?
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

(Mark One)

[ ]      Registration  Statement  pursuant  to  Section  12(b)  or  (g)  of  the
         Securities Exchange Act of 1934
                                       or

[X]      Annual  Report  pursuant  to  Section  13 or  15(d)  of the  Securities
         Exchange Act of 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       or

[ ]      Transition  Report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934
              For the transition period from _________ to _________

                         Commission file number: 0-51005

                           AMERA RESOURCES CORPORATION
             (Exact name of Registrant as specified in its charter)

                           AMERA RESOURCES CORPORATION
                 (Translation of Registrant's name into English)

                            BRITISH COLUMBIA, CANADA
                 (Jurisdiction of incorporation or organization)

      #709 - 837 WEST HASTINGS STREET, VANCOUVER, BRITISH COLUMBIA, V6C 3N6
                    (Address of principal executive offices)

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

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

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act.
                                 NOT APPLICABLE
                                (Title of Class)

Indicate the number of  outstanding  shares of each of the  issuer's  classes of
capital or common stock as of December 31, 2004
          14,087,882 COMMON SHARES OUTSTANDING AS OF DECEMBER 31, 2004

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  [X]        No  [ ]

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

Item 17 [X]     Item 18 [ ]

                                       -1-


<PAGE>



GENERAL INFORMATION:  UNLESS OTHERWISE  INDICATED,  ALL REFERENCES HEREIN ARE TO
CANADIAN DOLLARS.

                                                      GLOSSARY

The  following  is a glossary of  geological  and  technical  terms used in this
annual report:

ALTERATION                   Any  physical  or  chemical  change  in a  rock  or
                             mineral  subsequent  to its  formation.  Milder and
                             more localized than metamorphism.

ARGILLIC ALTERATION:         Development   of   secondary   clay   minerals   by
                             weathering or hydrothermal activity.

BRECCIA:                     A rock containing  generally  angular  fragments of
                             itself or some other rock.

CATEO:                       In Argentina,  a cateo is an exploration concession
                             granted for a period of up to 1,100 days.  In areas
                             where  field work  seasons  are  limited,  only the
                             available   field  season  will  be  considered  in
                             determining  the  1,100  days.  A cateo  gives  the
                             holder the  exclusive  right to  explore  the area,
                             subject to certain pre-existing rights of owners of
                             mines  within  the  area  and  abutting  owners  of
                             cateos.  Through  the process of  exploration,  the
                             owner   of   the    cateo   may   make   and   file
                             "manifestations"   of  discovery  (see  below)  and
                             petition the mining  authority  for the granting of
                             mines  (see  below).  A cateo  may be up to  10,000
                             hectares  in size.  A single  legal  person may not
                             hold more than 20 cateos  or  200,000  hectares  of
                             cateos  in any one  province.  When  the  cateo  is
                             officially  granted,  a one time  payment  of about
                             US$0.35 ( Pesos $0.80 ) per hectare is required.

CLASTIC:                     Rock components  consisting of fragments derived by
                             mechanical erosion of pre-existing rocks.

COLOR ANOMALY:               An atypical or unusual color pattern visible on air
                             photos or satellite  images of rock outcrop  areas,
                             often caused by hydrothermal alteration.

EPITHERMAL:                  A   mineral   deposit   consisting   of  veins  and
                             replacement   bodies,   usually  in   volcanic   or
                             sedimentary rocks,  containing precious metals, or,
                             more rarely, base metals.  Epithermal deposits form
                             in   hydrothermal   systems   related  to  volcanic
                             activity  and while  active  can  discharge  to the
                             surface as hot springs or fumaroles.

G/T:                         grams per tonne

HIGH SULPHIDATION:           Veins,  vuggy  breccias and  sulphide  replacements
                             ranging  from  pods  to  massive  lenses  occur  in
                             volcanic  sequences   associated  with  high  level
                             hydrothermal   systems   marked  by   acid-leached,
                             advanced argillic, siliceous alteration.

HYDROTHERMAL ALTERATION:     Those chemical and mineral  changes  resulting from
                             the   interaction  of  hot  water   solutions  with
                             pre-existing solid mineral phases.

INTRUSIVE ROCKS:             A body of rock,  that while fluid,  penetrated into
                             or  between  other  rocks,  but  solidified  before
                             reaching the surface.

KM:                          Kilometre

LOW SULPHIDATION:            Precious metal deposits that form in high- level to
                             near-surface   environments.   The   ore   commonly
                             exhibits  open-  space  filling   textures  and  is
                             associated  with  volcanic-related  hydrothermal to
                             geothermal  systems  and  comprises  quartz  veins,
                             stockworks  and  breccias  carrying  gold,  silver,
                             electrum,  argentite  and  pyrite  with  lesser and
                             variable   amounts  of  sphalerite,   chalcopyrite,
                             galena.

M:                           Metre

MAFIC:                       Dark  colored,  generally  iron or magnesium  rich,
                             rock or mineral.

                                 -2-
<PAGE>


MANIFESTATIONS:              In Argentina,  manifestations or  "manifestaciones"
                             of discovery  are official  notices  filed with the
                             mining authority  indicating that the person filing
                             (who  must be the  owner  of the  cateo  in an area
                             covered  by a  cateo)  has  made a  discovery.  The
                             filing and  acceptance  by the mining  authority of
                             such  a  notice,  constitutes  the  first  step  in
                             converting  a discovery  to a mine (see  below).  A
                             manifestation  of  discovery  may cover one or more
                             claims in the case of either a vein or disseminated
                             deposit.  The  size of the  manifestations  and the
                             annual  payments  required of the owner is the same
                             as those for a mine.

MINE:                        In  Argentina,  a mine or "mina" is a real property
                             interest. It is a right of exploration granted on a
                             permanent basis after the completion of an official
                             survey  for as  long  as the  right  is  diligently
                             utilized  and  semi-annual  payments  of  40  Pesos
                             (approximately US$17.50) per claim are made. A mine
                             may   consist   of  one  or   several   claims   or
                             "pertenencias".  In the case of vein deposits, each
                             claim  is a  maximum  of 200 by 300  metres  or six
                             hectares; for disseminated deposits,  each claim is
                             up to one square kilometre or 100 hectares.

PATHFINDER ELEMENT:          An element which  typically  occurs with the metals
                             of  interest  in  a  particular   type  of  mineral
                             deposit. For example: arsenic,  antimony,  mercury,
                             and silver are commonly  associated with epithermal
                             deposits

PORPHYRY:                    An igneous rock  containing  mineral  crystals that
                             are visibly  larger than other crystals of the same
                             or different composition.

POTASSIC ALTERATION:         Development    of   secondary    potassium-dominant
                             minerals   such  as   K-Feldspar   or   biotite  by
                             hydrothermal activity.

PPM:                         parts per million


PROPYLITIC ALTERATION:       Hydrothermal  alteration  consisting of the mineral
                             assemblage  epidote-chlorite-albite-calcite usually
                             found in the  outer  zones of  epithermal  gold and
                             copper porphyry deposits.

SATELLITE IMAGERY:           Maps or  images  produced  from data  collected  by
                             satellite   displaying   wavelength  and  intensity
                             variations   of  visible  and  infrared   radiation
                             reflected from the Earth's surface.

SCREE:                       A slope of loose rock debris at the base of a steep
                             incline or cliff.

SEDIMENTARY ROCKS:           Descriptive  term for a rock  formed  of  sediment,
                             namely  solid  material  both  mineral and organic,
                             deposited from suspension in a liquid.

SILICA ALTERATION:           Hydrothermal  alteration consisting of the flooding
                             or impregnating  of  pre-existing  rock with silica
                             (SiO2).

SKARN:                       A style  of  alteration  characterized  by iron and
                             magnesium bearing aluminosilicate materials such as
                             garnet and diopside.

STOCKWORK:                   A mineral deposit or  accumulation  consisting of a
                             three-dimensional  network  of planar to  irregular
                             veinlets spaced closely together

STREAM SEDIMENT SAMPLE:      A  sample  of  fine   sediment   derived  from  the
                             mechanical action of the stream.

SULFIDE:                     A  compound  of  sulfur  combined  with one or more
                             metallic or semi-metallic elements.

SUPERGENE:                   A mineral  deposit or  enrichment  formed  near the
                             surface by descending solutions.

TACAZA VOLCANICS:            Tertiary-aged   (65  to  1.8  million   years  ago)
                             volcanic rocks.

TALUS:                       Rock fragments lying at the base of a cliff or on a
                             steep slope from which they were derived.


                                      -3-
<PAGE>


VEINLET:                     A small vein.

VEINS:                       An  occurrence  of minerals,  having been  intruded
                             into another rock, forming tabular shaped bodies.

AG:                          Silver

AS:                          Arsenic

AU:                          Gold

BA:                          Barium

CO:                          Cobalt

CU:                          Copper

MO:                          Molybdenum

PB:                          Lead

SB:                          Antimony

ZN:                          Zinc

                                    MINERALS

ARGENTITE:                   A silver sulphide mineral - Ag2S

AZURITE:                     A  deep  blue  to  violet  blue  copper   carbonate
                             hydroxide  mineral  commonly found in the oxidation
                             zones of porphyry copper deposits - Cu3(CO3)2(OH)2,

BIOTITE:                     An iron and magnesium bearing mica mineral.

CARBONATE:                   A mineral containing the radical CO3.

CALCITE:                     Calcium Carbonate (CaCO3)

CHALCOPYRITE:                A  sulfide  mineral  containing  copper  and iron -
                             CuFeS2.

CHLORITE:                    Family of sheet silicates of iron,  magnesium,  and
                             aluminum,  characteristic of low-grade metamorphism
                             or  hydrothermal  alteration.   Green  color,  with
                             cleavage  like  mica  except  that  chlorite  small
                             scales are not elastic.

ELECTRUM:                    Native gold  containing  a large  amount of alloyed
                             silver.

FELDSPAR:                    An   aluminosilicate   with  variable   amounts  of
                             potassium, sodium and calcium.

GALENA:                      Lead sulphide - PbS

HORNBLENDE:                  A complex  hydrated  aluminosilicate  of magnesium,
                             iron and sodium.

MAGNETITE:                   A magnetic iron oxide mineral.


MALACHITE                    A  bright  green  copper  carbonate  hydroxide
                             mineral  often found in the  oxidized  zone of
                             porphyry copper deposits - Cu2(CO3)(OH)2,

PYROXENE:                    An aluminosilicate of magnesium and iron.

PYRRHOTITE:                  A magnetic sulfide of iron.

SPHALERITE:                  Zinc sulphide - ZnS



                                      -4-
<PAGE>


                                   ROCK TYPES


ANDESITE:                    A volcanic rock with the principal  minerals  being
                             plagioclase.

CONGLOMERATE:                A  clastic   sedimentary  rock  containing  rounded
                             fragments of gravel or pebble size.

DACITE:                      A  volcanic  or  shallow  intrusive  rock  with the
                             principal  minerals being  plagioclase,  quartz and
                             one or more mafic constituents.

DIORITE:                     An intrusive  rock  composed  essentially  of sodic
                             plagioclase, hornblende, biotite, or pyroxene.

LIMESTONE:                   A sedimentary  rock  consisting  chiefly of calcium
                             carbonate.

SANDSTONE:                   A clastic  sedimentary  rock  composed  largely  of
                             sand-sized grains, principally quartz.

SHALE:                       A  clastic   sedimentary  rock  derived  from  very
                             fine-grained sediment (mud).

SILTSTONE:                   A clastic  sedimentary rock similar to shale except
                             comprised of slightly coarser material (silt).

TUFF:                        A  consolidated  rock formed of compacted  volcanic
                             fragments and fine ash,  generally smaller than 4mm
                             in  diameter.  If  particles  are  melted  slightly
                             together  from  their  own  heat,  it is a  "welded
                             tuff."


FORWARD LOOKING STATEMENTS

The Company cautions readers regarding  forward looking  statements found in the
following  discussion  and  elsewhere  in this  annual  report  and in any other
statement  made by, or on the  behalf of the  Company,  whether or not in future
filings with the Securities  Exchange  Commission  (the "SEC").  Forward looking
statements are statements not based on historical  information  and which relate
to future  activities,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and contingencies,  many of which are beyond the Company's control
and many of which,  with respect to future  business  decisions,  are subject to
change.  These  uncertainties  and  contingencies  can affect actual results and
could cause  actual  results to differ  materially  from those  expressed in any
forward  looking  statements  made by or on behalf of the  Company.  The Company
disclaims any obligation to update forward looking statements.



                                      -5-
<PAGE>


                                     PART I

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

Not applicable.


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

Not applicable.


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

SELECTED FINANCIAL DATA

The  selected  financial  data of the Company for the years ended  December  31,
2004,  2003 and 2002,  was derived from the financial  statements of the Company
which  have been  audited  by Moore  Stephens  Ellis  Foster  Ltd.,  independent
Chartered Accountants,  as indicated in their report which is included elsewhere
in this annual report.  The selected financial data set forth for the year ended
December 31, 2001 and for the period from inception (April 11, 2000) to December
31,  2000 are derived  from the  Company's  audited  financial  statements,  not
included herein.

The selected  financial  data for the periods ended  December 31, 2004 and 2003,
have been derived from the audited financial statements of the Company, included
herein  and,  in the  opinion of the  Company,  also  included  all  adjustments
(consisting of normally recurring  adjustments)  necessary to present fairly the
information set forth therein.

The  information  in the following  table was  extracted  from the more detailed
financial  statements  and related notes  included  herein and should be read in
conjunction  with such financial  statements and with the information  appearing
under the heading "Item 5.
Operating and Financial Review and Prospects."

Reference is made to Note 9 of the Company's  audited  financial  statements for
the years ended December 31, 2004 of the Company's financial  statements,  which
are included  herein,  for a  discussion  of the  material  differences  between
Canadian  generally  accepted  accounting  principles  ("GAAP") and US GAAP, and
their effect on the Company's financial statements.

To date,  the Company has not generated any cashflow from its activities to fund
ongoing activities and cash commitments. The Company has financed its operations
principally through the sale of its equity securities. The Company currently has
sufficient  funds to maintain  operations at its current  level of activity.  It
will continue to rely on the sale of its equity  securities to provide funds for
its activities. However, there is no assurance that it will be able to do so.
<TABLE>
<CAPTION>

                                                        YEAR ENDED DECEMBER 31,
                                ---------------------------------------------------------------------
                                    2004             2003           2002          2001        2000(1)
                                -----------      -----------      --------      --------     --------
<S>                            <C>               <C>              <C>           <C>          <C>

General and
   Administrative Expenses         $874,332         $405,756       $26,258          $116       $1,084
Net (Loss)                        $(874,332)       $(405,756)     $(26,258)        $(116)     $(1,084)
Total Assets                     $3,654,584       $1,820,883      $207,469            $1           $1
Net Assets                       $3,604,137       $1,705,531      $184,042       $(1,159)     $(1,083)
Capital Stock                    $4,527,877       $1,228,395       $80,000            $1           $1
Weighted Average
   Number of Shares              13,192,736        4,848,716        20,974             1            1

</TABLE>


                                      -6-
<PAGE>

<TABLE>
<CAPTION>

                                                        YEAR ENDED DECEMBER 31,
                                ---------------------------------------------------------------------
                                    2004             2003           2002          2001        2000(1)
                                -----------      -----------      --------      --------     --------
<S>                            <C>               <C>              <C>           <C>          <C>

Dividends per Share                       -                -             -             -            -
Basic and Fully Diluted
   (Loss) per Share                 $(0.07)          $(0.08)       $(1.25)     $(116.00)     $(1,084)

</TABLE>

NOTE:

(1)  The Company was  incorporated on April 11, 2000,  therefore,  the financial
     year ended  December  31,  2000,  is for the period  from April 11, 2000 to
     December 31, 2000.


ADJUSTMENT TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

DIFFERENCES  BETWEEN  CANADIAN AND UNITED STATES GENERALLY  ACCEPTED  ACCOUNTING
PRINCIPLES

The financial  statements  of the Company have been prepared in accordance  with
Canadian GAAP which differ in certain material  respects from US GAAP.  Material
differences  between  Canadian  and US GAAP and their  effect  on the  Company's
consolidated financial statements are summarized in the tables below.

ADJUSTED TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Under U.S.  GAAP the  following  financial  information  would be adjusted  from
Canadian GAAP (references are made to Note 9 of the Company's  audited financial
statements for the years ended December 31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>

                              INCEPTION
                              (APRIL 11,
                               2000) TO                         YEAR ENDED DECEMBER 31,
                             DECEMBER 31,    ------------------------------------------------------------
                                 2004             2004            2003            2002            2001
                             ------------    ------------    ------------    ------------    ------------
<S>                         <C>             <C>             <C>             <C>             <C>

STATEMENT OF LOSS

Earnings (Loss) for the
   period under
   Canadian GAAP              $(1,307,546)      $(874,332)      $(405,756)       $(26,258)          $(116)
Option interests and
   exploration costs for
   the period                  (1,915,221)     (1,230,962)      (684,259)             -             -
                             ------------    ------------    ------------    ------------    ------------
Net (Loss) under US GAAP      $(3,222,767)    $(2,105,294)   $(1,090,015)     $(26,258)        $(116)
                             ============    ============    ============    ============    ============

Earnings (Loss) per
   share under US GAAP                             $(0.16)         $(0.22)         $(1.25)       $(116.00)
                                             ============    ============    ============    ============

</TABLE>


                                      -7-
<PAGE>

<TABLE>
<CAPTION>

                                                        YEAR ENDED DECEMBER 31,
                                             --------------------------------------------
                                                 2004            2003            2002
                                             ------------    ------------    ------------
<S>                                         <C>             <C>             <C>

BALANCE SHEETS

Shareholders' Equity

Balance per Canadian GAAP                      $3,604,137      $1,705,531        $184,042
Option interests and deferred
   exploration costs expensed                  (1,915,221)       (684,259)              -
                                             ------------    ------------    ------------
Balance per US GAAP                            $1,688,916      $1,021,272        $184,042
                                             ============    ============    ============

Total Assets

Balance per Canadian GAAP                      $3,654,584      $1,820,883        $207,469
Mineral property interests and
   deferred costs expensed under
   US GAAP                                     (1,915,221)       (747,259)              -
                                             ------------    ------------    ------------
Balance per US GAAP                            $1,739,363      $1,073,624        $207,469
                                             ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>

                              INCEPTION
                              (APRIL 11,
                               2000) TO                 YEAR ENDED DECEMBER 31,
                             DECEMBER 31,    --------------------------------------------
                                 2004            2004            2003            2002
                             ------------    ------------    ------------    ------------
<S>                         <C>             <C>             <C>             <C>

CONSOLIDATED STATEMENTS
   OF CASH FLOWS

Operating Activities

Cash (used) provided
   per Canadian GAAP            $(930,629)      $(845,988)       $(80,610)        $(4,031)
Option interests and
   deferred costs              (1,645,221)     (1,230,962)       (414,259)              -
                             ------------    ------------    ------------    ------------
Cash used per US GAAP         $(2,578,850)    $(2,076,950)      $(494,869)        $(4,031)
                             ============    ============    ============    ============

Investing Activities

Cash used per Canadian GAAP   $(1,648,017)    $(1,233,758)      $(414,259)            $ -
Option interests and
   deferred costs               1,645,221       1,230,962         414,259               -
                             ------------    ------------    ------------    ------------
Cash provided (used)
   per US GAAP                    $(2,796)        $(2,796)            $ -             $ -
                             ============    ============    ============    ============

Financing activities

Cash provided per Canadian
   and US GAAP                 $4,257,878      $2,641,134      $1,415,245        $201,499
                             ============    ============    ============    ============

</TABLE>



                                      -8-
<PAGE>


EXCHANGE RATE HISTORY

The noon rate of exchange on May 31, 2005, reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States dollars was CDN$1.2512 (US$0.7992 = CDN S1.00).

The following table sets forth the average exchange rate for one Canadian dollar
expressed in terms of one U.S. dollar for the past five fiscal years.

         -------------------------------------------------------------
         PERIOD                                                AVERAGE
         -------------------------------------------------------------
         January 1, 2004 - December 31, 2004                    0.7682
         January 1, 2003 - December 31, 2003                    0.7206
         January 1, 2002 - December 31, 2002                    0.6368
         January 1, 2001 - December 31, 2001                    0.6456
         January 1, 2000 - December 31, 2000                    0.6746


The  following  table sets forth high and low  exchange  rates for one  Canadian
dollar expressed in terms of one U.S. dollar for the past six months:

         -------------------------------------------------------------
         MONTH                          HIGH                     LOW
         -------------------------------------------------------------
         December 2004                 0.8435                   0.8064
         January 2005                  0.8346                   0.8050
         February 2005                 0.8134                   0.7960
         March 2005                    0.8060                   0.8024
         April 2005                    0.8233                   0.7957
         May 2005                      0.8082                   0.7872

Exchange  rates are based upon the noon  buying  rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York.

RISK FACTORS

Due to the nature of the Company's business and the present stage of exploration
on its mineral  resource  properties,  the  following  risk factors apply to the
Company's  operations  (see "Item 4.  Information  on the  Company - History and
Development of the Company"):

LIQUIDITY  AND CASH FLOW:  The Company has limited  financial  resources,  has a
history of losses and has no source of operating  cash flow. The Company has not
generated any revenues from its mineral  claims and does not  anticipate  any in
the foreseeable future. Historically,  the only source of funds available to the
Company has been through the sale of its common shares.

As of May 31, 2005, the Company had working  capital of $1,300,000.  The Company
does not  believe it has  sufficient  working  capital to  conduct  all  planned
exploration work of on it mineral  property  interests during the 12 months from
January 1, 2005 through  December 31, 2005. See "Item 5. Operating and Financial
Review and Prospects - Liquidity and Capital  Resources." The Company may not be
able to raise the  necessary  funds,  if any,  and may not be able to raise such
funds on terms which are acceptable to the Company.  In the event the Company is
unable to raise adequate finances to fund its proposed  activities,  the Company
may have to delay or indefinitely  postpone further  exploration of its property
interests with the possible loss of its interests. Any further additional equity
financing undertaken by the Company may cause dilution to its shareholders.



                                      -9-
<PAGE>


EXPLORATION STAGE COMPANY:  All of the Company's  property  interests are in the
exploration stage and do not contain any "reserves",  as that term is defined in
Industry Guide 7 adopted by the Securities and Exchange  Commission (the "SEC").
The term  "reserves" is defined in Industry Guide 7 as "[t]hat part of a mineral
deposit  which could be  economically  and legally  extracted or produced at the
time of the reserve determination." Industry Guide 7 is available from the SEC's
website at HTTP://WWW.SEC.GOV/DIVISIONS/CORPFIN/FORMS/INDUSTRY.HTM#SECGUIDE7.

Mineral  exploration  involves  significant  risk  and few  properties  that are
explored are ultimately  developed into producing  mines.  The probability of an
individual  prospect ever having reserves that meet the requirements of Industry
Guide  7  is  extremely  remote.  The  Company's  property  interests,   in  all
probability,  do not contain any reserves and any funds spent on  exploration of
the Company's  property interests will probably be lost. If any of the Company's
exploration  programs are successful,  the Company will require additional funds
to advance the property beyond the exploration stage.  Substantial  expenditures
are required to establish  reserves through drilling,  to develop  metallurgical
processes to extract the metal from the ore and, in the case of new  properties,
to develop the mining and processing  facilities and  infrastructure at any site
chosen for mining.  If the Company is unable to secure additional  funding,  the
Company may lose its interest in one or more of its mineral claims and/or may be
required to cease all activities.

ADDITIONAL  FINANCING:  In recent years,  the securities  markets in Canada have
experienced a high level of price and volume volatility, and the market price of
securities of many companies, particularly junior mineral exploration companies,
have  experienced  wide  fluctuations in price which have not  necessarily  been
related to the operating  performance,  underlying  asset values or prospects of
such  companies.  Substantially  all  of  the  Company's  financings  have  been
conducted  through the sale of its common stock.  Continued  price  fluctuations
will have a  significant  impact on the  Company's  ability to  complete  equity
financings.

EXPLORATION  RISKS:  The  properties  in which the Company  has an interest  are
located in  Argentina (a portion of one project  extends  into Chile),  Peru and
Nevada, USA. Mineral  exploration  activities may be affected in varying degrees
by  political  instability  and  government  regulations  relating to the mining
industry.  Any changes in  regulations  or shifts in  political  conditions  are
beyond the control of the Company and may  adversely  affect its  business.  The
Company's  exploration   activities  may  be  affected  in  varying  degrees  by
government  regulations  with respect to restrictions on price controls,  export
controls,  income taxes,  expropriations of property,  environmental legislation
and mine safety.  The status of Argentina and Peru as  developing  countries may
make it more  difficult  for the  Company  to obtain  any  required  exploration
financing  for its  projects.  The  effect  of all of these  factors  cannot  be
accurately   predicted.   Both  the  Argentinean  and  Peruvian  economies  have
experienced  recessions in recent years and there can be no assurance that their
economies will recover from such  recessions.  If the economies of Argentina and
Peru fail to grow or suffer a recession, the Company may not be able to continue
its  activities in those  countries.  The Company does not maintain and does not
intend to purchase political risk insurance.

Exploration  activities  require  permits from various  federal,  provincial  or
territorial and local  governmental  authorities and are subject to national and
local  laws  and  regulations  governing  prospecting,   exports,  taxes,  labor
standards,  occupational  health,  waste disposal,  toxic substances,  land use,
environmental  protection,  mine safety,  and others  which  currently or in the
future  may have a  substantial  adverse  impact  on the  Company.  See "Item 4.
Information  on the  Company -  Business  Overview  -  Government  Regulations."
Exploration  activities are also subject to substantial  regulation  under these
laws by  governmental  agencies.  There can be no assurance,  however,  that all
permits  which the Company may require for its  exploration  activities  will be
obtainable on reasonable terms or on a timely basis or such laws and regulations
would  not have an  adverse  effect  on any  project  which  the  Company  might
undertake.

If the Company is unable to obtain the  necessary  permits  for its  exploration
activities,  the Company might have to change or abandon its planned exploration
for  such   non-permitted   properties   and/or  to  seek  other  joint  venture
arrangements.  In such event, the Company might be forced to sell or abandon its
property interests.

Failure to comply with applicable laws, regulations, and permitting requirements
may  result  in  enforcement  actions  thereunder,  including  orders  issued by
regulatory or judicial authorities causing exploration activities to cease or be
curtailed,  and may include corrective measures requiring capital  expenditures,
installation of additional equipment, or remedial actions.

                                      -10-
<PAGE>


The  provincial  government of Chubut  Province,  Argentina has enacted  certain
anti-mining  laws  banning  the use of cyanide and  open-pit  mining in metallic
extraction  in the  Province  of  Chubut.  The  provincial  legislation  is more
restrictive than current federal Argentinean mining laws. However,  there can be
no assurance that the provincial legislation will be revised or repealed.

Any change in or amendments to current laws,  regulations and permits  governing
activities of mineral exploration  companies,  or more stringent  implementation
thereof, could require increases in exploration expenditures,  or require delays
in exploration or abandonment of new mineral properties.  The cost of compliance
with  changes in  governmental  regulations  has a  potential  to  increase  the
Company's expenses.

PROJECT  DELAY:  If the Company  undertakes  new, or  significantly  expands its
existing,   exploration  activities  the  Company  may  be  required  to  obtain
pre-construction  environmental  and land use review and comply with permitting,
control and mitigation requirements of the jurisdiction in which such activities
are to be conducted.  Compliance with new requirements could impose costs on the
Company in the future,  the materiality of which cannot  reasonably be predicted
at this time.  Also, the Company may require  additional  permits for its future
activities, which may or may not be obtainable on reasonable terms.

TITLE TO PROPERTIES: The Company owns, leases or has under option mining claims,
mineral claims or concessions which constitute the Company's  property holdings.
The ownership and validity of mining claims and  concessions are often uncertain
and may be contested.

The Company does not obtain title  insurance  for its  property  interests.  The
possibility  exists that title to one or more of its  concessions,  particularly
title to undeveloped  claims,  might be defective because of errors or omissions
in the chain of title,  including defects in conveyances and defects in locating
or maintaining such claims, or concessions.

The Company's  mineral property  interests may be subject to prior  unregistered
agreements  or  transfers  or native  land  claims and title may be  affected by
undetected  defects.  Surveys have not been carried out on any of the  Company's
mineral properties,  therefore,  in accordance with the laws of the jurisdiction
in which such  properties  are  situated;  their  existence and area could be in
doubt. Until competing interests in the mineral lands have been determined,  the
Company  can give no  assurance  as to the  validity  of title of the Company to
those lands or the size of such mineral lands.

If the  Company,  or the person or entity from which the Company has obtained an
option  for  property  interests,  does not have  proper  title to its  property
interests,  the Company may incur  significant  expenses  defending or acquiring
proper  title  and/or may have to abandon  such  interests,  which may result in
significant  losses for the  Company and could  result in the Company  having to
cease all of its activities.

PRICE  FLUCTUATIONS AND SHARE PRICE  VOLATILITY:  In recent years the securities
markets in Canada have  experienced a high level of price and volume  volatility
and the  market  price of  securities  of many  companies,  particularly  junior
mineral  exploration   companies,   like  the  Company,  have  experienced  wide
fluctuations   which  have  not  necessarily   been  related  to  the  operating
performance,  underlying  asset  values  or  prospects  of  such  companies.  In
particular,  the per  share  price of the  Company's  common  shares  on the TSX
Venture Exchange (the "TSX-V") fluctuated from a high of $1.12 to a low of $0.35
during the 12-month period ending  December 31, 2004.  There can be no assurance
that continual fluctuations in price will not occur.

OPERATING  HAZARDS AND RISKS:  All of the Company's  mineral claim interests are
located  outside of Canada.  If the Company  were to become  involved in a legal
action in Canada relating to its mineral claim interests, the Company may not be
able to enforce any judgment it obtains in such an action against assets located
outside of Canada.

Peru has been the subject of terrorism.  The Company may not be able to continue
its activities in Peru if the terrorism resumes.  The Company may not be able to
find  suitable  labor  for its  Peruvian  projects  or may  have  difficulty  in
obtaining financing for its Peruvian projects in that event.



                                      -11-
<PAGE>

The Company's  long-term  profitability  will in part be directly related to the
costs and success of its exploration programs, which may be affected by a number
of factors.  Mineral  exploration is a speculative  business  characterized by a
number of significant risks including, among other things,  unprofitable efforts
resulting not only from the failure to discover  mineral  deposits but also from
finding mineral deposits that, though present,  are insufficient in quantity and
quality to return a profit.  The Company may not discover minerals in sufficient
quantities to justify  activities  beyond the exploration  stage. In which case,
the Company may have to delay or abandon its mineral property interests.

The  marketability  of minerals  may be affected by numerous  factors  which are
beyond the control of the Company and which cannot be accurately predicted, such
as  fluctuations  in the metals  markets,  the proximity and capacity of milling
facilities,  mineral markets and processing equipment, and such other factors as
government  regulations,  including  regulations relating to royalties,  prices,
taxes, land tenure, land use, allowable  production,  importing and exporting of
minerals, and environmental protection. The exact effect of these factors cannot
be accurately predicted,  but the combination of these factors may result in the
Company  not  receiving  an adequate  return on  invested  capital or losing its
investment capital.

MANAGEMENT:  The  success of the  activities  of the Company is  dependent  to a
significant  extent on the  efforts and  abilities  of its key  management,  Mr.
Nikolaos Cacos,  the President,  Chief  Executive  Officer and a director of the
Company, and Mr. Joseph Grosso, the Chairman of the Board of Directors. The loss
of  services of either Mr.  Cacos or Mr.  Grosso  could have a material  adverse
effect on the  Company.  With the  exception of the service  agreement  with Mr.
Cacos,  the Company has not entered into  employment  agreements with any of its
officers and is not expected to do so in the  foreseeable  future.  See "Item 6.
Directors, Senior Management and Employees - Employment Agreements." The Company
has not obtained key-man life insurance on any of its officers or directors. The
Company's ability to recruit and retain highly qualified management personnel is
critical to its success; if it is unable to do so this may materially affect the
Company's financial performance.

GROSSO GROUP MANAGEMENT LTD.

Effective  January 1, 2005,  the Company  engaged Grosso Group  Management  Ltd.
("Grosso Group") to provide  services and facilities to the Company.  The formal
agreement was approved by the TSX Venture Exchange May 19, 2005.

The Grosso  Group is a private  company  which is owned by the  Company,  Golden
Arrow Resources  Corporation  ("Golden Arrow"), IMA Exploration Inc. ("IMA") and
Gold  Point  Exploration  Ltd.  ("Gold  Point"),  each of which  own one  share.
Pursuant to the terms of the Administration Services Agreement, the Grosso Group
will provide its shareholder companies with geological,  corporate  development,
administrative, and management services on a non-exclusive and on an "as needed"
and "as  available"  basis.  The  administration  services for each  shareholder
company will include  bookkeeping,  accounting  and services in connection  with
quarterly  filings,  material  change  reports and other  disclosure  filings on
SEDAR.

The Grosso Group will provide each shareholder company with:

         1.       the use of the Grosso Group's offices;
         2.       receptionist personnel;
         3.       office equipment; and
         4.       services   of    administration,    accounting,    purchasing,
                  secretarial  and like support  staff on an "as needed" and "as
                  available" basis.

Shareholder  companies  may  appoint  the  Grosso  Group to  manage  their  work
programs.  In such event,  the Grosso Group will generally  retain suppliers and
contracts in connection with each shareholder  company's  approved work programs
and will separately  invoice such shareholder  company for the third-party costs
and  such  invoice  will  include  a  handling  charge  as a  percentage  of the
third-party  costs, such charge to be in accordance with industry  standards and
reviewed for reasonableness  from time to time, and which would be negotiated at
the time of such work program.


                                      -12-
<PAGE>

Each shareholder  company will pay the Grosso Group a monthly fee for the Grosso
Group's  services.  The Grosso Group  intends to allocate the costs of the staff
and related general and administrative  expenses to its shareholder companies on
a full recovery basis.  The fee will be based upon a pro-rationing of the Grosso
Group's costs,  including its executive staff and other overhead,  among each of
the shareholder  companies,  with regard to the expected average annual level of
services  provided to each  shareholder  company.  The staff of the Grosso Group
will record their daily activities in connection with each  shareholder  company
and they will  retain a log for  invoicing  purposes.  The fee is to be reviewed
from time to time and the basis may be changed by the Grosso  Group in the event
the  Grosso  Group's  costs  change  or the  shareholder  companies'  use of the
services  is in excess of  historical  experience  or in the event a greater  or
lesser number of shareholder  companies are using the Grosso  Group's  services.
Each shareholder company has prepaid one month's initial estimated allocation of
the Grosso Group's fully  recoverable  costs,  which for the Company amounted to
$20,000  (which as of the date of this report is the estimated  initial  monthly
allocation for the Company).

The Grosso Group has the right to request each of the  shareholder  companies to
allocate  a  reasonable  number  of shares in their  incentive  option  plans to
employees  of the Grosso  Group based upon the general  amount of time and value
added by such employees.

The Administration Services Agreement may be terminated by a shareholder company
after January 1, 2007,  upon 30 days' written notice to the Grosso Group.  Prior
to January 1, 2007, if a shareholder  company desires to terminate the agreement
in the first  year,  it will pay a  termination  fee equal to  one-year's  basic
administration  charge and if a  shareholder  company  desires to terminate  the
agreement in the second year, it will pay a termination fee equal to six-months'
basic administration charge.

Upon  termination  of  the  Administration  Services  Agreement,   each  of  the
shareholder  companies  will agree to resell its common share back to the Grosso
Group for $1.00 and the shareholder companies will not be able to sell, transfer
or  otherwise  dispose  of or  encumber  such  share  during  the  term  of  the
Administration Services Agreement.

The Grosso Group's areas of experience encompass financing,  marketing, property
acquisition,  community relations,  socioeconomic issues, regulatory compliance,
government relations, property exploration and investor relations.  Additionally
the Grosso Group has a number of other support staff at its corporate office and
arrangements with contract providers of accounting and  administrative  services
at the country operations' offices in Argentina and Peru.

The members of the board of directors  of the Grosso Group are  appointed by the
shareholder  companies,  with each  shareholder  company  appointing  one of its
directors  to serve as a director  of the Grosso  Group.  The  directors  of the
Grosso Group are Nikolaos Cacos, Joseph Grosso, Arthur Lang and Nick DeMare. Mr.
Grosso is an officer and director of the Company,  a director and officer of IMA
and a  director  and  officer  of Golden  Arrow.  Mr.  Lang is an officer of the
Company,  a director  and  officer of IMA and a director  and  officer of Golden
Arrow.  Nikolaos  Cacos is an officer of IMA, a director  and  officer of Golden
Arrow and a director and officer of the  Company.  Nick DeMare is an officer and
director of Gold Point Mr. DeMare indirectly owns 100% of Chase Management Ltd.,
a company  which  provides  consulting  services to the Company and other Grosso
Group shareholder companies.

Each of the  public  company  shareholders  of the  Grosso  Group  have  its own
separate  board of directors  (whose  members  include  persons  employed by the
Grosso Group);  however, some directors will serve on multiple boards and on the
board of directors of companies which are not shareholders of the Grosso Group.

The Board of Directors of the Company has approved the formal agreement.

