U.S. SECURITIES AND EXCHANGE COMMISSION 
  Washington, D.C. 20549
  FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________
  to _______________

0-21777 
  (Commission File Number)

GOLDEN QUEEN MINING CO. LTD. 
  (Name of small business issuer in its charter)

|Province of British Columbia      | Not Applicable     
|--------------------------------- | -------------------
|(State or other jurisdiction      | (IRS Employer      
|of incorporation or organization) | Identification No.)

11847 Gempen Street Mojave, California 93501 
   (Address of principal executive offices)       (Zip
  Code)

Issuers telephone number: (661) 824-1054

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

Securities registered under section 12(g) of the Exchange Act:
  Common Shares without par value
  The Common Shares are listed on the Toronto Stock Exchange

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

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B is not contained in this form, and no disclosure
  will be contained, to the best of registrants knowledge, in definitive
  proxy or information statements incorporated by reference in part III of this
  Form 10-KSB or any amendment to this Form 10-KSB. [  ]

The issuers revenues for its most recent fiscal year
  were $27,686 in interest and rental income. The aggregate market value of the
  voting stock held by non-affiliates at March 14, 2003 was $13,497,665. The number
  of shares of common stock outstanding at such date was 51,802,189.

Transitional Small Business Disclosure Format. Yes [ 
  ]   No [X]

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the Annual
  Meeting of Stockholders are incorporated by reference into Part III of this
  Form 10-KSB Report, which Proxy Statement is to be filed within 120 days after
  the end of the Registrant's fiscal year ended December 31, 2002.

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TABLE OF CONTENTS

|                                       |          |                                                                              | Page | 
|-------------------------------------- | -------- | ---------------------------------------------------------------------------- | ---- | 
|                                       |          |                                                                              |      | 
|PART I                                 |          |                                                                              |      | 
|                                       |          |                                                                              |      | 
|                                       | Item 1:  | Description of Business                                                      | 2    | 
|                                       | Item 2:  | Description of Property                                                      | 13   | 
|                                       | Item 3:  | Legal Proceedings                                                            | 15   | 
|                                       | Item 4:  | Submission of Matters to a Vote of Security Holders                          | 15   | 
|                                       |          |                                                                              |      | 
|                                       |          |                                                                              |      | 
|PART II                                |          |                                                                              |      | 
|                                       |          |                                                                              |      | 
|                                       | Item 5:  | Market for Common Equity and Related Stockholder Matters                     | 15   | 
|                                       | Item 6:  | Managements Discussion and Analysis and Plan of Operation                   | 16   | 
|                                       | Item 7:  | Financial Statements                                                         | 19   | 
|                                       | Item 8:  | Changes in and Disagreements with Accountants and Financial
      Disclosure | 19   | 
|                                       |          |                                                                              |      | 
|                                       |          |                                                                              |      | 
|PART III                               |          |                                                                              |      | 
|                                       |          |                                                                              |      | 
|                                       | Item 9:  | Directors and Executive Officers, Promoters and Control Persons;             |      | 
|                                       |          | Compliance with Section 16(a) of the Exchange Act                            | 19   | 
|                                       | Item 10: | Executive Compensation                                                       | 19   | 
|                                       | Item 11: | Security Ownership of Certain Beneficial Owners and Management               | 19   | 
|                                       | Item 12: | Certain Relationships and Related Transactions                               | 19   | 
|                                       | Item 13: | Exhibits and Reports on Form 8-K                                             | 20   | 
|                                       | Item 14: | Controls and Procedures                                                      | 21   | 
|                                       |          |                                                                              |      | 
|SIGNATURES                             |          |                                                                             
|                                       |          |                                                                              |      | 
|CERTIFICATIONS PURSUANT TO SECTION 302 |          |                                                                             
|                                       |          |                                                                              |      | 
|FINANCIAL STATEMENTS                   |          |                                                                             
|                                       |          |                                                                              |      | 
|EXHIBITS                               |          |                                                                             

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PART I

Item 1. Description of Business.

Glossary

Certain terms used throughout this report are defined below.

Advanced minimum royalty. Cash royalty payments made
  in advance of production to hold a mining lease. Advanced minimum royalties
  are usually but not always credited against production royalties arising after
  production commences.

Ag.The symbol for silver.

Au.The symbol for gold.

Caldera.A large diameter crater caused by the collapse
  or subsidence of the central part of a volcano, or as the result of a violent
  explosion.

Company.Golden Queen Mining Co. Ltd., a British Columbia
  company, and its wholly-owned subsidiary, Golden Queen Mining Company, Inc.,
  a California corporation.

Development stage.Activities related to the preparation
  of a commercially mineable deposit for extraction.

Exploration stage.Activities such as drilling, bulk
  sampling, assaying and surveying related to the search for mineable deposits.

Fault or faulting. A fracture in the earths
  crust accompanied by a displacement of one side of the fracture with respect
  to the other and in a direction parallel to the fracture.

Grade.A term used to assign value to reserves and
  resources, such as ounces per ton.

HDPE.High density polyethylene, which is a plastic
  used to create an impervious membrane.

Heap leaching.A gold extraction process involving
  the percolation of cyanide solution through crushed ore heaped on an impervious
  pad or base.

Linear kriging.A geostatistical method used to determine
  ore reserve grades.

Mineral deposit.A mineral deposit is a mineralized
  body, which has been intersected by sufficient closely-spaced drill holes or
  underground sampling to support sufficient tonnage and average grade(s) of metal(s)
  to warrant further exploration or development activities. A mineral deposit
  is sometimes also referred to as mineralized material or as mineralized
  material inventory. A mineral deposit does not qualify as a commercially
  mineable ore body (reserves) under standards promulgated by the Securities and
  Exchange Commission until a final, comprehensive economic, technical and legal
  feasibility study based upon test results has been concluded.

Ore.A natural aggregate of one or more minerals which,
  at a specified time and place, may be mined and sold at a profit or from which
  some part may be profitably separated.

Reserves.That part of a mineral deposit which could
  be economically and legally mined at the time of determination. Reserves are
  subcategorized as either proven (measured) reserves, for which (a) quantity
  is computed from dimensions revealed in outcrops, trenches, workings or drill
  holes, and grade and/or quality are computed from the results of detailed sampling,
  and (b) the sites for inspection, sampling and measurement are spaced so closely
  and geologic character is so well defined that size, shape, depth and mineral
  content are well-established; or probable (indicated) reserves,
  for which quantity and grade and/or quality are computed from information similar
  to that used for proven (measured) reserves, yet the sites for inspection, sampling
  and measurement are farther apart.

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Resources.The term resources covers mineralization
  and natural material of intrinsic economic interest which has been identified
  and estimated through exploration and sampling and within which reserves may
  subsequently be defined by the application of technical, economic, legal, environmental,
  socio-economic and governmental factors. The phrase reasonable prospects
  for economic extraction implies a judgment by a Qualified Person in respect
  of the technical and economic factors likely to influence the possibility of
  economic extraction.

Stripping ratio.The tonnage of waste material removed
  to allow the mining of one ton of ore in an open pit.

Volcanics.Rock composed of clasts or pieces that are
  of volcanic composition.

General Development of Business

The Company was incorporated under the laws of the Province
  of British Columbia in November 1985 and is engaged in the development of mineral
  properties located in the Mojave Mining District of Kern County, California
  known as the Soledad Mountain Project. The Company acquired its initial interest
  in the Soledad Mountain Project (the Project) in 1986. Since then,
  the Company has acquired additional property interests in the area and explored
  for gold and silver between 1988 and 1999. These activities are conducted through
  Golden Queen Mining Company, Inc., a California corporation and wholly owned
  subsidiary of the Company.

The Company first outlined a gold resource on the property
  in 1988. Further exploration work was conducted from 1989 through 1991. Initial
  metallurgical test work was also done. Thereafter, the Project remained dormant
  until 1994, when the Company renewed exploration activities with funds derived
  from several private placements of its common stock. A mineable ore reserve
  was prepared as part of a feasibility study completed by M3 Engineering and
  Technology of Tucson, Arizona in early 1998 using a gold price of $350 per ounce
  and a silver price of $5.00 per ounce. This mineable ore reserve was 48.6 million
  tonnes (53.6 million tons) with average grades of 0.86 grams of gold per tonne
  (0.025 ounces per ton) and 12.7 grams of silver per tonne (0.371 ounces per
  ton). The Company completed additional drilling and underground sampling to
  confirm previous results and to expand the resources and reserves between 1998
  and 2000. Test work was also done to determine value of waste rock and leached
  residues from the heap leach operation for use as construction aggregate.

The most recent geologic resource for the deposit, prepared
  in 2000, is 122.2 million tonnes (134.7 million tons) with average grades of
  0.669 g/t gold (0.020 ounces gold per ton) and 12.213 g/t silver (0.356 ounces
  silver per ton). Contained within this geologic resource is a mineable ore reserve
  of 57.3 million tonnes (63.3 million tons) with average grades of 0.83 g/t gold
  (0.024 ounces per ton) and 13.5 g/t silver (0.030 ounces per ton) and using
  prices of $300 per ounce gold and $5.50 per ounce silver. This mineable reserve
  is estimated to contain 1,529,000 ounces of gold and 24,870,000 ounces of silver.

The Company plans to develop the Project as an open pit mine
  and use a cyanide heap leach recovery process. This will include the construction
  of facilities capable of processing ore at a rate of up to 5.76 million tonnes
  (6.35 million tons) per year for a minimum of nine years, followed by heap detoxification
  and reclamation of the site.

The Company had previously reported that it expected to begin
  producing gold and silver from the Project during the second half of 1998, once
  permitting was completed. Because of relatively low gold prices in the late
  1990s and in the early 2000s, however, the Company was not able
  to obtain financing for the Project and the Project was therefore put on hold
  in late 2000. Employees were laid off and costs were reduced to the minimum
  required to maintain rights to the Property. The major landowners agreed to
  a 3-year moratorium on property payments or until the price of gold improved.
  The Company recorded an asset impairment loss of $28,547,592 for the year ended
  December 31, 2000. The asset impairment loss reduced the carrying value of fixed
  assets, mineral properties, and other assets to their estimated net realizable
  value.

The Project remained on hold in 2001 and 2002.

Most of the information provided in this report is unchanged
  from previous filings.

3

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The registered office of the Company is located at 1200 -
  750 West Pender Street, Vancouver, British Columbia V6C 2T8 and its executive
  offices are located at 11847 Gempen Street, Mojave, California 93501.

Project Background

The Project is located south of Mojave in Kern County in southern
  California.

Gold mining on Soledad Mountain dates back to the late 19th
  century although the largest producer was a syndicate managed by Gold Fields
  America Development Co., a subsidiary of Consolidated Gold Fields of South Africa.
  This syndicate ran an underground mine and mill on the property from 1935 to
  1942 when the mine was forced to close by the War Production Board Order L-208.
  Only intermittent production took place after the war as costs continued to
  increase while the price of gold remained pegged at $35 per ounce until 1973.

The Company was formed in November 1985 to acquire Golden
  Queen Mining Co., Inc., a California corporation, which had secured, by agreement,
  a core group of claims on Soledad Mountain. The Company has since added to its
  holdings and currently controls upwards of 1,012 hectares of land as set out
  in more detail in Sub-section 2.4 Land Status of this report.

Exploration & Mineral Resource Estimates

The Soledad Mountain deposit is hosted in a volcanic sequence
  of rhyolite porphyries, quartz latites and bedded pyroclastics that occur on
  a large dome-shaped feature, called Soledad Mountain, along the margins of a
  collapsed caldera. High-grade precious metal mineralization is associated with
  steeply dipping epithermal fissure veins occupying faults and fracture zones
  that cross-cut the rock units and generally trend in a north-west direction.
  The veins are contained within siliceous envelopes of lower grade material that
  forms the bulk of the mineral resource.

The primary rock types that will be mined are rhyolite porphyry
  and flow-banded rhyolite, pyroclastics, quartz latite porphyry and siliceous
  vein material. The rock types will be found in different areas and at various
  stages of the life of the mine. Little or no clay occurs in any of the rocks
  and the rocks contain upwards of 80 % Si as SiO2.
  Rhyolite porphyry and flow-banded rhyolite were grouped as a single rock type
  for the metallurgical test work and three primary ore types will therefore be
  mined at various times through the life of the mine.

Exploration began with an initial program of 12 diamond-drill
  holes and a program of underground check sampling in 1988. This was followed
  by extensive programs of mapping, diamond-drilling, reverse-circulation drilling
  and underground diamond-drilling and sampling to 1999. The information that
  has been used to develop the geological database has been summarized in the
  table below. The geological database contains 78,194 sample intervals.

|Diamond drilling             | 9,802.1 meters   | 32,127 feet 
|---------------------------- | ---------------- | ------------
|Reverse circulation drilling | 89,912.0 meters  | 294,987 feet
|Old cross-cuts (1930s)       | 6,813.0 meters   | 22,352 feet 
|Underground drilling (1930s) | 4,909.7 meters   | 16,108 feet 
|Recent cross-cuts (1980s)    | 2,156.6 meters   | 7,075 feet  
|TOTAL                        | 113,593.4 meters | 372,649 feet

Mineral Resources Development, Inc. (MRDI) completed a detailed
  due diligence review of the procedures, assays and geological and resource models
  used by the Company and its consulting engineers and submitted their final report
  in April 2000.

Industry-best-practices were employed at each stage in determining
  the mineral resource, the mineable ore reserve and the mine design.

The current deposit model was developed jointly by Mintex,
  Inc., Tucson, Arizona and Company personnel in March 2000. Note that the historic
  Gold Fields assays were adjusted downwards for the base case as
  recommended by MRDI. Linear kriging was used to estimate gold and silver grades
  for all blocks in the model. The deposit model allows for dilution as Mintec,
  Inc. felt that the approach used to develop the model was more

4

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than sufficient to take dilution into account for mine planning
  and ore reserve reporting purposes. The mineral resource estimate includes all
  blocks within the model limits with no assumptions as to economic viability.
  The mineral resource for a range of cut-off grades is shown in the table below.

|Mineral Resource at Selected Cut-off Grades
|-------------------------------------------
|Cut-Off Grade g/t                          
|0.274                                      
|0.686                                      
|1.029                                      
|                                           
|Cut-Off Grade oz/t                         
|0.008                                      
|0.020                                      
|0.030                                      

The mineral resource calculated with unadjusted historic Gold
  Fields gold assays shows an increase in the total gold content of the resource
  of 9.2 %. This therefore presents an upside case for the Project.

An independent manual estimate of mineralized material (cross
  section polygonal resource estimate) was also completed and this validates the
  block model.

The gold equivalent grade (AuEq) used for the mineral resource
  estimates and for the mine design was calculated as follows:

Gold equivalent grade or AuEq g/t = Au g/t + {(Ag/R1)*R2}
  g/t 
  R1 = Au price in $/oz/Ag price in $/oz; and
  R2= Ag recovery in %/Au recovery in %
  or R1 = 300/5.50 => 54.545 and R2= 60.00/78.00 => 0.7692

Exploration Potential

Additional geological targets have been identified on Soledad
  Mountain. These targets are generally peripheral (east, south and west) to the
  currently defined mineral resource. On the east, two additional zones of quartz
  stringer veins have been mapped in the hanging wall of the Karma/Ajax vein system.
  Toward the south, an extension of Silver Queen vein system is open and additional
  vein splits have been mapped on surface. Also, an extension of the Golden Queen
  vein system appears to be offset by an east-west trending fault. Initial drill
  results indicate widths of 8 meters with good gold and silver grades. Eight
  areas have been targeted for further exploration.

The exploration work to date has focused on known fault/vein
  structures central to the mineral resource. The host volcanics associated with
  the mineralization on Soledad Mountain extend further to the south and have
  not been fully evaluated. Anomalous gold has also been found in the low volcanic
  hills protruding from the pediment floor and trending northwest from Soledad
  Mountain.

The potential for developing an ore reserve that would be
  mined by underground methods is alos considered to be good and this will be
  assessed as funds become available to do the work.

Mine Design

The mine design was again done by Mintec, Inc., Tucson, Arizona.
  Gold and silver prices of $300.00/oz and $5.50/oz respectively were used to
  develop an ultimate pit shell with standard modeling techniques and this shell
  was used for the mine design. Mining will be done in 7 phases and allowance
  was made for backfilling a portion of the open pits with waste rock.

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Seegmiller International, Salt Lake City, Utah, did slope
  stability analyses and Golder Associates, Inc., Denver, Colorado, analyzed the
  stability of the waste rock dumps.

