EXHIBIT 99.2

# Differences between
Canadian and U.S. generally accepted accounting principles

The following represents additional
information to the consolidated financial statements of the Company that were prepared in
accordance with accounting principles generally accepted in Canada (Canadian
GAAP). Set out below are the material adjustments to net loss for the years ending
July 31, 2003 and 2002 and to shareholders equity at July 31, 2003 and 2002 in order
to conform to accounting principles generally accepted in the United States (U.S. GAAP).

# Statement of loss:

|                                        
|----------------------------------------
|
|                                        
|Net loss for the year based on          
|Canadian GAAP                           
|Deferred exploration costs prior to the 
|establishment of proven and probable    
|mineral reserves a)                     
|Future income taxes relating to deferred
|exploration costs a)                    
|Amortization of mineral rights a)       
|Future income tax relating to the       
|amortization of mineral rights a)       
|Foreign exchange gain on future income  
|taxes liability previously expensed     
|Stock based compensation c)             
|Interest expense on long term debt      
|adjusted to fair value f)               
|Foreign exchange gain on adjusted       
|long term debt f)                       
|Net loss for the year based on U.S. GAAP
|                                        
|Loss per share, basic and diluted       
|                                        

Shareholders' equity:

|                                        
|----------------------------------------
|
|                                        
|Shareholders' equity based on           
|Canadian GAAP                           
|Deferred exploration costs prior to the 
|establishment of proven and probable    
|mineral reserves a)                     
|Future income taxes relating to deferred
|exploration costs a)                    
|Amortization of mineral rights a)       
|Future income taxes relating to the     
|amortization of mineral rights a)       
|Foreign exchange gain on future income  
|taxes liability previously expensed     
|with exploration costs a)               
|Adjustment for exploration costs on     
|abandoned properties b)                 
|Interest expense on long term debt      
|adjusted to fair value f)               
|Foreign exchange gain on fair value     
|adjusted long term debt f)              
|                                        
|Shareholders' equity based on U.S. GAAP 
|                                        

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# Balance sheet
differences:

The following material balance sheet
differences exist between Canadian and U.S. GAAP.

1)    
          Mineral properties and related deferred costs

|                                             
|---------------------------------------------
|
|                                             
|Canadian GAAP                                
|Deferred exploration costs                   
|prior to the establishment of proven and     
|probable mineral reserves a)                 
|Amortization of mineral rights a)            
|Adjustment for exploration costs on abandoned
|properties b)                                
|Adjustment for mineral property purchase     
|at fair value f)                             
|                                             
|U.S. GAAP                                    
|                                             

2)    Long term debt

|                                             
|---------------------------------------------
|
|                                             
|Canadian GAAP                                
|Adjustment of long term debt to fair value f)
|Interest payable on long term debt           
|adjusted to fair value f)                    
|Foreign exchange gain on fair value          
|adjusted long term debt f)                   
|                                             
|U.S. GAAP                                    
|                                             

3)    
          Future income taxes

|                                                
|------------------------------------------------
|
|                                                
|Canadian GAAP                                   
|Future income taxes relating to deferred        
|exploration costs a)                            
|Future income taxes relating to the amortization
|of mineral rights a)                            
|Foreign exchange gain on future income tax      
|liabilities previously expensed a)              
|                                                
|U.S. GAAP                                       
|                                                

a)    
          Mineral properties and related deferred costs

In March 2002, the Emerging Issues
Committee of the CICA issued EIC 126  Accounting by Mining Enterprises for
Exploration Costs which affects mining companies with respect to the deferral of
exploration costs. EIC 126 refers to CICA Handbook Section 3061 Property, Plant and
Equipment, paragraph .21 which states that for a mining property, the cost of the
asset includes exploration costs if the enterprise considers that such costs have the
characteristics of property, plant and equipment. EIC 126 then states that a mining
enterprise that has not established mineral reserves objectively, and therefore does not
have a basis for preparing a

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projection of the estimated cash flow
from the property is not precluded from considering the exploration costs to have the
characteristics of property, plant and equipment. EIC 126 also sets forth the
Committees consensus that a mining enterprise in the exploration stage is not
required to consider the conditions regarding impairment in determining whether
exploration costs may be initially capitalized. With respect to impairment of capitalized
exploration costs, if an enterprise has not established mineral reserves objectively, and
therefore does not have a basis for preparing a projection of the estimated cash flow from
the property it is not obliged to conclude that capitalized costs have been impaired.
However, such an enterprise should consider the conditions set forth in CICA Handbook
Section 3061 in determining whether subsequent write-down of capitalized exploration costs
related to mining properties is required.