INSURABLE  RISKS AND  LIMITATIONS OF INSURANCE:  The Company  participates  in a
policy  with other  Grosso  Group  companies  for  certain  insurance  coverage,
however,  such insurance is subject to numerous exclusions and limitations.  The
Total Office Policy is in Canadian dollars on its principal offices.  Generally,
the Total  Office  Policy  provides a 90%  coverage  on office  contents,  up to
$160,000,  with a $500  deductible.  In addition,  the policy  provides  general
liability  coverage of up to $5,000,000 for personal injury,  per occurrence and
$2,000,000 for legal liability for any one premises, with a $500 deductible. The
Company  also  participates  for  insurance  coverage  of up to  $5,000,000  for
non-owned automobile liability.


                                      -13-
<PAGE>



The Company also  participates in a policy with other Grosso Group companies for
Foreign  Commercial  General  Liability  policy in U.S.  dollars which  provides
US$5,000,000  coverage for bodily injury or property  damage per  occurrence and
coverage  up to  US$5,000,000  per offence for  personal  injury or  advertising
injury (libel,  slander, etc.). The policy has a general aggregate limit for all
claims during each  consecutive  policy period,  except for those resulting from
product hazards or completed operations hazards, of US$5,000,000. The policy has
a US$5,000,000  aggregate limit for each consecutive  policy period,  for bodily
injury or property  damage  liability  arising out of completed  operations  and
products. In addition,  the Foreign Commercial General Liability policy provides
for  coverage  of up to  US$10,000  in  medical  expenses,  per  person,  with a
US$10,000  limit per  accident,  and up to  US$100,000  for each  occurrence  of
tenants'  fire legal  liability.  The policy does not apply to injury or damages
occurring  within  Canada,  the United States  (including  its  territories  and
possessions), Puerto Rico, any countries or territories against which the United
States has an embargo,  sanction or ban in effect,  territorial waters of any of
the foregoing,  the Gulf of Mexico, or international  waters or airspace when an
injury or damage occurs in the course of travel or transportation to any country
or place  included in the  foregoing.  The policy  also does not cover  asbestos
related claims or liability for bodily injury or property damages arising out of
the  discharge,  dispersal,  release or escape of smoke,  vapors,  soot,  fumes,
acids,  alkalis,  toxic  chemicals,  liquids or gases,  waste materials or other
irritants,  contaminants or pollutants into or upon land, the atmosphere, or any
water-course or body of water. The policy also contains a professional liability
exclusion  which  applies to bodily  injury or  property  damage  arising out of
defects in maps, plans, designs or specifications prepared,  acquired or used by
the Company or arising out of any act of negligence,  error, mistake or omission
in  rendering  or  failing  to render  professional  consulting  or  engineering
services,  whether  performed  by the  Company or other for whom the  Company is
responsible.

In the course of  exploration  of mineral  concessions,  certain  risks,  and in
particular, unexpected or unusual geological operating conditions including rock
bursts,  cave-ins,  fires,  flooding and earthquakes may occur. It is not always
possible to fully  insure  against  such risks and the Company may decide not to
take out  insurance  against  such risks as a result of high  premiums  or other
reasons.  Should such  liabilities  arise,  they could reduce or  eliminate  any
future  profitability  and result in increasing costs and a decline in the value
of the  securities  of the  Company.  The  Company  does not have any  insurance
coverage on its mineral concessions.

DEPENDENCE UPON OTHERS: The success of the Company's operations will depend upon
numerous factors, many of which are beyond the Company's control,  including (i)
the  ability  of the  Company  to  enter  into  strategic  alliances  through  a
combination of one or more joint ventures,  mergers or acquisition transactions,
(ii) the ability to discover and produce minerals;  (iii) the ability to attract
and retain additional key personnel in investor relations,  marketing, technical
support,  and  finance;  and (iv) the ability  and the  operating  resources  to
develop and maintain the properties held by the Company. These and other factors
will require the use of outside  suppliers as well as the talents and efforts of
the  Company.  There can be no  assurance  of  success  with any or all of these
factors on which the Company's operations will depend.

CONFLICTS OF INTEREST:  Several of the Company's  directors are also  directors,
officers or shareholders of other companies.  Some of the directors and officers
are  engaged  and will  continue  to be engaged  in the  search  for  additional
business opportunities on behalf of other corporations, and situations may arise
where  these  directors  and  officers  will be in direct  competition  with the
Company.  Such  associations may give rise to conflicts of interest from time to
time.  Such a  conflict  poses  the  risk  that the  Company  may  enter  into a
transaction  on terms which could place the Company in a worse  position than if
no conflict  existed.  Conflicts,  if any, will be dealt with in accordance with
the relevant provisions of the BUSINESS CORPORATIONS ACT (British Columbia) (the
"BCBCA").  The  directors of the Company are required by law to act honestly and
in good faith with a view to the best  interest  of the  Company and to disclose
any interest  which they many have in any project or opportunity of the Company.
However,  each director has a similar  obligation  to other  companies for which
such director  serves as an officer or director.  In order to avoid the possible
conflict  of  interest  which may arise  between  the  directors'  duties to the
Company and their duties to the other companies on whose boards they serve,  the
directors and officers of the Company have agreed to the following:

         1.       participation  in  other  business  ventures  offered  to  the
                  directors will be allocated  between the various companies and
                  on the basis of prudent  business  judgment  and the  relative
                  financial abilities and needs of the companies to participate;

         2.       no commissions or other  extraordinary  consideration  will be
                  paid to such directors and officers; and


                                      -14-
<PAGE>


         3.       business   opportunities   formulated   by  or  through  other
                  companies  in which the  directors  and  officers are involved
                  will  not be  offered  to the  Company  except  on the same or
                  better terms than the basis on which they are offered to third
                  party participants.

See "Item 7. Major  Shareholders and Related Party  Transactions - Related Party
Transactions - Conflicts of Interest".  As of the date of this annual report all
material  conflicts of interests  which have arisen since January 1, 2001,  have
been described in "Item 7.
Major Shareholders and Related Party Transactions."

FOREIGN COUNTRIES AND REGULATORY REQUIREMENTS: The projects in which the Company
has  an  interest  are  located  in  Argentina,  Peru  and  the  U.S.A.  Mineral
exploration  and mining  activities  in  Argentina  and Peru may be  affected in
varying degrees by political instability and government  regulations relating to
the  mining  industry.  Any  changes  in  regulations  or  shifts  in  political
conditions  are beyond the control of the Company and may  adversely  affect its
business.  The  Company  does  not  maintain  and does not  intend  to  purchase
political  risk  insurance.  Operations  may be affected  in varying  degrees by
government  regulations  with  respect  to  restrictions  on  production,  price
controls,   export   controls,   income  taxes,   expropriations   of  property,
environmental  legislation and mine safety.  The status of Argentina and Peru as
developing  countries  may make it more  difficult for the Company to obtain any
required  exploration  financing  for its  projects.  The effect of all of these
factors  cannot be accurately  predicted.  The Argentine and Peruvian  economies
have  experienced  recessions in recent years and there can be no assurance that
their economies will recover from such recessions.

Argentina has recently  experienced  some  economic and  political  instability.
Management  believes the new democratic elected government is making progress in
the   domestic   economy  and  it  is   improving   the  image  of  the  country
internationally.  Additionally,  management  believes  the  economic  crisis  of
December  2001 has been  overcome,  and  although  the country  defaulted on its
loans,  it has worked out with the  International  Monetary Fund a bail-out loan
agreement.  The Company  maintains  the majority of its funds in Canada and only
forwards  sufficient funds to meet current obligations and overhead in Argentina
and Peru.  The Company does not believe that any current  currency  restrictions
which may be imposed will have any immediate impact on the Company's exploration
activities.

IMPACT OF  GOVERNMENT  REGULATIONS  ON THE  COMPANY'S  BUSINESS:  The  Company's
activities are subject to various  governmental  regulations in Argentina,  Peru
and the U.S.A.

ARGENTINA

MINING INDUSTRY

Mineral  companies  are  subject to both the  Argentinean  Mineral  Code and the
Environmental  Protection  Mining Code.  The Company  believes it is in material
compliance  with  both  the  Argentinean  Mineral  Code  and  the  Environmental
Protection Mining Code.

MINING LAW IN ARGENTINA

In IM-11/19 Argentina; Economic Trends-Nov. 1999, the author stated:

         "Although some ambiguities in its interpretation have emerged, the 1993
         Argentine Mining Code has created a favorable investment climate in the
         sector.  An influx of foreign capital is bringing major copper and gold
         mines on line in Catamarca and Santa Cruz provinces, as well as smaller
         projects elsewhere."

(Source:  U.S.  Department  of  Commerce  - National  Trade Data Bank,  IM-11/19
ARGENTINA; ECONOMIC TRENDS-NOV. 1999).

The right to explore a property (a "cateo")  and the right to exploit (a "mina")
are granted by administrative or judicial  authorities via concessions.  Foreign
individuals  and  corporations  may apply for and hold cateos and minas,  at the
same level as local  investors  without  differences  of any nature.  Cateos and
minas are freely  transferable  upon  registration  with the  Provincial  Mining


                                      -15-
<PAGE>

Registry where title to the cateo or mina was first  registered.  Upon the grant
of a legal  concession  of a cateo or a mine,  parties have the right to explore
the land or to own the mine and the resources extracted therefrom.

MINING LAW IN ARGENTINA

The right to explore a property (a "cateo")  and the right to exploit (a "mina")
are granted by administrative or judicial  authorities via concessions.  Foreign
individuals  and  corporations  may apply for and hold cateos and minas,  at the
same level as local  investors  without  differences  of any nature.  Cateos and
minas are freely  transferable  upon  registration  with the  Provincial  Mining
Registry where title to the cateo or mina was first  registered.  Upon the grant
of a legal  concession  of a cateo or a mina,  parties have the right to explore
the land or to own the mine and the resources extracted therefrom.

Each  province has a Direction  of Minas (the  "Department  of Mines")  which is
responsible for the issuance of permits to conduct  exploration  activities.  An
exploration  permit is the authorization to perform  exploration work on a cateo
for a fixed period of time. A base line study and an environmental  impact study
are required for the exploration permit to be granted.  The Company has received
all necessary  government permits for its current exploration  activities on the
Mogote property in Argentina.  The Company will apply for additional exploration
permits as necessary to conduct future exploration on additional properties.

REGULATORY ENVIRONMENT

Management believes the present government is deeply committed to opening up the
economy,  and there has been significant  progress in reducing import duties and
export taxes. For decades local industry has been protected,  and the transition
to greater international competitiveness will take some time.

Importers and  exporters  must be  registered  with  Customs.  Except for a very
limited list of items requiring the previous approval of the authorities,  there
are no  import  restrictions.  Import  of  pharmaceuticals,  drugs,  foodstuffs,
defense  material,  and some other items require the approval of the  applicable
government   authority.   Import  duties  are  being  progressively  reduced  in
accordance with the free enterprise and free-trade  policy being  implemented by
the government in order to achieve  greater  international  competitiveness.  To
illustrate,  duties currently range between zero and 20 percent. Restrictions on
exports are not generally imposed.

POLITICAL ENVIRONMENT AND ECONOMY

In recent years Argentina has experienced a number of changes to its government.
The current president,  Nestor Kirchner,  came to power in May 2003. The country
continues to struggle with its external debt. Negotiations continue with the IMF
and  several of its other  major  creditors.  The  economic  performance  of the
country  has been  troubled  and  uncertain  since the late  1990's.  Management
believes  there  are  currently  some  positive  indications  that the  economic
situation is improving.

PERU

MINING INDUSTRY

Peru has a lengthy  history  of mining  activities  that  predates  the  Spanish
conquistadors.  Although  political  unrest  and  instability  have  slowed  the
development of some of Peru's ore bodies in recent years, mining continues to be
an important  contributor  to the national  economy and  exploration  by foreign
companies  is  accelerating  due to the  abundance of mineral  sources.  Peru is
already a  substantial  producer of at least six metals and may have  unexplored
and unexploited  reserves in these and other metals. Peru ranks among the top 20
gold producing nations, and the newly expanded Yanacocha mine is Latin America's
largest single gold producer and Antamina is the world's largest zinc and copper
mine.


                                      -16-
<PAGE>


MINERAL CONCESSIONS IN PERU

Under  Peruvian law the right to explore for and exploit  minerals is granted by
way of concessions.  A Peruvian mining concession is a  property-related  right,
distinct and independent from the ownership of land on which it is located, even
when both belong to the same person.  The rights granted by a mining  concession
are defensible against third parties,  transferable,  chargeable and in general,
may be the  subject of any  transaction  or  contract.  The basic unit for newly
claimed mining  concessions is 100 hectares and existing  concessions of greater
than 100 hectares  will be reduced to that amount.  Otherwise,  concessions  can
only be divided by percentage  parts or shares.  Buildings  and other  permanent
structures  used in a mining  operation are  considered  real property and as an
accessory to the concession on which they are situated.

The concession holder must pay an annual rent of US$3.00 per hectare (except for
the  year  of  acquisition,  as this  rent  is  paid  as part of the  concession
application  fee). The concession  holder must sustain a minimum level of annual
commercial  production  of greater than US$100 per hectare in gross sales within
six years of the grant of the  concession or, if the concession has not been put
into production  within that period,  from the seventh year, a penalty is due of
US$6.00 per hectare per year in addition to the annual rent. The concession will
terminate  if the annual  rent is not paid for two  consecutive  or  alternative
years. The term of a concession is indefinite provided it is properly maintained
by payment of rental duties.

The  Constitution  of Peru  provides  that foreign  persons or companies  cannot
acquire or own a land title or mining  right,  directly or  indirectly,  if such
land title or mining right is located  within 50 kilometres  of Peru's  borders.
The  government  of Peru is permitted to grant an  exemption  by  publishing  an
official statement declaring a public necessity,  called a Decreto Supremo.  The
Decreto  Supremo must be signed by the  President  of Peru and the  Presidential
Cabinet, called the Consejo de Ministros.

None of the Company's  property  interests  are located  within 50 kilometres of
Peru's borders.

Many commercial  activities  performed by private  companies are subject to some
government  inspection  or  control,  including  mining,  which  requires  prior
government  permission,  licensing or concession,  and  compliance  with special
registration  procedures  of the  Department of Energy and Mines.  However,  the
Company's exploration activities do not require any licenses or permits from the
Department of Energy and Mines. The Company has obtained the necessary  permits,
if any, for its current and planed work on the Esperanza property.

NEVADA, UNITED STATES

In the U.S., much of the Company's  exploration  activities  occur on unpatented
lode mining claims and mill sites that are on federal lands  pursuant to federal
mining  laws.  There are numerous  federal  regulatory  developments  that could
restrict  the  Company's   activities  and  significantly   increase  regulatory
obligations  and  compliance  costs with  respect to the  Company's  exploration
activities.

The  Company's  exploration  programs in Nevada are subject to state and federal
regulations regarding  environmental  considerations.  All activities associated
with the  exploration  for minerals are subject to existing laws and regulations
relating to exploration  procedures,  safety  precautions,  employee  health and
safety,  air quality  standards,  pollution of streams and fresh water  sources,
odor,  noise,  dust and  other  environmental  protection  controls  adopted  by
federal,  state  and local  governmental  authorities  as well as the  rights of
adjoining property owners. The Company may be required to prepare and present to
federal, state or local authorities data pertaining to the effect or impact that
its activities may have upon the environment.  All  requirements  imposed by any
such  authorities  may be costly,  time consuming and may delay  commencement or
continuation of the Company's  activities.  Future legislation may significantly
emphasize  the  protection  of  the  environment,  and,  as a  consequence,  the
activities of the Company may be more closely  regulated to further the cause of
environmental protection. Such legislation, as well as further interpretation of
existing  laws in the  United  States,  may  require  substantial  increases  in
equipment and  operating  costs to the Company and delays,  interruptions,  or a
termination  of its  activities,  the  extent  of  which  cannot  be  predicted.
Environmental  problems known to exist at this time in the United States may not
be in compliance  with  regulations  that may come into existence in the future.
This may have a substantial impact upon the capital expenditures required of the
Company  in order to deal  with such  problem  and  could  substantially  reduce
earnings.  At the present time, the Company's mineral exploration  activities in
Nevada are in compliance with all known environmental requirements.


                                      -17-
<PAGE>


Additionally, the National Historic Preservation Act requires that all operators
on public lands  conduct an  archeological  survey of the proposed  sites of new
disturbance.  As of the date of this annual report the Company has not conducted
an archeological survey on its Nevada properties.  In the future the Company may
be  required  to  conduct  such  a  survey  if  its   activities   constitute  a
"disturbance".  To the  best  of  management's  knowledge,  there  are no  known
environmental  or threaten  and  endangered  species  issues at the Roy or Hills
properties  that  would  provide  grounds  for denial of  approval  of a plan of
operation.

ENVIRONMENTAL REGULATIONS: The Company's operations are subject to environmental
regulations promulgated by government agencies from time to time.  Environmental
legislation  provides for restrictions  and prohibitions on spills,  releases or
emissions of various  substances  produced in  association  with certain  mining
industry  operations,  such as seepage from tailings disposal areas, which would
result in  environmental  pollution.  A breach of such legislation may result in
the imposition of fines and penalties.  At present, the Company does not believe
that compliance  with  environmental  legislation  and  regulations  will have a
material  affect  on  the  Company's   operations;   however,   any  changes  in
environmental  legislation or  regulations,  or in the Company's  business,  may
cause  compliance  with such  legislation  and/or  regulation to have a material
impact on the  Company's  operations.  In addition,  certain types of operations
require  the  submission  and  approval  of  environmental  impact  assessments.
Environmental   legislation  is  evolving  in  a  manner  which  means  stricter
standards,  and  enforcement,  fines and penalties for  non-compliance  are more
stringent.  Environmental  assessments  of proposed  projects carry a heightened
degree of  responsibility  for companies and directors,  officers and employees.
The cost of compliance with changes in governmental  regulations has a potential
to reduce the profitability of operations. The Company intends to ensure that it
complies fully with all environmental  regulations relating to its operations in
Argentina.

The  provincial  government of Chubut  Province,  Argentina has enacted  certain
anti-mining  laws  banning  the use of cyanide and  open-pit  mining in metallic
extraction  in the  Province  of  Chubut.  The  provincial  legislation  is more
restrictive than current federal  Argentinean mining laws. The Company has hired
a mining engineering  consultant to oversee all environmental and socio-economic
studies  and  programs to ensure  international  best  practices  for the mining
industry are applied in the  development  of the Company's  properties.  Certain
authorities  believe that the provincial  legislation  may be  unconstitutional.
However,  there can be no  assurance  that the  provincial  legislation  will be
repealed.

CURRENCY  FLUCTUATIONS:  The Company maintains its accounts in Canadian dollars.
The Canadian  dollar  varies under market  conditions.  The  expenditures  to be
incurred by the Company on its mineral  exploration  projects in  Argentina  and
Peru will be  denominated  in U.S.  dollars.  Accordingly,  the  results  of the
Company's activities will be subject to currency exchange risks, particularly to
changes in the exchange rate between the United States and Canadian dollars.  To
date,  the  Company has not  engaged in any formal  hedging  program to mitigate
these risks. The fluctuations in currency exchange rates,  particularly  between
the U.S.  and  Canadian  dollars,  may  significantly  impact  on the  Company's
financial position and results in the future.

NO  DIVIDENDS:  The Company has never  declared  or paid cash  dividends  on its
common  shares  and does not  anticipate  doing  so in the  foreseeable  future.
Additionally, the determination as to the declaration of dividends is within the
discretion  of the Company's  Board of  Directors,  which may never declare cash
dividends on the Company's  common stock.  Investors  cannot expect to receive a
dividend on the Company's common shares in the foreseeable future, if at all.

PENNY STOCK  REGULATION:  The SEC has adopted rules that regulate  broker-dealer
practices in connection with  transactions in "penny stocks".  Generally,  penny
stocks are  equity  securities  with a price of less than  US$5.00  (other  than
securities  registered on certain national securities exchanges or quoted on the
NASDAQ system).  Since the Company's shares are traded for less than US$5.00 per
share,  the shares are subject to the SEC's penny stock rules until such time as
(1) the Company's net tangible assets exceed  US$5,000,000  during the Company's
first three years of continuous  operations or US$2,000,000  after the Company's
first three years of continuous  operations;  or (2) the Company has had average
revenue of at least  US$6,000,000 for three years. The penny stock rules require
a  broker-dealer,  prior to a transaction in a penny stock not otherwise  exempt
from the rules, to deliver a standardized risk disclosure document prescribed by
the SEC that provides information about penny stocks and the nature and level of


                                      -18-
<PAGE>


risks in the  penny  stock  market.  The  broker-dealer  must  obtain a  written
acknowledgement   from  the  purchaser  that  the  purchaser  has  received  the
disclosure  document.  The  broker-dealer  also must provide the  customer  with
current bid and offer  quotations for the penny stock,  the  compensation of the
broker-dealer  and  its  salesperson  in the  transaction  and  monthly  account
statements  showing the market value of each penny stock held in the  customer's
account. In addition,  the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the  broker-dealer  must
make a  special  written  determination  that  the  penny  stock  is a  suitable
investment for the purchaser and receive the  purchaser's  written  agreement to
the transaction. These requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules.  Such rules and regulations may make it difficult for holders
to sell the  common  stock of the  Company,  and they may be  forced  to hold it
indefinitely.

ENFORCEMENT  OF LEGAL  PROCESS:  It may be difficult to bring and enforce  suits
against  the  Company.  The  Company is a  corporation  incorporated  in British
Columbia.  None of the Company's  directors are residents of the United  States,
and all or a  substantial  portion of their  assets are  located  outside of the
United  States.  As a  result,  it may be  difficult  for  U.S.  holders  of the
Company's common shares to effect service of process on these persons within the
United States or to enforce  judgments  obtained in the U.S.  based on the civil
liability  provisions of the U.S. federal securities laws against the Company or
its officers and directors.  In addition,  a shareholder  should not assume that
the courts of Canada (i) would  enforce  judgments  of U.S.  courts  obtained in
actions against the Company, its officers or directors predicated upon the civil
liability  provisions of the U.S.  federal  securities laws or other laws of the
United States, or (ii) would enforce,  in original actions,  liabilities against
the  Company,  its  officers  or  directors  predicated  upon the  U.S.  federal
securities laws or other laws of the United States.

U.S. laws may not be enforced by a Canadian  court if those laws are contrary to
Canadian  public policy,  are foreign penal laws or laws that deal with taxation
or the taking of property by a foreign  government or they are not in compliance
with applicable Canadian legislation regarding the limitation of actions.  Also,
a judgment obtained in a U.S. court may not be recognized by a Canadian court:

         a)       where the U.S. court where the judgment  was  rendered  had no
                  jurisdiction according to applicable Canadian law;

         b)       the judgment was subject to ordinary remedy (appeal,  judicial
                  review and any other  judicial  proceeding  which  renders the
                  judgment not final,  conclusive or enforceable  under the laws
                  of  the  applicable   state)  or  not  final,   conclusive  or
                  enforceable under the laws of the applicable state;

         c)       the judgment  was obtained by fraud or in any manner  contrary
                  to natural justice or rendered in contravention of fundamental
                  principles of procedure;

         d)       a dispute between the same parties,  based on the same subject
                  matter  has given rise to a  judgment  rendered  in a Canadian
                  court or has been decided in a third  country and the judgment
                  meets the necessary  conditions for  recognition in a Canadian
                  court;

         e)       the outcome of the judgment of the U.S. court was inconsistent
                  with Canadian public policy;

         f)       the judgment enforces  obligations  arising from foreign penal
                  laws or laws that deal with taxation or the taking of property
                  by a foreign government; or

        g)        there  has  not  been  compliance with applicable Canadian law
                  dealing with the limitation of actions.

EXCHANGE APPROVALS:  Pursuant to the policies of the TSX Venture, the Company is
required to provide certain  information about proposed  acquisitions to the TSX
Venture  and the  Company  must obtain  approval  from the TSX Venture  prior to
completing  any  proposed  acquisition.  In  addition,  the Company  must obtain
approval from the TSX Venture prior to issuing any shares in connection  with an
acquisition of, or the exercise of an option on, a property  interest.  There is
no assurance that the TSX Venture will approve the acquisition of any additional
properties  by the  Company,  whether  by way of  option  or  otherwise,  or the
subsequent  issuance of any shares in  connection  with any  property  which the
Company acquires.



                                      -19-
<PAGE>

COMPETITION:  The mineral  industry is intensely  competitive in all its phases.
The Company competes with many companies  possessing greater financial resources
and technical facilities than itself for the acquisition of mineral concessions,
claims,  leases and other mineral  interests as well as for the  recruitment and
retention  of  qualified  employees.  If the  Company  is unable to  effectively
compete against the other companies engaged in the mineral exploration industry,
the Company may be forced to cease all of its activities.  Specifically,  if the
Company is unable to recruit  and retain  qualified  officers,  consultants  and
others to provide the Company with the expertise necessary to plan and implement
its  exploration  programs,  the Company may be required to delay or abandon its
exploration programs or cease its activities entirely.

OUTSIDE  SCRUTINY:  Some mining companies have  experienced  issues and problems
from local  communities  relating to their exploration  activities.  These local
communities  have  restricted  access  to  the  companies'  properties.  If  the
Company's  activities  are not  acceptable  to  communities  where work is being
undertaken the Company may have to abandon its investment in the property.

DILUTION:  The Company may in the future grant to some or all of its  directors,
officers,  insiders and key employees  options to purchase the Company's  common
shares as non-cash incentives to those employees. Such options may be granted at
exercise  prices equal to market  prices,  or at prices as  allowable  under the
policies of the TSX Venture, when the public market is depressed.  To the extent
that  significant  numbers of such  options  may be granted and  exercised,  the
interests  of then  existing  shareholders  of the  Company  may be  subject  to
additional dilution.

METALS PRICE FLUCTUATIONS:  Factors beyond the control of the Company may affect
the  marketability  of any substances  discovered.  The prices of various metals
have  experienced  significant  movement  over short  periods  of time,  and are
affected  by  numerous  factors  beyond the  control of the  Company,  including
international economic and political trends, expectations of inflation, currency
exchange  fluctuations,  interest  rates  and  global  or  regional  consumption
patterns,  speculative  activities and increased  production of such metals. The
supply of and  demand  for metals are  affected  by various  factors,  including
political  events,  economic  conditions and  production  costs in major mineral
producing  regions.  Variations in the market prices of metals may impact on the
Company's ability to raise funding to continue  exploration of its projects.  In
addition,  any  significant  fluctuations  in metal  prices  will  impact on the
Company's decision to accelerate or reduce its exploration activities.

UNITED  STATES  MARKET:  As of the  date  of this  annual  report,  there  is no
established  market in the United States for the Company's  common  shares.  The
Company's common shares have been quoted in the pink sheets (the "Pink Sheets"),
published by Pink Sheets LLC,  under the symbol  "AJRSF" since January 14, 2004;
however,  trading in the  Company's  shares is sporadic and limited.  Management
anticipates  that the Company will seek to have its common  shares quoted on the
Over-The-Counter  Bulletin  Board  operated by the Nasdaq  Stock  Market,  Inc.;
however,  there are no assurances as to if, or when, the Company's common shares
will be quoted on the Over-The-Counter  Bulletin Board. In addition, even if the
Company's shares are quoted on the Over-The-Counter  Bulletin Board, trading may
continue to be sporadic and limited. Consequently, the Company's shareholders in
the United  States may not be able to use their shares for  collateral  or loans
and  may not be able  to  liquidate  at a  suitable  price  in the  event  of an
emergency.  In addition,  the Company's  shareholders  may not be able to resell
their shares in the United States and may have to hold them indefinitely.

U.S.  TAX  LIABILITY:  The  Company  may  be  deemed  to be a  "Passive  Foreign
Investment Company" ("PFIC").  See "Item 10. Additional Information - Taxation."
If the Company is deemed to be a PFIC, a United  States  holder of the Company's
common  shares  would be required to pay an interest  charge  together  with tax
calculated at maximum tax rates on certain  "excess  distributions"  (defined to
include  certain  dividends  from a PFIC  and any gain on the sale of stock of a
PFIC)  unless such  holder made an election  either to (1) include in his or her
taxable income his or her pro rata share of the PFIC's ordinary earnings and net
capital gains under the Qualified  Electing Fund rules or (2) mark to market his
or her Company  common  shares at the end of each  taxable  year as set forth in
Section 1296 of the Internal  Revenue Code of 1986,  as amended.  The  elections
require  certain  conditions be met such as filing on or before the due date, as
extended,  for filing the shareholder's  income tax return for the first taxable
year to which the election will apply.



                                      -20-
<PAGE>


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

HISTORY AND DEVELOPMENT OF THE COMPANY

The Company was incorporated pursuant to the COMPANY ACT (British Columbia) (the
"Company  Act") on April 11, 2000 under the name "XS Capital  Corp."  Initially,
the  Company  had one share  issued  and  outstanding,  which was held by Joseph
Grosso,  who at the time was not an  officer or  director  of the  Company.  Mr.
Grosso  transferred the single  outstanding share to Mr. Cacos,  President and a
director of the Company, on April 11, 2001.  Effective February 2004, Mr. Grosso
became the Chairman and a director of the Company.  The Company remained without
a business asset and was inactive until March 2003, when the Company  negotiated
a number of  agreements  to option and  acquire  interests  in  various  mineral
concessions  located  in  Argentina,  as  described  below.  As a result  of the
decision to engage in mineral  exploration  activities,  the Company changed its
name to "Amera  Resources  Corporation" on March 4, 2003. There was no change of
control or change in management in connection with the name change.  In December
2003, the Company  completed its initial public  offering  ("IPO") and commenced
trading on the TSX Venture  Exchange  ("TSXV") under the symbol "AMS". See "Item
10. Additional Information - Memorandum and Articles of Association."

The Company is a junior mineral  exploration  company engaged in the business of
acquiring, exploring and evaluating natural resource properties, and potentially
joint venturing these properties depending on the evaluation of the property.

To this end, the Company  entered into a Letter of Intent,  dated March 6, 2003,
as amended by Amending  Letter  Agreement dated September 30, 2003, with IMA and
Inversiones Mineras Argentinas S.A., an indirect, wholly-owned subsidiary of IMA
("IMASA"), whereunder the Company was granted an irrevocable option to acquire a
51% undivided  interest in the group of mineral rights known as Mogote,  located
in the  Province of San Juan,  Argentina  (the "Mogote  Project").  See "Item 4.
Information  on  the  Company  -  Property,  Plant  and  Equipment  -  Principal
Properties - Mogote Project" and "Item 7. Major  Shareholders  and Related Party
Transactions - Related Party  Transactions." To exercise the option, the Company
must issue an  aggregate  1,650,000  common  shares (of which  200,000 have been
issued) and incur an aggregate  US$1,250,000 in exploration  expenditures on the
Mogote Project by July 1, 2007, less the amount paid to IMA as reimbursement for
all past payments made and  expenditures  incurred by IMA on the Mogote Project,
being $197,854. As well, the Company has agreed to make all payments required to
maintain the Mogote  Project in good standing  including all payments due to the
underlying owners and vendors thereof,  which total  US$269,100.  As of December
31, 2004,  US$138,000  has been paid and a final payment of US$100,000 is due in
June 2005.  By reason of recent  Argentinean  legislation,  payment  obligations
denominated  in a foreign  currency  must now be paid in  Argentinean  currency,
calculated in accordance with set conversion  rates fixed by the government from
time to time,  which has the effect of reducing  the US dollar  amounts that the
Company will ultimately pay to the owners.  The Company shall be the operator of
the Mogote Project throughout the term of the subject option.

On April 8, 2004, the Company and IMA entered into a further  agreement  whereby
the Company can earn an additional 24% interest, for a total 75% interest, after
earning the initial 51% interest, by issuing an additional 300,000 common shares
and  expending an additional  US$3 million of  exploration  expenditures  over a
three year period. See "Item 4. Information on the Company - Property, Plant and
Equipment  -  Principal   Properties  -  Mogote  Project"  and  "Item  7.  Major
Shareholders and Related Party Transactions - Related Party Transactions."

By an agreement dated June 28, 2004,  effective July 7, 2004,  IMA's and IMASA's
rights and obligations  under these agreements were assigned to Golden Arrow and
Inversiones  Mineras  Australes  S.A., an Argentine  company and an  indirectly,
wholly-owned  subsidiary  of  Golden  Arrow  ("IMAUSA"),  as  a  result  of  IMA
transferring  its option on the Mogote  property  to Golden  Arrow,  through the
transfer of IMASA's interest in the Mogote property to IMAUSA.

In addition, the Company entered into a Property Purchase Agreement,  also dated
March 6,  2003,  with IMA and  IMASA  whereunder  the  Company  acquired  a 100%
interest in certain mineral  exploration  properties  located in the Province of
Chubut, Argentina,  consisting of three (3) cateos known as Lago Pico, Loma Alta
and Nueva Ruta (the "Chubut Project"). See "Item 4. Information on the Company -
Property,  Plant and Equipment - Other Properties - Chubut Project" and "Item 7.


                                      -21-
<PAGE>


Major Shareholders and Related Party Transactions - Related Party Transactions."
In  consideration  therefor,  the Company  agreed to issue 500,000 of its common
shares to IMA (with a deemed  value at the time of the  transaction  of  $22,000
which was IMA's recorded cost for the properties), IMA retained a 3% net smelter
returns  royalty in respect of such  properties  and the Company agreed to pay a
cash bonus of  US$250,000  to IMA at such time as a decision to place any of the
properties in commercial  production is made.  Although the 500,000 shares had a
deemed  value of $22,000  at the time of the  transaction,  the shares  were not
issued until November 2003, in connection with the Company's IPO. Under Canadian
GAAP,  the shares were  required to be valued at the market price at the time of
issuance,  which was $225,000  (based upon the initial public  offering price of
$0.45 per share).  By an agreement dated June 28, 2004,  effective July 7, 2004,
IMA's and IMASA's rights and  obligations  under this agreement were assigned to
Golden Arrow and IMAUSA.

In March 2003,  when the Letter of Intent and Property  Purchase  Agreement were
executed, the Company was not publicly listed. The agreements were negotiated by
the Company's  directors (then Messrs.  Cacos, Minni and Coltura) who considered
among other factors the agreements,  transactions of a similar nature  currently
being entered in the mining industry, the Company's business plan, the Company's
future IPO and its  planned  listing on the TSX  Venture.  At the time,  Messrs.
Minni and Coltura were disinterested  members of the board of directors.  At the
time of the April 8, 2004 amendment to the Letter of Intent,  Messrs.  Cacos and
Grosso  abstained from voting and the  transaction was approved by the remaining
disinterested  members of the board of  directors,  who at the time were Messrs.
Minni, Coltura and Bottomer.

On August 24, 2004, the Company signed a Letter of Intent with Arcturus Ventures
Inc.  whereby the Company  acquired an option to obtain up to an 80% interest in
the Esperanza property, located in Peru. See "Item 4. Information on the Company
- Property, Plant and Equipment - Other Properties - Esperanza Project."

In those situations where the Company issued shares of its common stock pursuant
to the agreements  discussed above, the shares were valued at the closing market
price  on the day of  issue.  This  amount  is the  value  that is  recorded  as
acquisition  cost  of the  applicable  property  as  described  in Note 3 to the
Company's December 31, 2004,  financial  statements.  The number of shares which
were  issued  for the  acquisition  of  mineral  properties  and their  value is
described in Note 4 of the Company's December 31, 2004, financial statements.

To  date,  the  Company  has  raised  $5,095,549  in cash  through  the  sale of
securities.  The Company intends to raise additional funding through the sale of
its  securities to carry out additional  exploration on its mineral  properties.
See "Item 5.  Operating  and  Financial  Review and  Prospects -  Liquidity  and
Capital  Resources."  There are no  assurances  that the Company will be able to
sell additional securities to fund its exploration or overhead requirements,  or
that the Company will receive a suitable price for any securities sold.

ACQUISITION AND DISPOSITION OF MINERAL PROPERTY INTERESTS DURING THE THREE PRIOR
FISCAL YEARS

The Company has made  additions  to mineral  properties  and  deferred  costs of
$1,230,962,  $684,259 and $nil and capital  assets of $2,934,  $nil and $nil for
the fiscal years ended December 31, 2004, 2003 and 2002, respectively.

During  fiscal  2003 and 2004 the Company did not  abandon,  dispose,  assign or
joint-venture  any  of  its  arrangements  to  earn  interests  in  its  mineral
properties. To May 31, 2005, the Company has not abandoned,  disposed,  assigned
or  joint-ventured  any of its  arrangements  to earn  interests  in its mineral
properties.

BUSINESS OBJECTIVES

The principal  business  carried on and intended to be carried on by the Company
is the acquisition and exploration of natural resource  properties.  The Company
intends on expending its existing cash resources to carry out exploration on its
mineral  properties,  to pay for  administrative  costs  during the fiscal years
ending  December  31, 2004 and 2005,  and for working  capital.  The Company may
decide to acquire  other  property  interests  in addition  to mineral  property
interests currently held by the Company.



                                      -22-
<PAGE>


No capital  expenditures were made by the Company during the 2002, 2003 and 2004
fiscal years other than expenditures  relating to the Company's mineral property
interests.  See "Item 4.  Information  on the  Company  -  Business  Overview  -
Exploration Expenditures."

