UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A
                                (Amendment No. 1)

[X]      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ]      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM  _______________ TO
         _______________


                           ALTAIR INTERNATIONAL INC.
                           -------------------------
             (Exact name of registrant as specified in its charter)


       Province of
        Ontario,
         Canada                   1-12497                         None
         ------                   -------                         ----
     (State or other        (Commission File No.)             (IRS Employer
      jurisdiction                                           Identification No.)
    of incorporation)


                         1725 Sheridan Avenue, Suite 140
                               Cody, Wyoming 82414
                               -------------------
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (307) 587B8245

[ ]      Securities registered pursuant to Section 12(b) of the Act:  None

[X]      Securities registered pursuant to Section 12(g) of the Act:


Common Shares, no par value                      Nasdaq National Market
---------------------------                      ----------------------
      (Title of Class)               (Name of each exchange on which registered)

         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 NO

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  Registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.

         The aggregate market value of the Common Shares held by  non-affiliates
of the  Registrant  on March 15, 2000,  based upon the closing sale price of the
Common  Shares on the NASDAQ Stock Market of $5.813 per share on March 15, 2000,
was approximately  $77,185,000.  Common Shares held by each officer and director
and by each other person who may be deemed to be an affiliate of the  Registrant
have been excluded.  As of March 15, 2000 the  Registrant had 15,837,882  Common
Shares outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
     Portions of the Registrant's Proxy Statement for the Annual Meeting of
           Shareholders to be held on June 1, 2000 are incorporated by
                      reference in Part III of this Report.


<PAGE>


         Altair  International Inc. ("Altair") is filing this Amendment No. 1 on
Form 10-K/A (this  "Amendment")  to its Annual  Report on Form 10-K for the year
ended  December  31, 1999 (the "Form 10-K") filed with the SEC on April 12, 2000
for the purpose of correcting the discussion of the differences between Canadian
generally  accepted  accounting  principals  ("Canadian GAAP") and United States
generally accepted  accounting  principles ("U.S. GAAP") set forth in Note 15 of
the Consolidated Financial Statements included in Item 14 of the Form 10-K.

         In the  past,  Altair  has  capitalized  exploration  expenditures  and
recorded them in the balance sheet as "Mineral  Properties and Related  Deferred
Exploration  Expenditures"  for  both  Canadian  GAAP and  U.S.  GAAP  purposes.
However, Altair is considered to be an exploration stage company under U.S. GAAP
and,  as an  exploration  stage  company,  is  required  to  record  exploration
expenditures as expenses in the period  incurred.  Accordingly,  we are amending
Note 15 to the Consolidated  Financial Statements to show that, under U.S. GAAP,
our  expenditures on mineral  exploration  would not be listed as an asset under
the line item "Mineral Properties and Related Deferred Exploration Expenditures"
as they are  under  Canadian  GAAP.  Rather,  under  U.S.  GAAP our  exploration
expenditures would be reflected as an expense in the Consolidated  Statements of
Operations. As a result of this adjustment,  our reported net loss for U.S. GAAP
purposes is increased from  $2,224,408 to $2,845,658 for year ended December 31,
1999,  from  $1,929,539 to $3,650,237  for the year ended  December 31, 1998 and
from $1,831,471to $2,311,719 for the year ended December 31, 1997.

         All  subsequent  references  to "Form  10-K" shall refer to the initial
Form 10-K, as amended by this Amendment.


                                       2
<PAGE>


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a) Documents Filed
         ---------------

         1.  Financial   Statements.   The  following   Consolidated   Financial
Statements of the Company and Auditor's  Report are filed as part of this Annual
Report on Form 10-K:

             o    Report  of  McGovern,  Hurley,  Cunningham,  LLP for the years
                  ended December 31, 1999, 1998, and 1997

             o    Consolidated Balance Sheets at December 31, 1999 and 1998

             o    Consolidated  Statements  of  Operations  and  Deficit for the
                  years ended December 31, 1999, 1998 and 1997

             o    Consolidated  Statements  of Cash  Flows for the  years  ended
                  December 31, 1999, 1998 and 1997

             o    Notes to the Consolidated Financial Statements

         2.  Financial Statement Schedule. Not applicable.


         3.  Exhibit List
<TABLE>
<CAPTION>

  Exhibit No.                         Exhibit                            Incorporated by Reference/ Filed Herewith
----------------    ---------------------------------------------     ------------------------------------------------
<S>                 <C>                                               <C>
                                                                      Incorporated by reference to Registration
          3.1.1     Articles of Incorporation of the Registrant       Statement on Form 10-SB filed with the
                                                                      Commission on November 25, 1996.

                                                                      Incorporated by reference to Amendment No. 1
          3.1.2     Amendment to Articles of  Incorporation  of       to  Registration Statement on Form 10 filed
                    the Registrant  dated November 6, 1966            with the Commission on December 23, 1996.

                                                                      Incorporated by reference to Registration
            3.2     Bylaws of the Registrant                          Statement on Form 10-SB filed with the
                                                                      Commission on November 25, 1996.

                                                                      Incorporated by reference to Registration
            4.1     Form of Common Stock Certificate                  Statement on Form 10-SB filed with the
                                                                      Commission on November 25, 1996.

                                                                      Incorporated by reference to the Company's
                                                                      Current Report on Form 8-K filed with the
            4.2     Form of Warrant (related to Convertible           Commission on January 13, 1998, as amended by
                    Debentures)                                       Amendment No. 1 to Current Report on Form
                                                                      8-K/A, filed on January 21, 1998.

                                                                      Incorporated by reference to the Company's
            4.3     Form of Series J Warrant                          Quarterly Report on Form 10-Q filed on May 15,
                                                                      1999.

                                                                      Incorporated by referenced to the Company's
            4.4     Form of Series K Warrant                          Annual Report on Form 10-K filed on April 12,
                                                                      2000.
</TABLE>


                                       3
<PAGE>


<TABLE>
<CAPTION>

<S>                 <C>                                               <C>
                                                                      Incorporated by referenced to the Company's
            4.5     Form of Series L Warrant                          Annual Report on Form 10-K filed on April 12,
                                                                      2000.

                    Shareholders Rights Plan Agreement dated
                    November 27, 1998, between Altair                 Incorporated by reference to the Company's
            4.6     International Inc. and Equity Transfer            Current Report on Form 8-K filed with the
                    Services Inc.                                     Commission on December 29, 1998.

                    Performance Escrow Agreement dated February       Incorporated by reference to Registration
           10.1     27, 1996; Performance Escrow Release              Statement on Form 10-SB filed with the
                    Schedule                                          Commission on November 25, 1996.

                                                                      Incorporated by reference to the Company's
                    Employment Agreement between Altair               Annual Report on Form 10-K filed with the
           10.2     International Inc. and William P. Long            Commission on March 31, 1998, as amended by
                    dated January 1, 1998                             Amendment No. 1 to Annual Report on Form
                                                                      10-K/A filed on May 15, 1998.

                    Employment Agreement between Fine Gold            Incorporated by reference to Registration
           10.3     Recovery Systems Inc. and C. Patrick Costin       Statement on Form 10-SB filed with the
                    dated August 15, 1994                             Commission on November 25, 1996.

                                                                      Incorporated by reference to the Company's
                    Employment Agreement between Altair               Quarterly Report on Form 10-Q for the quarter
           10.4     International Inc. and John W. Parsons            ended September 30, 1998, filed with the
                    dated July 6, 1998                                Commission on November 13, 1998.

                                                                      Incorporated by reference to the Company's
           10.5     Altair International Inc. Stock Option Plan       Registration Statement on Form S-8 filed with
                    adopted by shareholders on May 10, 1996           the Commission on July 11, 1997.

