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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

oANNUAL REPORT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
      EXCHANGE ACT OF 1934ORANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For the fiscal year ended December 31, 2003ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934Commission
      file number: 0-28954


International Thunderbird Gaming Corporation
      (Exact Name of Registrant as Specified in its Charter )Not Applicable(Translation of Registrant's Name into English)British Columbia(Jurisdiction of Incorporation or Organization)12155 Dearborn Place, Poway, California,
      USA 92064(Address of principal executive offices)Securities registered or to be
      registered pursuant to Section 12(b) of the Act: Not Applicable.Securities registered or
      to be registered pursuant to Section 12(g) of the Act:Title of each class
      Name of each exchange on which registeredCommon
      Canadian Trading and Quotation System Inc.Preferred
      Canadian Trading and Quotation System Inc.Securities for which there
      is a reporting obligation pursuant to Section 15(d) of the Act: Not
      Applicable.
      Indicate the number of outstanding shares of each of the issuer's
      classes of capital or common stock as of the close of the period covered
      by the annual report. As of December 31, 2003, there were 23,311,687
      shares issued and outstanding.
      
      
      Indicate by check mark whether the registrant (1) has filed all reports
      required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
      months (or for such shorter period that the registrant was required to
      file such reports) and (2) has been subject to such filing requirements
      for the past 90 days. Yes.
      
      
      Indicate by check mark which financial statement item the registrant
      has elected to follow.
      [X] Item 17 [ ] Item 18.(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
      PROCEEDINGS DURING THE PAST FIVE YEARS.)
      
      
      Indicate by check mark whether the registrant has filed
      all documents and reports required to be filed by Sections 12, 13 or 15(d)
      of the Securities Exchange Act of 1934 subsequent to the distribution of
      securities under a plan confirmed by a court. Not Applicable.
      
      
      [ ] Yes [ ] No




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TABLE OF CONTENTS

GLOSSARY
      3PART IItem 1 - Identity of Directors, Senior Management and Advisors
      3Item 2 -
      Offer Statistics and Expected Timetable
      3Item 3 -
      Key Information
      3Item 4 - Information on the
      Company
      8Item 5 -
      Operating and Financial Review and Prospects
      22Item 6 -
      Directors, Senior Management and Employees
      32Item
      7 - Major Shareholders and Related Party Transactions
      37Item 8 - Financial Information
      40Item 9 - The Offering and Listing
      40Item 10 - Additional
      Information
      42Item 11 - Quantitative and Qualitative Disclosures About Market Risk
      45Item 12 - Description of Securities Other, than Equity Securities
      45PART IIItem
      13 - Defaults, Dividend Arrearages and Delinquencies
      45Item 14 - Material Modifications to the Rights of Security Holders and Use
      of Proceeds
      46Item 15
      - Controls and Procedures
      46Item 16 - [Reserved],
      Experts, Ethics and Other Items
      46PART IIIItem
      17 - Financial Statements
      48Item 18 - Financial Statements
      48Item 19 - Exhibits
      49CONSOLIDATED FINANCIAL
      STATEMENTS
      50SIGNATURE
      90




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Glossary



Casino- a building or
location designed to allow individuals to play various games of chance for
money.



Gaming Machine- a
computerized slot machine that incorporates a central processing unit, memory,
computer software and a number of reels to determine the frequency and amount of
payout of prizes. It is distinguished from a VGT through the use of a number of
reels as opposed to a video terminal screen to display the game to the user.



Slot Machine- a
machine, providing a game of chance, worked by the insertion of a coin and a
random payout of coins based on the correct alignment of a number of reels.



VGT or Video Gaming Terminal- a computerized video gaming machine that incorporates a video terminal screen,
central processing unit, memory and computer software to determine the frequency
and amount of payout of prizes.



Skill Game- a game in
which the player based on utilization of his sight, motor skills and dexterity
may affect the outcome of the game.



Item 1 - Identity of Directors, Senior Management
and Advisers



Not applicable for annual report filing.



Item 2 - Offer Statistics and Expected Timetables



Not applicable for annual report filing.



Item 3 - Key Information



Except as otherwise indicated, all financial
information in this annual report is presented in U.S. dollars.



The temporal method is used to translate the
financial statements of fully integrated operations. Under this method monetary
assets and liabilities have been translated at the year end rate. Non-monetary
assets and liabilities are translated using historical exchange rates and
revenues and expenses translated at average rates for the period with any
resulting gain or loss charged to operations.



The current rate method is used to translate the
financial statements of self sustaining foreign operations. Under the current
rate method, assets and liabilities are translated at exchange rates in effect
at the balance sheet date and items in the statement of operations are
translated at weighted average rates. Exchange gains and losses arising from the
translation of the financial statements are deferred and included in the foreign
exchange adjustment account in shareholders' equity until there has been a
realized reduction in the net investment. The foreign exchange adjustment
account at December 31, 2003 relates mainly to the Company's Guatemalan
operations (2002 - mainly to Company's Guatemalan and Nicaraguan operations).

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An exception to the use of the current rate
method for translating the financial statements of self sustaining foreign
operations may occur when the economic environment of the foreign operation is
highly inflationary. In such events, the temporal method is used to translate
the financial statements of the foreign operation.



3A. Selected Financial Data



The following tables set forth selected
consolidated financial data. Such data for and as of the end of the fiscal years
ended December 31, 2003, 2002, 2002, 2000, and 1999 is derived from the
consolidated financial statements of the Company. The selected financial data as
at December 31, 2003 and 2002 and in each of the years in the three year period
ended December 31, 2003, should be read in conjunction with the Consolidated
Financial Statements of the Company and the Notes thereto contained elsewhere in
this Annual Report.



The Consolidated Financial Statements of the
Company have been prepared in accordance with accounting principles generally
accepted in Canada ("Canadian GAAP"). These principles, as applied to the
Company, differ from those generally accepted in the United States ("U.S. GAAP")
as set forth in Note 23 to the Consolidated Financial Statements of the Company.







INTENTIONAL SPACING FOR PRESENTATION PURPOSES











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The following is a summary of certain selected
financial data, based on accounting principles generally accepted in Canada, for
the years ended December 31, 2003, 2002, 2001, 2000, and 1999.



Fiscal year ended December 31,

(All in $1,000s except earnings (loss) per share)
      2003
      2002
      2001
      2000
      1999Canadian GAAPFor the period:Revenues:
      $       
      21,786
      $       
      18,519
      $       
      16,420
      $       
      16,194
      $       
      13,943Net income (loss):
      3,053
      324
      (3,080)
      (1,291)
      812Net income (loss)
      from continuing operations:
      3,053
      283
      (1,893)
      (629)
      936Earnings (loss)
      per share (basic):
      0.13
      0.01
      (0.13)
      (0.06)
      0.03Earnings (loss)
      per share from continuing operations (basic):
      0.13
      0.01
      (0.08)
      (0.03)
      0.04Earnings (loss)
      per share (diluted):
      0.11
      0.01
      (0.13)
      (0.06)
      0.03End of period
      working capital (deficiency):
      (815)
      (2,806)
      (3,081)
      (2,102)
      (1,180)Total assets:
      16,998
      14,553
      13,799
      13,789
      15,501Long term debt:
      4,985
      4,232
      4,296
      1,896
      2,060Total liabilities
      and minority interest:
      12,350
      13,066
      12,766
      9,733
      10,202Share capital:
      21,266
      21,085
      21,089
      21,032
      20,981Number of shares
      (000's omitted):
      24,311
      23,476
      23,490
      23,314
      23,159Cumulative translation:
      (415)
      (277)
      (411)
      (411)
      (408)Deficit:
      (16,268)
      (19,321)
      (19,645)
      (16,565)
      (15,274)






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The following is a summary of certain selected
financial data, based on accounting principles generally accepted in the United
States, for the years ended December 31, 2003, 2002, 2001, 2000, and 1999.



Fiscal year ended December 31,

(All in $1,000s except earnings (loss) per share)
      2003
      2002
      2001
      2000
      1999US GAAP for periods for which financial
      statements of the Company are included in this Annual ReportFor the period:Revenues:
      $       
      21,786
      $       
      18,519
      $       
      16,420
      $       
      16,194
      $       
      13,943Net income (loss):
      3,053
      478
      (2,849)
      (1,941)
      498Net income (loss) from
      continuing operations:
      3,053
      437
      (1,928)
      (1,013)
      622Earnings (loss) per share
      (basic):
      0.13
      0.01
      (0.12)
      (0.09)
      0.02Earning (loss) per share from
      continuing
      operations (basic):
      0.13
      0.01
      (0.08)
      (0.05)
      0.04Earnings (loss) per share
      (diluted):
      0.11
      0.01
      (0.12)
      (0.09)
      0.02End of period working capital
      (deficiency):
      (815)
      (4,691)
      (5,226)
      (2,102)
      (1,180)Total assets:
      16,928
      14,483
      13,566
      13,268
      15,501Long term debt:
      4,985
      2,374
      2,151
      1,896
      2,060Total liabilities and minority
      interest:
      12,350
      13,066
      12,766
      9,733
      10,202Share capital:
      Number of shares
      (000's omitted):
      20,721
      
      24,311
      21,630
      
      23,476
      21,634
      
      23,490
      21,475
      
      23,314
      20,981
      
      23,159Cumulative translation:
      (415)
      (277)
      (411)
      (411)
      (408)Deficit:
      (16,268)
      (19,900)
      (20,378)
      (17,529)
      (15,588)




The Company has never declared a dividend.



The information includes the results of the
operations of the subsidiaries from the date of acquisition.

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3B. Capitalization and Indebtedness



Not applicable for annual report filing.



3C. Reasons for the Offer and Use of Proceeds



Not applicable for annual report filing.



3D. Risk Factors



The Company, and thus the securities of the
Company, should be considered a highly speculative investment and investors
should carefully consider all of the information disclosed in this Annual Report
prior to making an investment in the Company. The Company operates in a risky
business environment. There are a number of risks inherent to the Company's
business. In addition to the other information presented in this Annual Report,
the following risk factors should be given special consideration when evaluating
an investment in any of the Company's securities.



1. Going Concern.The consolidated financial statements have been prepared on a going concern
  basis in accordance with Canadian generally accepted accounting principles,
  which assumes that the Company will continue in operation for the foreseeable
  future and be able to realize its assets and discharge its liabilities and
  commitments in the normal course of business. Up until December 31, 2001 the
  Company incurred significant losses, and had a working capital deficiency, and
  also had to seek a waiver from its primary lender relating to covenant
  violations on certain borrowings as at December 31, 2002 (see Note 9 to the
  Audited Financial Statements - loans payable).
2. Fiesta Casino Guayana, C.A.The Company has a 29% equity interest in the Venezuelan operation. The Companyis concerned over the continued devaluation of the local currency.
  However, the operation continues to generate enough cash to meet its monthly
  obligations. The Company's investment includes advances and receivables for
  which it expects repayment. The Company wrote down to nil in 2002 all of its
  contributions characterized as capital. However, the Company fully believes it
  will recover its advances in their entirety.
3. Regulatory.
  The ability to sell or place Gaming Machines in any country is dependent upon
  the regulatory authorities of various levels of government. The rulings made
  by the governments continue to fluctuate and are dependent upon a number of
  political, economic and public-oriented factors. The Company is dependent upon
  the government ruling in favor of allowing casino gaming and specifically VGTs
  and slot machines in their jurisdiction. Adverse government rulings may have a
  significant impact on the Company's ability to generate revenue.
4. Competition.The Company's products compete against those of other established companies,
  some of which have greater financial, marketing, and other resources than
  those of the Company. These competitors may be able to institute and sustain
  price wars, or imitate the features of the Company's products, resulting in a
  reduction of the Company's share of the market and reduced price levels and
  profit margins. In addition, there are no significant barriers to new
  competitors entering the marketplace.

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1. Marketplace. The marketplace for
  the Company's products and services is constantly undergoing change.
  Currently, revenue earned in the casino gaming industry in the global market
  continues to increase. As the casino gaming market matures, global demand will
  be expected to stabilize. The Company's continued profitability and growth
  will be dependent upon maintaining and expanding its market share of global
  markets.
2. Management. The Company is
  dependent on a relatively small number of key employees, the loss of any one
  of whom could have an adverse effect on the Company.
3. Marketing Plan. The Company's
  internal marketing plan is based on a number of assumptions, which may or may
  not prove valid. Marketing expenditures are to be funded partly from cash flow
  from operations. Poor market acceptance of the Company's products or other
  unanticipated events may result in lower revenues than anticipated, making the
  planned expenditures on advertising and promotion unachievable.
4. Exchange Rate Fluctuation. The
  profitability of the Company may be adversely affected by fluctuations in the
  rate of exchange among various currencies. The Company does not currently take
  any steps to hedge against currency fluctuations.



These business risks should be considered in the
context of the Company's business, which is described below.



Item 4 - Information on the Company



4A. History and Development of the Company



1. International Thunderbird Gaming Corporation
  ("the Company").
2. Originally incorporated on September 4, 1987.
3. Incorporated by registration of its memorandum
  and articles under the Company Act (British Columbia) on September 4, 1987
  under the name "Winters Gold Hedley Ltd.". The Company changed its name to
  "Regal Gold Corporation" and consolidated its share capital on a 2.5:1 basis
  effective August 26, 1993. The Company subsequently changed its name to
  International Thunderbird Gaming Corporation, and updated its articles,
  effective June 23, 1994. The Company continued into the Yukon effective
  February 5, 1999, as approved by the shareholders of the Company on June 18,
  1998.
  
  The Company's head and principal office is
  located at 12155 Dearborn Place, Poway, California 92064. The Company's
  registered and records office and address for service in the Yukon is in care
  of its solicitors, Preston, Lackowicz & Shier, Suite 300 - 204 Black Street,
  Whitehorse, Yukon, Canada Y1A 2M9.

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1. Important events in the development of the
  Company's business since January 1, 2003:
  
  
  Costa Rica. The
  Company succeeded in its legal challenge to secure collection of its $677,000
  account receivables stemming from past activity. The Company entered into a
  50/50 partnership with local investors and it obtained a lease and license and
  has begun to operate a casino at the Presidente Hotel in downtown San Jose.
  The Company is advancing its development efforts in Costa Rica. The Fiesta
  Casino at the Presidente Hotel now has 113 gaming machines and 34 table
  positions. In addition, the Company and its local 50% Costa Rica partner
  recently signed an agreement with a multi-national hotel owner-operator to
  build a casino near the San Jose International Airport. The development rights
  include the right to own and operate a casino/entertainment/restaurant
  property. The hotel owner will secure all appropriate construction and
  operating permits such as the casino license, food and alcohol beverage
  license, and approval of zoning for the construction and operation. The
  Company will undertake to construct the building and improvements for a Fiesta
  casino/entertainment center and the "shell/box" for a Denny's restaurant. The
  project cost is estimated at $5.3 million, which will result in the addition
  of 250 gaming machines and 84 new gaming positions. Costa Rica has a
  population of 3.9 million, a GDP of $32 billion and a per capita GDP of
  $8,300.
  
  Guatemala. In
  March 2003, the Company entered into a seven-year contract with ILAC to
  continue operations of its video lottery terminals at the Camino Real Hotel in
  Guatemala City. The Company is entitled to 65% of revenue and will be
  responsible for all operating expenses while ILAC and the Pediatric Foundation
  share the remaining 35% of revenue. The Company also leased additional space
  and added a bar as well as additional video lottery machines. The video
  lottery saloon at the Camino Real continues to yield consistent and reliable
  results. Revenues increased a modest 4% in 2003 compared with 2002. However,
  revenues are up 10% for the 4 months ended April 30, 2004, compared with the
  same period in 2003, with the addition of 29 machines. The Fiesta Cafe serves
  drinks and sandwiches, and continues to be well received by the patrons of the
  Salon. The Company is waiting for the new government to enact regulations
  before it pursues further locations.
  
  Nicaragua.In
  January 2003, the Company entered into an agreement with Hopewell Ltd. to
  merge its Nicaragua Fiesta Casino operation with Hopewell's Pharoah's Casino.
  The merger was effective March 1, 2003. The Company's net 20.54% interest in
  Nicaragua generated net profits of $239,000 in 2003, based on our ten months
  of combined operations. The Company also recorded in 2003 a one time gain of
  $830,000 as a result of the merger. The two casinos continue to perform well
  with its combined 211 slot positions and 114 table positions.
  
  Mexico. The
  Company'sMexico Operations were shut down by Gobernacion on October
  11, 2001. The Company filed a NAFTA claim against the government of Mexico and
  completed a five day evidentiary hearing on April 30, 2004. The three member
  international tribunal panel is expected to issue its ruling on the claim
  within the next several months. The Company pursued the NAFTA claim against
  Mexico throughout 2003. The Company is fully committed to the NAFTA process
  and believes that this forum offers a transparent and fair resolution of a
  meritorious claim. Simply put the Company seeks to have the international
  tribunal "right a very egregious wrong." The Company's Mexico Skill Game
  enterprise was well on its way to becoming an anchor business before Mexico
  illegally shut the operations down. The Company, as the managing and
  controlling investor hired a well qualified team of lawyers who presented the
  facts and law in a thorough manner. The case has been arbitrated and is in
  final briefing, culminating in a decision that will be reached in the next
  several months. Closing briefs are due June 30, 2004. The Company contributed
  approximately $200,000 of "in kind services" toward the

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> legal effort through utilization of management
>   time consisting of in house legal and accounting work. In addition, by the
>   conclusion of the case, the Company and its investors will have contributed
>   $618,000 of cash for outside legal fees, tribunal fees and miscellaneous
>   costs. The Company's portion of this cash contribution is $263,000.



> 



> 



1. Over the past three financial years, the
  Company has made the following significant capital expenditures: Expansion of
  its Panama operations; development of new operations in Mexico (initiated
  operations in Laredo and Reynosa in February 2001 and August 2001,
  respectively), Nicaragua (initiated operations in February 2001), Venezuela
  (initiated operations in August 2001) and Costa Rica.
  
  The Company through its 29% effective equity
  investment in Fiesta Casino Guayana is in the process of building out a 20,000
  square foot Events Center in the InterContinental Hotel Guayana. The Events
  Center shall have a dual purpose: (1) to enhance Hotel marketability and (2)
  to host casino special events, concerts and sporting events. The total capital
  expenditures for this project are estimated to be approximately $3 million and
  at the time of this filing, the center is estimated to be completed within two
  months. The

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> source of the funds to build out the
>   location is through investor contributions and financing secured with a bank
>   in Venezuela.



> In June 2002, Thunderbird Panama began an
>   expansion of its casino in the El Panama Hotel. This expansion was completed
>   in 2003 and added approximately 1,000 square meters of gaming and
>   entertainment space, including 120 new slot machines, 5 table games and a
>   facility for live music and shows. In addition, the existing bar will be
>   converted to a restaurant. The expansion also includes the addition of a Race
>   and Sports betting facility. The total capital expenditures for this project
>   were approximately $3 million. The source of the funds to complete this
>   project came from financing secured with a bank in Panama.



1. The Company is currently focused on developing
  its operations in Costa Rica, relying primarily on private funding sources.
  Estimated costs for expansion are approximately $5 million. In addition to
  Costa Rica, the Company has a development office in Chile to pursue
  opportunities in that area. To date, the Company's 50% interest from
  development expenses are approximately $300,000. The Company is funding its
  share with cash flow from operations, as well as performing "in kind"
  consulting services to the development project.
2. Not applicable.



4B. Business overview



> 1.International Thunderbird Gaming Corporations' ("The Company") primary
>   business activity is the provision of services to the gaming industry. The
>   Company is, or has been involved in the following business activities:



> Managing gaming operations under a Casino
>     Administration and Operations contract dated January 29, 1998, at six (2002
>     - five) casinos in the Republic of Panama in which the Company also has a
>     50% interest;
>   Managing a video lottery operation in
>     Guatemala, on a revenue and net profit sharing basis, under a Service and
>     Supply agreement which expired in October 2002. In March 2003, the Company
>     entered into a new five year agreement whereby the Company receives 65% of
>     the net wins, which is defined as total revenues less awards paid and taxes
>     withheld from award winners, and incurs 100% of the operating costs. The
>     agreement expires in March 2008;
>   Managing operations at three skill game
>     locations in Mexico in which the Company has an equity interest. During
>     2001, the Mexican government closed the skill game facilities in Matamoros,
>     Nuevo Laredo and Reynosa, Mexico in which the Company had an equity
>     interest, alleging the operations are in violation of the law. The Company
>     has filed a $100 million claim under section 11 of the North American Free
>     Trade Agreement ("NAFTA") subsequent to exhausting all other avenues for an
>     equitable settlement with the Mexican government;



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> Participating in an internet gaming
>     operation, on a net revenue share basis. In June 2001, the Company sold its
>     interest in the internet gaming operation;
>   Jointly managing a gaming operation in
>     Nicaragua with Hopewell Limited, S.A. ("Hopewell"). In March 2003, the
>     Company entered into an agreement to merge the Company's gaming operations
>     in Nicaragua with the gaming operations of Hopewell. The Company now owns a
>     20.54% equity interest in the merged entity;
>   Managing a gaming operation in Costa Rica, of
>     which the Company retained a 50% interest in October 2003; and
>   Managing a casino in Venezuela, which opened
>     in August 2001, in which the Company has a 29% equity interest.
>   The Company actively evaluates new
>     opportunities presented or identified from time to time in the gaming
>     industry. The relative importance of each business is based on the revenues
>     generated from each segment.



> 2.Major Revenue Sources:



> The following table outlines the consolidated
>   revenues of the Company by category for the fiscal years
>   ended December 31, 2003, 2002 and 2001:



Revenues by Category
      Year Ended
      December 31,
      2003
      Year Ended
      December 31,
      2002
      Year Ended
      December 31,
      2001Continuing operations:Revenue sharing revenues:
      $                     
      151,000
      $                  
      1,088,000
      $                  
      1,239,000Casino operations:
      21,635,000
      17,431,000
      15,181,000Total:
      $                
      21,786,000
      $                
      18,519,000
      $                
      16,420,000






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> The following table outlines the revenues of
>   the Company by subsidiary for the fiscal years ended
>   December 31, 2003, 2002 and 2001 for each operating subsidiary.