BUSINESS OVERVIEW

The Company is an exploration stage company exploring primarily for precious and
base metals.  To date,  the Company has not earned any production  revenue,  nor
found any proved  reserves  on any of its  properties.  Since  March  2003,  the
Company has proceeded to enter into a number of agreements to acquire  interests
in  resource  properties  located  in  Argentina,  Peru and  Nevada,  U.S.A.  In
addition,  the Company has  acquired  interests in  properties  located in Chile
adjacent to the  Company's  Mogote  properties.  These Chilean  properties  were
staked to add to the  Mogote  property  in  Argentina.  The Mogote  property  is
located near the border of the two countries.  The Chilean  properties are being
held by an agent in Chile for Golden Arrow and form part of the properties under
option in the  agreements  between the Company  and Golden  Arrow.  See "Item 4.
Information  on  the  Company  -  Property,  Plant  and  Equipment  -  Principal
Properties  -  Mogote  Project."  See  "Item 4.  Information  on the  Company  -
Property, Plant and Equipment".

The Company is currently  focusing its  financial  resources  in  conducting  an
exploration  program on the Mogote  property in  Argentina.  The Company is also
currently  reviewing other mineral property interest  opportunities in South and
North America.

EXPLORATION EXPENDITURES

During  fiscal  2004 the  Company  incurred  approximately  $388,739  (including
approximately  $329,250  which is  attributed  to 425,000  shares  issued by the
Company)  for mineral  property  acquisition  costs and  incurred  approximately
$842,223 for exploration costs on its mineral property interests.

During fiscal 2003 the Company incurred  $507,042  (including  $270,000 which is
attributed  to  600,000  shares  issued by the  Company)  for  mineral  property
acquisition  costs and $164,768 for  exploration  costs on its mineral  property
interests.  No mineral property  acquisitions or exploration  expenditures  were
made in fiscal 2002 or 2001.

EXPLORATION BUDGET

See "Item 4. Information on the Company - Plan of Operation."

SALES AND REVENUE DISTRIBUTION

As of the date of this annual  report the Company has not generated any revenues
from its mineral properties.

ORGANIZATIONAL STRUCTURE

As of the  date of this  annual  report,  the  Company  has  three  wholly-owned
subsidiaries,  Recursos de los Andes  S.A.C.,  a Peruvian  company  which became
active in December 2004 and Amera  Resources  (US) Inc., a Nevada,  USA company,
which was incorporated on February 2, 2005.

Amera  Resources  (US) Inc.  was formed to hold the  Company's  interests in its
Nevada  properties.  The Company owns all of the  outstanding  voting and equity
interests in Amera Resources (US) Inc.

Recursos de los Andes S.A.C.  was formed to hold the Company's  interests in its
Peruvian  properties.  The Company owns all of the outstanding voting and equity
interests in Recursos de los Andes S.A.C.

Amera-Chile  Sociedad  Contractual  Minera  was  formed  in May 2005 to hold the
Company's  interest  in its  Chilian  properties.  The  Company  owns all of the
outstanding  voting and equity  interests in  AMERA-Chile  Sociedad  Contractual
Minera.


                                      -23-
<PAGE>

Unless otherwise  indicated  herein,  the term "Company" means  collectively the
Company and its subsidiaries.

PRINCIPAL OFFICES

The Company's  principal  office is located at #709 - 837 West Hastings  Street,
Vancouver, British Columbia, V6C 3N6. The Company's registered office is located
at 709 - 837 West Hastings Street,  Vancouver, B.C. V6C 3N6 and its phone number
is (604) 687-1828.

On September 1, 2002 the Company began sharing office facilities, capital assets
and personnel with IMA.  Effective  January 1, 2005, the Company entered into an
agreement with Grosso Group  Management  Ltd. (the "Grosso  Group")  pursuant to
which the Grosso  Group  provides  offices  and  administrative  and  management
services to the  Company.  See "Item 7. Major  Shareholders  and  Related  Party
Transactions - Related Party Transactions."

PROPERTY, PLANT AND EQUIPMENT

The Company's  activities are focused on the exploration of its mineral property
interests.  As of the date of this annual report,  the Company does not have any
plant and  equipment,  mines or producing  properties.  The  Company's  proposed
programs  are  exploratory  in nature and all of the  Company's  properties  are
without known reserves.



                                      -24-
<PAGE>


                               ORGANIZATION CHART

      |-------------------------------------------------------------------|
      |                    AMERA RESOURCES CORPROATION                    |
      |                   (Vancouver, British Columbia)                   |
      | (Registered in B.C. and a foreign entity registered in Argentina) |
      |----|------------------------------|---------------------------|---|
           |                              |                           |
           |                              |                           |
           |                              |                           |
          100%                           100%                        100%
           |                              |                           |
           |                              |                           |
           |                              |                           |
|----------|-----------|         |--------|--------|        |---------|--------|
|                      |         |                 |        |                  |
| Amera-Chile Sociedad |         | Amera Resources |        | Recursos de los  |
|  Contractual Minera  |         |   (U.S.) Inc.   |        | Andes S.A.C.Peru |
|  (Chile)May 2005     |         |  February 2005  |        |  September 2004  |
|----------------------|         |-----------------|        |------------------|





                                      -25-
<PAGE>

The Company's  principal assets are its options to acquire interests in unproven
mineral claims.  Under Canadian GAAP,  option payments and exploration and field
support costs directly  relating to mineral claims are deferred until the claims
to which they relate are placed into production, sold or abandoned. The deferred
costs will be amortized over the life of the orebody  following  commencement of
production or written off if the property is sold or  abandoned.  Administration
costs and other  exploration  costs that do not relate to any specific  property
are expensed as incurred.

On a  periodic  basis,  management  reviews  the  carrying  values  of  deferred
acquisition and exploration  expenditures with a view to assessing whether there
has been any impairment in value.  Management takes into  consideration  various
information  including,  but not limited to, results of  exploration  activities
conducted to date,  estimated  future metal prices,  and reports and opinions of
outside geologists,  mine engineers and consultants.  In the event that reserves
are determined to be insufficient to recover the carrying value of any property,
the carrying  value will be written down or written off, as  appropriate.  As of
May 31, 2005, the Company has not established  that its option  interests or its
mineral claims have any known or proven reserves.

This accounting  treatment is different  under US GAAP,  under which the Company
would expense the option  payments and  exploration  costs  relating to unproven
mineral claims as incurred. In addition, US GAAP requires that exploration costs
not be  capitalized  until  a  positive  feasibility  study  is  completed.  The
capitalized costs of such claims would then be measured, on a periodic basis, to
ensure that the carrying  value can be recovered  on an  undiscounted  cash flow
basis.  If the carrying  value  cannot be  recovered on this basis,  the mineral
claims would be written down to net recoverable  value on a discounted cash flow
basis.

PRINCIPAL PROPERTIES

MOGOTE PROJECT

LOCATION AND ACCESS

The property is located in the  Departament  Iglesia,  Macho Muerto zone, in the
San  Juan  Province  close  to the  northern  border  with  La  Rioja  Province,
approximately  300  kilometres  northwest of the city of San Juan, and bordering
Chile.  See Map A. Access to the property is via either Chile or Argentina,  but
because special  arrangements need to be made to cross the international  border
where there are no established  crossing  points,  practical access is currently
from the Argentina  side. The nearest supply point where most goods and services
are  available  is the town of  Guandacol  in La Rioja  Province.  From here the
property is only  accessible by road during the months of October to April using
a 4x4 vehicle. Exploration activities can only be carried out during this period
due to seasonal weather  conditions.  Total distance from Guandacol to Mogote is
approximately 250 kms and the travel time is 6-7 hours. Access from Guandacol is
through  Aguadita,  across Rio Blanco,  and through the  historic La Brea mining
camp.   Road   conditions   are  poor  with  local  severe  dust  and  generally
un-maintained  road  conditions.  There is no electrical grid in the area of the
Mogote property.

MINERAL TITLES INCLUDED IN MOGOTE PROPERTY

The Mogote property consists of one cateo,  three discoveries and five minas. In
2004, the Company staked a number of claims adjoining the  northwestern  part of
the Mogote project on the Chilean side of the border. See Map A.


<TABLE>
<CAPTION>
     ----------------------------------------------------------------------------------------------------------
       CLAIM NAME &     CLAIM                        HECT-                  EXPIRY      WORK/PAYMENT
        COUNTRY         NUMBER       CLAIM TYPE      ACRES     OWNER         DATE         REQUIRED
     ----------------------------------------------------------------------------------------------------------
<S>                   <C>              <C>           <C>      <C>              <C>    <C>
             -        338579-R-92      CATEO         2259     IMAUSA           N/A    $2000 pesos
     (Argentina)                                                                      payment after
                                                                                      concession granted
     ----------------------------------------------------------------------------------------------------------
     ADELA # 1        425-098-A-2000   DISCOVERY     2000     N. Arturo        N/A    No payment for 3 years;
     (Argentina)                                                                      afterward $800 peso per
                                                                                      year per 100 hectares
     ----------------------------------------------------------------------------------------------------------


                                      -26-
<PAGE>

<CAPTION>
     ----------------------------------------------------------------------------------------------------------
       CLAIM NAME &     CLAIM                        HECT-                  EXPIRY      WORK/PAYMENT
        COUNTRY         NUMBER       CLAIM TYPE      ACRES     OWNER         DATE         REQUIRED
     ----------------------------------------------------------------------------------------------------------
<S>                   <C>              <C>           <C>      <C>              <C>    <C>
     MOGOTES NORTE    520-0275-R097    DISCOVERY     1650     R. Viviani       N/A    No payment for 3 years;
     (Argentina)                                                                      afterward $800 peso per
                                                                                      year per 100 hectares
     ----------------------------------------------------------------------------------------------------------
     MOGOTES SUR      520-0274-R-97    DISCOVERY     2100     R. Viviani       N/A    No payment for 3 years;
     (Argentina)                                                                      afterward $800 peso per
                                                                                      year per 100 hectares
     ----------------------------------------------------------------------------------------------------------
     MOGOTE 1         156.277-S-76     MINA          48       IMAUSA           N/A    $480 peso per year
     (Argentina)                                                                       canon
     ----------------------------------------------------------------------------------------------------------
     MOGOTE 9         156.285-S-76     MINA          48       N. Arturo        N/A    $480 peso per year
     (Argentina)                                                                       canon
     ----------------------------------------------------------------------------------------------------------
     MOGOTE 14        156.290-S-76     MINA          48       IMAUSA           N/A    $480 peso per year
     (Argentina)                                                                       canon

     ----------------------------------------------------------------------------------------------------------
     MOGOTE 4         156.280-S-76     MINA          48       IMAUSA           N/A    $480 peso per year
     (Argentina)                                                                      canon
     ----------------------------------------------------------------------------------------------------------
     MOGOTE 5         156.280-S-76     MINA          48       IMAUSA           N/A    $480 peso per year canon
     (Argentina)
     ----------------------------------------------------------------------------------------------------------
     Tronquito 1              -        Concesion de  200      Golden Arrow     N/A    US$220 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
     Tronquito 2              -        Concesion de  200      Golden Arrow     N/A    US$220 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
     Tronquito 3              -        Concesion de  300      Golden Arrow     N/A    US$330 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
     Tronquito 4              -        Concesion de  100      Golden Arrow     N/A    US$110 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
     Tronquito 5              -        Concesion de  200      Golden Arrow     N/A    US$220 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
     Tronquito 6              -        Concesion de  300      Golden Arrow     N/A    US$330 per year canon
     (Chile)                           Exploracion
     ----------------------------------------------------------------------------------------------------------
</TABLE>

AGREEMENTS

Under an option agreement dated June 7, 2000 among IMA, IMASA and Nestor Arturo,
as amended August 3, 2000, and September 1, 2000, IMA had the right to acquire a
100% interest in the property by making cash payments totaling US$280,000. IMA's
and IMASA's  rights and interests  under this  agreement were assigned to Golden
Arrow and  IMAUSA,  respectively,  effective  July 7,  2004.  To date IMA and/or
Golden Arrow have paid US$138,000, including a payment made on December 6, 2004,
which has been paid by the Company. A final payment of US$100,000 is due June 6,
2005. As a result of Argentinean  government  policy, it is expected that the US
dollar  amounts,  when paid in  Argentinean  currency,  will be reduced from the
original  amount.  The Company  anticipates that the amount of the final payment
will be less than  US$110,000 as a result of this policy.  The vendors also will
have the right to receive a royalty of 0.5% NSR, up to a maximum of US$500,000.

The  Company,  IMA and IMASA  signed a letter of  Intent  on March 6,  2003,  as
amended  September  30,  2003,  pursuant  to which  the  Company  could  earn an
undivided 51% interest in the Mogote Property.  See "Item 7. Major  Shareholders
and Related Party Transactions - Related Party  Transactions." IMA's and IMASA's
rights and  interests  under this  agreement  were  assigned to Golden Arrow and
IMAUSA,  effective  July 7, 2004.  To earn a 51% interest in the  property,  the
Company must issue  1,650,000  common shares to IMA (now Golden Arrow) and incur
US$1,250,000  of  expenditures,  including work programs and  underlying  option
payments,  all over five  years.  The Company has issued  200,000  shares,  at a
recorded cost of $85,000 and is proceeding with work expenditures.

The Company  agreed to reimburse  IMA (now Golden  Arrow) for past payments made
and  expenditures  which had been  incurred  by IMA on the Mogote  Property.  On
September 30, 2003, the Company,  IMA and IMASA entered into an amendment to the
March 6, 2003 agreement.  The amendment  provided that the amount of the expense
reimbursement  as of  September  30, 2003 was  $192,952  and  provided  that the
Company would be the operator of the Mogote  property.  As at December 31, 2003,
the  Company  had  reimbursed  IMA  and  IMASA  $192,952  and  $4,902   remained
outstanding  and is  included  in  amounts  payable.  As of June 30,  2004,  the
remaining  $4,902 had been paid.  As at December 31, 2003 the Company had issued
100,000 of its common  shares to IMA at a recorded  amount of  $45,000.  In July
2004 the Company issued  100,000 shares to IMA/Golden  Arrow with a deemed value
of $40,000.


                                      -27-
<PAGE>

On April 8, 2004,  the Company,  IMA and IMASA entered into a further  agreement
whereby  the  Company  can earn an  additional  24%  interest,  for a total  75%
interest,  after  earning  the initial 51%  interest,  by issuing an  additional
300,000  common  shares  (which have been  issued to IMA,  at a deemed  price of
$279,000) and expending an aggregate of US$3 million on exploration expenditures
over a three year  period.  IMA's and IMASA's  rights and  interests  under this
agreement were assigned to Golden Arrow and IMAUSA, respectively, effective July
7, 2004. See "Item 4.  Information  on the Company - History and  Development of
the Company."

The Company has committed to spend the initial US$1,000,000 by May 30, 2005. The
Company received approval from the TSX Venture for this transaction on April 22,
2004. Joseph Grosso,  Nikolaos Cacos and David Terry,  officers and/or directors
of the Company,  are also officers and/or directors of IMA and Golden Arrow. See
"Item 7. Major  Shareholders  and Related  Party  Transactions  - Related  Party
Transactions."

As of December 31, 2004 the Company had expended  $601,042 in acquisition  costs
and  $632,434  in  exploration  expenses  on the Mogote  Property.  See "Item 4.
Information on the Company - Plan of Operation."

REGIONAL AND LOCAL GEOLOGY

The property is underlain  by basement  rocks of the Permian age Choiyoi  Group,
which are faulted  against and  overlain by Tertiary  age  volcanic  rocks.  The
Mogote  region has been  subjected  to multiple  volcanic and  intrusive  events
dating from middle  Miocene  (~13.65  million years ago) back at least as far as
the Permo-Triassic (~250 million years ago), which management believes makes the
area particularly attractive for mineral exploration.

EXPLORATION HISTORY

A brief geological  reconnaissance  took place in March-April 2000, during which
21 rock and talus samples were collected. Anomalous samples came from zones with
clay  and/or  iron  alteration.  In  November-December  2000,  a  reconnaissance
geological and geochemical  sampling  program was carried out over the property.
This work outlined an area  measuring  approximately  3 kilometres  E-W near the
northern  property boundary which returned a high proportion of anomalous copper
and gold results in both rock and sediment samples. In March of 2001 IMA entered
into a Joint Venture agreement with Rio Tinto Mining and Exploration Limited who
carried out an eight day program  commencing March 11, 2001 which was terminated
by weather. Work accomplished  included road construction,  talus fines and rock
chip  sampling  and  resulted  in the  identification  of the Filo Este and Filo
Central  targets which both displayed  aspects of porphyry  copper-gold and high
sulphidation  epithermal precious metal systems. During January 2003 IMA carried
out a four week detailed surface  exploration program of mapping and geochemical
sampling.  The  results  significantly  expanded  the  gold-copper   exploration
potential of the project.

During the period November 17 through December 14, 2003, the Company carried out
an exploration program comprising  detailed geologic mapping,  ground magnetics,
induced   polarization   ("IP")   geophysics,   trench  sampling,   and  surface
geochemistry  in the northern part of the property.  The work was focused on two
major zones of copper-gold  mineralization,  Filo Este and Filo Central, and one
zone of high sulphidation epithermal alteration,  Zona Colorada. The copper-gold
mineralization is characterized by strongly  anomalous values in copper and gold
related to potassic  alteration  of a Miocene  (23.8 to 5.3  million  years ago)
diorite porphyry  system.  The high  sulphidation  alteration is the upper level
expression of a separate,  but similar diorite porphyry.  The work indicated the
presence of a major mineralized  porphyry beneath the Filo Este zone of potassic
and propylitic alteration. Mineralization is hosted within volcanic breccias and
phases of the Miocene diorite  porphyry which have undergone  moderate to strong
porphyry-type  alteration.   Hydrothermal  mineralization  consisted  of  copper
sulphide  minerals  chalcopyrite and bornite within quartz veins and as wallrock
disseminations.  Recent supergene  (surface-enriched)  oxidation has altered the
primary copper minerals to various copper oxide and sulphate minerals  including
malachite and antlerite.

A 600 metre trench was excavated over the Filo Este zone of potassic  alteration
and  encountered  510 metres of continuous  mineralization  that averaged 0.196%
copper  and 0.331 ppm gold.  Mineralization  consisted  of  fracture  controlled
sulfates and oxides and as disseminations  in wallrock and quartz veins.  Copper
minerals  were  approximately  80%  oxide  and 20%  sulfides  with the  sulfides
consisting  of  chalcopyrite  and bornite.  Ground  magnetics  suggest a shallow

                                      -28-
<PAGE>


porphyry system underlying Filo Este ridge with strong magnetite alteration that
covers an area of at least 1.5  kilometres  by 800 metres.  The shallow depth of
intrusion is indicated by a steep magnetic gradient which management believes is
consistent  with the level of exposure of  alteration  and  mineralization.  Two
other distinct  magnetic sources were encountered at Filo Central and underlying
the East Cirque area. The IP indicates several distinct copper sulfide bodies of
2-4% sulfide that are coincident with magnetite alteration on Filo Este.

MARCH 2004 DRILLING - FILO ESTE

In March 2004,  the Company  carried out a 1,475  metre,  5 hole  diamond  drill
program and conducted further  geological mapping and talus fine sampling on the
northern part of the Mogote property.  The drilling tested a portion of the Filo
Este porphyry  target to a depth of up to 495 metres over a strike length of 860
metres  and a  width  of  approximately  250  metres.  Hole  MOG-04-1  had to be
abandoned at 71.6 metres and hole  MOG-04-1A  was drilled from the same location
to target  depth.  Highlights  of the drill  results are  provided in table form
below.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                     (LWA)        (LWA)         (LWA)
Drillhole           Total Depth   From        To          Interval   Gold         Silver       Copper
                    (metres)      (metres)    (metres)    (metres)   (ppm)         (ppm)         (%)
-----------------------------------------------------------------------------------------------------
<S>               <C>           <C>         <C>         <C>        <C>          <C>          <C>
MOG-04-1            71.6          2.0         70.0        68.0       0.43         13.9         0.244
-----------------------------------------------------------------------------------------------------
MOG-04-1A           495.3         6.0         495.3       489.3      0.23         2.6          0.170
Including                         258.0       424.0       166.0      0.19         2.2          0.243
And                               308.0       396.0       88.0       0.20         1.9          0.290
-----------------------------------------------------------------------------------------------------
MOG-04-2            315.4         2.0         315.4       313.4      0.16         1.9          0.171
Including                         196.0       315.4       119.4      0.21         2.8          0.248
-----------------------------------------------------------------------------------------------------
MOG-04-3            300.0         6.0         300.0       294.0      0.11         1.3          0.078
-----------------------------------------------------------------------------------------------------
MOG-04-4            292.9         2.0         292.9       290.9      0.23         3.1          0.104
-----------------------------------------------------------------------------------------------------
</TABLE>

In addition to the drill program,  regional surface work was carried out on Filo
Central  and other  targets  in March 2004 to  advance  them to the  drill-ready
stage. This work comprised detailed mapping,  additional step-out talus sampling
and  road/trench  construction.  Talus fine sampling on the Filo Central target,
defined by a strong magnetic signature coextensive with highly anomalous surface
geochemistry,  has now extended the surface  copper-gold  geochemical anomaly of
greater  than  0.1 ppm Au and 500 ppm Cu to  4,000  x 800  metres.  Within  this
anomaly is a 600 x 400 metre area of greater than 0.5 ppm.  Management  believes
Filo  Central is a high  priority  target for the next phase of  exploration  on
Mogote.

A short surface  program was  commenced in early  November 2004 to prepare for a
drill program to test the Filo Central target, and to further test the Filo Este
target, which started in early 2005.

JANUARY-FEBRUARY 2005 DRILLING - FILO ESTE AND FILO CENTRAL

Between  mid-January  and early  February 2005 the Company  completed a Phase II
2,577 metre 9-hole RC drill  program on the Mogote  project.  Of the nine holes,
four were  found to contain  significant  gold-copper  mineralization  hosted in
porphyry or in metamorphosed volcanic sediments at the margin of porphyry.

All the Phase II drill holes were sited to test strong areas of potassic-altered
intrusive porphyries within the Filo Este and Filo Central anomalies, defined by
strong  magnetics,  highly  anomalous  copper and gold  geochemistry and surface
alteration.  Five holes were  completed  on Filo Este over an  east-west  strike
extent of 1.4  kilometres  spanning a  north-south  distance of 720 metres.  The
remaining  four holes were spaced out over 1.6 kilometres of strike length along
Filo  Central.  All  drill  holes  were  located  on the  Argentina  side of the
international border.

The significant intercepts include:



                                      -29-
<PAGE>


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                          Total                                          ppm       ppm          %
 Drillhole     Zone       Depth      From         To       Interval     Gold      Silver     Copper
                         (metres)  (metres)    (metres)    (metres)     (LWA)     (LWA)       (LWA)
----------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>        <C>          <C>       <C>         <C>        <C>

 MOG-6         Este        250         0         250          250        0.22                  0.083
 including                           176         246           70        0.36       3.0        0.158
----------------------------------------------------------------------------------------------------
 MOG-7         Este        287         0         287          287        0.25       3.0        0.107
----------------------------------------------------------------------------------------------------
 MOG-8         Este        300         4         142          138        0.47       2.0        0.093
----------------------------------------------------------------------------------------------------
 MOG-12        Este        300       214         276           62        0.30       1.1        0.140
----------------------------------------------------------------------------------------------------
</TABLE>


All significant  intercepts were from holes on Filo Este.  Drill holes MOG-7, 8,
and 12 are all  located  in the  northwest  corner  of the  property  and in the
northwestern  portion of the Filo Central  anomaly.  These holes were all hosted
in, or spatially related to, a newly mapped occurrence of fine-grained intrusive
porphyry that is interpreted as an early porphyry phase that typically alters to
potassic or intermediate argillic assemblages.

Copper  and gold  mineralization  in the drill  holes was  related  to  potassic
quartz-biotite  alteration and directly  related to early vein density and local
silicification.  Vein hosted and  disseminated  sulfides  include  chalcopyrite,
pyrite, and minor bornite.

The 2005 Phase II drill program was carried out under the supervision of project
geologist Steven K. Jones,  M.Sc.,  C.P.G.  Assays for the drilling program were
performed  by  Alex  Stewart  Labs,  Mendoza,   Argentina,   an  internationally
recognized assay service provider.  The Company is currently  reviewing the data
from the recent drill program in  conjunction  with all other  exploration  data
from the property to formulate  plans for the project going forward.  Therefore,
the Company has no current detailed plans to conduct exploration on the property
and has not budgeted any funds for further work at this time.



                                      -30-
<PAGE>



                                      MAP A

                [LOCATION MAP OF THE SAN JUAN PROVINCE, ARGENTINA
                   SHOWING THE LOCATION OF THE MOGOTE PROJECT]

                               [OMMITTED GRAPHIC]

               TO VIEW MAPS PLEASE VISIT THE COMPANY'S WEB SITE:
                             www.imaexploration.com



                                      -31-
<PAGE>



                                      MAP B

                 [LOCATION MAP OF THE CHUBUT PROVINCE, ARGENTINA
                       SHOWING THE LOCATION OF THE CHUBUT
                PROPERTIES: NUEVA RUTA, LOMA ALTA AND LAGO PICO]

                               [OMMITTED GRAPHIC]

               TO VIEW MAPS PLEASE VISIT THE COMPANY'S WEB SITE:
                             www.imaexploration.com




                                      -32-
<PAGE>



                                      MAP C

                 [LOCATION MAP OF THE AREQUIPA DEPARTMENT, PERU
                 SHOWING THE LOCATION OF THE ESPERANZA PROPERTY]

                               [OMMITTED GRAPHIC]

               TO VIEW MAPS PLEASE VISIT THE COMPANY'S WEB SITE:
                             www.imaexploration.com


                                      -33-
<PAGE>



                                      MAP D

                 [LOCATION MAP OF THE ROY AND HILLS PROPERTIES,
                             NYE COUNTY, NEVADA, USA
              SHOWING THE LOCATION OF THE ROY AND HILS PROPERTIES]

                               [OMMITTED GRAPHIC]

               TO VIEW MAPS PLEASE VISIT THE COMPANY'S WEB SITE:
                             www.imaexploration.com


                                      -34-
<PAGE>



OTHER PROPERTIES

ESPERANZA PROJECT

On August 24, 2004 the Company signed a Letter of Intent with Arcturus  Ventures
Inc. to purchase up to an 80%  interest  in the  Esperanza  property.  The 4,000
hectare  Esperanza  property  is  located  in the  province  of La  Union in the
department of Northern Arequipa and is approximately 600 kilometres southeast of
Lima.  See Map C. Access to the property  from the city of Arequipa is via paved
road to Chuquibamba  followed by a well-maintained  loose gravel surface road to
Cotahuasi and finally Puica. From Puica the property is approximately 4 hours on
horseback.  The nearest electrical grid is to Puica, a distance of approximately
3  kilometres  from the  property  boundary.  An  alternative  way to access the
property is via a new power line road located approximately 15 kilometres to the
east of the property.  From  Orcopampa the power line road can be accessed and a
four-wheel drive trail can be navigated to within 800 metres of the southeastern
corner of the property.

An initial 55%  interest  in the  Esperanza  project may be earned by  incurring
$750,000 in work  expenditures  over three years,  issuing 250,000 common shares
(25,000  shares have been issued  with a deemed  value of $10,250)  and making a
one-time  payment of $40,000 to Arcturus (which the Company has paid). By taking
the property up to the bankable  feasibility stage within three years of earning
the initial 55% interest and issuing a further 260,000  shares,  the Company may
earn an  additional  25%  interest.  This  Letter of Intent  was  subject to TSX
Venture  approval,  which was  subsequently  received.  In order to maintain the
4,000 hectare  property in good standing a cannon of US$12,000 per annum must be
paid to the Peruvian Government.

The  Esperanza   property  is  at  an  early  exploration  stage.  It  covers  a
three-kilometre  long epithermal system which encompasses four known zones where
numerous  old  workings  occur.  Other  than a limited  surface  program of rock
sampling and soils sampling  conducted by Arcturus,  no known modern exploration
has  previously  been used in the area.  Management  believes  the  property has
significant   potential  for  bulk-tonnage   style  gold   mineralization.   The
prospective   Tacaza   volcanics  unit,   which   underlies  the  property,   is
characterized  by widespread  epithermal  alteration  and elevated gold content.
Gold-bearing quartz veins and related epithermal  alteration extend upwards into
overlying rock units.  Exploration at Esperanza can be conducted  year-round and
road access is to within 800 meters of the property boundary.

In November 2004 the Company commenced a Phase I surface  exploration program on
the property.  The work was carried out over the course of four weeks with a two
week break in the  middle.  The work  comprised  detailed  surface  prospecting,
sampling and mapping.  On February 10, 2005,  the Company  issued a news release
discussing the results of the phase I surface program.  The work resulted in the
discovery of two significant  new gold anomalies,  Zona Ventana and Zona Afuera.
In  addition,   detailed   sampling   conducted   along  the  previously   known
3-kilometre-long  epithermal  gold trend  confirmed and expanded upon these gold
targets.  At Zona Ventana  anomalous  gold occurs over at least 1,000 length and
spans a vertical interval of 150 metres; the width remains open. Zona Afuera was
discovered  two  kilometres  to the  southeast  and  immediately  outside of the
property  boundary.  The  Esperanza  property was been  expanded to include this
target  and is now  4,000 ha in size.  A total of 138 rock  samples  and 44 soil
samples were collected during the Phase I surface program

ZONA VENTANA

Zona Ventana (The Window Zone) is  characterized  by  clay-altered  and variably
silica-altered  volcanic tuff exposed in a  north-northeasterly  trending stream
valley in the  southeast  sector of the  Esperanza  property.  This  altered and
mineralized unit is overlain by flat-lying  unaltered tuff. The zone is at least
1000 meters long and is defined by numerous samples  strongly  anomalous in gold
and  epithermal   pathfinder  elements   silver-arsenic-antimony-mercury.   Gold
anomalies span a vertical  interval of 150 metres;  the width of the mineralized
zone is currently not defined.  Various styles of silica alteration are evident.
Structural control on the altered and mineralized zones at Ventana is manifested
as both north-northwest  oriented structures with and  northeast-trending  veins
parallel to the Wayra-Huanca trend.

83 composite rock chip samples  (average  sample length 5 meters) were collected
from Zona Ventana.



                                      -35-
<PAGE>


ZONA AFUERA

Zona  Afuera  is  located  two  kilometers   south-southwest  of  Zona  Ventana.
Mineralization at Zona Afuera is hosted by hydrothermal  breccias  characterized
by volcanic  fragments in a siliceous  matrix.  These breccia  bodies outcrop as
isolated knobs in an alpine plain. Gold assays were anomalous in 3 out of 6 rock
samples collected. These included chip samples of 0.65 ppm gold across 8 metres,
0.403 ppm gold across 6 metres and 0.358 ppm gold across 6 metres.

Collectively  Zona  Ventana and Zona  Afuera  exhibit  the  geological  setting,
alteration  characteristics  and geochemical  signature of the upper level of an
epithermal gold system.  The large area over which alteration and mineralization
occurs in the  Ventana-Afuera  area  significantly  enhances the  potential  for
discovery of a bulk-tonnage  epithermal gold deposit.  The next phase of work on
the property will include further  detailed mapping and sampling of Zona Ventana
and Zona  Afuera  and ground  geophysics  to  outline  silica-altered  zones and
structures for drill-testing.

Detailed  sampling along the previously known  3-kilometre-long  epithermal gold
trend  confirmed  and  expanded  upon  gold  anomalies.   Veins  and  associated
mineralization  occur  along a  northeast-oriented  structural  trend  that is a
regionally  prominent  structural  fabric.  Further  work  along the trend  will
include soil sampling and detailed mapping.

The next phase of work on the Esperanza  Project will include detailed  mapping,
sampling  and  ground  geophysics  and is  budgeted  at  $250,000.  This work is
scheduled to commence in June 2005 The work program is being overseen by John A.
Brophy, Professional Geoscientist.

The Company is unable to determine the costs of a feasibility  study, or even if
such a study is warranted,  until  substantially  more information is available.
There are no  assurances  that the Company will be able to bring the property to
the bankable feasibility stage.

As of May 31, 2005,  the Company had spent  $215,000 on the Esperanza  property.
See "Item 4. Information on the Company - Plan of Operation."

NEVADA, USA, PROPERTIES

In March 2005,  pursuant to an agreement dated December 31, 2004, with Steven K.
Jones, M.Sc., C.P.G., the Company acquired two claim blocks in the Roysten Hills
area of Nye County of west central  Nevada.  See Map D. Mr. Jones,  as agent for
the Company, staked the claims on behalf of the Company in November 2004 and the
Company  advanced all of the costs associated with staking the claims during the
last quarter of fiscal  2004.  Mr. Jones is an arm's  length,  third party.  Mr.
Jones  transferred  the Hills and Roy claim groups to Amera  Resources (US) Inc.
and these  Quitclaim Deeds were filed with the Bureau of Land Management on June
1, 2005.

As of the date of this annual report, the Company owns 100% of the 478 ha (1,180
acre) Roy claim block and the 227 ha (560 acre) Hills claim  block.  In order to
retain the claims,  the Company must pay US$7,375 per year to the U.S. Bureau of
Land  Management  prior to September 1st and US$619 per year to Nye county prior
to November  1st. To retain the Hills  claims the Company  must pay US$3,500 per
year prior to September  1st to the U.S.  Bureau of Land  Management  and US$294
each year to Nye county prior to November  1st. As of May 31, 2005,  the Company
had expended  approximately  $77,304 for the  acquisition and exploration of the
Roy and Hills claim blocks and other generative work in Nevada.

The Roy  property is located 56  kilometres  northwest  of Tonopah and the Hills
property is located 65 kilometres  northwest of Tonopah. The properties are both
located adjacent to the Pole Line road.  Access to the property is by truck from
Tonopah.  There is no power  available on the  properties.  The nearest power is
available within less than 50 kilometres from the properties.

The Roy property is a gold-silver  epithermal system while the Hills property is
a  silver-gold  epithermal  system.  Both the Roy and  Hills  claim  blocks  are
underlain  by  volcanic  rocks that have  undergone  epithermal  alteration  and
mineralization prior to being covered by younger volcanic sediments and gravels.


                                      -36-
<PAGE>

Work  to  date  on the  Roy  and  Hills  properties  includes  surface  mapping,
geological  sampling,  and a ground  magnetics  survey  carried  out by  Quantec
Geophysic along 200 meter-spaced lines with 10 meter-spaced sample points.

As of the date of this annual report, the Roy and Hills claim blocks are without
known reserves and the Company's proposed programs are exploratory in nature.

Based upon the results of the exploration work, the Company has selected targets
for drill testing. The Company plans to test the Roy and Hills properties with a
1,200 metre 8-hole  program in the fall of 2005.  The budget for this program is
$100,000.  The holes would test zones of alteration with associated surface gold
and pathfinder  element  anomalies,  as well as and in conjunction  with targets
identified  through  interpretation  of structures and alteration zones from the
ground  magnetics  survey.  The  association  of gold  deposits  in Nevada  with
structures,  altered  volcanic rocks,  and gold and pathfinder  elements is well
documented  and, as such,  management  believes  the Roy and Hills  projects are
excellent  exploration  targets.   Steven  K.  Jones,  M.Sc.,  C.P.G.,  will  be
responsible for overseeing the drill program when it is carried out.

ROY PROPERTY

The Roy  mineral  system is  largely  a covered  anomaly  with few  outcrops  of
anomalous  alteration  that are seen through the  lacustrian  and gravel  cover.
Several  short  rotary  drill  holes  were  found  testing  the more  silicified
alteration  on the Roy  property,  but the  majority of  alteration  and covered
potential remain untested by drilling.  Outcropping  alteration is found over an
area of 1.5 by 1.5 kilometres.

Three separate  zones of alteration  were mapped and sampled at the Roy property
with the most  significant  silicified  alteration  found  on a 400  metre  long
outcrop within the Southern  Zone.  Alteration in the Southern Zone consisted of
moderately  silicified and quartz veined dacite flows along a narrow  structural
trend that also underwent pervasive argillic wallrock alteration  throughout the
zone. A number of grab samples were  collected  returning  anomalous gold values
and epithermal pathfinder elements.

The Northern Zone of alteration on the Roy property is  characterized  by weakly
silicified   volcanic  flows  contained   within  moderate   argillic   wallrock
alteration.  The Roy property encountered four large magnetic low anomalies that
are  situated  along a  regional,  east-west  trending  magnetic  linear that is
interpreted to be a district-scale  controlling  structure.  The size of the Roy
alteration  system is  similar  in scale  and  alteration  type to the  historic
Tonopah  District  which  produced  over 3 million gold  equivalent  ounces from
underground  operations.  Previous  drilling  has never  been  conducted  on the
magnetic low targets.

HILLS PROPERTY

The  silver-rich  Hills  property is located 7  kilometers  northwest of the Roy
claims.  It hosts one  significant  zone of alteration  that measures 1.0 by 0.5
kilometres and is  characterized  by pervasive  sericite-pyrite  alteration that
hosts  moderate  sheeted and  stockworked  calcite veins up to 1.0 centimeter in
width. The alteration is hosted in volcanics of probable  Oligocene age. Several
grab samples were weakly  anomalous in silver and gold. The alteration areas are
moderately anomalous in antimony,  manganese, and arsenic, and is believed to be
the  upper  levels  of an  epithermal  system  due to the  pervasive  degree  of
calcite-phyllic  alteration.  Significant  covered  potential also exists on the
Hills property that has not had previous drilling or surface sampling.

The Hills property  ground  magnetics  encountered a  district-scale,  east-west
trending  magnetic  gradient  with most  surface  alteration  found  within  the
magnetic low. Management believes the calcite-veining  present within the target
areas is indicative of the upper levels of an epithermal vein system.

