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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





---




FORM 10-QSB





(Mark One)


|x |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------




| |  | For the quarterly period ended September 30, 2002
| |  | -------------------------------------------------




| ̈ |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ----------------------------------------------------------------------------------




| |  | For the transition period from  to
| |  | ----------------------------------




Commission file Number 000-22731





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MINERA ANDES INC.


(Exact name of small business issuer as specified in its
charter)





ALBERTA, CANADA


(State or other jurisdiction of incorporation or organization)





NONE


(I.R.S. Employer Identification No.)





3303
N. SULLIVAN ROAD, SPOKANE, WA 99216


(Address of principal executive offices)





(509) 921-7322


(Issuers telephone number)





---




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





Shares outstanding as of October 31, 2002: 35,729,197 shares of common stock, with no par value





Transitional Small Business Disclosure Format (Check One): Yes  ̈ No  x





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TABLE OF CONTENTS





PART I  FINANCIAL INFORMATIONItem 1

Consolidated Financial Statements

3Item 2

Managements Discussion and Analysis of Financial Condition and Results of Operations

13Item 3

Controls and Procedures

18PART II  OTHER INFORMATIONItem 6

Exhibits and Reports on Form 8-K

19SIGNATURES

21CERTIFICATIONS

22




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MINERA ANDES INC.


An Exploration Stage Corporation


CONSOLIDATED BALANCE SHEETS


(U.S. Dollars-Unaudited)





September 30, 2002


December 31, 2001(Unaudited)ASSETSCurrent:Cash and cash equivalents

$
338,862


$
120,985Receivables and prepaid expenses


14,693



17,547Total current assets


353,555



138,532Mineral properties and deferred exploration costs


3,286,854



3,520,389Capital assets, net


6,281



9,148Total assets

$
3,646,690


$
3,668,069LIABILITIESCurrent:Accounts payable and accruals

$
19,676


$
5,269Due to related parties


24,932



103,133Total current liabilities


44,608



108,402SHAREHOLDERS EQUITYShare capital


18,639,369



18,197,422Accumulated deficit


(15,037,287
)


(14,637,755
)Total shareholders equity


3,602,082



3,559,667Total liabilities and shareholders equity

$
3,646,690


$
3,668,069





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




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MINERA ANDES INC.


An Exploration Stage Corporation


CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT


(U.S. Dollars-Unaudited)





Three Months Ended


Nine Months Ended


Period from July
1, 1994 (commencement) through Sept. 30, 2002Sept. 30,2002


Sept. 30, 2001


Sept. 30, 2002


Sept. 30,2001Administration fees

$
7,720


$
6,268


$
20,344


$
18,422


$
251,299Audit and accounting


7,475



4,252



18,911



36,490



351,743Consulting fees


14,092



8,377



37,572



25,616



957,532Depreciation


920



1,069



2,824



3,208



61,159Equipment rental


0



0



0



0



21,522Foreign exchange (gain) loss


10,137



398



22,435



545



429,447Insurance


1,360



6,300



4,080



18,900



234,054Legal


12,905



17,275



43,598



55,284



683,854Maintenance


0



0



701



0



1,593Materials and supplies


0



0



0



0



45,512Office overhead


7,732



12,615



42,023



55,268



1,410,301Telephone


2,327



3,842



6,762



13,712



362,578Transfer agent


1,638



1,136



4,890



4,490



97,370Travel


7,894



877



16,030



4,388



328,443Wages and benefits


40,360



39,542



120,542



115,958



1,320,767Write-off of deferred costs


0



0



0



0



8,118,123Total expenses


114,560



101,951



340,712



352,281



14,675,297Gain on sale of capital assets


0



(37,648
)


0



(69,568
)


(104,588
)Interest income


(903
)


(397
)


(1,279
)


(674
)


(453,750
)Net loss for the period


113,657



63,906



339,433



282,039



14,116,959Accumulated deficit, beginning of the period


14,917,352



14,472,199



14,637,755



14,254,066



0Share issue costs


6,278



0



60,099



0



903,113Deficiency on acquisition of subsidiary


0



0



0



0



17,215Accumulated deficit, end of the period

$
15,037,287


$
14,536,105


$
15,037,287


$
14,536,105


$
15,037,287Basic and diluted net loss per common share

$
0.01
*

$
0.01
*

$
0.01
*

$
0.01
*Weighted average shares outstanding


35,047,458



30,046,030



31,836,024



30,036,594


*Less than $0.01 per share





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







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MINERA ANDES INC.