                    1998 Altair International Inc. Stock Option       Incorporated by reference to the Company's
           10.6     Plan adopted by Shareholders on June 11,          Definitive Proxy Statement on Form 14A filed
                    1998                                              with the Commission on May 12, 1998.

                    Escrow Agreement among Altair International
                    Inc., Equity Transfer Services Inc., Thomas       Incorporated by reference to Registration
           10.7     P. Campbell and C. Patrick Costin dated           Statement on Form 10-SB filed with the
                    June 1, 1994                                      Commission on November 25, 1996.

                                                                      Incorporated by reference to the Company's
                                                                      Annual Report on Form 10-K filed with the
           10.8     Form of Mineral Lease                             Commission on March 31, 1998, as amended by
                                                                      Amendment No. 1 to Annual Report on Form
                                                                      10-K/A filed on May 15, 1998.

                                                                      Incorporated by reference to the Company's
           10.9     Exploration License with Option dated             Annual Report on Form 10-K filed with the
                    October 1, 1998                                   Commission on March 18, 1999.

                    Amended and Restated Shareholder Rights           Incorporated by reference to the Company's
          10.10     Plan dated October  15,  1999,  between the       Current Report on Form 8-K filed with the
                    Company and Equity Transfer Services, Inc.        Commission on November 19, 1999.
</TABLE>


                                       4
<PAGE>


<TABLE>
<CAPTION>

<S>                 <C>                                               <C>
                                                                      Incorporated by reference to the Company's
          10.11     Lease dated November 15, 1999, between the        Current Report on Form 8-K filed with the
                    Company and BHP Minerals International Inc.       Commission on November 19, 1999.

                    Services Agreement dated November 15, 1999,       Incorporated by reference to the Company's
          10.12     between the Company and BHP Minerals              Current Report on Form 8-K filed with the
                    International Inc                                 Commission on November 19, 1999.

                    Asset Purchase and Sale Agreement dated
                    November 15, 1999,  between  the  Company         Incorporated by reference to the Company's
          10.13     and BHP Minerals              International       Current Report on Form 8-K filed with the
                    Inc                                               Commission on November 19, 1999.

           23.1     Consent of McGovern, Hurley, Cunningham           Included in the Auditors Report filed herewith.

                                                                      Incorporated by referenced to the Company's
             24     Power of Attorney                                 Annual Report on Form 10-K filed on April 12,
                                                                      2000.

                                                                      Incorporated by referenced to the Company's
             27     Financial Data Schedule                           Annual Report on Form 10-K filed on April 12,
                                                                      2000.
</TABLE>

         (b)      Reports on Form 8-K
                  -------------------

                  The Company filed a Current Report on Form 8-K on November 19,
         1999,  in  which  (i) it  reported  the  acquisition  of  all  patents,
         technology  and other assets  related to a  hydrometallurgical  process
         developed  by BHP  primarily  for the  production  of titanium  dioxide
         products  from  titanium  bearing  ores or  concentrates  and filed all
         material  transaction  documents,  and (ii) it filed and  reported  its
         Amended and Restated  Shareholders  Rights Plan dated October 15, 1999,
         between the Company and Equity Transfer Services, Inc.

         (c)      Exhibits
                  --------

                  Exhibits  to this  Report  are  attached  following  page F-17
         hereof.

         (d)      Financial Statement Schedule
                  ----------------------------

                  Not applicable.


                                       5
<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has duly caused this report on Form 10-K/A
to be signed on its behalf by the  undersigned,  thereunto duly  authorized,  on
January 31, 2001.

                                   ALTAIR INTERNATIONAL INC.


                                   By: /s/ William P. Long
                                   -----------------------
                                           William P. Long,
                                           President, Chief Executive Officer


                              ADDITIONAL SIGNATURES

      Signature                       Title                             Date
      ---------                       -----                             ----
/s/ William P. Long        President and Chief Executive        January 31, 2001
-------------------        Officer and Director (Principal
William P. Long            Executive Officer)



/s/ Edward Dickinson       Chief Financial Officer
--------------------       (Principal Financial and
Edward Dickinson           Accounting Officer)                 January 31,  2001



/s/ James I. Golla*        Secretary and Director               January 31, 2001
-------------------
James I. Golla


/s/ George Hartman*        Director                             January 31, 2001
-------------------
George Hartman


* By: /s/ William P. Long
-------------------------
          William P. Long, Attorney-in-Fact


                                       6
<PAGE>


                            ALTAIR INTERNATIONAL INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

                      (Expressed in United States Dollars)

                                      F-1
<PAGE>


McGovern, Hurley, Cunningham, LLP                          Chartered Accountants
2005 Sheppard Avenue East, Suite  503                 Telephone:  (416) 496-1234
Toronto, Ontario, Canada   M2J 5B4                          Fax:  (416) 496-0125
                                             Gen.E-mail address: info@mhc-ca.com
                                                        Website:  www.mhc-ca.com

                                AUDITORS' REPORT

To the Shareholders of
ALTAIR INTERNATIONAL INC.

We have audited the consolidated  balance sheets of Altair International Inc. as
at December 31, 1999 and 1998 and the consolidated  statements of operations and
deficit and cash flows for the years ended  December  31,  1999,  1998 and 1997.
These consolidated  financial statements are the responsibility of the Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in Canada.  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, 1999
and 1998 and the  results  of its  operations  and its cash  flows for the years
ended December 31, 1999,  1998 and 1997 in accordance  with  generally  accepted
accounting principles in Canada.

Generally  accepted  accounting  principles in Canada differ in general respects
from those  applicable  in the United  States  (see Note 15).  We consent to the
incorporation by reference of this report in the Registration Statements on Form
S-3,  file  Nos.  333-54092,   333-36462  and  333-45511  and  the  Registration
Statements  on Form  S-8,  file Nos.  333-64495  and  333-33481  filed by Altair
International Inc.

                               McGOVERN, HURLEY, CUNNINGHAM, LLP

                               Signed "McGovern, Hurley, Cunningham, LLP"
                               ------------------------------------------
                               Chartered Accountants

TORONTO, Canada
February 17, 2000,
except as to Note 17 which
is as of April 7, 2000


                                      F-2
<PAGE>


ALTAIR INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31
================================================================================
                                                         1999            1998
(Expressed in United States Dollars)                       $               $
================================================================================
                                     ASSETS

CURRENT
    Cash and short-term investments                     153,580      3,100,577

    Other current assets                                980,453        130,642
                                                    -----------    -----------
                                                      1,134,033      3,231,219
CAPITAL
    Property and equipment (Cost, net of
      amortization) (Note 4)                          2,507,878        462,417

PATENTS AND RELATED EXPENDITURES
    (Cost, net of amortization) (Note 5)             10,001,967      3,609,024

MINERAL PROPERTIES AND RELATED DEFERRED
EXPLORATION EXPENDITURES (Note 6 and Note 15)         2,021,052      1,399,802

GOODWILL, net                                             8,978          9,590
                                                    -----------    -----------


Total Assets                                         15,673,908      8,712,052
                                                    ===========    ===========


                                  LIABILITIES

CURRENT
    Accounts payable and accrued liabilities            199,676        165,979
    Current portion of notes payable (Note 7)         7,363,600         73,533
                                                    -----------    -----------

Total Liabilities                                     7,563,276        239,512
                                                    -----------    -----------

                              SHAREHOLDERS' EQUITY

CAPITAL STOCK ISSUED (Note 8)
    15,474,915 and 15,174,915 common shares at
         December 31, 1999 and 1998, respectively    18,324,963     16,462,463

CONTRIBUTED SURPLUS                                     655,098        655,098

DEFICIT                                             (10,869,429)    (8,645,021)
                                                    -----------    -----------


Total Shareholders' Equity                            8,110,632      8,472,540
                                                    -----------    -----------


Total Liabilities and Shareholders' Equity           15,673,908      8,712,052
                                                    ===========    ===========


        See accompanying Notes to the Consolidated Financial Statements.


