EXHIBIT 99.1

# GAMMON LAKE RESOURCES
INC.

ANNUAL INFORMATION FORM

October 8, 2004

---

# GAMMON LAKE RESOURCES INC.
(the Corporation)

# ANNUAL INFORMATION FORM

# TABLE OF CONTENTS

|ITEM 1: | CORPORATE
STRUCTURE | 1
|------- | ------------------- | -

| | 1.1 |  | Name, Address and Incorporation | 1
| | --- |  | ------------------------------- | -

| | 1.2 |  | Intercorporate Relationships | 1
| | --- |  | ---------------------------- | -

|ITEM 2: | GENERAL DEVELOPMENT OF THE BUSINESS | 1
|------- | ----------------------------------- | -

| | 2.1 |  | Three Year History | 1
| | --- |  | ------------------ | -

| | 2.2 |  | Significant Acquisitions | 2
| | --- |  | ------------------------ | -

|ITEM 3: | DESCRIPTION OF THE BUSINESS | 2
|------- | --------------------------- | -

| | 3.1 |  | General | 2
| | --- |  | ------- | -

| | 3.2 |  | Mineral Projects | 2
| | --- |  | ---------------- | -

| |  |  | 1.   Ocampo Project | 2
| |  |  | ------------------- | -

| |  |  | Location and Description | 2
| |  |  | ------------------------ | -

| |  |  | a)   Location | 2
| |  |  | ------------- | -

| |  |  | Figure 1:  Location of Project | 3
| |  |  | ------------------------------ | -

| |  |  | b)   Access | 3
| |  |  | ----------- | -

| |  |  | c)   Infrastructure and Local Resources | 4
| |  |  | --------------------------------------- | -

| |  |  | d)   Climate | 4
| |  |  | ------------ | -

| |  |  | e)   Topography and Vegetation | 4
| |  |  | ------------------------------ | -

| |  |  | f)   The Concessions | 4
| |  |  | -------------------- | -

| | SOYOPA AGREEMENT | 5
| | ---------------- | -

| |  |  | MINERA FUERTE AGREEMENT | 5
| |  |  | ----------------------- | -

| |  |  | Table 1:  Gammon Lake Schedule of Properties | 6
| |  |  | -------------------------------------------- | -

| |  |  | Table 2:  Concession Map | 8
| |  |  | ------------------------ | -

| |  |  | MINIMUM INVESTMENT (assessment work) | 9
| |  |  | ------------------------------------ | -

| |  |  | Exploitation Concessions | 9
| |  |  | ------------------------ | -

| |  |  | Exploration Concessions | 9
| |  |  | ----------------------- | -

| |  |  | Table 2:  Minimum Investments | 10
| |  |  | ----------------------------- | --

| |  |  | MINING DUTY (tax) | 11
| |  |  | ----------------- | --

| |  |  | Table 3:  Mining Duties | 11
| |  |  | ----------------------- | --

| |  |  | Project History | 11
| |  |  | --------------- | --

| |  |  | Geology and Mineralization | 13
| |  |  | -------------------------- | --

| |  |  | a)   Regional Geology | 13
| |  |  | --------------------- | --

| |  |  | b)   Ocampo Area Geology | 13
| |  |  | ------------------------ | --

| |  |  | Figure 4:  District Geology Map | 15
| |  |  | ------------------------------- | --

| |  |  | c)   Mineral Deposits | 16
| |  |  | --------------------- | --

| |  |  | d)   Mineralization | 16
| |  |  | ------------------- | --

| |  |  | Exploration | 17
| |  |  | ----------- | --

| |  |  | a)   Overview | 17
| |  |  | ------------- | --

| |  |  | b)   Exploration Program | 17
| |  |  | ------------------------ | --

| |  |  | c)   Drilling | 18
| |  |  | ------------- | --

| |  |  | d)   The Aventurero Ramp | 19
| |  |  | ------------------------ | --

| |  |  | Figure 5:  Ramp | 20
| |  |  | --------------- | --

---

| |  |  | e)   Confirmation Diamond Drilling | 21
| |  |  | ---------------------------------- | --

| |  |  | f)   San Juan | 21
| |  |  | ------------- | --

| |  |  | Figure 6:  San Juan Long Section | 22
| |  |  | -------------------------------- | --

| |  |  | g)   Aventurero | 22
| |  |  | --------------- | --

| |  |  | Figure 7:  Aventurero Grade x Thickness Long Section | 23
| |  |  | ---------------------------------------------------- | --

| |  |  | Figure 8:  Aventurero Ramp Area | 23
| |  |  | ------------------------------- | --

| |  |  | h)   Other Exploration Drilling | 24
| |  |  | ------------------------------- | --

| |  |  | i)   Sampling and Analysis | 24
| |  |  | -------------------------- | --

| |  |  | 1.   Collection of Samples | 24
| |  |  | -------------------------- | --

| |  |  | SURFACE SAMPLES | 24
| |  |  | --------------- | --

| |  |  | UNDERGROUND SAMPLES | 24
| |  |  | ------------------- | --

| |  |  | RC DRILLING SAMPLES | 24
| |  |  | ------------------- | --

| |  |  | CORE SAMPLES | 24
| |  |  | ------------ | --

| |  |  | 2.  Sample Handling | 25
| |  |  | ------------------- | --

| |  |  | 3.  Assaying | 25
| |  |  | ------------ | --

| |  |  | 4.  Sample Security | 25
| |  |  | ------------------- | --

| |  |  | j)   Metallurgical Testing | 26
| |  |  | -------------------------- | --

| |  |  | k)   Feasibility Studies | 26
| |  |  | ------------------------ | --

| |  |  | l)   Mining Plan | 27
| |  |  | ---------------- | --

| |  |  | Resource Estimates | 27
| |  |  | ------------------ | --

| |  |  | A.   Resources Classification | 28
| |  |  | ----------------------------- | --

| |  |  | B.   Northeast Area Resources | 28
| |  |  | ----------------------------- | --

| |  |  | i)   Method of Estimation | 29
| |  |  | ------------------------- | --

| |  |  | Figure 9:  Las Animas Cross Section LA235 | 30
| |  |  | ----------------------------------------- | --

| |  |  | ii)   Grade Capping | 30
| |  |  | ------------------- | --

| |  |  | iii)   Method of Classification | 31
| |  |  | ------------------------------- | --

| |  |  | iv)   Northeast Area Resources calculated in 2003 Technical Study | 31
| |  |  | ----------------------------------------------------------------- | --

| |  |  | Table 2:  Northeast Area measured and Indicated Resources | 32
| |  |  | --------------------------------------------------------- | --

| |  |  | Table 3:  Northeast Area Inferred Resources | 32
| |  |  | ------------------------------------------- | --

| |  |  | C.   Ocampo Area Resources | 33
| |  |  | -------------------------- | --

| |  |  | i)   Ocampo Area Resources calculated in 2001 Technical Study | 33
| |  |  | ------------------------------------------------------------- | --

| |  |  | Table 4:  Ocampo Measured and Indicated Resources | 33
| |  |  | ------------------------------------------------- | --

| |  |  | ii)   Pit Resources calculated in 2002 Technical Study | 34
| |  |  | ------------------------------------------------------ | --

| |  |  | Figure 10:  Plaza de Gallos, Pit Section PDG 290 | 34
| |  |  | ------------------------------------------------ | --

| |  |  | iii)   Summary of Resource Estimates | 35
| |  |  | ------------------------------------ | --

| |  |  | Conclusions | 35
| |  |  | ----------- | --

| |  |  | Recommendations | 36
| |  |  | --------------- | --

| |  |  | 2.   Investment in Mexgold Resources Inc. | 36
| |  |  | ----------------------------------------- | --

| | 3.3 |  | Risk Factors | 37
| | --- |  | ------------ | --

| |  |  | 1.   No History of Profitability | 37
| |  |  | -------------------------------- | --

| |  |  | 2.   Exploration Stage Corporation | 38
| |  |  | ---------------------------------- | --

| |  |  | 3.   Foreign Operations | 38
| |  |  | ----------------------- | --

| |  |  | 4.   Government Regulations | 38
| |  |  | --------------------------- | --

| |  |  | 5.   Market Fluctuation and Commercial Quantities | 39
| |  |  | ------------------------------------------------- | --

| |  |  | 6.   Mining Risks and Insurance | 39
| |  |  | ------------------------------- | --

| |  |  | 7.   Environmental Protection | 39
| |  |  | ----------------------------- | --

| |  |  | 8.   Capital Investment | 39
| |  |  | ----------------------- | --

| |  |  | 9.   Conflicts of Interest | 40
| |  |  | -------------------------- | --

| |  |  | 10.  Dependence on Key Personnel | 40
| |  |  | -------------------------------- | --

| |  |  | 11.  Lack of Active Market | 40
| |  |  | -------------------------- | --

| |  |  | 12.  Currency | 40
| |  |  | ------------- | --

| |  |  | 13.  Dividends | 41
| |  |  | -------------- | --

---

| |  |  | 14.  Competition | 41
| |  |  | ---------------- | --

| |  |  | 15.  Possible PFIC Status | 41
| |  |  | ------------------------- | --

|ITEM 4: | DIVIDENDS | 41
|------- | --------- | --

|ITEM 5: | DESCRIPTION OF CAPITAL STRUCTURE | 42
|------- | -------------------------------- | --

| |  |  | Common Shares | 42
| |  |  | ------------- | --

| |  |  | Class A and Class B Preferred Shares | 42
| |  |  | ------------------------------------ | --