An Exploration Stage Corporation


CONSOLIDATED STATEMENTS OF MINERAL PROPERTIES


AND DEFERRED EXPLORATION COSTS


(U.S. Dollars-Unaudited)





Three Months Ended


Nine Months Ended


Period from July
1, 1994 (commencement) through Sept. 30,
2002Sept. 30,2002


Sept. 30, 2001


Sept. 30, 2002


Sept. 30, 2001Administration fees

$
2,628


$
3,906


$
10,588


$
12,440


$
368,587Assays and analytical


0



0



0



0



938,822Construction and trenching


0



0



0



0



507,957Consulting fees


10,796



3,179



34,482



15,705



948,031Depreciation


420



1,841



1,758



6,620



170,625Drilling


0



0



0



0



928,833Equipment rental


0



0



0



0



244,068Geology


7,125



700



8,250



2,328



2,911,693Geophysics


0



0



0



0



309,902Insurance


2,158



2,635



5,730



7,905



243,974Legal


0



0



1,192



28,620



649,597Maintenance


104



376



1,534



1,878



160,599Materials and supplies


258



170



419



1,574



433,897Project overhead


3,745



544



5,240



2,412



301,069Property and mineral rights


78



2,565



1,187



4,929



1,284,341Telephone


154



19



931



311



82,324Travel


7,762



2,460



15,811



7,019



1,020,206Wages and benefits


26,278



26,040



79,343



81,544



1,024,313Costs incurred during the period


61,506



44,435



166,465



173,285



12,528,838Deferred costs, beginning of the period


3,425,348



3,738,147



3,520,389



3,859,297



0Deferred costs acquired


0



0



0



0



576,139Deferred costs written off


0



0



0



0



(8,118,123
)Mineral property option proceeds


(200,000
)


(300,000
)


(400,000
)


(550,000
)


(1,700,000
)Deferred costs, end of the period

$
3,286,854


$
3,482,582


$
3,286,854


$
3,482,582


$
3,286,854





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




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MINERA ANDES INC.


An Exploration Stage Corporation


CONSOLIDATED STATEMENTS OF CASH FLOWS


(U.S. Dollars-Unaudited)





Three Months Ended


Nine Months Ended


Period from July
1, 1994 (commencement) through Sept. 30, 2002Sept. 30, 2002


Sept. 30, 2001


Sept. 30, 2002


Sept. 30, 2001Operating ActivitiesNet loss for the period

$
(113,657
)

$
(63,906
)

$
(339,433
)

$
(282,039
)

$
(14,116,959
)Adjustments to reconcile net loss to net cash used in operating activities:Write-off of incorporation costs


0



0



0



0



665Write-off of deferred costs


0



0



0



0



8,118,123Depreciation


920



1,069



2,824



3,208



61,159Gain on sale of capital assets


0



(37,648
)


0



(69,568
)


(104,588
)Change in:Receivables and prepaid expense


4,446



25,884



2,854



1,760



(12,707
)Accounts payable and accruals


(15,670
)


(29,340
)


14,407



(46,597
)


475Due to related parties


(1,159
)


(49,167
)


(78,201
)


1,821



24,932Cash used in operating activities


(125,120
)


(153,108
)


(397,549
)


(391,415
)


(6,028,900
)Investing ActivitiesIncorporation costs


0



0



0



0



(665
)Proceeds from sale (purchases) of capital assets


0



44,799



(1,715
)


89,779



(143,478
)Mineral properties and deferred exploration


(61,086
)


(42,594
)


(164,707
)


(166,665
)


(12,358,212
)Proceeds from sale of subsidiaries


0



0



0



0



9,398Mineral property option proceeds


200,000



300,000



400,000



550,000



1,700,000Cash provided by (used in) investing activities


138,914



302,205



233,578



473,114



(10,792,957
)Financing ActivitiesShares and subscriptions issued for cash, less issue costs


(4,248
)


0



381,848



7,558



17,160,719Cash provided by financing activities


(4,248
)


0



381,848



7,558



17,160,719Increase in cash and cash equivalents


9,546



149,097



217,877



89,257



338,862Cash and cash equivalents, beginning of the period


329,316



41,978



120,985



101,818



0Cash and cash equivalents, end of the period

$
338,862


$
191,075


$
388,862


$
191,075


$
338,862








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




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MINERA ANDES INC.


An Exploration Stage Corporation


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(U.S. Dollars-Unaudited)





1.    Accounting Policies, Financial Condition and Liquidity





The accompanying consolidated
financial statements of Minera Andes Inc. (the Corporation) for the three month and nine month periods ended September 30, 2002 and 2001 and for the period from commencement (July 1, 1994) through September 30, 2002 have been prepared in
accordance with accounting principles generally accepted in Canada which differ in certain respects from principles and practices generally accepted in the United States, as described in Note 2. Also, they are unaudited but, in the opinion of
management, include all adjustments, consisting only of normal recurring items, necessary for a fair presentation. Interim results are not necessarily indicative of results which may be achieved in the future. The December 31, 2001 financial
information has been derived from the Corporations audited consolidated financial statements.





These consolidated financial
statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2001. The accounting policies set forth in the audited annual consolidated financial statements are the
same as the accounting policies utilized in the preparation of these consolidated financial statements, except as modified for appropriate interim presentation.





The recoverability of amounts shown as mineral properties and deferred exploration costs is dependent upon the existence of economically recoverable reserves, the ability of the Corporation to obtain necessary financing to
complete their development, and future profitable production or disposition thereof. The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in Canada applicable to a going concern. The
use of such principles may not be appropriate because, as of September 30, 2002, there was significant doubt that the Corporation would be able to continue as a going concern.