Revenues by
      Subsidiary
      Year Ended
      December 31,
      2003
      Year Ended
      December 31,
      2002
      Year Ended
      December 31,
      2001Continuing operations:Thunderbird
      Greeley Inc. (Thunderbird Greeley)
      $                    
      0
      $            
      12,000
      $          
      109,000International
      Thunderbird Gaming (Panama) Corporation
      18,003,000
      14,717,000
      13,253,000Thunderbird de Guatemala, S.A. & Other
      3,326,000
      1,762,000
      1,645,000Fiestacasinos.com
      ---
      ---
      45,000Thunderbird de
      Nicaragua S.A.
      266,000
      2,028,000
      1,368,000Thunderbird de Costa Rica, S.A.
      191,000
      ---
      ---Total:
      $     21,786,000
      $    18,519,000
      $     16,420,000




> The following is a discussion of each of the
>   Company's major operating subsidiaries.
>   
>   Thunderbird Greeley Inc.
>   
>   
>   Thunderbird Greeley commenced operations as a
>   partnership on November 22, 1988 under the name of F&G Partnership. On January
>   14, 1994, the business was incorporated under the laws of the State of
>   Colorado under the name Ram Star, Inc. Its operations consisted of the
>   assembly and sale of button control VGTs predominantly to the amusement
>   industry. Sales to the gambling industry commenced in 1993. The Company
>   acquired 51% of Ram Star effective December 31, 1994, and the remaining 49% of
>   Ram Star was aquired effective January 1, 1995. Ram Star, Inc. changed its
>   name to Thunderbird Greeley Inc. on June 21, 1996.
>   
>   In 1998, as part of its effort to cut costs,
>   the Company assessed the costs involved in assembling its gaming machines and
>   determined that the costs of assembling "in-house" exceeded the costs to
>   outsource the assembly. Prior to 1998, a significant portion of these gaming
>   machines were installed into Native casinos in California.
>   
>   As of January 1, 2000, International
>   Thunderbird Gaming SRL assigned Thunderbird Greeley its rights in the revenue
>   share contract with the Table Mountain Tribe. Thunderbird Greeley continued to
>   collect revenues under this contract until first quarter 2001.
>   
>   In August 2001 Thunderbird Greeley entered into
>   a revenue share agreement with EDM-Reynosa.



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> The following is a breakdown of Thunderbird
>   Greeley's revenues:



Revenues of Thunderbird Greeley
      Year Ended
      December 31, 2003
      Year Ended
      December 31, 2002
      Year Ended
      December 31, 2001Revenue sharing revenue (continuing
      operations):
      $                              
      0
      $                    
      12,000
      $                  
      109,000




> International Thunderbird Gaming (Panama)
>   Corporation



> In January 1998 the Company's Panamanian subsidiary,
>   International Thunderbird Gaming (Panama) Corporation ("Thunderbird Panama"),
>   which was incorporated on November 25, 1996 under the laws of the Republic of
>   Panama, was awarded a renewable 20-year concession to operate casinos in the
>   Republic of Panama.
>   
>   The Company's bid of US$3.55 million was the winning bid for
>   the Group "A" package of five casinos in Panama and was therefore awarded this
>   concession by the Government of the Republic of Panama to operate these
>   casinos. Fifty percent of the bid price was advanced to the Company in the
>   form of an arm's length Panamanian third-party loan that was converted to a
>   50% equity interest in the Panamanian subsidiary.
>   
>   During 1998, the Company developed and opened four
>   properties in the Republic of Panama. On August 23, 1998 the El Soloy Hotel
>   Casino was opened. It is located in Panama City. On September 7, 1998 the El
>   Panama Hotel Casino was opened in Panama City. On October 18, 1998 the
>   Washington Hotel Casino was opened in Colon, Panama. On December 13, 1998 the
>   Nacional Hotel Casino was opened in David, Panama.
>   
>   The existing operations in Panama expanded in 1999 with the
>   four casinos expanding their cumulative area from 1,860 to 2,865 square
>   meters, increasing the number of positions at table games from 295 to 339 and
>   increasing the number of slot and video lottery terminals ("VLT's") from 424
>   to 537. Net win per machine in Panama has remained constant despite the
>   significant increase in the number of machines. The Company has also developed
>   of a VIP lounge in the El Panama property in Panama City.
>   
>   On December 1, 2000 the Company opened a fifth casino on the
>   Island of Contadora off the coast of Panama within the Contadora Hotel. During
>   2001, due to a lack of business the Company closed this casino.
>   
>   The Guayacanes Casino opened in August 2002 and Decameron
>   initiated operations in April 2003.





-14-

---

> The following table summarizes the size and
>   number of gaming positions currently available at each casino:



El Panama Casino
      Soloy
      Casino
      Washington Casino
      Nacional Casino
      Guayacanes
      Casino
      Decameron
      CasinoTable games:Black Jack
      70
      28
      28
      28
      14
      21Roulette
      18
      6
      12
      12
      6
      12Baccarat
      32
      ---
      9
      7
      14
      14Craps
      16
      ---
      ---
      ---
      ---
      ---Fiesta Poker
      21
      7
      14
      14
      ---
      ---Total table positions
      157
      41
      63
      61
      34
      47Slot machines
      320
      193
      97
      119
      64
      50Square meters
      2,100
      325
      710
      630
      230
      682




> Marketing and Competition



> Although the six casinos in Panama are located
>   in large hotels and do benefit from some tourist traffic, the overall customer
>   base is primarily made up of the local population. Marketing for the most part
>   focuses on this local population and utilizes newspapers, local radio and
>   television, billboards, direct mail and special events (tournaments and
>   give-a-ways) to attract customers.
>   
>   Including Thunderbird Panama, there are five
>   major gaming companies in Panama. Crown Casinos operates three casinos in
>   Panama City, which in aggregate consist of approximately 50 table games and
>   300 slot machines. Gaming and Services Corporation operates approximately 14
>   slot parlors throughout Panama City. Lucky Games operates several slot
>   parlors, which in aggregate, consist of approximately 400 to 500 slot
>   machines. Equus Gaming Corporation operates a racetrack.
>   
>   The Company's 50% interest in the revenues of
>   Panama is as follows:



Revenues of
      Thunderbird Panama
      Year Ended December 31, 2003
      Year Ended December 31, 2002
      Year Ended December 31, 2001Casino Operations:
      $                 
      18,003,000
      $                        
      14,717,000
      $                 
      13,253,000




-15-

---

> Thunderbird de Guatemala, S.A. & Other



In September of 1997, the Company entered into
  an agreement with Public Gaming Research Institute, Inc. ("PGR") and its
  wholly owned subsidiary, Institute for the Lotteries of Latin America and the
  Caribbean ("ILAC") to supply and manage up to 2,000 gaming machines for gaming
  facilities in Central America. PGR, through ILAC, has been issued a license to
  operate gaming establishments, and PGR selected the Company to supply machines
  under a revenue sharing agreement for a term of five years. Operations
  commenced in February 1998. This operation has successfully defended against
  regulatory and legal action initiated by the federal government in Guatemala.
  Final appeals were heard during 2000 and the Company enjoys regulatory
  tranquility in Guatemala.



The Company completed arbitration proceeding
  against its partner ILAC and was awarded $161,000. In addition, a new contract
  with ILAC was entered into for 7 years beginning March 15, 2003. The Company
  will be entitled to 65% of revenue and will be responsible for 100% of the
  operating expenses while ILAC and the Pediatric Foundation share the remaining
  35% of the revenues.



Marketing and Competition



Operations commenced on February 4, 1998 at the
  Camino Real Hotel, Guatemala City's premier hotel. The facility is 700 square
  meters and houses 279 video gaming machines. As in Panama, Thunderbird
  Guatemala's customer base is predominantly made up of the local population.
  The Company engages in a relatively modest marketing effort. This facility is
  the only government sanctioned video lottery operation in the country. The
  only other gaming operation is one large bingo parlor.



Thunderbird de Guatemala's revenues are as
  follows:



Revenues of
      Thunderbird de Guatemala & Other
      Year Ended
      December 31, 2003
      Year Ended
      December 31, 2002
      Year Ended
      December 31, 2001Revenue Sharing revenues:
      $            
      151,000
      $           
      1,076,000
      $           
      1,130,000Casino Operations:
      3,044,000
      686,000
      515,000Thunderbird de Guatemala
      3,195,000
      1,762,000
      1,645,000Other:
      131,000
      ---
      ---Total:
      $         
      3,326,000
      $          
      1,762,000
      $         
      1,645,000




-16-

---

> Thunderbird De Nicaragua merged into Buenas
>   Esperanza Limitada.



During 2000, the Company, through its
  subsidiary Thunderbird De Nicaragua, leased space under a five-year lease,
  with an option for another five years in the Hotel Intercontinental, Managua,
  Nicaragua, and commenced demolition and renovation. The casino opened in
  February 2001 with 77 table positions and 37 machines in operation. At the end
  of December 31, 2002, the Company owned a direct 74% interest in the
  subsidiary and an additional 5% interest through Thunderbird Panama, for a
  combined ownership interest of 79%. In March 2003, the Company merged its
  operation with Hopewell Ltd's Pharaoh's Casino and now owns a 21% share in the
  merged operation. For the ten (10) months ended December 31, 2003, the merged
  operations generated gross revenues of approximately $6.4 million.



Revenues of
      Thunderbird De Nicaragua
      Year Ended December 31,2003
      Year Ended December 31, 2002
      Year Ended December 31, 2001Casino Operations:
      $           
      266,000*
      $          
      2,028,000
      $          
      1,368,000* Revenues for the two (2) months ended February 28,
      2003




> Thunderbird de Costa Rica S.A.

The Company succeeded in its legal challenge to
  collect its $677,000 account receivables stemming from past activity. The
  Company entered into a 50/50 partnership with local investors and it obtained
  a lease and license and has begun to operate a casino at the Presidente Hotel
  in downtown San Jose. The Company is advancing its development efforts in
  Costa Rica. The Fiesta Casino at the Presidente Hotel now has 113 gaming
  machines and 34 table positions. In addition, the Company and its local 50%
  Costa Rica partner recently signed an agreement with a multi-national hotel
  owner-operator to build a casino near the San Jose International Airport. The
  development rights include the right to own and operate a
  casino/entertainment/restaurant property. The hotel owner will secure all
  appropriate construction and operating permits such as the casino license,
  food and alcohol beverage license, and approval of zoning for the construction
  and operation. The Company will undertake to construct the building and
  improvements for a Fiesta casino/entertainment center and the "shell/box" for
  a Denny's restaurant. The project cost is estimated at $5.3 million, which
  will result in the addition of 250 gaming machines and 84 new gaming
  positions. Costa Rica has a population of 3.9 million, a GDP of $32 billion
  and a per capita GDP of $8,300.



|Revenues of Thunderbird de Costa Rica | Year
    Ended December 31,2003 | Year
    Ended December 31, 2002 | Year
    Ended December 31, 2001
|------------------------------------- | ------------------------------- | -------------------------------- | --------------------------------
|                                      |                                 |                                  |                                 
|Casino Operations:                    | $             
    191,000      | ---                              | ---                             
|                                      |                                 |                                  |                                 

-17-

---

> 3.The Company's gaming business has no "true" seasonality. The elements that
>   most affect our revenues include local economic and political climates.



> 4.Not applicable.



> 5.



> 6.



> Panama



GuatemalaIn
  September 1997, the Company, through its subsidiary, Thunderbird de Guatemala,
  entered into an agreement with Public Gaming Research Institute, Inc. ("PGR"),
  and its wholly owned subsidiary, Institute for the Lotteries of Latin America
  and the Caribbean ("ILAC"), to supply and manage gaming machines for gaming
  facilities in Central America. PGR, through ILAC, has been issued a license to
  operate lottery establishments and PGR selected the Company to supply machines
  under a revenue sharing agreement for a term of five years. Operations
  commenced in February 1998 at the Camino Real Hotel in Guatemala City. In
  2003, the Company entered into a seven-year agreement with ILAC to continue
  operations of its video lottery terminals at the Camino Real Hotel in
  Guatemala City.



NicaraguaDuring
  2000, the Company, though its subsidiary Thunderbird de Nicaragua, leased
  space under a five-year lease, with an option for another five years in the
  Hotel InterContinental, Managua, Nicaragua, and commenced demolition and
  renovation. The casino opened in February 2001 with 77 table positions and 37
  machines in operation. At the end of December 31, 2002, the Company owned a
  direct 74% interest in the subsidiary and an additional 5% interest through
  Thunderbird Panama, for a combined ownership interest of 79%. The Company
  through Thunderbird de Nicaragua operates a casino in the Republic of
  Nicaragua under the name Fiesta Casinos. In March 2003, the Company merged its
  operation with Hopewell Ltd's Pharaoh's Casino and now owns a 20.54% share in
  the merged operation.

-18-

---

> Venezuela



Costa RicaThe
  Company through its 50% ownership of Thunderbird De Costa Rica operates the
  Fiesta Casino at the Presidente Hotel in San Jose, Costa Rica. The facility
  commenced operations under new ownership on October 1, 2003 with approximately
  34 table positions and 113 slot machines. The Company negotiated a five year
  lease term for the facility, beginning October 1, 2003 to September 30, 2008.



> 7.



> 8.

-19-

---

4C. Organizational Structure



The Company is a holding company that provides
financial and managerial resources to its operating subsidiaries. It carries out
its business through its operating subsidiaries. The Company owns and manages
the following wholly or partially owned subsidiaries (the "Subsidiaries"):



Name of Subsidiary
      Percentage of Voting Shares Beneficially Owned or
      Controlled by the Company
      Date of Incorporation
      Jurisdiction of IncorporationThunderbird Carolina Inc.
      100%
      Dec. 22, 1989
      North CarolinaThunderbird Gaming Inc.
      100%
      March 30, 1992
      British
      ColumbiaThunderbird Greeley, Inc.
      100%
      Jan. 14, 1994
      ColoradoInternational Thunderbird
      Gaming SRL
      100%
      March 7, 1996
      BarbadosThunderbird Development, Inc.
      100%
      March 19, 1996
      CaliforniaInternational Thunderbird
      Gaming (Panama) Corp
      50%
      Nov. 25, 1996
      PanamaThunderbird (Barbados) Inc.
      100%
      Jan. 27, 1997
      BarbadosInternational Thunderbird
      Gaming - Nova Scotia
      100%
      June 23, 1997
      Nova ScotiaThunderwatch Partnership
      100%
      July 2, 1997
      British
      ColumbiaCamino Real (BVI) Investments
      Ltd.
      100%
      August 29, 1997
      British Virgin
      IslandsInternational Thunderbird (BVI)
      Ltd.
      100%
      August 29, 1997
      British Virgin
      IslandsInternational Thunderbird
      Brazil (BVI) Ltd.
      100%
      Oct. 2, 1997
      British Virgin
      IslandsThunderbird de Guatemala, S.A.
      100%
      Oct. 15, 1997
      GuatemalaThunderwatch (Barbados) Inc.
      100%
      Oct. 16, 1997
      BarbadosThunderbird do Brazil, S.A.
      100%
      Oct. 30, 1997
      BrazilThunderbird Panama (BVI) I
      Ltd.
      79%
      April 22, 1998
      British Virgin
      IslandsThunderbird Panama (BVI) II
      Ltd.
      100%
      April 22, 1998
      British Virgin
      IslandsJuegos de Mexico Inc.
      100%
      June 23, 2000
      British Virgin
      IslandsSkill Game Equipment (BVI)
      Limited
      100%
      July 14, 2000
      British Virgin
      IslandsServicios de Destreza S.A.
      100%
      July 31, 2000
      MexicoCasino Pajaro Trueno S.A.
      50%
      August 9, 2000
      Costa RicaSouth American Entertainment
      Investment
      100%
      Jan. 11, 2000
      British Virgin
      IslandsGFN Finance Corporation
      50%
      April 4, 2001
      British Virgin
      IslandsThunderbird Entertainment S.A.
      100%
      July 3, 2003
      PanamaImmobiliaria Bilbao
      50%
      Jan. 8, 2001
      PanamaThunderbird de Costa Rica S.A.
      50%
      Oct. 8, 2003
      Costa RicaThunderbird Chile S.A.
      50%
      June 19, 2003
      ChileInmobiliaria Piedra Dorada S.A.
      50%
      Oct. 27, 2000
      Costa Rica




-20-

---

All of the subsidiaries were held directly by
the Company or indirectly through another subsidiary. None of the subsidiaries
have any non-voting shares outstanding.



The Company has investments in the following
entities:



Name of Entity
      Percentage of Voting Shares Owned by the Company
      Date of Incorporation
      Jurisdiction of IncorporationEntertainmens de Mexico -Nuevo Laredo-SRL
      33.3%
      Nov. 7, 2000
      MexicoEntertainmens de
      Mexico-Matamoros- SRL
      37.18%
      Dec. 15, 2000
      MexicoEntertainmens de
      Mexico-Reynosa SRL
      40%
      June 5, 2001
      MexicoFiesta Casino
      Guayana C.A.
      29.36%
      April 2000
      VenezuelaBuena Esperenza
      Limitada S.A.
      20.54%
      Nov. 25, 1999
      Nicaragua




4D Property, Plant and Equipment



The Company currently occupies 12155 Dearborn
Place, Poway, California. The property currently provides office space for
management, administration, investor relations and accounting employees.



Thunderbird Guatemala leases space for its office
located at Murano Center, 14th St 3-51 Zone 10, Guatemala.



The Thunderbird-Panama office is located at Calle
Alberto Navarro, El Cangrejo, Apartado 87-0558 Zona 7, Panama City, Panama.



Panama Leases:
      Soloy Hotel PropertyEl Panama Hotel PropertyWashington Hotel PropertyNacional Hotel PropertyGuayacanes Hotel PropertyDecameron Hotel Property






The Nicaragua office is located at Hotel
Intercontinental Managua, Octava Calle Suroeste No. 101, and P.O. Box 3278,
Managua, Nicaragua.



Nicaragua Lease:
      Hotel Intercontinental Managua Property




Buena Esperanza Limitada leases space for its
Fiesta Casino under a five-year lease, with an option for another five years in
the Hotel InterContinental, Managua, Nicaragua. The operation has 14 black jack
positions, 35 Fiesta poker positions, 12 roulette positions and 45 slot machines
in the 300 square meter facility.

-21-

---

The Venezuela office is located at Avenida las
Americas, Torre Loreto, P.H., Puerto Ordaz, Estado Bolivar, Venezuela.



The Thunderbird Costa Rica office is located at
100 Meters West and 400 Meters North

of ICE Sabana, P.O. Box 440-1100, San Jose, Costa
Rica.



Costa Rica Lease:
      El Presidente Hotel Property




In the aggregate, the 100% financial commitment
for the office and casino space leases for the twelve months ended December 31,
2003 is $3.9 million, of which $1.9 million is included in the consolidated
results of the Company.



Item 5 - Operating and Financial Review and
Prospects



The application of U.S. GAAP differs from results
applied under Canadian GAAP as set forth in Note 23 to the Consolidated
Financial Statements of the Company.



Critical accounting policies:



The preparation of financial statements in
conformity with generally accepted accounting principles requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. As described below, significant estimates are used
in determining the application of the going concern concept, allowance for
doubtful accounts and the useful lives of capital assets. We evaluate our
estimates on an ongoing basis, including those related to bad debt, investments,
capital assets, income taxes and contingencies and litigation and other
contingencies. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.



We believe the following critical accounting
policies affect our more significant judgments and estimates used in the
preparation of our financial statements:



Amounts receivable:



2003
      2002Costs recoverable from third party
      participation in Guatemalan operation (a)
      -
      161Apuestas Continentales, S.A. (b)
      408
      408The Fantasy Group (c)
      217
      -Fiesta Juegos de Costa Rica (d)
      -
      269Hopland Band of Pomo Indians (e)
      388
      625




-22-

---

(a) Costs recoverable from third party
participant in Guatemalan operation:



The Company was eligible to recover leasehold
improvement costs incurred for the Guatemalan operations from a third party
participant in the Guatemalan revenue and net profit sharing agreement ("Profit
Share Agreement"). The amounts were collectible on a monthly basis from the
third party's share of revenue and net profits from the operations. The costs
recoverable were non-interest bearing. During fiscal 2000, the third party
ceased reimbursing these costs and was disputing eligibility for reimbursement
of certain of these costs under the agreement. An arbitration proceeding
concerning this dispute was completed in March 2002. At December 31, 2002, the
amounts were written down by $369,000 to the amount awarded by the arbitrator of
$161,000, which was collected in 2003. In addition to the Company's claim for
reimbursement of the leasehold improvement costs, the Company claimed in the
proceeding that the expiration of the Profit Share Agreement, entered into in
October 1997, should be extended past the five year contract term of October
2002 as operations did not commence until February 1998. The arbitrator in his
ruling decided in favor of the Company with regard to the extension.



(b) Apuestas Continentales, S.A.:



The Company has a promissory note dated March 1,
2000 for the sale of gaming machines to Apuestas Continentales, S.A. ("Apuestas").
The note is non-interest bearing, with 24 monthly payments of $22,000 beginning
April 1, 2001 and maturing on March 1, 2003. Apuestas has not made any payments
as required under the terms of the note during fiscal 2002 or 2001. The Company
entered into discussions with Apuestas as payments have not been received as
required under the terms of the note. In the absence of reaching settlement with
Apuestas, the Company filed a lawsuit in Costa Rica and was successful in
embargoing 300 gaming machines to secure the repayment of the note, plus costs.



(c) The Fantasy Group, S.A.



The Company has an unsecured promissory note
dated June 4, 2003, with 48 monthly payments of principal and interest of
$5,200, beginning March 2004. The president and principal of The Fantasy Group,
S.A., is coordinating the Company's efforts to establish its operations in
Chile.