CHUBUT PROJECT

The Company  entered into a Property  Purchase  Agreement,  dated March 6, 2003,
with IMA and IMASA  whereunder  the Company  acquired a 100% interest in certain
mineral  exploration  properties  located in the Province of Chubut,  Argentina,
consisting of three (3) cateos known as Lago Pico, Loma Alta and Nueva Ruta. See
"Item 7. Major  Shareholders  and Related  Party  Transactions  - Related  Party
Transactions."  In  consideration  therefor,  the Company  issued 500,000 of its
common  shares to IMA.  These shares had a deemed value of $22,000 or $0.044 per
share (when the Property Purchase  Agreement was negotiated),  which at the time


                                      -37-
<PAGE>

was IMA's  recorded  cost for these  properties.  These shares were approved for
issuance,  as additional  shares to be issued, in conjunction with the Company's
initial public offering.  When the shares were issued in November 2003 they were
recorded at a deemed value of $225,000  ($0.45 per share - which was the initial
public  offering  issue  price).  IMA and IMASA (now  Golden  Arrow and  IMAUSA)
retained a 3% net smelter  returns royalty in respect of such properties and the
Company  agreed to pay a cash bonus of  US$250,000  to IMA (now Golden Arrow) at
such time as a decision to place any of the properties in commercial  production
is made,  of which  there are no  assurances.  See "Item 4.  Information  on the
Company - History and  Development of the Company." IMA's and IMASA's rights and
interests in the  agreement  were  transferred  and assigned to Golden Arrow and
IMAUSA, on July 7, 2004.

         LAGO PICO

         The Company  holds a 100%  interest in the Lago Pico cateo which covers
         10,000  hectares of ground.  The property is reached  from  Esquel,  in
         Chubut Province, Argentina by traveling 70 kilometres south along Route
         17 to  Corcovado  and then  traveling  80  kilometres  to the  south of
         Corcovado  along Route 44. See Map B. The property is four-wheel  drive
         accessible  along  secondary  roads  from the  Pueblo  of Rio  Pico,  a
         distance of less than 10 kilometres. The property has no infrastructure
         and  no  electrical   power.   The  property  is  prospective  for  low
         sulphidation  epithermal  gold  deposits.  This area was  staked on the
         strength  of  prospective  Jurassic  (213  to 145  million  years  ago)
         volcanic  host  rocks,  regional  prospecting  reports of large  silica
         altered  zones,  and  anomalous  features  in regional  magnetic  data.
         Airborne reduced-to-pole magnetics show a prominent circular feature in
         an area  underlain  by Jurassic  volcanic  rocks.  These  features  are
         considered to be  regionally  prospective  for  structurally-controlled
         epithermal  deposits.  No exploration  work has been carried out on the
         property to date.

         LOMA ALTA

         The Loma Alta cateo,  held 100% by the Company,  covers 10,000 hectares
         and covers an area of prospective Jurassic volcanic rocks between known
         mineralization  in the  Putrachoique  and  Arroyo  Cascada  areas.  The
         property is reached  from  Esquel,  in Chubut  Province,  Argentina  by
         traveling  70  kilometres  south along Route 17 to  Corcovado  and then
         traveling  35  kilometres  to the east on Route 17 before  leaving  the
         highway and taking  secondary and four-wheel  drive roads 10 kilometres
         south to the  property.  See Map B. The property has no  infrastructure
         and no  electrical  power.  Jurassic  volcanic  rocks of the Lago de la
         Plata  Formation are mapped as being intruded by Upper  Cretaceous (145
         to 65 million years ago) or younger intrusive rocks.  Airborne magnetic
         data suggests that a large  intrusive body may underlie the cateo.  The
         Company's  geologists  consider this to be a high  priority  target for
         both  intrusive-related  and more distal styles of  mineralization.  No
         exploration work has been carried out on the property to date.

         NUEVA RUTA

         The Company  holds a 100% interest in the Nueva Ruta cateo which covers
         4,180  hectares.  The  property  is  reached  from  Esquel,  in  Chubut
         Province,  Argentina by traveling 70 kilometres south along Route 17 to
         Corcovado and then traveling 23 kilometres to the east on Route 17. The
         property is bisected by the  highway.  Other parts of the  property are
         four-wheel drive  accessible.  See Map B. The Nueva Ruta cateo covers a
         portion of a large  alteration/mineralized  zone.  The  property has no
         infrastructure  and there is no electrical  power. No exploration  work
         has been carried out on the property to date.

As of May 31,  2005,  the  Company  has  spent  $225,000  in  acquisition  costs
(represented  by the  deemed  value of the  common  shares  issued)  and had not
incurred  any  exploration  expenses  on the  Chubut  properties.  See  "Item 4.
Information on the Company - Plan of Operation."

At the time the Company acquired the Chubut Properties,  the Company intended to
explore the properties for mineralization; however, the provincial government of
Chubut Province,  Argentina has enacted certain anti-mining laws banning the use
of cyanide and open-pit mining in metallic extraction in the Province of Chubut.


                                      -38-
<PAGE>

As a result, the Company has decided not to proceed with any exploration work on
these  properties  until  changes in mining  laws in Chubut  Province  have been
clarified. The Company does not know if, or when, such clarification will occur;
therefore,  the  Company has not  budgeted  any funds for  exploration  of these
properties for the fiscal 2005 period.

PLAN OF OPERATION

As of May 31, 2005, the Company had working capital of approximately $1,300,000.

Reconnaissance  programs  designed  to identify  properties  for staking in high
potential  mineral belts in southern Peru, Nevada and western Canada are ongoing
and  the  projected  budgets  for  these  programs  may be  adjusted  up or down
dependent  on  results.  Except for the  staking of the Roy and Hills  claims in
Nevada  during March 2005, as of the date of this annual  report,  no additional
properties have been acquired by the Company in Peru,  Nevada or western Canada.
In addition,  the Company is  continually  evaluating  property  submittals  and
opportunities  in a  number  of  prospective  jurisdictions  and  has an  active
property review program.  As prospective  opportunities are identified from this
program,  additional funds may be allocated to acquisitions and exploration work
based on the recommendations of management and the board of directors.

In January 2005 the Company  commenced a Phase II drilling program on the Mogote
Property.  See  "Item 4.  Information  on the  Company  -  Property,  Plant  and
Equipment -  Principal  Properties  - Mogote  Project."  An initial  2,577 metre
reverse-circulation  drill program in conjunction with further surface sampling,
trenching  and mapping was  budgeted at $500,000.  The Company is reviewing  the
results of the exploration program and as of the date of this annual report, the
Company  has not  budgeted  for any further  exploration  programs on the Mogote
Project during the balance of 2005.

In November 2004 the Company carried out a Phase I surface  exploration  program
on the Esperanza  property.  The work comprised  detailed  surface  prospecting,
sampling  and  mapping.  A Phase II  program of  geophysics  and  trenching,  in
conjunction  with ongoing surface work, is planned on the Esperanza gold project
in Peru for the first six months of 2005 and is  budgeted  at  $120,000.  If the
results of this work are positive,  a drilling  program to test the best targets
would be considered;  however, as of the date of this annual report, the Company
is unable to  determine  the timing of such a program and,  therefore,  no funds
have been budgeted for such a drilling program.

The Company announced the acquisition by staking of the Roy and Hills properties
in the Walker Lane district of Nevada,  U.S.A. in February 2005. The Company has
now  completed  a ground  magnetics  survey and has  selected  targets for drill
testing. A $100,000 program comprising 10 RC drill holes has been budgeted to be
carried out in the second half of 2005.

Reconnaissance  and evaluation  activities  aimed at  identifying  properties to
acquire by direct staking or through  agreements  with third parties are planned
to continue  through the first half of 2005 in Peru,  Nevada and western Canada.
In addition  the Company will be  continually  evaluating  submittals  and other
exploration opportunities as they arise. It is the aim of the Company to acquire
additional  properties over the next year, primarily in Peru, Nevada, or western
Canada.  The Company has budgeted  $500,000 for these  activities  during fiscal
2005. Management may have to make adjustments to the budget throughout the year,
dependant upon exploration results and/or acquisition opportunities.

The table below sets forth the Company's  exploration budget for the fiscal 2005
period.



                                      -39-
<PAGE>

                               -------------------------------------------------
                                                                   PROJECT TOTAL
                               JANUARY -         JUNE -          (JANUARY 2005 -
                                MAY 2005      DECEMBER 2005       DECEMBER 2005)
                               -------------------------------------------------

Mogote                          $580,000         $100,000              $680,000
Esperanza (Peru)                 $70,000         $250,000              $320,000
Nevada Properties                $10,000         $100,000              $110,000
General Evaluations and
   Reconnaissance Expenditures   $30,000         $500,000              $530,000
                               -------------------------------------------------
TOTAL                           $690,000         $950,000            $1,640,000
                               =================================================

The  Company  owns a 100%  interest  in 3 cateos  in  western  Chubut  Province,
Argentina. No work is planned for these properties in the immediate future.

The Company does not believe it has  sufficient  financial  resources to conduct
all of the planned exploration of its mineral property interests and to fund its
ongoing overhead  expenses during the 12 months from January 1, 2005 to December
31,  2005.  In the  future,  the Company  may need to raise  additional  capital
through  the  sale  of  its  equity  securities  to  fund  further   exploration
activities.  See  "Item 5.  Operating  and  Financial  Review  and  Prospects  -
Liquidity  and  Capital  Resources."  The  Company  may not be able to raise the
necessary  funds, if any, and may not be able to raise such funds at terms which
are  acceptable  to the  Company.  In the event the  Company  is unable to raise
adequate finances to fund the proposed activities,  it will need to reassess its
alternatives and may have to abandon one or more of its property  interests as a
result.

See "Item 6. Directors,  Senior Management and Employees - Employment Agreements
- Grosso Group."

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

The  following  discussion  of the results of  operation  of the Company for the
fiscal  years  ended  December  31,  2004,  2003  and  2002  should  be  read in
conjunction with the accompanying  audited  financial  statements of the Company
and related notes included therein.

The Company's  financial  statements  are prepared in  accordance  with Canadian
GAAP,  the  application  of which,  in the case of the Company,  conforms in all
material  respects  for  the  period  presented  with  US  GAAP  except  for the
differences noted in Note 9 of the Company's  audited  financial  statements for
the years ended December 31, 2004, 2003 and 2002 which are included herein.  The
noon rate of exchange on May 31,  2005,  reported by the United  States  Federal
Reserve Bank of New York,  for the  conversion  of Canadian  dollars into United
States dollars was CDN$1.2512  (US$0.7992 = CDN$1.00).  The effects of inflation
and  price  changes  have not had a  material  impact on the  Company  since its
incorporation. The Company does not engage in hedging activities.

The Company's financial  statements were prepared on a going concern basis which
assumes  that the  Company  will be able to realize  its  assets  and  discharge
liabilities in the normal course of business.

OVERVIEW

The Company was  incorporated on April 11, 2000 and remained  without a business
asset until March 2003,  when the Company  negotiated a number of  agreements to
option  and  acquire  interests  in  various  mineral   concessions  located  in
Argentina.  In December 2003, the Company  completed its initial public offering
and commenced trading on the TSX Venture under the symbol "AMS".

The Company is a junior mineral  exploration  company engaged in the business of
acquiring, exploring and evaluating natural resource properties, and potentially
joint  venturing these  properties  depending on the evaluation of the property.
The Company has been focusing on conducting an exploration program on the Mogote
Property  in  Argentina.  As of the date of this annual  report,  the Company is
reviewing the results of the exploration  program on the Mogote Property and has


                                      -40-
<PAGE>


not  budgeted  any funds for further  exploration  on the Mogote  Property.  The
Company has a budget of $320,000 for work on the Esperanza  property in Peru for
fiscal 2005.  All of the  Company's  material  mineral  property  interests  are
located in Argentina.  The Company is currently reviewing other mineral property
interest  opportunities in South and North America and has budgeted $500,000 for
fiscal 2005.  During December,  2004, the Company staked the Roy and Hills claim
blocks in Nevada. See "Item 4. Information on the Company - Property,  Plant and
Equipment - Other Properties - Nevada, USA, Properties."

RESULTS OF OPERATIONS

FISCAL YEAR ENDED  DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED  DECEMBER 31,
2003

The  Company  reported a net loss of  $874,332  in 2004  ($0.07 per  share),  an
increase in loss of $468,576  from the  $405,756  loss ($0.08 per share) for the
year ended December 31, 2003.

General and  administrative  costs in 2003 were  nominal as the Company had just
negotiated a number of mineral  property  agreements  and had not yet  commenced
significant corporate or exploration  activities.  In addition,  the Company did
not commence its efforts to begin its initial  public  offering until the second
quarter of 2003.  A total of $405,756 of general and  administrative  costs were
incurred  in 2003.  The 2004  period  represents  the first  full year since the
Company  completed  its initial  public  offering  and became a  publicly-traded
company. A total of $874,338 of general and  administrative  costs were incurred
in the year ended December 31, 2004.  Significant  expenditures were incurred in
2004 in the following categories:

     -    Investor relations  ($80,503) comprise of a monthly fee of $7,500 paid
          to Raven  Capital for market  awareness  and  investor  relations  for
          January to April. The arrangement with Raven Capital was terminated in
          April.  Ridgecrest  Capital S.A.  was  retained to provide  consulting
          services for the Company with European  investors and was paid fees of
          $18,305.  The  arrangement  with  Ridgecrest  Capital  was  terminated
          effective December 31, 2004. Attendance at investment  conferences was
          a cost of $30,100.
     -    Management fees ($72,400)  represents fees charged by the President of
          the Company pursuant to an employment agreement.
     -    Professional  fees ($99,320)  include fees (pursuant to a contract for
          services)  and a $25,000  relocation  allowance  paid to the Company's
          Vice-President, Exploration.
     -    Legal  fees  ($63,058)  have  increased  due to costs  related  to the
          preparation  and  filing  of  the  Company's  Form  20-F  registration
          statement and increased corporate legal costs for its activities.
     -    Salaries  ($65,874)  were paid to IMA for the  provision  of personnel
          under a cost sharing arrangement.  A total of $108,390 was paid to IMA
          for rent and administrative services.
     -    Corporate  development ($79,370) is comprised of fees for professional
          services  paid  to   consultants   to  assist  the  Company  with  its
          financings.
     -    Travel ($47,018)  principally related to attendance at conferences and
          presentations.
     -    Advertising   ($62,467)   included  costs  to  prepare  materials  for
          potential and existing shareholders.
     -    Stock-based  compensation  ($131,805) is the  estimated  fair value of
          stock options granted to employees, directors and consultants.

During 2004 the Company  incurred  $707,631 of exploration  expenditures  on the
Mogote  Property.  In addition,  a total of $93,576 of foreign value added taxes
were  also  recorded  as  part  of  mineral  resource   interests  and  deferred
exploration  costs. The Company also issued 300,000 common shares to IMA, with a
deemed  value of  $279,000,  to earn an  additional  24%  interest in the Mogote
Property,  pursuant to the April 8, 2004 agreement  between the Company and IMA.
On July 7, 2004 IMA's rights and interests under these  agreements were assigned
to Golden Arrow. In July the Company issued 100,000 shares to Golden Arrow, with
a deemed value of $40,000, as required under the agreement.

During  2004,  the Company  completed a number of private  placements  of common
shares  to raise  gross  proceeds  of  $2,891,350,  of which  $658,350  had been
received by the Company at  December  31,  2003.  The  Company  also  received a
further $281,040 from the exercises of warrants and an option.



                                      -41-
<PAGE>


FISCAL YEAR ENDED  DECEMBER 31, 2003 COMPARED TO FISCAL YEAR ENDED  DECEMBER 31,
2002

During 2003, the Company  reported a loss of $405,756,  an increase of $379,498,
compared to a loss of $26,258 in 2002.  General and  administrative  expenses of
$409,248 was reported in 2003, a  significant  increase of $382,634 from $26,614
in 2002.  The Company was  inactive  from its  inception on April 11, 2000 until
late in 2002, when it commenced raising equity financing.  Activities  continued
in earnest in 2003 as the Company  conducted a number of financings,  negotiated
mineral property  acquisition  agreements and successfully  completed an initial
public offering and listing on the TSX Venture.  Accordingly,  significant costs
were  incurred  in 2003.  The  Company  incurred  accounting,  audit,  legal and
professional fees with respect to the review of property  acquisitions,  general
corporate  matters  and  increased  activities.  Advertising,  office and travel
expenses were incurred on the  implementation  of a market awareness program and
investor  relations.  The Company also incurred  management  fees of $25,000 for
services rendered by the President of the Company. In addition,  during 2003 the
Company  recorded a non-cash  charge of $252,000  attributed  to the granting of
stock options to employees,  directors and consultants.  The compensation charge
is an estimate of the fair value of the stock  options based on the Black Schole
model using assumptions and estimates.

During 2003, the Company acquired interests in the Mogote and Chubut Properties.
As at December 31, 2003, the Company had recorded  $197,854 for reimbursement to
IMA for past costs  incurred,  issued  100,000  common shares at a fair value of
$45,000,  and  incurred  $39,188 in  additional  property  costs and $164,768 in
exploration  expenditures  during  the  Phase  I  drill  program  on the  Mogote
Property.  No  exploration  activities  had been conducted in 2003 on the Chubut
Properties,  with the Company  issuing  500,000 common shares at a fair value of
$225,000 for their acquisition.

During 2003,  the Company  completed a number of special  warrant  financings to
raise gross  proceeds of $363,900.  This was followed by the  Company's  initial
public offering to raise $675,000. A further $5,000 was received on the exercise
of warrants.  During 2002,  the Company  received  $79,999 from its seed capital
financing.

FISCAL YEAR ENDED  DECEMBER 31, 2002 COMPARED TO FISCAL YEAR ENDED  DECEMBER 31,
2001

During 2002 the Company  reported a loss of $26,258 an increase of $26,142  from
the 2001 loss of $116 when the Company was not active.  In late 2002 the Company
commenced its activities  which consisted of preparations for the acquisition of
mineral properties and its financings.

LIQUIDITY AND CAPITAL RESOURCES

As the Company is an exploration stage company, revenues are limited to interest
earned on cash held with the Company's financial  institutions.  The Company has
financed its operations through the sale of its equity  securities.  At December
31, 2004,  the Company had total  assets of  $3,654,584  and working  capital of
$3,604,137. The Company has budgeted $680,000 for the exploration program on the
Mogote  Property and $320,000 for its program on the Esperanza  property in Peru
and $500,000 for general exploration for fiscal 2005. The Company considers that
it has  adequate  resources  to  maintain  its  ongoing  operations  and current
property  commitments for the ensuing year but does not have sufficient  working
capital to fund all of its planned exploration work. The Company intends to seek
further financings.  If the Company is unable to secure additional funding,  the
Company may lose its interest in one or more of its mineral claims.

The  Company  does  not  know of any  trends,  demand,  commitments,  events  or
uncertainties  that will result in, or that are reasonably  likely to result in,
its liquidity  either  materially  increasing or decreasing at present or in the
foreseeable   future.   Material   increases  or  decreases  in  liquidity   are
substantially  determined by the success or failure of the exploration programs.
The Company  does not have any loans or bank debt and there are no  restrictions
on the use of its cash resources.

Subsequent  to December  31, 2004 the Company  completed a private  placement of
1,650,000  units at $0.55 per unit,  for  proceeds of $907,500  less  $40,310 of
related cash issue costs.


                                      -42-
<PAGE>


RESEARCH AND DEVELOPMENT

See "Item 4. Information on the Company - Business  Overview - Dispositions" and
"Item  4.  Information  on  the  Company  -  Business   Overview  -  Exploration
Expenditures."

TREND INFORMATION

None of the Company's assets are currently in production or generate revenue.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any material off balance sheet  arrangements that have
or are  reasonably  likely to have a current or future  effect on the  Company's
financial  condition,  changes in  financial  condition,  revenues or  expenses,
results of operations, liquidity, capital expenditures or capital resources.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

                                         PAYMENTS DUE BY PERIOD(2)
                                 -----------------------------------------------
                                             LESS THAN                 MORE THAN
                     TOTAL       1 YEAR      1-3 YEARS    3-5 YEARS     5 YEARS
                    --------     -----------------------------------------------
CONTRACTUAL
   OBLIGATIONS(1)   $128,000     $128,000          -0-          -0-          -0-
                    --------     --------     --------     --------     --------
TOTAL               $128,000     $128,000          -0-          -0-          -0-
                    ========     ========     ========     ========     ========

(1)  The payments  shown are option  payments due under the Company's  agreement
     with Golden Arrow  Resources  relating to the Mogote  Project.  The vendors
     will have the right to  receive a royalty  of 0.5% NSR,  up to a maximum of
     US$500,000.  See "Item 4 - Information on the Company - Property, Plant and
     Equipment - Principal Properties - Mogote Project."
(2)  As of December 31, 2004.


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

DIRECTORS AND SENIOR MANAGEMENT

The names,  positions held with the Company and terms of office of each director
and officer of the Company as of the date of this annual report, are as follows:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                             PRINCIPAL OCCUPATION AND IF
                                             NOT AT PRESENT AN ELECTED
                                             DIRECTOR, OCCUPATION DURING         PERIOD OF SERVICES AS A
NAME, POSITION AND COUNTRY OF RESIDENCE      THE PAST FIVE YEARS(1)                 DIRECTOR/OFFICER
---------------------------------------      ------------------------------      -----------------------
<S>                                         <C>                                 <C>

NIKOLAOS CACOS                               Corporate Secretary of IMA                Apr.11/2000
President, Chief Executive Officer           Exploration Inc. since July,
and Director                                 1999 and a Director since
(resident of Vancouver, BC, Canada)          June, 2002. Director of Info
Age 38                                       Touch Technologies since
                                             August, 1998. Director of
                                             Gatco Technologies Corp. from
                                             May, 2000 to October, 2002.
                                             Director and Corporate
                                             Secretary of Golden Arrow
                                             Resources Corporation since
                                             2004.
---------------------------------------      ------------------------------      -----------------------


                                      -43-
<PAGE>

<CAPTION>
--------------------------------------------------------------------------------------------------------
                                             PRINCIPAL OCCUPATION AND IF
                                             NOT AT PRESENT AN ELECTED
                                             DIRECTOR, OCCUPATION DURING         PERIOD OF SERVICES AS A
NAME, POSITION AND COUNTRY OF RESIDENCE      THE PAST FIVE YEARS(1)                 DIRECTOR/OFFICER
---------------------------------------      ------------------------------      -----------------------
<S>                                         <C>                                 <C>

JOSEPH GROSSO                                Director, President and CEO of            Feb.20/2004
Chairman and Director                        IMA Exploration Inc. since
(resident of Burnaby, BC, Canada)            February 1990.  President of
Age 67                                       Oxbow International Marketing
                                             Corp., a private BC company.
                                             President, President, CEO and
                                             Chairman of Golden Arrow
                                             Resources Corporation since
                                             2004.
---------------------------------------      ------------------------------      -----------------------

JERRY A. MINNI                               Partner of Minni, Clark &                 Nov.19/2002
Director                                     Company, Certified General
(resident of Vancouver, BC, Canada)          Accountants;  Director and
Age 44                                       officer of several reporting
                                             issuers.
---------------------------------------      ------------------------------      -----------------------

ROBERT COLTURA                               Employment Coordinator,                   Aug.2/2002
Director                                     Destinations, a division of
(resident of Langley, BC, Canada)            Grant Thornton, Chartered
Age 39                                       Accountants, since April, 1996.
                                             Food and Beverage Director,
                                             Executive Inn Hotels from March,
                                             1993 to February, 1998.
---------------------------------------      ------------------------------      -----------------------

LINDSAY BOTTOMER                             Registered as a Professional              Feb.11/2004
Director                                     Geoscientist in British
(resident of Vancouver, BC, Canada)          Columbia.  President of
Age 55                                       Southern Rio Resources, and is
                                             a Director of several other
                                             publicly listed companies
                                             including Pacific North West
                                             Capital and Entree Gold. Past
                                             President of the BC & Yukon
                                             Chamber of Mines.
---------------------------------------      ------------------------------      -----------------------

ART LANG                                     Chief Financial Officer.                  March/2005
Officer                                      Director of IMA Exploration
(resident of Vancouver, BC, Canada)          Inc. since April 2004 and a
Age 61                                       Director and Officer of Golden
                                             Arrow Resources Corporation
                                             since June 2004.   Consultant
                                             providing financial management
                                             services to various clients
                                             from 1999 to April 2004
                                             through Arthur G Lang Inc., a
                                             private British Columbia
                                             company.
---------------------------------------      ------------------------------      -----------------------

                                      -44-
<PAGE>

<CAPTION>
--------------------------------------------------------------------------------------------------------
                                             PRINCIPAL OCCUPATION AND IF
                                             NOT AT PRESENT AN ELECTED
                                             DIRECTOR, OCCUPATION DURING         PERIOD OF SERVICES AS A
NAME, POSITION AND COUNTRY OF RESIDENCE      THE PAST FIVE YEARS(1)                 DIRECTOR/OFFICER
---------------------------------------      ------------------------------      -----------------------
<S>                                         <C>                                 <C>

MAR BERGSTROM                                Corporate Secretary.                      March/2005
Officer                                      President of LGM - Lions Gate
(resident of Vancouver, BC, Canada)          Management Ltd. providing
Age 54                                       corporate and securities
                                             consulting services to various
                                             clients since 1997.
---------------------------------------      ------------------------------      -----------------------

DAVID TERRY                                  Director of IMA May 2004 to               March/2004
Officer                                      present.  Vice President for
(resident of Maple Ridge, BC, Canada)        the IMA since June 2004 to
Age 40                                       present.  Director and Officer
                                             for Golden  Arrow from July 2004.
                                             Regional geologist with the
                                             British Columbia Ministry of
                                             Energy and Mines in Cranbrook,
                                             British Columbia from May 2001
                                             to March 2004. Project Geologist
                                             with Boldien Limited prior
                                             to May 2001.
---------------------------------------      ------------------------------      -----------------------

</TABLE>

There are no family relationships between any directors or executive officers of
the Company. To the best of the Company's  knowledge,  there are no arrangements
or understandings  with major  shareholders,  customers,  suppliers,  or others,
pursuant to which any of the Company's  officers or directors was selected as an
officer or director of the Company.

CONFLICTS OF INTEREST

There are no existing or potential conflicts of interest among the Company,  its
directors, officers or promoters as a result of their outside business interests
with the  exception  that  certain  of the  Company's  directors,  officers  and
promoters serve as directors,  officers and promoters of other  companies,  and,
therefore,  it is possible  that a conflict may arise  between their duties as a
director,  officer or promoter of the Company and their  duties as a director or
officer of such other companies.

The  directors  and  officers of the Company are aware of the  existence of laws
governing accountability of directors and officers for corporate opportunity and
requiring disclosures by directors of conflicts of interest and the Company will
rely upon such laws in respect of any  directors'  and  officers'  conflicts  of
interest  or in  respect  of any  breaches  of duty by any of its  directors  or
officers.  All such conflicts will be disclosed by such directors or officers in
accordance with the BCBCA, and they will govern themselves in respect thereof to
the best of their ability in accordance with the  obligations  imposed upon them
by law.

All of the Company's  directors are also directors,  officers or shareholders of
other  companies  that are engaged in the business of acquiring,  developing and
exploiting natural resource properties  including  properties in countries where
the Company is conducting its  operations.  Such  associations  may give rise to
conflicts of interest from time to time. Such a conflict poses the risk that the
Company may enter into a transaction on terms which place the Company in a worse
position than if no conflict existed.  The directors of the Company are required
by law to act honestly and in good faith with a view to the best interest of the
Company  and to  disclose  any  interest  which they may have in any  project or
opportunity of the Company.  However,  each director has a similar obligation to
other  companies for which such director  serves as an officer or director.  The
Company has no specific internal policy governing conflicts of interest.

See "Item 3.  Key Information - Risk Factors."



                                      -45-
<PAGE>

The following table identifies, as of May 31, 2005, the name of each officer and
director  of the  Company and any  company  (i) which  employs  such  officer or
director, (ii) for which such officer or director currently serves as an officer
or director, or (iii) which is affiliated with such officer or director:

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
NAME OF DIRECTOR    NAME OF COMPANY                 DESCRIPTION OF BUSINESS     POSITION                 TERM OF SERVICE
-----------------------------------------------------------------------------------------------------------------------------------
<S>                <C>                             <C>                         <C>                      <C>

Nikolaos Cacos      IMA Exploration Inc.            Mineral Exploration         Corporate Secretary      July 1993 to present

                    Golden Arrow Resources Corp.    Mineral Exploration         Director                 July 2004 to present
                                                                                Corporate Secretary      July 2004 to present
-----------------------------------------------------------------------------------------------------------------------------------
Joseph Grosso       IMA Exploration Inc.            Mineral Exploration         Director                 February 1990 to present
                                                                                President & CEO          February 1990 to present

                    Golden Arrow Resources Corp.    Mineral Exploration         Director, Chairman       May 2004 to present
                                                                                President & CEO          May 2004 to present
-----------------------------------------------------------------------------------------------------------------------------------
Jerry Minni         Raytec Development Corp.        Food Equipment              Director                 February 1992 to present
                                                        Manufacturer            President                February 1992 to present

                    Triex Mineral Corp.             Mineral Exploration         Director                 June 1994 to December 2004

                    Global Sortweb.com Inc.         Software Development        Director                 July 1998 to present
                                                                                CFO                      July 1998 to present

                    Avantec Technologies Inc.       Chemical Equipment          Director                 June 1999 to present
-----------------------------------------------------------------------------------------------------------------------------------
Lindsay Bottomer    Southern Rio Resources Ltd.     Mineral Exploration         Director                 July 2001 to present
                                                                                President & CEO          July 2001 to present

                    Entree Gold Inc.                Mineral Exploration         Director                 June 2002 to present

                    Strategem Capital Corp.         Venture Capital             Director                 June 2003 to present

                    Altima Resources Ltd.           Mineral Exploration         Director                 November 2003 to present

                    Pacific North West
                        Capital Corp.               Mineral Exploration         Director                 May 1998 to present
-----------------------------------------------------------------------------------------------------------------------------------
David Terry         Golden Arrow Resources Corp.    Mineral Exploration         Director                 July 2004 to present
                                                                                Vice-Pres, Exploration   July 2004 to present

                    IMA Exploration Inc.            Mineral Exploration         Director                 May 2004 to present
                                                                                Vice-Pres, Exploration   June 2004 to present
-----------------------------------------------------------------------------------------------------------------------------------
Robert Coltura      Grant Thornton                  Chartered Accountants       Employment Director      April 1996 to present


                    Matalia Investments Ltd.        Hospitality and Tourism     President                October 1993 to present
                                                        Consulting
-----------------------------------------------------------------------------------------------------------------------------------


                                      -46-
<PAGE>


<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
NAME OF DIRECTOR    NAME OF COMPANY                 DESCRIPTION OF BUSINESS     POSITION                 TERM OF SERVICE
-----------------------------------------------------------------------------------------------------------------------------------
<S>                <C>                             <C>                         <C>                      <C>

Arthur Lang         IMA Exploration Inc.            Mineral Exploration         Director                 April 2004 to present
                                                                                Chief Financial Officer  April 2004 to present
                                                                                Vice-President           April 2004 to present

                    Golden Arrow Resources Corp.    Mineral Exploration         Director                 June 2004 to present
                                                                                Chief Financial Officer  July 2004 to present
                                                                                Vice-President           July 2004 to present

                    Arthur G Lang Inc.              Financial and Management    Director                 1999 to present
                                                        Consulting Services     President                1999 to present
-----------------------------------------------------------------------------------------------------------------------------------
Mar Bergstrom       LGM-Lions Gate Management       Regulatory Consulting       President                1997 to present
                                                        Services
-----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

Each  director's and officer's term of office shall expire at the Company's next
annual general  meeting.  The Company does not have an executive  committee or a
compensation  committee.  The  Company's  audit  committee  is  responsible  for
reviewing the  Company's  financial  statements  before they are approved by the
Company's directors.

The  Company  is an  exploration  stage  junior  exploration  company.  As such,
management  does not believe  the  Company  requires  full-time  employees.  The
Company's  needs will be dependent  upon its level of  exploration  programs and
financial  condition.  The officers and  directors of the Company will devote as
much time as is needed. .See "Item 6. Directors, Senior Management and Employees
- Employment  Agreements  - Grosso  Group" and "Item 7. Major  Shareholders  and
Related  Party   Transactions  -  Related  Party  Transactions  -  Conflicts  of
Interest."

COMPENSATION

During the year ended December 31, 2004, the Company was charged  $108,390 (2003
-  $35,110;  2002 - $6,000)  by IMA for shared  rent and  administration  costs.
During the year ended December 31, 2004, the Company paid $113,400 (2003 - $nil;
2002 - $nil) for professional fees (including a $25,000  relocation  allowance),
billed by a director  and by an officer of the Company.  Of this amount  $42,000
has been reimbursed by IMA as an allocation of the professional services.

Effective  January 2, 2004,  the  Company  entered  into an  agreement  with the
President of the Company for his  services.  Under the contract the President is
currently  paid $6,125 per month.  During the year ended  December 31, 2004, the
Company paid $72,400 (2003-$25,000;  2002 - $nil) to the President. The contract
also provides  that, in the event the services are  terminated  without cause or
upon a change in control of the Company, a termination  payment would include an
undetermined bonus plus eighteen months of compensation.

The Company does not have any retirement plans or benefits.

EXECUTIVE COMPENSATION

The  following  information  provides  details of the  compensation  paid by the
Company to its directors and officers  during the fiscal year ended December 31,
2004,  which has been released by the Company in accordance with the regulations
(the "Regulations") made under the Securities Act (British Columbia).

SUMMARY COMPENSATION TABLE

Named  Executive  Officers  mean the  Chief  Executive  Officer  ("CEO")  of the
Company, regardless of the amount of compensation of that individual and each of
the Company's four most highly compensated  executive  officers,  other than the
CEO,  who were  serving  as  executive  officers  at the end of the most  recent
financial  year. In addition,  disclosure  is also  required for any  individual
whose total salary and bonus during the most recent  financial year was at least
$100,000,  whether  or not  they  were an  executive  officer  at the end of the
financial year.



                                      -47-
<PAGE>

During the Company's last completed  financial year ended December 31, 2004, the
Company had one Named Executive Officer, Mr. Nikolaos Cacos.

The following table  (presented in accordance with the  Regulations)  sets forth
all annual and long term  compensation  for  services in all  capacities  to the
Company for the financial  years ended December 31, 2004,  2003 and 2002 (to the
extent required by the Regulations) in respect of the Named Executive Officer:

<TABLE>
<CAPTION>

                                                                    ---------------------------------------
                                                                             LONG TERM COMPENSATION
                                  ------------------------------    ---------------------------------------
                                      ANNUAL COMPENSATION                     AWARDS                PAYOUTS
                                  ------------------------------    ----------------------------    -------    ---------
                                                         OTHER                       RESTRICTED
------------------                                       ANNUAL      SECURITIES      SHARES OR                 ALL OTHER
    NAME AND            ----                             COMPEN-    UNDER OPTIONS/   RESTRICTED      LTIP       COMPEN-
PRINCIPAL POSITION      YEAR      SALARY      BONUS      SATION     SARS GRANTED     SHARE UNITS    PAYOUTS      SATION
------------------      ----      ------------------------------    ----------------------------    -------    ---------
                                    ($)        ($)         ($)           (#)             (#)          ($)          ($)
<S>                   <C>        <C>          <C>        <C>       <C>                  <C>         <C>          <C>

Nikolaos Cacos          2004      72,400       Nil         Nil         50,000            Nil          Nil          Nil
President and CEO       2003      25,000       Nil         Nil        125,000            Nil          Nil          Nil
                        2002         Nil       Nil         Nil            Nil            Nil          Nil          Nil

</TABLE>

NOTE:

(1)  Figures represent options granted during a particular year; see "Aggregated
     Option  Exercises  During the Most Recently  Completed  Financial  Year and
     Financial Year-end  Option/SAR Values" table below for the aggregate number
     of options outstanding at year end.

LONG TERM INCENTIVE PLAN AWARDS

The Company does not have any long term incentive plan awards  ("LTIP")  defined
as "any  plan  providing  compensation  intended  to serve as an  incentive  for
performance  to occur  over a period  longer  than one  financial  year  whether
performance is measured by reference to financial  performance of the Company or
an affiliate,  or the price of the Company's  shares but does not include option
or SAR plans or plans for compensation through restricted shares or units."

OPTION/STOCK  APPRECIATION  RIGHT ("SAR") GRANTS AND REPRICINGS  DURING THE MOST
RECENTLY COMPLETED FINANCIAL YEAR

The following  table sets forth stock options  granted by the Company during the
financial  year ended  December 31, 2004 to the Named  Executive  Officer of the
Company:


<TABLE>
<CAPTION>

                                                 % OF TOTAL                           MARKET VALUE OF
                               SECURITIES      OPTIONS GRANTED     EXERCISE OR     SECURITIES UNDERLYING
                             UNDER OPTIONS      IN FINANCIAL      BASE PRICE(2)  OPTIONS ON DATE OF GRANT   EXPIRATION
 NAME                         GRANTED (#)          YEAR(1)        ($/SECURITY)         ($/SECURITY)            DATE
<S>                          <C>                  <C>              <C>                   <C>               <C>

Nikolaos Cacos                  50,000               11%               0.90               $50,000            Apr 2/09
                                ======               ==                ====               =======
</TABLE>

NOTES:
(1)  Percentage of all options granted during the financial year.
(2)  The exercise  price of stock  options was set according to the rules of the
     TSX Venture.