                                      F-3
<PAGE>

<TABLE>
<CAPTION>

ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE YEARS ENDED DECEMBER 31
=================================================================================================
                                                             1999           1998           1997
(Expressed in United States Dollars)                           $              $              $
=================================================================================================
<S>                                                         <C>            <C>            <C>
OPERATING EXPENSES
    Wages and administration                                373,269        251,798        256,033
    Testing, research and development                       290,420        259,630         78,034
    Professional fees                                       252,337        236,549        293,883
    Shareholder relations                                   209,009        165,063        105,993
    General and office                                      134,949        108,785         74,266
    Travel                                                   97,663        106,661         87,777
    Occupancy costs                                          92,581         69,286         43,146
    Shareholders' meetings and reports                       92,414        119,497         96,308
    Insurance                                                57,580         58,951         48,120
    Government fees and taxes                                39,236         23,123         25,447
    Stock exchange fees                                      18,505         61,320          7,438
    Corporate services                                       12,170         10,625          8,166
    Transfer agent's fees                                     4,616         14,247         17,390
    Bank charges                                              1,580          2,272          1,589
    Loss on foreign exchange                                160,619         17,109        123,612
    Loss on disposal of fixed assets                           --            4,418           --
    Write off of mineral properties                          93,643           --             --
    Amortization                                            494,104        555,626        590,831
                                                        -----------    -----------    -----------
                                                          2,424,695      2,064,960      1,858,033
Interest on long-term debt                                    1,966         32,165         43,497
Interest income                                            (134,811)      (335,037)       (70,059)
                                                        -----------    -----------    -----------

Loss from operations                                      2,291,850      1,762,088      1,831,471
Premium on redemption of convertible debentures                --          193,256           --
(Gain) on forgiveness of debt                               (67,442)       (25,805)          --
                                                        -----------    -----------    -----------

NET LOSS FOR THE YEAR                                     2,224,408      1,929,539      1,831,471
Deficit, beginning of the year                            8,645,021      6,303,879      3,956,564
Premium on conversion of convertible debentures                --          244,915           --
Accretion of equity element of convertible debentures          --          144,801           --
Convertible debenture issuance costs                           --           21,887        515,844
                                                        -----------    -----------    -----------
Deficit, end of the year                                 10,869,429      8,645,021      6,303,879
                                                        ===========    ===========    ===========

Basic net loss per share from operations (Note 11)            (0.15)         (0.13)         (0.13)
                                                        ===========    ===========    ===========

Net loss per share from premium on redemption of
Convertible debentures                                        (0.00)         (0.01)         (0.00)
                                                        ===========    ===========    ===========


Net income per share from gain on forgiveness of debt          0.00           0.00           0.00
                                                        ===========    ===========    ===========
</TABLE>


        See accompanying Notes to the Consolidated Financial Statements.


                                       F-4
<PAGE>


<TABLE>
<CAPTION>

ALTAIR INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
==========================================================================================================
                                                                       1999          1998         1997
(Expressed in United States Dollars)                                     $             $            $
==========================================================================================================
<S>                                                                <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year                                              (2,224,408)   (1,929,539)   (1,831,471)
Items not involving cash:

    Amortization                                                      494,104       555,626       590,831
    Gain on forgiveness of debt                                       (67,442)      (25,805)         --
    Write off of mineral properties                                    93,643          --            --
    Unrealized loss on foreign exchange                               160,862          --            --
    Loss on disposal of fixed assets                                     --           4,418          --
    Interest on long-term debt                                           --           9,619          --
                                                                   ----------    ----------    ----------
                                                                   (1,543,241)   (1,385,681)   (1,240,640)
    Changes in non-cash working capital balances:

       Other current assets                                           112,739       (99,450)      (17,637)
       Accounts payable and accrued liabilities                        33,697       (61,459)       71,444
                                                                   ----------    ----------    ----------


Net cash used in operating activities                              (1,396,805)   (1,546,590)   (1,186,833)
                                                                   ----------    ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of pigment processing technology                   (2,422,763)         --            --
    Purchase of mineral properties and related
       deferred exploration expenditures                             (714,893)     (793,251)     (480,248)
    Purchase of capital assets                                       (231,550)     (146,211)     (237,283)
    Purchase of centrifugal jig patents and related
       expenditures                                                   (37,398)     (168,572)      (46,701)
                                                                   ----------    ----------    ----------


Net cash used in investing activities                              (3,406,604)   (1,108,034)     (764,232)
                                                                   ----------    ----------    ----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Issuance of common shares for cash, net of share issue costs    1,862,500          --            --
    Proceeds from exercise of stock options                              --         113,664     1,530,406
    Proceeds from exercise of warrants                                   --            --         991,042
    Payment of notes payable                                           (6,088)     (160,454)     (162,930)
    Issuance of convertible debentures                                   --       5,000,000
    Convertible debenture issuance costs                                 --         (21,887)     (515,844)
    Redemption of convertible debentures                                 --      (2,337,892)         --
                                                                   ----------    ----------    ----------


Net cash provided by (used in) financing activities                 1,856,412    (2,406,569)    6,842,674
                                                                   ----------    ----------    ----------

Net increase (decrease) in cash and short-term investments         (2,946,997)   (5,061,193)    4,891,609

Cash and short-term investments, beginning of year                  3,100,577     8,161,770     3,270,161
                                                                   ----------    ----------    ----------

Cash and short-term investments, end of year                          153,580     3,100,577     8,161,770
                                                                   ==========    ==========    ==========
</TABLE>


        See accompanying Notes to the Consolidated Financial Statements.


                                       F-5
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

1.       BASIS OF PRESENTATION

                  The United States  dollar is the  principal  currency in which
         the  Company  conducts   business;   accordingly,   these  consolidated
         financial statements are expressed in United States dollars.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         These consolidated financial statements are prepared in accordance with
         accounting  principles  generally  accepted in Canada.  As described in
         Note 15, these  principles  differ in certain  respects from principles
         and practices generally accepted in the United States. Summarized below
         are those policies considered particularly significant for the Company.

         Consolidation

                The financial statements include the accounts of the Company and
                its  subsidiaries,  Mineral  Recovery  Systems,  Inc., Fine Gold
                Recovery Systems,  Inc., Altair  Technologies,  Inc,  California
                Recovery  Systems,  Inc.,  Tennessee Valley  Titanium,  Inc. and
                660250 Ontario Limited, all of which are 100% owned.


         Nature of Operations

                The Company and its  subsidiaries are engaged in the business of
                (1) producing titanium dioxide products,  (2) developing mineral
                processing  equipment  for use in the recovery of fine and heavy
                mineral  particles,   including   titanium,   zircon,  gold  and
                environmental  contaminants,  and (3) exploring  and  developing
                mineral properties in the United States.

         Mineral Properties and Related Deferred Exploration Expenditures

                Mineral  properties  are  carried at cost until they are brought
                into   production,   at  which  time  they  are  depleted  on  a
                unit-of-production method based on proven and probable reserves.
                If a property is subsequently determined not to be economic, the
                property  and related  deferred  costs are  written  down to net
                realizable value.

                Exploration  expenses,  as  well  as  advance  royalty  payments
                relating  to  mineral  properties  in which the  Company  has an
                interest,  are deferred  until the  properties  are brought into
                production,   at   which   time   they   are   amortized   on  a
                unit-of-production basis. Other general exploration expenses are
                charged  to  operations   as  incurred.   The  cost  of  mineral
                properties   abandoned  or  sold  and  their  related   deferred
                exploration costs are charged to operations in the current year.