(d) Fiesta Juegos de Costa Rica S.A.:



On August 23, 2001, the Company sold its gaming
subsidiary, Fiesta Juegos de Costa Rica S.A. ("Fiesta Juegos"), to a third party
for proceeds consisting of a note receivable for $269,000, resulting in a gain
on sale of $203,000 which has been deferred at December 31, 2001. The gain will
be recognized in income as the note receivable is collected. The note receivable
bears interest at 12%, with monthly payments consisting of 25% of the net income
from the operations of Fiesta Juegos, beginning the earlier of 45 days after
Fiesta Juegos achieves positive cash flows from operations or November 1, 2001.
In 2002, the Company entered into discussions with the purchaser of Fiesta
Juegos as payments have not been received as required under the terms of the
note. In the absence of settlement, the Company filed a lawsuit in Costa Rica.
During 2003, the Company negotiated a 50% interest in the gaming operation in
Costa Rica as part of its recovery. This interest is held in Thunderbird de
Costa Rica. In addition to its interest, the Company received approximately
$60,000 in cash towards the note.

-23-

---

(e) Hopland Band of Pomo Indians



The Company previously entered into various
agreements for the financing, design and construction of a gaming facility on
the Hopland Indian Reservation ("Hopland") which included a one-half interest in
a Gaming Hardware Lease Agreement (the "Lease"). Pursuant to a settlement
agreement dated May 31, 2002, Hopland agreed to pay the Company $750,000 in
satisfaction of all obligations owing under the Lease and accordingly, the
Company recorded a recovery of $750,000. The amount receivable from Hopland
bears interest at 12% per annum and is repayable in monthly instalments of
$24,900.



Going Concern:



These consolidated financial statements have been
prepared on a going concern basis in accordance with Canadian generally accepted
accounting principles, which assumes that the Company will continue in operation
for the foreseeable future and be able to realize its assets and discharge its
liabilities and commitments in the normal course of business. Up until December
31, 2001 the Company incurred significant losses, and had a working capital
deficiency, and also had to seek a waiver from its primary lender relating to
covenant violations on certain borrowings as at December 31, 2002.



Since July 2001, the Company has been working to
develop future profitable operations and improve the working capital position of
the Company. During the year ended December 31, 2001, the Company refocused its
efforts toward the operation and profitability of current facilities as opposed
to the development of new facilities. As a result, the Company reduced its
development and support staff and related expenses. In addition, the Company
reduced its staff levels in the Republic of Panama and refinanced a portion of
its debt. As a result of these efforts, the Company has now reached profitable
operations, has significantly reduced its working capital deficiency, and is
currently not in violation of any debt covenants.



The ability of the Company to continue as a going
concern and to realize the carrying value of its assets and discharge its
liabilities when they become due is dependent on the success of its core
operations. Management believes that the core operations in Panama and
Guatemala, in conjunction with the expected increase in profits from the
Company's investments in Nicaragua and Costa Rica, which commenced operations in
the current year, has mitigated the adverse conditions and events which created
the current $815,000 (2002 - $2.8 million) working capital deficiency.



These financial statements do not reflect
adjustments that would be necessary if the Company is unable to continue as a
going concern. If the going concern assumption is not appropriate for these
financial statements, then adjustments would be necessary to the carrying value
of assets and liabilities, the reported net income, and the balance sheet
classifications used.

-24-

---

Capital assets:



At December 31, 2003, the Company has $7,426,000
(2002 - $7,709,000 ) in carrying value of fixed and intangible assets.
Intangible assets primarily relate to the gaming license for Panama. Management
of the Company periodically assesses the amortization periods and potential for
impairment in the carrying value of theses assets after consideration of
expected future use and utilization, projected cash flows and other indicators
of value. When the fair value of the specific asset is less than the carrying
value, an impairment charge is recorded for the differences. In the future,
events or conditions could arise that are outside of the Company's control,
including changes in economic environments, competition, customer demands and
regulations which could impact such assets fair value. In addition, changes in
management's business objectives or plans could also result in an impairment
charge.



Investment in and advances to equity investees:



At December 31, 2003, the Company has $1,665,000
(2002 - $430,000) in carrying value of equity investments in Nicaragua and
Venezuela (2002 - Venezuela only). The investments in and advances to equity investees are accounted for using the equity method. Under the equity method,
the original cost of the investee is adjusted for the Company's share of
post-acquisition earnings or losses and is reduced for dividends received.
Management of the Company periodically assesses the potential for impairment in
the carrying value of theses assets after consideration of expected future
profitability, projected cash flows and other indicators of value. When the fair
value of the specific asset is less than the carrying value, an impairment
charge is recorded for the differences. In the future, events or conditions
could arise that are outside of the Company's control, including changes in
economic environments, competition, customer demands and regulations which could
impact such assets fair value. In addition, changes in management's business
objectives or plans could also result in an impairment charge.



5A. Operating Results:







The tables set out below set forth selected
consolidated financial data. Such data is derived from the consolidated
financial statements of the Company, which have been audited by Davidson &
Company, Chartered Accountants.



The selected financial data should be read in
conjunction with the Consolidated Financial Statements of the Company and the
Notes thereto. Additional information relating to the Company, including the
Company's AIF, is on SEDAR at www.sedar.com.

The Consolidated Financial Statements of the
Company have been prepared in accordance with accounting principles generally
accepted in Canada ("Canadian GAAP"). (All in US $000's except earnings per
share).

-25-

---



Audited (1)
      Fiscal Year ended December 31For the Period:
      2003
      2002
      2001Revenue
      21,786
      18,519
      16,420Net income (loss)
      3,053
      324
      (3,080)Earnings (loss)
      per share - basic
      0.13
      .01
      (0.13)Earnings (loss)
      per share - diluted
      0.11
      .01
      (0.13)End of period
      working capital (deficiency)
      (815)
      (2,806)
      (3,081)Total assets
      16,998
      14,553
      13,799Long term debt
      (2)
      4,985
      4,232
      4,296Total liabilities
      12,201
      13,066
      12,766Share capital (3)
      21,266
      21,085
      21,089Foreign exchange
      adjustment
      (415)
      (277)
      (411)Deficit
      (16,268)
      (19,321)
      (19,645)Notes:
      (1)Under Canadian GAAP.(2)Excludes the current portion of the
      long-term debt.(3)The Company has authorized issuance of two
      classes of shares (preferred and common) but has only one class of shares
      issued and outstanding, being common shares.


No dividends were paid during the periods
reported above.



2003
      2002Q4
      Q3
      Q2
      Q1
      Q4
      Q3
      Q2
      Q1Revenue
      5,989
      5,435
      5,231
      5,131
      5,306
      4,252
      4,511
      4,450Income (loss) from continuing operations
      989
      704
      684
      676
      450
      (63)
      (154)
      50Net income (loss)
      989
      704
      684
      676
      469
      (74)
      (121)
      50Earnings (loss) per share - basic
      0.04
      0.03
      0.03
      0.03
      0.02
      Nil
      (0.01)
      NilEarnings (loss) per share - diluted
      0.03
      0.02
      0.03
      0.03
      0.02
      Nil
      (0.01)
      Nil




Comparison of Results of Operations - Fiscal
Year ended December 31, 2003 Compared to Fiscal Year Ended December 31, 2002.



Revenues for the year 2003 from continuing
operations were $21.8 million, an increase of 18% over 2002 revenues from
continuing operations of $18.5 million. In March 2003, the Company merged its
majority owned Nicaragua entity with a local competitor and obtained a net
20.54% interest in the merged operations. The Company now records the results of
the Nicaragua operations using the equity method, recording only the Company's
share of the net earnings in its Statement of Operations under "equity gain in
equity investees." During the year 2002, the Company fully consolidated the
assets, liabilities, revenues and expenses of its Nicaragua entity. Therefore,
the Company recorded 2 months of Nicaragua revenues in 2003, prior to the
merger, compared to 12 months in 2002. Also in March 2003, the Company obtained
a new agreement related to its operations in Guatemala. The original agreement
allowed for a revenue share, where direct operating expenses were deducted from
revenue prior to distribution to the participants. The current treatment allows
for revenues to be distributed without deduction, as the Company assumed
responsibility for 100% of all operating expenses, pursuant to the terms of the
new agreement. The new agreement has a favorable impact with the way the Company
reports its revenues in Guatemala and a negative impact with regards to
operating costs.

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Net income for the year was $3.1 million compared
with $0.3 million in 2002. General and Administrative expenses increased 5% from
$6.7 million in 2002 to $7.0 million in 2003. The overall net increase in G&A
expenses reflects the additional costs associated with new operations in Costa
Rica, the additional expenses from the Fiesta Cafe in Guatemala and expansion in
Panama, as well as elevated rent expense resulting from revenue participation in
certain of the Panama leases. The contrary effects of the Nicaragua and
Guatemala events of March 2003, explained above, offset some of the impact of
the increased expenses associated with the new operations and expansion. The
company doubled its pre-opening and development expenses in 2003 compared to
2002. The costs in 2003 are related primarily to the new casino in the Hotel Decamaron in Panama, of which the Company's 50% interest is $177 thousand, and
the Company's 50% interests in its Chile development, which was $130 thousand at
the end of 2003. Management continues to pursue opportunities that will
strengthen the financial condition of the Company.



The Company recorded a one time gain of $830
thousand in 2003 related to its investment in Nicaragua and the March 2003
merger, which is mentioned above. There is also in the 2003 results, the $311
thousand net impact of the Company's settlement with one of the California
Indian tribes. The settlement was for $430 thousand, all of which has been
received, before legal and consulting fees. The Company has no additional
pending issues with any California Indian tribes.



The Company's equity gain of $116 thousand for
2003 includes a $302 thousand gain from its Nicaragua investment. Of this
amount, $63 thousand belongs to minority interests. The Company also advanced
and wrote down the $186 thousand it expended as part of its contribution to the
NAFTA claim against the Mexico government. The Company projects an additional
$76 thousand will be advanced and expensed in 2004, as the trial before the
arbitrators took place at the end of April 2004.



In 2003, the Company achieved EBITDA (Earnings
Before Interest, Taxes, Depreciation and Amortization) of $6.9 million or $0.29
per share, compared to $3.9 million or $0.17 per share in 2002. The growth in
EBITDA is a result primarily of increased operating profits and the realization
of one time gains. EBITDA before the impact of one time gains was $5.8 million
or $0.24 per share in 2003 compared to $4.1 million or $0.17 per share in 2002.
Earnings per share from continuing operations was $0.13 ($0.11 diluted) in 2003
compared to $0.01 in 2002.







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Comparison of Results of Operations - Fiscal
Year ended December 31, 2002 Compared to Fiscal Year Ended December 31, 2001



Revenues for the year 2002 from continuing
operations were $18.5 million, an increase of 13% over 2001 revenues from
continuing operations of $16.4 million.



Net gain for the year was $324,000 compared with
a loss of $3.1 million in 2001. General and Administrative expenses decreased 6%
from $7.4 million in 2001 to $7.0 million in 2002. The decrease in G&A expenses
reflects cost savings from reduced payroll, staff, audit fees and corporate
rent.



In 2002, the Company incurred a total of $745,000
in income taxes compared with $791,000 in 2001. The increase in the expense for
depreciation is directly related to the increased capital assets associated with
the expansion in Panama.



In 2002, the Company achieved EBITDA before
discontinued operations (Earnings Before Interest, Taxes, Depreciation and
Amortization) of $3.9 million or $0.17 per share, compared to $1.3 million or
$0.05 per share in 2001. The growth in EBITDA is a result primarily of increased
revenues. Earnings per share from continuing operations was $0.01 in 2002
compared to a loss of $0.08 in 2001.



Cash provided by continuing operations increased
to $2.8 million for the year ended December 31, 2002 from $2.1 million for the
year ended December 31, 2001. The Company's cash flow from operations consists
primarily of cash flows from its joint venture interest in the Panama Fiesta
Casinos and Guatemalan revenue sharing arrangements. Cash and cash equivalents
decreased to $1.2 million at December 31, 2002 from $1.5 million at December 31,
2001. The working capital deficiency of $3.1 million at the end of 2001 has been
reduced to $2.8 million at the end of 2002. The decrease in the deficiency is
due, in part, by renegotiating debt, moving portions to long term, and
collecting certain receivables which were previously classified as long term.
Total long-term debt and capital lease obligations at December 31, 2001, were
$4.3 million and has decreased to $4.2 million at December 31, 2002. The reason
for such an insignificant change is due to additional debt incurred in Panama to
finance that expansion. During the year ended December 31, 2002, the Company
renegotiated the terms of two of its loans in which it was previously in arrears
and/or in default, such that at December 31, 2002, the Company is no longer in
arrears in payments or in default in respect of any loans.

5B. Liquidity and Capital Resources.

Cash provided by continuing operations increased
to $3.9 million for the year ended December 31, 2003 from $2.8 million for the
year ended December 31, 2002. The Company's cash flow from operations consists
primarily of cash flows from its joint venture interest in the Panama Fiesta
Casinos and Guatemalan revenue sharing arrangements. Cash and cash equivalents
increased to $2.2 million at December 31, 2003 from $1.2 million at December 31,
2002. The Company used $1.9 million for expenditures on capital assets in 2003.
These purchases included a corporate office building in Panama, as well as costs
for expansion in Panama, such as leasehold improvements on new properties, and
new gaming machines for Panama, Guatemala and Costa Rica. The working capital
deficiency of $2.8 million at the end of 2002 has been reduced to $0.8 million
at the end of 2003. The substantial decrease in the deficiency is due primarily
to increase profitability and improved cash flow of the consolidated operations.
Total long-term debt and capital lease obligations at December 31, 2002, were
$4.2 million and has increased to $5.0 million at December 31, 2003. The reason
for the increase is the assumption of an additional $800 thousand loan to fund
certain development activity.

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The Company raised $181 thousand during the year
ended December 31, 2003 by way of issuance of shares on exercise of options.

The Company anticipates paying its obligations
and working capital deficiency from cash flow generated from operations and
collection of amounts receivable and recoverable. The Company currently does not
plan to raise capital by the issuance of shares in the near future.

The Company intends to fund its development
projects via a combination of commercial bank loans and the funding by private
investors.

As of December 31, 2003, the Company had
outstanding share options exercisable for up to 2,526,984 common shares at
prices ranging from CDN$0.08 to CDN$1.19 per share. If all share options are
exercised, to which no assurance can be given, 2,526,984 common shares would be
issued generating proceeds of CDN$962 thousand.



5C. Research and Development, Patents and
Licenses, etc.



The Company expenses all development costs as
they are incurred. These costs relate to the identification of gaming locations
and development of the locations prior to opening. For the year ended December
31, 2003, the Company expensed $536,000 (2002 - $267,000). For the year ended
December 31, 2001, the Company expensed $1,573,000, including amounts reflected
in the loss from associated companies. For the year ended December 31, 2000 the
Company expensed $1,316,000. Over the past three (3) financial years, the
Company has committed financial resources to developing casino operations in
Mexico, Nicaragua, Costa Rica, Venezuela and Chile.



The Company's business model is now well defined:
diversify operations across a number of different partners, properties and
jurisdictions; and commit the minimum level of financial capital consistent with
maximizing returns. The Company will continue to focus on developing markets to
take advantage of greater market share with lower capital costs. The net worth
of the Company in the past years has been comparatively low and not a factor
allowing financing of growth. Neither has there been any contribution of new
equity from shareholders for several years. This has required that the growth
occur in the context of a high risk and highly leveraged business model.
Management believed and continues to believe dilution through contribution of
new equity does not make sense at current share prices. Consequently, the
Company has been and will continue for some time to be built through high
interest rate, short term loans.







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5D. Trend Information



The Company constantly monitors the competitive
landscape in the various countries in which it operates, as wells as those
countries where potential development is viable. The Company enjoyed a very
profitable operation in 2003 with significant revenue growth. This trend
continues through the first five (5) months of 2004. The significant factors
which might impact operations include the effects of foreign exchange, economic
and political changes in the indigenous countries and new competitors in the
market. At this time, management does not believe that any of these factors
amount to trends, which might have a material impact on the Company's
operations. The Company continues to reduce its working capital deficiency by
extinguishing old debt with the excess cash flow from profitable operations. The
unaudited financial statements as of March 31, 2004, reflect a working capital
deficiency of $492,000, which is an improvement over the 2003 year-end amount of
$815,000 (2002 - $2.8 million).



5E. Off-balance Sheet Arrangements



The Company has no off-balance sheet
arrangements.

5F. Contractual Obligations



As of December 31, 2003 (000's omitted)
      Total
      Less than 1 year
      1 - 3 years
      3 - 5 years
      More than 5 yearsLong-term debt obligations
      5,776
      1,464
      2,509
      1,441
      362Capital lease obligations
      15
      8
      7
      0
      0Operating lease obligations
      4,284
      919
      1,715
      1,650
      0Other long-term liabilities
      885
      219
      137
      120
      409Total
      10,960
      2,610
      4,368
      3,211
      771




In addition to the above, Thunderbird Panama is
committed to pay minimum annual rentals for two of the casinos equal to 9% of
the net win less the income participation payable to the Government of the
Republic of Panama.



Thunderbird Panama is committed to pay the
Government of the Republic of Panama an annual minimum income participation
equal to $4,216,000 in the first year, which increases by 2% per year, or 10% of
Thunderbird Panama's gross income, whichever is higher. This commitment
commenced in August 1998, on the opening of the first casino in the Republic of
Panama and related payments commenced shortly thereafter. Amounts paid under the
agreement by Thunderbird Panama were $4,851,400 in 2003 (2002 - $4,539,868). The
Company recorded its 50% interest in its consolidated financial statements.

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Thunderbird Panama is committed to pay a 2%
profit interest, defined as gross revenue less operating expenses, in the
Panamanian operations to a third party. The Company is committed to pay to a
third party $13,000 each month while operations continue in the Republic of
Panama commencing July 1999, for a maximum of 10 years.

5G. Safe Harbor



Caution:The
information provided herein contains forward-looking statements that include
risks and uncertainties. The factors that could cause actual results to differ
materially from those indicated in such forward-looking statements include
political and economical concerns adversely impacting the Company's ability to
conduct its operations in certain developing countries, market conditions,
foreign exchange exposure, competitive and political intervention and unforeseen
difficulties that could affect revenues and costs.





INTENTIONAL SPACING FOR PRESENTATION
PURPOSES







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Item 6 - Directors, Senior Management and
Employees



6A. Directors and Senior Management



The following is a list of the current directors
and senior officers of the Company, their municipalities of residence, their
current positions with the Company and their principal occupations during the
past five years.



Name and Municipality
      Of Residence
      Principal Occupation for Previous Five YearsJack R. Mitchell
      (1)(2)
      Panama City,
      Panama
      President, Chief
      Executive Officer and Director
      President and Chief Executive Officer of the Company since April 1997;
      Partner, Mitchell & Skola from 1986 to March 1997, a law firm in San
      Diego, California.Albert W. Atallah(2)
      El Cajon, California USA
      General Counsel, Chief Operating Officer and Director
      General Counsel to the Company since July 1997; Private practice in
      California and Michigan from 1981 to present; Certified Tax Specialist;
      LLM Taxation; BBA University of Michigan.Clay Hardin
      Estes Park, Colorado USA
      Vice President-Operations
      Vice President, Operations of the Company since April 1997; President,
      Gaming Resources International, Inc. from October 1995 to March 1997.Booker T. Copeland III
      Vista, California USA
      Chief Financial Officer
      Corporate Secretary
      Corporate Accounting Manager to the Company from 1999 to 2001; Corporate
      Controller from 2001 to 2002; Chief Financial Officer and Corporate
      Secretary since October 2002Jean Duval (1)(2)
      Carnigan, Quebec, Canada
      Director
      Vice-President of XTL Transport in Ontario from 1990 to 2001;
      Vice-President of STCH in Quebec from 2001 to the present; Director since
      June 2002Salomon Guggenheim (1)(2)
      Baech, Switzerland
      Director
      Managing Director with Rabo Investment Management Ltd. in Zurich from 1987
      to Dec. 2001; self-employed since January 2002; Director since June 2002


Notes:
      (1)
      Member of the Company's Audit Committee.(2)
      The directors of the Company received
      $30,500 in 2003 and $10,000 in 2002, as cash compensation for their
      services as directors. Directors are eligible to receive stock options
      pursuant to the Company's stock option plan. See "Principal Holders of
      Securities" for particulars of the shares and stock options held by the
      directors and senior officers.




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6B. Executive Compensation



Set out below are particulars of compensation paid to the
following persons (the "Named Executive Officers"):



1. the Company's Chief Executive Officer;
2. each of the Company's four most highly compensated executive
  officers who were serving as executive officers at the end of the most
  recently completed financial year and whose total salary and bonus exceeded
  $100,000 per year; and
3. any additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as an
  officer of the Company at the end of the most recently completed financial
  year.



As at December 31, 2003, the end of the most recently completed
fiscal year of the Company, the Company had four Named Executive Officers: Jack
R. Mitchell, the President and Chief Executive Officer and a director of the
Company; Clay Hardin, the Vice-President, Operations; Albert W. Atallah, Chief
Operating Officer and General Counsel and a director of the Company; and Booker
T. Copeland III, Chief Financial Officer and Corporate Secretary.



Summary of Compensation



The following table is a summary of compensation
paid to the Named Executive Officers for each of the Company's three most
recently completed fiscal years.