For the nine months ended September 30, 2002 the Corporation had a loss of approximately $339,000 and an accumulated deficit of approximately $15 million. In addition, due to the nature of the mining
business, the acquisition, exploration and development of mineral properties requires significant expenditures prior to the commencement of production. To date, the Corporation has financed its activities through the sale of equity securities and
joint venture arrangements. The Corporation expects to use similar financing techniques in the future and is actively pursuing such additional sources of financing.





Although there is no assurance that the Corporation will be successful in these actions, management believes that they will be able to secure the necessary financing to enable it to continue as a going
concern. Accordingly, these financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications used that would be necessary if the going concern
assumption were not appropriate. Such adjustments could be material.




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2.    Differences Between Canadian and United States Generally Accepted
Accounting Principles





Differences between Canadian and U.S. generally accepted accounting principles (GAAP) as they
pertain to the Corporation relate to accounting for share issue costs, loss per share, non-cash issuance of common shares, the acquisition of Scotia Prime Minerals, Incorporated, compensation expense associated with the release of shares from
escrow, mineral properties and deferred exploration costs and stock-based compensation and are described in Note 10 to the Corporations consolidated financial statements for the year ended December 31, 2001.





The impact of the above on the interim consolidated financial statements is as follows:





Sept. 30, 2002


Dec. 31, 2001Shareholders equity, end of period, per Canadian GAAP

$
3,602,082


$
3,559,667Adjustment for acquisition and deferred exploration costs


(3,286,854
)


(3,520,389
)Shareholders equity, end of period, per U.S. GAAP

$
315,228


$
39,278





Three Months Ended


Nine Months Ended


Period from July
1, 1994 (commencement) through Sept. 30, 2002Sept. 30, 2002


Sept. 30, 2001


Sept. 30, 2002


Sept. 30, 2001Net loss for the period, per Canadian GAAP

$
113,657


$
63,906


$
339,433


$
282,039


$
14,116,959Adjustment for acquisition of Scotia


0



0



0



0



248,590Adjustment for compensation expense


0



0



0



0



6,324,914Adjustment for deferred exploration costs


(138,494
)


(258,130
)


(233,535
)


(381,644
)

$
3,286,854(Profit)/Loss for period, per U.S. GAAP

$
(24,837
)

$
(194,224
)

$
105,898


$
(99,605
)

$
23,977,317(Profit)/Loss per common share, per U.S. GAAP, basic and diluted

$
(0.01
)*

$
(0.01
)*

$
0.01
*

$
(0.01
)*





* Less than $0.01 per share




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3.    Changes to Share Capital





On June 25, 2002, the Corporation raised gross proceeds totaling Cdn$662,500 (US$432,498) by way of a private placement through the issuance of 4,416,667 units
at a price of Cdn$0.15 per unit. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at an exercise price of Cdn$0.35 for a period of 12
months. Each whole warrant has a forced exercise clause (starting when the units are exercisable), whereby the subscribers must exercise warrants into common shares if the average price of the common shares of the Corporation is equal to or greater
than Cdn$0.50 per common share for a period of 30 consecutive trading days. Under the transaction, Haywood Securities Inc. (Haywood) acted as the agent and received a 7 percent cash commission. In addition, Haywood received broker
warrants equal to 10 percent of the 4,416,667 share private placement. Each broker warrant, upon exercise, will entitle the holder to purchase one common share of the Corporation at a price of Cdn$0.15 for a period of 12 months. The units are
subject to a four-month hold period from the date of closing.





During the nine months ended September 30, 2002, the Corporation issued
91,500 shares for the exercise of stock options and received proceeds of Cdn$14,640 (US$9,449).





4.    Basic and
Diluted Loss Per Common Share





Basic earnings per share (EPS) is calculated by dividing loss applicable to common shareholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. Due to the losses in 2002 and 2001,
potentially dilutive securities were excluded from the calculation of diluted EPS, as they were anti-dilutive. Therefore, there was no difference in the calculation of basic and diluted EPS in 2002 and 2001.





5.    Mineral Properties and Deferred Exploration Costs





In January 2002, Argentine laws went into effect on all dollar contracts, whereby they were converted to pesos at a ratio of one peso equals one dollar. The Argentine government also put into place
laws that prohibit Argentine companies from transferring money out of the country.





The new laws also provide that the parties to an
agreement affected by these changes will negotiate a restructuring of their respective obligations, attempting to share in an equitable manner the effects of change in exchange rate within 180 days. If an agreement cannot be reached, the parties can
follow mediation procedures in the appropriate tribunals. During the restructuring or mediation procedure the debtor party cannot refuse to make payments and the creditor cannot refuse to accept payment.





The agreements on the Chubut properties are between Argentine subsidiaries of Minera Andes Inc. and Brancote Holdings PLC (Brancote) and are affected
by these laws. Brancote and the Corporation are not Argentine companies. The agreements are in U.S. dollars and the payment was specified to be made to an account outside the country. The Corporation is currently seeking legal advice inside and out
of Argentina, and is not able to ascertain the impact that the law and currency changes in Argentina will have on the Corporation.




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Brancote has tendered payment in pesos because all Argentine contracts were converted to pesos, however
the Corporation has not taken the money because we are in dispute over the payment in pesos instead of U.S. dollars. Negotiations are ongoing with Meridian Gold Inc., which acquired Brancote Holdings PLC in July 2002 (see Subsequent Event).





