



13.10

Notwithstanding
anything in these Articles, no election of a person as a director is valid at
any general meeting of the Company unless such person shall have consented in
writing to act as a director and deposited such written consent with the
President of the Company not less than 35 days before the date of the general
meeting, provided that this restriction shall not apply to a director standing
for re-election or a nominee of management standing for election who delivers a
consent in writing as a director to the President of the Company before the
meeting or attends the meeting.



PART
14



POWERS
AND DUTIES OF DIRECTORS



14.1

The
directors shall, subject to the Act and these Articles, manage or supervise the
management of the business and affairs of the Company and shall have the
authority to exercise all such powers of the Company as are not, by the Act or
these Articles, required to be exercised by the shareholders of the Company.



14.2

The
directors may, from time to time, by power of attorney or other instrument under
seal, appoint any person to be the attorney of the Company for such purposes and
with such powers, authorities and discretions (not exceeding those vested in or
exercisable by the directors under these Articles and excepting the powers of
the directors relating to filling vacancies in the board of directors, removing
a director, the constitution of the Board and of any of its committees and the
appointment or removal of officers and the power to declare dividends) and for
such period, with such remuneration, and subject to such conditions as the
directors may think fit, and any such appointment may be made in favour of any
of the directors or any of the shareholders of the Company, or in favour of any
corporation, or of any of the members, directors, nominees or managers of any
corporation, firm or joint venture and any such power of attorney may contain
such provisions for the protection or convenience of persons dealing with such
attorney as the directors think fit.  Any such attorney may be authorized
by the directors to sub-delegate all or any of the powers, authorities and
discretions for the time being vested in him.



---



14.3



17



The
directors may set the remuneration of the auditor of the Company.





PART
15



CONFLICTS
OF INTEREST OF DIRECTORS AND OFFICERS



15.1

If
a director or senior officer has a disclosable interest in a contract or
transaction, such director or senior officer shall be liable to account to the
Company for any profits that accrue to the director or senior officer under or
as a result of the contract or transaction unless disclosure is made thereof and
the contract or transaction is approved in accordance with the provisions of the
Act.



15.2

A
director who holds a disclosable interest in a contract or transaction into
which the Company has entered or proposes to enter is not entitled to vote on
any directors' resolution to approve that contract or transaction, unless all
the directors have a disclosable interest in that contract or transaction, in
which case any or all of those directors may vote on such resolution.



15.3

A
director who holds a disclosable interest in a contract or transaction into
which the Company has entered or proposes to enter and who is present at the
meeting of directors at which the contract or transaction is considered for
approval may be counted in the quorum at the meeting whether or not the director
votes on any or all of the resolutions considered at the meeting.



15.4

A
director or senior officer who holds any office or possesses any property, right
or interest that could result, directly or indirectly, in the creation of a duty
or interest that materially conflicts which that individual's duty or interest
as a director or senior officer, must disclose the nature and extent of the
conflict as required by the Act.



15.5

The
disclosable interest of a director in any contract or transaction or otherwise
shall not affect such director's alternate director and such alternate director
may be counted in a quorum and may vote upon such the same notwithstanding
disqualification of the director, nor shall a disqualification of an alternate
director affect the ability of a director to be counted in a quorum or to vote
on a contract or transaction in which such director's alternate director shall
be disqualified.



15.6

Subject
to the Act, a director may hold any office or place of profit with the Company
(other than the office of auditor of the Company) in conjunction with his office
of director for such period and on such terms (as to remuneration or otherwise)
as the directors may determine and no director or intended director shall be
disqualified by his office from contracting with the Company, either with regard
to his tenure of any such other office or place of profit, or as vendor,
purchaser or otherwise, and, subject to compliance with the provisions of the
Act, no contract or transaction entered into by or on behalf of the Company in
which a director is in any way interested shall be liable to be voided by reason
thereof.



15.7

Subject
to compliance with the provisions of the Act, a director or his firm may act in
a professional capacity for the Company (except as auditor for the Company) and
he or his firm shall be entitled to remuneration for professional services as if
he were not a director.