INTENTIONAL SPACING FOR PRESENTATION PURPOSES







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Summary Compensation Table



Annual
      Compensation
      Long Term
      CompensationAwards
      PayoutsName and Principal
      Position
      Fiscal
      Year
      Ending
      Salary (1)
      Bonus (1)
      Other Annual Compen-sation (1)
      (2)
      Securities Under
      Options Granted
      Restricted
      Shares or Restricted Share Units
      LTIP
      Pay-Outs
      All
      Other
      Compen-
      Sation (1)Jack R. Mitchell
      President and CEO and Director
      2003
      2002
      2001
      $    
      225,000
      $    
      225,000
      $    
      225,000
      $    224,000*
      
      Nil
      $       
      17,000
      $    8,000
      $    2,000
      $    7,000
      190,000
      400,000
      35,000
      Nil
      Nil
      Nil
      N/A
      N/A
      N/A
      $        
      16,000
      $   74,000 (3)
      NilAlbert Atallah
      General Counsel and Director
      2003
      2002
      2001
      $    
      150,000
      $    
      150,000
      $    
      150,000
      $       
      22,000
      Nil
      $       
      12,000
      $    6,500
      $    2,000
      $    7,000
      100,000
      50,000
      130,000
      Nil
      Nil
      Nil
      N/A
      N/A
      N/A
      Nil
      $   62,000 (3)
      NilClay Hardin
      Vice-President, Operations
      2003
      2002
      2001
      $    
      150,000
      $    
      150,000
      $    
      150,000
      $       
      40,000
      $       
      45,000
      $       
      10,000
      Nil
      Nil
      Nil
      100,000
      100,000
      15,000
      Nil
      Nil
      Nil
      N/A
      N/A
      N/A
      Nil
      $   17,000 (3)
      NilBooker T. Copeland III, Chief
      Financial Officer and Corporate Secretary
      2003
      2002
      $    
      100,000
      $      
      95,000
      $      
      12,000
      Nil
      Nil
      Nil
      75,000
      100,000
      Nil
      Nil
      N/A
      N/A
      Nil
      $   25,000 (3)


Notes:
      (1)
      These monies were paid or accrued in United
      States dollars.(2)
      These monies were paid as directors' fees.(3)
      On June 4, 2002 the company was informed of
      a "dissident proxy battle" that was planned on being filed by a group of
      shareholders (as disclosed in a Press Release). The dissidents requested
      board and officer resignations and threatened legal action. Resignations
      were offered in order to serve the best interest of the Company. After
      learning more about the difficulties of the foreign operations and that
      management would not support the group of dissidents, the dissidents
      determined not to proceed in removing directors and management. The
      compensation paid to Jack R. Mitchell, Albert W. Atallah,
      Clay Hardin and Booker Copeland was initially paid as severance and
      thereafter retained by these members of management as compensation to
      assure that the Company work out its financial problems and bolster its
      operations.(*)
      This amount includes bonus accruals that
      have not yet been paid.


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6C. Board Practices



Appointment of Directors



The Articles of Continuance of the Company
provide for a minimum of three and a maximum of seven directors. The numbers of
directors proposed to be elected at the Meeting are two.

Pursuant to the amendment to the articles of the
Company (allowing for staggered terms), directors of the Company served for
various one, two and three year terms. Jean Duval is up for election to serve a
one-year term expiring at the 2005 AGM. Albert W. Atallah was elected to a two
year term at the 2003 AGM expiring at the 2005 AGM or until their successors are
elected or appointed. The directors to be elected for a three-year term expiring
at the 2004 AGM are Jack R. Mitchell and Salomon Guggenheim.

The articles of the Company permit the directors
to appoint directors to fill any casual vacancies that may occur on the board.
The articles of the Company also permit the directors to add additional
directors to the board between successive annual general meetings so long as the
number appointed does not exceed more than one-third of the number of directors
appointed at the last annual general meeting. Individuals appointed as directors
to fill casual vacancies on the board or added as additional directors hold
office like any other director until the next annual general meeting at which
time they may be reelected or replaced.



Executive Compensation and Formulation of a
Compensation Committee

The Company formulated in 2002 a compensation
committee comprised of two outside board of directors, Salomon Guggenheim and
Juan Duval for the current year. For the previous years, the Company's Board of
Directors has administered Executive Officer compensation on an ad hoc basis.
The compensation of executive officers consists of a base salary and various
prerequisites, discretionary annual bonuses and participation in the Company's
common share option plan. The compensation of each executive officer is based on
an assessment of the value to the Company of the officer concerned, the standard
of performance during the past year by the officer concerned and the duties
comprising the office.



Audit Committee

Following the 2002 meeting of shareholders, an
Audit Committee consisting of three directors, two of whom were outside and
unrelated directors, was properly constituted. The Audit Committee carries out
the following responsibilities:

> reviewing the Company's audited financial
>     statements; and
>     meeting with the Company's management and
>     auditors for that purpose.

The members of the Audit Committee are identified
under "Election of Directors". To ensure that the Board is able to function
independently from management, the Company appointed an Audit Committee of three
directors. The Company's audit committee is currently comprised of Jean Duval
(independent outside board member), Salomon Guggenheim (independent outside
board member) and Jack R. Mitchell (President, CEO and Director) in compliance
with section 173 (2) of the Act. The Audit Committee is fully apprised of its
responsibilities under guidelines established by the American Institute of
Certified Public Accountants.

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6D. Employees



As at December 31, 2003, the Company, including Thunderbird
Panama in which the Company has a 50% interest, Fiesta Casino Guayana, in which
the Company has a 29.36% interest, Buena Esperanza Limitada in which the Company
has a net 20.54% interest and Thunderbird de Guatemala, had a total of 1,568
employees. Of these 1,568 employees, 133 employees serve in a management,
operation and administration capacity, 1,403 employees serve in a sales and
marketing capacity, and 32 serve in a technical support capacity. These
employees are divided among the Company's operations as follows:



Office Location
      Mgmt. & Admin.
      Marketing & Sales
      Tech. Support
      TotalRepublic of Panama
      61
      796
      8
      865San Diego, CA
      5
      0
      0
      5Venezuela
      21
      219
      3
      243Nicaragua
      16
      221
      7
      244Guatemala
      16
      81
      13
      110Costa Rica
      14
      86
      1
      101Totals:
      133
      1,403
      32
      1,568




For particulars on the Company's directors and senior
officers, see "Directors and Officers".

The foregoing full and part-time personnel are sufficient to
meet the Company's stated business objectives. Additional personnel will be
added as and when circumstances warrant. As of the years ended 2002 and 2001,
the Company had 1,188 and 992 employees, respectively.





INTENTIONAL SPACING FOR PRESENTATION PURPOSES







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6E. Share Ownership



The following table sets out stock ownership and incentive
stock options outstanding for the Named Executive Officers

As of May 31, 2004

Name
      Securities
      beneficially
      owned
      (# of common
      shares)
      Percentage of
      total outstanding common shares
      Unexercised
      options on common stock
      Expiration date
      and exercise priceJack R. Mitchell
      1,712,090
      7.0%
      35,000
      234,546
      190,000
      159,000
      9/21/2006 C$0.55
      9/18/2007 C$0.09
      6/13/2008 C$0.20
      2/12/2009
      US$0.41Albert W.
      Atallah
      197,500
      Less than 1%
      130,000
      7,500
      50,000
      100,000
      62,500
      7/28/2005 C$1.17
      9/21/2006 C$0.55
      9/18/2007 C$0.09
      6/13/2008 C$0.20
      2/12/2009
      US$0.41Clay Hardin
      322,000
      1.3%
      130,000
      15,000
      100,000
      100,000
      42,500
      7/28/2005 C$1.17
      9/21/2006 C$0.55
      9/18/2007 C$0.09
      6/13/2008 C$0.20
      2/12/2009
      US$0.41Booker T.
      Copeland III
      20,000
      Less than 1%
      2,500
      5,000
      32,500
      100,000
      75,000
      15,000
      9/16/2004 C$1.11
      7/28/2005 C$1.17
      9/21/2006 C$0.55
      9/18/2007 C$0.09
      6/13/2008 C$0.20
      2/12/2009
      US$0.41




Item 7 - Major Shareholders and Related Party
Transactions



As of May 31, 2004, the Company had a total of
24,511,687 (24,311,687 at December 31, 2003) common shares issued and
outstanding.



7A. Major Shareholders.



> (1a)     As
>   of May 31, 2004, Jack Mitchell is the one major shareholder known by the
>   Company to have owned beneficially, directly or indirectly, more than 5% of
>   the outstanding common shares of the Company. As of the date, he owns
>   1,712,090 shares which is approximately 7% of the issued and outstanding
>   shares.
>   (1b)    
>   Jack Mitchell purchased the majority of these shares in the past year.
>   
>   (1c)    
>   The Company's major shareholders do not have different voting rights.

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> 2

Total Number of Holders
      Number of Canadian Holders
      Number of Common Shares Held in Canada
      Percentage of Common Shares Held in Canada141
      25
      17,834,261
      73%


> The computation of the number and percentage of
>   common shares held in Canada, the host country, is based upon the number of
>   common shares held by record holders with Canadian addresses and by trusts,
>   estates or accounts with Canadian addresses as disclosed to the Company
>   following inquiry to all record holders known to the Company to be trustees,
>   executors, guardians, custodians or other fiduciaries holding common shares
>   for one or more trusts, estates or accounts. Canadian residents may
>   beneficially own common shares held of record by non-Canadian residents.
>   A substantial number of common shares are held
>   in "street name" by trustees, executors, guardians, custodians or other
>   fiduciaries, including depositories, brokerage firms and financial
>   institutions. Based on the number of annual reports and proxy statements
>   requested by such nominees, management of the Company estimates that the
>   number of beneficial holders of common shares exceeds 2,200.
>   
>   3.   
>   To the best of the knowledge of management, the Company is not directly or
>   indirectly owned or controlled by another corporation, by any foreign
>   government or by any other natural or legal person(s) severally or jointly.
>   
>   4.   
>   The Company is not aware of any arrangements, the operation of which may at a
>   subsequent date result in a change in control of the Company.



7B. Related party transactions.



Indebtedness of Directors and Executive and
Senior Officers



During the last completed fiscal year, no
director, executive officer, senior officer or nominee for director of the
Company or any of their associates has been indebted to the Company or any of
its subsidiaries, nor has any of these individuals been indebted to another
entity which indebtedness is the subject of a guarantee, support in agreement,
letter of credit, or other similar arrangement or understanding provided by the
Company or any of its subsidiaries, except as set forth below.

In 2001, the Company loaned the sum of $9,000 to
Jack R. Mitchell, the President, Chief Executive Officer and a director of the
Company. The loan is secured by the Company's shares and is interest bearing and
payable on demand. The loan was made for the purpose of enabling Mr. Mitchell to
purchase common shares of stock of the Company.

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The Company loaned the sum of $6,750 to Albert W.
Atallah, Chief Operating Officer, General Counsel and a director of the Company.
The loan is secured by the Company's shares and is interest bearing and payable
on demand. The loan was made for the purpose of enabling Mr. Mitchell to
purchase common shares of stock of the Company.

The Company loaned the sum of $9,000 to Clay
Hardin, Vice President of Operations. The loan is secured by the Company's
shares and is interest bearing and payable on demand. The loan was made for the
purpose of enabling Mr. Hardin to purchase common shares of stock of the
Company.

The Company loaned the sum of $4,500 to Booker T.
Copeland III, currently Chief Financial Officer and Corporate Secretary but
Controller of the Company at the time the loan was made. The loan is secured by
the Company's shares and is interest bearing and payable on demand. The loan was
made for the purpose of enabling Mr. Copeland to purchase common shares of stock
of the Company.

The Company loaned the sum of $15,724 to Jack R.
Mitchell, the President, Chief Executive Officer and a director of the Company.
The loan was unsecured non-interest-bearing and payable on demand. The loan was
not made for the purpose of enabling Mr. Mitchell to purchase securities of the
Company.

Interest of Insiders in Material Transactions

Except as disclosed herein, since the
commencement of the last completed fiscal year, no insider of the Company,
nominee for director, or any associate or affiliate of an insider or nominee,
had any material interest, direct or indirect, in any transaction or any
proposed transaction which has materially affected or would materially affect
the Company. Except as disclosed herein, no person has any material interest,
direct or indirect, by way of beneficial ownership of securities or otherwise,
in matters to be acted upon at the meeting. For the purpose of this paragraph,
"person" includes each person (a) who has been a director, senior officer or
insider of the Company at any time since the commencement of the Company's last
fiscal year, (b) who is a proposed nominee for election as a director of the
Company, or (c) who is an associate or affiliate of a person included in
subparagraphs (a) or (b).



Related Party Receivables



Included in accounts receivable is $1,954,000
(2002 - $1,650,000) due from Thunderbird Panama. Also included in accounts
receivable is $194,000 (2002 - $18,000) receivable from officers of the Company.
Certain of these receivables are offset by payables due to the employee,
principally for accrued bonus. The receivable amounts are unsecured,
non-interest bearing and due on demand. Included in loans payable is $112,000
(2002 - $285,000) due to related parties.



7C. Interests of Experts and Counsel.



Not applicable for annual report filing.

-39-

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Item 8 - Financial Information



8A. Consolidated Statements and Other Financial
Information



The Company has included as part of this filing
its Audited Consolidated Balance Sheets as at December 31, 2003 and 2002, and
the Consolidated Statements of Operations and Deficit, and Cash Flows for each
of the years in the three year period ended December 31, 2003. See Consolidated
Financial Statements listed in response Item 17, herein.



8B. Significant Changes



No significant change has occurred since the date
of the annual financial statements.



Item 9 - The Offering and Listing



9A. Offering and Listing Details



> 1.    
>   Not required in annual report filing.
>   
>   2.    
>   Not required in annual report filing.
>   
>   3.    
>   Not required in annual report filing.
>   
>   4.    
>   Price history.



> The common shares of the Company were listed
>     for trading on the TSX on February 13, 1996. The closing price of the
>     Company's common shares on December 31, 2002 was CDN $0.09. The TSX
>     suspended the Company's shares from trading effective November 1, 2002. The
>     Company delisted from the TSX effective July, 2003. The following summarizes
>     the reported high and low prices and the volume of trading of the Company's
>     common shares on the TSE for the periods indicated:
>     
>     Trading information for trading of the
>     Company's common shares on the TSX.



Year Ended
      High (C$)
      Low (C$)
      VolumeDecember 31, 1999
      1.45
      0.45
      9,352,896December 31, 2000
      2.10
      0.69
      7,797,437December 31, 2001
      1.24
      0.27
      5,323,460December 31, 2002
      0.53
      0.02
      6,697,608




> The common shares of the Company were listed for trading
>     on the Canadian Network Quotation (CNQ) on July 25, 2003. The closing price
>     of the Company's common shares on December 31, 2003 was USD $0.48. The
>     following summarizes the reported high and low prices and the volume of
>     trading of the Company's common shares on the CNQ for the periods indicated:

-40-

---

> Trading information for trading of the
>     Company's common shares on the CNQ.

One Month Period Ended
      High (US$)
      Low (US$)
      VolumeMay 31, 2004
      0.42
      0.33
      99,200April 30, 2004
      0.39
      0.33
      114,000March 31, 2004
      0.40
      0.31
      112,550February 29, 2004
      0.50
      0.35
      96,607January 31, 2004
      0.45
      0.37
      151,875December 31, 2003
      0.48
      0.43
      108,424December 31, 2003 (since listing)
      0.38
      0.11
      1,043,162


> At December 31, 2003, there is no active
>     trading market for the common shares in the United States, although United
>     States residents may purchase common shares in Canada.



> 5.   
>   Not required in annual report filing.
>   
>   6.   
>   Not required in annual report filing.
>   
>   7.    
>   Not required in annual report filing.



9B. Plan of Distribution.

Not required in annual report filing.



9C. Markets.



The Company currently trades on the CNQ, a
Canadian stock exchange. The Company is actively pursuing re-listing on the
Toronto Stock Exchange, having voluntarily de-listed in 2002 to address concerns
by the TSX related to the Company's financial condition. While the financial
condition of the Company has improved, it must wait for review by the TSX to see
if re-listing is possible.



9D. Selling Shareholders.

Not required in annual report filing.



9E. Dilution.

Not required in annual report filing.

9F. Expenses of the Issue.

Not required in annual report filing.

-41-

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Item 10 - Additional Information



10A. Share Capital.

Not required in annual report filing.



10B. Memorandum and Articles of Association



International Thunderbird Gaming Corporation
("the Company") was incorporated by registration of its memorandum and articles
under the Company Act (British Columbia) on September 4, 1987 under the name
"Winters Gold Hedley Ltd.". The Company changed its name to "Regal Gold
Corporation" and consolidated its share capital on a 2.5:1 basis effective
August 26, 1993. The Company subsequently changed its name to International
Thunderbird Gaming Corporation, and updated its articles, effective June 23,
1994.The Company continued into the Yukon effective February 5, 1999, as
approved by the shareholders of the Company on June 18, 1998.



> 1.



> The Company's objectives and purposes are
>     described in its Bylaws (see section 2 of the Bylaws) and its Articles of
>     Continuance, attached as Exhibit 1.



2.The following comprises the summary of provisions of the articles of
  continuance and bylaws relating to directors: Nothing in the Articles of
  Continuance affects the rights of directors as identified in this section. The
  By-Laws, (section three) identifies the director's responsibilities and
  restrictions if any; section five provides for Indemnity for the Directors.



3.The company is authorized to issue an unlimited number of shares divided into
  Common and Preferred shares as identified in Exhibit 2(a), which
  describes the rights, preferences and restrictions attaching to each class.



4.See attached Exhibit 2(a) which describes what action is necessary to
  change the rights of holders of the stock



5.Provisions relating to the Annual and Special meetings of Shareholders are set
  forth in Section 8 of the Articles of Continuance attached as Exhibit 1.



6.Exhibit 2(a) contains any and all restrictions with respect to
  shareholders rights.



7.Exhibit 2(a) may be viewed as having an effect of delaying, deferring
  or preventing change in control of the company in that the Articles provide
  for a rotating board of directors whereby two directors are voted on every
  three years, two additional directors are voted on every two years and two are
  voted on every year. In addition, the directors are authorized to issue an
  unlimited number of preferred shares as described in the schedule.

-42-

---

> 8.Nothing contained in the Articles or in the Bylaws governs the ownership
>   threshold above which shareholder ownership must be disclosed. The Canadian
>   securities laws provide that such ownership must be disclosed when any single
>   individual or entity has 5% or greater ownership.



> 9.



10.Not
  applicable.



10C. Material Contracts



Guatemala. In
March 2003, the Company entered into a seven-year contract with ILAC to continue
operations of its video lottery terminals at the Camino Real Hotel in Guatemala
City. The Company is entitled to 65% of revenue and will be responsible for all
operating expenses while ILAC and the Pediatric Foundation share the remaining
35% of revenue.



Material Contracts Provided with this Filing:



- New Guatemala contract with ILAC.



10D. Exchange Controls and Other Limitations
Affecting Security Holders



There is no law or governmental decree or
regulation in Canada that restricts the export or import of capital, or affects
the remittance of dividends, interest or other payments to a non-resident holder
of common shares, other than withholding tax.



There is no limitation imposed by Canadian law or
by the constituent documents of the Company on the right of a non-resident to
hold or vote common shares, other than as provided in the Investment Canada Act
(the "Act"). The following summarizes the principal features of the Act.

The Act requires certain "non-Canadian"
individuals, governments, corporations or other entities who wish to acquire a
"Canadian business" (as defined in the Act), or establish a "new Canadian
business" (as defined in the Act) to file either a notification or an
application for review with a governmental agency known as "Investment Canada."
The Act requires that certain acquisitions of control of a Canadian business by
a "non-Canadian" must be reviewed and approved by the Minister responsible for
the Act on the basis that the Minister is satisfied that the acquisition is
"likely to be of net benefit to Canada," having regard to criteria set forth in
the Act.



Only acquisitions of control are reviewable under
the Act. However, the Act provides detailed rules for the determination of
whether control has been acquired and, pursuant to those rules, the acquisition
of one-third or more of the voting shares of a corporation may, in some
circumstances, be considered to constitute an acquisition of control. Certain
reviewable acquisitions of control may not be implemented before being approved
by the Minister. If the Minister does not ultimately approve a reviewable
acquisition, which has been completed, the acquired Canadian business must be
divested.

-43-

---

Failure to comply with the review provisions of
the Act could result in, among other things, an injunction or a court order
directing disposition of assets or shares.



10E. Taxation



A brief description of certain provisions of the
tax treaty between Canada and the United States is included below, together with
a brief outline of certain taxes, including withholding provisions to which
United States security holders are subject under existing laws and regulations
of Canada and the United States; the consequences, if any, of state and local
taxes are not considered. The following information is general and security
holders should seek the advice of their own tax advisors, tax counsel or
accountants with respect to the applicability or effect of their own individual
circumstances of not only the matters referred to herein, but also any state or
local taxes. The Company has not paid dividends on the common shares in any of
its last five fiscal years, and has no plans to pay dividends in the immediate
future.



Canadian federal tax legislation would require a
25% withholding from any dividends paid or deemed to be paid to the Company's
non-resident shareholders. However, individual shareholders resident in the
United States would generally have this rate reduced to 15% through the tax
treaty between Canada and the United States. If a company resident in the United
States owns at least 10 % of the voting stock of the Company, the withholding
rate is further reduced by the tax treaty to 5%." The amount of stock dividends
paid to non-residents of Canada would be subject to withholding tax at the same
rate as cash dividends. The amount of a stock dividend (for tax purposes) would
generally be equal to the amount by which the stated capital of the Company had
increased by reason of the payment of such dividend. The Company will furnish
additional tax information to shareholders in the event of such a dividend.
Interest paid or deemed to be paid on the Company's debt securities held by
non-Canadian residents may also be subject to Canadian withholding tax. The rate
of withholding is reduced to 10% by the tax treaty between Canada and the United
States.



Gains derived from a disposition of shares of the
Company by a non-resident shareholder will be subject to tax in Canada if,
generally, not less than 25% of any class of shares of the Company was owned by
the non-resident shareholder and/or persons with whom the non-resident did not
deal at arm's length at any time during the five-year period immediately
preceding the disposition. In such cases, gains derived by a U.S. shareholder
from a disposition of shares of the Company would likely be exempt from tax in
Canada by virtue of the Canada-U.S. tax treaty, except generally where the U.S.
shareholder was previously resident in Canada for ten years and has not been a
non-resident of Canada for at least ten years immediately preceding the
disposition.



All security holders are advised to consult their
own tax advisors with respect to the specific tax consequences of purchasing
common shares.



10F. Dividends and Paying Agents.

Not required in annual report filing.

-44-

---

10G. Statement by Experts.

Not required in annual report filing.



10H. Documents on Display.

Consolidated Financial Statements of the Company
and the notes thereto are displayed on the Company's website,
www.thunderbirdgaming.com, and the CNQ stock exchange, www.cnq.ca. Additional
information relating to the Company, including the Company's AIF, is on SEDAR at
www.sedar.com.