In the nine months ended September 30, 2002, the Corporation received $400,000 from Mauricio Hochschild & Cia. Ltda. under an option
and joint venture agreement signed on March 15, 2001, for the exploration and possible development of the Corporations El Pluma/Cerro Saavedra properties in Santa Cruz province.





6.    Recent Accounting Pronouncements





In June 2001, the FASB
issued SFAS No. 141 Business Combinations which supersedes APB Opinion No. 16 Business Combinations and FASB Statement No. 38 Accounting for Preacquisition Contingencies of Purchased Enterprises. The provisions of
this statement require that all business combinations be accounted for using purchase accounting and it disallows the use of pooling of interests as previously allowed under APB Opinion No. 16 and FASB Statement No. 38. This
statement is effective for all business combinations subsequent to June 30, 2001. The adoption of this statement did not have a material effect on the financial statements.





Also in June 2001, the FASB issued SFAS No. 142 Goodwill and Other Intangible Assets, which supersedes APB Opinion No. 17 Intangible Assets. The provisions of this statement
changes the unit of account for goodwill and takes a very different approach to how goodwill and other intangible assets are accounted for subsequent to their initial recognition. Because goodwill and some intangible assets will no longer be
amortized, the reported amounts of goodwill and intangible assets, as well as total assets, will not decrease at the same time and in the same manner as under previous standards. This statement is effective for all fiscal years beginning subsequent
to December 15, 2001. The adoption of this statement did not have a material effect on the financial statements.





In June 2001, the FASB
issued SFAS No. 143 Accounting for Asset Retirement Obligations, which amends SFAS No. 19. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The requirements
of this statement must be implemented for fiscal years beginning after June 15, 2002; however, early adoption is encouraged. The adoption of this statement did not have a material effect on the financial statements.





The FASB also issued SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. It supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions of APB
Opinion No. 30, Reporting the Results of Operations  Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a
business. It also amends APB No. 51, Consolidated Financial Statements, to eliminate the exception to consolidation for a subsidiary for which control is likely to be temporary. The provisions of this Statement are effective for
financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years, with early application encouraged. The provisions of this Statement generally are to be applied prospectively. The
adoption of this statement did not have a material effect on the financial statements.




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In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections (SFAS No. 145). SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements, by rescinding SFAS No. 4, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in Accounting Principles Board Opinion No. 30 will now be used to classify those gains and
losses. Additionally, SFAS No. 145 amends SFAS No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. Finally, SFAS No.
145 also makes technical corrections to existing pronouncements. While those corrections are not substantive in nature, in some instances, they may change accounting practice. The provisions of SFAS No. 145 that amend SFAS No. 13 are effective for
transactions occurring after May 15, 2002 with all other provisions of SFAS No. 145 being required to be adopted by us in our consolidated financial statements for the first quarter of fiscal 2003. Our management currently believes that the adoption
of SFAS No. 145 will not have a material impact on our financial statements.





On July 30, 2002, the FASB issued SFAS No. 146
Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or
disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing or other exit or disposal activity. SFAS
No. 146 replaces the prior guidance that was provided by EITF Issue No. 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS
No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. Our management currently believes that the adoption of SFAS No. 146 will not have a material impact on our financial statements.





In October 2002, the issued SFAS No. 147  Acquisitions of Certain Financial Institutionsan amendment of FASB Statements No. 72 and
144 and FASB Interpretation No. 9. This Statement was issued to remove the special distinction of financial institution acquisitions from the scope of both SFAS No. 72 and FASB Interpretation No. 9. Thus, the former method of recognizing any
excess of the fair value of liabilities assumed over the fair value of tangible and identifiable assets as a unidentifiable intangible asset no longer applies to acquisitions of financials institutions or branches of financial institutions. These
acquisitions will be accounted for in accordance with FASB Statements Nos. 141 and 142, which will require the recording of goodwill that is not amortized, but rather tested for impairment. Further this Statement amends SFAS No. 144, to include in
its scope long-term customer relationships such as depositor and borrower relationship intangible assets and credit cardholder intangible assets. This statement does not affect the Company.




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|7. |  | Stock Options
|-- |  | -------------




| | a. |  | A summary of the status of the Corporations stock option plan as of September 30, 2002 is:
| | -- |  | -------------------------------------------------------------------------------------------




Options


(Cdn) Weighted Ave. Exercise PriceOutstanding and exercisable at beginning of year

2,214,000


$
0.43Granted

930,000


$
0.40Exercised

(91,500
)

$
0.16Forfeited

(204,000
)

$
0.25Outstanding at September 30, 2002

2,848,500


$
0.44Weighted average fair value of options granted during the nine months ended September 30, 2002




$
0.40





The range of exercise prices is from Cdn$0.16 to Cdn$0.68 with a
weighted average remaining contractual life of 2.81 years at September 30, 2002.