|ITEM 6: | MARKET FOR SECURITIES | 42
|------- | --------------------- | --

| | 6.1 |  | Trading Price and Volume | 42
| | --- |  | ------------------------ | --

| | 6.2 |  | Prior Sales | 43
| | --- |  | ----------- | --

|ITEM 7: | ESCROWED SECURITIES | 43
|------- | ------------------- | --

|ITEM 8: | DIRECTORS AND OFFICERS | 44
|------- | ---------------------- | --

|ITEM 9: | PROMOTERS | 45
|------- | --------- | --

|ITEM 10: | LEGAL PROCEEDINGS | 45
|-------- | ----------------- | --

|ITEM 11: | INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS | 45
|-------- | ---------------------------------------------------------- | --

|ITEM 12: | TRANSFER AGENTS AND REGISTRARS | 47
|-------- | ------------------------------ | --

|ITEM 13: | MATERIAL CONTRACTS | 47
|-------- | ------------------ | --

|ITEM 14: | INTERESTS OF EXPERTS | 47
|-------- | -------------------- | --

|ITEM 15: | ADDITIONAL INFORMATION | 47
|-------- | ---------------------- | --

---

# ANNUAL INFORMATION FORM

# for the twelve months
ended July 31, 2004
containing information as at October 8, 2004

ITEM 1:   CORPORATE
STRUCTURE

# 1.1    Name, Address and Incorporation

Gammon Lake
Resources Inc. (the Corporation) has a head office located at 202 Brownlow
Avenue, Cambridge 2, Suite 306, Dartmouth, Nova Scotia, B3B 1T5. The registered office of
the Corporation is located at 1, Place Ville-Marie, Suite 3900, Montreal, Quebec, H3B 4M7.

The
Corporation was incorporated under Part 1A of the Companies Act (Quebec) on
February 25, 1986, under the name Golden Rock Explorations Inc.. By articles
of amendment dated April 7, 1998, the Corporation changed its name to its current form of
name, Gammon Lake Resources Inc., and consolidated its common shares on a 15:1
basis.

# 1.2    Intercorporate Relationships

The Corporation
has the following direct and indirect wholly-owned subsidiaries:

|                                                                                                           
|-----------------------------------------------------------------------------------------------------------
|
|                                                                                                           
|                                                                                                           
|Gammon Lake Resources (Barbados)                                                                           
|Inc. ("Gammon Lake Barbados")                                                                              
|                                                                                                           
|Gammon Lake de Mexico S.A. de                                                                              
|C.V. ("Gammon Lake Mexico")                                                                                
|                                                                                                           
|                                                                                                           
|Notes:
     (1)    
All of the subsidiaries are sometimes referred to together herein as the "Corporation".

ITEM 2:   GENERAL
DEVELOPMENT OF THE BUSINESS

# 2.1    Three Year History

During
the past three years the Corporation has focussed on the exploration and development of
its mineral interests (comprising a total of 44 mining concessions encompassing
approximately 3,500 hectares) in the municipality of Ocampo, in the state of Chihuahua,
Mexico (collectively referred to herein as the Ocampo Project). The Ocampo
Project is described under, Item 3: Description of the Business.

---

2

# 2.2    Significant
Acquisitions

The
Corporation has not completed any significant acquisitions during the twelve months ended
July 31, 2004, except as noted herein. The Corporations primary focus at this time
is on the exploration and development of the Ocampo Project.

On
November 6, 2003, the Corporation terminated a joint venture agreement with Bolnisi Gold
NL upon payment of U.S. $5.0 million to Bolnisi Gold N.L. As a result of this termination,
the Corporation has a 100% interest in the Ocampo Project.

The
Corporation has made strategic investments in Mexgold Resources Inc., as described under
Item 3: Description of the Business  3.2 Mineral Projects  2. Investment
in Mexgold Resources Inc..

ITEM 3:   DESCRIPTION OF
THE BUSINESS

# 3.1    General

The
Corporation is a mineral exploration and development company which is currently engaged in
the exploration for and development of gold and silver deposits in the State of Chihuahua,
Mexico. The Corporations mineral interests in the State of Chihuahua, Mexico are
comprised of a total of 44 mining concessions encompassing approximately 3,500 hectares
located in the Municipality of Ocampo (herein referred to herein as the Ocampo
Project). The Corporation has a total of 96 employees and contract workers. The
Corporations immediate objective is to complete a feasibility study for the Ocampo
Project by the six months ended January 31, 2005. In general, see Item 3:
Description of the Business  3.3 Risk Factors.

# 3.2    Mineral Projects

1.    Ocampo Project

Certain
portions of this section, particularly as they relate to the descriptions of the geology,
mineralization, resource audit and feasibility study plans of the Corporations
exploration projects are derived from a report dated March 31, 2004 as amended July 15,
2004, prepared by Glenn R. Clark & Associates Limited entitled, Ocampo
Gold-Silver Project Review, Chihuahua, Mexico (the Clark Report). The
author of the Clark Report has made a site visit to examine the geology and exploration
work carried out on the exploration properties of the Corporation. The Clark Report
embodies work completed by the Corporation as at the date of the Clark Report which
includes updates of the results detailed in earlier technical reports. Where appropriate,
references are made to the earlier technical reports completed prior to the Clark Report.

Location and Description

a)    Location

The
Ocampo Project is located approximately 235 km west southwest of the state capital
Chihuahua, within the Ocampo Municipio, in the State of Chihuahua, Mexico.

---

3



Scale:  1:5,000,000 approx.

# Figure 1: Location of
Project

b)    Access

The
State of Chihuahua has two International airports located at the cities of Ciudad Juarez
and Chihuahua. Within the State there is over 4,000 km of paved highway, 7,000 km of
improved road and 2,100 km of railway.

Federal
Highway 16 is a major transportation route that crosses the Sierra Madre. The property can
be accessed using Government maintained gravel roads from Cahuisori (27 km). Alternatively
the property can be reached from Highway 16 by a government maintained gravel road to
Morris then east to Ocampo. The property is 310 km by road from Chihuahua.

---

4

c)    Infrastructure and
Local Resources

The
Town of Ocampo is at the eastern edge of the project area. It has an estimated population
of 500 people and is the seat of the municipal government.

Ocampo
has recently been connected to the National Electrical grid. The feasibility study will
consider whether it is practical to rely on the National Grid and/or on site power
generation to supply the power for the mining project due to the cost and time of hooking
up to the grid.

Mining
and forestry are the major industries in the area. An adequate workforce that is familiar
with mining is present in the region.

Although
there is a reasonable amount of rainfall each year there are no large bodies of water or
large rivers nearby to supply the water required for the Corporations planned
operation. The required water will need to be supplied from ground water wells.

d)    Climate

The
cool winters and mild summers are typical of the temperate climate in the area. The
rainfall is erratic and mainly occurs during the summer monsoon season. Snow does occur
sporadically in the winter. The average annual precipitation is approximately 800 mm. The
weather conditions should not affect planned operations.

e)    Topography and
Vegetation

The
Ocampo Project is within the Sierra Madre Occidental physiographic province. This province
is mountainous, however there are features that suggest an incised plateau rather than a
true mountain range.

The
Project area ranges in elevation from 1,600 m to 2,200 m in elevation and is located near
the eastern edge of the Barranca (canyon) country.

The
town of Ocampo is in a steep-sided canyon. There is adequate space on the
Corporations mining concessions for the plant, tailings pond and other necessary
facilities.

The
vegetation in the area consists of pine and mixed pine and deciduous stands of trees.
There is sufficient forestation in the area to support a number of sawmills. The
Corporation may be able to source some of its lumber requirements from these local
sawmills.

f)    The Concessions

The
Ocampo Project concessions are located in the Municipality of Ocampo in the State of
Chihuahua in Mexico, and consist of 44 concessions that cover 3,524.54 hectares.

The
concessions are held by Gammon Lake de Mexico, S.A. de C.V., a wholly owned subsidiary of
the Corporation (Gammon Mexico). The records show that Gammon Mexico has a
100% interest in the claims. Twenty-seven of the claims are filed free of any liens or
encumbrances while the other 17 claims are subject to fulfilling the Soyopa
Agreement (as defined below). Seven claims that are filed free of encumbrances are
subject to further payment terms under the Minera Fuerte Agreement (as defined
below).

---

5

SOYOPA AGREEMENT

The
Soyopa Agreement outlines the terms for the Corporation to purchase the concessions from
Minerales de Soyopa, S.A. de C.V. This agreement was entered into on March 1, 2000 with
amendments, August 17, 2000, April 24, 2001 and November 24, 2001 (collectively, the
Soyopa Amending Agreements).

To
date all of the terms of these agreements have been met and the only the following terms
are outstanding.

The
Corporation is required to make an additional payment of U.S. $7,000,000. This payment can
be made in two separate installment with U.S. $3,5000,000 to be paid on or before November
23, 2006 and the remaining U.S. $3,500,000 to be paid on or before November 23, 2007
except if the property is placed into production prior to November 23, 2006, in which case
an annual advance payment of U.S. $1,000,000 shall be made to Soyopa which will be
credited against the U.S. $7,000,000 obligation and, if the property is sold to a third
party, the balance of U.S. $7,000,000 shall be due and owing immediately. The obligation
to complete the payment of U.S. $7,000,000 is secured by a charge registered on the mining
concessions. In a related arms length agreement with Compania Minera Global S.A. de
C.V. (Minera Global) dated July 17, 2000, pursuant to which consulting
services were provided with respect to the Soyopa Amending Agreements, a balance of U.S.
$1,000,000 is due to Minera Global upon the sale of the Ocampo Project.

The
concessions subject to the Soyopa Agreement are numbered 170141-170153, 191736, 192048,
204194, 212551.