The ore that will be mined as per the current mine design
  is 57.3 million tones (63 million tons) with grades of 0.83 g/t gold (0.024
  oz/ton) and 13.5 g/t silver (0.39 oz/ton). This mineable ore reserve is estimated
  to contain1,529,000 oz gold and 24,870,000 oz silver.

Company personnel prepared a detailed ore production and waste
  removal schedule. The Company estimates that the current mineable ore reserve
  will support production at a rate of up to 5.76 million tonnes (6.35 million
  tons) per year for a life-of-mine of eleven years with an estimated average
  stripping ratio of 3.5 to 1.0.

It is significant that at a gold price of $300.00 per ounce
  only 46.7 % of the mineral resource is included in the mineable ore reserve.
  There is therefore a significant potential for a longer mine life at higher
  gold prices.It is further expected that mineralized veins that continue
  into the walls and floor of the open pits, can be mined by underground mining
  methods and this may add some higher-grade ore at various points in the life
  of the mine.

Open Pit Operation

The operation will be an open pit operation.

Contract mining will be used for the first two years of the
  operation. The contractor will also construct two major access roads using waste
  rock mined in the first two years. Contract mining proposals were received from
  three contractors and allowance has been made for contractor mobilization and
  demobilization costs in the capital cost estimates.

The Company will purchase the necessary equipment to do the
  mining from Year 3 onwards and this is the scenario that has been included in
  the most recent cash flow projections. Company personnel prepared the mine manpower
  and equipment requirements and the cost of the equipment in 2000.

Ore from waste separation will require special attention to
  ensure overall grade projections are met.

Ground water has been reported only in the deeper historic
  underground mine openings and no seepage of water into the open pit is expected.
  Underground mine openings will be encountered from time-to-time during open
  pit mining and this will be allowed for in the detailed mine planning.

Process Development & Flow Sheet

Test work and process development done on Soledad Mountain
  ores from 1988 to 2000 shows that these ores are readily amenable to heap leach
  treatment provided the ore is crushed and/or ground to relatively small sizes
  and this is the process that has been chosen for the Project. Various test programs
  confirmed parameters such as agglomerate strength, percolation rate, cyanide
  consumption and cement and/or lime required for pH control.

Studies show that gold is present as native gold and electrum
  ranging in size from <10 micron to >150 micron. A semi-quantitative SEM-EDX
  analysis of the electrum indicates a silver content of up to 25 %. Silver is
  also present as acanthite (Ag2S) with some
  native silver, pyrargyrite (3Ag2S.Sb2S3)
  and polybasite (9Ag2S.Sb2S3).
  Multi-element x-ray fluorescence analyses show only trace quantities of mercury.

Gold recoveries by size fraction for the bulk column leach/re-leach
  tests of the 3 primary ore types completed in 1999 show that gold recoveries
  are significantly higher for the finer particle sizes and the particle size
  distributions is therefore the key to preparing the various ore types for heap
  leaching.

It was proposed to crush and screen the ore to 100 % - 8 mesh
  or 100 % - 2.37 mm and a four-stage crushing and screening plant was designed
  for the Project in 1998. A review done by the Companys management in 2002
  provided new insights into the test work and test results and an alternative
  flow sheet has now been developed based upon the ues of a high-pressure grinding
  roll or HPGR.

The Companys management developed a flow sheet for the
  process that uses the HPGR for final particle sizing and preparation in late-2002.
  Information obtained from a laboratory-scale HPGR test done in 1989 provided
  the design

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parameters for this flow sheet. Signet Engineering Pty. Ltd.,
  Perth, Australia has extensive experience in the application of the HPGR and
  has reviewed and confirmed the flow sheet.

Why HPGR?

- Indications are that micro-fracturing of particles in
      the HPGR will, at a minimum, give higher recoveries in a heap leach operation.
- Test work also showed that ore crushed in the HPGR gave
      stronger agglomerates than ore crushed in the Barmac VSI.
- The HPGR is considerably more energy-efficient than conventional
      crushers and mills.
- The HPGR can provide dramatically lower capital costs
      than conventional crushers and screens.

The crushing-screening circuit now has considerable flexibility
  built into it and crusher settings and screen sizes can be changed for different
  ore types. This will yield better results than a traditional crushing-screening
  circuit with VSI crushers and screens to size the ore. Note the ability to bypass
  the HPGR with certain ores that do not require fine crushing. The circuit as
  designed will process >800 tonnes per hour. The key to good recovery is the
  particle size distribution of the feed to the agglomerating drum and to the
  heap and frequent sampling will be used to check this. Adjustments as set out
  above can be made on an as-required basis for optimum leach performance based
  upon actual operating experience.

A confirmation test for the application of the HPGR will be
  required and it is expected that this can be completed in the second quarter
  of 2003 at a cost of approximately $30,000.

Work on a detailed site layout is underway that includes a
  crushing-screening plant based upon the current flow sheet. Site preparation
  will also be significantly reduced.

The crushed ore will finally be agglomerated in an agglomerating
  drum and transported to the heap with conveyors.

Merrill-Crowe Plant

Gold and silver are typically recovered by dissolution in
  a dilute cyanide solution and then by precipitation with zinc or adsorption
  on activated carbon. The zinc precipitation process, referred to as the Merrill-Crowe
  process after its developers, is used to recover gold and silver when the silver
  to gold ratio is greater than 10 to 1. The silver to gold ratio is expected
  to average 15:1 for the Project and a Merrill-Crowe precipitation plant will
  therefore be required. The process is highly efficient and recoveries in the
  plant typically range from 96 % to 98 %.

Dust Control

Only a limited number of transfer points need to be addressed
  in the current flow sheet and this will make dust control manageable. Dust will
  be controlled by low pressure water sprays in the primary crushing circuit and
  collected in a central dry bag dust collector in the secondary crushing and
  screening circuit. Individual dry dust collectors will be used on the cement
  silo and at conveyor transfer points.

Heap Leach Pads & Solution Handling & Storage

The detailed pad design, which includes solution storage,
  has been completed. The design, which is a partial valley-fill design, was done
  by an independent consulting engineer.

The pads have been designed for zero discharge. Leach olutions
  will be contained within the heaps and the liner protection fill. The first
  pad to be constructed will be located on the northern slope of Soledad Mountain.
  A second pad will be located on the western slope if required. Each pad will
  be constructed as a side hill pad with a perimeter dike to support the toe of
  the heap. The pads have been designed as dedicated pads, i.e. ore will be stacked,
  leached, rinsed and left in place on the pads for final reclamation.

- Pads 1 & 2 have been designed to receive 32.3 million t and 19.5 million
    t of ore respectively;
- Pad 1 will have an area of 585,000 m2with 4 cells to be constructed
    in 3 phases;
- Pad 2 will have an area of 372,000 m2with 3 cells to be constructed
    in 3 phases;
- Lifts will be 10.7 m in height;

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- Heaps will be constructed to an ultimate height of up to 61 m and will be
    constructed with slopes of 2H:1V;
- The design allows for both solution storage and a 100-year,
      24-hour storm event in the heaps and in the liner protection fill.

Drainage ditches will be constructed to divert runoff around the pads. The pads will be lined with a composite liner consisting of a compacted
    soil liner and a geomembrane. The geomembrane will in turn be covered and
    protected by 45 cm of a crushed liner protection fill that will act as a drainage
    layer. A network of perforated pipes will be installed in the liner protection
    fill. Two vertical turbine pumps will be required for each cell to pump the
    pregnant solution to the Merrill-Crowe plant. Access to the pumps will be
    via a 60 cm diameter perforated steel riser pipe. Provision will be made for
    leak detection and leakage recovery systems. Solution will be distributed over the heaps by a system of pipes and drip
    emitters. Solution will percolate through the heap to extract the gold and
    silver contained in the ore and then flow along the base of the heap to a
    collection sump. The design of the pads meets all regulatory requirements. QA/QC for the construction of the pads will require extra care and this
    will be provided by an independent consulting engineer with prior experience
    in this particular field. Gold & Silver Recoveries Detailed analysis of the test work shows that recoveries for gold and silver
    of 80% and 65% respectively can be projected for the heap leach operation. The Companys management has prepared a detailed leach recovery schedule.
    Once the heap has been under leach for a complete leach cycle and ore is being
    mined and processed at the design rate, estimated recoveries will be as follows:


| | Percentage of 80% Gold & 65% Silver | 
| | ----------------------------------- | 
| | Days                                | 
| |                                     | 
| | 30                                  | 
| | 60                                  | 
| | 90                                  | 
| | 275                                 | 
| | 400                                 | 
| |                                     | 
| |                                     | 

The heaps will be rinsed prior to closure and closing reclamation
  with a combination of fresh water and recycled water treated with peroxide.

Services

The Project is located approximately 10 km south of Mojave,
  California. The metropolitan areas of Lancaster/Palmdale and Los Angeles lie
  approximately 48 km and 110 km further to the south. Access to site is from
  State Route 14 and Silver Queen Road, an existing paved county road. The Burlington
  Northern/Santa Fe and Union Pacific/Southern Pacific railroad lines run parallel
  to and just east of State Route 14. Services such as a hospital, ambulance,
  fire-protection, garbage and hazardous waste disposal, schools, motels and housing,
  shopping, airport and recreation are available in Mojave and its surroundings.
  Telephone service is currently available on site.

Water Supply

A make-up water supply will be required because of the arid
  climate and groundwater will be used.

A detailed evaluation of the available groundwater was done
  by an independent consulting engineer in 1996. As many as 35 wells have been
  drilled in the greater Project area. Records for some of these wells plus step
  rate test data from production well #1 drilled by the Company indicate that
  initially two production wells can provide the

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maximum estimated water requirements of 170 m3/h
  (). Production well #1 is located approximately 2 km north of the Project. A
  second production well will be drilled and equipped and a third well can be
  drilled and equipped in the future if required.

A water sample taken from production well #1 indicated that
  groundwater can be used in the heap leach process without pretreatment.

Solution storage in the heap may reduce loss of water due
  to evaporation.

Power Supply

Power will be supplied via a dedicated 12.5 kV "express" line
  to be constructed by the local utility.

Offices & Workshop/Warehouse

All services required for a successful mining operation will
  be provided and allowance has been made for these services in the Project capital
  cost.

Aggregate

It is expected that a construction aggregate business can
  be developed based on the location of the Project in southern California with
  close proximity to major highways and railway lines. The source of raw materials
  will be the finely crushed and rinsed residue or sand from the heap leach operation
  and rock from the waste rock dumps. The leached residue or sand can find a market
  in "Superpave" asphalt mixtures and as concrete sand. The waste rock can be
  classified into a range of products such as riprap, crushed stone and gravel.
  Test work to confirm the suitability of these materials for use as aggregate
  was done in 1998 and 1999

It is important to note that both the sand and rock will be
  produced as byproducts from a mining operation. This will give the Project an
  economic advantage as an aggregate producer by comparison to producers that
  have to mine rock to produce aggregate. It has also become increasingly difficult
  to permit new aggregate operations in California in recent years and that is
  a further advantage for the Project.

The concept that is being pursued is that the Company will
  not invest directly in or develop an aggregate business as owner/operator but
  will participate financially in the production and sale of aggregate via royalty
  payments. Such a stream of royalty payments would have a significant impact
  on operating cash flows and support the Project in times of difficult conditions
  in the gold and silver markets.

The Company is actively seeking a major aggregate producerwith experience in the southern California marketsas a partner for
  developing the aggregate business.

Environmental Issues & Permits

The Project is located on private and federally controlled
  lands in an unincorporated area of Kern County, California. Current and proposed
  mining activities on these lands are thus subject to federal, state and local
  regulations. Annual site inspections are conducted to verify the Companys
  compliance with regulations. For the year ended December 31, 2002, the Company
  was in compliance with regulations and received favorable reviews from each
  of the reviewing agencies. These regulations and the Companys compliance
  efforts are summarized below.

CEQA/NEPA

The project is subject to the California Environmental Quality
  Act (CEQA) and the National Environmental Policy Act (NEPA),
  each of which requires written analysis of proposed mining activities and their
  effect on the physical, biological, social and economic resources of the area.
  This analysis is known under CEQA as an environmental impact report (EIR),
  and under NEPA as an environmental impact statement (EIS).

The Company submitted its combined EIR/EIS to the Kern County
  Planning and Development Department in February 1996, in accordance with a memorandum
  of understanding between Kern County and the Bureau of Land Management (BLM),
  which gave Kern County primary responsibility for the review. The EIR/EIS took
  the form of a combined

9

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conditional use permit application, environmental information
  statement, surface mining reclamation plan and plan of operation.

Comments were received in response to the submission on ground
  water quality and quantity, air quality, the effect of development on native
  species of plants and animals, the visual impact of the project and the potential
  hazards associated with transporting supplies and chemicals to the project site.
  These comments were incorporated into a revised EIR/EIS released for public
  comment in June 1997. In September 1997, the Company received a favorable notice
  of determination regarding the EIR/EIS, as well as approval of its conditional
  use permit application and surface mining reclamation plan (required by the
  California Surface Mining and Reclamation Act and applicable Kern County zoning
  ordinances). This was followed in November 1997 by a record of decision from
  the BLM approving the Companys plan of operation under NEPA.

Air Quality

The project lies within the Southeast Desert Air Basin, which
  is under the jurisdiction of the Kern County Air Pollution Control District.
  The district is empowered to regulate stationary sources of air pollution within
  the basin, pursuant to authority granted under the federal Clean Air Act.

The Area is designated as unclassified for PM10
  emissions (that portion of the total suspended particulates less than 10 microns
  in size) and as a non-attainment area for ozone. The typically windy conditions
  and very dry nature of the area are probably responsible for the high PM10background levels recorded at several nearby monitoring stations.On-site
  air sampling was conducted for approximately one year with high background PM10
  levels found.

Fugitive dust, when combined with the background dust, may
  cause unacceptable levels of PM10 emissions
  off-site and may represent the greatest potential environmental issue. A PM10
  level of 44 micrograms per cubic meter is projected by computer modeling for
  a mining rate of 27 million tonnes (30 million tons) per year of ore and waste.
  This level is below the California attainment standard of 50 micrograms per
  cubic meter and the Federal standard of 150 micrograms per cubic meter. However,
  the Company believes that it will achieve compliance with applicable standards
  by a greater margin, as the modeling methodology assumes worst case conditions,
  which are considered unlikely to be encountered in actual operations and based
  on the use by the Company of commonly-accepted dust control techniques in all
  phases of mining and crushing and screening. The Company submitted an application
  to the Kern County Air Pollution Control District for authority to construct
  the project, and based upon the dispersion modeling discussed above, the application
  was approved in February 1998.

Water Quality

The Project is situated in the northern portion of the Antelope
  Valley ground water basin and experiences an average annual rainfall of less
  than 14.5 cm (5.7 in.). There are no surface waters of any kind, other than
  the periodic runoff that follows the rare heavy rains that typically occur during
  the winter months. Drainage in the area is controlled by a series of deeply
  incised gullies and channels that ultimately drain to the northwest into the
  Chaffee hydrologic area. The water that does not evaporate will raise the ground
  water levels. No water quality data is available for surface runoff. Ground
  water in the bedrock underlying Soledad Mountain is almost certainly very modest
  in quantity and is restricted to fractures. Groundwater is typically at depths
  of 55 to 61 m (180 to 200 feet).

Water quality data shows that groundwater quality is adequate for the process with no pretreatment.

The Lahontan Water Quality Control Board (the Board) is responsible for ensuring compliance with the federal Clean Water Act and Californias Porter-Cologne Water Quality Act. The Company submitted an application to the Board in June 1997 with
all necessary information. The application was reviewed and approved at the March 1998 meeting of the Board.

Closure, Reclamation and Bonding

The Company commissioned an independent consulting engineer to prepare a closure and reclamation plan for the Project in 1996. This plan was submitted to the Kern County Planning and Development Department as part of the Companys conditional
use permit application. The plan meets the requirements of Californias Surface Mining and Reclamation Act, the applicable Kern County zoning ordinances and federal requirements designed to prevent degradation of federal lands.

10

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The objective of the reclamation plan is to return the site
  to its pre-mining status as wildlife habitat and open space. Under the plan,
  the Company is required to remove all structures, neutralize and dispose of
  leach solutions, re-contour the overburden dumps and leached residue piles,
  rip up or otherwise reclaim access roads, prepare disturbed surfaces for seeding
  and re-plant with native species. Reclaimed slopes must be stable and there
  is no requirement to demonstrate growth. Growth media (generally the top 5 cm
  or 2 inches of cover) will be removed from the waste dump and pad areas during
  construction and stockpiled for closing reclamation. It is expected that the
  growth media will contain most of the seeds necessary and native species will
  self-propagate.