At September 30, 2002, there
were options held by directors, officers and employees of the Corporation for the purchase of common shares as follows:





Number of Shares

Exercise Price

Expiry Date215,000

Cdn$0.68

March 2, 20031,146,000

Cdn$0.55

June 3, 200429,000

Cdn$0.59

June 3, 2004528,500

Cdn$0.16

August 28, 2005930,000

Cdn$0.40

June 27, 20072,848,500





| | b. |  | U.S. generally accepted accounting principles require disclosure of compensation expense for the stock option plan as if it had been determined based on the
fair market value-based method. The Corporations net loss for the year and net loss per common share would have been increased to the pro forma amounts below had the market value based method been followed:
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




2002

2001Net loss for the yearAs reported:

$
339,433

$
383,684Pro forma:

$
546,108

$
383,684Net loss per common shareAs reported:

$
0.01

$
0.01Pro forma:

$
0.02

$
0.01




12




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##### Table of Contents

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted average assumptions used for grants in 2002:





2002Dividend yield (%)

Expected volatility (%)

131Risk-free interest rates (%)

4.08Expected lives (years)

2.81





|8. |  | Subsequent Events
|-- |  | -----------------




| | a. |  | On November 12, 2002 N.A. Degerstrom, Inc. exercised 1,175,000 purchase warrants at Cdn$0.25 per warrant for 1,175,000 common shares of the Corporation. The
Corporation received gross proceeds of Cdn$293,750 (approximately US$188,000) from this transaction.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




The purchase warrants were from a November 30, 2000 private placement whereby N.A. Degerstrom, Inc. acquired 1,175,000 special warrants of the Corporation at Cdn$0.20 per special warrant for gross proceeds of Cdn$235,000
(US$162,242). Each special warrant entitled the holder to acquire one unit comprised of one common share of the Corporation and one non-transferable common share purchase warrant at no additional cost. Each purchase warrant was exercisable into one
common share at the price of Cdn$0.20 if exercised on or before 4:30 p.m. (Calgary time) on the first year anniversary of the issuance date or at a price of Cdn$0.25 if exercised on or before 4:30 (Calgary time) on the second year anniversary of the
issuance date. On August 22, 2002, the special warrants were exercised to acquire 1,175,000 common shares and 1,175,000 purchase warrants.





| | b. |  | The Corporation has negotiated an early buy-out on two separate purchase agreements on the Willimanco and Leleque properties in Chubut province, Argentina.
Meridian Gold Inc. will pay US$720,000 and Argentine P$200,000 (approximately US$57,000) to Minera Andes. This transaction is expected to close at the end of November 2002.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




In August 2000, Minera Andes and Brancote Holdings PLC signed an agreement in which Brancote had the option to purchase the Willimanco and Leleque properties over four
years for a total of US$1.25 million and a 2 percent net smelter return royalty. The properties are located to the immediate north and south, respectively, of Brancotes Cordon de Esquel exploration target.





Earlier this year, Brancote agreed to a merger with Meridian Gold Inc., in which Meridian would be the surviving entity.





Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations





Note Regarding Forward-Looking Statements


The information in this report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (A1934 Act), and is subject to the safe harbor created by those sections. Factors that could cause results to differ materially from those
projected include, but are not limited to, results of current exploration activities, the market price of precious and base metals, the availability of joint venture partners or sources of financing, and other risk factors detailed in the
Corporations Securities and Exchange Commission filings.




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Overview


The
principal business of the Corporation is the exploration and development of mineral properties, located primarily in the Republic of Argentina, consisting of mineral rights and applications for mineral rights, covering approximately163,000 hectares
in three provinces in Argentina. The Corporation carries out its business by acquiring, exploring and evaluating mineral properties through its ongoing exploration program. Following exploration, the Corporation either seeks to enter joint ventures
to further develop these properties or disposes of them if the properties do not meet the Corporations requirements. The Corporations properties are all early stage exploration properties and no proven or probable reserves have been
identified.





Plan of Operations


The Corporation
has working capital of approximately $309,000. Management believes that this will be sufficient, together with funds from the joint ventures on the El Pluma/Cerro Saavedra and Chubut properties, to cover its budgeted expenditures for mineral
property and exploration activities on its properties in Argentina, and general and administrative expenses through at least the end of 2002; however, the Corporation believes it may seek to raise additional funds toward the end of 2002 and the
first part of 2003.





On March 15, 2001, Minera Andes Inc. signed an option and joint venture agreement with Mauricio Hochschild &
Cia. Ltda. (Hochschild), Lima, Peru, for the exploration and possible development of Minera Andes 217,000-acre (88,000 hectares) epithermal gold-silver exploration land package in southern Argentina. The land package, known as El Pluma/Cerro
Saavedra, includes Huevos Verdes, a high-grade gold/silver vein system target, and Minera Andes most advanced exploration prospect. Hochschild immediately began exploration work on El Pluma/ Cerro Saavedra.





Under the agreement, Hochschild can earn a 51 percent ownership in El Pluma/Cerro Saavedra by spending a total of $3 million in three years, and a minimum of
$100,000 per year on exploration targets within El Pluma/Cerro Saavedra other than Huevos Verdes, the most advanced prospect. In addition, Hochschild will make semi-annual payments totaling $400,000 per year until pilot plant production is achieved.
To date, the Corporation has received $800,000 in semi-annual payments





The agreement also outlines a business plan for possible mining
production based on the positive exploration results achieved to date by Minera Andes at Huevos Verdes.