                The Company reviews its mineral properties on an annual basis to
                determine if events or changes in circumstances  have transpired
                which  indicate that the carrying value of its assets may not be
                recoverable. The recoverability of costs incurred on the mineral
                properties  is  dependent   upon  numerous   factors   including
                exploration  results,   environmental  risks,  commodity  risks,
                political risks, and the Company's  ability to attain profitable
                production.  In reviewing  its mineral  properties,  the Company
                estimates  the future  cash flows  expected  to result from each
                asset  and  its  eventual   disposition.   If  the  sum  of  the
                undiscounted,  expected  future  cash  flow  is  less  than  the
                carrying value of the asset,  an impairment  loss is recognized.
                It is reasonably  possible,  based on existing  knowledge,  that
                changes in future  conditions in the  near-term  could require a
                change in the  determination  of the need for and  amount of any
                writedown.


                                      F-6
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


         Administrative Expenditures

                Administrative   expenditures   are  charged  to  operations  as
                incurred.

         Short-term Investments

                Surplus  cash  of  the  Company  is  invested  in a  diversified
                portfolio  of  United  States  dollar-denominated  money  market
                instruments.  These  investments are liquid and can be converted
                to cash  at any  time  through  the  public  money  market.  The
                carrying amount of the short-term investments approximates their
                market value.

         Capital Assets and Amortization

                Capital assets are stated at acquisition  cost.  Amortization is
                provided  based on the  estimated  useful  life of the assets as
                follows:

         Furniture and office equipment    -    3, 5 and 7 year straight-line
         Vehicles                          -    5 year straight-line
         Centrifugal jig equipment         -    7 year straight-line
         Jig test facility                 -    7 year straight-line
         Pigment production facility       -    10 year straight-line

                Effective  January 1, 1998, the Company  changed certain methods
                of  amortization  from  the  declining  balance  method  to  the
                straight-line    method.    This   change   has   been   applied
                prospectively. The effect of the change on the reported net loss
                for the year ended December 31, 1998 is not significant.

         Patents and Related Expenditures

                The Company  owns  patents  with  respect to pigment  production
                technology and centrifugal  jig technology.  Patents are carried
                at acquisition  cost and are being  amortized on a straight-line
                basis over their remaining lives.

                The related  expenditures  are also being carried at acquisition
                cost and the amortization policies are as follows:

         Royalty agreement (Note 3(a))      -   15-year straight-line
         License agreement                      Straight-line over the remaining
                                                life of the related patent
         Mineral recovery technology rights -   Straight-line over the remaining
                                                life of the related patent

                The Company  reviews its patents and related  expenditures on an
                annual basis to determine if events or changes in  circumstances
                have  transpired  which  indicate that the carrying value of its
                assets may not be  recoverable.  In performing  its review,  the
                Company  estimates the future cash flows expected to result from
                each  asset  and  its  eventual  disposition.  If the sum of the
                undiscounted expected future cash flow is less than the carrying
                value of the asset,  an  impairment  loss is  recognized.  It is
                reasonably possible,  based on existing knowledge,  that changes
                in future  conditions in the  near-term  affecting the operating
                capability  and/or   marketability  of  the  pigment  processing
                facility  and  centrifugal  jig  could  require  a change in the
                determination of the need for and amount of any writedown.


                                      F-7
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


         Research and Development Expenditures

                Research and development  expenditures are charged to operations
                as incurred.

         Goodwill

                Goodwill  is  the  excess  of the  cost  of  the  investment  in
                subsidiaries  over the  estimated  fair  value of the net assets
                acquired  and is  amortized  on a  straight-line  basis  over 20
                years. Goodwill is written down (to fair value) when declines in
                value are  considered  other than  temporary  based on  expected
                future cash flows of the respective subsidiary.

         Foreign Currency Translation

                The Company's consolidated operations are integrated and amounts
                denominated in currencies other than U.S. dollars are translated
                into  U.S.  dollars  using  the  temporal  method.  This  method
                translates  monetary  balances  at the rate of  exchange  at the
                balance sheet date, non-monetary balances at historical exchange
                rates and revenue and expense items at average  exchange  rates.
                The resulting  gains and losses are included in income (loss) in
                the reporting period.

         Use of Estimates

                The   preparation  of  consolidated   financial   statements  in
                conformity  with  generally   accepted   accounting   principles
                requires  management  to make  estimates  and  assumptions  that
                affect  the  reported  amounts  of assets  and  liabilities  and
                disclosure of contingent  assets and  liabilities at the date of
                the consolidated  financial  statements and the related reported
                amounts of revenue and expense during the report period.  Actual
                results could differ from those estimates.  Management  believes
                that the estimates are reasonable.

         Financial Instruments

                The carrying amounts for other current assets,  accounts payable
                and accrued liabilities, and notes payable on the balance sheets
                approximate  fair  value  because of the  limited  term of these
                instruments.  Fair value estimates are made at the balance sheet
                date based on relevant market  information and information about
                the financial  instrument.  These  estimates  are  subjective in
                nature  and  involve  uncertainties  in  significant  matters of
                judgment and  therefore  cannot be  determined  with  precision.
                Changes  in  assumptions   could   significantly   affect  these
                estimates.

         Income Taxes

                In fiscal 1999,  the company  adopted the Canadian  Institute of
                Chartered  Accountants'  recommendations  for the  accounting of
                income taxes. The new standard requires the use of the asset and
                liability method of accounting for income taxes. Under the asset
                and liability method, future income taxes are recognized for the
                future  income  tax  consequences  attributable  to  differences
                between  the  financial  statement  carrying  values  and  their
                respective  income  tax basis  (temporary  differences).  Future
                income tax assets and  liabilities  are measured  using  enacted
                income  tax rates  expected  to apply to  taxable  income in the
                years  in  which  temporary   differences  are  expected  to  be
                recovered or settled. The effect on future income tax assets and
                liabilities  of a change in tax rates is  included  in income in
                the period that includes the enactment  date.  Future income tax
                assets are evaluated and if realization  is not considered  more
                likely than not, a valuation allowance is provided.  Previously,
                the Company  followed  the  deferral  method of  accounting  for
                income taxes that related the  provision for income taxes to the
                accounting income for the period.

                As at December 31,  1999,  the  valuation  allowance is equal to
                100% of the future income tax asset. There is no effect on prior
                years' figures as a result of this change in accounting policy.


                                      F-8
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

3.       ACQUISITIONS

         (a)    Intercontinental Development Corporation

                In 1996, the Company purchased 66% of the issued and outstanding
                shares of Intercontinental  Development  Corporation  ("INDECO")
                for  total  consideration  of  $319,298.   The  acquisition  was
                accounted for using the purchase method. From 1997 through 1999,
                the Company  acquired  the  remaining  34% of INDECO  shares for
                total  consideration  of  $105,584.  The  entire  amount  of the
                purchase price has been allocated to the Centrifugal Jig Royalty
                Agreement.  INDECO, which was dissolved in 1999, had as its sole
                asset a royalty  agreement  entitling the  corporation to 10% of
                the cost of manufacturing any Centrifugal Jigs which were placed
                in production, sold or exploited for profit worldwide.

         (b)    Pigment Production Technology and Assets

                As of  November  15,  1999,  the Company  entered  into an Asset
                Purchase and Sale  Agreement  (the "Asset  Purchase  Agreement")
                with BHP Minerals  International  Inc. ("BHP") pursuant to which
                it   purchased   all  patents  and   technology   related  to  a
                hydrometallurgical  process  developed by BHP  primarily for the
                production of titanium  dioxide  products from titanium  bearing
                ores or concentrates (the "Technology"),  all tangible equipment
                and  other  assets  used by BHP to  develop  and  implement  the
                Technology  (the  "Assets")  and the  use  for  one  year of the
                services  of  the  BHP  personnel   presently   developing   the
                Technology.