MINERA FUERTE AGREEMENT

In
January 6, 1999 the Corporation entered into a joint venture agreement with Minera Fuerte
Mayo, S.A. de C.V. (the Minera Fuerte Agreement) covering 17
concessionsMinera Fuerte Joint Venture.This agreement was amended December 2, 1999
and March 5, 2001, and includes a related agreement with Compania Minera Brenda, S.A. de
C.V. dated February 21, 2003 (collectively, the Minera Fuerte Amending
Agreements). Ten of the concessions were bought outright and 7 concessions are
subject to the terms of the February 21, 2003 Minera Fuerte Amending Agreements which
provides for a purchase (the Minera Fuerte Buy-Out Agreement). With the Minera
FuerteBuy-Out Agreement, Gammon Mexico acquired a 100% interest in the Minera Fuerte
Agreement in consideration for the grant of an 8% net profits royalty up to the maximum of
U.S. $2,000,000. An additional U.S. $250,000 is due if, as a result of exploration of the
property, a minimum mining reserve of two million ounces of equivalent gold is obtained,
as determined by an independent third party consulting firm of international repute which
is mutually acceptable to the parties thereto. In the event that the Corporation were to
sell the property, the full U.S. $2,000,000 becomes dues and payable at that time.

The
concessions subject to this agreement are numbered 147733, 150528, 151997, 153207, 155697,
155698 and 192789.

A
list of all the mining concessions and a map of the concessions (Figure 2) follows.

---

6

Table 1:  Gammon Lake Schedule of
Properties

|  
|--
|
|  
|1 
|2 
|3 
|4 
|5 
|6 
|7 
|8 
|9 
|10
|11
|12
|13
|14
|15
|16
|17
|18
|19
|20
|21
|22
|22
|23
|24
|25
|26
|27
|28
|29
|30
|31
|32
|33
|34
|35
|36
|37
|38
|39
|40
|41
|42
|42
|  
|  

---

7

The
Concessions that are named in blue are the concessions that are the subject of the Soyopa
Agreement.

The
Concessions that are named in purple are the concessions that are the subject of the
Minera Fuerte Agreement.

All
of the concessions are exploitation concessions except the eight that have the numbers
shown in red. These concessions are exploration concessions, numbers 212992,
213422-213424, 213571, 214374, 214375 and 217082.

As
noted above, the Ocampo Project includes both exploration and exploitation concessions.
All of the concessions are surveyed prior to being granted.

Exploration
concessions have a six year period before they expire and can be elevated to an
exploitation concession.

Exploitation
concessions have a 50-year life and can be renewed for as long as the mine is active. The
elevation of a mining concession from exploration to exploitation can be a lengthy process
but all rights concerning exploration and exploitation remain in force during the
conversion period.

The
concessions are for mineral rights only and the Corporation has secured the surface rights
in the current areas of interest. On March 20, 2002, Gammon Mexico and Minerales de
Soyopa, S.A. de C.V. (Soyopa) entered into a surface rights lease with the
Common Land (Ejido) Commissariat covering the mining concessions of Gammon Mexico and
Soyopa. This agreement covers approximately 2000 hectares. The agreement is for 30 years
for the initial and only payment of U.S. $20,000. The agreement has been registered with
the National Agrarian Registry.

In
order to engage in exploration and commercial mining activity, an environmental permit is
required. The Corporation currently has all necessary environmental permits for
exploration activity and does not envision any obstacles in obtaining the necessary
environmental permits for commercial mining activity on these concessions.

All
concessions have an annual minimum investment to complete and an annual mining tax must be
paid to keep the concessions in good standing.

It
should be noted that some small concessions, held by others, exist within the
Corporations concession blocks. These small holdings can be seen on the concession
map. These concessions are not in areas of significant mineralization and are not
considered a problem to the Ocampo Project.

---

8



map provided by GLR

Figure 2:  Concession Map

---

9

MINIMUM INVESTMENT
(assessment work)

To
keep the concessions in good standing a minimum investment or assessment work (MI) must be
made each year and the work filed. The amount of the MI varies based on the size, age and
type of the concession. The MI required changes each year with the Department of Mines
publishing a new list at the first of the year and it varies with the consumer price
index.

It
is possible to group concessions together and carry forward the excess work from previous
years. The current work programs coupled with the past work by the Corporation should
satisfy the minimum requirements for many years.

Exploitation Concessions

For
exploitation concessions the annual amount of MI only varies with the size of the
concessions. The smallest concessions up to 30 ha only have a requirement of 45.14
pesos/ha or approximately Cdn. $5.40/ha. Twenty-eight of the concessions are in that
category. As the concessions get larger the MI increases. For 30 to 100 ha the annual MI
is 90.27 pesos or approximately Cdn. $10.80 Cha. Five of the concessions fall into that
category. The concessions that are greater than 100 ha have a fixed fee per concession
plus an amount per ha. Gammon has 2 concessions just over 100 ha and the average MI is
187.71 pesos/ha for the 105 ha concession and 187.52 pesos/ha for the 108 ha concession or
approximately Cdn. $22.50/ha. The largest concession 1657.92 ha has an MI of 724.90
pesos/ha or approximately Cdn. $87/ha.

The
average MI on the Corporations 2,471.6 ha of exploitation concessions is currently
518.45 pesos or approximately Cdn. $62.21/ha totaling Cdn. $153,767.

Exploration Concessions

The
MI for the exploration concessions varies with size and age of the concession being
greater for larger and older concessions.

The
Corporations exploration concessions are all in either the 3rd or
4th period. Five of the 8 exploration concessions are in the lowest category at
30.09 pesos/ha (Cdn. $3.61). The 469.88 ha concession averages 91.87 pesos/ha (Cdn.
$11.02) and the 505.67 ha concession averages 90.22 pesos/ha (Cdn. $10.82).

The
average MI on the Corporations 1,052.94 ha of exploration concessions is currently
86.54 pesos/ha or approximately Cdn. $10.38/ha totaling Cdn. $10,934.

---

10

Table 2:  Minimum
Investments

# (assessment work)
EXPLORATION CONCESSIONS

|SURFACE RANK
(HECTARES) | FIXED ANNUAL FEE
(PESOS) | ADDITIONAL ANNUAL FEE PER
HECTARE
(PESOS PER HECTARE)
|----------------------- | ------------------------ | -----------------------------------------------------
|                        |                         
|
|                       
|Up to 30                |                          | 0.00                                                 
|                       
|>30 up to 100           |                          | 0.00                                                 
|                       
|>100 up to 500          |                          | 752.27                                               
|                       
|>500 up to 1,000        |                          | 2,256.82                                             
|                       
|>1,000 up to 5,000      |                          | 4,513.64                                             
|                       
|>5,000 up to 50,000     |                          | 15,797.74                                            
|                       
|More than 50,000        |                          | 150,454.66                                           
|                       

EXPLOITATION CONCESSIONS

|                  
|------------------
|
|                  
|Up to 30          
|                  
|>30 up to 100     
|                  
|>100 up to 500    
|                  
|>500 up to 1,000  
|                  
|>1,000 up to 5,000
|                  
|More than 5,000   
|                  

---

11

MINING DUTY (tax)

The
rate of the mining duty (MD) depends on the concession type and the age of the concession.
The rate changes each semester with the Mexico Department of Mines publishing the new
rates in January and July. The MD is due in both January and July.

Table 3:  Mining Duties

rate per hectare for the first semester of 2004
(in Mexican Pesos):

EXPLORATION CONCESSIONS

|                             | 
|---------------------------- | 
|During the first year        | 
|From the 2nd to the 4th year | 
|From the 5th year            | 

EXPLOITATION CONCESSIONS

|                               | 
|------------------------------ | 
|During the first and 2nd years | 
|From the 3rd and 4th year      | 
|From the 5th year              | 

The
rates are effective if you pay during January, but if the payment is delayed, every month
you have to add some penalties and actualizations that are also published in the
Official Newspaper of the Mexico Department of Mines.

The
Ocampo Project exploitation concessions are all at the high rate of 88.29 pesos/ha except
for 3 concessions totaling 77.7 ha are at the rate of 50.34 pesos/ha. The average rate of
MD for the exploitation concessions is 87.10 pesos/ha.

The
exploration concessions are all at the rate of 6.01 pesos/ha.

The total
MD for the Ocampo Project concessions is approximately Cdn. $26,600 for the first quarter
of 2004.

Project History

The
Ocampo area has been explored and exploited over the last 200 years. Large amounts of gold
and silver have been extracted from the area.

Exploration
of Northern Mexico by the Spanish started in 1554 and was quite successful with the first
significant mineral discovery in the Santa Barbara district by 1567. Further significant
discoveries were made during the next two hundred years.

The
Ocampo mineralization was discovered in 1804 by an employee of Jose de Herrero, a
Spaniard. The initial exploration and exploitation of the area was curtailed because of
the Mexican War for Independence, 1810 to 1820.

After
the war, French and English interests made significant investments in the Refugio and
Plaza de Gallos mines in the western part of the district. Other mines in the northeastern

---

12

portion were found at this time. In
the mid 1800s the mining in the district was idled due to the political unrest and
some technical problems with water in the mines.

In
the late 1800s the government again encouraged foreign investment and the Ocampo
area was reactivated and it was from the 1880s onward that Ocampo had the greatest
period of development. This active period continued until the onset of the Mexican
Revolution in 1912, and then the mining in the Ocampo district was once again idled.