Once Hochschild vests at 51
percent ownership, Minera Andes will have the option of participating in the development of a pilot production plant that would process a minimum of 50 tons per day (tpd). Minera Andes may participate on either a pro-rata basis, or by choosing to
retain a 35 percent carried ownership interest. Upon the successful completion and operation of the 50 tpd plant, Minera Andes would have the option of participating on a pro-rata basis, or choosing a 15 percent interest in return to
being carried to first production of 500 tpd.





The Corporation has budgeted and plans to spend approximately $175,000 on its
mineral property and exploration activities and general and administrative expenses for the balance of the year ending December 31, 2002, with most properties being kept on care and maintenance. While the Corporations existing funds and
estimated receipts under the joint venture should be sufficient, the Corporation will also try to raise additional funding during the next few months in order to continue its operations over the longer term. If additional funds are raised during
2002, through the exercise of warrants or options, through a further equity financing, by the sale of property interests or by joint venture financing, additional exploration could be planned and carried out. If the Corporation were to develop a
property or a group of properties beyond the exploration stage, substantial additional financing would be necessary. Such financing would likely be in the form of equity, debt, or a combination of equity and debt. The Corporation is working on
various plans to obtain such financing but there is no assurance that such financing, would be available to the Corporation on favorable terms.




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Results of Operations





Third quarter 2002 compared with third quarter 2001


The Corporation had a net loss of $114,000 for the third quarter of
2002, compared with a net loss of $64,000 ($0.01 per share) for the third quarter of 2001. Total mineral property and deferred exploration costs were $62,000 during the third quarter of 2002, compared with $44,000 spent in the third quarter of 2001.
The Corporation is maintaining its staff in Argentina at minimum levels. During the third quarter in 2002, the Corporation received $200,000 in mineral property option proceeds, compared with $300,000 in the third quarter last year.





Nine months ended September 30, 2002 compared with the nine months ended September 30, 2001


The Corporation had a net loss of $339,000 for the nine months ended September 30, 2002, compared with a net loss of $282,000 for the comparable period in 2001. Total mineral property and deferred exploration costs for the
nine months were $166,000 in 2002 and $173,000 in the comparable period of 2001. Expenditures in both years were focused on the El Pluma/Cerro Saavedra property. In the nine months ended September 30, 2002, the Corporation received mineral property
option proceeds of $400,000, compared with receipts of $550,000 in the same period last year. Total cumulative deferred expenditures related to mineral properties and exploration were $3,287,000 as of September 30, 2002, compared with $3,483,00 as
of September 30, 2001.





Liquidity and Capital Resources


Due to the nature of the mining industry, the acquisition, exploration and development of mineral properties requires significant expenditures prior to the commencement of production. To date, the Corporation has financed its
activities through the sale of equity securities and joint venture arrangements. The Corporation expects to use similar financing techniques in the future. However, there can be no assurance that the Corporation will be successful with such
financings. See Plan of Operations.





At September 30, 2002, the Corporation had cash and cash equivalents of $339,000
compared to $121,000 at December 31, 2001. Working capital at September 30, 2002 was $309,000. The Corporations operating activities used $398,000 for the first nine months of 2002, compared with $391,000 in 2001. Investing activities provided
$234,000 (including mineral property option proceeds) in the 2002 period compared with $473,000 used in 2001. The receipt of $400,000 and $550,000 in mineral property option proceeds in the first nine months of 2002 and 2001 provided this
contribution. Mineral property and deferred exploration costs of $165,000 and 167,000 were focused on the El Pluma/Cerro Saavedra property during the nine month periods ended September 30, 2002 and 2001. The Corporations expenditures were
reduced this year as a result of the Hochschild joint venture on the property.





The recoverability of amounts shown as mineral properties
and deferred exploration costs is dependent upon the existence of economically recoverable reserves, the ability of the Corporation to obtain necessary financing to complete their development, and future profitable production or disposition thereof.
The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in Canada applicable to a going concern. The use of such principles may not be appropriate because, as of September 30, 2002, there
was significant doubt that the Corporation would be able to continue as a going concern.




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##### Table of Contents




For the nine months ended September 30, 2002, the Corporation had a loss of approximately $339,000 and
an accumulated deficit of approximately $15 million. In addition, due to the nature of the mining business, the acquisition, exploration and development of mineral properties requires significant expenditures prior to the commencement of production.
To date, the Corporation has financed its activities through the sale of equity securities and joint venture arrangements. The Corporation expects to use similar financing techniques in the future and is actively pursuing such additional sources of
financing.





Although there is no assurance that the Corporation will be successful in these actions, management believes that they will
be able to secure the necessary financing to enable it to continue as a going concern. Accordingly, these financial statements do not reflect adjustments to the carrying value of assets and liabilities, the reported revenues and expenses and balance
sheet classifications used that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.





Subsequent Events


On November 12, 2002 N.A. Degerstrom, Inc. exercised 1,175,000 purchase warrants at Cdn$0.25 per warrant for 1,175,000 common
shares of the Corporation. The Corporation received gross proceeds of Cdn$293,750 (approximately US$188,000) from this transaction.