AGGREGATED  OPTION EXERCISES DURING THE MOST RECENTLY  COMPLETED  FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION/SAR VALUES

The following  table sets forth details of all exercises of stock options during
the financial year ended December 31, 2004 by the Named Executive  Officer,  and
the financial year end value of unexercised options on an aggregated basis:


                                      -48-
<PAGE>


<TABLE>
<CAPTION>

                                                                       UNEXERCISED              VALUE OF UNEXERCISED
                               SECURITIES                              OPTIONS  AT             IN THE MONEY OPTIONS AT
                               ACQUIRED ON    AGGREGATE VALUE      FINANCIAL YEAR -END(3)        FINANCIAL YEAR -END(3)(4)
NAME                            EXERCISE(1)      REALIZED(2)     EXERCISABLE/UNEXERCISABLE    EXERCISABLE / UNEXERCISABLE
                                   (#)              ($)                    (#)                           ($)
<S>                               <C>              <C>              <C>                           <C>

Nikoloas Cacos                     Nil                Nil              175,000/ N/A                   $10,000 / N/A
                                   ===                ===              ============                   =============
</TABLE>

NOTES:

(1)  Number of common  shares of the Company  acquired on the  exercise of stock
     options.
(2)  Calculated  using the closing  price of common shares of the Company on the
     TSX Venture.
(3)  As  freestanding  SARs have not been granted,  the number of shares relates
     solely to stock options.
(4)  Value of  unexercised  in-the-money  options  calculated  using the closing
     price of common  shares of the Company on the TSX  Venture on December  31,
     2004 of $ per share, less the exercise price of in-the-money stock options.

TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL

Other than the management  agreement with Mr. Cacos, the Company has no plans or
arrangements  with respect to  remuneration  received or that may be received by
the Named  Executive  Officer  during  the  Company's  most  recently  completed
financial year or current  financial year in view of compensating  such officers
in  the  event  of  termination  of  employment  (as a  result  of  resignation,
retirement, change of control, etc.) or a change in responsibilities following a
change of control,  where the value of such  compensation  exceeds  $100,000 per
executive  officer.  See "Item 6. Directors,  Senior  Management and Employees -
Employment Agreements."

PENSION PLAN

The Company  does not provide  retirement  benefits  for  directors or executive
officers.

DIRECTOR COMPENSATION

CASH COMPENSATION

The Company  does not  compensate  its  directors in their  capacities  as such,
although  directors of the Company are reimbursed for their expenses incurred in
connection with their services as directors.

NON-CASH COMPENSATION

The following  table sets forth stock options  granted by the Company during the
financial  year ended  December 31, 2004 to the  directors who are not the Named
Executive Officer of the Company:


<TABLE>
<CAPTION>

                                                                                     MARKET VALUE OF
                             SECURITIES       % OF TOTAL                          SECURITIES UNDERLYING
                           UNDER OPTIONS     OPTIONS GRANTED     EXERCISE OR       OPTIONS ON DATE OF
                              GRANTED        IN FINANCIAL         BASE PRICE             GRANT
NAME                           (#)              YEAR(1)         ($/SECURITY)(2)       ($/SECURITY)       EXPIRATION DATE
<S>                          <C>              <C>                <C>                 <C>                 <C>

Directors as a group who      125,000           27.50%            0.90                   $1.00               April 2/09
are not Named Executive       =======           =====             ====                   =====
Officers

</TABLE>

NOTES:
(1)  Percentage of all options granted during the financial year.
(2)  The exercise  price of stock  options was set according to the rules of the
     TSX Venture.



                                      -49-
<PAGE>

The following  table sets forth details of all exercises of stock options during
the  financial  year ended  December 31, 2004 by the  directors  who are not the
Named  Executive  Officer,  and the  financial  year end  value  of  unexercised
options:

<TABLE>
<CAPTION>

                                                                  UNEXERCISED OPTIONS AT   VALUE OF UNEXERCISED IN
                                                                  FINANCIAL YEAR END(3)      THE MONEY OPTIONS AT
                             SECURITIES                                    (#)                FINANCIAL YEAR END
                             ACQUIRED ON      AGGREGATE VALUE                                     ($)(3)(4)
                             EXERCISE(1)        REALIZED(2)            EXERCISABLE/              EXERCISABLE/
         NAME                    (#)                ($)               UNEXERCISABLE             UNEXERCISABLE
<S>                           <C>                <C>                 <C>                        <C>

Directors as a group             Nil                Nil               125,000 / N/A                $0 / N/A
who are not Named                ===                ===               =============                ========
Executive Officers
</TABLE>

NOTES:

(1)  Number of common  shares of the Company  acquired on the  exercise of stock
     options.
(2)  Calculated  using the closing  price of common shares of the Company on the
     TSX Venture.
(3)  As  freestanding  SARs have not been granted,  the number of shares relates
     solely to stock  options.
(4)  Value of  unexercised  in-the-money  options  calculated  using the closing
     price of common  shares of the Company on the TSX  Venture on December  31,
     2003 of $0.91 per share,  less the  exercise  price of  in-the-money  stock
     options.

EMPLOYMENT AGREEMENTS

Effective January 2, 2004, the Company entered into a management  agreement with
Mr.  Nikolaos  Cacos for his services as  President  of the  Company.  Under the
agreement,  the  Company  paid Mr.  Cacos  $5,300 for January  2004,  $5,850 for
February 2004 and $6,125per month thereafter. . The compensation amounts will be
adjusted  annually.  The agreement  also provides  that, in the event Mr. Cacos'
services  are  terminated  without  cause or upon a  change  of  control  of the
Company,  a termination  payment would include an undetermined bonus (subject to
board  approval) plus eighteen  months of  compensation.  This  provision  could
provide the board of directors with a method of making a hostile takeover of the
Company undesirable. As of the date of this annual report, the criteria for such
a bonus have not been  determined.  Any  decision by the board of  directors  to
grant Mr. Cacos a bonus upon  termination  is subject to the board of directors'
fiduciary duties to the Company.

The Company and David Terry entered into a consulting  agreement  dated February
16, 2004,  pursuant to which Mr. Terry was paid a monthly  salary of $7,500.  In
addition,  the  agreement  states that Mr. Terry is to be granted  stock options
from the Company and IMA. The Company is  obligated  to issue Mr. Terry  options
for 50,000 shares of common stock  vesting  August 16, 2004 (issued) and options
for 50,000  (10,000 of which had been issued as of January 31,  2005)  shares of
common stock vesting February 16, 2005. Mr. Terry also receives a $500 per month
automobile and parking allowance from the Company and the Company gave Mr. Terry
a relocation  allowance of $25,000.  The  agreement is effective  from March 16,
2004 to March 16, 2006. Prior to the effective date of the agreement,  Mr. Terry
billed the Company  $405.00 per day for services.  In the event the agreement is
terminated  the  Company  must pay Mr.  Terry  $7,500  (plus GST) in lieu of one
month's notice.

By an agreement dated June 29, 2004,  effective June 1, 2004, the Company agreed
to increase Mr. Terry's monthly salary to $9,500 per month. In addition,  it was
agreed that IMA would issue Mr. Terry options for 200,000 shares of common stock
over a period of 12  months,  and  options in other  companies  under the common
administration  of the Grosso Group would be granted at the discretion of Joseph
Grosso, the applicable president or compensation committee.

Mr. Terry,  in connection with his consulting  agreement with the Company,  also
provides  services to IMA and Golden Arrow.  As such,  IMA and Golden Arrow have
agreed to reimburse the Company for a portion of Mr.  Terry's  fees.  During the
year  ending  December  31,  2004,  IMA  reimbursed  the Company for half of Mr.
Terry's compensation  ($42,000) in connection with Mr. Terry's services.  During
2004 Mr.  Terry's fees were shared equally  between IMA and the Company.  Golden
Arrow  did not  participate  in this  cost  sharing  arrangement  in 2004 as Mr.
Terry's time involvement on Golden Arrow matters was minimal.



                                      -50-
<PAGE>


In connection  with the  Company's  agreement  with the Grosso Group  (discussed
below),  the  Company  and Mr.  Terry have  terminated  Mr.  Terry's  consulting
agreement,  effective  January 1, 2005.  Mr. Terry has entered into a consulting
agreement with the Grosso Group,  effective January 1, 2005, upon  substantially
similar  terms as his  consulting  agreement  with  the  Company.  See  "Item 6.
Directors,  Senior  Management  and  Employees - Employment  Agreements - Grosso
Group."

Arthur  Lang's  services to the Company  are  provided as part of the  Company's
agreement with the Grosso Group. Mr. Lang has entered into an agreement with the
Grosso Group.  Prior to January 1, 2005, Mr. Lang's services to the Company were
provided as part of the Company's  agreement  with IMA. See "Item 6.  Directors,
Senior  Management  and  Employees - Employment  Agreements - Grosso  Group" and
"Item 7. Major  Shareholders  and Related  Party  Transactions  - Related  Party
Transactions."

Mar  Bergstrom's  services to the Company are provided as part of the  Company's
agreement  with the Grosso  Group.  Lions Gate,  Ms.  Bergstrom's  company,  has
entered  into a  consulting  agreement  with  the  Grosso  Group.  See  "Item 6.
Directors,  Senior  Management  and  Employees - Employment  Agreements - Grosso
Group" and "Item 7. Major  Shareholders and Related Party Transactions - Related
Party Transactions."

Other than the Company's agreement with Mr. Cacos, there are no other agreements
with any of the Company's  officers or directors which provide for benefits upon
termination of employment.

MANAGEMENT CONTRACTS

GROSSO GROUP MANAGEMENT LTD.

Effective  January 1, 2005,  the  Company  engaged  the Grosso  Group to provide
services and facilities to the Company. The formal agreement was approved by the
TSX Venture Exchange May 19, 2005.

The Grosso  Group is a private  company  which is owned by the  Company,  Golden
Arrow , IMA and Gold Point,  each of which own one share.  Pursuant to the terms
of the  Administration  Services  Agreement,  the Grosso  Group will provide its
shareholder companies with geological,  corporate  development,  administrative,
and  management  services  on a  non-exclusive  and on an "as  needed"  and  "as
available" basis. The administration  services for each shareholder company will
include  bookkeeping,  accounting  and  services in  connection  with  quarterly
filings, material change reports and other disclosure filings on SEDAR.

The Grosso Group will provide each shareholder company with:

          1.   the use of the Grosso Group's offices;
          2.   receptionist personnel;
          3.   office equipment; and
          4.   services of administration,  accounting,  purchasing, secretarial
               and like  support  staff  on an "as  needed"  and "as  available"
               basis.

Shareholder  companies  may  appoint  the  Grosso  Group to  manage  their  work
programs.  In such event,  the Grosso Group will generally  retain suppliers and
contracts in connection with each shareholder  company's  approved work programs
and will separately  invoice such shareholder  company for the third-party costs
and  such  invoice  will  include  a  handling  charge  as a  percentage  of the
third-party  costs, such charge to be in accordance with industry  standards and
reviewed for reasonableness  from time to time, and which would be negotiated at
the time of such work program.

Each shareholder  company will pay the Grosso Group a monthly fee for the Grosso
Group's  services.  The Grosso Group  intends to allocate the costs of the staff
and related general and administrative  expenses to its shareholder companies on
a full recovery basis.  The fee will be based upon a pro-rationing of the Grosso
Group's costs,  including its executive staff and other overhead,  among each of
the shareholder  companies,  with regard to the expected average annual level of
services  provided to each  shareholder  company.  The staff of the Grosso Group
will record their daily activities in connection with each  shareholder  company
and they will  retain a log for  invoicing  purposes.  The fee is to be reviewed


                                      -51-
<PAGE>

from time to time and the basis may be changed by the Grosso  Group in the event
the  Grosso  Group's  costs  change  or the  shareholder  companies'  use of the
services  is in excess of  historical  experience  or in the event a greater  or
lesser number of shareholder  companies are using the Grosso  Group's  services.
Each shareholder company has prepaid one month's initial estimated allocation of
the Grosso Group's fully  recoverable  costs,  which for the Company amounted to
$20,000  (which as of the date of this report is the estimated  initial  monthly
allocation for the Company).

The Grosso Group has the right to request each of the  shareholder  companies to
allocate  a  reasonable  number  of shares in their  incentive  option  plans to
employees  of the Grosso  Group based upon the general  amount of time and value
added by such employees.

The Administration Services Agreement may be terminated by a shareholder company
after January 1, 2007,  upon 30 days' written notice to the Grosso Group.  Prior
to January 1, 2007, if a shareholder  company desires to terminate the agreement
in the first  year,  it will pay a  termination  fee equal to  one-year's  basic
administration  charge and if a  shareholder  company  desires to terminate  the
agreement in the second year, it will pay a termination fee equal to six-months'
basic administration charge.

Upon  termination  of  the  Administration  Services  Agreement,   each  of  the
shareholder  companies  will agree to resell its common share back to the Grosso
Group for $1.00 and the shareholder companies will not be able to sell, transfer
or  otherwise  dispose  of or  encumber  such  share  during  the  term  of  the
Administration Services Agreement.

The Grosso Group's areas of experience encompass financing,  marketing, property
acquisition,  community relations,  socioeconomic issues, regulatory compliance,
government relations, property exploration and investor relations.  Additionally
the Grosso Group has a number of other support staff at its corporate office and
arrangements with contract providers of accounting and  administrative  services
at the country operations' offices in Argentina and Peru.

The members of the board of directors  of the Grosso Group are  appointed by the
shareholder  companies,  with each  shareholder  company  appointing  one of its
directors  to serve as a director  of the Grosso  Group.  The  directors  of the
Grosso Group are Nikolaos  Cacos,  Joseph  Grosso,  Arthur Lang and Nick DeMare.
Mr.. Grosso is an officer and director of the Company, a director and officer of
Golder Arrow and a director and officer of IMA. Mr. Lang is an officer of Amera,
a  director  and  officer  of IMA and a director  and  officer of Golden  Arrow.
Nikolaos  Cacos is an officer of IMA, a director and officer of Golden Arrow and
a director and officer of Amera.  Nick DeMare is an officer and director of Gold
Point Exploration Ltd. Mr. DeMare indirectly owns 100% of Chase Management Ltd.,
a company  which  provides  consulting  services to the Company and other Grosso
Group shareholder companies.

Each of the  public  company  shareholders  of the  Grosso  Group  have  its own
separate  board of directors  (whose  members  include  persons  employed by the
Grosso Group);  however, some directors will serve on multiple boards and on the
board of directors of companies which are not shareholders of the Grosso Group.

The Board of Directors of the Company has approved the formal agreement.

See also "Item 7. Major  Shareholders  and Related Party  Transactions - Related
Party Transactions."

BOARD PRACTICES

AUDIT COMMITTEE

The Company's Audit Committee must be comprised of at least three directors, the
majority of whom are not employees,  control persons or members of management of
the Company or any of its  associates or  affiliates.  The board of directors of
the Company,  after each annual shareholder'  meeting must appoint or re-appoint
an audit  committee.  As of the date of this annual  report,  the members of the
audit committee were Messrs. Minni, Coltura, and Bottomer.



                                      -52-
<PAGE>


The Audit Committee must review the annual  financial  statements of the Company
before they are approved by the board of directors of the Company.  The board of
directors of the Company must review, and if considered appropriate, approve the
annual  financial   statements  of  the  Company  before   presentation  to  the
shareholders of the Company.

REMUNERATION COMMITTEE

The  Company  does not have a separate  remuneration  committee.  The full Board
reviews  the terms and  conditions  of  employment,  management  agreements  and
remuneration levels for officers and directors.

SHARE OWNERSHIP

The following table sets forth certain  information  regarding  ownership of the
Company's shares by the Company's officers and directors as of May 31, 2005.

--------------------------------------------------------------------------------
                                        SHARES AND RIGHTS
                                           BENEFICIALLY                PERCENT
TITLE OF CLASS     NAME OF OWNER       OWNED OR CONTROLLED(1)        OF CLASS(1)
--------------------------------------------------------------------------------

Common Stock       Nikolaos Cacos          1,243,532(2)                  7.73%
--------------------------------------------------------------------------------
Common Stock       Joseph Grosso           1,656,991(3)                 10.30%
--------------------------------------------------------------------------------
Common Stock       Robert Coltura            194,832(4)                  1.21%
--------------------------------------------------------------------------------
Common Stock       Jerry Minni               163,549(5)                  1.02%
--------------------------------------------------------------------------------
Common Stock       Lindsay Bottomer           57,500(6)                  0.36%
--------------------------------------------------------------------------------
Common Stock       David A. Terry            100,000(7)                  0.62%
--------------------------------------------------------------------------------
Common Stock       Arthur Lang                     -                         -
--------------------------------------------------------------------------------
Common Stock       Mar Bergstrom            100,000(8)                   0.62%
--------------------------------------------------------------------------------

NOTES:

(1)  Where  persons  listed on this  table  have the right to obtain  additional
     shares of common  stock  through  the  exercise of  outstanding  options or
     warrants  within 60 days from May 31,  2005,  these  additional  shares are
     deemed to be  outstanding  for the purpose of computing  the  percentage of
     common stock owned by such  persons,  but are not deemed to be  outstanding
     for the purpose of  computing  the  percentage  owned by any other  person.
     Based on 16,089,844 shares of common stock outstanding as of May 31, 2005.
(2)  Includes the following  shares,  options and warrants held by Mr. Cacos and
     Aspasia Cacos (Mr. Cacos' wife):
          a.   768,032 shares held by Mr. Cacos;
          b.   67,000 shares held by Mrs. Cacos;
          c.   Options held by Mr. Cacos to acquire 175,000 shares;
          d.   Options held by Mrs. Cacos to acquire 24,500 shares;
          e.   Warrants held by Mr. Cacos to acquire  199,000  shares at a price
               of $1.00 per share,  exercisable  until  March 24,  2005 and at a
               price of $1.20 per share  exercisable  until  March 24,  2006 and
               warrants held by Mr. Cacos' RRSP account to acquire 10,000 shares
               at a price of $1.00 per share,  exercisable  until March 24, 2005
               and at a price of $1.20 per  share  exercisable  until  March 24,
               2006. See "Item 6. Directors,  Senior  Management and Employees -
               Options, Warrants and Other Rights to Acquire Securities."
(3)  Includes the  following  shares and options  held by Mr.  Grosso and Evelyn
     Grosso (Mr. Grosso's wife):
          a.   957,180 shares held by Mr. Grosso;
          b.   459,811 shares held by Mrs. Grosso;
          c.   Options held by Mr. Grosso to acquire 185,000 shares;
          d.   Options held by Mrs.  Grosso to acquire 55,000 shares;  See "Item
               6. Directors, Senior Management and Employees - Options, Warrants
               and Other Rights to Acquire Securities."


                                      -53-
<PAGE>


(4)  Includes the following shares, options and warrants held by Mr. Coltura and
     Betty Coltura (Mr. Coltura's wife):
          a.   126,332 shares held by Mr. Coltura
          b.   7,500 shares held by Mrs. Coltura
          c.   Options held by Mr. Coltura to acquire 50,000 shares;
          d.   Warrants  held by Mr.  Coltura to acquire 6,000 shares at a price
               of $1.00  per share  exercisable  until  March 24,  2005 and at a
               price of $1.20 per share  exercisable  until  March 24,  2006 and
               warrants  to acquire  5,000  shares at a price of $0.60 per share
               exercisable until March 18, 2006. See "Item 6. Directors,  Senior
               Management and Employees - Options,  Warrants and Other Rights to
               Acquire Securities."
(5)  Includes  113,549 shares held by Mr. Minni and options held by Mr. Minni to
     acquire  an  additional  50,000  shares.  See  "Item 6.  Directors,  Senior
     Management  and  Employees - Options,  Warrants and Other Rights to Acquire
     Securities."
(6)  Includes  10,000  shares  held  by Mr.  Bottomer  and  options  held by Mr.
     Bottomer to acquire 40,000 shares and warrants to acquire 5,000 shares at a
     price of $1.00 per share exercisable until March 24, 2005 and at a price of
     $1.20 per share  exercisable  until March 24, 2006 and  warrants to acquire
     2,500  shares  at a price of $0.60 per share  exercisable  until  March 18,
     2006. See "Item 6.  Directors,  Senior  Management and Employees - Options,
     Warrants and Other Rights to Acquire Securities."
(7)  Includes options held by Mr. Terry to acquire 100,000 shares.  See "Item 6.
     Directors,  Senior  Management and Employees - Options,  Warrants and Other
     Rights to Acquire Securities."
(8)  Includes options held by Ms. Bergstrom to acquire 100,000 shares. See "Item
     6. Directors, Senior Management and Employees - Options, Warrants and Other
     Rights to Acquire Securities."

All of the Company's shareholders have the same voting rights.

OPTIONS, WARRANTS AND OTHER RIGHTS TO ACQUIRE SECURITIES

As of May 31, 2005, the Company had entered into property  acquisition or option
agreements pursuant to which up to 1,935,000 common shares of the Company may be
issued. See "Item 4. Information on the Company - Property,  Plant and Equipment
- Principal Properties - Mogote Project" and "Item 4. Information on the Company
- Property, Plant and Equipment - Other Properties - Esperanza Project."

Additionally,  as of May 31,  2005,  the  Company  had granted a number of stock
options and issued a number of warrants pursuant to which up to 5,490,531 common
shares of the Company may be issued.  The  following is a brief summary of these
stock options and warrants.

STOCK OPTIONS

The TSX Venture requires all TSX Venture listed companies to adopt stock options
plans,  and such  plans  must  contain  certain  provisions.  At the  annual and
extraordinary  general  meeting of  shareholders of the Company held on June 30,
2004,  the  shareholders  approved the  Company's  stock option plan (the "Stock
Option  Plan").  The Stock Option Plan replaces the Company's  2003 stock option
plan.  The  purpose  of the Stock  Option  Plan is to provide  incentive  to the
Company's employees,  officers,  directors,  and consultants responsible for the
continued success of the Company. The following is a summary of the Stock Option
Plan.

ADMINISTRATION OF THE STOCK OPTION PLAN

The Stock Option Plan  provides  that it will be  administered  by the Company's
board  of  directors  (the  "Board"),  or  by  a  stock  option  committee  (the
"Committee")  of  the  Company's  Board  consisting  of not  less  than 2 of its
members. The Stock Option Plan is currently administered by the Board.


                                      -54-
<PAGE>


DESCRIPTION OF STOCK OPTION PLAN

The effective date (the "Effective  Date") of the Stock Option Plan is April 13,
2004,  the date the Board of Directors  approved  the Stock Option Plan,  and it
will terminate ten years from the Effective Date.

The Stock  Option Plan  provides  that  options may be granted to any  employee,
officer, director or consultant of the Company or a subsidiary of the Company.

The options  issued  pursuant to the Stock Option Plan will be  exercisable at a
price not less than the market value of the Company's  common shares at the time
the option is granted. "Market Value" means:

(a)      for each  organized  trading  facility  on which the common  shares are
         listed,  Market Value will be the closing  trading  price of the common
         shares  on the day  immediately  preceding  the  grant  date  less  any
         discounts permitted by the applicable regulatory authorities;
(b)      if the  Company's  common  shares are listed on more than one organized
         trading  facility,  the  Market  Value  shall  be the  Market  Value as
         determined in accordance  with  subparagraph  (a) above for the primary
         organized  trading  facility on which the common shares are listed,  as
         determined  by the  Board  (or a  committee  thereof),  subject  to any
         adjustments  as may be  required  to secure  all  necessary  regulatory
         approvals;
(c)      if the  Company's  common  shares are  listed on one or more  organized
         trading  facilities  but have not traded  during the ten  trading  days
         immediately  preceding  the grant date,  then the Market  Value will be
         determined  by the  Board  (or a  committee  thereof),  subject  to any
         adjustments  as may be  required  to secure  all  necessary  regulatory
         approvals; and
(d)      if the  Company's  common  shares are not listed for trading on a stock
         exchange or over the counter  market,  the value which is determined by
         the  Board  (or a  committee  thereof)  to be  the  fair  value  of the
         Company's common shares, taking into consideration all factors that the
         Board (or a committee  thereof) deems appropriate,  including,  without
         limitation,  recent sale and offer  prices of the  Company's  shares in
         private transactions negotiated at arms' length.

Options  under the Stock Option Plan will be granted for a term not to exceed 10
years from the date of their grant, provided that if the Company is then a "Tier
2" company  listed on the TSX  Venture,  the term of the option will be not more
than five years.

Options under the Stock Option Plan will be subject to such vesting  schedule as
the  Committee  may  determine.  In the event that an option is to be terminated
prior to expiry of its term due to certain  corporate  events,  all options then
outstanding  shall  become  immediately  exercisable  for 10 days  after  notice
thereof, notwithstanding the original vesting schedule.

Options will also be  non-assignable  and  non-transferable,  provided that they
will be exercisable by an optionee's legal heirs,  personal  representatives  or
guardians for up to 12 months  following the death or termination of an optionee
due to disability,  or up to 12 months following the death of an employee if the
employee  dies  within 12  months of  termination  due to  disability.  All such
options  will  continue  to vest  in  accordance  with  their  original  vesting
schedule.

The maximum  number of common shares to be reserved for issuance under the Stock
Option Plan, including options currently outstanding, will not exceed 10% of the
number of common shares of the Company issued and  outstanding on the applicable
date of grant.

If a material  alteration  in the capital  structure of the Company  occurs as a
result of a recapitalization,  stock split, reverse stock split, stock dividend,
or otherwise,  the Committee shall make adjustments to the Stock Option Plan and
to the options  then  outstanding  under it as the  Committee  determines  to be
appropriate  and  equitable  under  the  circumstances,   unless  the  Committee
determines  that it is not  practical  or  feasible to do so, in which event the
options granted under the Stock Option Plan will terminate as set forth above.



                                      -55-
<PAGE>

The TSX Venture requires all TSX Venture listed companies who have adopted stock
option  plans which  reserve a maximum of 10% of the number of common  shares of
the Company issued and  outstanding on the applicable  date of grant,  to obtain
shareholder approval to the Stock Option Plan on an annual basis.

As of May 31,  2005,  an  aggregate  of  1,604,500  incentive  stock  options to
purchase  shares  of  the  Company's  common  stock  remain  outstanding  to the
following persons:

--------------------------------------------------------------------------------
                            NATURE          NO. OF     EXERCISE    EXPIRY
OPTIONEE                    OF OPTION(1)   OPTIONS   PRICE/SHARE   DATE
                                                          $
--------------------------------------------------------------------------------

Gerry Carlson               Consultant      25,000       0.60      Dec 12, 2008
Nick DeMare                 Consultant      50,000       0.60      Dec 12, 2008
Nikolaos Cacos              Director       125,000       0.60      Dec 12, 2008
Sean Hurd                   Consultant     100,000       0.60      Dec 12, 2008
Steve Phillips              Consultant      75,000       0.60      Dec 12, 2008
Juan Carlos Berretta        Consultant      25,000       0.60      Dec 12, 2008
William Lee                 Consultant      25,000       0.60      Dec 12, 2008
Joseph Grosso               Director       100,000       0.60      Dec 12, 2008
Carlo Timossi               Consultant      50,000       0.60      Dec 12, 2008
Evelyn Grosso               Consultant      55,000       0.60      Dec 12, 2008
Robert Coltura              Director        50,000       0.60      Dec 12, 2008
Jerry Minni                 Director        50,000       0.60      Dec 12, 2008
Louis P. Salley             Consultant      25,000       0.60      Dec 12, 2008
Robert Weicker              Consultant      25,000       0.60      Dec 12, 2008
Carlos D'Amico              Employee       100,000       0.60      Dec 12, 2008
Judy Wong                   Consultant      20,000       0.60      Dec 12, 2008
David Terry                 Officer         60,000       0.90      Apr 2, 2009
Lindsay Bottomer            Director        40,000       0.90      Apr 2, 2009
Gerry Carlson               Consultant      25,000       0.90      Apr 2, 2009
Diane Reeves                Consultant      25,000       0.90      Apr 2, 2009
Tookie Angus                Consultant      45,000       0.90      Apr 2, 2009
Sean Hurd                   Consultant      50,000       0.90      Apr 2, 2009
Nikolaos Cacos              Consultant      50,000       0.90      Apr 2, 2009
Aspasia Cacos               Consultant      24,500       0.90      Apr 2, 2009
Joseph Grosso               Director        85,000       0.90      Apr 2, 2009
Steve Phillips              Consultnat      25,000       0.90      Apr 2, 2009
Nick DeMare                 Consultant      25,000       0.90      Apr 2, 2009
David Terry                 Officer         40,000       0.75      Mar 21, 2010
Mar Bergstrom               Officer        100,000       0.75      Mar 21, 2010
Lee Shane                   Consultant      10,000       0.75      Mar 21, 2010
Campbell Smyth              Consultant      75,000       0.75      Mar 21, 2010
Claudia Sandoval            Consultant      25,000       0.75      Mar 21, 2010
                                         ---------
TOTAL:                                   1,604,500
                                         =========

(1)  Pursuant to the rules of the TSX  Venture,  the  Company  has issued  stock
     options to employees,  directors,  and  consultants.  The Company,  for the
     purposes of issuing stock  options,  designates  consultants  as employees;
     therefore,   certain   persons   designated  as  employees  are,  in  fact,
     consultants.

As of May 31, 2005,  the  directors  and officers of the Company,  as a group (7
persons), held options to purchase 779,500 shares of the Company's common stock,
including options held by their spouses.


                                      -56-
<PAGE>


WARRANTS

As of May 31, 2005, there were  non-transferable  common share purchase warrants
exercisable for the purchase of 3,886,031 common shares, which expire at various
times until March 31, 2006 and may be exercised at various  prices  ranging from
$0.60 per share to $1.20 per share, as follows:

--------------------------------------------------------------------------------
  COMMON SHARES ISSUABLE            EXERCISE
 ON EXERCISE OF WARRANTS          PRICE/SHARE           EXPIRY
                                       $
--------------------------------------------------------------------------------
           18,000                     0.90              Mar 24, 2006
        1,500,000                     1.00(1)           Mar 24, 2005(1)
          150,000                     0.90              Mar 31, 2006
        1,305,300                     1.00(2)           Mar 31, 2005(2)
          912,731                     0.60              Mar 18, 2006
--------------------------------------------------------------------------------
(1)  Exercisable  at $1.00 per share until March 24, 2005 and at $1.20 per share
     until March 24, 2006.
(2)  Exercisable  at $1.00 per share until March 31, 2005 and at $1.20 per share
     until March 31, 2006.

As of May 31, 2005,  the  directors  and officers of the Company,  as a group (7
persons),  held  warrants to purchase  227,500  shares of the  Company's  common
stock.

There are no  assurances  that the option or  warrants  described  above will be
exercised in whole or in part.

EMPLOYEES  REVIEW

As of the date of this annual report the Company has no employees other than the
Company's officers. The Company's officers serve on a part-time basis and, given
the current level of the Company's  activities,  management does not believe the
Company requires full-time employees. See "Item 6. Directors,  Senior Management
and Employees - Directors and Senior  Management."  During the fiscal year ended
December 31, 2004, the Company had five  part-time  employees,  Nikolaos  Cacos,
Joseph Grosso, Jerry Minni, David Terry, and Arthur Lang. During the fiscal year
ended December 31, 2003, the Company had two part-time employees, Nikolaos Cacos
and Jerry Minni.  During the fiscal year ended  December  31, 2003,  the Company
also  utilized  the  services of two  geologists.  During the fiscal years ended
December 31, 2002 and 2001,  the Company had one  part-time  employee,  Nikolaos
Cacos.  The  Company's  needs will be  dependent  upon its level of  exploration
programs and financial condition.

The Company entered into a management agreement with the Grosso Group, effective
January  1, 2005,  pursuant  to which  employees  of the  Grosso  Group  provide
services to the Company. See "Item 6. Directors, Senior Management and Employees
- Employment  Agreements  - Grosso  Group" and "Item 7. Major  Shareholders  and
Related Party Transactions - Related Party Transactions."


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

PRINCIPAL HOLDERS OF VOTING SECURITIES

The following table sets forth certain  information  regarding  ownership of the
Company's shares by the Company's  officers and directors as a group, as well as
all  persons  who own five  percent  (5%) or more of the  Company's  outstanding
shares, as of May 31, 2005.



                                      -57-
<PAGE>

--------------------------------------------------------------------------------
                                              SHARES AND RIGHTS
TITLE OF CLASS         NAME AND ADDRESS      BENEFICIALLY OWNED       PERCENT OF
                          OF OWNER            OR CONTROLLED(1)          CLASS(1)
--------------------------------------------------------------------------------

Common Stock           Nikolaos Cacos            1,243,532(2)             7.73%

Common Stock           Joseph Grosso             1,656,991(3)            10.30%

--------------------------------------------------------------------------------

NOTES:

(1)  Where  persons  listed on this  table  have the right to obtain  additional
     shares of common  stock  through  the  exercise of  outstanding  options or
     warrants within 60 days from March 31, 2005,  these  additional  shares are
     deemed to be  outstanding  for the purpose of computing  the  percentage of
     common stock owned by such  persons,  but are not deemed to be  outstanding
     for the purpose of  computing  the  percentage  owned by any other  person.
     Based on  16,089,844  shares of common  stock  outstanding  as of March 31,
     2005.
(2)  Includes the  following  shares,  options an warrants held by Mr. Cacos and
     Aspasia Cacos (Mr. Cacos' wife):

          a.   768,032 shares held by Mr. Cacos;
          b.   67,000 shares held by Mrs. Cacos;
          c.   Options held by Mr. Cacos to acquire 175,000 shares;
          d.   Options held by Mrs. Cacos to acquire 24,500 shares;
          e.   Warrants held by Mr. Cacos to acquire  199,000  shares at a price
               of $1.00 per share,  exercisable  until  March 24,  2005 and at a
               price of $1.20 per share  exercisable  until  March 24,  2006 and
               warrants held by Mr. Cacos RRSP account to acquire  10,000 shares
               at a price of $1.00 per share,  exercisable  until March 24, 2005
               and at a price of $1.20 per  share  exercisable  until  March 24,
               2006.

     See "Item 6. Directors, Senior Management and Employees - Options, Warrants
     and Other Rights to Acquire Securities."

(3)  Includes the  following  shares and options  held by Mr.  Grosso and Evelyn
     Grosso (Mr. Grosso's wife):

          a.   957,180 shares held by Mr. Grosso;
          b.   459,811 shares held by Mrs. Grosso;
          c.   Options held by Mr. Grosso to acquire 185,000 shares;
          d.   Options held by Mrs. Grosso to acquire 55,000 shares;

     See "Item 6. Directors, Senior Management and Employees - Options, Warrants
     and Other Rights to Acquire Securities."


None of the Company's  principal  shareholders have different voting rights than
any of the Company's other common shareholders.

CHANGES IN SHAREHOLDINGS

Initially,  the Company had one share issued and outstanding,  which was held by
Joseph Grosso.  Mr. Grosso transferred the single outstanding share to Mr. Cacos
on April  11,  2000.  Subsequently,  Messrs.  Cacos  and  Grosso  have  acquired
additional  shares of the  Company's  common  stock in private  placements,  the
initial public offering and purchases through the TSX Venture.

ESCROW SHARES

Under  the   applicable   policies  and  notices  of  the  Canadian   Securities
Administrators  securities held by Principals (as defined below) are required to
be held in escrow in accordance  with the national  escrow regime  applicable to
initial  public   distributions.   Equity  securities  owned  or  controlled  by
Principals,  including common shares,  special warrants and common shares issued
on the exercise of previously issued special  warrants,  (except for 10% of each
Principal's holdings of common shares) are subject to the escrow requirements.

Principals  include  all persons or  companies  that (on the  completion  of the
Company's  initial public offering in December 1, 2003 (the  "Offering")),  were
included in one of the following categories:

         (i)      directors and senior  officers of the Company or of a material
                  operating   subsidiary  of  the  Company,  as  listed  in  the
                  Company's prospectus for the Offering;
         (ii)     promoters of the Company  during the two years  preceding  the
                  Offering;
         (iii)    those  who  owned  and/or  controlled  more  than  10%  of the
                  Company's voting  securities  immediately  after completion of
                  the  Offering  if they  also  appointed  or had the  right  to
                  appoint a director  or senior  officer of the  Company or of a
                  material operating subsidiary of the Company;


                                      -58-
<PAGE>


         (iv)     those  who  owned  and/or  controlled  more  than  20%  of the
                  Company's voting  securities  immediately  after completion of
                  the Offering; and
         (v)      associates and affiliates of any of the above.

The  Principals of the Company were all of the directors and senior  officers of
the Company after the Offering, which were Messrs. Cacos, Minni and Coltura (and
included Mr. Cacos'  wife).  Pursuant to an agreement  (the "Escrow  Agreement")
dated as of April 30, 2003 among the  Company,  Computershare  Trust  Company of
Canada (the "Escrow  Agent") and the  Principals of the Company,  the Principals
agreed to deposit in escrow their common shares (the "Escrowed Securities") with
the Escrow Agent.  The Escrow  Agreement  provides that the Escrowed  Securities
will be released  from escrow in equal blocks at 6 month  intervals  over the 36
months  following  the  issue of the final  receipt  for the  prospectus  in the
Offering (November 3, 2003).