10I. Subsidiary Information.

All subsidiary information is included and
incorporated in the consolidated financial statements and information of the
Company, pursuant to generally accepted accounting principals in Canada,
reconciled to US GAAP, where applicable.



Item 11 - Quantitative and Qualitative
Disclosures about Market Risk



The Company's principal, and perhaps only market
risk is that of foreign currency exchange. The Company is currently operating
and / or developing in five countries whose local currency fluctuates against
the US dollar: Guatemala, Nicaragua, Costa Rica, Venezuela and Chile. The
profitability of the Company may be adversely affected by fluctuations in the
rate of exchange among the various currencies. The Company does not currently
take any steps to hedge against currency fluctuations. However, the Company
makes every effort to tie the operating cash flow to the local currency, to
minimize the impact of monthly revaluations and any currency devaluations. As no
one can accurately forecast future exchange rates, it is not possible for the
Company to adequately project the financial impact of this risk on its
operations.



Item 12 - Description of Securities Other, than
Equity Securities



Not required for annual report filing.



Item 13 - Defaults, Dividend Arrearages and
Delinquencies



The Company is not currently in default or
delinquent with any of its obligations from continuing operations. As of
December 31, 2003, the Company was not in default or delinquent with any of its
obligations from continuing operations.

However, Thunderbird Gaming, Inc. has past due
tax liabilities associated with the year ended December 31, 1997 with the IRS of
$96,099 (includes penalties and interest), which was the result of an IRS audit
completed in June of 2002, this liability was recorded in the second quarter of
2002, and the California Franchise Tax board of $184,540 (includes penalties and
interest), which was accrued prior to December 31, 2001. International
Thunderbird Gaming Corporation has a past due tax liability associated with the
year ended December 31, 1997 with the IRS of $62,945 (includes penalties and
interest), which was accrued prior to December 31, 2001. International
Thunderbird Gaming SRL has a past due tax liability associated with the year
ended December 31, 1997 with Barbados of $160,110 (includes penalties and
interest), which was accrued prior to December 31, 2001. As of the date of this
filing, the Company plans

-45-

---

on applying to the various taxing authorities for
offers in compromise to eliminate or substantially reduce the tax liabilities
but has no assurance of success nor its ability to pay these liabilities.



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



Not Applicable



Item 15 - Controls and Procedures.

1. The conclusions of the registrant's principal
  executive officer or officers and principal financial officer or officers, or
  persons performing similar functions, about the effectiveness of the
  registrant's disclosure controls and procedures (as defined in s240.13a-15(c)
  and 240.15d-15(c)) based on their evaluation the controls and procedures as of
  a date within 90 days prior to the filing date of the report are:The
  Company has designed and continues to maintain an appropriate system of
  internal controls to provide reasonable assurance that the accounting systems
  provide timely, accurate and reliable financial information and to safeguard
  the Company's assets. These controls are reviewed and improved, when and where
  applicable, on an ongoing basis.
2. Not yet applicable pursuant to the
  corresponding language of section 404.
3. Not yet applicable pursuant to the
  corresponding language of section 404.
4. There were no significant changes in the
  registrant's internal controls or in other factors that could significantly
  affect these controls subsequent to the date of their evaluation, including
  any corrective actions with regard to significant deficiencies and material
  weaknesses.

Item 16 - [Reserved],
Experts, Ethics and Other Items

16A. Audit Committee Financial Expert

The Company has at least one audit committee
financial expert serving on its audit committee. Jack Mitchell, the Company's
CEO and president, by virtue of his experience, as outlined in Item 6A, of
assessing the performance of companies with respect to the evaluation of
financial statements, is deemed the audit committee financial expert.

A person who is deemed to be an audit committee
financial expert will not be deemed an "expert" for any purpose, including
without limitation for purposes of section 11 of the Securities Act of 1933 (15
U.S.C. 77k), as a result of being designated or identified as an audit committee
financial expert pursuant to this Item 16A.

The designation or identification of a person as
an audit committee financial expert pursuant to Item 16A does not impose on such
person any duties, obligations or liability that are greater than the duties,
obligations and liability imposed on such person as a member of the audit
committee and board of directors in the absence of such designation or
identification.

-46-

---

The designation or identification of a person as
an audit committee financial expert pursuant to Item 16A does not affect the
duties, obligations or liability of any other member of the audit committee or
board of directors.



16B. Code of Ethics

1. The Registrant has adopted a code of ethics
  that applies to the Registrant's principal executive officer, principal
  financial officer, principal accounting officer or controller, or persons
  performing similar functions.
2. The Registrant's code of ethics meets the
  minimum standard as defined by the illustrations established under this
  section of the Form's guidelines.
3. The registrant has:Filed with the Commission a copy of its
    code of ethics that applies to the registrant's principal executive officer,
    principal financial officer, principal accounting officer or controller, or
    persons performing similar functions, as an exhibit to this annual report;
    Undertaken in its annual report filed with
    the Commission to provide to any person without charge, upon request, a copy
    of such code of ethics and explain the manner in which such request may be
    made.
4. Filed with the Commission a copy of its
    code of ethics that applies to the registrant's principal executive officer,
    principal financial officer, principal accounting officer or controller, or
    persons performing similar functions, as an exhibit to this annual report;
5. Undertaken in its annual report filed with
    the Commission to provide to any person without charge, upon request, a copy
    of such code of ethics and explain the manner in which such request may be
    made.
6. Not applicable.
7. Not applicable.

16C. Principal Accountant Fees and Services

1. Audit fees: 2003 - $80,000; 2002 - $70,000
2. Audit-related fees: 2003 - $0; 2002 - $0
3. Tax fees: 2003 - $35,000; 2002 - $30,000 Annual
  preparation of all Canadian and US returns
4. All other fees: 2003 - $0; 2002 - $0
5. The audit committee meets quarterly to review
    and approve the financial statements for the period. The committee meets
    annually with the Company's auditor to review and approve the audited
    financial statements.
    Remuneration for the services of the
    Company's auditor is established and approved by the Company's board of
    directors subsequent to the appointment of the auditor at the annual general
    meeting of shareholders. The amounts identified under tax fees are part of
    the normal, statutory services provided by the Company's auditor. As such,
    the fees are approved by the board of directors and, consequently, the audit
    committee.
6. The audit committee meets quarterly to review
    and approve the financial statements for the period. The committee meets
    annually with the Company's auditor to review and approve the audited
    financial statements.
7. Remuneration for the services of the
    Company's auditor is established and approved by the Company's board of
    directors subsequent to the appointment of the auditor at the annual general
    meeting of shareholders. The amounts identified under tax fees are part of
    the normal, statutory services provided by the Company's auditor. As such,
    the fees are approved by the board of directors and, consequently, the audit
    committee.

-47-

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1. Percentage of hours attributed to non-employees
  is 0

16D. Exemptions from the Listing Standards for
Audit Committees

Not applicable

16E. Purchases of Equity Securities by the Issuer
and Affiliated Purchasers

Not applicable

Item 17 - Financial Statements



The Company has included as part of this filing
our Audited Consolidated Balance Sheets as at December 31, 2003 and 2002and the
Consolidated Statements of Operations and Deficit, and Cash Flows for each of
the years in the three year period ended December 31, 2003, together with the
Auditors' Reports.



Item 18 - Financial Statements



Not applicable as foreign issuer.





INTENTIONAL SPACING FOR PRESENTATION PURPOSES













-48-

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Item 19 - Exhibits



EXHIBIT NUMBER
      DOCUMENT DESCRIPTION
      DATE1.
      Previously filed and incorporated herein
      by reference: Articles of Incorporation and By-Laws
      2/5/992(a)
      Previously filed and incorporated herein
      by reference: Schedules A-E
      A - Share provisions of both common and preferred
        shares of International Thunderbird Gaming Corporation
        B - Special Resolution of the shareholders of
        International Thunderbird Gaming Corporation
        C - Dissent Provisions
        D - Special Resolution of the shareholders of
        International Thunderbird Gaming Corporation
        E - Ordinary Resolution of the shareholders of
        International Thunderbird Gaming Corporation2 (b)
          Previously filed and
          incorporated herein by reference:
          Amendment to Loan Agreement of 3/9/01 between International
            Thunderbird Gaming Corporation as Borrower and Management Resources
            Group as Lender
            Loan Participation Agreement and Security Agreement between MRG
            Entertainment of Puerto Ordaz Venezuela LLC and Fiesta Casino
            Guayana C.A.
            Loan Agreement Secured by Pledge Agreement, Pledge Agreement,
            and Amended and Restated Loan Agreement among International
            Thunderbird Gaming Corporation and MRG Entertainment, LLC
            Loan and Security Agreement between Fiesta Casinos Guayana and
            Del Sur
          5/1/01
          
          8/8/01
          
          10/1/01
          
          1/4/012(b)(ii)
          Previously filed and incorporated herein by reference:
          Toronto Stock Exchange Approval of Proposed Private Placement (Loan
          Agreement)
          2/19/01 & 3/26/012(b)(iii)
          New seven year contract dated March 11,
      2003, related to the Company's operations in Guatemala.
          03/11/032(c)
          None3.
          None4(a)(1)
          Previously filed
          Memorandum of Understanding between International Thunderbird Gaming
          Corporation, T.H.E. Venezuelan Entertainment, C.A., Entertainment &
          Ventures Consultants, Inc., and International Thunderbird Gaming
          (Panama) Corporation.
          12/22/004(a)(2)
          Previously filed Amended and Restated Memorandum of
          Understanding between International Thunderbird Gaming Corporation,
          T.H.E. Venezuelan Entertainment, C.A., Entertainment & Ventures
          Consultants, Inc., and International Thunderbird Gaming (Panama)
          Corporation.
          2/9/014(a)(3)
          Previously filed Second Restated Memorandum of
          Understanding between International Thunderbird Gaming Corporation,
          T.H.E. Venezuelan Entertainment, C.A., Entertainment & Ventures
          Consultants, Inc., and International Thunderbird Gaming (Panama)
          Corporation.
          7/1/014(a)(4)
          Previously filed Third Restated Memorandum of
          Understanding between International Thunderbird Gaming Corporation,
          T.H.E. Venezuelan Entertainment, C.A., Entertainment & Ventures
          Consultants, Inc., and International Thunderbird Gaming (Panama)
          Corporation.
          10/1/014(a)(5)
          Previously filed Release Agreement between
          International Thunderbird Gaming Corporation and Hopland Band of Pomo
          Indians ($500,000 settlement)
          10/11/014(a)(6)
      Previously filed and incorporated herein
      by reference: Release Agreement between International Thunderbird Gaming
      Corporation and Hopland Band of Pomo Indians ($750,000 settlement)
      5/024(a)(7)
      Previously filed and incorporated herein
      by reference: Settlement Agreement and Mutual General Release between
      International Thunderbird Gaming Corporation and Shuffle Master
      5/14/024(a)(8)
      Previously filed and incorporated herein
      by reference: Settlement Agreement and Mutual General Release between
      International Thunderbird Gaming Corporation and the Spotlight 29 Tribe
      ($430,000)
      4/21/034(a)(9)
      Previously filed and incorporated herein
      by reference: Consolidated Note Agreement between MRG Entertainment and
      International Thunderbird Gaming Corporation ($3,000,000)
      1/1/034(a)(10)
      Previously filed and incorporated herein
      by reference: Stipulation for Entry of Judgment and Dismissal, Order
      Thereon between Thunderbird-Greeley and Prime Receivables (aka Stellar
      Financial Company aka U.S. Bancorp Portfolio Services) ($730,000)
      10/024(a)(11)
          Previously filed NAFTA arbitration filing between
          International Thunderbird Gaming Corporation and the Government of
          Mexico
          Trial-April, 20044(b)(i)
          None4(b)(ii)
          None4(b)(iii)
          None4(b)(iv)
          None4(c)
          None5.
          None6.
          None7.
          None8.
          List of All
          Subsidiaries9.
          None10.
          None21
      KPMG Auditor's Report31.a
      Certification of Jack R. Mitchell
      President, CEO and Director31.b
      Certification of Booker T.
      Copeland, III, Chief Financial Officer and Corporate Secretary32.a
      Certification of  Jack R.
      Mitchell President, CEO and Director32.b
      Certification of Booker T.
      Copeland, III, Chief Financial Officer and Corporate Secretary




-49-

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INTERNATIONAL THUNDERBIRD GAMING

CORPORATION





CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States Dollars)





DECEMBER 31, 2003





-50-

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DAVIDSON&
          COMPANYA Partnership of Incorporated
          ProfessionalsChartered AccountantsREPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

          
          To the Shareholders of
          International Thunderbird Gaming Corporation
          
          We have audited the consolidated balance sheets of
International Thunderbird Gaming Corporation as at December 31, 2003 and 2002
and the consolidated statements of operations and deficit and cash flows for the
years then ended. These financial statements, expressed in United States
dollars, are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

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

In our opinion, these consolidated financial statements
present fairly, in all material respects, the financial position of the Company
as at December 31, 2003 and 2002 and the results of its operations and its cash
flows for the years then ended in accordance with Canadian generally accepted
accounting principles."DAVIDSON & COMPANY"Vancouver, Canada
          Chartered AccountantsApril 2, 2004A Member of SC International1200 - 609 Granville Street, PO Box 10372, Pacific
          Centre, Vancouver, BC  Canada, V7Y 1G6Telephone (604) 687-0947 Fax (604) 687-6172




-51-

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INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars)

AS AT DECEMBER 31

---







2003
    2002ASSETSCurrent assetsCash and cash equivalents
    $       2,150
    $       1,162Accounts receivable less allowance for doubtful accounts
    of $Nil (2002 - $Nil)
    2,614
    2,243Prepaid expenses and supplies (Note 3)
    551
    686Current portion of amounts receivable
    307
    398Total current assets
    5,622
    4,489Restricted cash
    943
    707Amounts receivable less
    allowance for doubtful accounts of $Nil(2002 - $Nil) (Note 4)
    742
    1,101Investments in and advances to equity investees (Note
    5)
    1,665
    430Property and equipment (Note 6)
    6,161
    6,356Other assets (Note 7)
    1,865
    1,470Total assets
    $    16,998
    $    14,553


- continued -



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

-52-

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INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars)

AS AT DECEMBER 31

---







2003
    2002ContinuedLIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilitiesAccounts payable and accrued liabilities
    $       4,234
    $       4,497Income taxes payable
    512
    597Current portion of capital lease obligations
    8
    28Current portion of loans payable
    1,464
    2,005Current portion of other payables
    219
    168Total current liabilities
    6,437
    7,295Capital lease obligations (Note 8)
    7
    15Loans payable (Note 9)
    4,312
    3,626Other payables (Note 10)
    666
    591Deferred gain (Note 11)
    -
    848Future income taxes (Note 15)
    779
    691Total liabilities
    12,201
    13,066Non-controlling interest
    149
    -Shareholders' equityShare capital (Note 12)
    21,266
    21,085Contributed surplus (Note 12)
    65
    -Deficit
    (16,268)
    (19,321)Foreign exchange adjustment
    (415)
    (277)Total shareholders' equity
    4,648
    1,487Total liabilities and shareholders' equity
    $     16,998
    $      14,553










Nature of operations (Note 1)
Commitments and contingencies (Notes 1 and 17)
Subsequent events (Note 22)On behalf of the Board:___________________________________
    Director
    ___________________________________
    DirectorJack Mitchell
    
    Albert Attallah






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

-53-

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INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

(Expressed in thousands of United States Dollars)

YEAR ENDED DECEMBER 31

---





2003
    2002
    2001REVENUEGaming operations
    $       21,786
    $       18,519
    $       16,420COSTS AND EXPENSESGaming operations
    8,485
    6,935
    7,130General and administrative
    7,031
    6,717
    6,736Project development
    536
    267
    677Amortization
    1,860
    1,779
    1,296Financing costs
    961
    1,098
    1,086Equity (gain) loss in equity investees and write-down of
    equity investment (Note 5)
    (116)
    578
    1,366Uncollectible receivables (Note 4)
    -
    604
    -Gain on disposal of investments (Note 5)
    (830)
    -
    (208)Recovery of amounts receivable previously written-down
    (311)
    (487)
    (494)17,616
    17,491
    17,589Income (loss) before income taxes
    4,170
    1,028
    (1,169)Income taxes (Note 15)Current
    838
    598
    695Future
    216
    147
    961,054
    745
    791Income (loss) from continuing operations before
    non-controlling interest
    3,116
    283
    (1,960)Non-controlling interest (Note 5)
    (63)
    -
    67Income (loss) from continuing operations
    3,053
    283
    (1,893)Income (loss) from discontinued operations (Note 20)
    -
    41
    (1,187)Net income (loss) for the year
    3,053
    324
    (3,080)Deficit, beginning of year
    (19,321)
    (19,645)
    (16,565)Deficit, end of year
    $    (16,268)
    $    (19,321)
    $    (19,645)




- continued -



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

-54-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

(Expressed in thousands of United States Dollars)

YEAR ENDED DECEMBER 31

---





2003
    2002
    2001ContinuedBasic earnings (loss) per share (Note 13)Continuing operations
    $      0.13
    $      0.01
    $      (0.08)Discontinued operations
    -
    0.00
    (0.05)Net earnings (loss) per share
    $      0.13
    $      0.01
    $      (0.13)Diluted earnings (loss) per share (Note 13)Continuing operations
    $      0.11
    $      0.01
    $      (0.08)Discontinued operations
    -
    0.00
    (0.05)Net earnings (loss) per share
    $     
    0.11
    $      0.01
    $      (0.13)




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

-55-

---



INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States Dollars)

YEAR ENDED DECEMBER 31

---





2003
    2002
    2001CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) from continuing operations
    $          3,053
    $            283
    $          (1,893)Items not affecting cash:Amortization
    1,860
    1,779
    1,296Equity (gain) loss in equity investments
    (116)
    578
    1,366Future income taxes
    216
    147
    96Gain on disposal of investments
    (830)
    -
    -Uncollectible receivables
    -
    604
    (125)Recovery of amounts receivable previously written down
    -
    (487)
    -Non-controlling interest
    63
    -
    (67)Other
    60
    231
    98Changes in non-cash working capital items:(Increase) decrease in accounts receivable
    (105)
    (680)
    351Increase in inventories and prepaid expenses
    (429)
    (291)
    (264)Increase in accounts payable and accrued liabilities
    125
    939
    1,044(Increase) decrease in income taxes payable
    (83)
    (297)
    220Increase in other liabilities
    77
    -
    -Continuing operations
    3,891
    2,806
    2,122Discontinued operations (Note 20)
    -
    41
    -Net cash provided by operating activities
    3,891
    2,847
    2,122CASH FLOWS FROM INVESTING ACTIVITIESLoans receivable, net
    232
    152
    (332)Expenditures on capital assets, net
    (1,937)
    (3,033)
    (2,128)California gaming amounts recoverable
    -
    -
    626Investment in and advances to equity investees
    (1,119)
    (359)
    (1,264)(Increase) decrease in restricted cash
    (236)
    (47)
    51Proceeds on sale of partial interest in subsidiary
    -
    -
    285(Increase) decrease in other assets
    23
    (71)
    (67)Net cash used in investing activities
    (3,037)
    (3,358)
    (2,829)CASH FLOWS FROM FINANCING ACTIVITIESNet proceeds from issuance of common shares
    181
    5
    57Loans payable
    3,992
    1,698
    4,436Repayment of loans and leases payable
    (4,039)
    (1,524)
    (3,225)Net cash provided by financing activities
    134
    179
    1,268


- continued -



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

-56-

---



INTERNATIONAL THUNDERBIRD GAMING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States Dollars)

YEAR ENDED DECEMBER 31

---





2003
    2002
    2001ContinuedChange in cash and cash equivalents during the year
    988
    (332)
    561Cash and cash equivalents, beginning of year
    1,162
    1,494
    933Cash and cash equivalents, end of year
    $       2,150
    $       1,162
    $       1,494Supplemental disclosure with respect to cash flows 
    (Note 14):Interest paid
    $       1,098
    $          659
    $          911Income taxes paid
    933
    711
    498






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

-57-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|1. | NATURE OF OPERATIONS
|-- | --------------------

> International Thunderbird Gaming Corporations' ("The
>     Company") primary business activity is the provision of services to the
>     gaming industry. The Company is, or has been involved in the following
>     business activities:



> Managing gaming operations under a Casino Administration and Operations
>     contract dated January 29, 1998, at six (2002 - five) casinos in the
>     Republic of Panama in which the Company also has a 50% interest;
>   Managing a video lottery operation in Guatemala, on a revenue and net
>     profit sharing basis, under a Service and Supply agreement which expired in
>     October 2002. In March 2003, the Company entered into a new five year
>     agreement whereby the Company receives 65% of the net wins, which is defined
>     as total revenues less awards paid and taxes withheld from award winners,
>     and incurs 100% of the operating costs. The agreement expires in March 2008;
>   Managing operations at three skill game locations in Mexico in which the
>     Company has an equity interest. During 2001, the Mexican government closed
>     the skill game facilities in Matamoros, Nuevo Laredo and Reynosa, Mexico in
>     which the Company had an equity interest, alleging the operations are in
>     violation of the law. The Company has filed a $100 million claim under
>     section 11 of the North American Free Trade Agreement ("NAFTA") subsequent
>     to exhausting all other avenues for an equitable settlement with the Mexican
>     government;
>   Jointly managing a gaming operation in Nicaragua with Hopewell Limited,
>     S.A. ("Hopewell"). In March 2003, the Company entered into an agreement to
>     merge the Company's gaming operations in Nicaragua with the gaming
>     operations of Hopewell. The Company now owns a 20.54% equity interest in the
>     merged entity;
>   Managing a gaming operation in Costa Rica, of which the Company retained
>     a 50% interest in October 2003; and
>   Managing a casino in Venezuela, which opened in August 2001, in which
>     the Company has a 29% equity interest.
>   Participating in an internet gaming operation, on a net revenue share
>     basis. In June 2001, the Company sold its interest in the gaming operation.



> The Company actively evaluates new opportunities
>     presented or identified from time to time in the gaming industry. The
>     relative importance of each business is based on the revenues generated from
>     each segment.