The Company considers that
exploration costs have the characteristics of property, plant and equipment and,
accordingly, defers such costs. Furthermore, pursuant to EIC 126, deferred exploration
costs would not automatically be subject to regular assessment of recoverability, unless
certain conditions exist.

Under United States GAAP, exploration
costs are not considered to have the characteristics of property, plant and equipment and
accordingly are expensed prior to the Company determining that proven or provable mineral
reserves exist, after which time all such costs are capitalized. Prior to August 1, 1999,
the Company had capitalized $3,102,058 which is expensed for U.S. GAAP purposes.

Further, pursuant to FAS 142,
effective August 2002, the costs of acquiring mineral rights are considered to be
intangible assets with finite lives and under US GAAP must be amortized over the useful
life of the mineral right. Accordingly, the Company has commenced amortizing the mineral
rights over their estimated useful lives of 6 years commencing August 1, 2002.

b)    
          Adjustment for exploration costs on abandoned properties

The Company accounts for mineral
properties and related deferred expenditures as described in item (a). During the years
ended July 31, 2001 and 2000, $150,784 and $44,064 respectively was written-off as the
development was not considered economically feasible and therefore abandoned. Under U.S.
GAAP these costs would have been expensed in a prior period. The write-off of the mineral
rights under U.S. GAAP would be included in the expenses and the sub-total loss before
write-off would not be permitted.

# c)     Stock-based
compensation

The Company accounts for its stock
based compensation under US GAAP in accordance with APB25 (intrinsic value method) for
employees and FAS No. 123 (fair value method) for non-employees. Under Canadian GAAP,
stock options granted to employees and non-employees prior to August 1, 2002 are accounted
for as capital transactions when the options are exercised. Subsequent to August 1, 2002,
under Canadian GAAP, stock options granted to employees continue to be accounted for as
capital transactions and stock options granted to non-employees are accounted for using
the fair value method.

Prior to August 1, 1999, the Company
had issued stock options to non-employees with a total fair value of $180,613 which is
expensed for U.S. GAAP purposes.

If the Company had accounted for its
stock-based compensation plan for employees under FAS No. 123, the pro forma impact would
have been as follows:

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|                         
|-------------------------
|
|                         
|Expense under FAS No. 123
|                         
|Pro forma net loss       
|                         
|Pro forma loss per share:
|Basic and diluted        
|                         

The Company estimates the fair value
of options granted using the Black-Scholes option price model using the following
assumptions:

|                              
|------------------------------
|
|                              
|Risk free interest rate       
|Expected life of options      
|Expected volatility of the    
|Company's share price         
|Expected dividend yield       
|                              
|Weighted average fair value of
|options granted               
|                              

d)    
          Statements of cash flows

As a result of the treatment of
mining interests under item (a) above, cash expended for exploration costs would be
classified as operating rather than investing, resulting in the following totals.

|                       
|-----------------------
|
|                       
|Cash used in operations
|                       
|Cash used in investing 
|                       

# e)    Comprehensive income

Effective for fiscal years beginning
after December 15, 1997, Statement of Financial Accounting Standards No. 130
Reporting Comprehensive Income (FAS 130), is applicable for US
GAAP purposes. FAS 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general purpose financial
statements. FAS 130 requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a financial
statement.

f)              Fair
value of long term debt

In consideration for the Soyopa
claims acquired           in November, 2001 (Note 6(b)), the Company entered into a
non-interest bearing           loan agreement as disclosed in Note 7. Under Canadian
GAAP, this loan has been           presented at its face value of US $7,000,000. Under US
GAAP, interest must be           imputed on this loan in accordance with APB 21. The
reduction in the principal           amount of the loan as a result of imputing a market
rate of interest also           reduces the carrying values of the companys mineral
properties           accordingly.