The Company is an "emerging  issuer" as defined in the  applicable  policies and
notices of the Canadian  Securities  Administrators  and if the Company achieves
"established  issuer"  status during the term of the Escrow  Agreement,  it will
"graduate"  resulting in a catch-up  release and an  accelerated  release of any
securities  remaining  in  escrow  under  the 18 month  schedule  applicable  to
established  issuers as if the  Company had  originally  been  classified  as an
established issuer.

Pursuant to the terms of the Escrow Agreement, the securities held in escrow may
not be  transferred  or  otherwise  dealt  with  during  the term of the  Escrow
Agreement unless the transfers or dealings within the escrow are:

         (i)      transfers to continuing or, upon their  appointment,  incoming
                  directors and senior  officers of the Company or of a material
                  operating subsidiary,  with approval of the Company's board of
                  directors;
         (ii)     transfers to an RRSP or similar trustee plan provided that the
                  only  beneficiaries  are the  transferor  or the  transferor's
                  spouse or children;
         (iii)    transfers upon bankruptcy to the trustee in bankruptcy; and
         (iv)     pledges to a financial  institution  as collateral  for a BONA
                  FIDE loan,  provided  that upon a realization  the  securities
                  remain subject to escrow.  Tenders of Escrowed Securities to a
                  take-over bid are permitted  provided that, if the tenderer is
                  a Principal of the successor  corporation  upon  completion of
                  the  take-over  bid,   securities  received  in  exchange  for
                  tendered Escrowed  Securities are substituted in escrow on the
                  basis of the successor corporation's escrow classification.

The  following  table sets forth  details of the issued and  outstanding  common
shares that are subject to the Escrow  Agreement  which  reflects the release of
June 2, 2005:
         -------------------------------------------------------
                                      NO. OF             % OF
                                     ESCROWED        OUTSTANDING
         NAME                         SHARES           SHARES(2)
         -------------------------------------------------------

         Nikolaos Cacos(1)           388,089             2.41%
         Robert Coltura(1)            55,948             0.35%
         Jerry A. Minni(1)            58,746             0.36%
         Bruno Faccin                169,173             1.05%
         Susana Sueldo                20,697             0.13%
         Sean Hurd                    50,175             0.31%
         Alfie Colucci               169,174             1.05%
         Angelo Colucci              169,174             1.05%
         Evelyn Grosso               169,173             1.05%
         Joseph J. Grosso            169,173             1.05%
         Orianna Maiorano            169,173             1.05%
         Vince Maiorano              169,173             1.05%
         Marianna de Simone          169,173             1.05%
         Aspasia Michoulas(1)         30,150             0.19%
                                   ---------            -----
         TOTAL                     1,957,191            12.16%
                                   =========            =====


                                      -59-
<PAGE>

(1)  Includes 261,991 Special  Warrants  convertible into common shares upon the
     Company  obtaining  regulatory  approval of the prospectus for the Offering
     from the Securities Commissions.
(2)  Based upon  16,089,844  shares of common  stock  outstanding  as of May 31,
     2005.

The remaining shares in escrow will be released every six months in December and
June until all shares have been released from the escrow as follows: December 5,
2005, 652,398 common shares; June 2, 2006, 652,397 common shares and December 2,
2006, 652,396 common shares.

UNITED STATES SHAREHOLDERS

As of May 31, 2005,  there were 3  registered  holders of the  Company's  common
shares  in  the  United  States,   with  combined   holdings  of  8,000  shares,
representing  0.05% of the issued  shares of the  Company on May 31,  2005.  The
Company  does not know how many  beneficial  shareholders  it has in the  United
States, but management believes there are less than 300 such shareholders.

CONTROL BY FOREIGN GOVERNMENT OR OTHER PERSONS

To the  best  of the  Company's  knowledge,  the  Company  is  not  directly  or
indirectly owned or controlled by another  corporation,  any foreign government,
or any other natural or legal person, severally or jointly.

CHANGE OF CONTROL

As of the date of this annual  report,  there are no  arrangements  known to the
Company  which may at a  subsequent  date  result in a change of  control of the
Company.

RELATED PARTY TRANSACTIONS

Other than as  disclosed  below,  from  January 1, 2004 through May 31, 2005 the
Company has not entered into any  transactions  or loans between the Company and
any:  (a)  enterprises   that  directly  or  indirectly   through  one  or  more
intermediaries,  control or are controlled by, or are under common control with,
the Company; (b) associates;  (c) individuals owning, directly or indirectly, an
interest  in the  voting  power  of the  Company  that  gives  them  significant
influence over the Company,  and close members of any such individuals'  family;
(d) key management personnel and close members of such individuals' families; or
(e)  enterprises  in which a substantial  interest in the voting power is owned,
directly or indirectly, by any person described in (c) or (d) or over which such
a person is able to exercise significant influence.

1.       (i)      On April 8, 2004, the Company, IMA and IMASA entered into a
                  further  agreement on the Mogote  Property.  On April 8, 2004,
                  Messrs.  Cacos and Grosso,  were  officers,  directors  and/or
                  principal   shareholders  of  the  Company  and  officers  and
                  directors  of  IMA.  As of  April  8,  2004,  Mr.  Lang  was a
                  consultant  to the Company and was an officer and  director of
                  IMA. The Company can earn an additional  24%  interest,  for a
                  total 75% interest, after earning the initial 51% interest, by
                  issuing an additional  300,000 common shares (issued),  with a
                  deemed value of $279,000  and  expending  an  additional  US$3
                  million on exploration expenditures, as follows:

                           EXPLORATION
                           EXPENDITURES           DATE
                               US$

                             1,000,000            May 30, 2005
                             1,000,000            May 30, 2006
                             1,000,000            May 30, 2007
                            ----------
                             3,000,000
                            ==========


                                      -60-
<PAGE>



                  As a result  of the  April 8, 2004  agreement,  the  aggregate
                  expenditures  which  must be  incurred  by the  Company on the
                  Mogote Property, in order to earn the initial 51% interest and
                  the additional 24% interest, are as follows:

                          DATE FOR
                          COMPLETION         EXPENDITURES          CUMULATIVE

                          July 1, 2004       US $   250,000      US $   250,000
                          May 30, 2005       US $ 1,000,000      US $ 1,250,000
                          July 1, 2005       US $   300,000      US $ 1,550,000
                          May 30, 2006       US $ 1,000,000      US $ 2,550,000
                          July 1, 2006       US $   300,000      US $ 2,850,000
                          May 30, 2007       US $ 1,000,000      US $ 3,850,000
                          July 1, 2007       US $   400,000      US $ 4,250,000
                                             --------------
                          Total              US $ 4,250,000
                                             ==============

                  Pursuant to an agreement  dated June 28, 2004,  effective July
                  7, 2004,  IMA's and IMASA's  rights and interests  under these
                  agreements  were  transferred  to  Golden  Arrow  and  IMAUSA,
                  respectively.  As of June 28, 2004, Mr. Grosso was an officer,
                  director  and  principal  shareholder  of the  Company  and an
                  officer and director of IMA and Golden  Arrow.  As of June 28,
                  2004,   Mr.   Cacos,   an  officer,   director  and  principal
                  shareholder of the Company,  and Mr. Terry,  an officer of the
                  Company,  were  officers and  directors of IMA. Mr. Lang was a
                  consultant to the Company as of June 28, 2004,  and an officer
                  and  director  of IMA.  During  July 2004,  Messrs.  Cacos and
                  Terry,  officers,  directors and/or principal  shareholders of
                  the Company,  became  officers and  directors of Golden Arrow.
                  Mr. Lang,  an officer of the  Company,  became and officer and
                  director of Golden Arrow during July 2004.

                  See  "Item  4.  Information  on  the  Company  -  History  and
                  Development  of the Company" and "Item 4.  Information  on the
                  Company - Property, Plant and Equipment - Principal Properties
                  - Mogote Project."

                  Pursuant to the terms of the agreement, during the fiscal year
                  ended December 31, 2003, the Company  reimbursed IMA and IMASA
                  $192,952,   of  which  $4,902  remained  outstanding  and  was
                  included in amounts payable,  and issued 100,000 shares to IMA
                  with at a deemed value of $45,000.  As of June 30,  2004,  the
                  remaining $4,902 had been paid.

                  In July 2004 the Company issued 100,000 shares to Golden Arrow
                  with a deemed value of $40,000 (at which time,  Messrs.  Cacos
                  and Grosso, officers,  directors and principal shareholders of
                  the Company,  and Mr. Terry,  an officer of the Company,  were
                  officers  and/or  directors of IMA and/or Golden  Arrow).  Mr.
                  Lang,  was a consultant  to the Company and was an officer and
                  director of IMA and Golden Arrow at the time.

         ii)      purchased  a  100%   undivided   interest  in  three   mineral
                  properties  (the  "Chubut   Properties"),   comprising  24,280
                  hectares,  located in Chubut Province,  Argentina,  by issuing
                  500,000  common  shares  (issued in November  2003) for a fair
                  value of $225,000.  (At the time this agreement was negotiated
                  the  500,000  shares had a deemed  value of $22,000  which was
                  IMA's recorded cost for the  properties.) In addition,  in the
                  event that a decision  is made to place the Chubut  Properties
                  into commercial production, the Company will pay IMA and IMASA
                  (now Golden Arrow and IMAUSA) a bonus of  US$250,000  and a 3%
                  net smelter  returns  royalty.  Pursuant to an agreement dated
                  June 28,  2004,  effective  July 7,  2004,  IMA's and  IMASA's
                  rights and  interests  under this  agreement  were assigned to
                  Golden  Arrow and IMAUSA,  respectively.  As of June 28, 2004,
                  Mr. Grosso was an officer,  director and principal shareholder
                  of the Company  and an officer and  director of IMA and Golden
                  Arrow.  As of June 28, 2004, Mr. Cacos,  an officer,  director
                  and principal  shareholder of the Company,  and Mr. Terry,  an
                  officer of the Company, were officers and directors of IMA. As
                  of June 28, 2004, Mr. Lang was a consultant to the Company and


                                      -61-
<PAGE>


                  an officer  and  director of IMA.  During  July 2004,  Messrs.
                  Cacos  and  Terry,   officers,   directors   and/or  principal
                  shareholders of the Company,  became officers and directors of
                  Golden Arrow. Mr. Lang, an officer of the Company, also became
                  an officer and director of Golden Arrow in July 2004.

                  See  "Item  4.  Information  on  the  Company  -  History  and
                  Development  of the Company" and "Item 4.  Information  on the
                  Company - Property,  Plant and Equipment - Other  Properties -
                  Chubut Project."

2.       Through  December  31,  2004,  the Company  shared  office  facilities,
         capital assets and personnel with IMA.  Pursuant to a letter  agreement
         dated October 1, 2002,  the Company  agreed to pay IMA $2,000 per month
         for expenses ($1,500 for use of office,  boardroom,  reception services
         and  other  common  areas  and $500  for  secretarial  and  bookkeeping
         services), which amount was later increased to $2,500 per month. At the
         time of the letter agreement,  Nikolaos Cacos was an officer,  director
         and principal shareholder of the Company and an officer and director of
         IMA and Joseph Grosso was a principal shareholder of the Company and an
         officer and director of IMA. Nikolaos Cacos,  Joseph Grosso,  and David
         Terry,  officers,   directors  and/or  principal  shareholders  of  the
         Company,  are officers and/or directors of IMA. Arthur Lang, an officer
         of the  Company,  is also  an  officer  and  director  of IMA,  and his
         services to the Company,  through December 31, 2004, were provided as a
         part of the Company's  agreement with IMA. During the fiscal year ended
         December 31, 2003,  the Company  paid  $35,110  (2002 - $6,000;  2001 -
         $nil) to IMA. As at December 31, 2003,  $16,168 remained unpaid and was
         included in  accounts  payable  and  accrued  liabilities.  See Item 6.
         "Directors, Senior Management and Employees - Management Contracts" for
         update effective January 1, 2005.

3.       Effective  January 2, 2004, the Company  entered into an agreement with
         Mr. Cacos, the President, a principal shareholder and a director of the
         Company,  for his services.  See "Item 6. Directors,  Senior Management
         and Employees - Employment Agreements." Under the contract Mr. Cacos is
         currently paid $6,125 per month. During the fiscal year ending December
         31,  2004,  the Company paid $72,400 to Mr.  Cacos.  The contract  also
         provides that, in the event the services are  terminated  without cause
         or upon a change in control of the Company, a termination payment would
         include an undetermined bonus plus eighteen months of compensation.

4.       The  following  table  provides a listing of the  offerings and private
         placements conducted by the Company,  during the period from January 1,
         2004  through  May 31,  2005,  along  with the  names of the  officers,
         directors and/or principal  shareholders which purchased  securities in
         these offerings and private placements and the use of proceeds:
<TABLE>
<CAPTION>
                                                                                               PURCHASE   MARKET
                                                                               PARTICIPATION     PRICE    PRICE(1)
         PLACEE                                                                 BY INSIDERS        $         $
         ---------------------------------------------------------------------------------------------------------
        <S>                                                                        <C>         <C>       <C>

         PERIOD FROM JANUARY 1, 2004 THROUGH MAY 31, 2005

         Exercise of Greenshoe Option - 225,000 units.                                            0.45       N/A

         The agent exercised the greenshoe option in January 2004. The
         option entitled the agent to purchase 225,000 units at $0.45
         less an 8% commission.

              Gross Proceeds:    $ 101,250
              Commissions and
                  Finders' Fees: $ 8,100
              Offering Costs:    $ None
              Net Proceeds:      $ 93,150
              Use of Proceeds:   Working Capital

         No participation by officers, directors or principal shareholders             None
         -----------------------------------------------------------------       ==========

                                      -62-
<PAGE>

<CAPTION>
                                                                                               PURCHASE   MARKET
                                                                               PARTICIPATION     PRICE    PRICE(1)
         PLACEE                                                                 BY INSIDERS        $         $
         ---------------------------------------------------------------------------------------------------------
        <S>                                                                        <C>         <C>       <C>

         Private Placement - 1,257,000 units.                                                     0.55      0.68

         Each unit comprised one common share and one non-transferable
         share purchase warrant. Each warrant entitles the holder to
         purchase one additional common share at a price of $0.67 per
         share on or before January 20, 2005. As at December 31, 2003,
         $658,350 had been received by the Company on account of the
         private placement and had been recorded as share subscriptions
         received.

              Gross Proceeds:    $ 691,350.00
              Commissions and
                  Finders' Fees: $ none
              Offering Costs:    $ 3,956.75
              Net Proceeds:      $ 687,393.25
              Use of Proceeds:   Mineral Exploration, administration
                                 costs and working capital

         No participation by officers, directors or principal shareholders             None
         -----------------------------------------------------------------       ==========

         Private Placement - 2,750,000 units.                                                     0.80      0.98

         Each unit comprised one common share and one non-transferable
         share purchase warrant. On the non-brokered portion, each
         warrant entitles the holder to purchase one additional common
         share for a period of two years, at a price of $1.00 per share
         on or before March 24, 2005 and at $1.20 per share on or before
         March 24, 2006. On the brokered portion, each warrant entitles
         the holder to purchase one additional common share for a
         period of two years, at a price of $1.00 per share on or before
         March 31, 2005 and at $1.20 per share on or before March 31, 2006.

              Gross Proceeds:    $ 2,200,000.00
              Commissions and
                  Finder's Fees: $ 96,560 in cash. The Company also issued
                                 55,300 units on the same terms and basis
                                 as the private placement, and issued
                                 168,000 warrants. Each warrant entitles
                                 the holder to purchase one common share
                                 of the Company at $0.90 per share on or
                                 before March 31, 2006
              Offering Costs:    $ 57,401.19
              Net Proceeds:      $ 2,001,798.81
              Use of  Proceeds:  Mineral Exploration, administration
                                 costs, offering costs and working capital

                  Nikolaos Cacos (2)                                                208,000
                  Robert Coltura                                                      6,000
                  Lindsay Bottomer                                                    5,000
                                                                                 ----------
                  Total                                                             219,000
         -----------------------------------------------------------------       ==========

         Private Placement - 1,650,000 units.                                                    $0.55     $0.58

         Each unit comprised one common share and one/half non-transferable
         share purchase warrant. Each whole warrant entitles the holder
         thereof to purchase one common share in the capital of the Company
         for one year at a purchase price of $0.60 per share on or before
         March 18, 2006.

              Gross Proceeds:    $ 907,500.00
              Commissions and
                  Finder's Fees: $ 35,510.00 in cash plus $5,300.00 in
                                 administration fees and expenses. The
                                 Company issued 14,962 units, on the
                                 same terms and basis as the private
                                 placement, and issued 66,750 warrants
                                 on the same terms. The Company also
                                 issued 27,000 common shares and 13,500
                                 warrants representing the corporate
                                 finance fee on the brokered portion.
                                 All of the warrants are exercisable for
                                 one year at a purchase price of $0.60
                                 per share on or before March 18, 2006.
              Offering Costs:    $ None
              Net Proceeds:      $ 845,549.10
              Use of  Proceeds:  Mineral Exploration, administration costs,
                                 offering costs and working capital

                  Lindsay Bottomer                                                    5,000
                  Robert Coltura                                                     10,000
                  Evelyn Grosso (wife of Joseph Grosso)                             100,000
                                                                                 ----------
                  Total                                                             115,000
         -----------------------------------------------------------------       ==========

</TABLE>

                                      -63-
<PAGE>


         (1)  Quoted closing price on date of announcement of private  placement
              or offering.
         (2)  Includes 10,000 units purchased by Nikolaos Cacos (RRSP Account).
         (3)  A greenshoe  option is an underwriting  agreement  provision of an
              IPO (Initial Public Offering) that allows syndicate members to buy
              additional shares at the original price if the demand is high. The
              name  comes from the fact that the "Green  Shoe  Company"  was the
              first to issue this type of option.

5.       The Company entered into a consulting  agreement with David Terry dated
         February 16, 2004,  as amended June 29, 2004.  See "Item 6.  Directors,
         Senior  Management and Employees - Employment  Agreements."  During the
         year ended  December  31, 2004,  the Company  paid Mr.  Terry  $81,000,
         including  $25,000  for  relocation  expenses.  During  the year  ended
         December  31,  2004,  the  Company   received   $42,000  from  IMA  for
         reimbursement of a portion of Mr. Terry's fees.  Nikolaos Cacos, Joseph
         Grosso,   and  David  Terry,   officers,   directors  and/or  principal
         shareholders  of the  Company,  are officers  and/or  directors of IMA.
         Arthur Lang is an officer of the  Company,  an officer of Golden  Arrow
         and an officer and director of IMA. This  agreement was  terminated and
         effective  January 1, 2005,  Mr. Terry began  providing his services to
         the Company through the Grosso Group.  See "Item 6.  Directors,  Senior
         Management  and Employees - Employment  Agreements - Grosso Group." Mr.
         Terry has entered  into a  consulting  agreement  with the Grosso Group
         upon similar terms as his prior agreement with the Company.

6.       See  "Item  6.   Directors,   Senior   Management   and   Employees   -
         Compensation."

7.       The Company has engaged  the  services of the Grosso  Group,  effective
         January  1,  2005.  See  "Item  6.  Directors,  Senior  Management  and
         Employees  -  Employment  Agreements  - Grosso  Group." The Company has
         entered  into an  Administration  Services  Agreement  by and among the
         Company, Golden Arrow, Gold Point , IMA and the Grosso Group, effective
         January 1, 2005.  Mr.  Cacos will become an officer and director of the
         Grosso  Group.  Joseph  Grosso,  an  officer,  director  and  principal
         shareholder  of the  Company is also an officer  and  director  of IMA,
         Golden  Arrow and the  Grosso  Group.  David  Terry,  an officer of the
         Company,  is an officer  and  director of IMA and Golden  Arrow.  It is
         anticipated  that Mr. Terry will become an officer of the Grosso Group.
         Arthur Lang,  an officer of the Company,  is an officer and director of
         IMA and Golden  Arrow and Mr. Lang will become and officer and director
         of the Grosso Group. Nick DeMare, an officer and director of Gold Point
         Exploration  Ltd., will be a director of the Grosso Group and that Sean
         Hurd, a director of Gold Point  Exploration Ltd., IMA and Golden Arrow,
         will be an  officer of the  Grosso  Group.  Chase  Management  Ltd.,  a
         company indirectly owned by Mr. DeMare provides services to the Company
         and to the other Grosso Group shareholder companies.  Mar Bergstrom, an
         officer of the Company,  provides  her services to the Company  through
         the Grosso Group, which has a consulting  contract with the Lions Gate,
         a company owned and  controlled by Ms.  Bergstrom.  Ms.  Bergstrom also
         provides services, through the Grosso Group, to IMA and Golden Arrow.

INDEBTEDNESS OF DIRECTORS, OFFICERS, PROMOTERS AND OTHER MANAGEMENT

During the fiscal  years  ended  December  31,  2002,  2003,  2004,  none of the
following were indebted to the Company:

         (a)      enterprises  that directly or  indirectly  through one or more
                  intermediaries,  control  or are  controlled  by, or are under
                  common control with, the Company;
         (b)      associates;
         (c)      individuals owning, directly or indirectly, an interest in the
                  voting  power  of the  Company  that  gives  them  significant
                  influence  over the  Company,  and close  members  of any such
                  individuals' family;
         (d)      key   management   personnel   and  close   members   of  such
                  individuals' families; or
         (e)      enterprises  in which a  substantial  interest  in the  voting
                  power  is  owned,  directly  or  indirectly,   by  any  person
                  described in (c) or (d) or over which such a person is able to
                  exercise significant influence.



                                      -64-
<PAGE>


INTERESTS OF EXPERTS AND COUNSEL

Not applicable.


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

DESCRIPTION                                                           PAGE
-----------                                                           ----
Audited Financial Statements for the
Years Ended December 31, 2004, 2003 and 2002                          F-1

SIGNIFICANT CHANGES

The Company  closed a private  placement of units in March 2005 for net proceeds
of $845,549.  The Company  issued  1,691,962  units at a price of $0.55 per unit
(including  14,962 units issued to Canaccord  Capital  Corporation  in lieu of a
portion of its cash  commission).  Each unit  consisted  of one common share and
one-half  non-transferable  share purchase warrant.  Each whole warrant entitles
the holder thereof to purchase one common share of the Company for one year at a
purchase price of $0.60 per share on or before March 18, 2006. In addition,  the
Company issued 66,750 agent's  warrants to Canaccord  Capital  Corporation.  The
agent's  warrants  have  the same  terms as the  other  warrants  issued  in the
offering.  The Company also issued 27,000  common shares and 13,500  warrants to
Canaccord  Capital  Corporation  as a corporate  finance  fee.  The Company paid
$35,510 in cash commissions, plus $5,300 in administration fees and expenses.

In December 2004 the Company staked two claim blocks in Nye County,  Nevada. See
"Item 4.  Information  on the  Company - Property,  Plant and  Equipment - Other
Properties - Nevada, USA, Properties."

DIVIDEND POLICY

The Company has not paid any  dividends on its common shares and does not intend
to pay dividends on its common shares in the immediate  future.  Any decision to
pay  dividends  on its common  shares in the future will be made by the board of
directors of the Company on the basis of earnings,  financial  requirements  and
other such conditions that may exist at that time.

LEGAL PROCEEDINGS

None.


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

PRICE HISTORY

The Company's  common stock commenced  trading on the TSX Venture on December 2,
2003. The Company's stock  currently  trades on the TSX Venture under the symbol
"AMS" and CUSIP number 02351P105.

The following table sets forth the market price ranges and the aggregate  volume
of trading  of the  common  shares of the  Company  on the TSX  Venture  for the
periods indicated:

                   TSX VENTURE EXCHANGE STOCK TRADING ACTIVITY




                                                           SALES PRICE
                                                    ---------------------------
YEAR ENDED                       VOLUME                 HIGH            LOW
                                                    ------------   ------------
December 31, 2004             7,113,900                $1.12           $0.35
December 31, 2003(1)          1,444,847                $0.95           $0.60

(1) Period from December 2, 2003 to December 31, 2003.

                                      -65-
<PAGE>


                                                           SALES PRICE
                                                    ---------------------------
QUARTER ENDED                    VOLUME                 HIGH            LOW
                                                    ------------   ------------
March 31, 2005                1,537,808                $0.74           $0.40
December 31, 2004             1,076,700                $0.77           $0.48
September 30, 2004            1,033,400                $0.70           $0.35
June 30, 2004                 1,931,600                $1.12           $0.40
March 31, 2004                3,072,200                $1.10           $0.75
December 31, 2003(1)          1,444,847                $0.95           $0.60

(1) Period from December 2, 2003 to December 31, 2003.

                                                           SALES PRICE
                                                    ---------------------------
MONTH ENDED                      VOLUME                 HIGH            LOW
                                                    ------------   ------------
May 31, 2005                     93,500                $0.455          $0.40
April 30, 2005                  197,070                $0.51           $0.40
March 31, 2005                  392,350                $0.65           $0.40
February 28, 2005               539,258                $0.64           $0.45
January 31, 2005                606,200                $0.74           $0.60
December 31, 2004               249,600                $0.76           $0.55

                           PINK SHEET TRADING ACTIVITY

The Company's common shares have been listed in the Pink Sheets under the symbol
"AJRSF"  since January  2004.  The  following  tables set forth the market price
ranges and the  aggregate  volume of trading of the common shares of the Company
in  the  Pink  Sheets  for  the  periods  indicated.  These  quotations  reflect
inter-dealer  prices without retail mark-up,  mark-down,  or commissions and may
not necessarily represent actual transactions.

                                                        CLOSING SALES PRICE
                                                    ---------------------------
YEAR ENDED                       VOLUME                 HIGH            LOW
                                                    ------------   ------------
December 31, 2004               330,750                $0.84           $0.27

                                                        CLOSING SALES PRICE
                                                    ---------------------------
QUARTER ENDED                    VOLUME                 HIGH            LOW
                                                    ------------   ------------

March 31, 2005                   56,280                $0.54           $0.40
December 31, 2004                34,450                $0.64           $0.41
September 30, 2004               75,200                $0.30           $0.27
June 30, 2004                    79,300                $0.84           $0.30
March 31, 2004                  141,800                $0.83           $0.60


                                      -66-
<PAGE>


                                                        CLOSING SALES PRICE
                                                    ---------------------------
MONTH ENDED                      VOLUME                 HIGH            LOW
                                                    ------------   ------------
May 31, 2005                     10,000                $0.34           $0.32
April 30, 2005                   24,230                $0.41           $0.32
March 31, 2005                   15,600                $0.54           $0.48
February 28, 2005                40,680                $0.47           $0.40
January 31, 2005          no trading activity           N/A             N/A
December 31, 2004                 6,750                $0.64           $0.44

As of May 31, 2005, the Company's shares were not being traded on an exchange in
the United States,  and there was no established market in the United States for
the Company's shares.

The  Company  intends to seek a listing  for its shares on the  Over-the-Counter
Bulletin Board operated by the National  Association of Securities Dealers.  The
Company does not know if, or when, it will obtain such a listing.

REGISTRATION, TRANSFER AND PAR VALUE

The  Company's  common  shares,  no par value,  are  registered.  The  Company's
transfer agent is  Computershare  Trust Company of Canada,  510 Burrard  Street,
Vancouver, British Columbia, V6C 3B9, Canada.

RESTRICTIONS ON TRANSFERABILITY

A  total  of  1,957,191   common  shares  are  subject  to  TSX  Venture  resale
restrictions  and are held in escrow  as of June 3,  2005.  See  "Item 7.  Major
Shareholders and Related Party Transactions - Escrow Shares."


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

SHARE CAPITAL

Not Applicable

MEMORANDUM AND ARTICLES OF ASSOCIATION

Previously  described  in  registration  statement  with  an  effective  date of
December 27, 2004

MATERIAL CONTRACTS

The following  are material  contracts to which the Company is a party and which
were  entered  into  during  the two years  proceeding  the date of this  annual
report:

         1.       Letter of Intent among the Company,  IMA Exploration  Inc. and
                  Inversiones  Mineras  Argentinas S.A. dated March 6, 2003. See
                  "Item 4.  Information  on the  Company -  Property,  Plant and
                  Equipment - Principal  Properties - Mogote  Project" and "Item
                  7. Major Shareholders and Related Party Transactions - Related
                  Party Transactions."

         2.       Property Purchase Agreement among the Company, IMA Exploration
                  Inc. and  Inversiones  Mineras  Argentinas S.A. dated March 6,
                  2003.  See "Item 4.  Information  on the  Company -  Property,
                  Plant and Equipment - Other  Properties - Chubut  Project" and
                  "Item 7. Major  Shareholders and Related Party  Transactions -
                  Related Party Transactions."

         3.       Stock Option Plan dated March 6, 2003. See "Item 6. Directors,
                  Senior Management and Employees - Options,  Warrants and Other
                  Rights to Acquire Securities - Stock Options."


                                      -67-
<PAGE>


         4.       Stock  Option  Plan  dated  April  13,  2004.   See  "Item  6.
                  Directors, Senior Management and Employees - Options, Warrants
                  and Other Rights to Acquire Securities - Stock Options."

         5.       Escrow  Agreement  among  the  Company,   Computershare  Trust
                  Company  of Canada and the  Principals  of the  Company  dated
                  April 30, 2003.  See "Item 7. Major  Shareholders  and Related
                  Party Transactions - Escrow Shares."

         6.       Agency  Agreement  between the Company and  Canaccord  Capital
                  Corporation  ("Canaccord")  dated July 31,  2003,  pursuant to
                  which  Canaccord  agreed to the Company  with an offering  for
                  sale of 1,500,000 units at $0.45 per unit. Each unit consisted
                  of one share and one warrant  exercisable at $0.50.  Canaccord
                  was  given the  right to sell up to an  additional  15% of the
                  offering.  Canaccord's compensation included an 8% commission;
                  warrants totaling up to 15% of the units sold, priced at $0.45
                  per warrant;  an  administration  fee of $7,500;  and, 100,000
                  shares of the  Company's  common stock.  The warrants  expired
                  September  1,  2004.  Canaccord  was  granted a right of first
                  refusal for any further  financings during from the closing of
                  the offering until September 1, 2004.

         7.       Amending Letter  Agreement among the Company,  IMA Exploration
                  Inc. and Inversiones  Mineras  Argentinas S.A. dated September
                  30, 2003. See "Item 4.  Information on the Company - Property,
                  Plant and Equipment - Principal  Properties - Mogote  Project"
                  and "Item 7. Major Shareholders and Related Party Transactions
                  - Related Party Transactions."

         8.       Management  Agreement  with  Nikolaos  Cacos dated  January 2,
                  2004. See "Item 6. Directors,  Senior Management and Employees
                  - Employment Agreements."

         9.       Consulting Agreement with David Terry dated February 16, 2004.
                  See "Item 6.  Directors,  Senior  Management  and  Employees -
                  Employment Agreements."

         10.      Engagement Agreement between the Company and Canaccord Capital
                  Corporation  dated March 8, 2004,  pursuant to which Canaccord
                  agreed to assist the  Company in raising up to  $1,000,000  at
                  $0.80  per unit in a private  placement  without  an  offering
                  memorandum.  Each  unit  consisted  of one share and one whole
                  warrant,  with each warrant  exercisable  into one share for a
                  period  of 24  months at a price of $1.00 in year one and at a
                  price $1.20 in year two. Canaccord's compensation consisted of
                  an 8% cash  commission;  warrants equal to 12% of the offering
                  sold  at a  price  of  $0.80  for a  period  of two  years;  a
                  corporate  finance  fee of  40,000  units  (on the same as the
                  units sold in the  offering);  and, an  administration  fee of
                  $7,500. Canaccord was granted a right of first refusal for any
                  further financing from the closing of the offering until March
                  31, 2005.

         11.      Amending  Letter   Agreement  made  among  the  Company,   IMA
                  Exploration Inc. and Inversiones Mineras Argentinas S.A. dated
                  April 8,  2004.  See  "Item 4.  Information  on the  Company -
                  Property,  Plant and Equipment - Principal Properties - Mogote
                  Project"  and "Item 7. Major  Shareholders  and Related  Party
                  Transactions - Related Party Transactions."

         12.      Assignment and Assumption  Agreement dated June 28, 2004 among
                  the  Company,   IMA  Exploration  Inc.,   Inversiones  Mineras
                  Argentinas  S.A.,  Golden  Arrow  Resources  Corporation,  and
                  Inversiones  Mineras  Australes S.A. relating to the Company's
                  Argentinean properties.

         13.      Assignment and Assumption  Agreement dated June 28, 2004 among
                  the  Company,   IMA  Exploration  Inc.,   Inversiones  Mineras
                  Argentinas  S.A.,  Golden  Arrow  Resources  Corporation,  and
                  Inversiones  Mineras  Australes  S.A.  relating  to the Mogote
                  property.

         14.      Amendment to Consulting  Agreement with David Terry dated June
                  29,  2004.  See  "Item 6.  Directors,  Senior  Management  and
                  Employees - Employment Agreements."



                                      -68-
<PAGE>


         15.      Letter Agreement dated August 24, 2004 between the Company and
                  Arcturus Ventures Inc. See "Item 4. Information on the Company
                  - Property, Plant and Equipment - Other Properties - Esperanza
                  Project."

         16.      Agency  Letter  Agreement  between the  Company and  Canaccord
                  Capital Corporation dated February 18, 2005, pursuant to which
                  Canaccord  agreed to the Company with a portion of an offering
                  for sale of  900,000  units  at  $0.55  per  unit.  Each  unit
                  consisted  of one share and one half  warrant  exercisable  at
                  $0.60.  Canaccord's  compensation included an 8% of the amount
                  placed,  payable  either  in cash or in  agent's  units at the
                  election of the agent.  The  agent's  units will have the same
                  terms as the client's units.  In addition,  the Company agreed
                  to issue  warrants  to  Canaccord  equal  to 10% of the  units
                  subscribed,  each warrant will be  exercisable  to purchase an
                  additional  share at  $0.60  for a  period  of one  year  from
                  closing.  In  addition,  the  Company  will  pay  Canaccord  a
                  corporate  finance  fee,  payable  by the  issuance  of 27,000
                  units,  having  the same  terms  as the  clients'  units.  The
                  Company  will  pay an  administration  fee  plus  expenses  to
                  Canaccord of $5,000.

EXCHANGE CONTROLS

There are no governmental  laws,  decrees,  or regulations in Canada relating to
restrictions on the export or import of capital,  or affecting the remittance of
interest,  dividends, or other payments to non-resident holders of the Company's
common  stock.  Any  remittances  of dividends to United States  residents  are,
however,  subject  to a  15%  withholding  tax  (10%  if  the  shareholder  is a
corporation  owning at least 10% of the outstanding common stock of the Company)
pursuant to Article X of the reciprocal tax treaty between Canada and the United
States. See "Item 10. Additional Information - Taxation".

Except as  provided  in the  Investment  Canada  Act,  there are no  limitations
specific to the rights of  non-Canadians to hold or vote the common stock of the
Company  under the laws of Canada or the Province of British  Columbia or in the
charter documents of the Company.

Management  of the  Company  considers  that the  following  general  summary is
materially  complete and fairly  describes  those  provisions of the  Investment
Canada Act pertinent to an investment by an American investor in the Company.

The following  discussion  summarizes  the principal  features of the Investment
Canada Act for a non-resident who proposes to acquire the common shares.

The Investment  Canada Act generally  prohibits  implementation  of a reviewable
investment  by  an  individual,   government  or  agency  thereof,  corporation,
partnership,  trust or joint venture (each an "entity") that is not a "Canadian"
as defined in the Investment Canada Act (a "non-Canadian"), unless after review,
the  Director of  Investments  appointed  by the  minister  responsible  for the
Investment  Canada Act is satisfied  that the  investment is likely to be of net
benefit to Canada.  An investment in the common shares by a  non-Canadian  other
than a "WTO Investor" (as that term is defined by the Investment Canada Act, and
which  term  includes  entities  which are  nationals  of or are  controlled  by
nationals of member states of the World Trade Organization) when the Company was
not  controlled by a WTO  Investor,  would be  reviewable  under the  Investment
Canada Act if it was an  investment  to acquire  control of the  Company and the
value of the  assets  of the  Company,  as  determined  in  accordance  with the
regulations  promulgated  under the Investment  Canada Act, equals or exceeds $5
million for direct acquisition and over $50 million for indirect acquisition, or
if an order for review was made by the federal  cabinet on the grounds  that the
investment   related  to  Canada's  cultural  heritage  or  national   identity,
regardless  of the value of the  assets of the  Company.  An  investment  in the
common  shares by a WTO  Investor,  or by a  non-Canadian  when the  Company was
controlled by a WTO Investor,  would be reviewable  under the Investment  Canada
Act if it was an investment  to acquire  control of the Company and the value of
the assets of the Company,  as  determined in  accordance  with the  regulations
promulgated  under  the  Investment  Canada  Act was not less  than a  specified
amount,  which for 2004 was any amount in excess of $237 million. A non-Canadian
would acquire  control of the Company for the purposes of the Investment  Canada



                                      -69-
<PAGE>


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

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

TAXATION

MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES

Management  of the  Company  considers  that  the  following  discussion  fairly
describes the material Canadian federal income tax consequences  applicable to a
holder of common stock of the Company who is a resident of the United States and
who is not a resident of Canada and who does not use or hold,  and is not deemed
to use or hold,  his shares of common  stock of the Company in  connection  with
carrying on a business in Canada (a "non-resident shareholder").