> These consolidated financial statements have been
>     prepared on a going concern basis in accordance with Canadian generally
>     accepted accounting principles, which assumes that the Company will continue
>     in operation for the foreseeable future and be able to realize its assets
>     and discharge its liabilities and commitments in the normal course of
>     business. Up until December 31, 2001 the Company incurred significant
>     losses, and had a working capital deficiency, and also had to seek a waiver
>     from its primary lender relating to covenant violations on certain
>     borrowings as at December 31, 2002 (see Note 9 - loans payable).



-58-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|1. | NATURE OF OPERATIONS
    (cont'd)
|-- | ---------------------------------





> Since July 2001, the Company has been working to develop
>     future profitable operations and improve the working capital position of the
>     Company. During the year ended December 31, 2001, the Company refocused its
>     efforts toward the operation and profitability of current facilities as
>     opposed to the development of new facilities. As a result, the Company
>     reduced its development and support staff and related expenses. In addition,
>     the Company reduced its staff levels in the Republic of Panama and
>     refinanced a portion of its debt. As a result of these efforts, the Company
>     has now reached profitable operations, has significantly reduced its working
>     capital deficiency, and is currently not in violation of any debt covenants.
>     
>     The ability of the Company to continue as a going concern
>     and to realize the carrying value of its assets and discharge its
>     liabilities when they become due is dependent on the success of its core
>     operations. Management believes that the core operations in Panama and
>     Guatemala, in conjunction with the expected increase in profits from the
>     Company's investments in Nicaragua and Costa Rica, which commenced
>     operations in the current year, has mitigated the adverse conditions and
>     events which created the current $815,000 (2002 - $2.8 million) working
>     capital deficiency.
>     
>     These financial statements do not reflect adjustments
>     that would be necessary if the Company is unable to continue as a going
>     concern. If the going concern assumption is not appropriate for these
>     financial statements, then adjustments would be necessary to the carrying
>     value of assets and liabilities, the reported net income, and the balance
>     sheet classifications used.

|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------



> Basis of consolidation



> These consolidated financial statements include the accounts of the
>     Company, its subsidiaries, and on a proportionate basis the accounts of its
>     joint ventures. Significant inter-company balances and transactions with
>     subsidiaries and the Company's proportionate share of inter-company balances
>     and transactions with joint ventures are eliminated upon consolidation.



> Use of estimates
>     
>     
>     The preparation of financial statements in conformity
>     with Canadian generally accepted accounting principles requires management
>     to make estimates and assumptions that affect the reported amounts of assets
>     and liabilities and disclosure of contingent assets and liabilities at the
>     date of the financial statements and the reported amounts of revenues and
>     expenses during the reporting period. Significant areas requiring the use of
>     management estimates include the determination of the recoverability of
>     accounts and amounts receivable, investments, capital assets and other
>     assets, the amortization rates of capital assets and other assets. Actual
>     results could differ from those estimates.
>     
>     Cash and cash equivalents
>     
>     
>     Cash equivalents consist of highly liquid investments
>     that are readily convertible to known amounts of cash and generally have
>     original maturities of three months or less.



-59-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|2. | SIGNIFICANT ACCOUNTING POLICIES

(cont'd)
|-- | -----------------------------------------

> Accounts and amounts receivable

Accounts and amounts receivable are reported at face
    value less any provisions for uncollectible accounts considered necessary.
    Accounts receivable primarily includes receivables due from the Company's
    non-eliminated interests in its Panama joint venture. Amounts receivable
    primarily consists of notes receivable from various parties as described in
    Note 4. The Company estimates allowances on amounts receivable when there
    are indications that an impairment exists, at which point the amounts will
    be written down to their collectible values.



> Investments in and advances to equity investees

The investments in and advances to equity investees are
    accounted for using the equity method. Under the equity method, the original
    cost of the investee is adjusted for the Company's share of post-acquisition
    earnings or losses and is reduced for dividends received.



> Restricted cash

Restricted cash includes the Company's portion of the
    casino's bankroll and hopper loads in the Republic of Panama, Nicaragua
    (2002 only) and Costa Rica.



> Property and equipment

Property and equipment are recorded at cost. Amortization
    of property and equipment is provided on a straight-line basis over their
    estimated useful lives as follows:







Building
    30 yearsFurniture, fixtures and equipment
    3 - 5 yearsGaming operations equipment
    3 - 5 yearsLeasehold improvements
    Over the lease termMachinery and equipment
    3 yearsVehicles
    3 - 5 years






> Other assets



Other assets include the Company's proportion of the fee
    for the right to operate casinos and slot machines in the Republic of Panama
    and deferred financing charges on long term debt. TheCompany's proportion
    of the fee to operate has been capitalized as license rights and is being
    amortized on a straight-line basis over 20 years, being the term of the
    operating rights. The deferred financing charges are amortized over the term
    of the related debt.



-60-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|2. | SIGNIFICANT ACCOUNTING POLICIES

(cont'd)
|-- | -----------------------------------------





> Income taxes



The Company uses the asset and liability method of
    accounting for income taxes. Under the asset and liability method, future
    tax assets and liabilities are recognized for the future tax consequences
    attributable to differences between the financial statement carrying amounts
    of existing assets and liabilities and their respective tax bases. Future
    tax assets are recognized to the extent that realization of those assets is
    more likely than not. Future tax assets and liabilities are measured using
    enacted or substantively enacted tax rates expected to apply to taxable
    income in the years in which those temporary differences are expected to be
    recovered or settled. The effect on future tax assets and liabilities of a
    change in tax rates is recognized in income in the period that includes the
    date of enactment or substantive enactment. Withholding taxes, where
    applicable, on earnings of foreign operations are provided in the accounts
    only to the extent earnings are expected to be repatriated.



> Project development and pre-opening costs



Project development costs incurred in an effort to
    identify and develop new gaming locations are expensed as incurred.
    Pre-opening costs for new projects that are not recoverable from third
    parties are expensed as incurred.



Revenue recognition



The Company recognizes as gaming revenues the net win
    from gaming activities which is the difference between coins and currencies
    deposited into the machines and payments to customers and, for other games,
    the difference between gaming wins and losses.



Reporting currency and foreign currency translation



The temporal method is used to translate the financial
    statements of fully integrated operations. Under this method monetary assets
    and liabilities have been translated at the year end rate. Non-monetary
    assets and liabilities are translated using historical exchange rates and
    revenues and expenses translated at average rates for the period with any
    resulting gain or loss charged to operations.



The current rate method is used to translate the
    financial statements of self sustaining foreign operations. Under the
    current rate method, assets and liabilities are translated at exchange rates
    in effect at the balance sheet date and items in the statement of operations
    are translated at weighted average rates. Exchange gains and losses arising
    from the translation of the financial statements are deferred and included
    in the foreign exchange adjustment account in shareholders' equity until
    there has been a realized reduction in the net investment. The foreign
    exchange adjustment account at December 31, 2003 relates mainly to the
    Company's Guatemalan operations (2002 - mainly to Company's Guatemalan and
    Nicaraguan operations).



An exception to the use of the current rate method for
    translating the financial statements of self sustaining foreign operations
    may occur when the economic environment of the foreign operation is highly
    inflationary. In such events, the temporal method is used to translate the
    financial statements of the foreign operation.





-61-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|2. | SIGNIFICANT ACCOUNTING POLICIES

(cont'd)
|-- | -----------------------------------------







> Earnings per share



The Company uses the treasury stock method to compute the
    dilutive effect of options, warrants and similar instruments. Under this
    method the dilutive effect on earnings per share is recognized on the use of
    the proceeds that could be obtained upon exercise of options, warrants and
    similar instruments. It assumes that the proceeds would be used to purchase
    common shares at the average market price during the period.



Basic earnings per share is calculated using the
    weighted-average number of shares outstanding during the year.



Change in accounting policies

Stock-based compensation



Effective January 1, 2003, the Company recognizes
    compensation expense for stock options granted in the consolidated
    statements of income using the fair value based method of accounting for all
    options issued on or after January 1, 2003. Pro forma disclosures of net
    income and earnings per share, as if the fair value based accounting method
    had been used to account for stock-based compensation for any options
    granted before January 1, 2003 but on or after January 1, 2002 are provided
    in the notes. Any cash paid by the employee on the exercise of stock options
    is added to the stated value of common shares.



Long-lived assets



Effective January 1, 2003, the Company adopted the new
    recommendations of The Canadian Institute of Chartered Accountants ("CICA")
    with respect to accounting for the impairment of long-lived assets. This
    standard requires that long-lived assets be reviewed for impairment whenever
    events or changes in circumstances indicate that the carrying amount of an
    asset may not be recoverable. Long-lived assets are grouped at the lowest
    level for which identifiable cash flows are largely independent, when
    testing for and measuring impairment. Under the new standard, a two-step
    process is used to assess the impairment of long-lived assets held for use,
    with the first step determining when impairment is recognized and the second
    step measuring the amount of the impairment. Impairment losses are
    recognized when the carrying amount of long-lived assets exceeds the sum of
    the undiscounted cash flows expected to result from their use and eventual
    disposition and is measured as the amount by which the long-lived asset's
    carrying amount exceeds its fair value. Adoption of this new standard did
    not have an impact on the Company's financial position, results of
    operations or cash flows.



Also effective May 1, 2003, the Company adopted the new
    CICA recommendations relating to the disposal of long-lived assets and
    discontinued operations. Subject to certain criteria, long-lived assets and
    any associated assets or liabilities that management expects to dispose of
    by sale are classified as held for sale. The related results of operations
    from these assets classified as held for sale are reported as discontinued
    operations if certain criteria are met, with reclassification of prior
    years' related operating results. Assets to be disposed of are reported at
    the lower of the carrying amount and fair value less costs to sell. Adoption
    of this new standard did not have an impact on the Company's financial
    position, results of operations or cash flows.



Comparative figures



Certain comparative figures have been reclassified to conform
with the current year's presentation.



-62-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|3. | PREPAID EXPENSES AND SUPPLIES
|-- | -----------------------------





2003
    2002Parts and supplies
    $        384
    $        293Prepaid expenses
    167
    393$        551
    $        686








|4. | AMOUNTS RECEIVABLE
|-- | ------------------

> Amounts receivable consist of the following:





2003
    2002Costs recoverable from third party participant in
    Guatemalan operation
    $          -
    $         161Apuestas Continentales, S.A.
    408
    408The Fantasy Group S.A.
    217
    -Fiesta Juegos de Costa Rica, S.A.
    -
    269Hopland Band of Pomo Indians
    388
    625Other
    36
    361,049
    1,499Current portion of amounts receivable
    (307)
    (398)$        742
    $      1,101








|a) | Costs recoverable from third party participant in Guatemalan operation
|-- | ----------------------------------------------------------------------



> Under the terms of the original operating agreement,
>       the Company was eligible to recover leasehold improvement costs incurred
>       for the Guatemalan operations from a third party participant in the
>       Guatemalan revenue and net profit sharing agreement ("Profit Share
>       Agreement"). The amounts were collectible on a monthly basis from the
>       third party's share of revenue and net profits from the operations. The
>       costs recoverable were non-interest bearing. During the year ended
>       December 31, 2000, the third party ceased reimbursing these costs and
>       disputed eligibility for reimbursement of certain of these costs under the
>       agreement. An arbitration proceeding concerning this dispute was completed
>       in March 2002. During the year ended December 31, 2002, the costs
>       recoverable were written down by $369,000 to the amount awarded by the
>       arbitrator of $161,000, which was collected during the current year.



-63-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|4. | AMOUNTS RECEIVABLE
    (cont'd)
|-- | -------------------------------





|b) | Apuestas Continentales, S.A.
|-- | ----------------------------



> The Company has a promissory note dated March 1, 2000
>       for the sale of gaming machines to Apuestas Continentales, S.A. ("Apuestas").
>       The note is non-interest bearing, with 24 monthly payments of $22,000
>       beginning April 1, 2001 and maturing on March 1, 2003. The Company entered
>       into discussions with Apuestas as payments have not been received as
>       required under the terms of the note. In the absence of reaching
>       settlement with Apuestas, the company filed a lawsuit in Costa Rica and
>       was successful in embargoing 300 gaming machines to secure the repayment
>       of the note, plus costs.



|c) | The Fantasy Group, S.A.
|-- | -----------------------

> The Company has an unsecured promissory note dated June
>       4, 2003, with 48 monthly payments of principal and interest of $5,200,
>       beginning March 2004. The president and principal of The Fantasy Group,
>       S.A., is coordinating the Company's efforts to establish its operations in
>       Chile.



|d) | Fiesta Juegos de Costa Rica, S.A.
|-- | ---------------------------------



> On August 23, 2001, the Company sold its gaming
>       subsidiary, Fiesta Juegos de Costa Rica, S.A. ("Fiesta Juegos"), to a
>       third party for proceeds consisting of a note receivable for $269,000,
>       resulting in a gain on sale of $203,000 (Note 11). The note receivable
>       bears interest at 12%, with monthly payments consisting of 25% of the net
>       income from the operations of Fiesta Juegos, beginning the earlier of 45
>       days after Fiesta Juegos achieves positive cash flows from operations or
>       November 1, 2001. The Company entered into discussions with the purchaser
>       of Fiesta Juegos as payments have not been received as required under the
>       terms of the note. In the absence of settlement, the Company filed a
>       lawsuit in Costa Rica. During 2003, the Company negotiated a 50% interest
>       in the gaming operation in Costa Rica as part of its recovery. This
>       interest is held in Thunderbird de Costa Rica. In addition to its
>       interest, the Company received approximately $60,000 in cash towards the
>       note.



|e) | Hopland Band of Pomo Indians
|-- | ----------------------------



> The Company previously entered into various agreements
>       for the financing, design and construction of a gaming facility on the
>       Hopland Indian Reservation ("Hopland") which included a one-half interest
>       in a Gaming Hardware Lease Agreement (the "Lease"). Pursuant to a
>       settlement agreement dated May 31, 2002, Hopland agreed to pay the Company
>       $750,000 in satisfaction of all obligations owing under the Lease and
>       accordingly, the Company recorded a recovery of $750,000. The amount
>       receivable from Hopland bears interest at 12% per annum and is repayable
>       in monthly instalments of $24,900.



-64-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|4. | AMOUNTS RECEIVABLE
    (cont'd)
|-- | -------------------------------







|f) | Tristar Media, Inc. (successor to Sing Security
    Services, Ltd.)
|-- | -------------------------------------------------------------------

> On June 30, 2001, the Company sold its internet gaming
>       business, FiestaCasinos.com, to Sing Security Services Ltd. for proceeds
>       consisting of a $340,000 note receivable and the assumption of a related
>       liability in the amount of $70,000, resulting in a gain of $208,000. The
>       note receivable bears interest at 10% and requires monthly payments of
>       interest of $2,833 commencing July 31, 2001 through to December 31, 2001,
>       and monthly payments of principal and interest of $7,224 from January 31,
>       2002 through to December 31, 2006. The note receivable is secured by the
>       shares of FiestaCasinos.com. In addition, under the terms of the sale, the
>       Company has the right until June 30, 2006 to buy-back a 50% interest in
>       FiestaCasinos.com at a price based on FiestaCasinos.com's current earnings
>       before interest, taxes and amortization. During the year ended December
>       31, 2002, the Company wrote-off the receivable as a result of the
>       uncertainty of collectibility. However, the Company continues to pursue
>       collection.



|g) | Calsino, Inc.
|-- | -------------

> The Company has a promissory note dated October 1, 2000
>       resulting from the sale of the assets and liabilities of Calsino, Inc. ("Calsino"),
>       including the name of the business, to former employees of Calsino (the
>       "Employees"). The note bears interest at 15%, with quarterly payments of
>       $20,000 beginning April 15, 2001, and maturing on January 15, 2006. The
>       note is secured by an interest in certain assets. During the year ended
>       December 31, 2001, the Employees ceased making the payments required under
>       the terms of the promissory note. At December 31, 2001, the amount
>       receivable was written down to $Nil, reflecting management's uncertainty
>       of its ability to collect under the terms of the promissory note. During
>       the year ended December 31, 2002, the Company collected and recorded a
>       gain on settlement of $150,000 included in discontinued operations
>       (Note 20).



|h) | California gaming amounts receivable
|-- | ------------------------------------

> During the year ended December 31, 1998, the
>       Company agreed to sell a substantial majority of its interest in its
>       California revenue share agreements, loans receivable from California
>       Native Tribes and inventory. The transaction was not recorded as a sale,
>       but rather the Company's California assets were presented as assets held
>       for disposal, as the collection of the consideration from the buyer was
>       dependent upon the buyer collecting sufficient payments from the Native
>       Tribes on the assets sold once the legal and regulatory status of Native
>       Gaming in California was settled. The carrying amount at December 31, 1998
>       represented the net book value of the assets at the date of the
>       transaction and management's best estimate of the minimum amount that will
>       be realized based on its evaluation of all relevant available information.
>       During the year ended December 31, 1999, the sales agreement was rescinded
>       by the parties and the California gaming assets reverted back to the
>       Company. The Company collected $335,000 of the amount during the year
>       ended December 31, 2000 and accordingly, reduced the amount recoverable.
>       During the year ended December 31, 2001, an additional $1,120,000 was
>       collected, resulting in a reduction of the amount recoverable balance to
>       $Nil and a gain on collection of the Californian gaming amounts
>       recoverable of $494,000.



-65-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|5. | INVESTMENTS IN AND ADVANCES TO EQUITY INVESTEES
|-- | -----------------------------------------------

> Through its equity investments, the Company manages
>     operations at one gaming operation in Venezuela (Note 5b), managed
>     operations in various skill game locations in Mexico (Note 5a), and jointly
>     manages operations in two casinos in Nicaragua (Note 5c). The equity
>     investments of the Company and the Company's share of income (loss) from
>     these investments are as follows:





2003
    
    2002Nicaragua
    Mexico
    Venezuela
    Total
    
    Mexico
    Venezuela
    TotalInvestment andadvances
    $        610
    $     1,458
    $      2,397
    $      4,465
    
    $ 1,272
    $ 2,074
    $ 3,346Gain (loss /
    write-down) of equity investment
    302
    (1,458)
    (1,644)
    (2,800)
    
    (1,272)
    (1,644)
    (2,916)$         912
    $            -
    $       753
    $    1,665
    
    $ -
    $ 430
    $ 430






> The Company is entitled to recover the advances that
>     funded certain pre-opening costs from the first available cash flows of the
>     operations. The advances are non-interest bearing.
> 
>     
>     The equity losses of the Company's investees include
>     pre-opening costs which are expensed by the investees in the year the costs
>     are incurred.



> In Mexico, as at December 31, 2003 the Company has a
>       37% (2002 - 37%) equity interest in the operation located in Matamoros, a
>       33% (2002 - 33%) equity interest in the operation located in Nuevo Laredo,
>       and a 40% (2002 - 40%) equity interest in the operation located in Reynosa,
>       which was opened during 2001.
>       As described in Note 1, during the year ended December
>       31, 2001, the Mexican government closed the three skill game facilities in
>       Mexico in which the Company has an equity interest, alleging the
>       operations are in violation of the law. Although the Company has filed a
>       $100 million NAFTA claim against the Mexican government in relation to the
>       closure of the Mexican operations, at December 31, 2001, the Company had
>       written-down its investment in Mexico to $Nil due to the uncertainty of
>       being able to recover its investment.
>         The Company has a 29% equity (2002 - 36%) interest
>       in the Venezuelan operation. During the year ended December 31, 2001, this
>       interest was transferred, through a series of transactions, to a
>       subsidiary in which a third party holds a non-controlling interest. During
>       the year ended December 31, 2001, a portion of the Company's advances to
>       the Venezuelan operation was capitalized to equity, thereby increasing the
>       cost of its investment. During the year ended December 31, 2002, the
>       subsidiary was re-structured to remove the third party minority interest
>       and the Company recorded an impairment charge of $149,000 to reduce the
>       balance of the investment and advances to the estimated net realizable
>       value. During the current year, the subsidiary was restructured to add
>       another shareholder, thereby decreasing the Company's equity interest.