During the periods subsequent to
November, 2001, the interest imputed on the loan is recorded as a period expense.

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g)    
          Recent accounting pronouncements

Foreign currency and
hedging

In November 2001, the CICA issued
Accounting Guideline 13, Hedging Relationships (AcG 13) which
establishes new criteria for hedge accounting and will apply to all hedging relationships
in effect for the Companys years ending on or after August 1, 2003. Effective August
1, 2003, the Company will reassess all hedging relationships to determine whether the
criteria are met or not and will apply the new guidance on a prospective basis. To qualify
for hedge accounting, the hedging relationship must be appropriately documented at the
inception of the hedge and there must be reasonable assurance, both at the inception and
throughout the term of the hedge, that the hedging relationship will be effective. The
Company does not currently have any hedging relationships.

Disposal of Long-Lived
Assets and Discontinued Operations

In December 2002, the CICA issued
Handbook Section 3475 for Disposal of Long-Lived Assets and Discontinued Operations with
the purpose of harmonizing Canadian GAAP with generally accepted accounting principles in
the Unites States of America (U.S. GAAP). The section is effective for
disposal activities initiated by a commitment to a plan on or after May 1, 2003, with
earlier adoption encouraged. The key aspects of Handbook Section 3475 are as follows:

| |  |  | a
 long-lived  asset to be  disposed  of other than by sale  should  continue  to be
 classified  as held and used until it is          disposed of;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | a
long-lived asset can only be classified as held for sale if certain criteria are met;
| | - |  | ---------------------------------------------------------------------------------------

| |  |  | an
asset classified as held for sale should be measured at the lower of its carrying amount
or fair value less costs to sell;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

| |  |  | a
loss recognized on classification of an asset as held for sale does not include future
operating losses;
| | - |  | ----------------------------------------------------------------------------------------------------------

| |  |  | discontinued
operations are defined more broadly than previously. They comprise dispositions where the
operations and cash flows can be clearly distinguished, operationally and for financial
reporting purposes, from the rest of the enterprise;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the
income statement display of discontinued operations is unchanged from previous display;
and
| | - |  | -----------------------------------------------------------------------------------------------

| |  |  | various
disclosures related to the disposal of long-lived assets is required.
| | - |  | -----------------------------------------------------------------------------

The Company is currently assessing
the impact of Handbook Section 3475 on its financial position and results of operations.

Accounting for Severance
and Termination Benefits

In March 2003, the EIC issued EIC
Abstract 134 for Accounting for Severance and Termination Benefits, which addresses the
various types of severance and termination benefits related to the termination of an
employees services prior to normal retirement. The accounting treatment must be
applied prospectively to exit or disposal activities initiated after March 31, 2003. This
Abstract harmonizes Canadian GAAP and U.S. GAAP.

Costs associated with
exit or disposal activities

In July 2002, the FASB issued
Statement of Financial Accounting Standards No. 146 Accounting for Costs Associated with
Exit or Disposal Activities (FAS 146). FAS 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities, and is effective for
exit or disposal activities initiated after December 31, 2002. FAS 146 nullifies Emerging
Issues Task Force Issue No. 94-3 (EITF 94-3) Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including Certain costs
Incurred in Restructuring). The principal difference between FAS 146 and EITF 94-3 relates
to the recognition of a liability for a cost associated with an exit or disposal activity.
FAS 146 requires that the cost associated with an exit or disposal activity be recognized
when the liability is incurred, whereas under EITF 94-3 the liability was recognized at
the date of an entitys commitment to an exit plan. This is substantially consistent

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with the CICA EIC Abstract 135,
Accounting for Costs Associated with Exit and Disposal Activities (Including Costs
Incurred in a Restructuring). This new guidance is effective for fiscal years beginning
after December 31, 2002, and will impact any exit or disposal activities the company
initiates after that date.