The reclamation plan provides that reclamation of the leached
  residues will begin in the sixth year of the life of the mine and continue for
  approximately four years after mining has ended. Closure requires four steps:
  first, a fresh water rinse is periodically applied to the leached residues to
  aid the natural degradation of the cyanide in solution; next, the leach solution
  is sequentially moved from one active cell to the next to minimize the total
  volume of solution required for the operation; once leaching has ended, any
  remaining solution is chemically neutralized with hydrogen peroxide and sprinkled
  on the surfaces of waste dumps that have been re-sloped. The leached residues
  will finally be covered with a growth-medium and re-vegetated. Small volumes
  of seepage will continue to collect in the low point of each cell and these
  will be pumped out periodically during the post-closure monitoring period and
  sprinkled on surfaces that have been re-vegetated. The pad liners may eventually
  be perforated to allow seepage to the groundwater and this will be done only
  in full agreement with the regulatory authorities.
  The Company is required to obtain three bonds for the Project:

A bond to be held by Kern County designed to cover the general reclamation
      on site.
    A bond to be held by the Board designed to cover the neutralization and
      ultimate disposal of leach solutions.
    An unforeseen events bond to be held by the Board designed
      cover an unforeseen event that could contaminate surface or ground water


The regulatory authorities will determine the value of these bonds once the
    Project proceeds. The Company expects to meet these bonding requirements by
    purchasing surety bonds from one or more insurers. Alternatively, the Company
    may post money market securities such as a certificate of deposit or a bank
    letter of credit in lieu of, or in addition to, such surety bonds. The Company estimates that the cost of complying with environmental requirements
    will be approximately $3,000,000 at the start of production and this will
    increase to $5,410,000 at the end of the life of the mine. Facilities and Employees The Companys principal executive offices are located at its Soledad
    Mountain site - 11847 Gempen Street in Mojave, California. The Company employs
    a half-time accountant at this Mojave office. Miscellaneous All of the Companys directors, Edward G. Thompson, Chester Shynkaryk,
    Gordon C. Gutrath, and H. Lutz Klingmann are residents of Canada. Consequently,
    it may be difficult for United States investors to effect service of process
    within the United States upon those directors, or to realize in the United
    States upon judgments of United States courts predicated upon civil liabilities
    under the United States securities laws. A judgment of a U.S. court predicated
    solely upon such civil liabilities would probably be enforceable in Canada
    by a Canadian court if the U.S. court in which the judgment was obtained had
    jurisdiction, as determined by the Canadian court, in the matter. There is
    substantial doubt whether an original action could be brought successfully
    in Canada against any of such directors predicated solely upon such civil
    liabilities. Risk Factors The following are some of the risk factors that apply to an investment in
    our company. These risk factors should be read in conjunction with disclosure
    on our business and risks appearing in this document and elsewhere. 11


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The Likelihood of Continued Losses from Operations

The Company has no revenue from mining operations and has
  incurred losses from inception through December 31, 2002 of approximately $33,823,000.
  This trend is expected to continue for at least the next two years and is expected
  to reverse only if, and when gold is produced from the Soledad Mountain Project.
  At December 31, 2002, the Company held $84,000 in cash and cash equivalents,
  and is currently in care and maintenance with a burn rate of approximately
  $22,000 per month. While the Company has been successful in the past in obtaining
  funds for care and maintenance activities, there can be no assurance that current
  efforts will be successful. As of this report date, the Company has yet to identify
  a source of funding for the balance of 2003 or for the next twelve months.

Property Interests are not in Good Standing

The Company ceased making payments to landowners in October
  of 2000, and has since been in the process of negotiating moratorium agreements
  with its landowners. In the meantime, the Company is technically in default
  on the agreements which have not been paid or re-negotiated. Signed agreements
  will cost the Company $58,000 in 2003 while pending agreements could cost an
  additional $92,000.

Ability to Continue as a Going Concern

The Company has had no revenues from operations since inception,
  has a deficit accumulated during the development stage of $34,409,336, has been
  unable to successfully renegotiate payment schedules with all landowners, and
  has been unable to obtain the necessary financing to complete current development
  activities or exit the development stage. These conditions continue to raise
  substantial doubt about the Companys ability to continue as a going concern.

The ability of the Company to obtain financing and adequately
  manage its expenses, and thus maintain solvency, is dependent on equity market
  conditions, the ability to find a joint venture partner, the market for precious
  metals, and the willingness of other parties to lend the Company money, While
  the Company has been successful at certain of these efforts in the past, there
  can be no assurance that current efforts will be successful. These financial
  statements do not reflect the outcome of these uncertainties.

The Need for Significant Additional Financing

In addition to the above, the Company anticipates that it
  will need approximately $44,000,000 in additional financing to put the Project
  into production; an anticipated $36,000,000 will be used for capital expenditures
  and $8,000,000 will be used as working capital. These estimates are based on
  certain assumptions contained in the Project Summary & Cash Flow Projections,
  which was prepared by the Company in 2003 and, which is more fully discussed
  in Part I, Item 1 of this report. The Company expects to finance development
  from additional sales of common stock, from bank or other borrowings or, alternatively,
  through a joint venture with another mining company. However, the Company has
  no commitment for bank financing or for the underwriting of additional stock,
  and it is not a party to any agreement or arrangement providing for a joint
  venture. Whether and to what extent Project financing can be secured will depend
  on a number of factors, not the least of which is the price of gold. Gold prices
  fluctuate widely and are affected by numerous factors beyond the Company's control,
  such as the strength of the United States dollar and foreign currencies, global
  and regional demand, and the political and economic conditions of major gold
  producing countries throughout the world. Gold prices have recently traded in
  the $330 per ounce range and the Company believes that financing for the Project
  can be secured if gold prices remain firmly above $325 per ounce. It may however
  not be economical for the Company to take the Project to production at lower
  gold prices.

Risks and Contingencies Associated with the Mining Industry
  Generally

In addition to the risks noted above, the Company is subject
  to all of the risks inherent in the mining industry, including environmental
  risks, fluctuating metals prices, industrial accidents, labor disputes, unusual
  or unexpected geologic formations, cave-ins, flooding and periodic interruptions
  due to inclement weather. These risks could result in damage to, or destruction
  of, mineral properties and production facilities, personal injury, environmental
  damage, delays, monetary losses and legal liability. Although the Company maintains
  or can be expected to maintain insurance within ranges of coverage consistent
  with industry practice, no assurance can be given that such insurance will be
  available at

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economically feasible premiums. Insurance against environmental
  risks (including pollution or other hazards resulting from the disposal of waste
  products generated from exploration and production activities) is not generally
  available to the Company or other companies in the mining industry. Were the
  Company subjected to environmental liabilities, the payment of such liabilities
  would reduce the funds available to the Company. Were the Company unable to
  fund fully the cost of remedying an environmental problem, it might be required
  to suspend operations or enter into interim compliance measures pending completion
  of remedial activities.

Item 2. Description of Property

Location and Access

The Soledad Mountain Project is located in the Mojave Mining
  District in Kern County in southern California, approximately 2.4 kilometers
  (1.5 miles) from Highway 14, a paved, four-lane highway. Los Angeles, California
  is about 100 kilometers (62 miles) south of the project and the metropolitan
  area of Lancaster/Palmdale, California is less than 35 kilometers (22 miles)
  to the south by Highway 14. Secondary paved access roads extend from Highway
  14 and encircle Soledad Mountain..

The population centers of Mojave, Lancaster, Bakersfield and
  Los Angeles, all located within a 161-kilometer (100 mile) radius of the project,
  are sources for the labor, supplies, material and equipment needed for the project.
  The Santa Fe Railway line runs parallel to, and just east of, Highway 14.

Local climatic conditions reflect the high desert environment
  of the Mojave Desert in southern California. Conditions are variable, with temperatures
  ranging from below freezing in the winter to more than 40.6o Celsius
  (105oF) in the summer. Wind is a factor with respect to structural
  stability, as gusts frequently reach 100 to 130 kilometers (62 to 81 miles)
  per hour. Flora and fauna are sparse in the area, reflective of the Mojave Desert
  environment. There are no streams or springs exist in the area and the only
  surface run-off occurs during the heavy rainstorms that are most prevalent from
  December through March of each year.

Land Ownership and Mining Rights

The Property is situated west of California State Highway
  14 and largely south of Silver Queen Road in Kern County, California, covering
  all of section 6 and portions of sections 5, 7 and 8 in Township 10 North, Range
  12 West; portions of sections 1 and 12 in Township 10 North, Range 13 West;
  portions of section 18 in Township 9 North, Range 12 West and portions of section
  32 in Township 11 North, Range 12 West, all from the San Bernardino Baseline
  and Meridian. The Project facilities will be located in Section 6 in Township
  10 North, Range 12 West. The area that will be disturbed by the Project is a
  497-hectare (1,228 acres) contiguous block within an area of approximately 1,012
  hectares (2,501 acres) held by the Company. The Property is comprised of 33
  patented lode mining claims, 123 unpatented lode mining claims, one unpatented
  placer mining claim, one patented mill site claim, six unpatented mill site
  claims and 379 hectares (937 acres) of fee land.

The Property is held by the Company under a variety of agreements
  with 60 property owners. These agreements include 56 mining leases, two exploration
  agreements with options to purchase and two purchase agreements that are in
  various stages of completion. These agreements were entered into during a six-year
  period from 1990 - 1996, at a total cost to the Company of approximately $3,800,000.

The Company ceased making payments to landowners, according
  to the terms of the various agreements, in October 2000 and has since been in
  the process of negotiating moratorium agreements with its landowners. The Company
  is technically in default on the agreements, which have not been paid or re-negotiated.
  While the Company has successfully negotiated moratorium agreements with these
  landowners in the past and has reached new agreements with many of the landowners,
  there can be no assurance that the remaining agreements will be successfully
  renegotiated in the future.

The basis of the moratorium agreements is a suspension of
  advance minimum royalty payments and all other payments for a period of three
  years, or until the Company secures production financing, whichever is sooner.
  As of December 31, 2002, 54% of the agreements, constituting approximately 86%
  of the mineral rights of the project, were successfully re-negotiated. Based
  on personal contacts with each landowner from October 2000 through February
  2001, management believes that a variety of factors, other than non-approval
  of the moratorium request, are the cause

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for a lack of response from the remaining landowners. Follow-up
  contacts with these landowners will be conducted in 2003.

The costs to the Company for all land agreements for the years
  ending December 31, 2000, 2001, and 2002 were $344,000, $69,000, and $58,000
  respectively. The re-negotiated agreements will cost the Company $58,000 in
  2003, while the remaining agreements could cost the Company as much as $92,000.
  If the Company fails to negotiate the outstanding agreements, additional financing
  will be required to keep the land package together.

Maintaining control of the Property is critical to the future
  of the Company. Without land and mineral rights, the Company has no basis for
  continuing. While each piece of property on Soledad Mountain has its own value
  and unique purpose in the overall mine plan, the feasibility of the Project
  depends on the Companys ability to maintain control of the Property as
  a whole.

The Company commissioned a formal title summary covering the
  Property, which was rendered in August and September 1996. It was updated in
  February 1998 and again in March 1999. With such a complicated ownership history,
  as is common in historic mining districts, it is typical for title problems
  to exist with respect to properties within the project area. On May 15, 1999
  the Company obtained a quiet title judgment, which resolved a majority of the
  title questions. The Company has determined that the remaining title questions
  do not present a material threat to the project, however the Company is attempting
  to resolve the title issues through its California counsel, a law firm with
  experience in title matters relating to properties in the Mojave Mining District.

A comprehensive land survey of the Property has not yet been
  undertaken. Since 1993, the whole of the Property and much of the immediate
  surrounding area has been segregated from appropriation under the United States
  General Mining Law of 1872.

The various property purchase agreements to which the Company
  is a party typically require payment by the Company of the purchase price over
  an extended period of time. In most cases, a somewhat larger advance payment
  was made at the time the agreement was entered into and, in some instances,
  a larger payment is due at the time the purchase is completed. Certain of the
  property purchase agreements require the payment by the Company of royalties
  upon the commencement of commercial production. As of December 31, 2002, $762,000
  remained to be paid by the Company under these various property purchase agreements;
  $5,500 of this amount is due within the ensuing twelve months. Certain of these
  agreements have been successfully re-negotiated to a three-year moratorium of
  payments. Without moratorium agreements, the Company would have been unable
  to fulfill the payment obligations of the original contracts.

The leases to which the Company is a party to, typically require
  payment in the form of advance minimum royalties. With one exception, these
  payments are subject to a credit when production from the project starts. In
  both the leases and the purchase agreements, applicable royalties are restricted
  to the property covered by the lease or agreement, as the case may be. Most
  of the royalties are of the net smelter return (NSR) type and are
  based on a sliding scale, with the percentage amount of the royalty being a
  function of the ore grade on the property to which the royalty relates. Typically,
  the royalties are 5% NSR or less, with an expected average of 3.1% NSR based
  on the sliding scale royalty percentage and the modest grade of the deposit.
  Many of the leases provide that the royalty payable to the lessor is subject
  to adjustment in the event that the interest of such lessor in the property
  leased to the Company is greater or less than represented by the lessor in such
  lease. A number of the agreements have an additional modest royalty, which applies
  in the event that non-mineral commodities, such as aggregates, are sold.

In addition to these agreements, the Company is also obligated
  under the terms of an April 1, 1995 option agreement. The Company acquired,
  through its subsidiary, Golden Queen Mining Company, Inc. (the Subsidiary),
  an option to purchase all of the issued and outstanding shares of a privately
  held California corporation, holding an interest in a previously non-contracted
  tract of land located in the area. The option called for an initial, non-refundable,
  payment of $100,000 in exchange for access to the property, to evaluate the
  presence of mineral reserves, for a period of nine months. At the end of the
  nine-month period, the Company chose to exercise its option to purchase the
  shares of the corporation, by making the initial purchase payment of $250,000.
  This was followed by a second payment of $500,000 on July 1, 1997. An additional
  $750,000 was due upon reaching sustained production or July 1, 1999, whichever
  came first. In June 1999, the Subsidiary and the shareholders of the private
  corporation signed an amendment to the original stock purchase agreement. The
  amendment provides that if the full purchase price of $1,600,000 was not made
  on or before July 1, 1999, all rights of the Subsidiary to purchase the stock
  would terminate, unless the Subsidiary paid $75,000, which would extend the
  termination date to July 1, 2000. If, on or before July 1,

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2000, the Subsidiary paid an additional $75,000, the termination
  date would be extended to July 1, 2001. These additional payments are to extend
  the option period and will not apply to the balance of the $1,600,000 purchase
  price. In addition, the amendment provides for the payment of the balance of
  the purchase price upon the earlier of a determination of sustained production,
  or the termination date, which may be extended to July 1, 2001. On July 7, 2000,
  the Subsidiary made the required $75,000 payment to extend the termination date
  to July 1, 2001. The Company anticipated its inability to make the extension
  payment scheduled for July 1, 2001 and on August 10, 2001, a second amendment
  to the original stock purchase agreement was signed. This amendment suspends
  all terms and obligations of the Company as set forth in the original agreement
  and the first amendment. Further, the second amendment requires the Company
  to recognize a liability of $35,000, on or before July 1, 2001, and on each
  successive anniversary date for up to five years. In order to extend the termination
  date of the agreement, $10,000 of the liability is to be paid in cash, and the
  balance of $25,000 is to be accrued, without interest, payment of which is deferred
  until the final stock purchase payment is made. On July 11, 2001, and July 1,
  2002 the Company made the required payments of $10,000, accrued liabilities
  of $25,000, and extended the termination dates of the agreement to July 1, 2002
  and July 1, 2003 respectively. The Company has no legal obligation to continue
  making payment and cannot perfect its rights, as a shareholder of the corporation,
  until full payment under the option is made. Upon commencement of commercial
  production, the Company will pay a royalty of 1% of gross smelter returns for
  a period of up to 60 years, not to exceed $60,000,000.

The Company does not require additional properties to put
  the Soledad Mountain Project into production, but has historically endeavored
  to acquire property with potential for extension of known mineralized trends.
  The Company continually evaluates other precious metals mining opportunities
  for possible acquisition or joint venture and from time-to-time engages in exploratory
  discussions regarding such opportunities. As of the date of this report, the
  Company has no agreement, undertaking or other arrangement with any person regarding
  the acquisition of mining properties outside the Soledad Mountain Project area.

Item 3. Legal Proceedings

To the best of our knowledge, there are no legal actions pending,
  threatened or contemplated against us.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Companys
  shareholders during the fourth quarter of 2002.