15.8

A
director may be or become a director or other officer or employee of, or
otherwise interested in any corporation or firm in which the Company may be
interested as a shareholder or otherwise, and, subject to compliance with the
provisions of the Act, such director shall not be accountable to the Company for
any remuneration or other benefits received by him as a director, officer or
employee of, or from his interest in such other corporation or firm prior to the
Company in general meeting directing otherwise.

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18

PART
16



PROCEEDINGS
OF DIRECTORS



16.1

The
chair of the Board, if any, or in his absence, the president, if any, if the
president is a director, shall preside as chair at every meeting of the
directors, or if there is no chair of the Board or neither the chair of the
Board nor the president is present within fifteen minutes of the time appointed
for holding the meeting or is unwilling to act as chair, or if the chair of the
Board, if any, and the president, if any, if the president is a director have
advised the secretary that they will not be present at the meeting, the
directors present shall choose one of their number to be chair of the meeting.
If the Company is a public company and is required or is desirous of holding a
meeting of the directors who are independent of management, the chair of the
independent Board or vice chair shall chair such meeting or if such chair or
vice chair is absent or unwilling to act as chair, the independent directors
present may choose one of their number to be chair.



16.2

The
directors may meet together for the conduct of business, adjourn and otherwise
regulate their meetings as they think fit.  Questions arising at any
meeting shall be decided by a majority of votes.  In the case of an
equality of votes, the chair shall not have a second or casting vote.
 Meetings of the Board held at regular intervals may be held at such place,
at such time and upon such notice (if any) as the Board may by resolution from
time to time determine.



16.3

One
or more directors, or all directors, may participate in a meeting of the Board
or of any committee of the directors by means of conference telephones or other
communication medium by means of which the directors participating in the
meeting can communicate with each other provided that a majority of such
directors agree to such participation. A director participating in a meeting in
accordance with this Article shall be deemed to be present at the meeting and to
have so agreed and shall be counted in the quorum therefor and be entitled to
speak and vote thereat.



16.4

A
director may, and the secretary or an assistant secretary of the Company, if
any, upon request of a director, shall call a meeting of the Board at any time.
 Reasonable notice of such meeting specifying the place, day and hour of
such meeting shall be given by mail, postage prepaid, addressed to each of the
directors and alternate directors at his address as it appears on the books of
the Company or by leaving it at his usual business or residential address, or by
telephone, telegram, telex, electronic mail or any method of transmitting
legibly recorded message.  It shall not be necessary to give notice of a
meeting of directors to any director or alternate director if such meeting is to
be held immediately following a general meeting at which such director shall
have been elected or is the meeting of directors at which such director is
appointed.

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19

16.5

Any
director of the Company may file with the Company, a document executed by him,
waiving notice of any past, present or future meetings of the directors being or
required to have been sent to him and may, at any time, withdraw such waiver
with respect to meetings held thereafter.  After filing such waiver with
respect to future meetings, until such notice is withdrawn, no notice need be
given to such director, and unless the director otherwise requires in writing to
the Company, to his alternate director, of any meeting of directors and all
meetings of the directors so held shall be deemed not to be improperly called or
constituted by reason of notice not having been given to such director or
alternate director.



16.6

The
quorum necessary for the transaction of the business of the directors may be
fixed by the directors and if not so fixed shall be a majority of the directors
or, if the number of directors is fixed at one, shall be one director.



16.7

The
continuing directors may, notwithstanding any vacancy in their body, but if and
so long as their number is reduced below the number fixed pursuant to these
Articles as the necessary quorum of directors, act only for the purpose of
increasing the number of directors to that number, or of summoning a general
meeting of the Company, but for no other purpose.



16.8

Subject
to the provisions of the Act, all acts done by any meeting of the directors or
of a committee of directors, or by any person acting as a director or officer,
shall, notwithstanding that it be afterwards discovered that there was some
defect in the qualification, election or appointment of any of such directors or
the members of such committee or persons acting aforesaid, or that they or any
of them were disqualified, be as valid as if every such person had been duly
elected or appointed and was qualified to be a director or officer, as the case
may be.