-66-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---









|5. | INVESTMENTS IN AND ADVANCES TO EQUITY INVESTEES

(cont'd)
|-- | ---------------------------------------------------------



> The Company has a net 20.54% equity interest in the
>       Nicaraguan operation. (The Company owns 79% of a subsidiary that owns 26%
>       of the Nicaraguan operation, resulting in a net interest of 20.54%). As
>       described in Note 1, during March, 2003, the Company entered into an
>       agreement to merge the Company's gaming operations in Nicaragua with the
>       gaming operations of Hopewell Limited, S.A. The Company now owns a net
>       20.54% equity interest in the merged entity. Prior to the merger, the
>       Company owned 79% of its Nicaragua operations. Upon disposition of its net
>       assets, the company recognized an $830,000 gain from the transaction,
>       $645,000 of which was deferred in 2002 (Note 11). The remaining $185,000
>       gain resulted from the recovery of previously recorded losses on
>       consolidation, and 20.54% of the fair value of the net assets of the
>       Nicaraguan operations. The non-controlling interest represents the
>       minority shareholder of the subsidiary that the Company owns 79% as
>       described above.



|6. | PROPERTY AND EQUIPMENT
|-- | ----------------------







2003
    
    
    
    2002Cost
    Accumulated
    Amortization
    Net
    Book Value
    
    Cost
    Accumulated
    Amortization
    Net
    Book ValueGaming operations
    equipment
    $      5,680
    $     3,619
    $     2,061
    
    $    4,837
    $     2,586
    $     2,251Leasehold
    improvements
    3,015
    830
    2,185
    
    2,694
    552
    2,142Machinery and
    equipment
    1,207
    920
    287
    
    1,122
    652
    470Furniture, fixtures
    and equipment
    1,657
    947
    710
    
    1,492
    652
    840Building
    725
    41
    684
    
    475
    50
    425Land
    175
    -
    175
    
    175
    -
    175Vehicles
    154
    95
    59
    
    125
    72
    53$    12,613
    $     6,452
    $     6,161
    
    $    10,920
    $     4,564
    $     6,356








|7. | OTHER ASSETS
|-- | ------------





2003
    2002Panama gaming license, net of
    amortization of $444 (2002 - $355)
    $   1,265
    $   1,353Deferred finance charges
    215
    -Other
    385
    117$   1,865
    $   1,470






-67-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|8. | CAPITAL LEASE OBLIGATIONS
|-- | -------------------------







> The following minimum lease payments of the Company and
>     the Company's share of minimum lease payments of its joint venture relating
>     to various capital leases are as follows:





2003
    2002Total minimum lease payments
    $        17
    $        51Amount representing interest
    (2)
    (8)Balance of obligations
    15
    43Current portion of capital lease obligations
    (8)
    (28)Non-current portion of capital lease obligations
    $         7
    $        15






|9. | LOANS PAYABLE
|-- | -------------



> Loans payable consist of the following:





2003
    2002The Company and wholly owned
    subsidiaries:13% loan payable due in monthly instalments of principal only of
      $10,000 (2002 - $10,000), maturing October 2008, and secured by a certain
      lease of gaming machines (Note 9a).
    $        570
    $        69015% loan payable in monthly instalments of principal and interest of
      $31,425, maturing 2002.
    -
    628.75% note payable due in monthly payments of principal and interest of
      $1,700, maturing August 2004, and secured by certain assets.
    -
    4314% (30% upon the occurrence of an event of default) term loan due in
      quarterly payments of interest only ranging between $56,400 and $57,700,
      due through June 2004, and secured by the shares of Thunderbird Panama
      (Note 9b).
    -
    1,61314% (16% upon the occurrence of an event of default) term loan due in
      monthly payments of principal and interest of $26,500, due through
      November 2004, and secured by the shares of Thunderbird Panama (Note 9b).
    -
    53214% (20% upon the occurrence of an event of default) term loan due in
      monthly payments of principal and interest of $88,600, due through
      December 2007, and secured by the shares of Thunderbird Panama (Note 9b).
    3,240
    -Mortgage and remodel loan due in monthly principal instalments of
      $3,333, plus annual interest at the Bank of Panama prime rate plus 0.5%,
      maturing October 2013.
    393
    -




- continued -

-68-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|9. | LOANS PAYABLE

(cont'd)
|-- | -----------------------









2003
    2002Thunderbird Panama:Commercial loan due in monthly instalments of $4,100, plus annual
      interest at LIBOR six months plus 3% reviewed semi annually, due through
      October 2003, secured by equipment.
    -
    41Commercial loan due in monthly instalments of $8,300, plus annual
      interest rate at prime rate plus 1%, with a minimum of 9%, maturing
      November 2003.
    -
    83Mortgage loan due in monthly instalments of $5,800, plus annual
      interest rate at prime rate plus 2.5%, maturing March 2011.
    519
    58918% notes payable, due in monthly instalments of $4,700, including
      interest, through October 2003 (Note 16).
    -
    45Note payable due in monthly instalments of $24,000, plus annual
      interest at 12.5%, maturing in December 2003.
    -
    26815% notes payable, due in monthly instalments including interest,
      ranging between $757 and $2,600 through November 2004 (Note 16).
    40
    -15% notes payable, due in monthly instalments of $757, including
      interest through October 2004 (Note 16).
    7
    -15% notes payable, due in monthly instalments of $1,250, including
      interest through September 2004 (Note 16).
    11
    -Commercial loan due in monthly instalments of $17,800 plus interest at
      LIBOR six months with a minimum of 9%, with maturity date in January 2007.
    564
    70015% notes payable, due in monthly instalments including interest,
      ranging between $734 and $2,600 through April 2004 (Note 16).
    54
    17010.5% note payable due in monthly instalments of $5,400, including
      interest, through July 2003.
    -
    358% note payable due in monthly instalments of $8,500, including
      interest, through January 2004.
    8
    10610% note payable due in monthly instalments of $16,800, including
      interest, through October 2004.
    161
    336






- continued -

-69-

---



INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|9. | LOANS PAYABLE
(cont'd)
|-- | ----------------------





2003
    2002Thunderbird Panama:
    (cont'd)10% commercial loan due in monthly instalments of $5,800, including
      interest, with maturity date in January 2003.
    -
    68% commercial loan due in monthly instalments of $9,900, including
      interest, with maturity date in October 2003.
    -
    968% commercial loan due in monthly instalments of
      $2,200, including interest, through November 2003.
    -
    218% commercial loan due in monthly instalments of
      $3,700, including interest, with maturity date in December 2003 (repaid in
      January, 2004).
    4
    478% commercial loan due in monthly instalments of
      $3,900, including interest, with maturity date in September 2004.
    30
    -10% commercial loan due in monthly instalments of
      $3,700, including interest, with maturity date in May 2003.
    -
    1512.23% commercial loan due in monthly instalments of
      $800, including interest, with maturity date in May 2003.
    -
    47.5% commercial loan due in monthly instalments of
      $5,800, including interest, with maturity date in October 2003.
    -
    598% note payable due in monthly instalments of $4,000,
      including interest, through October 2003 (Note 16).
    -
    3915% note payable due in monthly instalments of $2,700,
      including interest, through January 2004 (Note 16).
    3
    318% note payable due in monthly instalments of $2,100,
      including interest, through April 2004 (Note 16).
    8
    -8.25% note payable due in monthly instalments of
      $4,429, including interest, through January 2005.
    59
    -8.25% note payable due in monthly instalments of
      $4,748, including interest, through January 2005.
    105
    -5,776
    5,631Current portion of loans payable
    (1,464)
    (2,005)$4,312
    $3,626






-70-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|9. | LOANS PAYABLE
(cont'd)
|-- | ----------------------



|a) | 13% loan:
|-- | ---------

> During the year ended December 31, 2000, the Company
>       renegotiated the terms of a loan on which it was in arrears in payments
>       and in default. The loan was replaced by the 13% interest rate loan
>       amortized over 26 months with monthly payments of principal and interest
>       of $33,000. During the year ended December 31, 2001, the Company was again
>       in arrears and in default and renegotiated the terms of the loan. The loan
>       amortization period was extended to 48 months with monthly payments of
>       principal and interest of $21,270. During the period subsequent to the
>       renegotiation and as at December 31, 2001, the Company was in violation of
>       certain covenants specified under the terms of the loan. The Company has
>       obtained a waiver from the lender as of December 31, 2001 through January
>       1, 2004 and therefore, has classified the short-term and long-term
>       portions of the loan in accordance with the renegotiated terms. During the
>       year ended December 31, 2002, the Company renegotiated the terms to
>       $10,000 per month for 73 months, without interest.



|b) | 14% term loans:
|-- | ---------------

> During the year ended December 31, 2002, the Company
>       entered into negotiations to replace its 14% term loans and warrants with
>       a new consolidated term loan and new warrants. Effective January 1, 2003,
>       the Company negotiated a consolidated term loan in the amount of
>       $2,975,000 bearing interest at 14% per annum (20% upon the occurrence of
>       an event of default) due in monthly instalments of $81,300 and secured by
>       the shares of Thunderbird Panama. This loan was obtained in exchange for
>       the Company's 14% term loans outstanding as at December 31, 2002 in the
>       amount of $2,145,000, a Loan Participation Agreement representing a 6%
>       distribution right in the gaming operation in Venezuela to the lender in
>       the amount of $530,000, and additional transaction costs of $300,000.
> 
>       
>       In connection with the consolidated term loan, the
>       Company also granted the lender warrants to acquire up to 2,345,000 common
>       shares of the Company at a price of the lesser of CDN$0.15 or US$0.10,
>       which replaced previous warrants with the right to purchase up to
>       2,000,000 common shares of the Company at a price of CDN$0.65 per share
>       and 345,000 common shares of the Company at a price of CDN$0.35 per share.
>       The exercise price of the new warrants shall first be paid by reduction of
>       the principal and interest on the consolidated term loan. The warrants
>       commence expiring February, 2005 and continue each month thereafter in an
>       amount equal to 97,708 warrants per month until fully expired.
> 
>       
>       On November 20, 2003, the Company restated its 14% term
>       loans and warrants that were effective January 1, 2003 to a new
>       consolidated term loan. In addition to the outstanding balance of the
>       existing loan, the lender funded the Company an additional $856,000 for
>       development projects. Monthly payments on the loan are now $88,600, and
>       are spread out through December, 2007. There were no other changes,
>       modifications or clarifications from the previous fully restated loan
>       agreement of January 2003.



-71-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---







|10. | OTHER PAYABLES
|--- | --------------







2003
    2002Support Consultants, Inc.
    $ 104
    $ 194Former directors and former associated companies
    408
    468Other
    373
    97885
    759Current portion of other payables
    (219)
    (168)$ 666
    $ 591






> Support Consultants, Inc.
> 
>   
>     
>     On July 1, 2002, the Company entered into an agreement
>     with Support Consultants, Inc. ("SCI") pursuant to which the Company, as a
>     result of settlements with various California Native Tribes, agreed to pay
>     SCI an additional $263,000 recorded as a reduction of amounts recovered from
>     the Tribes. The Company also agreed to combine all amounts owing to and from
>     SCI resulting in a net payable of $214,000 of which $110,000 has been paid
>     to December 31, 2003. The remaining amount is repayable on a pro-rata basis
>     from the amounts received from Hopland.
> Former directors and associated companies
> 
>   
>     Effective December 31, 2002, the Company renegotiated the
>     terms on accrued liabilities of $468,000, owed to former officers and an
>     associated company. The repayment terms were extended to instalments of
>     $5,000 per month from January 1, 2003 to June 1, 2004, then $6,500 per month
>     from July 1, 2004 to June 1, 2005, then $5,000 per month to June 1, 2010.

|11. | DEFERRED GAIN
|--- | -------------





2003
    2002Fiesta Juegos de Costa Rica, S.A.
    $     -
    $     203Thunderbird de Nicaragua, S.A.
    -
    645$     -
    $     848




> Fiesta Juegos de Costa Rica, S.A.
>     
>     
>     
>     
>     The gain on the sale of Fiesta Juegos of $203,000 (Note
>     4), originally deferred in 2001 was offset this year against the note
>     receivable from Fiesta Juegos de Costa Rica, S.A. upon the acquisition of
>     the 50% interest in Costa Rica.



-72-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|11. | DEFERRED GAIN
    
(cont'd)
|--- | ---------------------------





> Thunderbird de Nicaragua, S.A.
>     
>     
>     
>     
>     During the current year, the Company entered into an
>     agreement to merge its majority owned Nicaraguan subsidiary, Thunderbird de
>     Nicaragua, S.A. ("Thunderbird Nicaragua"), with the operations of Hopewell
>     Limited, S.A. ("Hopewell") as described in notes 1 and 5c . In November,
>     2002, in preparation for the merger, the non-controlling shareholders' loans
>     to Thunderbird Nicaragua of $645,000 were capitalized to the equity of
>     Thunderbird Nicaragua. The effect of this capitalization was recognized on
>     merger of Thunderbird Nicaragua with Hopewell. The deferred gain was
>     recognized in income in the current year results (Note 5).



|12. | SHARE CAPITAL
|--- | -------------

> Holders of common shares are entitled to one vote for
>     each share held. There are no restrictions that limit the Company's ability
>     to pay dividends on its common stock. The Company has not declared any
>     dividends since incorporation. The Company's common stock has no par value.





Number
    of Shares
    Amount
    Contributed
    SurplusAuthorized100,000,000 common shares
    without par valueIssuedBalance as at December 31, 2000
    23,314,312
    $     21,032
    $         -Exercise of options
    176,062
    57
    -Balance as at December 31, 2001
    23,490,374
    21,089
    -Exercise of options
    25,494
    5
    -Shares returned to treasury
    (40,000)
    (9)
    -Balance as at December 31, 2002
    23,475,868
    21,085
    -Exercise of options
    835,819
    181
    -Compensation expense
    -
    -
    65Balance as at December 31, 2003
    24,311,687
    $     21,266
    $         65






-73-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|12. | SHARE CAPITAL
    
(cont'd)
|--- | ---------------------------







> Warrants



|                               | 2003                       |                                             | 2002 | 2001                      
|------------------------------ | -------------------------- | ------------------------------------------- | ---- | --------------------------
|                               | Number
    of
    Warrants | Weighted
    Average
    Exercise
    Price |      | Number
    of
    Warrants
|                               |                            |                                             |      |                           
|Outstanding, beginning of year | 2,345,000                  | CDN$ 0.93                                   |      | 2,345,000                 
|Cancelled                      | (2,345,000)                | (0.93)                                      |      | -                         
|Issued                         | 2,345,000                  | 0.15                                        |      | -                         
|                               |                            |                                             |      |                           
|Outstanding, end of year       | 2,345,000                  | CDN$ 0.15                                   |      | 2,345,000                 





> Options



> The Company, through its Board of Directors and
>     shareholders, adopted a July 1, 1997 Stock Option Plan. The Company has
>     granted a number of stock options and entered into various agreements for
>     which up to 2,526,984 shares are available for purchase pursuant to options
>     granted under this plan. All of the stock options issued under this plan are
>     nontransferable and terminate on the earlier of the expiry date or 30 days
>     after the grantee ceases to be employed by the Company. All options are
>     vested when issued.





Number
    of Shares
    Weighted
    Average
    Exercise Price
    (CDN $)Balance as at December 31, 2000
    4,114,215
    $              0.81Granted
    245,000
    0.64Exercised
    (176,062)
    0.50Cancelled
    (193,000)
    1.40Balance as at December 31, 2001
    3,990,153
    0.77Granted
    1,208,830
    0.10Exercised
    (25,494)
    0.32Cancelled
    (1,042,045)
    1.29Balance as at December 31, 2002
    4,131,444
    0.45Granted
    710,000
    0.20Exercised
    (835,819)
    0.30Cancelled
    (1,478,641)
    0.53Balance as at December 31, 2003
    2,526,984
    $              0.38Number of options currently exercisable
    2,526,984
    $              0.38






-74-

---

I

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|12. | SHARE CAPITAL
    
(cont'd)
|--- | ---------------------------





> The following table summarizes information about the stock
> options outstanding at December 31, 2003:







Range of
    Exercise prices (CDN $)
    Number
    Outstanding
    Weighted Average
    Remaining Life
    Weighted Average
    Exercise Price
    (CDN $)$0.08 - $0.09
    993,376
    3.72 years
    $    0.09$0.20 - $0.55
    852,000
    4.17 years
    0.26$0.60 - $1.00
    306,108
    0.58 years
    0.70$1.11 - $1.19
    375,500
    1.55 years
    1.172,526,984
    3.16 years
    0.38






> Stock-based compensation



> Effective January 1, 2003, the Company recognizes
>     compensation expense for stock options granted in the consolidated
>     statements of operations and deficit using the fair value based method of
>     accounting for all options issued on or after January 1, 2003. During the
>     current year, the Company granted 710,000 stock options with a fair value of
>     $65,000, which is included in general and administrative expense. Pro forma
>     disclosures of net income and earnings per share as if the fair value based
>     accounting method had been used to account for stock-based compensation for
>     any options granted before January 1, 2003 but on or after January 1, 2002
>     are provided as follows:









Net income for the year ending December 2002, as reported
    $      324Additional compensation expense
    (65)Pro-forma net income
    $      259Pro-forma basic and diluted earnings per share
    $     0.01






> The weighted average fair value of each option granted
>     during the current year was $0.09 (2002 - $0.10).

-75-

---



INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|12. | SHARE CAPITAL
    
(cont'd)
|--- | ---------------------------







> The following weighted average assumptions were used for
>     the Black-Scholes method of valuation of stock options granted during the
>     year:





2003
    2002Risk-free interest rate
    4.0%
    4.5%Expected life of options
    5 years
    5 yearsAnnualized volatility
    70%
    70%Dividend rate
    0%
    0%








|13. | EARNINGS PER SHARE
|--- | ------------------

> The following weighted average number of shares were used for
> computation of earnings per share:





(000's omitted)
    2003
    2002
    2001Weighted average shares used in computation of basic earnings (loss) per share
    23,812
    23,511
    23,398Effect of diluted securitiesStock options and warrants
    2,811
    -
    -Weighted average shares used in computation of diluted earnings (loss) per share
    26,623
    23,512
    23,398Income (loss) from continuing operations
    $     3,053
    $        283
    $    (1,893)Income (loss) from discontinued operations
    -
    41
    (1,187)Net income (loss) for the year
    $     3,053
    $        324
    $    (3,080)








|14. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
|--- | --------------------------------------------------

> Significant non-cash transactions for the year ended December
> 31, 2003 included:



> The Company recorded an $830,000 gain from the
>       results of the merger in Nicaragua. As of December 2002, the Company had a
>       deferred gain of $645,000 related to its Nicaragua operations, which is
>       part of the $830,000 gain.
>     The Company acquired 50% of the Costa Rican
>       Operation as a result of the lawsuit filed in Costa Rica (Note 4), and
>       offset the note receivable from Fiesta Juegos of $210,000 against the
>       $203,000 deferred gain, resulting in a loss of $7,000.



-76-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|14. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS(cont'd)
|--- | ----------------------------------------------------------

> Significant non-cash transactions for the year ended December
> 31, 2002 included:



> The Company negotiated an agreement pursuant to
>       which amounts owing to SCI of $291,000 and due from SCI of $242,000 were
>       combined into other payables.
>     The Company acquired and cancelled 40,000 common
>       shares in exchange for a loan receivable from a director of $9,000.
>     The Company renegotiated the terms on accrued
>       liabilities of $468,000, agreeing to pay $60,000 in monthly instalments of
>       $5,000 over the next fiscal year and extending the payment of $408,000 to
>       non-current portion of other payables.
>     The non-controlling shareholders' loans to
>       Thunderbird Nicaragua of $645,000 were capitalized to the equity of
>       Thunderbird Nicaragua resulting in a deferred gain.
>     The Company acquired the non-controlling interest of
>       a subsidiary held by a third party in exchange for a 4% equity interest in
>       the Venezuelan operation.



> There were no significant non-cash transactions during the
> year ended December 31, 2001.



|15. | INCOME TAXES
|--- | ------------

> A reconciliation of income taxes at statutory rates is as
> follows:





2003
    2002
    2001Computed "expected" tax expense (recovery) at statutory
      rates
    $       1,400
    $         371
    $       (450)Increase (reduction) in income taxes resulting from:Lower effective income tax rate on income of foreign
      subsidiaries
    (808)
    (571)
    (208)Benefit of losses not reflected in accounts
    462
    816
    1,351Application of previously unrecognized tax losses
    -
    -
    (53)Other
    -
    129
    151$       1,054
    $         745
    $        791






-77-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---



|15. | INCOME TAXES
    
(cont'd)
|--- | --------------------------









|a) | Future tax assets and liabilities:
|-- | ----------------------------------



> The tax effects of temporary differences that give rise
>       to significant future tax assets and future tax liabilities are as
>       follows:





2003
    2002
    2001Future income tax assets:Non-capital loss carry forwards
    $                8,038
    $ 7,519
    $7,955Property and equipment - unamortized tax cost in excess of net book
      value
    720
    694
    755Other
    -
    -
    359Total future tax assets
    8,758
    8,213
    9,069Valuation allowance
    (8,758)
    (8,161)
    (8,964)Future income tax assets, net of allowance
    -
    52
    105Future income tax liabilities:Property and equipment - net book value in excess of unamortized
        capital cost
    238
    217
    221Other assets - net book value in excess of unamortized tax cost
    379
    406
    432Withholding tax on repatriation of retained earnings from foreign subsidiaries
    162
    120
    248Total future tax liabilities
    779
    743
    901Net future income tax liability
    $                 779
    $691
    $
796








|b) | Potential future tax benefits
|-- | -----------------------------

> At December 31, 2003, the Company has Canadian
>       non-capital loss carry forwards of approximately $9.6 million and United
>       States' operating losses of approximately $14.3 million. The Canadian
>       non-capital loss carry forwards and United States' operating losses expire
>       at various dates prior to 2010 and 2023, respectively. The potential
>       income tax benefits related to the Canadian loss carry forwards, and the
>       United States' operating losses have not been reflected in the accounts.



|16. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

> Included in accounts receivable is $194,000 (2002 -
>     $18,000) receivable from officers of the Company. The receivable amounts are
>     unsecured, non-interest bearing and due on demand. Most of the receivable
>     will be satisfied by the application of bonus payments to the employee.
>     Included in loans payable is $123,000 (2002 - $285,000) due to related
>     parties.



-78-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---





|16. | RELATED PARTY TRANSACTIONS(cont'd)
|--- | ----------------------------------

> Included in amounts receivable are share purchase loans
>     totalling $36,000 (2002 - $36,000) due from certain management and officers
>     of the Company. The amounts are secured by non-interest bearing notes due on
>     the earlier of November 2004 or upon ceasing employment.
> 
>     
>     Included in accounts receivable is $1,954,000 (2002 -
>     $1,650,000) due from Thunderbird Panama. Also included in accounts
>     receivable is $251,000 (2002 - $Nil) due from Thunderbird de Costa Rica.
>     These amounts represent the balances due in excess of the Company's
>     proportionate share of the net assets included on consolidation.
> 
>     
>     During the year, the Company recorded management fees of
>     $Nil (2002 - $Nil; 2001 - $200,000) from the Nuevo Laredo operation pursuant
>     to the "Management Agreement" dated November 2000 and management fees of
>     $Nil (2002 - $Nil; 2001 - $80,000) from the Reynosa operation pursuant to
>     the "Management Agreement" dated June 2001. During the year ended December
>     31, 2002, the "Management Agreement" for the Reynosa operation was
>     terminated pursuant to the terms of the agreement due to the closure of the
>     skill game facility and the failure to re-open within a period of six
>     months. In addition, the Company charged administrative and overhead costs
>     of $Nil (2002 - $Nil; 2001 - $111,000) to the Matamoros operation, $Nil
>     (2002 - $Nil; 2001 - $24,000) to the Nuevo Laredo operation, $Nil (2002 -
>     $Nil; 2001 - $32,000) to the Reynosa operation, $Nil (2002 - $48,000; 2001 -
>     $151,000) to the Venezuelan operation and $25,000 (2002 - $Nil; 2001 - $Nil)
>     to the Nicaragua operation.
> 
>     
>     The transactions described above are in the ordinary
>     course of business and are on normal commercial terms. Transactions with
>     these related parties are recorded at the exchange amount, which is based on
>     the consideration given for the service provided.



|17. | COMMITMENTS AND CONTINGENCIES
|--- | -----------------------------

> As at December 31, 2003, minimum operating lease
>       payments of the Company and the Company's share of minimum operating lease
>       payments of joint ventures were as follows:







2004
    $    9192005
    8772006
    8382007
    8382008
    812$   4,284






> In addition to the above, Thunderbird Panama is
>       committed to pay minimum annual rentals for two of the casinos equal to 9%
>       of the net win less the income participation payable to the Government of
>       the Republic of Panama.
> 
>       
>       Rent expense for the year ended December 31, 2003 was
>       $1,713,000 (2002 - $1,639,000).