PART II

Item 5. Market for Common Equity and Related Shareholder Matters

Market and Trading Price

The common shares of the Company are listed and traded on
  The Toronto Stock Exchange under the trading symbol GQM. The following
  table sets out the high and low sales prices of the common stock as reported
  by The Toronto Stock Exchange for the calendar periods indicated. All prices
  are reported in Canadian dollars.

|Year ended December 31 | High  |  | Low   | 
|---------------------- | ----- |  | ----- | 
|2001 Fourth Quarter    | $0.30 |  | $0.16 | 
|Third Quarter          | 0.30  |  | 0.16  | 
|Second Quarter         | 0.23  |  | 0.15  | 
|First Quarter          | 0.25  |  | 0.13  | 
|2002 Fourth Quarter    | 0.39  |  | 0.13  | 
|Third Quarter          | 1.12  |  | 0.26  | 
|Second Quarter         | 0.90  |  | 0.55  | 
|First Quarter          | 0.90  |  | 0.35  | 

As of December 31, 2002 there were 275 holders of record of the Companys common shares.

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Dividend Policy and Record

The Company has never paid dividends on its common shares.
  The Company does not intend to pay dividends on the common stock in the foreseeable
  future.

Sales of Unregistered Securities.

In December 2000, the Company received $65,000 from two shareholders
  of the Company, Landon T. Clay and Harris Clay, pursuant to terms of an unsecured
  convertible promissory note. In January 2001, the note was converted into 406,250
  common shares at a per share rate of USD $0.16. These transactions were exempt
  from registration pursuant section 4(2) of the U.S. Securities Act of
  1933, as the Company believes the offer and sale did not involve any public
  offering. In particular, the purchasers were at all relevant times affiliates
  of the Company as a result of them each holding greater than 10% of the issued
  and outstanding common voting shares of the Company.

Also, in December 2000, the same two shareholders advanced
  the Company $200,000 pursuant to a private placement completed in January 2001.
  The terms of the private placement called for the issuance of an aggregate of
  1,538,462 shares at US$0.13 per share. In addition, an aggregate of 1,656,250
  common shares were reserved for issuance upon exercise of warrants exercisable
  at a price of US$0.16 per share. In April 2002, the two shareholders exercised
  an aggregate of warrants to acquire 1,520,836 common shares at US$0.16 per share
  netting US$243,334 for the Company. The balance of 135,414 warrants expired
  as of January 20, 2003. These transactions were exempt from registration pursuant
  section 4(2) of the U.S. Securities Act of 1933, as the Company believes
  the offer and sale did not involve any public offering. In particular, the purchasers
  were at all relevant times affiliates of the Company as a result of holding
  over 10% of the voting shares of the Company.

Item 6. Managements Discussion and Analysis or Plan
  of Operations Statements of Operations and Deficit and Changes in Financial
  Position Data Results of Operations Overview

During the periods indicated in the discussion which follows,
  the Company has been under care and maintenance in the exploration and development
  stage of its business and therefore has earned no revenue from operations. Variations
  in the level of expenses between periods have been as a result of the nature,
  timing and cost of the activities undertaken in the various periods. Financing
  of the 2000, 2001, and 2002 care and maintenance expenses and cumulative exploration
  and development of the Soledad Mountain project during such periods has been
  obtained through the sale of shares of common stock of the Company in predominantly
  offshore transactions, and through borrowings. Please see Plan of Operations
  below.

Operating results of the Company are summarized as follows:

| |                  |   | Year Ended        |   |   | Year Ended        |   |   | Cumulative Since |  
| | ---------------- | - | ----------------- | - | - | ----------------- | - | - | ---------------- | -
| |                  |   | December 31, 2002 |   |   | December 31, 2001 |   |   | Inception        |  
| |                  |   |                   |   |   |                   |   |   |                  |  
| | Asset Impairment | $ | -                 |   | $ | -                 |   | $ | 28,547,592       |  
| | General and      |   |                   |   |   |                   |   |   |                  |  
| | administrative   |   |                   |   |   |                   |   |   |                  |  
| | expense          | $ | 315,097           |   | $ | 363,809           |   | $ | 5,880,178        |  
| | Interest expense | $ | 60,192            |   | $ | 67,516            |   | $ | 451,193          |  
| | Interest income  | $ | 254               |   | $ | 6,753             |   | $ | 1,081,673        |  
| | Net loss         | $ | (347,603          | ) | $ | (262,059          | ) | $ | (33,506,592      | )

Due to sustained depressed gold and silver prices during 2000,
  and an inability to secure financing in order to place the Companys assets
  in service for their intended use, the Company recorded an asset impairment
  loss of $28,547,592 for the year ended December 31, 2000. The asset impairment
  loss reduced the carrying value of fixed assets, mineral properties, and other
  assets to their estimated net realizable value. The Company incurred general
  and administrative expenses of $315,097 for the year ended December 31, 2002,
  as compared to $363,809 for the

16

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year ended December 31, 2001. Interest expense for the year
  ended December 31, 2002 of $60,192 decreased from $67,516 for the year ended
  December 31, 2001 as a result of a decrease in interest only payments related
  to extended land agreements. Previously, interest on these borrowings was capitalized.
  Interest income for the year ended December 31, 2002 was $254, as compared to
  $6,753 for the year ended December 31, 2001. The decrease is due to a decrease
  in the Companys average cash balance, lower interest rates, and a lower
  balance for investments during the year. As a result of the foregoing factors,
  the Company incurred a net loss of $347,603 for the year ended December 31,
  2002, as compared to a net loss of $262,059 for the year ended December 31,
  2001.

Liquidity and Capital Resources

General

The Company acquired the Soledad Mountain Project in 1986.
  Since then it has solidified its land position, conducted several drilling and
  sampling programs to delineate ore reserves, and taken steps to secure permits
  and approvals necessary for production activities. The Company previously reported
  that it expected to begin producing gold and silver from the project during
  the second half of 1998, once permitting was completed. Because of the downturn
  in world gold prices during the second half of 1997, however, the Company was
  not able to obtain financing for construction. The Company is however seeking
  financing for the Project at the higher gold prices that prevail in early 2003.

The Company has had no reported revenues from operations since
  inception, has completed the exploration or development stage, and remains in
  a care and maintenance position. During the period from inception through December
  31, 2002, the Company has used $4,543,000 in operating activities, primarily
  as a result of cumulative losses of $33,823,000. During the same period, the
  Company has used $29,948,000 in investing activities; these consisted of $28,681,000
  in expenditures related to the Soledad Mountain Project and fixed asset purchases
  of $1,314,000. These operating and investing activities were financed by net
  borrowings of $2,579,000 under various long-term debt arrangements and from
  the sale of $34,576,000 of equity securities. As of December 31, 2000, the Company
  recorded an asset impairment loss of $26,834,131 on mineral properties which
  adjusted the assets to managements estimate of net realizable value or
  salvage value.

At December 31, 2002, the Company held $84,000 in cash and
  cash equivalents. With a projected burn rate of $22,000 per month,
  the Company will need to secure additional financing for 2003. While the Company
  has been successful in the past in obtaining funds for care and maintenance
  activities, there can be no assurance that current efforts will be successful.

As discussed below under the heading Plan of Operations,
  significant additional funds will be needed to place the Soledad Mountain Project
  into production. These funds are expected to come from additional sales of common
  stock and from bank or other borrowings. Alternatively, the Company may decide
  to enter into a joint development or other similar arrangement with another
  mining company to develop the project. The Company does not have a commitment
  for bank financing or for the underwriting of additional shares of its common
  stock and is not party to any agreement or arrangement providing for the joint
  development of the Soledad Mountain Project. Whether and to what extent additional
  or alternative financing options are pursued by the Company will depend on a
  number of important factors, including the results of further development activities
  at the Soledad Mountain Project, managements assessment of the financial
  markets, the overall capital requirements for development of the project, and
  the price of gold. Gold prices fluctuate widely and are affected by numerous
  factors beyond the Companys control, such as inflation, the strength of
  the United States dollar and foreign currencies, global and regional demand,
  and the political and economic conditions of major gold producing countries
  throughout the world. As of December 31, 2002, world gold prices were approximately
  $343 per ounce. While the project is economical as a stand-alone precious metals
  operation at current world gold prices, the current market is unstable and is
  poor for raising additional capital for the Company. However, the proposed combination
  precious metals-aggregates operation is expected to have more robust economics
  and may be viable at relatively lower market prices for each of these commodities.

Some of the conditions noted above raise substantial doubt
  about the Companys ability to continue as a going concern. As noted above,
  the ability of the Company to obtain financing and adequately manage its expenses,
  and thus maintain solvency, is dependent on equity market conditions, the ability
  to find a joint venture partner, the market for precious metals, and / or the
  willingness of other parties to lend the Company money. While the

17

---

Company has been successful at certain of these efforts in
  the past, there can be no assurance that current efforts will be successful.

Our auditors have made reference to the substantial doubt
  about our ability to continue as a going concern in their audit report on our
  financial statements.

In December 2000, the Company received $65,000 from two shareholders
  of the Company pursuant to terms of an unsecured promissory note. In January
  2001, the note was converted into 406,250 common shares of the Companys
  stock at $0.16 (USD$) per share.

In December 2000, two shareholders advanced the Company $200,000
  pursuant to a private placement completed in January 2001. The terms of the
  private placement call for the issuance of an aggregate of 1,538,462 shares
  at US$0.13 per share. In addition, an aggregate of 1,656,250 Common Shares were
  reserved for issuance as warrants with a fixed price of US$0.16 per share. In
  April 2002, the two shareholders converted an aggregate of 1,520,836 warrants
  for common shares at US$0.16 per share netting $243,334 for the Company. The
  balance of 135,414 warrants expired as of January 20, 2003.

Year Ended December 31, 2002. During the year ended
  December 31, 2002, the Company used $277,000 in operating activities, primarily
  as a result of a $347,000 net loss during the year. Due to the conversion of
  warrants noted above and the exercise of options by Directors, the Company received
  $271,000 from financing activities. As a result of the foregoing, the Companys
  cash balance decreased by $6,000, to $84,000, at December 31, 2002.

Year Ended December 31, 2001. During the year ended
  December 31, 2001, the Company used $295,000 in operating activities, primarily
  as a result of a $262,000 net loss during the year. Proceeds from the sale of
  fixed assets netted $21,000. In addition, $7,000 was expended for financing
  expenses related to interest and share issuance costs. As a result of the foregoing,
  the Companys cash balance decreased by $281,000, to $90,000, at December
  31, 2001.

Plan of Operations

Proposed Activities and Estimated Costs

The Company plans to develop the Project as an open pit mine
  and use a cyanide heap leach recovery process. This will include the construction
  of facilities capable of processing ore at a rate of up to 5.76 million tonnes
  (6.35 million tons) per year for a minimum of nine years, followed by heap detoxification
  and reclamation of the site.

The Company estimates that it will need approximately $44,000,000
  in additional financing to put the Project into production; an anticipated $36,000,000
  will be used for capital expenditures and $8,000,000 will be used as working
  capital. These estimates are based on certain assumptions contained in the Project
  Summary & Cash Flow Projections, which was prepared by the Company in January
  and February 2003. The Company believes that financing for the Project can be
  secured if gold prices remain firmly above $325 per ounce.

The Company estimates that total average operating costs will
  be $5.93 per tonne ($5.39 per ton) of ore processed, based on a stripping ratio
  of 3.5 to 1. The Company also estimates that average annual production rates
  of 110,000 ounces of gold and 1,466,000 ounces of silver can be maintained for
  eleven years at an average cash cost of $204 per ounce of gold after royalty
  payments and net of silver credits.

The Company is also pursuing the development of an aggregate
  construction business based on the location of the Project in southern California
  with close proximity to major highways and railway lines. The source of raw
  materials will be the finely crushed and rinsed residue or sand from the heap
  leach operation and rock from the waste rock dumps. It is important to note
  that both the sand and rock will be produced as byproducts from a mining operation.
  This will give the Project an economic advantage as an aggregate producer by
  comparison to producers that have to mine rock to produce aggregate.

At December 31, 2002, the Company had a deferred tax asset
  of $12,300,000, from which the Company has provided a 100% valuation allowance
  as management cannot determine that it is more likely than not that the Company
  will receive the benefit of the asset.

18

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Critical Accounting Policies

There are no production, sales or inventory in the conventional
  sense for the Companys development activities. The Companys financial
  position will be dependent upon the extent to which it can develop its properties.
  Such development may take yeas to complete and the amount of resulting income,
  if any, is difficult to determine with any certainty. The sales value of any
  gold and silver produced will largely depend upon factors beyond the Companys
  control such as the future market prices of gold and silver.

As the carrying value and amortization of the mineral properties
  and capital assets is, in part, related to the Companys mineral reserves,
  the estimation of such reserves will have a significant impact on the Companys
  financial position and results of operations.

New Accounting Pronouncements

The Financial Accounting Standards Board (FASB)
  approved for issuance, Statement of Financial Accounting Standards No. 143 (SFAS
  No. 143), Accounting for Asset Retirement Obligations in June
  2001. SFAS No. 143 addresses the accounting for legal obligations associated
  with the retirement of tangible long-lived assets. Under SFAS No. 143, the fair
  value of a liability for an asset retirement obligation shall be recognized
  in the period in which the obligation is incurred. SFAS No. 143 is effective
  for fiscal years beginning after June 15, 2002 with early adoption permitted.

Statement of Financial Accounting Standards No. 146, Accounting
  for Costs Associated with Exit or Disposal Activities (SFAS No. 146),
  provides guidance on the recognition and measurement of liabilities for costs
  associated with exit or disposal activities. The provisions of this Statement
  are effective for exit or disposal activities that are initiated after December
  31, 2002.

The FASB issued FASB Interpretation No. 45 (FIN No.
  45), Guarantors Accounting and Disclosure Requirements for
  Guarantees, including Indirect Guarantees of Indebtedness of Others, in
  November 2002. FIN No. 45 addressed the accounting for and disclosure of guarantees.
  FIN No. 45 requires a guarantor to recognize a liability for the fair value
  of a guarantee at inception. The recognition of the liability is required even
  if it is not probable that payments will be required under the guarantee. The
  disclosure requirements are effective for interim and annual financial statements
  ending after December 15, 2002. The initial recognition and measurement provisions
  are effective for all guarantees within the scope of FIN No. 45 issued or modified
  after December 31, 2002.

FIN No. 46, Consolidation of Variable Interest Entities,
  clarified the application of Accounting Research Bulletin No. 51, Consolidated
  Financial Statements, to certain entities in which equity investors do
  not have the characteristics of a controlling financial interest or do not have
  sufficient equity at risk for the entity to finance its activities without additional
  subordinated financial support from other parties. FIN No. 46 is applicable
  immediately for variable interest entities created after January 31, 2003. For
  variable interest entities created prior to January 31, 2003, the provisions
  of FIN No. 46 are applicable no later than July 1, 2003.

The implementation of these new standards is not expected
  to have a material impact on the Companys financial statements.

Item 7. Financial Statements.

The Consolidated Financial Statements of the Company and the
  notes thereto are attached to this report following the signature page and Certifications.

Item 8. Changes in and Disagreements with Accountants on
  Accounting and Financial Disclosure.

None.