16.9

A
resolution consented to in writing by all of the directors or alternate
directors entitled to vote on it shall be as valid and effectual as if it had
been passed at a meeting of the directors duly called and held. Such resolution
may be in two or more counterparts which together shall be deemed to constitute
one resolution in writing.  Such resolution shall be filed with the minutes
of the proceedings of the directors and shall be effective on the date stated
thereon or on the latest day stated on any counterpart.  A resolution may
be consented to by a director or alternate director who has a disclosable
interest in the subject matter of the resolution provided that he has otherwise
complied with the provisions of these Articles and the Act.



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20



PART
17



EXECUTIVE
AND OTHER COMMITTEES



17.1

The
directors may, by resolution, create and appoint an executive committee to
consist of such member or members of their body as they think fit, which
committee shall have, and may exercise during the intervals between the meetings
of the Board, all the powers vested in the Board except the power to fill
vacancies on the Board, the power to remove a director, the power to change the
membership of or fill vacancies in any committee of the Board, and such other
powers, if any, as may be specified in the resolution.  The said committee
shall keep regular minutes of its transactions and shall cause them to be
recorded in the books for that purpose, and shall report the same to the Board
at such times as the Board may from time to time require.  The Board shall
have the power at any time to revoke or override the authority given to or acts
done by the executive committee except as to the acts done before such
revocation or overriding and to terminate the appointment or change the
membership of such committee and to fill vacancies on it.  The executive
committee may make rules for the conduct of its business and may appoint such
assistants as it may deem necessary.  A majority of the members of the said
committee shall constitute a quorum thereof.



17.2

The
directors may, by resolution, create and appoint one or more committees
consisting of such member or members of their body as they think fit and may
delegate to any such committee, such powers of the Board as the Board may
designate or prescribe (except the power to fill vacancies in the Board, the
power to remove a director, the power to change the membership of, or fill
vacancies in, any committee of the Board and the power to appoint or remove
officers appointed by the Board) subject to such conditions as may be prescribed
in such resolution, and all committees so appointed shall keep regular minutes
of their transactions and shall cause them to be recorded in books kept for that
purpose, and shall report same to the Board at such times as the Board may from
time to time require.  The directors shall also have power at any time to
revoke or override any authority given to or acts to be done by any such
committees except as to acts done before such revocation or overriding and to
terminate the appointment or change the membership of a committee and to fill
vacancies in it.  Committees may make rules for the conduct of their
business and may appoint such assistants as they may deem necessary.  A
majority of the members of a committee shall constitute a quorum thereof.



17.3

The
executive committee and any other committee may meet and adjourn as it thinks
proper.  Questions arising at any meeting shall be determined by a majority
of votes of the members of the committee present, and in case of an equality of
votes, the chairman shall not have a second or casting vote.  A resolution
approved in writing by all the members of the executive committee or any other
committee shall be as valid and effective as it if had been passed at a meeting
of such committee duly called and constituted.  Such resolution may be in
two or more counterparts which together shall be deemed to constitute one
resolution in writing.  Such resolution shall be filed with the minutes of
the proceedings of the committee and shall be effective on the date stated
thereon or on the latest date stated in any counterpart.

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21



PART
18



OFFICERS



18.1

The
directors shall, from time to time, appoint such officers, if any, as the
directors shall determine and the directors may, at any time, terminate any such
appointment.



18.2

Other
than the chair of the Board or the managing director, officers need not be
directors.  No officer shall be appointed unless that officer is qualified
in accordance with the Act.  The remuneration of the officers of the
Company as such and the terms and conditions of their tenure of office or
employment shall, from time to time, be determined by the directors; such
remuneration may be by way of salary, fees, wages, commission or participation
in profits or any other means or all of these modes and an officer may, in
addition to such remuneration, be entitled to receive, after he ceases to hold
such office or leaves the employment of the Company, a pension or gratuity. The
directors may decide what functions and duties each officer shall perform and
may entrust to and confer upon him any of the powers exercisable by them upon
such terms and conditions and with such restrictions as they think fit and may,
from time to time, revoke, withdraw, alter or vary all or any of such functions,
duties and powers.