> Thunderbird Panama is committed to pay the
>       Government of the Republic of Panama an annual minimum income
>       participation equal to $4,216,000 in the first year, which increases by 2%
>       per year, or 10% of Thunderbird Panama's gross income, whichever is
>       higher. This commitment commenced in August 1998, on the opening of the
>       first casino in the Republic of Panama and related payments commenced
>       shortly thereafter. Amounts paid under the agreement by Thunderbird Panama
>       were $4,851,400 in 2003 (2002 - $4,539,868).



-79-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|17. | COMMITMENTS AND CONTINGENCIES
    
(cont'd)
|--- | -------------------------------------------







> Thunderbird Panama is committed to pay a 2% profit
>       interest, defined as gross revenue less operating expenses, in the
>       Panamanian operations to a third party. The Company is committed to pay to
>       a third party $13,000 each month while operations continue in the Republic
>       of Panama commencing July 1999, for a maximum of 10 years.
>     Thunderbird de Costa Rica is committed to pay to Apuestas a monthly revenue share fee of 30% of net win of each machine for
>       the use of certain of its gaming machines. As part of the Company's
>       embargo on the machines, these amounts have been accrued by the entity but
>       not paid, pending the settlement of amounts owed by Apuestas to the
>       Company.
>     In connection with the equity investment in Venezuela,
>       the Company has pledged its shares of the equity investment as collateral
>       on a $2,322,000 loan made available by a Venezuelan financial
>       institution to the investee.
>     The Company has a pending tax appeal regarding a
>       prior year. The Company does not expect a significant liability arising
>       out of this reassessment.
>     As at December 31, 2003, principal payments required
>       under the terms of the loan agreements and their liabilities in each of
>       the next five years are as follows:





Year ending December 31:2004
    $ 1,4642005
    1,2212006
    1,2882007
    1,2322008
    209Thereafter
    362$ 5,776








|18. | DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS
|--- | ------------------------------------------------------



> Fair value:
> 
>   
>     
>     The carrying amount of cash and equivalents, accounts
>     receivable, accounts payable and accrued liabilities and income taxes
>     payable approximate their fair value because of the short-term maturities of
>     these items. The carrying amount of the restricted cash approximates fair
>     value because of the high liquidity of the item. Certain of the Company's
>     amounts receivable, loans payable and other payables do not bear any
>     interest, bear fixed rates of interest or are due to related parties.
> Credit risk:
> 
>   
>     Financial instruments that potentially subject the
>     Company to concentrations of credit risk consist primarily of cash and cash
>     equivalents, accounts receivable and amounts receivable.  The Company places
>     its cash and cash equivalents with high quality financial institutions and
>     limits the amount of credit exposure with any one institution.  The Company
>     has limited concentrations of credit risk with respect to accounts
>     receivable since better than 80% of its accounts receivable is due from its
>     joint ventures.  At December 31, 2003, the Company has accounts receivable
>     of $1.9 million (2002 - $1.7 million) due from its joint venture in Panama.
>       The Company mitigates credit risk through standard credit and reference
>     checks, but generally does not require collateral to support accounts
>     receivable.



-80-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|18. | DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

(cont'd)
|--- | ----------------------------------------------------------------







> Currency risk:
> 
> 
>   
>     
>     The Company is exposed to financial risk arising from
>     fluctuations in foreign exchange rates and the degree of volatility of these
>     rates. The Company does not use derivative instruments to reduce its
>     exposure to foreign currency risk.

|19. | INVESTMENT IN JOINT VENTURES
|--- | ----------------------------



> Amounts included in these financial statements related to the
> Company's interest in joint ventures are as follows:





2003
    2002Current assets
    $      1,461
    $      1,238Long-term assets
    8,052
    7,902Current liabilities
    3,388
    3,430Long-term liabilities
    1,768
    1,757Revenue
    18,193
    14,717Expenses
    15,597
    12,865Net income before taxes
    2,596
    1,852Cash flows from operating activities
    3,981
    3,471Cash flows from financing activities
    (2,125)
    (547)Cash flows from investing activities
    (1,509)
    (2,950)








|20. | DISCONTINUED OPERATIONS
|--- | -----------------------



> During the year ended December 31, 2000, the Company
>     discontinued the operations of its gaming products business. This operation
>     consisted primarily of the gaming and commercial signage and display
>     businesses, operated through Calsino, and the sale of gaming machines and
>     the distribution of card shufflers in the United States and Central America.
> 
>     
>     The assets of Calsino were sold to a third party on
>     September 30, 2000 for proceeds of approximately $266,000, consisting of a
>     note receivable, bearing interest at 15%, with quarterly payments of $20,000
>     beginning April 15, 2001 and maturing January 15, 2006. The note is secured
>     by an interest in certain assets. The distribution rights to the Quick Draw
>     Shuffler, acquired in 1999, were converted to a royalty interest whereby the
>     Company will receive $500 per machine sold in the United States by the
>     manufacturer. During 2001, these amounts were written down to $Nil,
>     reflecting management's uncertainty of its ability to collect under the
>     terms of the note and the royalty interest agreement, respectively. In
>     addition, the inventory with a book value of $339,000 was written-off in
>     fiscal 2001. During the year ended December 31, 2002, the Company collected
>     and recorded a gain of $150,000 in settlement of the receivable previously
>     written down.



-81-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|20. | DISCONTINUED OPERATIONS

(cont'd)
|--- | ---------------------------------





> The amounts included in the balance sheet as at December 31
> relating to the discontinued operations are as follows:





2003
    2002Amounts receivable
    $    -
    $   408Capital lease obligations
    -
    (9)$    -
    $   399






> Revenue and expenses of the gaming products discontinued
>     operations were as follows:





2003
    2002
    2001General and administrative expenses
    $     -
    $    (40)
    $           -Recovery (write-down) of assets
    -
    150
    (1,187)Income (loss) before taxes
    -
    110
    (1,187)Income tax expense
    -
    69
    -Income (loss) for the year
    $     -
    $    41
    $   (1,187)






> The cash provided by (used in) discontinued operations is as
> follows:





2003
    2002
    2001Income from discontinued operations
    $     -
    $   41
    $   (1,187)Write-down of assets
    -
    -
    1,187$     -
    $     -
    $            
    -








|21. | SEGMENTED INFORMATION
|--- | ---------------------



> Management has organized the enterprise based on a
>     combination of differences in products and services provided and geographic
>     areas of operations. Based on this organization, the Company has the
>     following reportable segments, excluding the revenue, expenses and assets
>     from the discontinued operations disclosed in Note 20. The accounting
>     policies of the segments are the same as those described in Note 2 of the
>     financial statements.



-82-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|21. | SEGMENTED INFORMATION
(cont'd)
|--- | ------------------------------









2003
    Panama
    Gaming
    Guatemala
    Video
    Lottery
    Nicaragua
    Corporate
    And Other
    TotalExternal revenue
    $     18,003
    $3,195
    $266
    $322
    $21,786Amortization
    1,654
    97
    19
    90
    1,860Income tax expense
    936
    112
    5
    1
    1,054Net income (loss)
    from continuing operations
    1,518
    1,405
    (7)
    137
    3,053Segment assets
    9,219
    562
    -
    6,809
    16,590








2002
    Panama
    Gaming
    Guatemala
    Video
    Lottery
    Nicaragua
    Corporate
    And Other
    TotalExternal revenue
    $14,717
    $1,762
    $2,028
    $12
    $18,519Amortization
    1,192
    310
    115
    162
    1,779Income tax expense
    651
    91
    -
    3
    745Net income (loss)
    from continuing operations
    1,326
    928
    (252)
    (1,719)
    283Segment assets
    9,140
    988
    603
    3,414
    14,145






2001
    Panama
    Gaming
    Guatemala
    Video
    Lottery
    California
    Gaming
    Nicaragua
    Corporate
    And Other
    TotalExternal revenue
    $13,253
    $1,645
    $22
    $1,368
    $132
    $16,420Amortization
    884
    190
    -
    87
    135
    1,296Gain (loss) on
    disposal of capital assets
    8
    -
    -
    -
    (68)
    (60)Income tax expense
    727
    58
    -
    -
    6
    791Net income (loss)
    from continuing operations
    1,268
    930
    516
    (911)
    (3,696)
    (1,893)Segment assets
    7,199
    1,790
    -
    701
    3,724
    13,414






> Geographic information as at December 31, 2003:





Panama
    Guatemala
    Nicaragua
    United
    States
    Other
    TotalRevenue
    $18,003
    $3,195
    $266
    $-
    $322
    $21,786Property and equipment
    5,608
    310
    -
    98
    145
    6,161






-83-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---







|21. | SEGMENTED INFORMATION
(cont'd)
|--- | ------------------------------

> Geographic information as at December 31, 2002:





Panama
    Guatemala
    Nicaragua
    United
    States
    Other
    TotalRevenue
    $14,717
    $1,762
    $2,028
    $12
    $
    -
    $18,519Property and equipment
    5,671
    121
    384
    180
    -
    6,356






> Geographic information as at December 31, 2001:





Panama
    Guatemala
    Nicaragua
    United
    States
    Other
    TotalRevenue
    $13,253
    $1,645
    $1,368
    $22
    $132
    $16,420Property and equipment
    3,794
    380
    496
    333
    -
    5,003








|22. | SUBSEQUENT EVENTS
|--- | -----------------



> The following events occurred subsequent to December 31,
> 2003:



> Costa Rica: The Company and its local 50%
>       Costa Rica partner signed an agreement with a multi-national hotel
>       owner-operator to build a casino near the San Jose International Airport.
>       The development rights include the right to own and operate a
>       casino/entertainment/restaurant property. The hotel owner will secure all
>       appropriate construction and operating permits such as the casino license,
>       food and alcohol beverage license, and approval of zoning for the
>       construction and operation. The Company will undertake to construct the
>       building and improvements for a Fiesta casino/entertainment center and the
>       "shell/box" for a Denny's restaurant. The project cost is estimated at
>       $5.3 million, which will result in the addition of 250 gaming machines and
>       84 new gaming positions.
>     Chile:

-84-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES
|--- | -------------------------------------------------------------------------------------------





> These financial statements have been prepared in
>     accordance with Canadian generally accepted accounting principles ("Canadian
>     GAAP") Material variations in the accounting principles, practices and
>     methods used in preparing these consolidated financial statements from
>     principles, practices and methods accepted in the United States ("US GAAP")
>     are described and quantified below:



> Accounting for stock-based compensation



> Under U.S. GAAP, Statements of Financial Accounting
>       Standards No. 123, "Accounting for Stock-based Compensation" ("SFAS 123")
>       requires companies to establish a fair market value based method of
>       accounting for stock-based compensation plans. During the years ended
>       December 31, 2001 and 2002, the Company has chosen to account for
>       stock-based compensation using Accounting Principles Board Opinion No. 25
>       "Accounting for Stock Issued to Employees" ("APB 25"). Accordingly,
>       compensation cost for stock options is measured as the excess, if any, of
>       the quoted market price of the Company's stock at the date of grant over
>       the option price. The Company has elected to account for stock-based
>       compensation using SFAS 123 for the year ended December 31, 2003.
>       
>       Under Canadian GAAP, the reporting of stock-based
>       compensation expense in the Company's consolidated financial statements
>       was not required for the year ended December 31, 2001. New accounting and
>       disclosure standards were introduced under Canadian GAAP (Notes 2 and 12)
>       for the fiscal years ending December 31, 2002 and 2003.
>       
>       There is no difference between Canadian GAAP and U.S.
>       GAAP on the accounting for stock-based compensation for the years ended
>       December 31, 2003 and 2002.



> Investment in joint ventures



> Investment in joint ventures are accounted for under
>       the proportionate consolidation method for purposes of Canadian GAAP.
>       Under U.S. GAAP, investments in joint ventures are accounted for under the
>       equity method. However, rules prescribed by the Securities and Exchange
>       Commission ("SEC") permit the use of the proportionate consolidation
>       method in the reconciliation to U.S. GAAP provided the joint venture is an
>       operating entity and the significant financial operating policies of which
>       are, by contractual arrangement, jointly controlled by all parties having
>       an equity interest in the joint venture entity. The SEC's policy requires
>       specified disclosures which have been made in Note 19. Accordingly, for
>       purposes of reconciliation to U.S. GAAP, the Company has used the
>       proportionate consolidation method and no GAAP difference arises.



> Imputation of interest



> U.S. GAAP requires that where property, goods or
>       services is exchanged for a note receivable that does not bear interest at
>       market rates, the transaction should be recorded at the discounted present
>       value. Any premium or discount recorded on the note should then be
>       accounted for as an element of interest over the life of the note. There
>       is no similar requirement under Canadian GAAP. Accordingly, at December
>       31, 2003, the Company's note receivable from Apuestas Continentales, S.A.
>       recorded at $408,000 (2002 - $408,000) for Canadian GAAP would be reduced
>       to approximately $374,000 (2002 - $374,000) under U.S. GAAP. Interest
>       income would remain unchanged under U.S. GAAP for the year (2002 - no
>       change in interest income; 2001 - $66,000 increase in interest income) ,
>       resulting in no change in the reported income for the year (2002 - no
>       change in the reported income; 2001 - $66,000 decrease in the reported
>       loss for the year).



-85-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES(cont'd)
|--- | ---------------------------------------------------------------------------------------------------









> Investments in and advances to equity investees



> Under both Canadian GAAP and U.S. GAAP, when accounting
>       for investments in companies using the equity method, an investor is
>       required to recognize its pro rata share of any post-acquisition losses of
>       an investee by way of a reduction in the carrying amount of its
>       investment, including advances, in the investee. However, in situations
>       where an investor owns common stock and other investments in or has
>       advances to the investee, is not required to advance additional funds to
>       the investee and where losses have reduced the common stock investment to
>       zero, U.S. GAAP prohibits the recognition of equity method losses by an
>       investor based solely on the percentage of investee common stock held by
>       an investor while Canadian GAAP does not prescribe a method for
>       determining an investor's "pro rata share" of any post-acquisition losses
>       of an investee.



> During the year ended December 31, 2003, for Canadian
>       GAAP purposes, the Company recorded aggregate equity losses in equity
>       investees of $nil (2002 - $578,000; 2001 - $1,366,000) which was
>       calculated based on the percentage of common stock of the equity investees
>       held by the Company. Under U.S. GAAP, the aggregate equity losses in
>       equity investees would be unchanged (2002 - decreased to $424,000; 2001 -
>       decreased to $1,365,000), resulting in an increase in the carrying value
>       of the company's Mexican, Nicaraguan and Venezuelan investments by $nil
>       (2002 - $nil; 2001 - $27,000), and $nil (2002 - $nil; 2001 - $154,000),
>       and $nil (2002 & 2001 - $nil), respectively.



> Gain on disposal of discontinued operations



> For Canadian GAAP purposes, the Company recorded a gain
>       on disposal of the Calsino, Inc. operations during the year ended December
>       31, 2000 as described in Note 20. For U.S. GAAP purposes, the gain would
>       be deferred until the note receivable is paid. As described in Note 4(g),
>       the note receivable was written down to $Nil during fiscal 2001,
>       reflecting management's uncertainty of its ability to collect under the
>       terms of the note receivable.



> Share purchase loans



> Under Canadian GAAP, the Company includes share
>       purchase loans totaling $36,000 (2002 - $36,000; 2001 - $45,000) due from
>       certain management and officers of the Company in amounts receivable.
>       Under U.S. GAAP, these loans are recorded as a deduction to shareholders'
>       equity.



> Term loans



> Under Canadian GAAP, the term loans (Note 9(b)) are
>       classified between current and long-term liabilities based on their
>       scheduled repayment dates. These loans become repayable on demand upon the
>       occurrence of specified events of default, one of which, is the occurrence
>       of a material adverse change (as defined in the loan agreements). Under
>       U.S. GAAP, as a result of such a subjective acceleration charge, $nil
>       (2002- $1,885,000) classified as long-term debt under Canadian GAAP would
>       be classified as a current liability.



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INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES
      (cont'd)
|--- | ----------------------------------------------------------------------------------------------------------





> Recent accounting pronouncements:
>   In January 2003, FASB issued Financial Interpretation
>       No. 46 "Consolidation of Variable Interest Entities" ("FIN 46") (revised
>       in December 17, 2003). The objective of FIN 46 is to improve financial
>       reporting by companies involved with variable interest entities. A
>       variable interest entity is a corporation, partnership, trust, or any
>       other legal structure used for business purposes that either (a) does not
>       have equity investors with voting rights or (b) has equity investors that
>       do not provide sufficient financial resources for the entity to support
>       its activities. FIN 46 requires a variable interest entity to be
>       consolidated by a company if that company is subject to a majority of the
>       risk of loss from the variable interest entity's activities or entitled to
>       receive a majority of the entity's residual returns or both. FIN 46 also
>       requires disclosures about variable interest entities that the company is
>       not required to consolidate but in which it has a significant variable
>       interest. The consolidation requirements of FIN 46 apply immediately to
>       variable interest entities created after December 15, 2003. The
>       consolidation requirements apply to older entities in the first fiscal
>       year or interim period beginning after March 15, 2004.
>       
>       In April 2003, FASB issued Statements of Financial
>       Accounting Standards No. 149 "Amendment of Statement 133 on Derivative
>       Instruments and Hedging Activities" ("SFAS 149"). SFAS 149 amends and
>       clarifies financial accounting and reporting for derivative instruments,
>       including certain derivative instruments embedded in other contracts and
>       for hedging activities under FASB Statement No. 133 "Accounting for
>       Derivative Instruments and Hedging Activities". SFAS 149 is generally
>       effective for contracts entered into or modified after June 30, 2003.
>       
>       In May 2003, FASB issued Statements of Financial
>       Accounting Standards No. 150 "Accounting for Certain Financial Instruments
>       with Characteristics of both Liabilities and Equity" ("SFAS 150"). SFAS
>       150 establishes standards for how an issuer classifies and measures
>       certain financial instruments with characteristics of both liabilities and
>       equity. SFAS 150 is effective for financial instruments entered into or
>       modified after May 31, 2003.









-87-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES
    (cont'd)
|--- | --------------------------------------------------------------------------------------------------------





> The impact of the material differences between Canadian
>     and United States GAAP on the consolidated balance sheets and statements of
>     operations are as follows:





2003
    2002Assets under Canadian GAAP
    $     16,998
    $     14,553Adjustment for imputation of interest cost (c)
    (34)
    (34)Adjustment for share purchase loans (f)
    (36)
    (36)Assets under U.S. GAAP
    $      16,928
    $     14,483








Total liabilities under Canadian GAAP and U.S. GAAP
    $     12,201
    $     13,066Non-controlling interest under Canadian GAAP and U.S.
    GAAP
    149
    -Shareholders' equity under Canadian GAAP
    4,648
    1,487Adjustment for imputation of interest cost (c)
    (34)
    (34)Adjustment for share purchase loans (f)
    (36)
    (36)Shareholders' equity under U.S. GAAP
    4,578
    1,417Total liabilities and shareholders' equity under U.S.
    GAAP
    $     16,928
    $     14,483






-88-

---

INTERNATIONAL THUNDERBIRD GAMING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Tabular amounts expressed in thousands of dollars except per
share amounts)

DECEMBER 31, 2003

---

|23. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES
      (cont'd)
|--- | ----------------------------------------------------------------------------------------------------------





> The impact of the material differences between Canadian
>     GAAP and U.S. GAAP on the consolidated statements of operations are as
>     follows:





2003
    2002
    2001Income (loss) from continuing operations under Canadian
    GAAP
    $     3,053
    $       283
    $     (1,893)Stock-based compensation to non-employees (a)
    -
    -
    (102)Imputation of interest cost (c)
    -
    -
    66Gain of equity accounted investments (d)
    -
    154
    1Income (loss) from continuing operations under U.S. GAAP
    3,053
    437
    (1,928)Income (loss) from discontinued
    operations under Canadian GAAP
    -
    41
    (1,187)Adjustment to gain on discontinued operations (e)
    -
    -
    266Income (loss) from discontinued operations under U.S.
    GAAP
    -
    41
    (921)Net income (loss) under U.S. GAAP
    $     3,053
    $       478
    $     (2,849)Basic earnings (loss) per share under U.S. GAAPContinuing operations
    $       0.13
    $      0.01
    $     (0.08)Discontinued operations
    0.00
    0.00
    (0.04)Net earnings (loss) under U.S. GAAP
    $       0.13
    $      0.01
    $     (0.12)Diluted earnings (loss) per share under U.S. GAAPContinuing operations
    $       0.11
    $      0.01
    $    (0.08)Discontinued operations
    0.00
    0.00
    (0.04)Net earnings (loss) under U.S. GAAP
    $       0.11
    $      0.01
    $ (0.12)






> The impact of the material differences between Canadian
>     GAAP and U.S. GAAP do not materially affect the consolidated statements of
>     cash flows.

-89-

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SIGNATURE
          
          The registrant hereby certifies that it meets all of
          the requirements for filing on Form 20-F and that it has duly caused
          and authorized the undersigned to sign this annual report on its
          behalf.Dated: July 12, 2004
          INTERNATIONAL THUNDERBIRD GAMING CORPORATION
          Per:
          
          
          
          
          Albert W. Atallah
          Chief Operating Officer










-90-

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