PART III

Items 9  12

Information with respect to Items 9 - 12 is set forth in the
  Proxy Statement to be filed with the Securities and

19

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Exchange Commission on or before April 30, 2003 and is incorporated
  herein by reference.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

|Exhibit No. |  | Description
      of Exhibit                                                                                                                                                                                                                                                                                                                                                            |  | Manner of Filing                                                                                                                                                        
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|3.1         |  | Certificate
        of Incorporation, Articles of Incorporation, Memorandum, and all current
        amendments thereto of the registrant under the Company Act of British
        Columbia, as amended.                                                                                                                                                                                |  | Incorporated by reference to Exhibit
      3.1 to the Form 10-SB of the Company, filed with the SEC on November 21,
      1996 and amendments thereto (the Form 10-SB)
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.1        |  | Warrant Indenture
        dated May 23, 1996 between the registrant and Montreal Trust Company of
        Canada as trustee.                                                                                                                                                                                                                                                            |  | Incorporated by reference to Exhibit
      10.1 to the Form 10-SB                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.2        |  | Lease dated
        October 20, 1994 between the Subsidiary and William J. Warner with respect
        to certain property within the project area.                                                                                                                                                                                                                                     |  | Incorporated by reference to Exhibit
      10.5 to the Form 10-SB                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.3        |  | Lease dated
        September 19, 1994 between the Subsidiary and Western Centennials, Inc.,
        with respect to certain property within the project area.                                                                                                                                                                                                                          |  | Incorporated by reference to Exhibit
      10.6 to the Form 10-SB                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.4        |  | Stock option
        purchase agreement dated April 1, 1995 between the Subsidiary and Grace
        W. Meehl, Madge W. Wolff, Stephen G. Wegmann, Michael L. Wegmann, John
        G. Hodgson, Virginia L. Sigl, Patrick L. Wolff and George P. Wolff with
        respect to the acquisition by the Subsidiary of an option to purchase
        all of the outstanding shares of KWC. |  | Incorporated by reference to Exhibit
      10.8 to the Form 10-SB                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.5        |  | Purchase
        agreement dated March 29, 1996 between the Subsidiary and the Meehl Family
        Trust and others with respect to the acquisition by the Subsidiary of
        certain property within the project area.                                                                                                                                                             |  | Incorporated by reference to Exhibit
      10.10 to the Form 10-SB                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.4        |  | Mineral exploration
        agreement and option to lease or purchase dated January 25, 1996 between
        the Soledad-Mojave Mining Syndicate and the Subsidiary with respect to
        the potential acquisition by the Subsidiary of 129.5 hectares of fee land
        within the project area.                                                                                  |  | Incorporated by reference to Exhibit
      10.11 to the Form 10-SB                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.5        |  | Purchase
        agreement dated August 1, 1996 between the Subsidiary and Southwestern
        Refining Corporation with respect to the acquisition by the Subsidiary
        of certain property and mill tailings within the project area.                                                                                                                                           |  | Incorporated by reference to Exhibit
      10.12 to the Form 10-SB                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.6        |  | Stock option
        plan of the registrant, as amended.                                                                                                                                                                                                                                                                                                                                |  | Incorporated by reference to Exhibit
      10.13 to the Form 10-SB                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|10.7        |  | Forms of
        debentures issued by the registrant to Landon T. Clay Charitable Lead
        Trust II and Landon T. Clay Charitable Lead Trust dated November 30, 1983.                                                                                                                                                                                                               |  | Incorporated by reference to Exhibit
      10.15 to the Form 10-SB                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|21.1        |  | Subsidiaries
        of the Registrant.                                                                                                                                                                                                                                                                                                                                                 |  | Incorporated by reference to Exhibit
      24.0 to the Form 10-SB                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|23.1        |  | Consent of
        BDO Dunwoody, LLP                                                                                                                                                                                                                                                                                                                                                    |  | Filed herewith                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                         |  |                                                                                                                                                                         
|99.1        |  | Certification
        required pursuant to section 906 of the Sarbanes-Oxley Act.                                                                                                                                                                                                                                                                                                       |  | Filed herewith                                                                                                                                                          

20

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(b) Reports on Form 8-K

No reports on Form 8-K were filed by the registrant during
  the fourth quarter of 2002.

Item 14. Controls and Procedures

The Company maintains disclosure controls and procedures that
  are designed to ensure that information required to be disclosed in its reports
  filed pursuant to the Securities Exchange Act of 1934 is recorded, processed,
  summarized and reported within the time periods specified in the rules and forms
  promulgated under such Act, and that such information is accumulated and communicated
  to management, including its Chief Executive Officer and Chief Financial Officer,
  as appropriate, to allow timely decisions regarding required disclosure.

Within 90 days prior to the date of this report, management
  carried out an evaluation, under the supervision and with the participation
  of the management, including the President and principal accounting officer,
  of the effectiveness of the design and operation of the Companys disclosure
  controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the
  foregoing, the President and principal accounting officer concluded that the
  Companys disclosure controls and procedures are effective in connection
  with the filing of this Annual Report on Form 10-KSB for the year ended December
  31, 2002.

There were no significant changes in our internal controls
  or in other factors that could significantly affect these controls subsequent
  to the date of their evaluation, including any significant deficiencies or material
  weaknesses of internal controls that would require corrective action.

21

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act,
  the registrant caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.

GOLDEN QUEEN MINING CO. LTD.

By:  /s/ H. Lutz Klingmann
         H. Lutz Klingmann
         President and Chief Executive Officer

Date: April 11, 2003



In accordance with the Exchange Act, this report has been
  signed by the following persons on behalf of the registrant and in the capacities
  indicated on the dates indicated.

|Signature             | Title                              | Date          
|--------------------- | ---------------------------------- | --------------
|                      |                                    |               
|/s/ H. Lutz Klingmann | President and Director             | April 11, 2003
|H. Lutz Klingmann     |                                    |               
|                      |                                    |               
|/s/ Keith Gainey      | Principal Accounting Officer       | April 14, 2003
|Keith Gainey          |                                    |               
|                      |                                    |               
|/s/ Edward Thompson   | Chairman of the Board and Director | April 7, 2003 
|Edward Thompson       |                                    |               
|                      |                                    |               
|/s/ Chester Shynkaryk | Secretary and Director             | April 11, 2003
|Chester Shynkaryk     |                                    |               
|                      |                                    |               
|/s/ Gordon Gutrath    | Director                           | April 11, 2003
|Gordon Gutrath        |                                    |               



22

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SECTION 302 CERTIFICATION

I, H. Lutz Klingmann, certify that:

|1. | I have reviewed this annual report
      of December 31, 2002 of Golden Queen Mining Co. Ltd.                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | Based
        on my knowledge, this annual report does not contain any untrue statement
        of a material fact or omit to state a material fact necessary in order
        to make the statements made, in light of the circumstances under which
        such statements were made, not misleading with respect to the period covered
        by this annual report;                                                     
|  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | Based on my
        knowledge, the financial statements, and other financial information included
        in this annual report, fairly present in all material respects the financial
        condition, results of operations and cash flows of the registrant as of,
        and for, the periods presented in this annual report;                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | The
        registrants other certifying officers and I are responsible for
        establishing and maintaining disclosure controls and procedures (as defined
        in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | The registrants
        other certifying officers and I have disclosed, based on our most recent
        evaluation, to the registrants auditors and the audit committee
        of registrants board of directors (or persons performing the equivalent
        function):                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | The registrants
        other certifying officers and I have indicated in this annual report whether
        or not there were significant changes in internal controls or in other
        factors that could significantly affect internal controls subsequent to
        the date of our most recent evaluation, including any corrective actions
        with regard to significant deficiencies and material weaknesses.

| | By: /s/ H. Lutz Klingmann   
| | ----------------------------
| | H. Lutz Klingmann, President
| |                             
| | Dated: April 14, 2003       

23

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SECTION 302 CERTIFICATION

I, Keith Gainey, certify that:

|1. | I have reviewed this annual report
      of December 31, 2002 of Golden Queen Mining Co. Ltd.                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | Based
        on my knowledge, this annual report does not contain any untrue statement
        of a material fact or omit to state a material fact necessary in order
        to make the statements made, in light of the circumstances under which
        such statements were made, not misleading with respect to the period covered
        by this annual report;                                                     
|  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|3. | Based on my
        knowledge, the financial statements, and other financial information included
        in this annual report, fairly present in all material respects the financial
        condition, results of operations and cash flows of the registrant as of,
        and for, the periods presented in this annual report;                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | The
        registrants other certifying officers and I are responsible for
        establishing and maintaining disclosure controls and procedures (as defined
        in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|5. | The registrants
        other certifying officers and I have disclosed, based on our most recent
        evaluation, to the registrants auditors and the audit committee
        of registrants board of directors (or persons performing the equivalent
        function):                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | The registrants
        other certifying officers and I have indicated in this annual report whether
        or not there were significant changes in internal controls or in other
        factors that could significantly affect internal controls subsequent to
        the date of our most recent evaluation, including any corrective actions
        with regard to significant deficiencies and material weaknesses.

| | By: /s/ Keith Gainey                      
| | ------------------------------------------
| | Keith Gainey, Principal Accounting Officer
| |                                           
| | Dated: April 14, 2003                     

24

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|                      | BDO Dunwoody LLP                    | 600 Park Place
|--------------------- | ----------------------------------- | --------------
|Chartered Accountants | 666 Burrard Street                 
|                      | Vancouver, BC, Canada
      V6C 2X8
|                      | Telephone: (604)
      688-5421    
|                      | Telefax: (604) 688-5132            
|                      | E-mail: vancouver@bdo.ca           
|                      | www.bdo.ca                         



Report of Independent Accountants

To the Shareholders of
  Golden Queen Mining Co. Ltd.
  (a development stage company)
  Vancouver, B.C.

We have audited the accompanying consolidated balance sheets
  of Golden Queen Mining Co. Ltd. (a development stage company), as of December
  31, 2002 and 2001, and the consolidated statements of loss, changes in shareholders
  equity, and cash flows for the years then ended. We have also audited the statements
  of loss, changes in shareholders equity, and cash flows for the period
  from inception (November 21, 1985) through December 31, 2002, except that we
  did not audit these financial statements for the period from inception (November
  21, 1985) through May 31, 1996; those statements were audited by other auditors
  whose report dated July 12, 1996, expressed an unqualified opinion on those
  statements. These financial statements are the responsibility of the Companys
  management. Our responsibility is to express an opinion on these consolidated
  financial statements based on our audits. Our opinion, insofar as it relates
  to the amounts for the period from inception (November 21, 1985) through May
  31, 1996, is based solely on the report of the other auditors.

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

In our opinion, based on our audits and the report of other
  auditors, the consolidated financial statements referred to above present fairly,
  in all material respects the financial position of Golden Queen Mining Co. Ltd.,
  as of December 31, 2002 and 2001, and the results of its operations and its
  cash flows for the years then ended and for the period from inception (November
  21, 1985) through December 31, 2002, in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the consolidated financial statements, the Company has had no revenues since
  inception, has a deficit accumulated during the development stage of $34,409,336,
  has been unable to successfully renegotiate payment schedules with all landowners,
  and has been unable to obtain the necessary financing to complete current development
  activities or exit the development stage. These conditions raise substantial
  doubt about the Companys ability to continue as a going concern. Managements
  plans in regard to these matters are also described in Note 1. The financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.



/s/ BDO Dunwoody LLP



Chartered Accountants
  February 26, 2003
  Vancouver, British Columbia

25

---



**GOLDEN QUEEN MINING CO. LTD.
  (a development stage company) 
  Consolidated Balance Sheets
  (U.S. dollars)**

|                                                          |   | December 31, |   |   | December 31, |  
|--------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                          |   | 2002         |   |   | 2001         |  
|                                                          |   |              |   |   |              |  
|Assets (Note 1)                                           |   |              |   |   |              |  
|                                                          |   |              |   |   |              |  
|Current assets:                                           |   |              |   |   |              |  
|Cash and cash equivalents                                 | $ | 83,506       |   | $ | 89,653       |  
|Receivables                                               |   | 3,425        |   |   | 4,729        |  
|Prepaid expenses and
      other current assets           |   | 22,407       |   |   | 24,540       |  
|                                                          |   |              |   |   |              |  
|Total current assets                                      |   | 109,338      |   |   | 118,922      |  
|                                                          |   |              |   |   |              |  
|Property and equipment,
      net (Note 2)                |   | 276,772      |   |   | 291,011      |  
|Mineral properties
      (Notes 3, 4, 6 and 10)           |   | 682,687      |   |   | 682,687      |  
|                                                          |   |              |   |   |              |  
|                                                          | $ | 1,068,797    |   | $ | 1,092,620    |  
|                                                          |   |              |   |   |              |  
|Liabilities and Shareholders Equity (Note
      11)      |   |              |   |   |              |  
|Current liabilities:                                      |   |              |   |   |              |  
|Accounts payable                                          | $ | 43,179       |   | $ | 25,180       |  
|Royalty and mining
      rights payable (Note 11)         |   | 122,484      |   |   | 97,484       |  
|Accrued liabilities                                       |   | 20           |   |   | 12,037       |  
|Current maturities
      of long-term debt (Note 6)       |   | 5,480        |   |   | 5,010        |  
|                                                          |   |              |   |   |              |  
|Total current liabilities                                 |   | 171,163      |   |   | 139,711      |  
|                                                          |   |              |   |   |              |  
|Long-term debt, less
      current maturities (Note 6)    |   | 761,601      |   |   | 767,081      |  
|                                                          |   |              |   |   |              |  
|Total liabilities                                         |   | 932,764      |   |   | 906,792      |  
|                                                          |   |              |   |   |              |  
|Commitments and contingencies
      (Notes 4 and 10)      |   |              |   |   |              |  
|                                                          |   |              |   |   |              |  
|Shareholders equity:                                     |   |              |   |   |              |  
|Preferred shares,
      no par, 3,000,000 shares          |   |              |   |   |              |  
|authorized;
      no shares outstanding                   |   | -            |   |   | -            |  
|Common shares, no
      par, 100,000,000 shares           |   |              |   |   |              |  
|authorized;
      51,802,189 and 49,991,353 shares issued |   |              |   |   |              |  
|and
      outstanding (Note 8)                            |   | 34,523,913   |   |   | 34,243,345   |  
|Contributed surplus                                       |   | 21,456       |   |   | -            |  
|Deficit accumulated
      during the development stage    |   | (34,409,336  | ) |   | (34,057,517  | )
|                                                          |   |              |   |   |              |  
|Total shareholders equity                                |   | 136,033      |   |   | 185,828      |  
|                                                          |   |              |   |   |              |  
|                                                          | $ | 1,068,797    |   | $ | 1,092,620    |  
|                                                          |   |              |   |   |              |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements

26

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Consolidated Statements of Loss
  (U.S. dollars)

|                                       |   |                   |   |   |                   |   |   | Cumulative        |  
|-------------------------------------- | - | ----------------- | - | - | ----------------- | - | - | ----------------- | -
|                                       |   |                   |   |   |                   |   |   | Amounts From Date |  
|                                       |   |                   |   |   |                   |   |   | of Inception      |  
|                                       |   |                   |   |   |                   |   |   | (November 21,     |  
|                                       |   | Year Ended        |   |   | Year Ended        |   |   | 1985) through     |  
|                                       |   | December 31, 2002 |   |   | December 31, 2001 |   |   | December 31, 2002 |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|General and administrative expense     | $ | 315,097           |   | $ | 363,809           |   | $ | 5,756,981         |  
|Interest expense                       |   | 60,192            |   |   | 67,516            |   |   | 451,193           |  
|Interest income                        |   | (254              | ) |   | (6,753            | ) |   | (1,081,673        | )
|Other (income) expense, net            |   | (27,432           | ) |   | (25,886           | ) |   | 8,381             |  
|Asset impairment loss                  |   | -                 |   |   | -                 |   |   | 28,547,592        |  
|Abandoned mineral interests            |   | -                 |   |   | -                 |   |   | 277,251           |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|Gain on settlement of debt (Note 11)   |   | -                 |   |   | (136,627          | ) |   | (136,627          | )
|                                       |   |                   |   |   |                   |   |   |                   |  
|Net loss                               | $ | 347,603           |   | $ | 262,059           |   | $ | 33,823,098        |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|Net loss per share  basic and diluted | $ | 0.01              |   | $ | 0.01              |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  
|Weighted average shares outstanding    |   | 51,491,944        |   |   | 49,890,120        |   |   |                   |  
|                                       |   |                   |   |   |                   |   |   |                   |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.