From
1907 to 1912, the Sierra Consolidated Mining Company was the major mining company in the
area. In 1912, shortly before the Mexican Revolution, the chief engineer of Sierra
Consolidated, estimated that up until that time, the total production of gold and silver
from Ocampo had exceeded 100 million U.S. dollars.

In
the 1930s with the rise in the official price of gold, activity in the area
increased. In personal communication with consultants to the Corporation, Soyopa reported
that in the period between 1939 and 1941, one high grade ore shoot at the Plaza de Gallos
mine produced over 3.8 tonnes of gold and 59 tonnes of silver. Since this mine was over
100 years old at the time, it was obvious that the historical miners had not found all of
the good veins.

Small
operators and gambosinos continued to operate in the area through the slow periods. In the
1980s the Consejo de Resources Minerales (CRM), an agency of the Mexican federal
Government, financed the construction of a mill equipped with a flotation circuit that can
process about 100 tonnes per day.

In
1994, the Mexican mining laws were changed to allow 100 percent foreign ownership of
mining properties. After that the Ocampo area became active again.

In
1997, Mogul Mining NL (Mogul) entered into a joint venture with Soyopa. Mogul conducted a
district scale mapping and sampling program focusing on the western portion of the
district. A total of 59 reverse circulation drill holes for a total of 6,288 m of drilling
was completed.

In
1999, Augusta Resources Corporation (Augusta) entered into an agreement to acquire
Moguls interest in the project. Augusta drilled 11 reverse circulation holes and
deepened one existing hole for a total of approximately 1,677 m drilled. Mogul and Augusta
did not meet the work commitments in the agreement and the property reverted to Soyopa.

In
1999, the Corporation entered the picture with an option to purchase 17 mining concessions
in the area from Minera Fuerta Mayo, S.A de C.V. (Minera Fuerta). During 1999, the
Corporation had an active exploration program consisting of mapping, sampling, underground
test mining and core drilling. A total of 50 holes were drilled totaling approximately
3,729 m.

In
2000, the Corporation entered a joint venture agreement with Soyopa. The joint venture
agreement was replaced with a purchase agreement dated November 24, 2001.

The
Corporation effectively consolidated the entire Ocampo mining area for the first time
since the Mexican Revolution of 1912.

---

13

In
2000, the Corporation continued exploring the properties. Drilling to delineate the
western deposits and to explore the potential of the northeastern structures at depth was
carried out. A total of 31,046 m of reverse circulation and core drilling was completed.

Metallurgical
testing was carried out by technical consultants in 2000, 2001 and 2002. A preliminary
design and a cost estimate for a heap leach pad and ponds were made by technical
consultants in March 2001. At the same time technical consultants completed a geotechnical
evaluation on the stability of potential open pits for the Picacho, Plaza de Gallos and
Refugio deposits. A detailed structural analysis was completed and additional structural
work was done by technical consultants.

During
2001, the Corporation completed a resource study that was audited by technical
consultants.

In
March 2002, Bolnisi entered an agreement with the Corporation to earn a 60% interest in
portions of the property. They were to complete a feasibility study and bring the property
to production. This agreement was terminated in November 2003 with all of the technical
data available to the Corporation.

The
Corporation has continued with exploration on the property including drilling, sampling,
underground exploration. A full feasibility study is currently being done.

Geology and Mineralization

a)    Regional Geology

The
Ocampo Project is within the Sierra Madre Occidental Province. This extensive
physiographic province extends from southwestern Mexico to the Arizona border and is host
to many precious and base metal deposits. Regionally it is a relatively undeformed high
plateau. (See Figure 2)

The
main feature of the province is the thick sequence of unmetamorphosed volcanic flows,
tuffs, agglomerates and related intrusives of andesitic to rhyolitic composition. These
Tertiary volcanic rocks overlay a basement of Precambrian to Jurassic rocks. Uplift and
erosion have created deep incised canyons. The basement rocks are found only in isolated
windows.

The
stratigraphy of the area has been divided into two main groups, the Lower Volcanic Group
(LVG) and the Upper (UPG). The LVG is the host to the majority of the Au-Ag deposits
exploited in the Sierra Madres.

The
regional structural fabric has a general northwest trend.

b)    Ocampo Area Geology

The LVG
rocks are dominant in the immediate project area and consist predominantly of massive
andesitic to rhyolitic flows, tuffs, agglomerates and volcaniclastics.

The
overlying UVG rocks are predominantly felsic ignimbrites, tuffs, flows and
volcaniclastics.

All
of the rocks have been intruded by andesite to dacite dykes and sills.

---

14

Within
the Ocampo area the structural regime is broken down into two discrete areas, the PGR
Trend and the Ocampo Northeast area.



# Figure 3:  Regional
Geologic Map

---

15



north is to the left

# Figure 4:  District Geology
Map

---

16

The
WNW striking PGR Trend extends from Altagracias in the southeast to beyond La Estrella in
the west and is over 5 km in length. This trend is made up of a series of NW trending
faults crosscut by WNW trending structures. There are a number of known mineral deposits
in the PGR Trend. From east to west they are Picacho, Plaza de Gallos, Refugio, Conico and
La Estrella.

The
Northeast Project area consists of numerous northwest trending faults that are cut by
north to northeast trending faults. This produces a rhombohedral pattern of horsts and
grabens. In the Northeast area there are a number of mineralized structures that include
Brenda, Maria, JM, Rosario, Aventurero, San Juan, Las Animas and Santa Juliana.

Structural
studies have documented six major periods of deformation produced by a combination of the
emplacement of a postulated intrusive beneath the district and extensional regional
tectonics. Both strike slip and dip slip movement accompanied each of the deformations.

In
the Ocampo area the total length of the known mineralized structures is in excess of 27
km.

c)     Mineral Deposits

The
Ocampo mineralization area appears to be classic gold-silver epithermal deposition. Based
on the mineralogy and alteration, the deposits, in both the PGR Trend and the Northeast
Area, are of the low sulphidation, quartz-adularia type.

The
low sulphidation systems contain quartz vein stockworks and breccias with gold, silver,
electrum, argentite and pyrite with minor and variable amounts of base metal sulphides.
These minerals probably were deposited in a high level (epizonal) to near surface
environment.

In
the northwest portion of the Ocampo Project, historic mines such as La Fe and other
prospects are considered to be of the high sulphidation, quartz enargite type deposits.
This type of system has veins, vuggy breccias, and sulphide replacements ranging from pods
to massive lenses associated with high level hydrothermal systems. The mineralization in
the La Fe area is hosted by rhyolite and dacite rocks. These rocks and mineralization may
be stratigraphically lower than the mineralization in the PGR Trend and the Northeast
area. This suggests that this type of mineralization may be found at depth under the PGR
Trend and the Northeast deposits.

d)    Mineralization

The
gold-silver mineralization in the project area is structurally controlled. Structures that
strike N, WNW, NW, NE and E-W all host mineralization that is potentially of economic
grade.

It
is interesting to note that andesitic agglomerates host the majority of the deposits found
to date in the area. These andesitic conglomerates are not considered the best host for
the mineralization. It is believed that this is only an apparent preference due to the
mineralization that has been exposed. Other rocks in the sequence are also expected to be
hosts of the mineralization.

---

17

The
hydrothermal mineralization occurred during all six episodes of structural deformation.
Quartz deposition took place during all the deformations. The quartz occurs in a number of
forms such as banded creamy white chalcedony, clear crystalline white quartz and drusy
amethyst. The gold-silver deposition only took place in the last two periods of
deformation.

The
gold-silver mineralization is seldom found in discreet fissure type veins at Ocampo. The
structures that house the mineral zones of importance have a core of quartz breccia
surrounded by varying degrees of quartz stockworks and silicification. The true thickness
of the mineralization exceeds 50 m in some areas such as Plaza de Gallos and Refugio. An
argillized halo is often present surrounding the silicified structures.

The
gold-silver mineralization is always associated with quartz however all of the quartz does
not contain gold-silver mineralization due to the episodic quartz mineralization. The
precious metal consists of electrum, native silver and argentite. The base metals
sphalerite, galena and chalcopyrite occur in minor varying amounts and have no economic
importance in these veins and there does not appear to be an increase in concentration at
depth.

A
study completed by technical consultants suggests that Cu, Pb and Zn along with gold and
silver can be indicators for precious metal deposition. The same study found that
depletions of Li, Ba, Na, K and Ti can also be an indication of precious metal deposition.

Argillic
or clay caps may be an expression of the very tops of the precious metal depositional
horizons.

The
gold-silver mineralization is known to occur in this area over a vertical distance of 750
m. This vertical distance is not known from one deposit. It is based on the fact that the
lowest productive levels at the Santa Juliana mine were at an elevation of approximately
1,400 m and the vein outcrop at the Plaza de Gallos, the highest point, is at an elevation
of approximately 2,150 m.

Exploration

a)    Overview

The
Corporation has been actively exploring the Ocampo area properties since 1999. Between
March 2002 and November 2003, the Corporation had a partner in the PGR Trend area. Since
November 2003, the Corporation has been continuing the exploration in the entire project
area without a partner.

Sufficient
work has been done to outline resources that are the subject of a feasibility study now in
progress.

b)    Exploration Program

The
Corporation initiated exploration in 1999. Exploration since then has been multifaceted
with geological mapping, sampling both on surface and underground, diamond drilling and RC
drilling from surface, diamond drilling from underground and test mining.

A
number of studies have been done off site. These include mineralogy, metallurgy, slope
stability, preliminary economic evaluations.

---

18

In
1999, the initial exploration was in the Northeast area. As well as geological mapping and
sampling, test mining was carried out at the old Brenda mine and 50 diamond drill holes
were completed in the Northeast area.