PART
19



INDEMNITY
AND PAYMENT OF EXPENSES OF DIRECTORS AND OFFICERS



19.1

Subject
to the provisions of the Act, the directors shall cause the Company to indemnify
and pay all eligible penalties and expenses of an eligible party and, where
appropriate, the heirs and personal or other legal representatives of an
eligible party in accordance with the provisions of the Act.  Each
director, alternate director and officer is deemed to have contracted with the
Company on the terms of the indemnity contained in this Article 19.1.



19.2

The
failure of a director, alternate director or officer of the Company to comply
with the provisions of the Act or these Articles shall not invalidate any
indemnity to which he is entitled under this Part.



19.3

The
directors may cause the Company to purchase and maintain insurance for the
benefit of eligible parties.





PART
20



DIVIDENDS
AND RESERVES



20.1

Subject
to the Act, the directors may from time to time declare and authorize payment of
such dividends, if any, as they may deem advisable and need not give notice of
such

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22



declaration
to any shareholder.  The provisions of this Article 20.1 are subject to the
rights, if any, of shareholders holding shares with special rights as to
dividends.  No dividend shall be paid otherwise than out of funds and/or
assets properly available for the payment of dividends and a declaration by the
directors as to the amount of such funds or assets available for dividends shall
be conclusive.  The Company may pay any such dividend wholly or in part by
the distribution of specific assets and in particular, by paid-up shares, bonds,
debentures or other securities of the Company or any other corporation or in any
one or more such ways as may be authorized by the Company or the directors and
where any difficulty arises with regard to such a distribution, the directors
may settle the same as they think expedient, and in particular, may fix the
value for distribution of such specific assets or any part thereof, and may
determine that cash payments in substitution for all or any part of the specific
assets to which any shareholders are entitled shall be made to any shareholders
on the basis of the value so fixed in order to adjust the rights of all parties
and may vest any such specific assets in trustees for the persons entitled to
the dividend as may seem expedient to the directors.





20.2

Any
dividend declared on shares of any class by the directors may be made payable on
such date as is fixed by the directors.



20.3

Subject
to the rights of shareholders (if any) holding shares with special rights as to
dividends, all dividends on shares of any class or series shall be declared and
paid according to the number of shares held.



20.4

The
directors may, before declaring any dividend, set aside out of the funds
properly available for the payment of dividends, such sums as they think proper
as a reserve or reserves, which shall, at the discretion of the directors, be
applicable for meeting contingencies, or for equalizing dividends, or for any
other purpose to which such funds of the Company may be properly applied, and
pending such application may, at the like discretion, either be employed in the
business of the Company or be invested in such investments as the directors may
from time to time think fit.  The directors may also, without placing the
same in reserve, carry forward such funds which they think prudent not to
divide.



20.5

If
several persons are registered as joint holders of any share, any one of them
may give an effective receipt for any dividend, bonuses or other monies payable
in respect of the share.



20.6

No
dividend shall bear interest against the Company.  Where the dividend to
which a shareholder is entitled includes a fraction of a cent, such fraction
shall be disregarded in making payment thereof and such payment shall be deemed
to be payment in full.



20.7

Any
dividend, bonuses or other monies payable in cash in respect of shares may be
paid by cheque or warrant sent through the post, directed to the registered
address of the holder, or in the case of joint holders, to the registered
address of that one of the joint holders who is first named on the central
securities register, or to such person and to such address as the holder or
joint holders may direct in writing.  Every such cheque or warrant shall be
made payable to the order of the person to whom it is sent.  The mailing of
such cheque or warrant shall, to the extent the sum represented thereby (plus
the amount of any tax required by law to be deducted) discharge all liability
for the dividend, unless such cheque or warrant shall not be paid on
presentation or the amount of tax so deducted shall not be paid to the
appropriate taxing authority.