The
purchase warrants were from a November 30, 2000 private placement whereby N.A. Degerstrom, Inc. acquired 1,175,000 special warrants of the Corporation at Cdn$0.20 per special warrant for gross proceeds of Cdn$235,000 (US$162,242). Each special
warrant entitled the holder to acquire one unit comprised of one common share of the Corporation and one non-transferable common share purchase warrant at no additional cost. Each purchase warrant was exercisable into one common share at the price
of Cdn$0.20 if exercised on or before 4:30 p.m. (Calgary time) on the first year anniversary of the issuance date or at a price of Cdn$0.25 if exercised on or before 4:30 (Calgary time) on the second year anniversary of the issuance date. On August
22, 2002, the special warrants were exercised to acquire 1,175,000 common shares and 1,175,000 purchase warrants.





The Corporation has
negotiated an early buy-out on two separate purchase agreements on the Willimanco and Leleque properties in Chubut province, Argentina. Meridian Gold Inc. will pay US$720,000 and Argentine P$200,000 (approximately US$57,000) to Minera Andes. This
transaction is expected to close at the end of November 2002.





In August 2000, Minera Andes and Brancote Holdings PLC signed an agreement
in which Brancote had the option to purchase the Willimanco and Leleque properties over four years for a total of US$1.25 million and a 2 percent net smelter return royalty. The properties are located to the immediate north and south, respectively,
of Brancotes Cordon de Esquel exploration target.





Earlier this year, Brancote agreed to a merger with Meridian Gold Inc., in which
Meridian would be the surviving entity.





Recent Accounting Pronouncements


In June 2001, the FASB issued SFAS No. 141 Business Combinations which supersedes APB Opinion No. 16 Business Combinations and FASB Statement No. 38 Accounting for Preacquisition Contingencies
of Purchased Enterprises. The provisions of this statement require that all business combinations be accounted for using purchase accounting and it disallows the use of pooling of interests as previously allowed under
APB Opinion No. 16 and FASB Statement No. 38. This statement is effective for all business combinations subsequent to June 30, 2001. The adoption of this statement did not have a material effect on the financial statements.




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Also in June 2001, the FASB issued SFAS No. 142 Goodwill and Other Intangible Assets, which
supersedes APB Opinion No. 17 Intangible Assets. The provisions of this statement changes the unit of account for goodwill and takes a very different approach to how goodwill and other intangible assets are accounted for subsequent to
their initial recognition. Because goodwill and some intangible assets will no longer be amortized, the reported amounts of goodwill and intangible assets, as well as total assets, will not decrease at the same time and in the same manner as under
previous standards. This statement is effective for all fiscal years beginning subsequent to December 15, 2001. The adoption of this statement did not have a material effect on the financial statements.





In June 2001, the FASB issued SFAS No. 143 Accounting for Asset Retirement Obligations, which amends SFAS No. 19. This Statement addresses financial
accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement requires that the fair value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The requirements of this statement must be implemented for fiscal years beginning after June 15, 2002; however, early adoption is encouraged. The
adoption of this statement did not have a material effect on the financial statements.





The FASB also issued SFAS No. 144
Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets. It supersedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. It also amends APB No. 51, Consolidated Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be temporary. The provisions of this Statement are effective for financial statements issued for fiscal years beginning after December 15, 2001, and interim periods within those fiscal
years, with early application encouraged. The provisions of this Statement generally are to be applied prospectively. The adoption of this statement did not have a material effect on the financial statements.





In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS No. 145). SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements, by rescinding SFAS No. 4, which required all gains and losses from extinguishment of debt to be aggregated and, if
material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in Accounting Principles Board Opinion No. 30 will now be used to classify those gains and losses. Additionally, SFAS No. 145 amends SFAS No.
13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. Finally, SFAS No. 145 also makes technical corrections to existing
pronouncements. While those corrections are not substantive in nature, in some instances, they may change accounting practice. The provisions of SFAS No. 145 that amend SFAS No. 13 are effective for transactions occurring after May 15, 2002 with all
other provisions of SFAS No. 145 being required to be adopted by us in our consolidated financial statements for the first quarter of fiscal 2003. Our management currently believes that the adoption of SFAS No. 145 will not have a material impact on
our financial statements.




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On July 30, 2002, the FASB issued SFAS No. 146 Accounting for Costs Associated with Exit or
Disposal Activities. SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by the
standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing or other exit or disposal activity. SFAS No. 146 replaces the prior guidance that was
provided by EITF Issue No. 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS No. 146 is to be applied prospectively to
exit or disposal activities initiated after December 31, 2002. Our management currently believes that the adoption of SFAS No. 146 will not have a material impact on our financial statements.





In October 2002, the issued SFAS No. 147Acquisitions of Certain Financial Institutionsan amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9.
This Statement was issued to remove the special distinction of financial institution acquisitions from the scope of both SFAS No. 72 and FASB Interpretation No. 9. Thus, the former method of recognizing any excess of the fair value of liabilities
assumed over the fair value of tangible and identifiable assets as a unidentifiable intangible asset no longer applies to acquisitions of financials institutions or branches of financial institutions. These acquisitions will be accounted for in
accordance with FASB Statements Nos. 141 and 142, which will require the recording of goodwill that is not amortized, but rather tested for impairment. Further this Statement amends SFAS No. 144, to include in its scope long-term customer
relationships such as depositor and borrower relationship intangible assets and credit cardholder intangible assets. This statement does not affect the Corporation.