27

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company) Consolidated Statements of Changes in Shareholders Equity
  (U.S. dollars)

|From the Date
        of    |           |  |   |           |  |   |              |  |   | Deficit     |   |   |               |  
|--------------------------- | --------- |  | - | --------- |  | - | ------------ |  | - | ----------- | - | - | ------------- | -
|Inception                   |           |  |   |           |  |   |              |  |   | Accumulated |   |   |               |  
|(November
        21, 1985) |           |  |   |           |  |   |              |  |   | During the  |   |   | Total         |  
|through                     | Common    |  |   |           |  |   | Stock        |  |   | Development |   |   | Shareholders |  
|December 31,
        2002   | Shares    |  |   | Amount    |  |   | Subscription |  |   | Stage       |   |   | Equity        |  
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|November 21, 1985           |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for cash             | 1,425,001 |  | $ | 141,313   |  | $ | -            |  | $ | -           |   | $ | 141,313       |  
|Net loss for the year       | -         |  |   | -         |  |   | -            |  |   | (15,032     | ) |   | (15,032       | )
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1986       | 1,425,001 |  |   | 141,313   |  |   | -            |  |   | (15,032     | ) |   | 126,281       |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for cash             | 550,000   |  |   | 256,971   |  |   | -            |  |   | -           |   |   | 256,971       |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for mineral          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|property                    | 25,000    |  |   | 13,742    |  |   | -            |  |   | -           |   |   | 13,742        |  
|Net loss for the year       | -         |  |   | -         |  |   | -            |  |   | (58,907     | ) |   | (58,907       | )
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1987       | 2,000,001 |  |   | 412,026   |  |   | -            |  |   | (73,939     | ) |   | 338,087       |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for cash             | 1,858,748 |  |   | 1,753,413 |  |   | -            |  |   | -           |   |   | 1,753,413     |  
|Net income for the year     | -         |  |   | -         |  |   | -            |  |   | 38,739      |   |   | 38,739        |  
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1988       | 3,858,749 |  |   | 2,165,439 |  |   | -            |  |   | (35,200     | ) |   | 2,130,239     |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for cash             | 1,328,750 |  |   | 1,814,133 |  |   | -            |  |   | -           |   |   | 1,814,133     |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for mineral          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|property                    | 100,000   |  |   | 227,819   |  |   | -            |  |   | -           |   |   | 227,819       |  
|Net loss for the year       | -         |  |   | -         |  |   | -            |  |   | (202,160    | ) |   | (202,160      | )
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1989       | 5,287,499 |  |   | 4,207,391 |  |   | -            |  |   | (237,360    | ) |   | 3,970,031     |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for cash             | 1,769,767 |  |   | 2,771,815 |  |   | -            |  |   | -           |   |   | 2,771,815     |  
|Issuance of common          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|shares for mineral          |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|property                    | 8,875     |  |   | 14,855    |  |   | -            |  |   | -           |   |   | 14,855        |  
|Net loss for the year       | -         |  |   | -         |  |   | -            |  |   | (115,966    | ) |   | (115,966      | )
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1990       | 7,066,141 |  |   | 6,994,061 |  |   | -            |  |   | (353,326    | ) |   | 6,640,735     |  
|Net income for the year     | -         |  |   | -         |  |   | -            |  |   | 28,706      |   |   | 28,706        |  
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1991       | 7,066,141 |  |   | 6,994,061 |  |   | -            |  |   | (324,620    | ) |   | 6,669,441     |  
|Net loss for the year       | -         |  |   | -         |  |   | -            |  |   | (157,931    | ) |   | (157,931      | )
|                            |           |  |   |           |  |   |              |  |   |             |   |   |               |  
|Balance, May 31, 1992       | 7,066,141 |  |   | 6,994,061 |  |   | -            |  |   | (482,551    | ) |   | 6,511,510     |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.



---

GOLDEN QUEEN MINING CO. LTD. (a development stage company) Consolidated Statements of Changes in Shareholders Equity
  (U.S. dollars)

|From the Date
        of    |            |  |  |            |  |  |              |  |  | Deficit     |   |  |               |  
|--------------------------- | ---------- |  |  | ---------- |  |  | ------------ |  |  | ----------- | - |  | ------------- | -
|Inception                   |            |  |  |            |  |  |              |  |  | Accumulated |   |  |               |  
|(November
        21, 1985) |            |  |  |            |  |  |              |  |  | During the  |   |  | Total         |  
|through                     | Common     |  |  |            |  |  | Stock        |  |  | Development |   |  | Shareholders |  
|December 31,
        2002   | Shares     |  |  | Amount     |  |  | Subscription |  |  | Stage       |   |  | Equity        |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (285,391    | ) |  | (285,391      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, May 31, 1993       | 7,066,141  |  |  | 6,994,061  |  |  | -            |  |  | (767,942    | ) |  | 6,226,119     |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 5,834,491  |  |  | 1,536,260  |  |  | -            |  |  | -           |   |  | 1,536,260     |  
|Share issue costs           | -          |  |  | -          |  |  | -            |  |  | (18,160     | ) |  | (18,160       | )
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for mineral          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|property                    | 128,493    |  |  | 23,795     |  |  | -            |  |  | -           |   |  | 23,795        |  
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (158,193    | ) |  | (158,193      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, May 31, 1994       | 13,029,125 |  |  | 8,554,116  |  |  | -            |  |  | (944,295    | ) |  | 7,609,821     |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 648,900    |  |  | 182,866    |  |  | -            |  |  | -           |   |  | 182,866       |  
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (219,576    | ) |  | (219,576      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, May 31, 1995       | 13,678,025 |  |  | 8,736,982  |  |  | -            |  |  | (1,163,871  | ) |  | 7,573,111     |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 2,349,160  |  |  | 2,023,268  |  |  | -            |  |  | -           |   |  | 2,023,268     |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for debt             | 506,215    |  |  | 662,282    |  |  | -            |  |  | -           |   |  | 662,282       |  
|Issuance of 5,500,000       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|special warrants            | -          |  |  | 9,453,437  |  |  | -            |  |  | -           |   |  | 9,453,437     |  
|Special warrants issue      |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|cost                        | -          |  |  | -          |  |  | -            |  |  | (100,726    | ) |  | (100,726      | )
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (426,380    | ) |  | (426,380      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, May 31, 1996       | 16,533,400 |  |  | 20,875,969 |  |  | -            |  |  | (1,690,977  | ) |  | 19,184,992    |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 18,000     |  |  | 10,060     |  |  | -            |  |  | -           |   |  | 10,060        |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for special          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|warrants                    | 5,500,000  |  |  | -          |  |  | -            |  |  | -           |   |  | -             |  
|Special warrants issue      |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|cost                        | -          |  |  | -          |  |  | -            |  |  | (123,806    | ) |  | (123,806      | )
|Net loss for the period     | -          |  |  | -          |  |  | -            |  |  | (348,948    | ) |  | (348,948      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, December 31,       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|1996                        | 22,051,400 |  |  | 20,886,029 |  |  | -            |  |  | (2,163,731  | ) |  | 18,722,298    |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.

29

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company) Consolidated Statements of Changes in Shareholders Equity
  (U.S. dollars)

|From the Date
        of    |            |  |  |            |  |  |              |  |  | Deficit     |   |  |               |  
|--------------------------- | ---------- |  |  | ---------- |  |  | ------------ |  |  | ----------- | - |  | ------------- | -
|Inception                   |            |  |  |            |  |  |              |  |  | Accumulated |   |  |               |  
|(November
        21, 1985) |            |  |  |            |  |  |              |  |  | During the  |   |  | Total         |  
|through                     | Common     |  |  |            |  |  | Stock        |  |  | Development |   |  | Shareholders |  
|December 31,
        2002   | Shares     |  |  | Amount     |  |  | Subscription |  |  | Stage       |   |  | Equity        |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 157,000    |  |  | 157,050    |  |  | -            |  |  | -           |   |  | 157,050       |  
|Issuance of 3,500,000       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|special warrants            | -          |  |  | 5,287,315  |  |  | -            |  |  | -           |   |  | 5,287,315     |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for special          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|warrants                    | 3,500,000  |  |  | -          |  |  | -            |  |  | -           |   |  | -             |  
|Options to non-             |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|employee directors          | -          |  |  | 70,200     |  |  | -            |  |  | -           |   |  | 70,200        |  
|Special warrants issue      |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|cost                        | -          |  |  | -          |  |  | -            |  |  | (163,313    | ) |  | (163,313      | )
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (1,047,869  | ) |  | (1,047,869    | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, December 31,       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|1997                        | 25,708,400 |  |  | 26,400,594 |  |  | -            |  |  | (3,374,913  | ) |  | 23,025,681    |  
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares upon exercise        |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|of warrants                 | 1,834,300  |  |  | 857,283    |  |  | -            |  |  | -           |   |  | 857,283       |  
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares through              |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|conversion of debt          | 2,017,941  |  |  | 1,000,000  |  |  | -            |  |  | -           |   |  | 1,000,000     |  
|Share issuance cost         | -          |  |  | -          |  |  | -            |  |  | (6,060      | ) |  | (6,060        | )
|Issuance of common          |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|shares for cash             | 5,236,000  |  |  | 2,439,753  |  |  | -            |  |  | -           |   |  | 2,439,753     |  
|Options and re-priced       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|options to non-             |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|employee directors          | -          |  |  | 107,444    |  |  | -            |  |  | -           |   |  | 107,444       |  
|Net loss for the year       | -          |  |  | -          |  |  | -            |  |  | (971,595    | ) |  | (971,595      | )
|                            |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|Balance, December 31,       |            |  |  |            |  |  |              |  |  |             |   |  |               |  
|1998                        | 34,796,641 |  |  | 30,805,074 |  |  | -            |  |  | (4,352,568  | ) |  | 26,452,506    |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.

30

---

GOLDEN QUEEN MINING CO. LTD.
  (a development stage company)
  Consolidated Statements of Changes in Shareholders Equity
  (U.S. dollars)



See Accompanying Summary of Accounting Policies and Notes to
  Consolidated Financial Statements.



31

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Consolidated Statements of Cash Flows
  (U.S. dollars)

|                                     |   |              |   |   |              |   |   | Cumulative Amounts  |  
|------------------------------------ | - | ------------ | - | - | ------------ | - | - | ------------------- | -
|                                     |   |              |   |   |              |   |   | From Date of        |  
|                                     |   | Year Ended   |   |   | Year Ended   |   |   | Inception (November |  
|                                     |   | December 31, |   |   | December 31, |   |   | 21, 1985) through   |  
|                                     |   | 2002         |   |   | 2001         |   |   | December 31, 2002   |  
|                                     |   |              |   |   |              |   |   |                     |  
|Operating activities                 |   |              |   |   |              |   |   |                     |  
|Net loss                             | $ | (347,603     | ) | $ | (262,059     | ) | $ | (33,823,098         | )
|Adjustments to reconcile
      net   |   |              |   |   |              |   |   |                     |  
|loss to
      cash used in operating |   |              |   |   |              |   |   |                     |  
|activities:                          |   |              |   |   |              |   |   |                     |  
|Asset
      impairment loss          |   | -            |   |   | -            |   |   | 28,547,592          |  
|Abandoned
      mineral interests    |   | -            |   |   | -            |   |   | 277,251             |  
|Amortization
      and depreciation  |   | 14,239       |   |   | 16,488       |   |   | 390,945             |  
|Gain
      on disposition of         |   |              |   |   |              |   |   |                     |  
|property
      and equipment         |   | -            |   |   | (11,186      | ) |   | (10,032             | )
|Stock
      option compensation      |   |              |   |   |              |   |   |                     |  
|(Note
      9)                       |   | 21,456       |   |   | -            |   |   | 21,456              |  
|Changes in assets and liabilities:   |   |              |   |   |              |   |   |                     |  
|Receivables                          |   | 1,304        |   |   | (2,870       | ) |   | (3,425              | )
|Prepaid
      expenses and other     |   |              |   |   |              |   |   |                     |  
|current
      assets                 |   | 2,133        |   |   | 8,945        |   |   | (109,317            | )
|Accounts
      payable and accrued   |   |              |   |   |              |   |   |                     |  
|liabilities                          |   | 30,982       |   |   | (43,871      | ) |   | 165,683             |  
|                                     |   |              |   |   |              |   |   |                     |  
|Cash used in operating activities    |   | (277,489     | ) |   | (294,553     | ) |   | (4,542,945          | )
|                                     |   |              |   |   |              |   |   |                     |  
|Investment activities:               |   |              |   |   |              |   |   |                     |  
|Deferred exploration and             |   |              |   |   |              |   |   |                     |  
|development
      expenditures       |   | -            |   |   | -            |   |   | (22,395,449         | )
|Purchase of mineral properties       |   | -            |   |   | -            |   |   | (5,268,409          | )
|Deposits on mineral properties       |   | -            |   |   | -            |   |   | (1,017,551          | )
|Purchase of property and             |   |              |   |   |              |   |   |                     |  
|Equipment                            |   | -            |   |   | -            |   |   | (1,313,838          | )
|Proceeds from sale of property       |   |              |   |   |              |   |   |                     |  
|and equipment                        |   | -            |   |   | 21,000       |   |   | 47,153              |  
|                                     |   |              |   |   |              |   |   |                     |  
|                                     |   |              |   |   |              |   |   |                     |  
|Cash provided by (used in)           |   |              |   |   |              |   |   |                     |  
|investment activities                |   | -            |   |   | 21,000       |   |   | (29,948,094         | )
|                                     |   |              |   |   |              |   |   |                     |  
|Financing activities:                |   |              |   |   |              |   |   |                     |  
|Borrowing under long-term
      debt |   | -            |   |   | -            |   |   | 3,766,502           |  
|Payment of long-term debt            |   | (5,010       | ) |   | (4,580       | ) |   | (1,187,139          | )
|Issuance of convertible debt         |   | -            |   |   | -            |   |   | 65,000              |  
|Stock subscriptions                  |   | -            |   |   | -            |   |   | 200,000             |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.

32

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Consolidated Statements of Cash Flows
  (U.S. dollars)

|                                         |   |              |   |   |              |   |   | Cumulative Amounts  |  
|---------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------------- | -
|                                         |   |              |   |   |              |   |   | From Date of        |  
|                                         |   | Year Ended   |   |   | Year Ended   |   |   | Inception (November |  
|                                         |   | December 31, |   |   | December 31, |   |   | 21, 1985) through   |  
|                                         |   | 2002         |   |   | 2001         |   |   | December 31, 2002   |  
|                                         |   |              |   |   |              |   |   |                     |  
|                                         |   |              |   |   |              |   |   |                     |  
|Issuance of common shares
      for cash |   | 280,568      |   |   | -            |   |   | 13,367,470          |  
|Share issuance costs                     |   | (4,216       | ) |   | (3,337       | ) |   | (586,238            | )
|Issuance of special warrants             |   | -            |   |   | -            |   |   | 18,091,667          |  
|Issuance of common shares
      upon     |   |              |   |   |              |   |   |                     |  
|exercise
      of warrants               |   | -            |   |   | -            |   |   | 857,283             |  
|                                         |   |              |   |   |              |   |   |                     |  
|Cash provided by (used in )              |   |              |   |   |              |   |   |                     |  
|financing activities                     |   | 271,342      |   |   | (7,917       | ) |   | 34,574,545          |  
|                                         |   |              |   |   |              |   |   |                     |  
|                                         |   |              |   |   |              |   |   |                     |  
|Net change in cash and cash              |   |              |   |   |              |   |   |                     |  
|equivalents                              |   | (6,147       | ) |   | (281,470     | ) |   | 83,506              |  
|                                         |   |              |   |   |              |   |   |                     |  
|Cash and cash equivalents,               |   |              |   |   |              |   |   |                     |  
|beginning balance                        |   | 89,653       |   |   | 371,123      |   |   | -                   |  
|                                         |   |              |   |   |              |   |   |                     |  
|                                         |   |              |   |   |              |   |   |                     |  
|Cash and cash equivalents,               |   |              |   |   |              |   |   |                     |  
|ending balance                           | $ | 83,506       |   | $ | 89,653       |   | $ | 83,506              |  
|                                         |   |              |   |   |              |   |   |                     |  
|                                         |   |              |   |   |              |   |   |                     |  
|Supplemental disclosures of cash         |   |              |   |   |              |   |   |                     |  
|flow information:                        |   |              |   |   |              |   |   |                     |  
|                                         |   |              |   |   |              |   |   |                     |  
|Cash paid during period for:             |   |              |   |   |              |   |   |                     |  
|Interest                                 | $ | 60,186       |   | $ | 50,615       |   | $ | 905,860             |  
|Income taxes                             | $ | -            |   | $ | -            |   | $ | -                   |  
|                                         |   |              |   |   |              |   |   |                     |  
|Non-cash financing and                   |   |              |   |   |              |   |   |                     |  
|investing activities:                    |   |              |   |   |              |   |   |                     |  
|Stock option compensation
      (Note 9) | $ | 21,456       |   | $ | -            |   | $ | 21,456              |  
|Exchange of notes for common             |   |              |   |   |              |   |   |                     |  
|shares                                   | $ | -            |   | $ | 65,000       |   | $ | 1,727,282           |  
|Exchange of stock subscription
      for |   |              |   |   |              |   |   |                     |  
|common shares                            | $ | -            |   | $ | 200,000      |   | $ | 200,000             |  
|Exchange of note for future              |   |              |   |   |              |   |   |                     |  
|royalty
      payments                   | $ | -            |   | $ | -            |   | $ | 150,000             |  
|Common shares issued for
      mineral   |   |              |   |   |              |   |   |                     |  
|property                                 | $ | -            |   | $ | -            |   | $ | 280,211             |  
|Mineral property acquired                |   |              |   |   |              |   |   |                     |  
|through
      the issuance of long-      |   |              |   |   |              |   |   |                     |  
|term
      debt                          | $ | -            |   | $ | -            |   | $ | 1,084,833           |  

See Accompanying Summary of Accounting Policies and Notes to Consolidated Financial Statements.