This summary is based upon the current provisions of the Income Tax Act (Canada)
(the  "ITA"),  the  regulations  thereunder  (the  "Regulations"),  the  current
publicly  announced  administrative  and assessing  policies of Revenue  Canada,
Taxation and all specific  proposals (the "Tax  Proposals") to amend the ITA and
Regulations  announced  by the  Minister of Finance  (Canada)  prior to the date
hereof.  This  description  is not exhaustive of all possible  Canadian  federal
income tax  consequences  and, except for the Tax Proposals,  does not take into
account or anticipate any changes in law,  whether by legislative,  governmental
or judicial action.

DIVIDENDS

Dividends  paid on the common  stock of the  Company to a  non-resident  will be
subject  to  withholding  tax.  The  Canada-U.S.  Income Tax  Convention  (1980)
provides that the normal 25% withholding tax rate is reduced to 15% on dividends
paid on shares of a  corporation  resident  in Canada  (such as the  Company) to
residents of the United  States,  and also  provides for a further  reduction of
this rate to 5% where the  beneficial  owner of the  dividends is a  corporation
which is a resident of the United  States  which owns at least 10% of the voting
shares of the  corporation  paying  the  dividend.  In the event of the  Company
declaring and paying dividends it would withhold any applicable taxes.

CAPITAL GAINS

In general,  a  non-resident  of Canada is not subject to tax under the ITA with
respect  to a  capital  gain  realized  upon  the  disposition  of a share  of a
corporation  resident in Canada that is listed on a prescribed  stock  exchange.
For purposes of the ITA, the Company is listed on a prescribed  stock  exchange.
Non-residents  of Canada who dispose of shares of the Company will be subject to
income tax in Canada with respect to capital gains if:

         (a) the non-resident holder;
         (b) persons  with whom  the  non-resident  holder  did not deal with at
             arm's length; or
         (c) the  non-resident  holder and  persons  with whom the  non-resident
             holder did not deal with at arm's length,

owned  not less  than 25% of the  issued  shares  of any  class or series of the
Company at any time during the five-year period  preceding the  disposition.  In
the case of a  non-resident  holder  to whom  shares  of the  Company  represent
taxable Canadian  property and who is resident in the United States, no Canadian
taxes will be payable on a capital gain realized on such shares by reason of the
Canada-U.S. Income Tax Convention (1980) (the "Treaty") unless the value of such
shares is derived principally from real property situated in Canada. However, in
such a case, certain transitional relief under the Treaty may be available.


                                      -70-
<PAGE>


MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following  discussion  summarizes the material  United States federal income
tax  consequences,  under current law,  applicable to a U.S.  Holder (as defined
below)  of  the  Company's  common  stock.  This  discussion  does  not  address
consequences peculiar to persons subject to special provisions of federal income
tax law, such as tax-exempt organizations, qualified retirement plans, financial
institutions,  insurance  companies,  real estate investment  trusts,  regulated
investment companies,  broker-dealers,  nonresident alien individuals or foreign
corporations,  and shareholders owning common stock representing 10% of the vote
and value of the Company. In addition, this discussion does not cover any state,
local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code
of 1986,  as amended (the  "Code"),  Treasury  Regulations,  published  Internal
Revenue Service ("IRS") rulings,  published  administrative positions of the IRS
and court decisions that are currently applicable,  any or all of which could be
materially and adversely changed,  possibly on a retroactive basis, at any time.
In addition,  this  discussion  does not consider the  potential  effects,  both
adverse and beneficial of recently proposed legislation which, if enacted, could
be  applied,  possibly  on  a  retroactive  basis,  at  any  time.  Holders  and
prospective holders of the Company's common stock are urged to consult their own
tax advisors about the federal,  state,  local and foreign tax  consequences  of
purchasing, owning and disposing of shares of common stock of the Company.

U.S. HOLDERS

As used herein,  a "U.S.  Holder" is defined as (i) citizens or residents of the
U.S.,  or any state  thereof,  (ii) a  corporation  or other  entity  created or
organized  under the laws of the U.S.,  or any  political  subdivision  thereof,
(iii) an estate  the  income of which is  subject  to U.S.  federal  income  tax
regardless of source or that is otherwise  subject to U.S. federal income tax on
a net  income  basis in  respect  of the  common  stock,  or (iv) a trust  whose
administration  is subject to the primary  supervision of a U.S. court and which
has one or  more  U.S.  fiduciaries  who  have  the  authority  to  control  all
substantial  decisions  of the trust,  whose  ownership  of common  stock is not
effectively  connected  with the  conduct of a trade or  business  in the United
States and  shareholders  who  acquired  their  stock  through  the  exercise of
employee stock options or otherwise as compensation.

DISTRIBUTIONS ON SHARES OF COMMON STOCK

U.S. Holders receiving dividend distributions (including constructive dividends)
with  respect to the  Company's  common  stock are  required to include in gross
income for United  States  federal  income tax purposes the gross amount of such
distributions to the extent that the Company has current or accumulated earnings
and profits,  without  reduction for any Canadian  income tax withheld from such
distributions.  Such  Canadian tax withheld may be credited,  subject to certain
limitations,  against  the  U.S.  Holder's  United  States  federal  income  tax
liability  or,  alternatively,  may be deducted in computing  the U.S.  Holder's
United States federal taxable income by those who itemize deductions.  (See more
detailed  discussion  at  "Foreign  Tax  Credit"  below.)  To  the  extent  that
distributions exceed current or accumulated earnings and profits of the Company,
they  will be  treated  first as a return  of  capital  up to the U.S.  Holder's
adjusted  basis in the  common  stock  and  thereafter  as gain from the sale or
exchange of such shares.  Preferential tax rates for long-term capital gains are
applicable to a U.S. Holder which is an individual,  estate or trust.  There are
currently  no  preferential  tax rates for  long-term  capital  gains for a U.S.
Holder which is a corporation. Dividends paid on the Company's common stock will
not  generally  be eligible for the  dividends  received  deduction  provided to
corporations receiving dividends from certain United States corporations.

FOREIGN TAX CREDIT

A U.S. Holder who pays (or has withheld from distributions)  Canadian income tax
with respect to the ownership of the Company's common stock may be entitled,  at
the option of the U.S.  Holder,  to either a deduction  or a tax credit for such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a
credit  because  a  credit  reduces  United  States  federal  income  taxes on a
dollar-for-dollar  basis, while a deduction merely reduces the taxpayer's income
subject to tax. This election is made on a year-by-year basis and applies to all
foreign  taxes paid by (or  withheld  from) the U.S.  Holder  during  that year.
Subject to certain  limitations,  Canadian  taxes  withheld will be eligible for
credit against the U.S.  Holder's United States federal income taxes.  Under the
Code,  the  limitation  on  foreign  taxes  eligible  for  credit is  calculated
separately  with respect to specific  classes of income.  Dividends  paid by the
Company  generally  will be  either  "passive"  income or  "financial  services"



                                      -71-
<PAGE>


income,  depending on the particular U.S.  Holder's  circumstances.  Foreign tax
credits  allowable  with respect to each class of income  cannot exceed the U.S.
federal income tax otherwise  payable with respect to such class of income.  The
consequences of the separate  limitations  will depend on the nature and sources
of each U.S.  Holder's  income and the  deductions  appropriately  allocated  or
apportioned  thereto.  The  availability  of the  foreign  tax  credit  and  the
application  of the  limitations on the credit are fact specific and holders and
prospective  holders of common stock are urged to consult their own tax advisors
regarding their individual circumstances.

DISPOSITION OF SHARES OF COMMON STOCK

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

OTHER CONSIDERATIONS

The Company has not  determined  whether it meets the  definition  of a "passive
foreign  investment  company" (a "PFIC").  It is unlikely that the Company meets
the  definition  of  a  "foreign  personal  holding  company"  (a  "FPHC")  or a
"controlled foreign corporation" (a "CFC") under current U.S. law.

If more  than  50% of the  voting  power  or value  of the  Company  were  owned
(actually  or  constructively)  by U.S.  Holders  who each  owned  (actually  or
constructively)  10% or more of the voting power of the Company's  common shares
("10%  Shareholders"),  then  the  Company  would  become  a CFC  and  each  10%
Shareholder would be required to include in its taxable income as a constructive
dividend  an amount  equal to its share of certain  undistributed  income of the
Company.  If (1) more  than 50% of the  voting  power or value of the  Company's
common  shares  were  owned  (actually  or  constructively)  by  five  or  fewer
individuals  who are citizens or  residents of the United  States and (2) 60% or
more of the Company's  income consisted of certain  interest,  dividend or other
enumerated  types of income,  then the Company  would be a FPHC.  If the Company
were a FPHC,  then each U.S.  Holder  (regardless of the amount of the Company's
common  shares  owned by such U.S.  Holder)  would be required to include in its
taxable  income  as  a   constructive   dividend  its  share  of  the  Company's
undistributed income of specific types.

If 75% or more of the  Company's  annual gross income has ever  consisted of, or
ever consists of, "passive" income or if 50% or more of the average value of the
Company's  assets in any year has ever consisted of, or ever consists of, assets
that produce, or are held for the production of, such "passive" income, then the
Company would be or would become a PFIC. The Company has not provided assurances
that it has not been and does not expect to become a PFIC.  Please note that the
application of the PFIC provisions of the Code to resource companies is somewhat
unclear.

If the  Company  or any of its  subsidiaries  is deemed  to be a PFIC,  a United
States  holder  of the  Company's  common  shares  would be  required  to pay an
interest  charge  together  with tax  calculated at maximum tax rates on certain
"excess distributions" (defined to include certain dividends from a PFIC and any
gain on the sale of stock of a PFIC) unless such holder made an election  either
to (1)  include  in his or her  taxable  income his or her pro rata share of the
PFIC's ordinary earnings and net capital gains under the Qualified Electing Fund
rules or (2) mark to market his or her Company  common shares at the end of each


                                      -72-
<PAGE>


taxable year as set forth in Section 1296 of the Internal  Revenue Code of 1986,
as amended. The elections require certain conditions be met such as filing on or
before the due date, as extended, for filing the shareholder's income tax return
for the first taxable year to which the election will apply.

INFORMATION REPORTING AND BACKUP WITHHOLDING

U.S. information reporting requirements may apply with respect to the payment of
dividends to U.S. Holders of the Company's  shares.  Under Treasury  regulations
currently in effect,  non-corporate holders may be subject to backup withholding
at a 31% rate with respect to dividends when such holder (1) fails to furnish or
certify a correct  taxpayer  identification  number to the payor in the required
manner,  (2) is  notified  by the IRS that it has failed to report  payments  of
interest or dividends  properly or (3) fails,  under certain  circumstances,  to
certify  that it has been  notified  by the IRS  that it is  subject  to  backup
withholding for failure to report interest and dividend payments.

CONSENTS OF EXPERTS

The Company's  auditors for its financial  statements  for each of the preceding
three years was Moore Stephens Ellis Foster, Chartered Accountants, (now Ernst &
Young ) of 700 West Georgia Street, P.O. Box 10101, Vancouver, British Columbia,
V7Y 1C7,  Canada.  See "Item 1.  Directors,  Senior  Management  and  Advisors -
Auditors." Their audit report for the fiscal years ended December 31, 2004, 2003
and 2002 are  included  with the  related  financial  statements  in this annual
report statement with their consent.

INSPECTION OF DOCUMENTS

Copies of the  documents  referred to in this annual  report may be inspected at
the  Company's  corporate  office  at  Suite  709,  837  West  Hastings  Street,
Vancouver, British Columbia, V6C 3N6, Canada, during normal business hours.

The  Company's  documents  publicly  filed  with  the  Securities  and  Exchange
Commission  may also be viewed and inspected at the SEC's Public  Reference Room
located at 450 Fifth Street,  NW,  Washington,  D.C.  20549.  Copies may also be
obtained from the SEC at prescribed  rates.  Documents may also be viewed on the
SEC's Internet website at www.sec.gov.


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

Not applicable.


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

OPTIONS AND OTHER RIGHTS TO PURCHASE SECURITIES

Stock options to purchase  securities from the Company are currently  granted to
directors,  officers and employees of the Company and independent consultants on
terms and conditions under the Plan, as described in "Item 6. Directors,  Senior
Management  and  Employees  -  Options,  Warrants  and Other  Rights to  Acquire
Securities."

As of  May  31,  2005,  the  Company  had  granted  an  aggregate  of  1,604,500
non-transferable  incentive  stock  options to purchase  shares of the Company's
common stock. See "Item 6. Directors, Senior Management and Employees - Options,
Warrants and Other Rights to Acquire Securities."

The  Company  has  issued  warrants  which  are  exercisable  for  shares of the
Company's common stock. As of May 31, 2005, there were  non-transferable  common
share purchase warrants exercisable for the purchase of 3,886,031 common shares,
as described in "Item 6. Directors,  Senior  Management and Employees - Options,
Warrants and Other Rights to Acquire Securities."



                                      -73-
<PAGE>


All of the  Company's  outstanding  options and warrants are subject to standard
anti-dilution provisions.

As of May 31, 2005, the Company had entered into property  acquisition or option
agreements pursuant to which up to 1,935,000 common shares of the Company may be
issued. See "Item 4. Information on the Company - Property,  Plant and Equipment
-  Principal  Properties  - Mogote  Project"  and ""Item 4.  Information  on the
Company - Property, Plant and Equipment - Other Properties - Esperanza Project."


                                                       PART II

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

Not applicable.


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

Not applicable.


ITEM 15.  CONTROLS AND PROCEDURES.
--------------------------------------------------------------------------------

An evaluation was performed under the supervision and with the  participation of
the Company's  management,  including Mr. Cacos,  the Company's  chief executive
officer,   and  Mr.  Lang,  the  Company's  chief  financial  officer,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures  pursuant to Rules  13a-15(b)  and  15d-15(b) of the  Securities
Exchange  Act of 1934 (the  "Exchange  Act") as of December  31, 2004 Based upon
that evaluation, Messrs. Cacos and Lang, concluded that the Company's disclosure
controls and procedures are effective to ensure that information  required to be
disclosed by the Company in reports that it files or submits  under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in Securities and Exchange Commission rules and forms.

During the fiscal year ended  December  31,  2004,  there were no changes in the
Company's  internal  control  over  financial  reporting  that  have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.


ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.
--------------------------------------------------------------------------------

The Board of Directors  has  determined  that the Company has at least one audit
committee  financial expert,  Mr. Jerry Minni, who serves on the Company's audit
committee.


ITEM 16B. CODE OF ETHICS.
--------------------------------------------------------------------------------

  CODE OF BUSINESS CONDUCT AND ETHICS AND WHISTLE-BLOWER POLICY AND PROCEDURES

INTRODUCTION

Pursuant to  applicable  United  States  securities  laws and the United  States
Securities and Exchange  Commission  ("SEC"),  our Audit Committee has adopted a
Code of  Business  Conduct and Ethics to provide  principles  for the purpose of
promoting:



                                      -74-
<PAGE>


    -    Honest and ethical conduct, including the ethical handling of actual or
         apparent  conflicts  of  interest  between  personal  and  professional
         relationships;
    -    Full, fair, accurate,  timely, and understandable disclosure in reports
         and  documents  that we file with,  or submit to,  the  Securities  and
         Exchange Commission and in other public communications;
    -    Compliance with applicable governmental laws, rules and regulations;
    -    The prompt  internal  reporting of  violations  of our Code of Business
         Conduct and Ethics; and
    -    Accountability  for  adherence  to our  Code of  Business  Conduct  and
         Ethics.

REPORTING RESPONSIBILITY

It is the responsibility of all directors, officers and employees to comply with
the Code and to report  violations or suspected  violations  in accordance  with
this  Whistleblower  Policy.  In our Code of Business  Conduct and Ethics  these
individuals are referred to as "you".

Violations or suspected  violations may be submitted on a confidential  basis by
the  complainant  or may be  submitted  anonymously.  Reports of  violations  or
suspected   violations  will  be  kept  confidential  to  the  extent  possible,
consistent with the need to conduct an adequate investigation.

NO RETALIATION

No director,  officer or employee  who in good faith  reports a violation of the
Code shall suffer harassment,  retaliation or adverse employment consequence. An
employee  who  retaliates  against  someone who has reported a violation in good
faith is subject to discipline up to and including  termination  of  employment.
This  Whistleblower  Policy is intended to encourage  and enable  employees  and
others to raise  serious  concerns  within the  Corporation  rather than seeking
resolution outside the Corporation.

REPORTING VIOLATIONS

The Code  addresses  the  Corporation's  open  door  policy  and  suggests  that
employees  share their  questions,  concerns,  suggestions  or  complaints  with
someone who can address them properly.  In most cases, an employee's  supervisor
is in the best position to address an area of concern.  However,  if you are not
comfortable  speaking with your  supervisor  or you are not satisfied  with your
supervisor's  response,  you are  encouraged  to speak with anyone in management
whom you are comfortable in approaching.

Supervisors and managers are required to report suspected violations of the Code
of Conduct to the Company's  Compliance Officer,  who has specific and exclusive
responsibility  to investigate all reported  violations.  For suspected fraud or
securities law violations,  or when you are not satisfied or uncomfortable  with
following the  Corporation's  open door policy,  individuals  should contact the
Corporation's Compliance Officer directly.

COMPLIANCE OFFICER

The Corporation's Compliance Officer is appointed by the board of directors, and
is  responsible  for  investigating  and resolving all reported  complaints  and
allegations  concerning  violations  of the Code and, at his  discretion,  shall
advise the President and CEO, the CFO and/or the Audit Committee. The Compliance
Officer has direct  access to the Audit  Committee of the board of directors and
is  required to report to the  Committee  at least  annually  on his  compliance
activity.

In order to protect  your  anonymity,  and to ensure  proper  record  keeping as
required by regulations,  our Company uses an external reporting agency which is
the sole link to the Compliance Officer.



                                      -75-
<PAGE>

THE   COMPANY'S    COMPLIANCE    OFFICER   CAN   BE   REACHED   VIA   EMAIL   AT
GROSSOGROUP@WHISTLEBLOWERSECURITY.COM,  VIA TELEPHONE AT  1-866-921-6714  OR VIA
THE INTERNET LOCATED AT HTTP://WWW.WHISTLEBLOWERSECURITY.COM.

The  Compliance  Officer will notify the sender and  acknowledge  receipt of the
reported violation or suspected violation within five business days. All reports
will be promptly investigated and appropriate corrective action will be taken if
warranted by the investigation.

YOUR RESPONSIBILITIES

    1.        You shall act with  honesty and  integrity in the  performance  of
              your duties,  shall comply with all laws, rules and regulations of
              federal, provincial, state and local governments and other private
              and public  regulatory  agencies  that  affect the  conduct of our
              business and our financial reporting.

    2.        You  are  responsible  for  full,  fair,   accurate,   timely  and
              understandable  disclosure  in the reports and  documents  that we
              file with,  or submit  to, any  Canadian  Exchange  or  Securities
              Commission and the  Securities and Exchange  Commission and in our
              other  public   communications.   Accordingly,   each  of  you  is
              responsible  for  promptly   bringing  to  the  attention  of  The
              Compliance  Officer  any  material  information  of which  you may
              become aware that affects our disclosure in our public filings.

    3.        You  shall  promptly  bring  to the  attention  of The  Compliance
              Officer  any  information  you may have  concerning  evidence of a
              material  violation  of the  securities  or other  laws,  rules or
              regulations  applicable to us and the operation of our business or
              any  violation  of this Code of Business  Conduct  and Ethics.  In
              either event,  any reporting is confidential and you are protected
              from retaliation.

    4.        You  shall  promptly  bring  to the  attention  of The  Compliance
              Officer any  information  you may have  concerning (a) significant
              deficiencies in the design or operation of internal controls which
              could adversely affect our ability to record,  process,  summarize
              and  report  financial  data  of (b)  any  fraud,  whether  or not
              material,  that involves  management or other employees who have a
              significant  role  in  our  financial  reporting,  disclosures  or
              internal controls.

    5.        You must avoid any  personal  activity or  association  that could
              appear to influence  your  judgment or affect our best  interests.
              You shall  promptly  bring to the attention of your manager or the
              Compliance  Officer any  information  you may have  concerning any
              actual or apparent  conflicts  of interest  between  personal  and
              professional  relationships,  involving  any  management  or other
              employees who have a significant role in our financial  reporting,
              disclosures or internal controls.

VIOLATIONS AND WAIVERS

The Compliance Officer determines if a special meeting of the Audit Committee is
required and shall provide information about the complaint to all members of the
Audit  Committee at its next regularly  scheduled  meeting.  The Chairman of the
Audit Committee shall advise the Board of Directors in writing of all violations
of this Code of Business Conduct and Ethics reported to him.

Anyone filing a complaint  concerning a violation or suspected  violation of the
Code must be acting in good faith and have reasonable  grounds for believing the
information  disclosed  indicates a violation of the Code. Any allegations  that
prove not to be  substantiated  and which prove to have been made maliciously or
knowingly to be false will be viewed as a serious disciplinary offense.

 No waivers of any provision of this Code of Business  Conduct and Ethics may be
made except by the Audit Committee. Only the Audit Committee may amend this Code
of Business  Conduct and Ethics.  Any waiver or  amendment  shall be reported as
required by law or regulation.


                                      -76-
<PAGE>


ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.
--------------------------------------------------------------------------------

AUDIT FEES

For the fiscal year ended December 31, 2004, the Company's principal  accountant
is  expected  to bill  approximately  $15,700,  and for the  fiscal  year  ended
December 31, 2003,  the  Company's  principal  accountant  billed  approximately
$7,100 for the audit of the Company's  annual  financial  statements or services
that are normally  provided by the  accountant in connection  with statutory and
regulatory filings or engagements for those fiscal years.

AUDIT RELATED AND TAX FEES

The Company's principal accountant billed nil amounts for the fiscal years ended
December  31,  2004 and 2003,  respectively,  for  assurance  , tax and  related
services that were reasonably  related to the performance of the audit or review
of the Company's  financial  statements  outside of those fees  disclosed  above
under "Audit Fees"

Other Accounting Fees

The Company's  principal  accountant  billed $3,735 and nil for the fiscal years
ended December 31, 2004 and 2003,  respectively,  for other accounting  services
performed.

The above listed services were approved by the Company's audit committee.


ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
--------------------------------------------------------------------------------

Not applicable.


ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
           PURCHASERS.
--------------------------------------------------------------------------------

Not applicable.


                                    PART III


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

                                                                            Page

Audited Financial Statements for the Years Ended
December 31, 2004,  2003 and 2002                                            F-1


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

Not applicable.





                                      -77-
<PAGE>



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


    EXHIBIT NUMBER      DESCRIPTION
    --------------      --------------------------------------------------------

         1.1            Articles (1)
         1.2            Memorandum and Certificate of Incorporation (1)
         1.3            Certificate of Change of Name and Altered Memorandum (1)
         1.4            Notice of Articles (1)
         4.1            Letter Agreement dated October 1, 2002 made between the
                        Company and IMA Exploration Inc. (1)
         4.2            Letter of Intent made between the Company, IMA
                        Exploration Inc. and Inversiones Mineras Argentinas S.A.
                        dated March 6, 2003 (1)
         4.3            Property Purchase Agreement made between the Company,
                        IMA Exploration Inc. and Inversiones Mineras Argentinas
                        S.A. dated March 6, 2003 (1)
         4.4            Stock Option Plan dated March 6, 2003 (1)
         4.5            Stock Option Plan dated April 13, 2004 (1)
         4.6            Escrow Agreement among the Company, Computershare Trust
                        Company of Canada and the Principals of the Company
                        dated April 30, 2003 (1)
         4.7            Agency Agreement between the Company and Canaccord
                        Capital Corporation dated July 31, 2003 (1)
         4.8            Amending Letter Agreement made between the Company, IMA
                        Exploration Inc. and Inversiones Mineras Argentinas S.A.
                        dated September 30, 2003 (1)
         4.9            Agreement with Nikolaos Cacos dated January 2, 2004 (1)
         4.10           Consulting Agreement with David Terry dated February 16,
                        2004 (1)
         4.11           Engagement Agreement between the Company and Canaccord
                        Capital Corporation dated March 8, 2004 (1)
         4.12           Amending Letter Agreement made between the Company,
                        IMA Exploration Inc. and Inversiones Mineras Argentinas
                        S.A. dated April 8, 2004 (1)
         4.13           Amendment to Consulting Agreement with David Terry dated
                        June 29, 2004 (1)
         4.14           Assignment and Assumption Agreement dated June 28, 2004
                        among IMA Exploration Inc., Inversiones Mineras
                        Argentinas S.A., Golden Arrow Resources Corporation,
                        Inversiones Mineras Australes S.A. and the Company
                        (relating to the Argentinean properties) (1)
         4.15           Assignment and Assumption Agreement dated June 28, 2004
                        among IMA Exploration Inc., Inversiones Mineras
                        Argentinas S.A., Golden Arrow Resources Corporation,
                        Inversiones Mineras Australes S.A. and the Company
                        (relating to the Mogote Property) (1)
         4.16           Letter Agreement dated August 24, 2004 between the
                        Company and Arcturus Ventures Inc. (1)
         4.17           Acknowledgement between the Company and Steven K. Jones
                        dated December 31, 2004(2)
         4.18           Agency Letter Agreement dated February 18, 2005 between
                        the Company and Canaccord Capital Corporation(2)
         4.19           Form of Agreement with the Grosso Group Management
                        Ltd.(2)
         8.1            List of Subsidiaries(2)
         12.1           Certification of Nikolaos Cacos Pursuant to
                        Rule 13a-14(a)
         12.2           Certification of Arthur Lang Pursuant to Rule 13a-14(a)
         13.1           Certification of Nikolaos Cacos Pursuant to 18 U.S.C.
                        Section 1350
         13.2           Certification of Arthur Lang Pursuant to 18 U.S.C.
                        Section 1350

                                      -78-

<PAGE>


    EXHIBIT NUMBER      DESCRIPTION
    --------------      --------------------------------------------------------

         15.1           Consent of Moore Stephens Ellis Foster Ltd., Chartered
                        Accountants(2)
         15.2           Consent of Moore Stephens Ellis Foster Ltd., Chartered
                        Accountants

    (1)  Incorporated by reference to the exhibits to the Company's registration
         statement  on  Form  20-F  filed  with  the   Securities  and  Exchange
         Commission on October 28, 2004, file number 0-51005.
    (2)  Incorporated by reference to the exhibits to the Company's registration
         statement  on  Form  20-F  filed  with  the   Securities  and  Exchange
         Commission on April 28, 2005, file number 0-51005.



                                      -79-
<PAGE>



                                   SIGNATURES


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


                                          AMERA RESOURCES CORPORATION



Dated:   MAY 31, 2005                     /s/  NIKOLAOS CACOS
         ------------                     --------------------------------------
                                          Nikolaos Cacos, President and Director



                                      -80-
<PAGE>








                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)









                                      F-1
<PAGE>







MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The  accompanying  consolidated  financial  statements  of the Company have been
prepared by  management  in  accordance  with  accounting  principles  generally
accepted in Canada and reconciled to accounting principles generally accepted in
the  United  States  as set out in Note  11,  and  contain  estimates  based  on
management's  judgement.  Management maintains an appropriate system of internal
controls to provide  reasonable  assurance  that  transactions  are  authorized,
assets safeguarded, and proper records maintained.

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

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



/s/ Nikolaos Cacos                                      /s/ Art Lang
Nikolaos Cacos                                          Art Lang
President                                               Chief Financial Officer






                                      F-2

<PAGE>

MOORE STEPHENS
ELLIS FOSTER LTD.
CHARTERED ACCOUNTANTS

1650 West 1st Avenue
Vancouver, BC  Canada   V6J 1G1
Telephone:  (604) 737-8117  Facsimile: (604) 714-5916
Website:   www.ellisfoster.com
--------------------------------------------------------------------------------




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE SHAREHOLDERS OF

AMERA RESOURCES CORPORATION
(An Exploration Stage Company)

We have audited the consolidated  balance sheets of Amera Resources  Corporation
as at December  31, 2004 and 2003 and the  consolidated  statements  of loss and
deficit and cash flows for the years ended  December  31,  2004,  2003 and 2002.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

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

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

Canadian generally accepted  accounting  principles vary in certain  significant
respects from  accounting  principles  generally  accepted in the United States.
Application  of accounting  principles  generally  accepted in the United States
would have  affected the  company's  financial  position  and its  shareholders'
equity as at December 31, 2004 and 2003 and its results of  operations  for each
of the years in the  three-year  period ended  December 31, 2004,  to the extent
summarized in Note 9 to the consolidated financial statements.




                                           /s MOORE STEPHENS ELLIS FOSTER LTD.

Vancouver, Canada                                Chartered Accountants
April 22, 2005



--------------------------------------------------------------------------------
MSEF   A partnership of incorporated professionals
An independently owned and operated member of Moore Stephens North America Inc.,
A Member of Moore Stephens International Limited
-  members in principal cities throughout the world

                                      F-3
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                        AS AT DECEMBER 31, 2004 AND 2003
                         (Expressed in Canadian Dollars)



                                                       2004            2003
                                                         $               $
                                                   ----------------------------

                                     ASSETS

CURRENT ASSETS

Cash and cash equivalents                             1,679,232       1,117,845
Amounts receivable and prepaids                          57,335          18,779
                                                   ------------    ------------
                                                      1,736,567       1,136,624

MINERAL PROPERTIES AND DEFERRED COSTS (Note 3)        1,915,221         684,259

EQUIPMENT (Net of amortization of $138)                   2,796               -
                                                   ------------    ------------
                                                      3,654,584       1,820,883
                                                   ============    ============

                                   LIABILITIES

CURRENT LIABILITIES

Accounts payable and accrued liabilities                 50,447         115,352
                                                   ------------    ------------

                              SHAREHOLDERS' EQUITY


SHARE CAPITAL (Note 4)                                4,527,878       1,228,395

SHARE SUBSCRIPTIONS (Note 4)                                  -         658,350

CONTRIBUTED SURPLUS                                     383,805         252,000

DEFICIT                                              (1,307,546)       (433,214)
                                                   ------------    ------------
                                                      3,604,137       1,705,531
                                                   ------------    ------------
                                                      3,654,584       1,820,883
                                                   ============    ============

NATURE OF OPERATIONS (Note 1)

SUBSEQUENT EVENTS (Note 10)

APPROVED BY THE DIRECTORS

/s/ Nikolas Cacos     , Director
----------------------

/s/ Art Lang          , Director
----------------------


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


                                      F-4
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)



                                       2004            2003            2002
                                         $               $               $



EXPENSES

Accounting and audit                     26,080          22,341             375
Advertising                              62,467          18,505               -
Bank charges                              5,346               -               -
Corporate development                    79,370               -               -
Foreign exchange                         25,104             896               -
General exploration                      18,318               -               -
Investor relations                       80,503           7,500               -
Legal                                    63,058           5,302          20,016
Management fees                          72,400          25,000               -
Office and sundry                        15,124          10,548           1,723
Printing                                 21,866               -               -
Professional fees                        99,320          32,924               -
Regulatory fees                          11,773           5,225               -
Rent                                     29,511          20,000           4,500
Salaries                                 65,874               -               -
Shareholder costs                         9,344           2,175               -
Stock based compensation                131,805         252,000               -
Telephone                                 8,837               -               -
Transfer agent fees                      15,485           4,664               -
Travel                                   47,018           2,168               -
Interest income                         (14,271)         (3,492)           (356)
                                   ------------    ------------    ------------
LOSS FOR THE YEAR                      (874,332)       (405,756)        (26,258)

DEFICIT - BEGINNING OF YEAR            (433,214)        (27,458)         (1,200)
                                   ------------    ------------    ------------
DEFICIT - END OF YEAR                (1,307,546)       (433,214)        (27,458)
                                   ============    ============    ============



BASIC AND DILUTED LOSS PER SHARE         $(0.07)         $(0.08)         $(1.25)
                                   ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING       13,192,736       4,848,716          20,974
                                   ============    ============    ============


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

                                      F-5
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)


<TABLE>
<CAPTION>

                                                       2004            2003            2002
                                                         $               $               $
<S>                                               <C>             <C>             <C>

CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Loss for the year                                      (874,332)       (405,756)        (26,258)
Item not affecting cash
   Stock based compensation                             131,805         252,000               -
                                                   ------------    ------------    ------------
                                                       (742,527)       (153,756)        (26,258)

Increase in amounts receivable and prepaids             (38,556)        (18,779)               -
Increase in accounts payable and accrued
   liabilities                                          (64,905)         91,925          22,227
                                                   ------------    ------------    ------------
                                                       (845,988)        (80,610)         (4,031)
                                                   ------------    ------------    ------------
FINANCING ACTIVITIES

Issuance of common shares                             2,851,391         908,649          79,999
Issuance of special warrants                                  -               -         135,250
Share subscriptions received                                  -         658,350               -
Share issuance costs                                   (210,257)       (151,754)        (13,750)
                                                   ------------  --------------    ------------
                                                      2,641,134       1,415,245         201,499
                                                   ------------  --------------    ------------
INVESTING ACTIVITIES

Expenditures on mineral properties
   and deferred costs                                (1,230,962)       (414,259)              -
Purchase of equipment                                    (2,797)              -               -
                                                   ------------    ------------    ------------
                                                     (1,233,759)       (414,259)              -
                                                   ------------    ------------    ------------
INCREASE IN CASH DURING THE YEAR                        561,387         920,376         197,468
CASH AND CASH EQUIVALENTS
     - BEGINNING OF YEAR                              1,117,845         197,469               1
                                                   ------------    ------------    ------------
CASH AND CASH EQUIVALENTS
     - END OF YEAR                                    1,679,232       1,117,845         197,469
                                                   ============    ============    ============

CASH AND CASH EQUIVALENTS COMPRISE OF:

Cash                                                    679,232       1,117,845         197,469
Term Deposit                                          1,000,000               -               -
                                                   ------------    ------------    ------------
                                                      1,679,232       1,117,845         197,469
                                                   ============    ============    ============
</TABLE>


SUPPLEMENTAL CASH FLOW INFORMATION (Note 8)

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

                                      F-6

<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
     CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS AND DEFERRED COSTS
                      FOR THE YEAR ENDED DECEMBER 31, 2004
                         (Expressed in Canadian Dollars)


<TABLE>
<CAPTION>

                                            ARGENTINA                  PERU            USA
                                   ----------------------------    ------------    ------------
                                      MOGOTE          CHUBUT         ESPERANZA        WALKER
                                     PROPERTY       PROPERTIES       PROPERTY          LAKE           TOTAL
                                         $               $               $               $               $
<S>                               <C>             <C>             <C>             <C>             <C>

BALANCE - DECEMBER 31, 2003             459,259         225,000               -               -         684,259
                                   ------------    ------------    ------------    ------------    ------------
EXPENDITURES DURING THE YEAR

     Acquisition costs                  208,438               -         102,997          77,304         388,739
     Access                              60,457               -               -               -          60,457
     Assays                              28,326               -               -               -          28,326
     Contractors                        304,115               -          11,627               -         315,742
     Drilling                            73,581               -               -               -          73,581
     Fuel                                21,907               -           2,290               -          24,197
     Office and other                   146,898               -          13,872               -         160,770
     Rental                              17,723               -           7,389               -          25,112
     Supplies                            46,570               -           3,970               -          50,450
     Surveying                            1,769               -               -               -           1,769
     Travel                               6,285               -           1,868               -           8,153
     IVA Tax                             93,576               -               -               -          93,576
                                   ------------    ------------    ------------    ------------    ------------
                                      1,009,645               -         144,013          77,304       1,230,962
                                   ------------    ------------    ------------    ------------    ------------
BALANCE - DECEMBER 31, 2004           1,468,904         225,000         144,013          77,304       1,915,221
                                   ============    ============    ============    ============    ============

</TABLE>



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

                                      F-7
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
     CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS AND DEFERRED COSTS
                      FOR THE YEAR ENDED DECEMBER 31, 2003
                         (Expressed in Canadian Dollars)




                                            ARGENTINA
                                   ----------------------------
                                      MOGOTE          CHUBUT
                                     PROPERTY       PROPERTIES         TOTAL
                                         $               $               $

BALANCE - DECEMBER 31, 2002                   -               -               -
                                   ------------    ------------    ------------
EXPENDITURES DURING THE YEAR

     Access contractors                  27,761               -          27,761
     Acquisition costs                  282,042         225,000         507,042
     Assays                               3,087               -           3,087
     Drilling                                 -               -               -
     Field supplies                       2,990               -           2,990
     Geological                          54,234               -          54,234
     Geology supplies                    20,536               -          20,356
     Geophysics                          30,107               -          30,107
     Other                                3,320                           3,320
     Project management                  12,826               -          12,826
     Surveying                            1,767               -           1,767
     Vehicles                             8,140               -           8,140
     IVA Tax                             12,449               -          12,449
                                   ------------    ------------    ------------
BALANCE - DECEMBER 31, 2003             459,259         225,000         684,259
                                   ============    ============    ============




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


                                      F-8
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)



1.       NATURE OF OPERATIONS

         The Company was incorporated  under the Company Act of British Columbia
         on April 11, 2000, as XS Capital  Corp.  On March 4, 2003,  the Company
         changed its name to Amera Resources  Corporation.  On December 2, 2003,
         the Company's  common shares were listed for trading on the TSX Venture
         Exchange (the "TSXV") as a junior mineral exploration company.