In
2000, detailed surface geological mapping, trenching and road building were carried out. A
large drilling program was undertaken with a total of 180 RC and core holes completed.

The
Corporation expanded its holdings in 2000 and obtained the results of recent work that had
been done on the expanded property.

During 2000 and 2001, a program of
underground mapping and sampling in accessible workings was carried out. An exploration
drift was driven at this time.

In
2002 a portion of the property (PGR Trend area) was placed under a joint venture agreement
and the joint venture partner, Bolnisi Gold N.L., was the operator. The joint venture
partner carried out further drilling, metallurgical testing and process design work and
completed a feasibility study on open pit mining in the PGR Trend area.

The
Corporation continued to explore the Northeast area with diamond drilling in 2002, 2003
and 2004. In 2003, a ramp to access the Aventurero and associated veins was started. This
program of underground development and drilling is continuing in 2004.

c)    Drilling

Since
1997, this large project area has been the subject of a number of drilling campaigns by
the Corporation and other operators. The Corporation has the results of all the drilling
since 1997. The following table shows the number of holes that have been drilled for each
of the companies until the end of February 2004. The holes total more than 92,000 m in
length.

Table 1:  Drilling by Company

|                       | 
|---------------------- | 
|Gammon Lake Resources  | 
|Mogul Mining NL        | 
|Augusta Resource Corp. | 
|Bolnisi Gold NL        | 

Total to date
     657 - 105,500 m

The
drilling has been done using reverse circulation (RC) sample collection or by diamond core
drilling.

The
drilling on the PGR trend has been mainly by reverse circulation. In the Northeast area
the drilling has been predominantly by diamond core drilling. The holes were often started
by RC drilling and then cored once the hole was approaching the target area.

Underground
drilling has been carried out from drill stations prepared in the old workings. Drilling
from the new ramp that has been started to access the Aventurero vein and the associated
Las Animas, Rosario and Maris veins is being carried out.

---

19

At
present, there are 3 surface drills and 1 underground machine working on the property. Two
additional surface and 1 additional underground drill will be operating by the end of
April.

d)    The Aventurero Ramp

The
GL Ramp was started in the spring of 2003. This ramp is a full production sized ramp.

The initial
plan is to access two levels, vertically 60 m apart. The first level has been accessed and
the ramp is currently being extended down to the lower level. Drifting on the veins on
both levels and trial stoping is planned.

---

20



# Figure 5:  Ramp

The
Aventurero vein has been drifted along and sampled on the first level. To date, 102 m of
the Aventurero vein have been exposed and sampled. This section of the vein averaged 7.5 g
Au/t and 225 g Ag/t over an average width of 2.2 m. Drifting has started on the San Juan
vein. The first 8 m of drifting on the San Juan vein averaged 13.9 g Au/t and 355 g Ag/t
over and average width of 2.9 m. The results for the next 15 m of drifting on the vein are
pending.

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21

The
Development to March 20, 2004 has totaled 946 m of advance including:

| |  |  | 591
m in the ramp including, spiral, remucks and sumps;
| | - |  | -------------------------------------------------------

| |  |  | 46
m in haulages (San Juan and Aventurero);
| | - |  | -------------------------------------------

| |  |  | 135
m in the underground shop; and
| | - |  | ----------------------------------

| |  |  | 184
m in veins (San Juan, Aventurero, Esperenza).
| | - |  | -------------------------------------------------

e)    Confirmation Diamond
Drilling

Most
of the drilling that has been completed in the past year has been to confirm the results
of the initial wider spaced drill holes. The Clark Report concludes that the results are
in accordance with expectations and the zones that have been tested are much the same as
was predicted. The following is to show how the recent drilling has confirmed the previous
drilling results.

f)    San Juan

Drilling
from underground has located a new mineralized shoot. The new shoot is similar in grade to
previously drilled shoots in the San Juan vein. The drilling results on the new San Juan
shoot can be seen on the section below.

Drifting
has started on the San Juan vein. The first 8 m of drifting on the San Juan vein averaged
13.9 g Au/t and 355 g Ag/t over an average width of 2.9 m. The results for the next 15 m
of drifting on the vein are pending.

---

22



# Figure 6:  San Juan
Long Section

g)    Aventurero

In
the sections below, the surface drill holes numbered OG62 and higher and the underground
holes have been drilled since the last resource estimate. They confirm the vein
expectations.

The
Avenurero vein has been drifted along and sampled on the first level. To date, 102 m of
the Aventurero vein have been exposed and sampled. This section of the vein averaged 7.5 g
Au/t and 225 g Ag/t over an average width of 2.2 m.

---

23



# Figure 7:  Aventurero
Grade x Thickness Long Section



# Figure 8:  Aventurero Ramp
Area

---

24

h)    Other Exploration
Drilling

Some
drilling has been done to test the known zones at depth. These holes have been
encouraging, extending the known mineralization down dip below the proposed open pits. The
significance of these extensions will not be known until further drilling is completed.

i)    Sampling and Analysis

1.    Collection of Samples

The
Corporation has collected samples on surface, underground and by drilling. Both reverse
circulation (RC) drilling and core drilling were utilized.

SURFACE SAMPLES

The
surface samples were mostly in the form of channel chip samples that were collected by the
Corporations employees. The samples were generally 3 m in length. The sample lines
were surveyed by tape and compass methods and tied to the local grid using appropriate
points of control. Earlier exploration work used the same methods when collecting their
samples.

UNDERGROUND SAMPLES

The
underground samples were collected using chip samples across channels. When necessary, due
to groundwater scale, the face was cleaned prior to taking the sample. When the drift was
in the vein, back samples were taken usually with a single sample across the back. When
the exposure was in a cross cut a wall was sampled.

RC DRILLING SAMPLES

The
samples were continuously collected in a cyclone. At the end of each sample run (5 feet or
1.524 m) the sample was discharged through a Gilson Riffle. One half of the first split
was split again to form a sample for assaying and a duplicate sample. In zones of poor
recovery only one split was made. If the sample was wet due to injection or water inflow a
rotary wet splitter was used to collect the sample in buckets before being double split
through a riffle splitter. The drilling crew collected the samples. The quality of the
samples was under the Corporations supervision. The recovery was logged using a
qualitative scale of 1-5. An additional small sample was collected and placed in trays
designed to hold RC chip samples. The chips were geologically logged on site.

CORE SAMPLES

The
core was either HQ or NQ in size in the surface holes. Holes were started at the larger HQ
size and reduced to NQ if necessary. Underground holes were similarly started with HQ size
and reduced to NQ after 20 or 30 m during the 2001 and 2002 drill program. The longer
underground holes drilled in the 2000 and 2001 program utilized the smaller BQ size to
facilitate the drilling. All of the recent underground holes drilled in 2003 and 2004 were
drilled using HQ or NQ sized core.

---

25

The
drilling crew boxed the core and the Corporations employees transported it to the
core shack.

In
the core shack the core was geologically logged with sample lengths indicated. When the
sample lengths were determined the core was split using an impact splitter with one half
of the core being bagged and tagged for assay. The other half was returned to the core
trays for storage.

The
earlier BR and UGD holes used a sample length of 1 m. The surface ODH holes were sampled
on 1.5 m lengths. The current drilling is sampled at 4.5 m lengths until the stockwork
beside the quartz breccia/vein is reached. At that point the sample length is reduced to
1.5 m to sample the stockwork. When the quartz breccia/vein is reached the sample length
is reduced to 1 m in length and it usually stays that length until the end of the hole.
The length of the samples may vary due to the thickness of the vein.

2.    Sample Handling

The
handling procedure has always been the same. The bagged and tagged samples were turned
over to Chemex personnel at the site and Chemex took them to their sample preparation
facility. The sample rejects are stored in Chemexs facility in Hermosillo.

Chemex
crushed the samples and prepared 200-300 g pulp samples. Ninety percent of the pulp will
pass Tyler 150 mesh (106μm). The pulps were sent to Chemex in Vancouver for
analysis.

This procedure is continuing.

3.    Assaying

All
of the BR holes drilled by the Corporation in 1999 and year 2000 holes, ODH-60 to 80,
including the holes drilled by Augusta Resource Corporation and the first four holes
drilled by Mogul Mining NL used a 30 g fire assay with AA finish for gold and Aqua-Regia
extraction with an AA finish for silver. Assay values that exceeded 10 g Au/t or 100 g
Ag/t were re-analyzed by fire assay with gravimetric finish.

All
of the Corporations holes, subsequent to hole ODH-80, were analyzed using a 1 assay
ton sample for fire assay with a gravimetric finish for both gold and silver. Except for
the first four, all of the Mogul Mining NL holes utilized this same analytical method.

Chemex
discovered a potential underestimation of silver values due to plugging of the AA pipette
when using Aqua-Regia/AA methods. For this reason the mineralized zones from holes ODH-71
to 80 and a number of the 1999 BR holes were reanalyzed utilizing a 1 assay ton sized
sample for fire assay with a gravimetric finish. This re-assaying by fire assay indicated
that significant (order of magnitude) underestimating of silver had occurred in less than
5 percent of the samples that had been assayed using an Aqua-Regia/AA finish.

4.    Sample Security

The
samples for assay are taken directly from the site to the Chemex facilities by the Chemex
staff. The sample rejects are stored at Chemexs Hermosillo facility.

---

26

The
RC duplicate samples from the drilling prior to the 2002-2003 program are stored in a pole
barn at a fenced and secured site near Picacho. This site has a 24 hour guard that lives
adjacent to the site. Starting with the 2002-2003 drilling program the RC duplicate
samples are stored in a locked building at the Soyopa complex below Picacho.