33

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GOLDEN QUEEN MINING CO. LTD (a development stage company)
  Summary of Accounting Policies

Nature of Business and Principles of Consolidation.
  Golden Queen Mining Co. Ltd. (Golden Queen or the Company)
  is engaged in acquiring and maintaining gold mining properties for exploration,
  future development and production. The Company was formed on November 21, 1985.
  Since its inception, the Company has been in the development stage. Planned
  activities involve bringing to operation a precious metals mine located in Kern
  County, California. These consolidated financial statements include the accounts
  of Golden Queen, a British Columbia corporation, and its wholly-owned subsidiary,
  Golden Queen Mining Company, Inc. (the Subsidiary), a United States
  (State of California) corporation.

The underlying value of the Companys mineral properties
  and related deferred exploration and development expenditures is dependent on
  the existence and economic recovery of ore reserves, confirmation of the Companys
  interest in the underlying mineral claims, the ability to obtain necessary financing
  to complete the development, and future profitable production or proceeds from
  the disposition thereof.

Generally Accepted Accounting Principles. The consolidated
  financial statements have been prepared in accordance with accounting principles
  generally accepted in the United States of America.

Cash and Cash Equivalents. For purposes of balance
  sheet classification and the statements of cash flows, the Company considers
  all highly liquid investments purchased with an original maturity of three months
  or less to be cash equivalents.

Property and Equipment.Property and equipment are
  stated at the lower of cost or net realizable value. Depreciation is provided
  by the straight-line method over the estimated service lives of the respective
  assets, which range from 5 to 29 1⁄2 years.

Mineral Properties.Mineral properties include the
  cost of advance minimum royalty payments, the cost of capitalized property leases,
  share payments, and the cost of property acquired either by cash payment or
  the issuance of term debt. Expenditures for exploration and development on specific
  proven properties are also capitalized. These costs will be amortized against
  subsequent revenues or charged to operations at the time the related property
  is determined to have an impairment of value.

Valuation of Long-lived Assets. Statement of Financial
  Accounting Standards ("SFAS") No. 144 requires recognition of impairment of
  long-lived assets in the event the net book value of such assets exceeds the
  estimated undiscounted future cash flows attributable to such assets. It requires
  that those long-lived assets to be disposed of by sale are to be measured at
  the lower of carrying amount or fair value less cost of sale whether reported
  in continuing operations or in discontinued operations. The statement is applied
  prospectively.

In accordance with the provisions of SFAS No. 144, management
  of the Company reviews the carrying value of its mineral properties on a regular
  basis. Estimated undiscounted future cash flow from the mineral properties is
  compared with the current carrying value in order to determine if an impairment
  exists. Reductions to the carrying value, if necessary, are recorded to the
  extent the net book value of the property exceeds the estimate of future discounted
  cash flow or liquidation value.

Foreign Currency Translation.Golden Queen has adopted
  the United States dollar as its reporting currency for its financial statements
  prepared after May 21, 1996 as the United States dollar is the currency of the
  primary economic environment in which Golden Queen and the Subsidiary conduct
  business and is considered the appropriate functional currency for the Companys
  operations. Balances held in Canadian dollars are re-measured into the functional
  currency in accordance with SFAS No. 52, Foreign Currency Translation,
  (SFAS 52). Assets and liabilities in foreign currencies are generally
  translated into dollars at the rates ruling at the balance sheet date. Revenues
  and expenses are translated at average rates for the year. Where amounts denominated
  in a foreign currency are converted into dollars by remittance or repayment,
  the realized exchange differences are included in other income. The exchange
  rates prevailing at December 31, 2002 and December 31, 2001 were $1.58 and $1.59,
  respectively stated in Canadian dollars per one U.S. dollar. The average rates
  of exchange during both years ended December 31, 2002 and December 31, 2001
  were $1.57 and $1.55 respectively.

34

---

GOLDEN QUEEN MINING CO. LTD (a development stage company)
  Summary of Accounting Policies

Net Loss Per Share.The Company computes and discloses
  earnings and loss per share in accordance with SFAS No. 128, Earnings
  per Share (SFAS 128), which requires dual presentation of
  basic earnings per share and diluted earnings per share on the face of all income
  statements presented for all entities with complete capital structures. Basic
  earnings per share is computed as net income divided by the weighted average
  number of common shares outstanding for the period. Diluted earnings per share
  reflects the potential dilution that could occur from common shares issuable
  through stock options, warrants and convertible debt. Since the Companys
  convertible debt, stock options and warrants are antidilutive for all periods
  presented, only basic earnings per share is presented. A total of 1,090,000
  and 2,565,836 common shares were issuable pursuant to such stock options and
  warrants at December 31, 2002 and 2001 respectively.

Environmental and Reclamation Costs. The Company currently
  has no active reclamation projects, but expenditures relating to ongoing environmental
  and reclamation programs would either be expensed as incurred or capitalized
  and depreciated depending on the status of the related mineral property and
  their future economic benefits. The recording of provisions generally commences
  when a reasonably definitive estimate of cost and remaining project life can
  be determined.

Estimates.The preparation of financial statements
  in conformity with generally accepted accounting principles requires management
  to make estimates and assumptions that effect the reported amounts of assets
  and liabilities and disclosure of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of revenues and expenses
  during the reporting period. Significant estimates have been made by management
  in several areas including the ability to realize mineral properties and certain
  other assets. Actual results could differ from those estimates.

Fair Value of Financial Instruments.The carrying amount
  reported in the balance sheets for cash and cash equivalents, receivables, accounts
  payable and accrued expenses approximate fair value because of the immediate
  or short-term maturity of these financial instruments. The fair value of long-term
  debt approximates its carrying value because the stated rates of the debt reflect
  recent market conditions or because the rates are variable in nature.

Stock Based Compensation. The Company has adopted SFAS
  No. 123, Accounting for Stock-Based Compensation and has elected
  to continue to measure compensation cost for employees under Accounting Principles
  Board (APB) Opinion No. 25, including interpretations provided in
  Interpretation (FIN) No. 44. Generally, under APB No. 25 compensation
  expense is recognized for the difference between the market price of the underlying
  common stock and the exercise price of the stock options. Effective from the
  date of the modification, the Company regularly remeasures compensation expense
  for the options where there has been a substantive change or modification to
  such options.

SFAS No. 123 requires the Company to provide pro-forma information
  regarding net income as if compensation cost for the stock options granted to
  the Companys employees had been determined in accordance with the fair
  value based method prescribed in SFAS No. 123. The value of stock options granted
  to non-employees is recognized in these financial statements as compensation
  expense under SFAS No. 123 using the Black-Scholes option pricing model.

The Company does not plan to adopt the fair value method of
  accounting for stock-based compensation awarded to employees. Consequently,
  related pro-forma information as required by SFAS No. 123 (see Note 9 for further
  information) has been disclosed in accordance with SFAS No. 148 as follows:

35

---

GOLDEN QUEEN MINING CO. LTD (a development stage company)
  Summary of Accounting Policies

|                                            | Years Ended |  
|------------------------------------------- | ----------- | -
|                                            | December 31 |  
|                                            | 2002        |  
|                                            |             |  
|                                            |             |  
|Net loss, as reported                       | $(347,603   | )
|Add: Stock-based compensation               |             |  
|expense included in reported
      net loss | -           |  
|Deduct: Total stock-based compensation      |             |  
|expense determined under
      fair-value   |             |  
|based method for all awards                 | $(85,819    | )
|                                            |             |  
|                                            |             |  
|Pro-forma net loss                          | $(433,422   | )
|                                            |             |  
|Loss per share:                             |             |  
|Basic and diluted 
      as reported       | $(0.01      | )
|                                            |             |  
|Basic and diluted 
      pro-forma         | $(0.01      | )
|                                            |             |  

Gain on Settlement of Debt.During 2002, the Company
  early adopted Financial Accounting Standards Board Statement No. 145, Rescission
  of FASB Statements No. 4, 44 and 64, Amendment of FASB No. 13 and Technical
  Corrections (SFAS No. 145). SFAS No. 145 requires any gain or loss
  on early extinguishment of debt to be included in income from continuing operations
  instead of being classified as an extraordinary item. Any gain or loss on extinguishment
  of debts from the period prior to adoption must be reclassified into income
  (loss) from continuing operations. Accordingly, the Company has reclassified
  a gain of $136,627 in 2001 into continuing operations.

New Accounting Pronouncements. In June 2001, the Financial
  Accounting Standards Board approved for issuance, Statement of Financial Accounting
  Standards No. 143 (SFAS No. 143), Accounting for Asset Retirement
  Obligations, which addresses the accounting for legal obligations associated
  with the retirement of tangible long lived assets. Under SFAS No. 143, the fair
  value of a liability for an asset retirement obligation shall be recognized
  in the period in which the obligation is incurred. SFAS No. 143 is effective
  for fiscal years beginning after June 15, 2002, with early adoption permitted.

Statement of Financial Accounting Standards No. 146, Accounting
  for Costs Associated with Exit or Disposal Activities (SFAS No.
  146) provides guidance on the recognition and measurement of liabilities
  for costs associated with exit or disposal activities. The provisions of this
  Statement are effective for exit or disposal activities that are initiated after
  December 31, 2002.

In November 2002, the FASB issued FASB Interpretation (FIN)
  No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees,
  Including Indirect Guarantees of Indebtedness of Others, which addressed
  the accounting for and disclosure of guarantees. Interpretation 45 requires
  a guarantor to recognize a liability for the fair value of a guarantee at inception.
  The recognition of the liability is required even if it is not probable that
  payments will be required under the guarantee. The disclosure requirements are
  effective for interim and annual financial statements ending after December
  15, 2002. The initial recognition and measurement provisions are effective for
  all guarantees within the scope of Interpretation 45 issued or modified after
  December 31, 2002.

FIN 46, Consolidation of Variable Interest Entities,
  clarified the application of Accounting Research Bulletin No. 51, Consolidated
  Financial Statements, to certain entities in which equity investors do
  not have the characteristics of a controlling financial interest or do not have
  sufficient equity at risk for the entity to finance its activities without additional
  subordinated financial support from other parties. FIN 46 is applicable immediately
  for variable interest entities created after January 31, 2003. For variable
  interest entities created prior to January 31, 2003, the provisions of FIN 46
  are applicable no later than July 1, 2003.

The implementation of these new standards is not expected
  to have a material effect on the Companys financial statements.

36

---

GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

1. Financial Condition and Ability to Continue as a Going Concern.

The Company has had no revenues from operations since inception,
  has a deficit accumulated during the development stage of $34,409,336, has been
  unable to successfully renegotiate payment schedules with all landowners, and
  has been unable to obtain the necessary financing to complete current development
  activities or exit the development stage. These conditions continue to raise
  substantial doubt about the Companys ability to continue as a going concern.

Management plans to control current costs and continue with
  its efforts to obtain equity based financing to sustain care and maintenance
  and provide sufficient cash to fund Company activities over the next 12 months.
  In addition, management plans to secure debt, equity, or joint venture financing
  to fund construction of the operating facility at the Soledad Property (Soledad)
  .

The ability of the Company to obtain financing and adequately
  manage its expenses, and thus maintain solvency, is dependent on equity market
  conditions, the ability to find a joint venture partner, the market for precious
  metals, and the willingness of other parties to lend the Company money, While
  the Company has been successful at certain of these efforts in the past, there
  can be no assurance that current efforts will be successful. These financial
  statements do not reflect the outcome of these uncertainties.

2. Property and Equipment.

Property and equipment consists of:

|                              |   | December 31, 2002 |  |   | December 31, 2001 | 
|----------------------------- | - | ----------------- |  | - | ----------------- | 
|                              |   |                   |  |   |                   | 
|Building                      | $ | 26,360            |  | $ | 26,360            | 
|                              |   |                   |  |   |                   | 
|Furniture and fixtures        |   | 56,090            |  |   | 56,090            | 
|                              |   |                   |  |   |                   | 
|Equipment                     |   | 170,027           |  |   | 170,027           | 
|                              |   |                   |  |   |                   | 
|Automobiles                   |   | 21,401            |  |   | 21,401            | 
|                              |   |                   |  |   |                   | 
|Rental properties             |   | 313,635           |  |   | 313,635           | 
|                              |   |                   |  |   |                   | 
|                              |   |                   |  |   |                   | 
|Property and equipment, gross |   | 587,513           |  |   | 587,513           | 
|                              |   |                   |  |   |                   | 
|Less accumulated depreciation |   | 310,741           |  |   | 296,502           | 
|                              |   |                   |  |   |                   | 
|                              |   |                   |  |   |                   | 
|Property and equipment, net   | $ | 276,772           |  | $ | 291,011           | 
|                              |   |                   |  |   |                   | 

37

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

3. Mineral Properties.

The Company has capitalized the amounts which have been paid
  to acquire property rights and for professional services rendered in the exploration,
  drilling, sampling, engineering and other related technical, managerial and
  professional services toward the evaluation and development of certain mining
  claims known Soledad, Mojave Mining District, Kern County, California. The Companys
  investment in mineral properties consisted of the following:

|                                                  |   | December 31, 2002 |   |   | December 31, 2001 |  
|------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                                  |   |                   |   |   |                   |  
|Deferred exploration and development expenditures | $ | 21,015,506        |   | $ | 21,015,506        |  
|                                                  |   |                   |   |   |                   |  
|Properties                                        |   | 4,113,738         |   |   | 4,113,738         |  
|                                                  |   |                   |   |   |                   |  
|Advance minimum royalty                           |   | 2,387,574         |   |   | 2,387,574         |  
|                                                  |   |                   |   |   |                   |  
|Asset impairment loss                             |   | (26,834,131       | ) |   | (26,834,131       | )
|                                                  |   |                   |   |   |                   |  
|                                                  |   |                   |   |   |                   |  
|Total                                             |   | $682,687          |   |   | $682,687          |  
|                                                  |   |                   |   |   |                   |  

4. Other Assets.

On April 1, 1995, the Company acquired, through the Subsidiary,
  an option to purchase all of the issued and outstanding shares of a privately
  held California corporation holding an interest in a previously uncontracted
  tract of land located near the Soledad site. The option called for an initial
  non-refundable payment of $100,000 in exchange for access to the property to
  evaluate the presence of mineral reserves for a period of nine months. At the
  end of the nine-month period, the Company chose to exercise its option to purchase
  the shares of the corporation by making the initial purchase payment of $250,000.
  This was followed by a second payment of $500,000 on July 1, 1997. An additional
  $750,000 was due upon reaching sustained production or July 1, 1999, whichever
  came first. In June 1999, the Subsidiary and the private corporation amended
  the original agreement to allow for a one year extension in exchange for $75,000
  which was paid by the Subsidiary on June 30, 1999. The Company extended the
  amended agreement to July 2001 with another extension payment on July 7, 2000
  of $75,000. These extension payments do not apply to the overall purchase price.

The Company anticipated its inability to make the extension
  payment scheduled for July 1, 2001, and on August 10, 2001, signed a second
  amendment to the original stock purchase agreement. This amendment suspends
  all terms and obligations of the Company as set forth in the original agreement
  and the first amendment. Further, the amendment requires the Company to recognize
  a liability of $35,000, on or before July 1, 2001, and on each successive anniversary
  date for up to five years. To extend the termination date of the agreement,
  $10,000 of the liability is to be paid in cash, and the balance of $25,000 is
  to be accrued, without interest, payment of which is deferred until the final
  stock purchase payment is made. On July 11, 2001, the Company made the required
  transfer of $10,000, accrued a liability of $25,000, and extended the termination
  date of the agreement to July 1, 2002. On July 2, 2002, the Company made the
  required transfer of $10,000, accrued a liability of $25,000, and extended the
  termination date of the agreement to July 1, 2003.

38

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

The Company has no legal obligation to continue making payment
  and cannot perfect its rights as a shareholder of the corporation until full
  payment under the option is made. Upon commencement of commercial production,
  if any, the Company would be required to pay a royalty of 1% of gross smelter
  returns for a period of up to 60 years, not to exceed $60,000,000.

5. Income Taxes.

At December 31, 2002 and December 31, 2001, the Company had
  future tax assets of approximately $ 12,320,000and $12,250,000, respectively,
  principally arising from net operating loss carry-forwards for income tax purposes
  offset by development costs expended for income tax purposes but capitalized
  for financial reporting purposes. As management of the Company does not currently
  believe that it is more likely than not that the Company will receive the benefit
  of this asset, a valuation allowance equal to the future tax asset has been
  established at both December 31, 2002 and December 31, 2001.