                The purchase  price for the Technology and Assets was 15,000,000
                Australian   Dollars   (AUD$)  and  is  payable  in  four  equal
                installments.  The first installment was paid at closing and the
                second payment,  which was originally due February 15, 2000, has
                been  rescheduled  by Letter of Amendment,  with interest at 15%
                per annum,  until May 15, 2000.  The  remaining two payments are
                due and  payable on May 15,  2000 and August  15,  2000.  If the
                Company fails to pay any of the remaining three installments, it
                will  forfeit to BHP,  without a right to  reimbursement  of any
                amount of the purchase price paid to date, all right,  title and
                interest in the Technology and Assets.

                The Asset Purchase Agreement also requires the Company to pay to
                BHP, until the earlier of the fifteenth  anniversary of November
                15, 1999 or the date the Company has paid an  aggregate  royalty
                of AUD$105,000,000, a quarterly royalty equal to:

                o     1.5% of the  international  market  price of all  uncoated
                      titanium  dioxide pigment produced and sold as a result of
                      the use of the  Technology  by the Company or a transferee
                      at the Company's mineral properties in Tennessee;

                o     1.5% of the  international  market  price of all  uncoated
                      titanium  dioxide pigment produced and sold as a result of
                      the use of the  Technology  by BHP or any affiliate of BHP
                      at a specified  heavy mineral sand operation  located near
                      Auckland, New Zealand;

                o     3% of the  international  market  price  of  all  uncoated
                      titanium  dioxide pigment produced and sold as a result of
                      the use of the  Technology  by the Company or a transferee
                      of the Company at any  location  other than the  Tennessee
                      mineral  property  or  the  Auckland,  New  Zealand  heavy
                      mineral sand operation; and

                o     3% of the sales  proceeds  received  by the  Company  or a
                      transferee  of the Company  from the sale of any  products
                      other than titanium  dioxide pigment  produced through the
                      Company's use of the Technology.


                                      F-9
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

3.       ACQUISITIONS (Continued)

                In addition,  in connection  with the Asset Purchase  Agreement,
                the  Company and BHP entered  into a lease  dated  November  15,
                1999,  pursuant  to which the Company  will lease  approximately
                20,000  square feet of  laboratory  and  testing  space at BHP's
                testing facility in Reno,  Nevada for a monthly rent of $15,000.
                The  initial  term of the lease  expires on December  31,  2000,
                subject  to  automatic   renewals  for   six-month   periods  at
                inflation-adjusted  rent until  terminated  by the Company.  The
                lease  grants the Company a right of first  refusal in the event
                BHP intends to sell the  building  and  property  subject to the
                lease.

                The Assets have been recorded in the capital  asset  accounts as
                pigment production facility (see Note 4), and the Technology has
                been  recorded  in the patents  accounts  as pigment  production
                patents (see Note 5).

4.       CAPITAL ASSETS
<TABLE>
<CAPTION>

                                            December 31, 1999                               December 31, 1998
                             ------------------------------------------------  -------------------------------------------
                                              Accumulated                                      Accumulated
                                  Cost        Amortization        Net               Cost       Amortization       Net
                                  ----        ------------        ---               ----       ------------       ---
                                    $              $               $                 $              $              $
<S>                                 <C>             <C>             <C>               <C>             <C>           <C>
  Furniture and office
    equipment                       76,228          42,952          33,276            65,538          28,325        37,213
  Vehicles                         125,031          68,119          56,912            92,629          44,499        48,130
  Centrifugal jig
    equipment                      333,028         154,523         178,505           333,028         111,674       221,354
  Jig testing facility              45,128          18,583          26,545            45,128          12,555        32,573
  Pigment production
    facility                     1,925,100          24,064       1,901,036                 -               -             -
  Centrifugal jigs under
    construction                   311,604               -         311,604           123,147               -       123,147
                               -----------     -----------     -----------       -----------     -----------   -----------

                                 2,816,119         308,241       2,507,878           659,470         197,053       462,417
                               ===========     ===========     ===========       ===========     ===========   ===========
</TABLE>



5.       PATENTS AND RELATED EXPENDITURES
<TABLE>
<CAPTION>

                                          December 31, 1999                                 December 31, 1998
                           -------------------------------------------------  ----------------------------------------------
                                            Accumulated                                       Accumulated
                                Cost       Amortization          Net               Cost       Amortization        Net
                                ----       ------------          ---               ----       ------------        ---
                                 $               $                $                 $              $               $
<S>                              <C>              <C>             <C>                <C>             <C>           <C>
  Pigment production
    patents                    6,773,400          55,228        6,718,172                  -             -               -
  Centrifugal jig
    patents                    4,223,800       1,601,052        2,622,748          4,182,262     1,332,821       2,849,441
  Royalty agreement              424,881          88,588          336,293            424,604        59,265         365,339
  Mineral recovery
    technology rights            243,000          37,385          205,615            243,000        18,692         224,308
  License agreement              136,004          16,865          119,139            136,004         6,036         129,968
  Patent application                   -               -                -             39,968             -          39,968
                              ----------    ------------       ----------        -----------   -----------     -----------

                              11,801,085       1,799,118       10,001,967          5,025,838     1,416,814       3,609,024
                              ==========    ============       ==========        ===========   ===========     ===========
</TABLE>


                                      F-10
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


6.       MINERAL PROPERTIES AND RELATED DEFERRED EXPLORATION EXPENDITURES

                  The  Company's  subsidiary,  Mineral  Recovery  Systems,  Inc.
         ("MRS"), has entered into various mineral leases for a 100% interest in
         approximately  14,000 acres of land in the state of  Tennessee,  United
         States with minimum annual advance royalty payments as follows:

                                                                  Amount
                                                                  ------
                           Year                                    $
                           ----
                           2000                                    90,992
                           2001                                   152,116
                           2002                                   194,513
                           2003                                   212,289
                           2004                                   423,736
                           2005 and every year thereafter         430,132

         The mineral leases are subject to a production  royalty;  however,  MRS
         will  receive a credit  against  production  royalties  for all advance
         royalties  paid. The lessors can only terminate the leases upon failure
         of MRS to make the minimum  payments as required by the leases.  During
         the years ended December 31, 1999 and 1998,  approximately $715,000 and
         $793,000, respectively, were incurred on exploration.

7.       NOTES PAYABLE
<TABLE>
<CAPTION>

                                                                                                 1999            1998
                                                                                                 ----            ----
                                                                                                  $               $
<S>                                                                                             <C>                 <C>
                Note payable to BHP Minerals International, Inc., $4,903,600 due
                     May 15, 2000, $2,460,000 due August 15, 2000 (Note (a))                    7,363,600               -

                Notes payable assumed from Trans Mar, Inc., interest payable at
                     various rates, unsecured, principal and interest due
                     December 31, 1999                                                                  -          67,442

                Note payable, interest payable at 10% per annum, unsecured,
                     blended payments of $2,000 per month, due April 1, 1999                            -           6,091
                                                                                              -----------   -------------
                                                                                                7,363,600          73,533
                                                                                              ===========   =============
</TABLE>

                (a) Interest is due on $2,443,600 at 15% per annum from February
                16,  2000  to May  15,  2000.  The  remainder  of  payments  are
                interest-free  and secured by pigment  production  equipment and
                patents having a net book value of $8,619,208.