The
drill core in the early stages of the program was kept in a locked, closed and secure
building near the GLR field office at the Fomento mill just north of the Northeast
drilling area. This core has been moved and all the core is now stored in a cement block
building at the Soyopa complex. This facility is locked and secure and a security guard
lives on the site.

j)    Metallurgical Testing

There
has been considerable metallurgical test work carried out throughout the life of this
project. The Corporation has used technical consultants for bottle roll tests throughout
the project. In 2003 the consultants produced a scoping study regarding potential
production from the Northeast area deposits. Input from these technical consultants will
be used in the feasibility study that combines production from the Northeast area and the
PGR Trend that is currently being prepared.

The
mineralogy of the deposits in the Ocampo district is simple and consists of electrum,
native silver and argentite. Trace amounts of galena and chalcopyrite are present. Based
on visual examination of the core, the mineralization is generally fine grained. In the
high grade sections large portions of visible native silver, electrum or gold are not
seen.

The
gold and silver mineralization has been shown to be cyanide soluble.

In
the scoping study of the Northeast deposits, the technical consultants found that the ore,
generally was very high grade, averaging 3.27 gpt Au and 517 gpt Ag. The projected gold
recovery for use in this study, 96% was determined by averaging the 48-hour results of the
test on the composite sample, and then applying process efficiency adjustments. The silver
recovery used in this study, 93% was taken from the 24-hr result of the 5,000 gm NaCN/MT
test (no process efficiency adjustments were applied, as these should be offset by longer
leach time).

In
a report prepared for Bolnisi Gold NL on the potential of exploiting the PGR Trend zones
only, the recoveries that were used in that study were 95% for gold and 93% for silver
based on the planned flotation followed by cyanidation.

k)    Feasibility Studies

Bolnisi
Gold N.L. and consultants retained by it produced a positive bankable
feasibility report in September 2003. This feasibility report was based on an open pit
mine in the PGR trend, producing 1.25 million tonnes per year. The Corporation and its
consultants have determined that a new feasibility study incorporating open pit mining and
higher grade production from underground is warranted. Much of the data contained in the
Bolnisi report will be used in the Corporations feasibility study. In addition, the
Corporations feasibility study will consider design changes in the production plans.
These changes may involve a different metallurgical process, different annual production
levels and feed grade as well as different site locations for the plant and the tailings
impoundment. A new block model for the open pit reserve and resource estimations will be
considered.

---

27

M3
Engineering & Technology Corp. has been retained by the Corporation to prepare a
report on the feasibility of placing the property into production. These consultants are
to use all of the test work and studies that have been done for the Corporation and other
companies in the evaluation. M3 is currently working on this report.

The
 completed report is to include but is not limited to the following:

| |  |  | New
Reserve and Resource calculations;
| | - |  | --------------------------------------

| |  |  | Mining
plans for open pits of the PGR trend deposits;
| | - |  | -----------------------------------------------------

| |  |  | Mining
plans for underground mining of the Adventurero, San Juan, Las Animas, Rosario and Maria
vein systems in the Northeast area;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------

| |  |  | Process
plant (Mill) design;
| | - |  | ----------------------------

| |  |  | A
possible heap leach circuit;
| | - |  | ------------------------------

| |  |  | Site
plans; and
| | - |  | ---------------

| |  |  | Financial
evaluation.
| | - |  | ---------------------

l)    
          Mining Plan

The
current plans call for mining from open pits and from underground. The ore will be
processed in a mill that recovers the gold and silver with cyanide leach.

Resource Estimates

Resource
estimates have been carried out by the Corporation in 2001, 2002 and 2003. These resources
have been audited by technical consultants and found to be in keeping with generally
accepted industry practice, and the standards adopted by National Instrument 43-101.

Considerable
work has been done since the last resource estimate. Most of the drilling and the
underground work was and still is directed at the confirmation of the known zones or
extending these zones at depth or along strike. The Corporation is compiling the new
drilling and sampling results in preparation for an up to date resource estimation. The
metallurgical and other studies were directed at the necessary details to complete a
production feasibility study.

The
Corporation releases to the public the results of their drilling and other studies and can
be accessed at www.gammonlake.com.

Based
on the examination of the results of this years drilling and underground sampling it
appears that the resource is essentially as previously estimated with the grade and
tonnage being quite close within the volume of the previous resource estimate. The
difference in the resource will come from the closer spaced sampling giving added
confidence to the zones. Over all, it is expected that the work in this past year will
increase the Measured Resource and increase the Inferred Resource.

The
overall project resource will be increased as drilling has extended the zones both along
stike and down dip. The underground drilling along strike in the San Juan structure has
disclosed a previously unknown shoot. The recently discovered La Esperanza vein
demonstrates the effectiveness of the underground development program adding to the
resource base.

---

28

A.    Resource Classification

The
Corporation uses the classifications as prescribed in the National Instrument 43-101 for
the categories of resource estimates.

Mineral resources are sub-divided
into 3 categories depending on the geological confidence. The lowest level or the resource
with the least confidence is the Inferred category. The next level of confidence is the
Indicated category and the level with the most confidence is the Measured category.

The
definitions for each of the categories are given here for clarity.

INFERRED RESOURCE

An
Inferred Mineral Resource is that part of a mineral resource for which quantity and grade
or quality can be estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.

INDICATED RESOURCE

An
Indicated Mineral Resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough for geological and
grade continuity to be reasonably assumed.

MEASURED RESOURCE

A
Measured Mineral Resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics are so well established that they
can be estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and reliable
exploration, sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough to confirm both geological and grade continuity.

B.    Northeast Area
Resources

The
Northeast Area resources were calculated originally as part of the overall project review
that was done in 2001. The results of the project view are given later. Based on further
information the resources of the Northeast Area were re-estimated in 2002 and 2003. Both
of these estimates were audited by technical consultants. As the 2003 estimate is the most
up to date the details are given below.

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29

i)    Method of Estimation

The
estimation method used by the Corporation in 2003 was similar to the methods used in the
previous estimations.

Zone
outlines (mineralized boundaries) were digitized by the Corporation in AutoCAD on cross
sections using local geologic control. An external cut-off grade of 3 g/t equivalent Gold
(eAu) was used for the underground portion of the resources. The silver to
gold ratio used was 65:1. The 3 g/t eAu cutoff was derived from data generated by
technical consultants in a 2002 report and reflects a reasonably realistic underground
mining cut-off grade.

A
minimum true thickness of 1 m was required to define a resource block. This is based on
the realistic minimum mining thickness as indicated by the Corporations mining
contractor.

Up
to 3 samples (4.6 m) of internal waste could be incorporated into the composite, as long
as the next sample exceeds the 3 g/t eAu cut-off and the composite grade exceeds 3 g/t
eAu.

The
average gold and silver grades were calculated using Excel spreadsheets. The assay data
was imported into the spreadsheets directly from assay laboratory files.

The
assay length was a consistent 1.5 m if the metric drill pipe was used or 1.524 m if the
pipe was of English manufacture.

In
a technical report completed in 2003, the technical consultants concluded that, in
general, the deposits are structurally controlled and have good continuity along strike
and down dip. The zones are open at depth in most areas. These technical consultants
participated in some of thezone interpretations on the cross sections.

The
digitized cross sectional outlines were divided into mineralized blocks, projecting half
of the distance to adjacent drill holes on each section and between sections. Intercepts
that were below the cut-off grade or the minimum true thickness were used to interpret the
zone continuity but were not used in the resource estimate. The interpretation of the
zones was aided by the information from the surface and underground old workings, but was
not used for grade estimation.

The
areas of the blocks was determined in AutoCad and multiplied by the width of the block
(the distance between the sections) to give a volume. The volume was converted to tonnes
using a density of 2.5 tonnes per cubic metre (t/m3). This density has been
determined on many samples and checked by both technical consultants. Examination of the
core and the mineralization suggests that it is reasonable.

The
tonnage and grade was estimated for each mineralized block on each section and tabulated.
All calculations were made using Excel spreadsheets. Cross section A730 shown in FIGURE 8
is an example of the method used.

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30



# Figure 9:  Las Animas
Cross Section LA235

ii)    Grade Capping

It
should be noted that for the resource estimations there has been no attempt to cap or
otherwise limit the effect of very high grade gold or silver samples. On examination of
the assay results and the check analysis, especially of the bottle roll test results, it
appears that it may be necessary to introduce some method to limit the high grades for the
reserve estimations. Additional studies on the appropriate procedures for grade capping
are recommended by the Clark Report.

---

31

iii)    Method of
Classification

The
resource was classified as measured, indicated or inferred based on the spacing of the
information and allowable projections.

MEASURED RESOURCE:

Blocks that were projected 25 m or
less from any drill hole between cross sections and had data support on all four sides
were categorized as Measured. One section allowed an additional 5 m projection length to
30 m in one direction only.

INDICATED RESOURCE:

Blocks that were projected half way
to the nearest drill hole up to 50 m and generally defined as blocks that had support on
three sides or less, where section spacing exceeded 50 m or where the block was at the end
of the zone were categorized as Indicated. The end of the zone could be either the strike
or down dip extension of the mineralization. The average total width of the blocks for the
Indicated Resource was 70 m.

INFERRED RESOURCE:

The
Inferred blocks were estimated based on the average true thickness of all measured and
indicated blocks. This was calculated separately for each mineralized structure. The Au
and Ag grades were based on the weighted average (by strike length and down dip extension)
for each structure. Inferred blocks were projected up to 100 m up or down dip from
indicated blocks. If the structure was open along strike the projection distance from
indicated blocks was 100 m.