As at December 31, 2002, the Company had net operating loss
  carry-forwards available to reduce taxable income in future years as follows:

| | Country                 |   | Amount     |  | Expiration Dates | 
| | ----------------------- | - | ---------- |  | ---------------- | 
| |                         |   |            |  |                  | 
| | United States - Federal | $ | 20,890,000 |  | 2003 - 2022      | 
| |                         |   |            |  |                  | 
| | United States - AMT     | $ | 16,450,000 |  | 2003 - 2022      | 
| |                         |   |            |  |                  | 
| | Canada                  | $ | 1,512,000  |  | 2003 - 2009      | 

These financial statements do not reflect the potential effect
  on future income taxes of the application of these losses.

Major items causing the Corporations affective tax rate
  to differ from the statutory rate are as follows:

|                                       |   | December 31, 2002 |   |     |   | December 31, 2001 |   |         
|-------------------------------------- | - | ----------------- | - | --- | - | ----------------- | - | --------
|                                       |   |                   |   |     |   |                   |   |         
|                                       |   |                   |   |     |   |                   |   |         
|Income benefit at statutory
      rate | $ | (139,041          | ) | (40 | ) | %                 | $ | (104,825
|Foreign income taxes at other          |   |                   |   |     |   |                   |   |         
|than the
      US statutory rate       |   | 3,193             |   | 2   |   | %                 |   | -       
|Effect of expiry of tax loss           |   | 52,672            |   | 40  |   | %                 |   | -       
|Non-deductible expense                 |   | 13,546            |   | 40  |   | %                 |   | -       
|Change in valuation allowance          |   | (69,630           | ) | 40  |   |                   |   | 104,825 
|                                       |   |                   |   |     |   |                   |   |         
|Total                                  | $ | -                 |   | -   |   | %                 | $ | -       
|                                       |   |                   |   |     |   |                   |   |         

39

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

6. Long-Term Debt.

Long-term debt consists of the following:

| |                                                           |   | December 31, 2002 |  |   | December 31, 2001 | 
| | --------------------------------------------------------- | - | ----------------- |  | - | ----------------- | 
| |                                                           |   |                   |  |   |                   | 
| | Note due to a corporation, payable in monthly             |   |                   |  |   |                   | 
| | installments
      of $9,275, including interest at prime |   |                   |  |   |                   | 
| | plus 2%
      estimated to mature in July 2013 and        |   |                   |  |   |                   | 
| | collateralized
      by mineral property. *               | $ | 745,548           |  | $ | 745,548           | 
| |                                                           |   |                   |  |   |                   | 
| | Note due an individual, payable in monthly                |   |                   |  |   |                   | 
| | installments
      of $600 including interest at 9%,      |   |                   |  |   |                   | 
| | maturing June 2006, collateralized
      by mineral       |   |                   |  |   |                   | 
| | property.                                                 |   | 21,533            |  |   | 26,543            | 
| |                                                           |   |                   |  |   |                   | 
| |                                                           |   |                   |  |   |                   | 
| | Total long-term debt                                      |   | 767,081           |  |   | 772,091           | 
| | Current maturities                                        |   | 5,480             |  |   | 5,010             | 
| |                                                           |   |                   |  |   |                   | 
| |                                                           |   |                   |  |   |                   | 
| | Long-term debt, less current maturities                   | $ | 761,601           |  | $ | 767,081           | 
| |                                                           |   |                   |  |   |                   | 

|* | In June of 2000, an agreement effective
        September 30, 2000 was signed by the note holder which allowed for the
        deferment of principal and interest payments on the note in exchange for
        monthly payments of $4,000 over a period of three years or until the Company
        obtains production financing, whichever is sooner. These payments are
        reflected under interest expense in the financial statements and discussed
        in Note 11 below. The following schedule shows the maturity of the debts
        under the new agreement:
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Year ending December 31, |            | Amount |        
| | ------------------------ | ---------- | ------ | -------
| |                          |            |        |        
| |                          | 2003       | $      | 5,480  
| |                          | 2004       |        | 32,947 
| |                          | 2005       |        | 36,778 
| |                          | 2006       |        | 37,392 
| |                          | 2007       |        | 37,992 
| |                          | Thereafter |        | 616,492
| |                          |            |        |        
| |                          |            | $      | 767,081
| |                          |            |        |        

7. Convertible Debt.

In December 2000, the Company received $65,000 from two shareholders
  of the Company pursuant to terms of an unsecured promissory note. In January
  2001, the note was converted into 406,250 common shares, at a per share rate
  of $0.16.

40

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

8. Common Shares.

In April 2002, two shareholders exercised an aggregate of
  1,520,836 warrants for common shares at US$0.16 per share for proceeds of $243,334.
  A balance of 135,414 warrants expired as of January 20, 2003.

In December 2000, two shareholders advanced the Company $200,000
  pursuant to a private placement to be completed in January 2001. In January
  2001 the private placement was completed with the issuance of an aggregate of
  1,538,462 shares at $0.13 per share. In addition, an aggregate of 1,656,250
  Common Shares were reserved for issuance as warrants with a fixed price of US$0.16
  per share.

On July 20, 1999, 13,250,000 of unregistered common shares
  of the Company were issued upon the exercise of special warrants, which were
  issued on March 15, 1999, at a price of $0.26 (C$0.40) per share for gross proceeds
  of $3,472,450, (C$5,300,000), less agent fees of $121,535. In addition, the
  Company paid $166,620 in costs related to the private placement and issued 463,750
  broker warrants which had a strike price of (C$0.60) and expired March 15, 2001.

Subsequent to December 31, 2002, 75,000 stock options were
  exercised for proceeds of $37,500.

9. Stock Option Plan.

Under its amended 1996 stock option plan, the Company may
  grant options to purchase up to 3,300,000 shares of common stock to officers,
  directors and employees. The exercise price for all stock options is the closing
  price of the Companys common shares in Canadian dollars as traded on the
  Toronto Stock Exchange on the date of grant. Options issued to directors vest
  immediately. For all other options, the right to exercise vests over a two year
  period in equal increments on the date of grant and on each of the first two
  anniversaries of such date. All stock options issued and outstanding as of December
  31, 2002 expire at a date determined by the Companys Board of Directors,
  not exceeding five years from the date of grant, or after 39 months from the
  date of grant if not specified.

On March 9, 2002, stock options to purchase up to a total
  of 375,000 shares were granted to four directors . The options are exercisable
  at the price of C$0.50 per share and expire on May 9, 2007.

On December 4, 2001, stock options to purchase up to a total
  of 180,000 shares were granted to two directors. The options are exercisable
  at the price of C$0.13 per share and expire on December 4, 2006.

On June 26, 2001, stock options to purchase up to a total
  of 50,000 shares were granted to a director. The options are exercisable at
  the price of C$0.20 per share and expire on June 26, 2006. On the same date
  stock options to purchase up to a total of 50,000 shares were granted to an
  employee. The options are exercisable at the price of C$0.20 per share and expire
  on September 26, 2004.

On March 1, 2001 stock options to purchase up to 115,000 shares
  were granted to a director. The options are exercisable at C$0.25 per share
  and expire March 1, 2006

On February 4, 2000, stock options to purchase up to a total
  of 210,000 shares were granted to two directors. The options are exercisable
  at the price of C$0.23 per share and expire on February 4, 2005.

41

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

The following is a summary of stock option activity during the years ended
  December 31, 2002 and 2001:

|                                       | Year Ended        |   | Year Ended       
|-------------------------------------- | ----------------- | - | -----------------
|                                       | December 31, 2002 |   | December 31, 2001
|                                       | Shares            |   | Price Range      
|                                       |                   |   |                  
|Options outstanding, beginning of year | 1,045,000         |   | C$0.13-1.00      
|Options granted                        | 375,000           |   | C$0.50           
|Options exercised                      | (290,000          | ) | C$0.13-0.25      
|Options expired / cancelled            | (40,000           | ) | C$1.00           
|                                       |                   |   |                  
|Options outstanding, end of year       | 1,090,000         |   | C$0.13-0.50      
|                                       |                   |   |                  
|Options exercisable                    | 1,073,333         |   | C$0.13-0.50      
|                                       |                   |   |                  

The following table summarizes information about stock options outstanding
  at December 31, 2002:

|                |  |             |  | **Options**Outstanding |  | **Options**Exercisable | 
|--------------- |  | ----------- |  | ---------------------- |  | ---------------------- | 
|                |  |             |  | Weighted-              |  | Weighted-              | 
|                |  | Number      |  | Average                |  | Average                | 
|                |  | Outstanding |  | Contractual Life       |  | Exercise Price         | 
|Range of Prices |  |             |  | (Years)                |  |                        | 
|                |  |             |  |                        |  |                        | 
|C$0.50          |  | 775,000     |  | 5.0                    |  | C$0.50                 | 
|C$0.25          |  | 65,000      |  | 5.0                    |  | C$0.25                 | 
|C$0.23          |  | 110,000     |  | 5.0                    |  | C$0.23                 | 
|C$0.20          |  | 50,000      |  | 3.25                   |  | C$0.20                 | 
|C$0.13          |  | 90,000      |  | 5.0                    |  | C$0.13                 | 
|                |  |             |  |                        |  |                        | 
|C$0.13 - $0.50  |  | 1,090,000   |  | 4.92                   |  | C$0.41                 | 
|                |  |             |  |                        |  |                        | 

The Company accounts for stock-based compensation plans by
  applying APB Opinion No. 25, Accounting for Stock Issued to Employees, and related
  Interpretations. Under APB Opinion No. 25, because the exercise price of the
  Companys employee stock options approximates the market price of the underlying
  stock at the date of grant, no compensation cost is recognized. The weighted
  average market value at date of grant for options granted to employees in 2002
  and 2001 was C$0.27 and C$0.18 per option respectively.

SFAS Statement No. 123, Accounting for Stock-Based Compensation
  (SFAS 123), requires the Company to provide pro forma information
  regarding net income and earnings per share as if compensation cost for the
  Companys stock option plans had been determined in accordance with the
  fair value based method prescribed in SFAS 123. The Company estimates the fair
  value of each stock option at the grant date by using the Black-Scholes option-pricing
  model with the following weighted-average assumptions used for grants in 2002
  and 2001, respectively: no dividend yield and expected option life of 5 years
  for each year; expected volatility of 199% and 100%; and risk-free interest
  rates of 6.0% and 5.0 %.

Based on the above assumptions, the fair value of options
  issued during 2002 and 2001 was $107,534 and $54,879 respectively. During 2002,
  the Company, using the Black-Scholes option-pricing model with the above-noted
  assumptions estimated the fair value of stock options granted for non-directors
  services and $21,456 (2001 - $Nil) has been recognized as compensation expenses
  for non-director services.

42

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

10. Commitments and Contingencies.

The Companys investment in mineral properties includes
  an exclusive lease to explore, develop and mine the Soledad site. The lease
  is for a minimum twenty year period, continuing on as long as the property remains
  in production subject to processing a minimum of 12,000 tons of ore per year.
  The lease is also subject to production royalties of 3% to 7.5% of net smelter
  returns depending on the quality of ore eventually extracted. All advance minimum
  royalties paid, formerly amounting to $100,000 per year, are applied against
  any future production royalties. The Company has agreed to issue 100,000 common
  shares upon commencement of commercial production in connection with certain
  property acquisitions.

The Company has entered into various exploration right, lease
  option and property acquisition agreements on the above claims. In 2001, the
  lease agreement was successfully renegotiated to include a three year moratorium
  of payments. The Company ceased making payments to landowners, according to
  the terms of the various agreements, in October 2000 and has since been in the
  process of negotiating moratorium agreements with its landowners. The Company
  is technically in default on the agreements, which have not been paid or re-negotiated.
  While the Company has successfully negotiated moratorium agreements with these
  landowners in the past and has reached new agreements with many of the landowners,
  there can be no assurance that the remaining agreements will be successfully
  renegotiated in the future.

All are subject to a sliding scale royalty on net smelter
  returns beginning at 3%.

On September 19, 1994, the Company entered into a mining lease
  agreement granting exclusive exploration and development rights on property
  adjacent to claims previously described. The term of the agreement is for 20
  years and consideration included a cash payment of $30,000 and annual minimum
  lease payments of $10,000. In 2001, this lease was successfully renegotiated
  to include a three year moratorium of payments.

On December 30, 1994, the Company signed an amendment to a
  September 25, 1989 agreement of purchase for certain leasehold interests and
  unpatented claims. Under the terms of the amendment, the outstanding balance
  on the $150,000 note was cancelled and a production royalty was granted on all
  products produced from the property up to a maximum payment of $300,000 plus
  simple interest. The outstanding balance on the cancelled note was credited
  to mineral properties.

43

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GOLDEN QUEEN MINING CO. LTD. (a development stage company)
  Notes to Consolidated Financial Statements

11.Gain on Settlement of Debt.

In the third quarter of 2001, the Company recorded a gain
  of $136,627 on the recovery of royalties previously expensed. The gain included
  $67,516 of interest only payments made to extend land agreements. During 2001,
  the Company accrued liabilities for royalty payments and land payments payable
  to landowners involved in the moratorium negotiation process. As agreements
  were secured, related expenses and liabilities were adjusted to reflect the
  actual expenses, and liabilities of amended agreements, in accordance with the
  troubled debt restructuring provisions of SFAS No. 15, Accounting by Debtors
  and Creditors for Troubled Debt Restructuring. The balances due and payable
  to landowners still involved in the negotiation process will continue to be
  accrued until such time as an agreement is reached.

12. Related Party Transactions.

Jerrold W. Schramm, a director of Golden Queen until January
  22, 2001, is a partner of the law firm of Lawson Lundell Lawson & McIntosh,
  counsel to the Company. During the year ended December 31, 2002 and 2001, the
  Company paid Lawson Lundell Lawson & McIntosh C$36,576 and C$42,798 respectively
  for services rendered. No members of the firm of Lawson Lundell Lawson &
  McIntosh other than Mr. Schramm owned any shares of common stock of the Company,
  or rights or options to purchase such stock at December 31, 2002.

For the year ended December 31, 2002, $14,647 (2001 - $10,653)
  was paid to Mr. Edward Thompson for his services as President of the Company.
  In 2001, $3,874 (2002 - $Nil) was paid to Mr. Chester Shynkaryk, a director,
  for his efforts in dealing with landowners regarding moratorium agreements.
  No other compensation was paid or given during the year for services rendered
  by the directors in such capacity, and no additional amounts were payable at
  year-end under any standard arrangements for committee participation or special
  assignments.

The above noted transactions were in the normal course of
  operations, and were measured at the exchange amount, which is the amount of
  consideration established and agreed to by the related parties.



[The balance of this page has been left blank intentionally.]

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|                      | BDO Dunwoody LLP              | 600 Park Place
|--------------------- | ----------------------------- | --------------
|Chartered Accountants | 666 Burrard Street           
|                      | Vancouver, BC, Canada V6C 2X8
|                      | Telephone: (604) 688-5421    
|                      | Telefax: (604) 688-5132      
|                      | E-mail: vancouver@bdo.ca     
|                      | www.bdo.ca                   







---

Consent of Independent Accountants


---

Golden Queen Mining Co. Ltd.
  Vancouver, Canada

We hereby consent to the incorporation by reference in the
  Registration Statement Form S-8 (No. 333-102112) of Golden Queen Mining Co.
  Ltd., of our report dated February 26, 2003 relating to the consolidated financial
  statements of Golden Queen Mining Co. Ltd., which appears in this Form 10-KSB.
  Our report contains an explanatory paragraph regarding the Companys ability
  to continue as a going concern.

/s/ BDO Dunwoody LLP

Chartered Accountants

Vancouver, Canada
  April 14, 2003

45

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Exhibit 99.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
  AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Golden Queen Mining
  Co. Ltd. (the "Company") on Form 10-KSB for the period ended December 31, 2002
  as filed with the Securities and Exchange Commission on the date hereof (the
  "Report"), each of the undersigned, in the capacities and on the dates indicated
  below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant
  to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

|1. |  | The Report
        fully complies with the requirements of Section 13(a) or 15(d) of the
        Securities Exchange Act of 1934; and                               
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                     
|2. |  | The information
        contained in the Report fairly presents, in all material respects, the
        financial condition and results of operations of the Company.



|Dated: April 14, 2003 | /s/ H. Lutz Klingmann       
|--------------------- | ----------------------------
|                      | H. Lutz Klingmann           
|                      | President                   
|                      |                             
|Dated: April 14, 2003 | /s/ Keith Gainey            
|                      | Keith Gainey                
|                      | Principal Accounting Officer

46

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