                                      F-11
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


8.       CAPITAL STOCK

                  Authorized  capital  stock of the Company is  comprised  of an
         unlimited  number of Common Shares.  Details of issued and  outstanding
         shares are as follows:
<TABLE>
<CAPTION>

                                                                          Shares          Amount
                                                                        -----------    -----------
                                                                            #                $
<S>                                                                      <C>            <C>
         Balance, December 31, 1996                                      14,686,296     11,373,259
         Exercise of stock options                                          362,500      1,530,406
         Exercise of warrants                                               411,229        991,042
         Common shares issued on warrants exercised in December 1996         32,720         47,746
                                                                        -----------    -----------
         Balance, December 31, 1997                                      15,492,745     13,942,453
         Exercise of stock options                                           17,500        113,664
         Common shares issued on conversion of convertible debentures       387,735      3,061,443
         Common shares canceled pursuant to settlement agreement
             with former TMI shareholders                                  (723,065)      (655,097)
                                                                        -----------    -----------
         Balance, December 31, 1998                                      15,174,915     16,462,463
         Common shares issued for cash                                      300,000      1,862,500
                                                                        -----------    -----------
         Balance, December 31, 1999                                      15,474,915     18,324,963
                                                                        ===========    ===========
</TABLE>

         Prospectus

         Pursuant to a  prospectus  dated  March 17,  1999,  the Company  issued
         300,000  common  shares  and  150,000  warrants  for  net  proceeds  of
         $1,862,500.

         Stock Options

                  As of December 31, 1999,  3,060,000 Common Shares are reserved
         for issuance to directors,  officers and employees  under the Company's
         stock option plans.  The following table summarizes the status of stock
         options outstanding and exercisable as of December 31, 1999:
<TABLE>
<CAPTION>

                                             Stock Options Outstanding                     Stock Options Exercisable
                                 ---------------------------------------------------  -------------------------------------
                                                      Weighted
                                                      Average         Weighted                               Weighted
                                                     Remaining         Average                               Average
                    Range of                        Contractual       Exercise                               Exercise
                Exercise Prices      Shares         Life (Years)        Price               Shares            Price
                ---------------      ------         ------------        -----               ------            -----
                       $                #                                 $                   #                 $
<S>               <C>                  <C>             <C>              <C>                <C>                 <C>
                  2.56 to 4.13         550,000         2.0              2.98               500,000             2.87
                  4.38 to 4.94         860,000         4.8              4.46               202,500             4.55
                  5.82 to 7.50         945,000         3.5              7.07               765,000             7.01
                 8.00 to 10.00         705,000         3.7              8.83               367,500             8.36
</TABLE>

         The number of Common  Shares  available  for the granting of options at
         December 31, 1999 and 1998 was 358,000 and 1,453,000, respectively. The
         following  table  summarizes  stock option activity for the years ended
         December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                                                     1999              1998
                                                                 -----------       -----------
<S>                                                                <C>                 <C>
               Outstanding at beginning of year                    1,965,000           962,500
               Granted during the year                             1,550,000         1,020,000
               Cancelled                                            (455,000)                -

               Exercised at an average price of $9.26 (1998)               -           (17,500)
                                                                 -----------       -----------
               Outstanding at end of year                          3,060,000         1,965,000
                                                                 ===========       ===========
               Currently exercisable                               1,835,000         1,540,000
                                                                 ===========       ===========
</TABLE>


                                      F-12
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


8.       CAPITAL STOCK (Continued)

         Warrants

         As of  December  31,  1999,  there  were  150,000  Warrants  issued and
         outstanding,  of which 125,000  warrants entitle the holder to purchase
         one common  share at $9.00 per share on or before the  earlier of March
         19,  2002 and the date  that is 30 days  following  the  fifth  day the
         closing  price equals or exceeds  $14.00 per share and 25,000  warrants
         entitle the holder to purchase  one common  share at $6.00 per share on
         or before the earlier of November 30, 2002 and the date that is 30 days
         following  the fifth day the closing  price equals or exceeds $8.00 per
         share.

9.       CONVERTIBLE DEBENTURES

         On December 29, 1997,  the Company  issued  $5,000,000  in  convertible
         subordinated  debentures  due  December  29,  2001  (the  "Debentures")
         bearing  interest at 5% per annum  payable in cash or Common  Shares of
         the Company annually or upon conversion or maturity,  at the discretion
         of the Company.  Subject to certain  restrictions  during the first 180
         days after  closing,  the Debentures  were  convertible by holders into
         Common  Shares at a  conversion  rate equal to the lesser of (i) 92% of
         the average  price of the Common Shares for the five trading days prior
         to  submission  of a  notice  of  conversion  by the  holder,  or  (ii)
         $14.36875 per share.  The  purchasers of the  Debentures  also received
         transaction  warrants  entitling the holders to purchase  75,000 Common
         Shares on or before December 29, 1999 at a price of $16.7188 per share.
         In addition,  the placement agent received 105,000  placement  warrants
         entitling the agent to purchase  105,000  Common Shares at $16.7188 per
         share on or before December 29, 1999.

         During the period May 20, 1998 through  July 31,  1998,  the holders of
         the Debentures elected to convert $2,750,000 of the principal amount of
         the Debentures and $66,528 of accrued  interest.  The conversions  were
         made at a  conversion  price rate equal to 92% of the average  price of
         the Common  Shares for the five trading days prior to submission of the
         notice of conversion by the holders.  These conversions resulted in the
         issuance of 387,735 Common Shares.

         On August  28,  1998,  the  Company  elected  to redeem  the  remaining
         $2,250,000 of Debentures  using cash previously  invested in short-term
         instruments.   The  total  cash  required  to  redeem  the  Debentures,
         including  the  10%  redemption  premium  and  accrued  interest,   was
         $2,550,938.  As of December 31,  1999,  all of the warrants had expired
         unexercised.

10.      COMMITMENTS

         Under the  current  employment  agreement  between  the Company and its
         president, Dr. William P. Long, Dr. Long is entitled to receive payment
         of 200,000 Common Shares in the event (i) voting control of over 35% of
         the  issued  stock is  acquired  by a person or group of  persons  in a
         merger, takeover or similar transaction (a "change of control") and Dr.
         Long's employment  agreement is terminated within 180 days before or at
         any time  after  such  change of  control,  or (ii)  absent a change of
         control,  if Dr.  Long's  employment  agreement is  terminated  for any
         reason except by Dr. Long, by mutual consent, by the Company for cause,
         or at the end of the term.


                                      F-13
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


11.      NET LOSS PER SHARE

                  The calculation of basic net loss per share from operations is
         based on the weighted  average number of Common Shares  outstanding for
         the year.  Net loss  used in the  calculation  is loss from  operations
         increased  by  the  accretion  of the  equity  element  of  convertible
         subordinated debentures.
<TABLE>
<CAPTION>

                                                                                  1999             1998            1997
                                                                               -----------    ------------   ------------
                                                                                    $               $               $
<S>                                                                              <C>              <C>           <C>
               Loss from operations                                              2,291,850        1,762,088     1,831,471
               Accretion of equity element of convertible debentures
                                                                                         -          144,801             -
                                                                               -----------    ------------   ------------
                                                                                 2,291,850       1,906,889      1,831,471
                                                                               ===========    ============   ============
               Weighted average number of common shares                         15,374,093      15,143,020     14,366,457
                                                                                ==========     ===========    ===========
               Basic net loss per share from operations                           0.15             0.13            0.13
                                                                                  ====             ====            ====
</TABLE>

                  The  existence  of stock  options,  warrants  and  convertible
         debentures affects the calculation of loss per share on a fully diluted
         basis.  As the effect of this  dilution is to reduce the reported  loss
         per share, the fully diluted loss per share has not been presented.

12.      INCOME TAXES

                  As  of  December  31,  1999,  the  Company  has  approximately
         $7,500,000  of  non-capital  losses  carried  forward  for  income  tax
         purposes which,  under certain  circumstances,  are available to reduce
         future  years'  income for tax  purposes.  Approximately  $7,300,000 of
         these losses are subject to expiration beginning in 2003.

13.      CONCENTRATION OF CREDIT RISK

                  As of December 31, 1999, the Company had $115,044  invested in
         a  diversified  portfolio  of United  States  dollar-denominated  money
         market  instruments  in the United  States.  This  portfolio is neither
         insured nor guaranteed by the United States Government.