Previous
studies estimated an Inferred Resource for untested or under drilled portions of the
mineralized structures. The estimated volume was based on the known length and width of
the mineralization and an assumed depth projection. The average grade of the known
intercepts was used. A percentage factor of 50% to account for the assumed
proportion of mineralized structure was then applied to the volume calculation to arrive
at an Inferred Resource. Since the information on the surface areas of the NE deposits is
essentially the same as it was for the previous estimate in April 2002. This previous
method was used to estimate an Inferred Resource for the Northeast surface resources. Dip
length was restricted to 100 m.

The
previous surface resources that were audited by technical consultants used an eAu of 0.5
g/t as a cut-off and a gold to silver ratio of 1:50. The current eAu is calculated at a
gold to silver ratio of 1:65. Using this new ratio a previous 0.5 g/t eAu if made up
solely of silver would now only be 0.38 g/t.

iv)    Northeast Area
Resources calculated in 2003 Technical Study

The
total of the Measured and Indicated (M & I) Resources in the Northeast Area, both
underground and at surface is approximately 5.9 million tonnes grading 4.0 g Au/t and 202
g Ag/t.

The
total of the Measured and Indicated Resources that would be mined underground is
approximately 3.5 million tonnes grading 5.9 g Au/t and 302 g Ag/t.

---

32

# Table 2: Northeast
Area measured and Indicated Resources

|                               
|-------------------------------
|
|                               
|Aventurero                     
|                               
|Rosario                        
|                               
|San Juan                       
|                               
|Total NE Underground Measured  
|                               
|Brenda Surface Measured        
|                               
|Total Northeast Ocampo Measured
|                               

|                                
|--------------------------------
|
|                                
|Aventurero                      
|                                
|Las Animas                      
|                                
|Rosario                         
|                                
|Maria                           
|                                
|San Juan                        
|                                
|Total NE Underground Indicated  
|                                
|Total NE Surface Indicated      
|                                
|                                
|TOTAL NORTHEAST OCAMPO INDICATED
|                                

Cut-off grades are the same aws for
all resources.

# Table 3: Northeast
Area Inferred Resources

|                              
|------------------------------
|
|                              
|Aventurero                    
|                              
|Las Animas                    
|                              
|Rosario                       
|                              
|Maria                         
|                              
|San Juan                      
|                              
|Total NE Underground, Inferred
|                              

|                               
|-------------------------------
|
|                               
|San Juan                       
|                               
|Brenda                         
|                               
|Maria                          
|                               
|Total NE Surface, Inferred     
|                               
|                               
|Total Northeast Ocampo Inferred
|                               

Cut-off grade for
Underground resources is 3 g/t eAU at 1:65 gold to silver ratio. Cut-off grade
for Surface was originally calculated at 0.5 g/t eAU at a 1:50 gold to silver
ratio.

---

33

The
Inferred Resource for underground is larger than the total of the underground Measured and
Indicated Resource. This is not surprising as the area has good potential.

The
total of the Inferred Resources in the Northeast Area, both underground and at surface is
approximately 5.6 million tonnes grading 5.1 g Au/t and 248 g Ag/t.

The
total of the Inferred Resources that would be mined underground is approximately 4.5
million tonnes grading 6.1 g Au/t and 298 g Ag/t.

C.    Ocampo Area Resources

i)    Ocampo Area Resources
calculated in 2001 Technical Study

The
resources of the area were estimated by the Corporation and audited by technical
consultants. The method of calculation was essentially the same as was described above and
for that reason it is not described here.

The
cut-off grade used for these estimations was 0.5 g eAu/t. At least 2 samples (3 m) were
needed to establish a resource

block.

The
Aventurero and San Juan  Balvanera deposits were assumed to be underground targets
and for that reason the cut-off grade used for estimating those resources was 4.0 g eAu/t.

The
eAu was calculated on a gold to silver ratio of 1:50. This is different from the more
recent calculation and has been noted above.

The
projections for the Indicated category may have been more liberal in some areas but the
difference was not of a serious nature.

The
values in the following table that summarizes Measured and Indicated Resources of the area
has been taken from work prepared by technical consultants.

Table 4:  Ocampo Measured and
Indicated Resources

|                                
|--------------------------------
|
|                                
|Measured                        
|                                
|Indicated                       
|                                
|                                
|Total Ocampo Area               
|Measured and Indicated Resources
|                                

Cut-off grade 0.5 g/t eAu calculated
at 1:50 gold to silver ratio

In
addition to the Measured and Indicated Resources there is an Inferred Resource of
approximately 5.8 million tonnes at a grade of about 1.7 g Au/t and 86 g Ag/t.

These
 resources for all of the Ocampo area are inclusive of the Northeast  Area that was
detailed  above.  The Northeast Area Measured and Indicated Resources included in this

---

34

estimation are approximately 3
million tonnes grading 2.44 g Au/t and 105 G Ag/t. The Northeast Area accounts for about
25% of the eAu ounces in the total Measured and Indicated Resource. In the total Inferred
Resource, the Northeast Area accounts for about 16 % of the tonnage and 40% of the eAu
ounces.

As
can be seen if the 2003 results for the Northeast Area are compared with the 2002 resource
estimate, the drill program in the Northeast Area had the effect of increasing the tonnage
but more dramatically increasing the grade.

The
PGR Trend deposits are also included in the Ocampo area resources. Four of the PGR
deposits account for the bulk of the tonnage. These four deposits are the Conico, Picacho,
Refugio and the Plaza de Gallos. Combined the Measured and Indicated Resources for these
four deposits total approximately 16.6 million tonnes. Some of these deposits are near
surface and potentially can be mined by open pit.

ii)    Pit Resources
calculated in 2002 Technical Study

Technical
consultants carried out a study in 2002 on the open pit potential of the resources in the
4 main PGR deposits. They examined the same data that was used for the 2001 resource
estimate that is given above and developed potential open pits. The section Figure 10 is
included to show the general distribution of the resources within the pits.



# Figure 10:  Plaza de
Gallos, Pit Section PDG 290

---

35

The
resources were divided up into two groups, low grade and high grade resources. The high
grade resources were blocks above 1 g eAu/t and the low grade blocks were from 0.5 to 1.0
g eAu/t.

Combined,
the 4 pits, including the high and low grade blocks, account for approximately half of the
Resource in these 4 deposits.

The
total of the Measured and Indicated Resources in the potential pits on the four deposits
(Conico, Picacho, Refugio and the Plaza de Gallos) is 8.4 million tonnes grading 1.5 g
Au/t and 71 g Ag/t.

The
high grade portions (above 1 g eAU/t) account for 6.5 million tonnes grading 1.81 g Au/t
and 87 g Ag/t.

iii) Summary of Resource
Estimates

The
first resource estimate for the Ocampo Area gave an overall Measured and Indicated
Resource of approximately 22.6 million tonnes grading 1.44 g Au/t and 57 g Ag/t.

As
exploration progressed, the potential for 4 pits in the PGR Trend and underground mining
in the Northeast Area was recognized. These were included the overall Ocampo Area.

The
pit resource estimation gave an Measured and Indicated Resource, within 4 pits, of
approximately 8.4 million tonnes at 1.5 g Au/t and 71 g Ag/t.

The
Northeast Area underground resource estimation gave an Measured and Indicated Resource of
3.5 million tonnes grading 5.9 g Au/t and 302 g Ag/t.

The
exploration done since these estimates has continued to confirm the tonnage and grades in
the deposits.

Overall
there is still a lot of potential in the area. Mining underground in the area of the pits
and other surface mining are possibilities.

Conclusions

The
Clark Report reached the following conclusions:

Exploration
by the Corporation and others since 1998 has confirmed the potential of the properties.

The
Corporation has conducted a staged, well run exploration program that has been well
carried out with accepted engineering practice. The sampling methods and protocols have
given results that can be relied upon for further development of the properties.

The
staged exploration has been very rewarding. As the exploration progressed the expectations
of each stage have increased and each stage has been able to confirm or exceed the
expectations for the deposits. Currently the exploration is being carried out with
drilling on surface and from the GL ramp that is being driven at the Aventurero vein.

---

36

Although
there has been considerable exploration done by the Corporation at Ocampo there is still a
lot of potential for discovering additional resources.

Some
of the mineralized zones are accessible by open pits, however there appears to be a
significant tonnage of higher grade material that can be accessed from underground,
utilizing an adit and a ramp. The historical operations indicate that simple stoping
methods can be employed to extract the mineralization.

At
the present time, a production feasibility study is being carried out for the Corporation.
This will include all of the items necessary to be able to make economic evaluations
regarding production at the Ocampo Project. The current plans call for mining from open
pits and from underground. The ore will be processed in a mill that recovers the gold and
silver with cyanide leach.

Metallurgical
testing has indicated that good recoveries of the gold and silver can be obtained.

A
new resource and reserve estimate is being prepared as part of the feasibility study. It
is expected that the recent drilling in the Northeast Ocampo area will have increased the
tonnage of the Measured and Inferred Resources with the Indicated Resources staying much
the same. The current deep drilling program in the open pit PGR trend, if successful, will
further increase the overall project resource.

The
anticipated production has not yet been proven to be viable. Until all of the tests are
done, including geotechnical investigations, further metallurgical tests and appraisals
and the reserves estimated, it is not possible to reliably estimate the capital and
production costs. This is common to most properties at this stage of development.

Recommendations

The
program as it is now planned should continue. The current systems in place are working
well and there is no need for any immediate changes.

The
sample handling and assaying has been shown to be adequate. It is important for the
Corporation to continue to monitor the handling and storage of samples as well as
continuing to monitor the assaying labs with the Corporations own check samples and
with repeat analysis at another laboratory.