---

20.8

23



Notwithstanding
anything contained in these Articles, the directors may, from time to time,
capitalize any undistributed surplus of the Company on hand and may, from time
to time, issue as fully paid and non assessable, any unissued shares, or any
bonds, debentures or debt obligations of the Company as a dividend representing
such undistributed surplus on hand or any part thereof.





PART
21



DOCUMENTS,
RECORDS AND REPORTS



21.1

The
Company shall keep at its records office or at such other place as the Act may
permit, the documents, copies, registers, minutes and records which the Company
is required by the Act to keep at its records office or such other place, as the
case may be.



21.2

The
Company shall cause to be kept proper books of account and accounting records in
respect of all financial and other transactions of the Company in order to
properly record the affairs and condition of the Company and to comply with the
Act.



21.3

Unless
the directors determine otherwise, or unless otherwise determined by an ordinary
resolution, no shareholder of the Company shall be entitled to inspect the
accounting records of the Company.



21.4

The
directors shall, from time to time, at the expense of the Company, cause to be
prepared and laid before the shareholders in general meeting such financial
statements and reports as are required by the Act, provided always that if the
Company is a public company, the Company shall provide financial statements in
accordance with applicable securities regulatory requirements.





PART
22



NOTICES



22.1

Unless
the Act or these Articles requires otherwise, a notice, statement, report or
other record may be given or delivered by the Company to any shareholder,
director or officer either by delivery to him personally or by sending it by
mail to him at his registered address, in the case of a shareholder, or at the
prescribed address for mailing shown for the director or officer in the records
kept by the Company, in the case of a director or officer, or the mailing
address provided by the recipient for the sending of that record or records of
that



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24



class
or by fax or electronic mail to the fax number or electronic mail address
provided by the intended recipient for the sending of that record or records of
the class or as otherwise permitted by any securities legislation in any
jurisdiction in North America that is applicable to the Company and all rules
and regulations made and promulgated under that legislation and all
administrative policy statements, blanket orders and rulings, notices and other
administrative directives issued by securities commissions or similar
authorities appointed under that legislation.  Where a notice, statement,
report or other record is sent by mail, service or delivery of the notice,
statement, report or other record shall be deemed to be effected by properly
addressing, prepaying and mailing the notice, statement, report or other record
and shall be deemed to have been given on the day, (Saturdays, Sundays and
holidays excepted), following the date of mailing.  A certificate signed by
the secretary, if any, or other officer of the Company or of any other
corporation acting in that behalf for the Company that the letter, envelope or
wrapper containing the notice, statement, report or other record was so
addressed, prepaid and mailed shall be conclusive evidence thereof.



22.2

A
notice, statement, report or other record may be given or delivered by the
Company to the joint holders of a share by giving notice to the joint holder
first named in the central securities register in respect of the share.



22.3

A
notice, statement, report or other record may be given or delivered by the
Company to the persons entitled to a share in consequence of the death,
bankruptcy or incapacity of a  shareholder by sending it through the mail,
prepaid, addressed to them by name or by the title of representative of the
deceased or incapacitated person or trustee of the bankrupt, or by any like
description, at the address (if any) supplied to the Company for the purpose by
the persons claiming to be so entitled, or (until such address has been so
supplied) by giving notice in the manner in which same might have been given if
the death, bankruptcy or incapacity had not occurred.



22.4

Notice
of every general meeting or meeting of shareholders holding a class of shares
shall be given in the manner hereinbefore authorized to every shareholder
holding at the time of the issue of the notice or the date fixed for determining
the shareholders entitled to such notice, whichever is the earlier, shares which
confer the right to notice of and to attend and vote at any such meeting.
 No other person except the auditor of the Company and the directors of the
Company shall be entitled to receive notices of any such meeting.



22.5

Notwithstanding
the preceding Articles in this Part, if the Company is or becomes a public
company, the Company shall give notices and provide statements, reports and
other records in accordance with applicable securities regulatory requirements.