14.      STATEMENTS OF CASH FLOWS

         Non-Cash Investing and Financing Activities

         Year ended  December  31,  1999:  There were no non-cash  investing  or
         financing activities.

         Year ended December 31, 1998: Convertible debentures having a principal
         amount of  $2,750,000  and accrued  interest of $66,528 were  converted
         into 387,735 Common Shares with a fair market value of $3,061,444.

         Year ended  December  31,  1997:  There were no non-cash  investing  or
         financing activities.

         Cash and Cash Equivalents

                  The cash and short-term investments on hand as of December 31,
         1999  represent  cash and a  diversified  portfolio  of  United  States
         dollar-denominated  money market  instruments  which is considered cash
         equivalent.

         Supplemental Information

                                        1999             1998             1997
                                        ----             ----             ----
                                          $                $               $
         Interest paid                 1,966            32,165           43,497
         Interest received           134,811           335,037           70,057


                                      F-14
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

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

         The  Company  prepares  its  accounts  in  accordance  with  accounting
         principles   generally  accepted  in  Canada  ("Canadian  GAAP")  which
         conform, in all material respects, with accounting principles generally
         accepted in the United States ("U.S. GAAP"), except as described below.

         Exploration Stage Enterprise

         As of  December  31,  1999 the  Company  would be  characterized  as an
         "exploration  stage  enterprise"  under U.S. GAAP. Under Canadian GAAP,
         there  are  no   requirements   for  the  indication  or  reporting  of
         exploration  stage entities.  The following is a summary of the deficit
         accumulated during the exploration stage:

                                                             Accumulated deficit
                                                                      during the
                                                               exploration stage
                                                             -------------------
                                                                          $
             Professional fees                                        1,604,549
             Salaries and wages                                       2,245,499
             Shareholders' expenses                                   1,291,838
             Office and general                                       2,549,845
             Loss on sale of mining claims                              101,047
             Amortization                                             2,031,656
             Interest on long-term debt                                  97,001
             Write off of mineral properties and related deferred
              exploration expenditures                                3,407,048
             Write off of organization costs                              8,563
                                                                    -----------
                                                                     13,337,046

             Less:
                  Interest income                                      (581,420)
                  Gain on sale of marketable securities                 (35,773)
                  Lease payments                                       (143,754)
                  Gain on forgiveness of debt                          (795,973)
                  Option payments                                       (70,906)
                                                                    -----------
             Total accumulated loss                                  11,709,220
             Convertible debenture costs                                537,731
             Share issue costs                                           60,557
             Accretion of equity element of convertible debentures      144,801
             Premium on conversion of convertible debentures            244,915
             Premium on redemption of convertible debentures            193,256
                                                                    -----------
             Accumulated deficit, December 31, 1999                  12,890,480
                                                                    ===========


         Foreign Currency Translation

                  In Canada and the United States, a distinction is made between
         the measurement and accounting for an enterprise's  own transactions in
         a foreign currency.  The Company  remeasures its books and records into
         the  functional  currency  prior  to  translation  into  the  reporting
         currency.  The  Company  maintains  its books and  records in  Canadian
         dollars and the U.S.  subsidiaries  maintain their books and records in
         United States dollars.  The  remeasurement  of the Company's  financial
         statements  according to U.S.  GAAP would not change the results of the
         consolidated  financial statements prepared in accordance with Canadian
         GAAP.


                                      F-15
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================

15.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
         GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)


         Stock Options

                  Under  Canadian  GAAP,  there  is  no  requirement  to  record
         compensation   on  the  issuance  of  stock  options  to  employees  or
         directors.  Under U.S. GAAP,  compensation would be accrued on the date
         of granting of the options,  calculated as the  difference  between the
         market  price  and  exercise  price on the date of the  grant.  For the
         fiscal years ended  December 31, 1999 and 1998,  the exercise  price of
         all stock options  granted has been equal to or greater than the market
         price on the date of the  grant and  therefore  the  compensation  cost
         under U.S. GAAP would be nil.

         Reconciliation  to  Accounting  Principles  Generally  Accepted  in the
         United States

                  Convertible Debentures
                  ----------------------
                  Convertible  debenture issuance costs are added to the deficit
         under Canadian GAAP, but would be recorded as deferred  financing costs
         (an asset),  and  amortized to expense,  under U.S.  GAAP.  The Company
         incurred  issuance  costs of $21,887 in 1998 and  $515,844 in 1997 that
         have been charged to deficit under Canadian GAAP.  Under U.S. GAAP, the
         balance sheet at December 31, 1997 would  include a deferred  financing
         cost asset of $515,844  but this amount and the 1998 charges of $21,887
         would  be  charged  to  expense  in  1998  due  to the  redemption  and
         conversion of the Debentures  during the year (see Note 8). Also, under
         U.S.  GAAP,  the  premium  on  conversion  of  convertible   debentures
         ($144,801)   and  the  accretion  of  equity   element  of  convertible
         debentures   ($244,915)   would  be  expensed  in  the   Statements  of
         Operations.

                  Exploration Expenses
                  --------------------
                  The Company's costs with respect to its mineral properties are
         considered to be exploratory.  Canadian GAAP requires that  exploration
         expenses,  including  advance royalty  payments,  be deferred until the
         properties are brought into production.  Under U.S. GAAP, such expenses
         are charged to operations in the period  incurred until a determination
         has been made that a property has economically recoverable reserves.

                  The following  reflects  amounts that would have been reported
         had the Company's  consolidated  financial  statements been prepared on
         the basis of U.S. GAAP incorporating the differences described above:

         Consolidated Balance Sheets
         ---------------------------
<TABLE>
<CAPTION>

                                                                    1999             1998
                                                               ---------------- ----------------
                                                                      $                $
<S>                                                             <C>             <C>               <C>
         Mineral properties and related deferred exploration
              expenditures                                                -                -
         Deficit                                                (12,890,480)     (10,044,822)


         Consolidated Statements of Operations

                                                                    1999             1998              1997
                                                               ---------------- ----------------  ---------------
                                                                      $                $                $
         Exploration expenses                                       621,250          793,251         480,248
         Convertible debenture issuance costs                             -          537,731               -
         Premium on conversion of convertible debentures                  -          244,915               -
         Accretion of equity element of convertible
          debentures                                                      -          144,801               -
         Net loss for the year                                    2,845,658        3,650,237       2,311,719
         Deficit, beginning of year                              10,044,822        6,394,585       4,082,866
         Deficit, end of year                                    12,890,480       10,044,822       6,394,585
         Basic net loss per share from operations                  (0.19)           (0.24)            (0.16)


         There are no other material differences between Canadian GAAP and U.S. GAAP.
</TABLE>


                                      F-16
<PAGE>


ALTAIR INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


16.      UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

                  The Year 2000 Issue arises because many  computerized  systems
         use two digits  rather  than four to  identify  a year.  Date-sensitive
         systems  may  recognize  the  year  2000 as 1900  or some  other  date,
         resulting  in  errors  when  information   using  year  2000  dates  is
         processed.  In  addition,  similar  problems  may arise in some systems
         which use certain  dates in 1999 to  represent  something  other than a
         date.  Although the change in date has occurred,  it is not possible to
         conclude  that all  aspects  of the Year 2000 Issue that may affect the
         entity, including those related to customers, suppliers, or other third
         parties, have been fully resolved.

17.      SUBSEQUENT EVENTS

         (a)      Pursuant to three stock purchase  agreements  dated subsequent
                  to the year end, the Company  issued 125,000 common shares and
                  62,500  warrants for gross proceeds of $500,000.  Each warrant
                  entitles the holder to purchase one common share at a price of
                  $6.00  per  share  on or  before  the  earlier  of  the  third
                  anniversary  and the date that is 30 days  following the fifth
                  day the closing price equals or exceeds $8.00 per share.