Item 3.    Controls and Procedures





Evaluation of Disclosure Controls and
Procedures


Within the 90 days prior to the date of this report, the Corporation carried out an evaluation of the effectiveness of the design and operation of the
Corporations disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-14(c) and 15d-14(c)) under the supervision and with the participation of the Corporations
management, including the Corporations President and its Chief Financial Officer. Based upon that evaluation, the Corporations President and its Chief Financial Officer concluded that our disclosure controls and procedures are effective.





Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be
disclosed in Corporation reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, but are not limited to, controls and procedures designed to ensure that information required to be disclosed in Corporation reports filed under the Exchange Act is accumulated and communicated to management to allow timely
decisions regarding required disclosure.





Changes in Internal Controls


There were no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect our disclosure controls and procedures subsequent to the date the Corporation carried out this
evaluation.




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##### Table of Contents




PART IIOTHER INFORMATION





|Item |  | 2.    Changes in Securities
|---- |  | ---------------------------




On June 25, 2002, the Corporation sold 4,416,667 units to 28 accredited investors for Cdn$0.15 per unit for an aggregate of Cdn$662,500 (US$432,498). Each unit consists of one common share and one-half
common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at an exercise price of Cdn$0.35 for a period of 12 months. Each whole warrant has a forced exercise clause (starting when the units are
exercisable), whereby the subscribers must exercise warrants into common shares if the average price of the common shares of the Corporation is equal to or greater than Cdn$0.50 per common share for a period of 30 consecutive trading days.





The sale of the units was exempt from the registration provisions of the Securities Act of 1933, as amended, pursuant to Rule 506 of
Regulation D thereof and the rules and regulations thereunder.





Under the transaction, Haywood Securities Inc. (Haywood)
acted as the agent and received a 7 percent cash commission. In addition, Haywood received broker warrants equal to 10 percent of the 4,416,667 share private placement. Each broker warrant, upon exercise, will entitle the holder to purchase one
common share of the Corporation at a price of Cdn$0.15 for a period of 12 months. The units are subject to a four-month hold period from the date of closing.





On August 22, 2002, N.A. Degerstrom, Inc. exercised its 1,175,000 Special Warrants of the Corporation to acquire 1,175,000 Common Shares and 1,175,000 Purchase Warrants. Each Purchase Warrant is exercisable into one Common
Share of the Corporation at a price of Cdn$0.25 if exercised on or before November 30, 2002.





The transaction was undertaken by way of
issuance from treasury pursuant to an exercise of Special Warrants which were acquired on November 30, 2000 in a private placement.





On August 22, 2002, 930,000 stock options were granted to directors, officers and employees of the Corporation.





During the nine months ended September 30, 2002, the Corporation issued 91,500 shares for the exercise of stock options and received proceeds of Cdn$14,640 (US$9,449).





|Item |  | 6.    Exhibits and Reports on Form 8-K
|---- |  | --------------------------------------




| | a. |  | Exhibits
| | -- |  | --------




10.20:

Amendment to the Option and Joint Venture Agreement (El Pluma/Cerro Saavedra properties) between the Corporation and Mauricio
Hochschild & Cia. Ltda. of March 15, 2001 dated May 14, 2002.10.21:

Second Amendment to the Option and Joint Venture Agreement (El Pluma/Cerro Saavedra properties) between the Corporation and Mauricio
Hochschild & Cia. Ltda. of March 15, 2001 dated August 27, 2002.







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99.1:

Officers Certificate for Allen V. Ambrose99.2:

Officers Certificate for Bonnie L. Kuhn





| | b. |  | Reports on Form 8-K: A report dated November 5, 2002 was filed with the Securities and Exchange Commission regarding N.A. Degerstrom, Inc.s sale of
1,175,000 common shares of the Corporation with intention to use proceeds to exercise purchase warrants for 1,175,000 common shares of the Corporation.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents




SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.





MINERA ANDES INC.Date:

November 12, 2002



By:

/s/    Allen V. AmbroseAllen V. Ambrose President





Date:

November 12, 2002



By:

/s/    Bonnie L. KuhnBonnie L. Kuhn Chief Financial Officer and Secretary




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##### Table of Contents




CERTIFICATION





I, Allen V. Ambrose, certify that:





|1. |  | I have reviewed this quarterly report on Form 10-QSB of Minera Andes Inc.;
|-- |  | --------------------------------------------------------------------------




|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly
report (the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | c. |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------




|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------




|6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Date:

November 12, 2002



By:

/s/    Allen V. AmbroseAllen V. Ambrose, President




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##### Table of Contents




CERTIFICATION





I, Bonnie L. Kuhn, certify that:





|1. |  | I have reviewed this quarterly report on Form 10-QSB of Minera Andes Inc.;
|-- |  | --------------------------------------------------------------------------




|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly
report (the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | c. |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------




|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------




|6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Date:

November 12, 2002



By:

/s/    Bonnie L. KuhnBonnie L. Kuhn, CFO and Secretary




23