PART
23



RECORD
DATES



23.1

The
directors may fix in advance a date, which shall not be more than the maximum
number of days permitted by the Act preceding the date of any meeting of
 shareholders of any class

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25



of
shares, or of the payment of any dividend, or of the proposed taking of any
other proper action requiring the determination of shareholders, as the record
date for the determination of the shareholders entitled to notice of, or to
attend and vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or for any other proper purpose and, in
such case, notwithstanding anything elsewhere contained in these Articles, only
shareholders of record on the date so fixed shall be deemed to be shareholders
for the purposes aforesaid. If the Company is or becomes a public company, it
shall, notwithstanding the foregoing, comply with the requirements of
appropriate securities regulatory requirements.



23.2

Where
no record date is so fixed for the determination of shareholders as provided in
the preceding Article, the date on which the notice is mailed or on which the
resolution declaring the dividend is adopted, as the case may be, shall be the
record date for such determination.





PART
24



SEAL



24.1

The
directors may provide a seal for the Company and, if they do so, shall provide
for the safe custody of the seal which shall not be affixed to any instrument
except in the presence of the following persons, namely:



(a)

any
two directors, or



(b)

any
officer, together with any director, or



(c)

if
the Company shall have only one director, that director, or



(d)

such
person or persons as the directors may from time to time by resolution
determine,



and
the said directors, officers, person or persons in whose presence the seal is so
affixed to an instrument shall sign such instrument.  For the purpose of
certifying under seal a certificate of incumbency of the directors or officers
or a true copy of any document or resolution, the seal may be affixed in the
presence of any one of the foregoing persons.



24.2

To
enable the seal of the Company to be affixed to any bonds, debentures, share
certificates or other securities of the Company, whether in definitive or
interim form, on which facsimiles of any of the signatures of the directors or
officers of the Company are, in accordance with the Act and/or these Articles
printed or otherwise mechanically reproduced, there may be delivered to the
person employed to engrave, lithograph or print such definitive or interim
bonds, debentures, share certificates or other securities one or more unmounted
dies reproducing the Company's seal and the chair of the Board or any senior
officer may in writing authorize person to cause the Company's seal to be
affixed to such

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26



definitive
or interim bonds, debentures, share certificates or other securities by the use
of such dies.  Bonds, debentures, share certificates and other securities
to which the Company's seal has been so affixed shall, for all purposes, be
deemed to be under and to bear the Company's seal lawfully affixed thereto.



24.3

The
Company may have for use in any other province, state, territory or country an
official seal which shall have on its face, the name of the province, state,
territory or country where it is to be used and all of the powers conferred by
the Act with respect thereto may be exercised by the directors or by a duly
authorized agent of the Company.





PART
25



MECHANICAL
REPRODUCTION OF SIGNATURES



25.1

The
signature of any officer, director, registrar, branch registrar, transfer agent
or branch transfer agent of the Company, unless otherwise required by the Act or
by these Articles may, if authorized by the directors, be printed, lithographed,
engraved or otherwise mechanically reproduced upon all instruments executed or
issued by the Company or any officer thereof; and any instrument on which the
signature of any such person is so reproduced shall be deemed to have been
manually signed by such person whose signature is so reproduced and shall be as
valid to all intents and purposes as if such instrument had been signed
manually, and notwithstanding that the person whose signature is so reproduced
may have ceased to hold the office that he is stated on such instrument to hold
at the date of the delivery or issue of such instrument.



25.2

The
term "instrument" as used in Article 25.1 shall include deeds,
mortgages, hypotheses, charges, conveyances, transfers and assignments of
property, real or personal, agreements, releases, receipts and discharges for
the payment of money or other obligations, shares and share warrants of the
Company, bonds, debentures and other debt obligations of the Company, and all
paper writings.



PART
26



PROHIBITIONS



26.1

If
the Company is, or becomes a company which is not a public company, then no
shares shall be transferred without the previous consent of the directors
expressed by a resolution of the Board and the directors shall not be required
to give any reason for refusing any such proposed transfer.