         The Company is engaged in the  acquisition  and exploration of resource
         properties  in the  Americas.  The Company  presently  has no proven or
         probable  reserves and on the basis of  information to date, it has not
         yet   determined   whether  these   properties   contain   economically
         recoverable ore reserves.  Consequently the Company considers itself to
         be an exploration stage company.  The amounts shown as mineral property
         interests  represent  costs  incurred to date,  less amounts  amortized
         and/or written off, and do not necessarily  represent present or future
         values.  The  underlying  value of the mineral  properties and deferred
         costs  is  entirely   dependent  on  the   existence  of   economically
         recoverable  reserves,  securing and  maintaining  title and beneficial
         interest  in the  properties,  the ability of the Company to obtain the
         necessary  financing to advance the properties  beyond the  exploration
         stage,  and  future  profitability  of  the  properties.   The  Company
         considers  that  it  has  adequate   resources  to  maintain  its  core
         activities and planned exploration programs for the next fiscal year.


2.       SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         These   consolidated   financial   statements  have  been  prepared  in
         accordance  with  Canadian  generally  accepted  accounting  principles
         ("Canadian GAAP"). The significant measurement difference between those
         principles  and  those  that  would  be  applied  under  United  States
         generally accepted accounting principles ("US GAAP") as they affect the
         Company are disclosed in Note 9.

         USE OF ESTIMATES

         The  preparation  of financial  statements in conformity  with Canadian
         GAAP requires  management to make estimates and assumptions that affect
         the  reported  amount of  assets  and  liabilities  and  disclosure  of
         contingent  assets  and  liabilities  at  the  date  of  the  financial
         statements and the reported  amount of revenues and expenses during the
         period.  Significant  areas  requiring the use of management  estimates
         relate to the determination of environmental obligations and impairment
         of mineral  properties  and deferred  costs.  Actual results may differ
         from these estimates.

         PRINCIPALS OF CONSOLIDATION

         These  consolidated  financial  statements  include the accounts of the
         Company and its  wholly-owned  subsidiary,  Recoursos  de los Andes,  a
         Peruvian  company.  The Company  operates in  Argentina as a registered
         branch.  All inter-company  balances and transactions are eliminated on
         consolidation.

         CASH AND CASH EQUIVALENTS

         Cash and cash  equivalents  include  cash  and  short-term  investments
         maturing within 90 days of initial investment.



                                      F-9
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

2.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         MINERAL PROPERTIES AND DEFERRED COSTS

         Direct costs  related to the  acquisition  and  exploration  of mineral
         properties  held  or  controlled  by the  Company  are  deferred  on an
         individual  property  basis  until  the  viability  of  a  property  is
         determined.  Administration  costs and  general  exploration  costs are
         expensed  as  incurred.   When  a  property  is  placed  in  commercial
         production,    deferred    costs   will   be    depleted    using   the
         units-of-production  method.  Management  of the  Company  periodically
         reviews  the  recoverability  of the  capitalized  mineral  properties.
         Management takes into consideration various information including,  but
         not limited to,  results of exploration  activities  conducted to date,
         estimated  future  metal  prices,  and reports and  opinions of outside
         geologists, mine engineers and consultants.  When it is determined that
         a project or property will be abandoned then costs are written-off,  or
         if its  carrying  value has been  impaired,  then the costs are written
         down to fair value.

         The  Company  accounts  for  foreign  value added taxes paid as part of
         mineral properties and deferred costs. The recovery of these taxes will
         commence on the  beginning  of foreign  commercial  operations.  Should
         these  amounts be  recovered  they would be treated as a  reduction  in
         carrying costs of mineral properties and deferred costs.

         Although  the  Company  has  taken  steps to  verify  title to  mineral
         properties  in  which  it  has an  interest,  these  procedures  do not
         guarantee the Company's title.  Such properties may be subject to prior
         agreements  or  transfers  and  title  may be  affected  by  undetected
         defects.

         From time to time,  the Company  acquires  or  disposes  of  properties
         pursuant to the terms of option  agreements.  Options  are  exercisable
         entirely  at the  discretion  of the  optionee  and,  accordingly,  are
         recorded as mineral  property costs or recoveries when the payments are
         made or received.

         EQUIPMENT

         Equipment is recorded at cost less accumulated  depreciation calculated
         using the  straight-line  method over their  estimated  useful lives of
         five years.

         ASSET RETIREMENT OBLIGATIONS

         The fair value of a liability  for an asset  retirement  obligation  is
         recognized  when a reasonable  estimate of fair value can be made.  The
         asset  retirement   obligation  is  recorded  as  a  liability  with  a
         corresponding increase to the carrying amount of the related long-lived
         asset. Subsequently, the asset retirement cost is allocated to expenses
         using a  systematic  and  rational  method and is  adjusted  to reflect
         period-to-period changes in the liability resulting from the passage of
         time and  revisions  to  either  timing or the  amount of the  original
         estimate of the  undiscounted  cash flow.  As at December  31, 2004 the
         Company does not have any asset retirement obligations.

         LONG-LIVED ASSETS IMPAIRMENT

         Long-lived assets are reviewed for impairment when events or changes in
         circumstances   suggest  their  carrying  value  has  become  impaired.
         Management  considers  assets  to be  impaired  if the  carrying  value
         exceeds the estimated undiscounted future cash flows expected to result
         from the use of the asset and its eventual  disposition.  If impairment
         is deemed to exist, the assets will be written down to fair value. Fair
         value is generally determined using a discounted cash flow analysis.


                                      F-10
<PAGE>




                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

2.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         TRANSLATION OF FOREIGN CURRENCIES

         The Company's  foreign  operations  are  integrated  and are translated
         using the temporal method.  Under this method,  the Company  translates
         monetary  assets and liabilities  denominated in foreign  currencies at
         period-end rates. Non-monetary assets and liabilities are translated at
         historical rates. Revenues and expenses are translated at average rates
         in effect during the period except for  depreciation  and  amortization
         which are translated at historical rates. The resulting gains or losses
         are reflected in operating results in the period of translation.

         FAIR VALUES OF FINANCIAL INSTRUMENTS

         The fair value of the  Company's  financial  instruments  consisting of
         cash and cash equivalents,  amounts receivable and accounts payable and
         accrued  liabilities  approximate  their  carrying  values  due  to the
         short-term mature of those instruments.

         CONCENTRATION OF CREDIT RISK

         Financial  instruments  that  potentially  subject  the  Company  to  a
         significant  concentration of credit risk consist primarily of cash and
         cash  equivalents  and  amounts  receivable.  The  Company  limits  its
         exposure to credit loss by placing its cash and  cash-equivalents  with
         major financial institutions.

         INCOME TAXES

         The Company uses the liability  method of accounting  for future income
         taxes.  Under  this  method  of  tax  allocation,   future  income  tax
         liabilities   and  assets  are   recognized   for  the   estimated  tax
         consequences  attributable to differences  between the amounts reported
         in the  consolidated  financial  statements  and their  respective  tax
         bases, using substantively enacted tax rates and laws that are expected
         to be in effect in the periods in which the future income tax assets or
         liabilities  are  expected to be settled or  realized.  The effect of a
         change in income tax rates on future income tax  liabilities and assets
         is recognized in income in the period that the change occurs. Potential
         future income tax assets are not recognized, as they are not considered
         likely to be realized.

         LOSS PER SHARE
         Loss per share is calculated on the weighted  average  number of common
         shares issued and outstanding  during the year. The effect of potential
         issuances of shares under options and warrants  would be  anti-dilutive
         and therefore basic earnings and diluted losses per share are the same.

         STOCK BASED COMPENSATION

         Stock-based  compensation  is accounted for at fair value as determined
         by the  Black-Scholes  option  pricing  model  using  amounts  that are
         believed to  approximate  the  volatility  of the trading  price of the
         Company's   stock,   the  expected   lives  of  awards  of  stock-based
         compensation,  the fair value of the Company's  stock and the risk-free
         interest  rate.  The  estimated  fair  value of awards  of  stock-based
         compensation  is charged to expense  as awards  vest,  with  offsetting
         amounts recognized as contributed surplus.

         COMPARATIVE FIGURES

         Certain of the 2003  fiscal  year  figures  have been  reclassified  to
         conform with the presentation used in fiscal 2004.



                                      F-11
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)


3.       MINERAL PROPERTY INTERESTS AND DEFERRED COSTS
<TABLE>
<CAPTION>

                                                       2004                                            2003
                                   --------------------------------------------    --------------------------------------------
                                    ACQUISITION     EXPLORATION                     ACQUISITION     EXPLORATION
                                       COSTS       EXPENDITURES        TOTAL           COSTS       EXPENDITURES        TOTAL
                                        $                $               $               $               $               $
        <S>                       <C>             <C>             <C>             <C>             <C>             <C>

         Argentina
             Mogote Property            667,697         707,631       1,375,328         282,042         164,768         446,810
             Chubut Properties          225,000               -         225,000         225,000               -         225,000
         Peru
             Esperanza Property         102,997          41,016         144,013               -               -               -
         USA
             Walker Lake                 77,304               -          77,304               -               -               -
                                   ------------    ------------    ------------    ------------    ------------    ------------
                                      1,072,998         748,647       1,821,645         507,042         164,768         671,810
         Foreign value added tax              -          93,576          93,576               -          12,449          12,449
                                   ------------    ------------    ------------    ------------    ------------    ------------
                                      1,072,998         842,223       1,915,221         507,042         177,217         684,259
                                   ============    ============    ============    ============    ============    ============
</TABLE>

         a)       The  Company  and IMA  Exploration  Inc.  ("IMA"),  a publicly
                  traded  company with common  management  and  directors,  have
                  entered  into  agreements  whereby  the  Company  optioned  or
                  acquired interests in various mineral  concessions  located in
                  Argentina.  On  July  7,  2004,  IMA  completed  its  plan  of
                  arrangement in which the following agreements were transferred
                  into  a  separate  public  company,   Golden  Arrow  Resources
                  Corporation ("Golden Arrow"), as follows:

                  i)       to earn a 51% interest in eight mineral  concessions,
                           comprising  8,009  hectares (the "Mogote  Property"),
                           located in San Juan Province,  Argentina, the Company
                           must  issue a total of  1,650,000  common  shares and
                           conduct a minimum of US $1.25 million of  exploration
                           expenditures,  including work programs and underlying
                           option payments, as follows:

                              SHARES TO          EXPLORATION
                              BE ISSUED          EXPENDITURES      DATE
                                                     US$

                                100,000                  -       Issued in 2003
                                100,000            250,000       Issued in 2004
                                250,000            300,000       July 1, 2005
                                300,000            300,000       July 1, 2006
                                900,000            400,000       July 1, 2007
                              ---------          ---------
                              1,650,000          1,250,000
                              =========          =========

                           On April 8, 2004,  the Company and IMA entered into a
                           further agreement on the Mogote Property. The Company
                           can earn an additional 24% interest,  for a total 75%
                           interest,  after earning the initial 51% interest, by
                           issuing 300,000 common shares (issued) and conducting
                           an   additional   US  $3   million   of   exploration
                           expenditures, as follows:



                                      F-12
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

3.       MINERAL PROPERTY INTERESTS AND DEFERRED COSTS (continued)

                                    US $           DATE

                                 1,000,000         May 30, 2005
                                 1,000,000         May 30, 2006
                                 1,000,000         May 30, 2007
                                 ---------
                                 3,000,000
                                 =========

                           The final underlying option payment of US $110,000 is
                           due on June 6, 2005.

                  ii)      purchased a 100% undivided  interest in three mineral
                           properties  (the  "Chubut  Properties"),   comprising
                           24,280   hectares,   located   in  Chubut   Province,
                           Argentina,  by issuing  500,000  common  shares for a
                           fair value of  $225,000.  In  addition,  in the event
                           that  a   decision   is  made  to  place  the  Chubut
                           Properties  into commercial  production,  the Company
                           will pay a bonus of US $250,000  and a 3% net smelter
                           returns royalty.

         b)       The Company  entered into an option  agreement  with  Arcturus
                  Ventures  Inc.  ("Arcturus")  whereby it may earn up to an 80%
                  undivided interest in the Esperanza Property  comprising 3,000
                  hectares  located in northern  Arequipa  Province,  Peru.  The
                  Company  may earn an initial  55%  interest  in the  Esperanza
                  Property  by paying  $40,000  to  Arcturus  (paid),  incurring
                  $750,000  in work  expenditures  over three  years and issuing
                  250,000 common shares (25,000 shares issued).  The Company can
                  earn an  additional  25%  interest  by  preparing  a  bankable
                  feasibility study on the Esperanza Property within three years
                  and issuing a further 260,000 shares.

         c)       As  part  of  the  Company's  ongoing  generative  exploration
                  program,  funds have been expended to support a reconnaissance
                  program of evaluating  epithermal  gold targets in prospective
                  mineral belts in Nevada, USA. The Company has staked two claim
                  blocks in the Roysten  Hills of west central  Nevada.  The 478
                  hectare Roy Claim block and the 227 hectare  Hills Claim block
                  are  located 45  Kilometres  northwest  of  Tonapah  along the
                  northern margin of the Walker Lane epithermal belt.




                                      F-13
<PAGE>

                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)


4.       SHARE CAPITAL

         Authorized:  unlimited common shares without par value
<TABLE>
<CAPTION>

         Issued:                                               2004                            2003
                                                   ----------------------------    ----------------------------
                                                      SHARES          AMOUNT          SHARES          AMOUNT
        <S>                                       <C>             <C>             <C>             <C>
                                                                         $                               $

         Balance, beginning of year                   9,086,832       1,228,395       4,000,000          80,000
                                                   ------------    ------------    ------------    ------------
         Issued during the year
         For cash
              - initial public offering                       -               -       1,500,000         675,000
              - private placements                    4,007,000       2,891,350               -               -
              - special warrants                              -               -       2,876,832         363,900
              - exercise of warrants                    288,750         143,650          10,000           5,000
              - greenshoe option                        225,000         101,250               -               -
         For agent's fees                                55,300          44,240         100,000          45,000
         For mineral properties                         425,000         329,250         600,000         270,000
                                                   ------------    ------------    ------------    ------------
                                                      5,001,050       3,509,740       5,086,832       1,358,900
                                                   ------------    ------------    ------------    ------------
         Less:  share issue costs                             -       (210,257)               -       (210,505)
                                                   ------------    ------------    ------------    ------------
                                                      5,001,050       3,299,483       5,086,832       1,148,395
                                                   ------------    ------------    ------------    ------------
         Balance, end of year                        14,087,882       4,527,878       9,086,832       1,228,395
                                                   ============    ============    ============    ============
</TABLE>

         (a)      During  the  year  ended   December  31,  2004,   the  Company
                  completed:

                  i)       a private  placement  financing of 1,257,000 units at
                           $0.55 per unit, for gross proceeds of $691,350.  Each
                           unit    comprised    one   common   share   and   one
                           non-transferable share purchase warrant. Each warrant
                           entitles the holder to purchase one additional common
                           share  at a price  of $0.67  per  share on or  before
                           January 20, 2005.  As at December 31, 2003,  $658,350
                           had been  received  by the  Company on account of the
                           private  placement  and had  been  recorded  as share
                           subscriptions received;

                  ii)      a private  placement  financing of 2,750,000 units at
                           $0.80 per unit,  for gross  proceeds  of  $2,200,000.
                           Each  unit   comprised   one  common  share  and  one
                           non-transferable share purchase warrant. Each warrant
                           entitles the holder to purchase one additional common
                           share at a price of $1.00  per  share for a period of
                           one year  from  date of issue  and at $1.20 per share
                           for a period of two years from date of issue.

                           In connection with the private  placement the Company
                           paid cash  commissions  and finder's  fees  totalling
                           $96,560,  issued  55,300  units on the same terms and
                           basis as the private  placement,  and issued  168,000
                           warrants.   Each  warrant   entitles  the  holder  to
                           purchase one common share of the Company at $0.90 per
                           share on or before March 31, 2006;


                                      F-14
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)


4.       SHARE CAPITAL (continued)

                  iii)     issued  225,000  units on the exercise of a greenshoe
                           option,  which has been granted  under the  Company's
                           initial  public  offering,  at $0.45  per  unit,  for
                           $101,250.  Each unit  comprised  one common share and
                           one  non-transferable  share  purchase  warrant.  Two
                           warrants entitle the agent to purchase one additional
                           common  share,  at a price of $0.50 per share,  on or
                           before  September  1,  2004.  During  the year  ended
                           December  31,  2004,  the  warrants  expired  without
                           exercise; and

                  iv)      the  Company   applies  the  residual   approach  and
                           allocates the total proceeds to the common shares and
                           $nil to the attached warrants.

         (b)      During the year ended December 31, 2004,  the Company  granted
                  stock options to acquire  454,500 common shares of the Company
                  and recorded compensation expense of $131,805.

                  The following  table  summarizes  information  about the stock
                  options outstanding and exercisable at December 31, 2004:

                                      NUMBER OF OPTIONS
                                       OUTSTANDING AND
                  EXERCISE PRICE         EXERCISABLE         EXPIRY DATE

                       $0.60                900,000          December 12, 2008
                       $0.90                454,500          April 2, 2009
                                          ---------
                                          1,354,500
                                          =========

                  The fair value of stock  options  granted is  estimated on the
                  date of grant using the  Black-Scholes  option  pricing  model
                  with the following assumptions used for the grants made during
                  2004:

                                                   2004                 2003

                  Risk-free interest rate           2.18%               3.26%
                  Estimated volatility               36%                 30%
                  Expected life                  2.5 years            2.5 years
                  Expected dividend yield            0%                   0%

                  The fair  value per share of stock  options  granted  in 2004,
                  calculated using the  Black-Scholes  option pricing model, was
                  $0.29 per share.

                  Option-pricing   models  require  the  use  of  estimates  and
                  assumptions including the expected volatility.  Changes in the
                  underlying  assumptions  can materially  affect the fair value
                  estimates and,  therefore,  existing models do not necessarily
                  provide  reliable  measure of the fair value of the  Company's
                  stock options.

         (c)      A summary of the number of common shares reserved  pursuant to
                  the  Company's   outstanding   warrants  and  agents  warrants
                  outstanding at December 31, 2004, and 2003 and the changes for
                  the years ending on those dates is as follows:


                                      F-15
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

4.       SHARE CAPITAL (continued)

                                                        NUMBER OF WARRANTS
                                                   ----------------------------
                                                       2004            2003

                  Balance, beginning of year            965,000               -
                  Issued                              4,342,800         975,000
                  Exercised                            (288,750)        (10,000)
                  Expired                              (788,750)              -
                                                   ------------    ------------
                  Balance, end of period              4,230,300         965,000
                                                   ============    ============

                  Common shares reserved pursuant to warrants and agent warrants
                  outstanding at December 31, 2004 are as follows:

                       NUMBER          EXERCISE PRICE      EXPIRY DATE
                                             $

                      1,257,000              0.67          January 20, 2005
                      1,500,000          1.00 / 1.20       March 24, 2005 / 2006
                         18,000              0.90          March 24, 2006
                      1,305,300          1.00 / 1.20       March 31, 2005 / 2006
                        150,000              0.90          March 31, 2006
                      ---------
                      4,230,300
                      =========

         (d)      As at December 31, 2004,  2,609,588  common shares are held in
                  escrow and are released  every six months,  ending on November
                  3, 2006.

         See also Note 10.


5.       RELATED PARTY TRANSACTIONS

         The Company shares office  facilities  with IMA.  During the year ended
         December 31, 2004,  the Company was charged  $108,390  (2003 - $35,110;
         2002 - $6,000) by IMA for shared rent and administration  costs. During
         the year ended  December 31, 2004,  the Company paid  $113,400  (2003 -
         $nil;  2002  -  $nil)  for  professional   fees  (including  a  $25,000
         relocation  allowance),  billed by a director  and by an officer of the
         Company.  Of this  amount  $42,000  has  been  reimbursed  by IMA as an
         allocation of the professional services.

         Effective  January 2, 2004, the Company  entered into an agreement with
         the President of the Company for his  services.  Under the contract the
         President  is  currently  paid $6,125 per month.  During the year ended
         December 31, 2004, the Company paid $72,400 (2003-$25,000; 2002 - $nil)
         to the  President.  The contract also  provides  that, in the event the
         services are  terminated  without  cause or upon a change in control of
         the Company, a termination  payment would include an undetermined bonus
         plus eighteen months of compensation.

         See also Notes 3 and 10.



                                      F-16
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

6.       SEGMENTED INFORMATION

         The Company is primarily involved in mineral exploration  activities in
         Argentina,  Peru and the USA. The Company is in the  exploration  stage
         and,  accordingly,  has no  reportable  segment  revenues or  operating
         revenues for the years ended December 31, 2004 and 2003.

         The  Company's  total  assets  as at  December  31,  2004  and 2003 are
         segmented geographically as follows:
<TABLE>
<CAPTION>

                                   ----------------------------------------------------------------------------
                                                                       2004
                                   ----------------------------------------------------------------------------
                                                      MINERAL         MINERAL         MINERAL
                                     CORPORATE      EXPLORATION     EXPLORATION     EXPLORATION
                                      CANADA         ARGENTINA         PERU             USA            TOTAL
                                         $               $               $               $               $
        <S>                       <C>             <C>             <C>             <C>             <C>

         Current assets               1,706,891          11,151          18,525               -       1,736,567
         Mineral property interests
            and deferred costs                -       1,693,904         144,013          77,304       1,915,221
         Equipment                            -               -           2,796               -           2,796
                                   ------------    ------------    ------------    ------------    ------------
                                      1,706,891       1,705,055         165,334          77,304       3,654,584
                                   ============    ============    ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>

                                   ----------------------------------------------------------------------------
                                                                       2003
                                   ----------------------------------------------------------------------------
                                                      MINERAL         MINERAL         MINERAL
                                     CORPORATE      EXPLORATION     EXPLORATION     EXPLORATION
                                      CANADA         ARGENTINA         PERU             USA            TOTAL
                                         $               $               $               $               $
        <S>                       <C>             <C>             <C>             <C>             <C>

         Current assets               1,136,624               -               -               -       1,136,624
         Mineral property interests
            and deferred costs                -         684,259               -               -         684,259
                                   ------------    ------------    ------------    ------------    ------------
                                      1,136,624         684,259               -               -       1,820,883
                                   ============    ============    ============    ============    ============

</TABLE>





                                      F-17
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

7.       INCOME TAXES

         The recovery of income taxes shown in the  consolidated  statements  of
         operations  and deficit  differs from the amounts  obtained by applying
         statutory  rates to the loss before  provision  for income taxes due to
         the following:
<TABLE>
<CAPTION>

                                                                       2004            2003            2002
                                                                         $               $               $
        <S>                                                       <C>             <C>             <C>

         Statutory tax rate                                              35.62%          37.62%          39.62%
                                                                   ============    ============    ============

         Loss for the year                                             (874,332)       (405,756)        (26,258)
                                                                   ============    ============    ============

         Provision for income taxes based on statutory
            Canadian combined federal and provincial
               income tax rates                                        (311,137)       (152,645)        (10,403)

         Differences in foreign tax rates                                (1,170)              -               -

         Losses for which an income tax benefit
            has not been recognized                                     312,307         152,645          10,403
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
</TABLE>


         As at  December  31,  2004,  the  Company  has  non-capital  losses  of
         approximately  $900,000 and cumulative foreign exploration  expenses of
         approximately  $1,900,000  carried  forward  for tax  purposes  and are
         available to reduce  taxable  income of future years.  The  non-capital
         losses expire  commencing in 2006 through 2014. The cumulative  foreign
         exploration expenses can be carried forward indefinitely.

         Future income tax benefits  which may arise as a result of these losses
         have  not  been  recognized  in  these  financial  statements  as their
         realization is unlikely.


8.       SUPPLEMENTARY CASH FLOW INFORMATION

         Non-cash  investing  and  financing  activities  were  conducted by the
         Company  during the years ended  December  31,  2004,  2003 and 2002 as
         follows:

<TABLE>
<CAPTION>

                                                                       2004            2003            2002
                                                                         $               $               $
        <S>                                                       <C>             <C>             <C>

         Investing activity
            Expenditures on mineral property interests and             (329,250)       (270,000)              -
               deferred costs
            Shares issued for mineral properties                        329,250         270,000               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============

         Financing activities
            Agent's fees payable                                        (44,240)        (45,000)              -
            Shares issued for payment of agent's fees                    44,240          45,000               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
</TABLE>



                                      F-18
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

9.       DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES

         (a)      The financial  statements of the Company have been prepared in
                  accordance with Canadian GAAP which differ in certain material
                  respects from US GAAP.  Material  differences between Canadian
                  and US  GAAP  and  their  effect  on the  Company's  financial
                  statements are summarized in the tables below.

<TABLE>
<CAPTION>

                                                                   INCEPTION TO
                                                                       2004            2004            2003            2002
                                                                         $               $               $               $
                <S>                                              <C>             <C>             <C>             <C>

                  STATEMENTS OF LOSS

                  Net loss under Canadian GAAP                       (1,307,546)       (874,332)       (405,756)        (26,258)
                  Mineral property interests and
                     deferred costs for the period (i)               (1,915,221)     (1,230,962)       (684,259)              -
                                                                   ------------    ------------    ------------    ------------
                  Net loss under US GAAP                             (3,222,767)     (2,105,294)     (1,090,015)        (26,258)
                                                                   ============    ============    ============    ============

                  Basic and diluted loss per share under US GAAP
                                                                                         $(0.16)         $(0.22)         $(1.25)
                                                                                   ============    ============    ============

                  Average number of common shares outstanding
                                                                                     13,192,736       4,848,716          20,974
                                                                                   ============    ============    ============
</TABLE>
<TABLE>
<CAPTION>

                                                                                       2004            2003
                                                                                         $               $
                <S>                                                              <C>             <C>

                  BALANCE SHEETS

                  Shareholders' equity

                  Balance per Canadian GAAP                                           3,604,137      1,705,531
                  Mineral property interests and deferred costs (i)                  (1,915,221)       (684,259)
                                                                                   ------------    ------------
                  Balance per US GAAP                                                 1,688,916      1,021,272
                                                                                   ============    ============

                  Total assets

                  Balance per Canadian GAAP                                           3,654,584      1,820,883
                  Mineral property interests and deferred costs under US GAAP        (1,915,221)       (747,259)
                                                                                   ------------    ------------
                  Balance per US GAAP                                                 1,739,363       1,073,624
                                                                                   ============    ============
</TABLE>




                                      F-19
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

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

<TABLE>
<CAPTION>

                                                   INCEPTION TO
                                                       2004            2004            2003            2002
                                                         $               $               $               $
                <S>                              <C>              <C>             <C>             <C>

                  STATEMENTS OF CASH FLOWS

                  Operating activities

                  Cash used per Canadian GAAP          (930,629)       (845,988)        (80,610)         (4,031)
                  Mineral property interests and
                     deferred costs (i)              (1,645,221)     (1,230,962)       (414,259)              -
                                                   ------------    ------------    ------------    ------------
                  Cash used per US GAAP              (2,575,850)     (2,076,950)       (494,869)         (4,031)
                                                   ============    ============    ============    ============


                  Investing activities

                  Cash used per Canadian GAAP        (1,648,017)     (1,233,758)       (414,259)              -
                  Mineral property interests and
                     deferred costs (i)               1,645,221       1,230,962         414,259               -
                                                   ------------    ------------    ------------    ------------
                  Cash provided (used) per US GAAP       (2,796)         (2,796)              -               -
                                                   ============    ============    ============    ============
</TABLE>


                  (i)      Mineral property interests and deferred costs

                           Mineral  property  interests  and deferred  costs are
                           accounted  for in  accordance  with  Canadian GAAP as
                           disclosed in Note 3. The Company has  determined  for
                           US GAAP  purposes to expense the option  payments and
                           exploration costs relating to unproven mineral claims
                           as  incurred.  In  addition,  US GAAP  requires  that
                           exploration costs not be capitalized until a positive
                           feasibility study is completed. The capitalized costs
                           of such claims would then be measured,  on a periodic
                           basis,  to  ensure  that the  carrying  value  can be
                           recovered on an undiscounted  cash flow basis. If the
                           carrying value cannot be recovered on this basis, the
                           mineral   claims   would  be  written   down  to  net
                           recoverable value on a discounted cash flow basis.

                  (ii)     Income Tax

                           Under  Canadian  GAAP,  future  income tax assets are
                           calculated based on enacted or substantially  enacted
                           tax rates applicable to future years.  Under US GAAP,
                           only  enacted  rates are used in the  calculation  of
                           deferred  income taxes.  This  difference in GAAP did
                           not have any  effect  on the  financial  position  or
                           results of  operations  of the  Company for the years
                           ended December 31, 2004, 2003, and 2002.




                                      F-20
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

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

                  (iii)    Other Comprehensive Income

                           US GAAP  requires  that a statement of  comprehensive
                           income be displayed with the same prominence as other
                           financial statements and that the aggregate amount of
                           comprehensive   income   excluding   the  deficit  be
                           disclosed   separately   in   shareholders'   equity.
                           Comprehensive  income,  which  incorporates  the  net
                           loss,  includes all changes in  shareholders'  equity
                           during  a  period   except   those   resulting   from
                           investments by and distributions to owners.  There is
                           currently no  requirement  to disclose  comprehensive
                           income under Canadian GAAP. The Company does not have
                           any other  comprehensive  income  component  in 2004,
                           2003, and 2002.

         (b)      Recent Accounting Pronouncements

                  Consolidation of Variable Interest Entities

                  FAS 146R became effective in June 2003 for USGAAP for the year
                  ended December 31, 2004.  The Company has  determined  that it
                  does not havy any variable  interest  entities.  In June 2003,
                  the  CICA   issued   a  new   accounting   guideline   ACG-15,
                  "Consolidation of Variable Interest Entities",  which requires
                  the  consolidation  of certain  entities  that are  subject to
                  control on a basis other than  ownership of voting  interests.
                  The  purpose  of the  Guideline  is to  provide  guidance  for
                  determining   when  an   enterprise   includes   the   assets,
                  liabilities and results of activities of such an entity in its
                  consolidated  results. It applies to entities with a structure
                  that precludes  control through  ownership of voting interests
                  but over which control may exist  through other  arrangements.
                  The Guideline  generally applies to annual and interim periods
                  beginning on or after November 1, 2004.

                  Exchanges of Non-Monetary Assets

                  In December  2004,  the FASB issued  Statement  No. 153 ("SFAS
                  153")  "Exchanges of  Nonmonetary  Assets".  SFAS 153 replaces
                  guidance   previously   issued   under  APB  Opinion  No.  29,
                  "Accounting for Nonmonetary Transactions",  which was based on
                  the principle that  exchanges of nonmonetary  assets should be
                  measured based on the fair value of the assets exchanged.  The
                  guidance in that Opinion, however, included certain exceptions
                  to that principle. SFAS 153 amends Opinion 29 to eliminate the
                  exception  for  nonmonetary  exchanges  of similar  productive
                  assets and replaces it with a general  exception for exchanges
                  of nonmonetary assets that do not have commercial substance. A
                  nonmonetary  exchange has  commercial  substance if the future
                  cash flows of the entity are expected to change  significantly
                  as a  result  of  the  exchange.  SFAS  153 is  effective  for
                  nonmonetary  exchanges  occurring in fiscal periods  beginning
                  after  June 15,  2005.  The  Company  will  comply  with  this
                  guidance for any nonmonetary  transactions after the effective
                  date for U.S. GAAP purposes.

                  Whether Mineral Rights are Tangible or Intangible Assets

                  Effective  for  reporting  periods  beginning  after April 29,
                  2004,  the EITF released Issue 04-2,  "Whether  Mineral Rights
                  are Tangible or  Intangible  Assets".  The  consensus was that
                  mineral rights acquired on a business combination are tangible
                  assets  and should be  recorded  as a  separate  component  of
                  property,  plant  and  equipment  either  on the  face  of the
                  financial statements or in the notes. The Company has not been
                  involved  to date in a business  combination  but will  comply
                  with the Issue in the future as required.





                                      F-21
<PAGE>



                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)

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

                  Mining Assets:  Impairment and Business Combinations

                  Effective  for  reporting  periods  beginning  after March 31,
                  2004,  the EITF  released  Issue  No.  04-3,  "Mining  Assets:
                  Impairment  and  Business  Combinations".   The  EITF  reached
                  consensus  that an entity  should  include value beyond proven
                  and probable  reserves in the value allocated to mining assets
                  in  a  purchase  price  allocation  to  the  extent  a  market
                  participant  would include such value in determining  the fair
                  market  value of the asset.  The EITF also  reached  consensus
                  that an entity  should  include  the  effects  of  anticipated
                  changes in market prices of minerals when determining the fair
                  market value of mining assets in a purchase  price equation in
                  a manner consistent with expectations of the marketplace.

                  An entity should also include cash flows associated with value
                  beyond  proven and  probable  reserves in  estimates of future
                  cash flows for determining if a mining asset is impaired under
                  SFAS 144. An entity  should also  anticipate  fluctuations  in
                  market prices when determining these cash flows.

                  The  Company  will  comply  with  this  Issue  for any  future
                  business combinations and impairment reviews.

                  Financial Instruments

                  On January  27,  2005,  the CICA  issued  Section  3855 of the
                  Handbook  titled  "Financial  Instruments  -  Recognition  and
                  Measurement".  It expands  Handbook  section 3860,  "Financial
                  Instruments - Disclosure and Presentation" by prescribing when
                  a  financial  instrument  is to be  recognized  on the balance
                  sheet and at what  amount.  It also  specifies  how  financial
                  instrument gains and losses are to be presented. All financial
                  instruments  will be required to be  classified  into  various
                  categories. Held to maturity investments loans and receivables
                  are measured at amortized cost with amortization of premium or
                  discounts and losses and impairment included in current period
                  interest income or expense.  Held for trading financial assets
                  and  liabilities  are  measured at fair market  value with all
                  gains and losses included in net income in the period in which
                  they  arise.  All  available  for sale  financial  assets  are
                  measured  at fair  market  value  with  revaluation  gains and
                  losses included in other comprehensive  income until the asset
                  is  removed  from the  balance  sheet  except  that other than
                  temporary losses due to impairment are included in net income.
                  All other financial liabilities are to be carried at amortized
                  cost. This new Handbook  section will bring Canadian GAAP more
                  in line with U.S.  GAAP.  The mandatory  effective date is for
                  fiscal  years  beginning  on or after  October 1,  2006,  with
                  optional early  recognition  for fiscal years  beginning on or
                  after  December  31,  2004.  At present,  the  Company's  most
                  significant   financial   instruments   are   cash,   accounts
                  receivable  and accounts  payable.  This new section  requires
                  little   difference   in   accounting   for  these   financial
                  instruments from current standards.

                  Hedge Accounting

                  New  Handbook  Section  3865,  "Hedges"  provides  alternative
                  treatments to Handbook  Section 3855 for entities which choose
                  to designate qualifying  transactions as hedges for accounting
                  purposes.  The  effective  date of this  section is for fiscal
                  years  beginning on or after  October 1, 2006,  with  optional
                  early  recognition  for  fiscal  years  beginning  on or after
                  December 31, 2004.

                  The Company does not currently have any hedging relationships.





                                      F-22
<PAGE>


                           AMERA RESOURCES CORPORATION
                         (An Exploration Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (Expressed in Canadian Dollars)


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

                  Comprehensive Income

                  New Handbook Section 1530, "Comprehensive Income",  introduces
                  a new  requirement  to temporarily  present  certain gains and
                  losses outside of income.  Section 1530 defines  comprehensive
                  income as a change in value of net  assets  that is not due to
                  owner activities.  Assets that are classified as available for
                  sale will have revaluation  gains and losses included in other
                  comprehensive  income  until  the  asset is  removed  from the
                  balance sheet.

                  At present, the Company does not have investments in shares of
                  arm's length  corporations that may be classified as available
                  for  sale  investments.  The  Company  would  be  required  to
                  recognize  unrealized  gains and losses on such securities and
                  include these amounts in comprehensive  income.  The effective
                  date of this section is for fiscal years beginning on or after
                  October 1, 2006,  with optional early  recognition  for fiscal
                  years beginning on or after December 31, 2004.  Implementation
                  of this  section will more closely  align  Canadian  GAAP with
                  U.S. GAAP.


10.      SUBSEQUENT EVENTS

         Subsequent to December 31, 2004 the Company:

         a)       completed a private  placement of 1,650,000 units at $0.55 per
                  unit,  for  proceeds of $907,500.  Each unit  consisted of one
                  common  share  and one half  non-transferable  share  purchase
                  warrant.  Each whole warrant entitles the holder to purchase a
                  common  share for $.60 per share on or before  March 18, 2006.
                  The Company  also  issued  14,962  Agent's  Units at $0.55 per
                  Unit,  66,750  Agent's  Warrants at $0.60 and 27,000  Units at
                  $0.55 per Unit as a Corporate  Finance  Fee.  There was also a
                  cash commission/administration fee paid of $40,310;

         b)       granted  250,000  stock  options  for  $0.75  per share to its
                  directors,  employees  and  consultants  for a period  of five
                  years; and

         c)       Effective  January 1, 2005,  the  Company  engaged  the Grosso
                  Group to provide  services and  facilities  to the Company.  A
                  formal  agreement  among the Company and the Grosso  Group has
                  not been  finalized.  Until such time as the formal  agreement
                  has been finalized, the Company and the Grosso Group intend to
                  work under the terms of the proposed  Administration  Services
                  Agreement by and among the Company and the Grosso Group. It is
                  anticipated  that the formal  agreement will have an effective
                  date of January 1, 2005.  The agreement  with the Grosso Group
                  will replace the current arrangement with IMA.




                                      F-23
<PAGE>