         (b)      Pursuant to a stock  purchase  agreement  dated March 3, 2000,
                  the Company issued  166,667 common shares and 83,333  warrants
                  for gross  proceeds of $1 million.  Each warrant  entitles the
                  holder to  purchase  one common  share at a price of $8.00 per
                  share on or before  the  earlier of March 3, 2004 and the date
                  that is 30 days  following  the  fifth day the  closing  price
                  equals or exceeds $10.00 per share.

         (c)      Subsequent  to  the  year  end,   71,300  stock  options  were
                  exercised for total proceeds of $335,778.

         (d)      On April 7, 2000,  the Company  entered into a stock  purchase
                  and equity line of credit agreement with an investor. Pursuant
                  to the common stock purchase agreement, the Company has issued
                  1,251,303   common  shares  and  250,261  warrants  for  gross
                  proceeds of $6,000,000 before deducting estimated costs of the
                  issue of $455,000 and 75,085 warrants.

                  Each warrant  entitles the holder to purchase one common share
                  at a price of $6.76 on or before April 7, 2003.

                  The  1,251,303  common  shares  are  subject  to a  "repricing
                  period" of 120 days. During the repricing  period,  additional
                  shares may be issued  through a reset  provision that compares
                  market price in the repricing  period to an adjusted  original
                  issue price.

                  Pursuant to the equity line of credit agreement,  the investor
                  will purchase up to $10 million of the Company's common shares
                  over an 18-month period at a discounted  market price based on
                  the five lowest  closing  bid prices of the common  shares for
                  the ten trading  days  following  the  Company's  notice.  The
                  timing and amounts of the purchases  are at the  discretion of
                  the Company.  Each additional  purchase may be no greater than
                  66.7% of the average daily  weighted  dollar trading volume of
                  the  common  shares  for the twenty  days  preceding  both the
                  notice and closing of the purchase.  In addition,  the average
                  market value during the same twenty-day period must be greater
                  than $2.00 per share.


                                      F-17
<PAGE>


                            SUPPLEMENTARY INFORMATION


                                      F-18
<PAGE>


ALTAIR INTERNATIONAL INC.
SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


COMMON STOCK

UNITED STATES

The Company's  Common Shares began trading through the Nasdaq National Market on
January 23, 1998 under the symbol "ALTIF". From March 24, 1997 until January 23,
1998,  the Common  Shares  traded  under the same symbol on the Nasdaq  SmallCap
Market.  Prior to March 24, 1997,  the Common  Shares traded on the OTC Bulletin
Board under the symbol  "AIDGF".  On  December  31,  1999,  the number of record
holders  was 471 and the  Company  estimates  that on that date there were 9,600
beneficial owners.

The Company has never declared or paid dividends on its Common Shares. Moreover,
the  Company  currently  intends to retain any  future  earnings  for use in the
business and,  therefore,  does not  anticipate  paying  dividends on its Common
Shares in the foreseeable future.

The following  table sets forth,  on a quarterly  basis,  the high and low sales
prices during the last two fiscal years for the Common  Shares as reported.  The
prices reported do not include retail mark-up,  mark-down or commissions and may
not reflect actual transactions.
<TABLE>
<CAPTION>

       For the Fiscal Years Ended                            December 31, 1999                   December 31, 1998
                                                             -----------------                   -----------------
       (In U.S. Dollars)                                             $                                   $
                                                          High               Low               High               Low
                                                          ----               ---               ----               ---
<S>                                                       <C>                <C>               <C>               <C>
       First Quarter                                      9.88               6.06              15.63             8.13
       Second Quarter                                     6.88               4.13              9.63              7.00
       Third Quarter                                      5.00               3.88              10.25             3.00
       Fourth Quarter                                     5.06               3.45              8.63              5.88
</TABLE>

CANADA

In Canada,  the Common  Shares were traded under the symbol "AIL" on the Alberta
Stock  Exchange  (the "ASE")  through  April 23, 1998.  The Company  voluntarily
removed the Common  Shares from the ASE on that date due to  increased  focus on
operations in the United States and diminishing trading volume on the ASE.

Exchange Rate Information

The following exchange rates represent the noon buying rate in New York City for
cable transfers in Canadian dollars,  as certified for Customs purposes,  by the
Federal  Reserve Bank of New York.  The table sets forth,  for each of the years
indicated,  the period-end  exchange rate, the average  exchange rate (i.e., the
average of the exchange  rates on the last day of each month during the period),
and the high and low  exchange  rates of the U.S.  dollar  in  exchange  for the
Canadian dollar for the years indicated, based on the noon buying rates:
<TABLE>
<CAPTION>

       For the Year Ended December 31                    1999          1998           1997          1996          1995
                                                         ----          ----           ----          ----          ----
       (Canadian Dollar per U.S. Dollar)                  $              $             $             $              $

<S>                                                     <C>           <C>            <C>           <C>           <C>
       High                                             1.5302        1.5770         1.4398        1.3822        1.4238
       Low                                              1.4440        1.4075         1.3392        1.3310        1.3285
       Average                                          1.4827        1.4894         1.3849        1.3638        1.3725
       Year-End                                         1.4440        1.5375         1.4288        1.3697        1.3655
</TABLE>


                                      F-19
<PAGE>


ALTAIR INTERNATIONAL INC.
SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
================================================================================


Canadian Taxation Considerations

Dividends paid on Common Shares of the Company owned by  non-residents of Canada
are  subject  to  Canadian  withholding  tax.  The  rate of  withholding  tax on
dividends under the Income Tax Act (Canada) (the "Act") is 25%. However, Article
X of the reciprocal  treaty between Canada and the United States of America (the
"Treaty")  generally  limits the rate of  withholding  tax on dividends  paid to
United States residents to 15%. The Treaty further  generally limits the rate of
withholding  tax to 5% if  the  beneficial  owner  of  the  dividends  is a U.S.
corporation that owns at least 10% of the voting shares of the subject company.

If the beneficial  owner of the dividend carries on business in Canada through a
permanent  establishment in Canada, or performs in Canada  independent  personal
services  from a fixed base in Canada,  and the shares of stock with  respect to
which the  dividends  are paid are  effectively  connected  with such  permanent
establishment  or fixed base,  the  dividends  are taxable in Canada as business
profits at rates  which may exceed the 5% or 15% rate  applicable  to  dividends
that are not so connected with a Canadian permanent establishment or fixed base.
Under the  provisions  of the treaty,  Canada is permitted to apply its domestic
law rules for differentiating dividends from interest and other disbursements.

A capital gain realized on the  disposition of Common Shares of the Company by a
person resident in the United States (a  "non-resident")  will be subject to tax
under the Act if the  shares  held by the  non-resident  are  "taxable  Canadian
property".  In general,  Common Shares will be taxable Canadian  property if the
particular  non-resident used (or in the case of a non-resident insurer, used or
held) the Common  Shares in  carrying  on  business  in Canada or,  pursuant  to
proposed  amendments to the Act,  where at any time during the five-year  period
immediately  preceding  the  realization  of the gain,  not less than 25% of the
issued and  outstanding  shares of any class or series of shares of the  Company
were owned by the particular  non-resident,  by persons with whom the particular
non-resident did not deal at arm's length, or by any combination thereof. If the
Company's   Common  Shares   constitute   taxable  Canadian   property,   relief
nevertheless may be available under the Treaty. Under the Treaty, gains from the
alienation of Common Shares owned by a non-resident  who has never been resident
in Canada generally will be exempt from Canadian capital gains tax if the shares
do not relate to a permanent  establishment or fixed base which the non-resident
has or had in  Canada,  and if not more than 50% of the value of the  shares was
derived from real property  (which  includes rights to explore for or to exploit
mineral deposits) situated in Canada.


                                      F-20