Guarantees

In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN
45), which requires certain disclosures to be made by a guarantor in its interim and
annual financial statements for periods ending after December 15, 2002 about its
obligations under guarantees. FIN 45 also requires the recognition of a liability by a
guarantor at the inception of certain guarantees entered into or modified after December
31, 2002. FIN 45 requires the guarantor to recognize a liability for a non-contingent
component of certain guarantees; that is, it requires the recognition of a liability for
the obligation to stand ready to perform in the event that specified triggering events or
conditions occur. The initial measurement of this liability is the fair value of a
guarantee at inception. This is substantially consistent with the CICA Accounting
Guideline AcG-14, Disclosure of Guarantees. The Company does not have any guarantees under
these standards.

Variable interest entities

In January 2003, the FASB issued
Interpretation No. 46 Consolidation of Variable Interest Entities
(VIEs) (FIN 46) which requires that companies that control
another entity through interests other than voting interest should consolidate the
controlled entity. In the absence of clear control through a voting equity interest, a
companys exposure (variable interests) to the economic risk and the potential
rewards from a VIEs assets and activities are the best evidence of a controlling
financial interest. VIEs created after January 31, 2003 must be consolidated
immediately. VIEs existing prior to February 1, 2003 must be consolidated by the
Company commencing with its first quarter 2004 financial statements. The Company has not
yet determined whether it has any VIEs which will require consolidation.

Derivatives and hedging
activities

In April 2003, the FASB issued SFAS
No, 149 Amendment of SFAS No. 133 on Derivative Instruments and Hedging
Activities. SFAS 149 amends and clarifies accounting for SFAS No. 133
Accounting for Derivative Instruments and Hedging Activities. In particular,
it clarifies under what circumstances a contract with an initial net investment meets the
characteristics of a derivative as discussed in SFAS No. 133; clarifies when a derivative
contains a financing component; amends the definition of an underlying to conform it to
the language used in the FASB Interpretation No. 45; and amends certain other existing
pronouncements. This is substantially consistent with the CICA EIC Abstract 128,
Accounting for Trading, Speculative or Non-Hedging Derivative Financial Instruments.

SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003 and for hedging relationships
designated after June 30, 2003. CICA EIC Abstract 128 is effective for fiscal years
beginning on or after July 1, 2003. The Company will adopt the provisions of SFAS No. 149
for U.S. GAAP purposes on August 1, 2003 and will adopt the provisions of CICA EIC 128 on
July 1, 2003 and is currently assessing the impact, if any, that the adoption of SFAS No,
149 will have on its results of operations and financial position.

Liabilities and equity

On May 15, 2003, the FASB issued
Statement No, 150, Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity. The Statement requires issuers to classify as liabilities
(or assets in some instances) three classes of freestanding financial instruments that
embody obligations for the issuer.

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Generally, the Statement is effective
for financial instruments entered into or modified after May 31, 2003 and is otherwise
effective at the beginning of the first interim period beginning after June 15, 2003. The
Company will adopt the provisions of the Statement on August 1, 2003. The Company is
currently assessing the impact of the new standard.

Asset Retirement
Obligations

In July 2001, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement Obligations. This statement
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement costs. This
Statement applies to all entities. It applies to legal obligations associated with the
retirement of long-lived assets that result from the acquisition, construction,
development and/or the normal operation of a long-lived asset, except for certain
obligations of lessees. This Statement is effective for financial statements issued for
fiscal years beginning after June 15, 2002. This is substantially consistent with the CICA
Handbook Section 3110, Asset Retirement Obligations, which is effective for fiscal periods
beginning on or after January 1, 2004.

Stock-based employee
compensation

In December 2002, the FASB issued
Statement 148 (SFAS 148), Accounting for Stock-Based Compensation  Transition
and Disclosure: an amendment of FASB Statement 123 (SFAS 123), to provide
alternative transition methods for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends the
disclosure requirements of SFAS 123 to require prominent disclosures in annual financial
statements about the method of accounting for stock-based employee compensation and the
pro forma effect on reported results of applying the fair value based method for entities
that use the intrinsic value method of accounting. The pro forma effect disclosures are
also required to be prominently disclosed in interim period financial statements. This
statement is effective for financial statements for fiscal years ending after December 15,
2002 and is effective for financial reports containing condensed financial statements for
interim periods beginning after December 15, 2002, with earlier application permitted. The
Company does not plan a change to the fair value based method of accounting for
stock-based employee compensation and believes that the accompanying financial statements
are consistent with the new guidance contained in SFAS 148.

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