The
new reserve and resource study that is being prepared as part of the feasibility study
might indicate some changes to the drilling program. The grade distribution within the
zones and the effect, if any, on the proposed mining grade should be studied as part of
the reserve estimations.

The
ramp and the planned trial stoping should be continued.

2.    Investment in Mexgold
Resources Inc.

In
December 2002, the Corporation made a strategic investment by acquiring 5.0 million shares
of Mexgold Resources Inc. (Mexgold) for $500,000 ($0.10 per share). Mexgold is
a

---

37

junior resource exploration
Corporation engaged in locating, acquiring and exploring for gold and base metals.
Subsequent to making this investment, Mexgold completed a reverse take-over transaction
whereupon its common shares were listed for trading on the TSX Venture Exchange under the
trading symbol, MGR. Pursuant to an agreement with Mexgold, these shares must
be held until August 20, 2009, and there will be no sale, transfer, assignment, pledge,
encumbrance, grant of a security interest in or other form of conveyance of these shares,
directly, indirectly or beneficially, prior to that time unless Mexgold so consents in
writing thereto.

Mexgold
holds a 100% ownership of five mining concessions encompassing the Guadalupe y Calvo
gold/silver property. The Guadalupe y Calvo gold/silver project is located in the Sierra
Madres in the state of Chihuahua, Mexico, approximately 300 kilometres southwest of the
city of Chihuahua and 200 kilometers west of the city of Hidalgo de Parral.

On
February 26, 2004, the Corporation invested a further $11.8 million into Mexgold Resources
Inc. to maintain its 25% interest in Mexgold. This investment was part of a Mexgold
private placement financing consisting of the sale of 22.5 million Subscription Receipts
at $2.00 per Subscription Receipt for gross proceeds of $45,000,000. Each Subscription
Receipt represented the right to receive one Unit upon completion of the acquisition of
the El Cubo Gold-Silver Mine. Each Unit consists of one common share of Mexgold and
one-half of one common share purchase warrant. Each whole warrant entitles the holder to
acquire one common share for $2.50 until February 26, 2006. Gammon Lake acquired 5.9
million Subscription Receipts out of the total Mexgold financing of 22.5 million
Subscription Receipts for a total purchase price of $11.8 million on the same basis as all
the other investors in this financing.

On
March 5, 2004, Mexgold acquired the El Cubo Gold-Silver Mine in Guanajuato State, Mexico.
The El Cubo Gold-Silver Mine is located in the Guanajuato gold-silver district in the
Republic of Mexico, near the City of Guanajuato in Guanajuato State. Pursuant to the terms
of the Subscription Receipts, the Subscription Receipts were deemed to have been exercised
as at 5:00 p.m. (Toronto time) on March 15, 2004, and the common shares and warrants of
Mexgold underlying the Subscription Receipts were issued to the holders of the
Subscription Receipts.

Mexgold
and the Corporation have certain common directors and officers.

# 3.3    Risk Factors

An investment in the securities of
the Corporation is speculative and involves numerous and significant risks and should be
undertaken only by purchasers whose financial resources are sufficient to enable them to
assume such risks and who have no need for immediate liquidity in their investment.
Prospective investors should carefully consider the risk factors described below.

1.    No History of
Profitability

The
Corporation is a development stage Corporation with no history of profitability. There can
be no assurance that the operations of the Corporation will be profitable in the future.
The Corporation has limited financial resources and will require additional financing to
further explore, develop, acquire and retain its property interests and if financing is
unavailable for any reason, the Corporation may become unable to acquire and retain its
mineral concessions and carry out its business plan.

---

38

2.    Exploration Stage
Corporation

The
Corporation is engaged in the business of exploration and development of the Ocampo
Project in the hope of locating economic deposits of minerals. The property interests of
the Corporation are in the exploration and development stage only and are without a known
body of commercial ore. Accordingly, there is little likelihood that the Corporation will
realize any profits in the short to medium term. Any profitability in the future from the
business of the Corporation will be dependent upon locating an economic deposit of
minerals, which itself is subject to numerous risk factors. Further, there can be no
assurance, even if an economic deposit of minerals is located, that any of the
Corporations property interests can be commercially mined. The exploration and
development of mineral deposits involve a high degree of financial risk over a significant
period of time of which even a combination of careful evaluation, experience and knowledge
of management may not eliminate. While discovery of additional ore-bearing structures may
result in substantial rewards, few properties which are explored are ultimately developed
into producing mines. Major expenses may be required to establish reserves by drilling and
to construct mining and processing facilities at a particular site. It is impossible to
ensure that the current exploration programs of the Corporation will result in profitable
commercial mining operations. The profitability of the Corporations operations will
be, in part, directly related to the cost and success of its exploration programs which
may be affected by a number of factors. Substantial expenditures are required to establish
reserves which are sufficient to commercially mine some of the Corporations
properties and to construct, complete and install mining and processing facilities in
those properties that are actually mined and developed.

3.    Foreign Operations

All
of the Corporations property interests are located in the State of Chihuahua,
Mexico, and are subject to that jurisdictions laws and regulations. The Corporation
believes the present attitude of Mexico and the State of Chihuahua to foreign investment
and mining to be favourable but investors should assess the political risks of investing
in a foreign country. Any variation from the current regulatory, economic and political
climate could have an adverse effect on the affairs of the Corporation.

4.    Government Regulations

The
Corporations exploration operations are subject to government legislation, policies
and controls relating to prospecting, development, production, environmental protection,
mining taxes and labour standards. In order for the Corporation to carry out its mining
activities, the Corporations exploration licences must be kept current. There is no
guarantee that the Corporations exploration licences will be extended or that new
exploration licences will be granted. In addition, such exploration licences could be
changed and there can be no assurances that any application to renew any existing licences
will be approved. The Corporation may be required to contribute to the cost of providing
the required infrastructure to facilitate the development of its properties. The
Corporation will also have to obtain and comply with permits and licences which may
contain specific conditions concerning operating procedures, water use, waste disposal,
spills, environmental studies, abandonment and restoration plans and financial assurances.
There can be no assurance that the Corporation will be able to comply with any such
conditions.

---

39

5.    Market Fluctuation and
Commercial Quantities

The
market for minerals is influenced by many factors beyond the control of the Corporation
such as changing production costs, the supply and demand for minerals, the rate of
inflation, the inventory of mineral producing corporations, the international economic and
political environment, changes in international investment patterns, global or regional
consumption patterns, costs of substitutes, currency availability and exchange rates,
interest rates, speculative activities in connection with minerals, and increased
production due to improved mining and production methods. The metals industry in general
is intensely competitive and there is no assurance that, even if commercial quantities and
qualities of metals are discovered, a market will exist for the profitable sale of such
metals. Commercial viability of precious and base metals and other mineral deposits may be
affected by other factors that are beyond the Corporations control including
particular attributes of the deposit such as its size, quantity and quality, the cost of
mining and processing, proximity to infrastructure and the availability of transportation
and sources of energy, financing, government legislation and regulations including those
relating to prices, taxes, royalties, land tenure, land use, import and export
restrictions, exchange controls, restrictions on production, as well as environmental
protection. It is impossible to assess with certainty the impact of various factors which
may affect commercial viability so that any adverse combination of such factors may result
in the Corporation not receiving an adequate return on invested capital.

6.    Mining Risks and
Insurance

The
Corporation is subject to risks normally encountered in the mining industry, such as
unusual or unexpected geological formations, cave-ins or flooding. The Corporation may
become subject to liability for pollution, damage to life or property and other hazards of
mineral exploration against which it or the operator if its exploration programs cannot
insure or against which it or such operator may elect not to insure because of high
premium costs or other reasons. Payment of such liabilities would reduce funds available
for acquisition of mineral prospects or exploration and development and would have a
material adverse affect on the financial position of the Corporation.

7.    Environmental
Protection

The
mining and mineral processing industries are subject to extensive governmental regulations
for the protection of the environment, including regulations relating to air and water
quality, mine reclamation, solid and hazardous waste handling and disposal and the
promotion of occupational health and safety which may adversely affect the Corporation or
require it to expend significant funds.

8.    Capital Investment

The
ability of the Corporation to continue exploration and development of its property
interests will be dependent upon its ability to raise significant additional financing
hereafter. There is no assurance that adequate financing will be available to the
Corporation or that the terms of such financing will be favourable. Should the Corporation
not be able to obtain such financing, its properties may be lost entirely. A summary of
the Corporations financial commitments under the Corporations option and joint
venture agreements is provided in the following table. Also refer to Item 3:
Description of Business  3.2 Mineral Projects  1. Ocampo Project.

---

40

|                                     
|-------------------------------------
|
|                                     
|Minera Fuerte Joint Venture Agreement
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|Soyopa Joint Venture Agreement       
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     

9.    Conflicts of Interest

Certain
of the directors and officers of the Corporation also serve as directors of Mexgold
Resources Inc. and other companies involved in natural resource exploration and
development and consequently, the possibility of conflict exists. The Corporations
investment in Mexgold Resources Inc. is described in, Item 3: Description of the
Business  3.2 Mineral Projects  2. Investment in Mexgold Resources Inc..
Any decisions made by such directors involving the Corporation will be made in accordance
with the duties and obligations of directors to deal fairly and in good faith with the
Corporation and such other companies. In addition, such directors declare, and refrain
from voting on any matters in which such directors may have a conflict of interest.

10.    Dependence on Key
Personnel

The
success of the Corporation is heavily dependent on its key personnel and on its ability to
motivate, retain and attract highly skilled persons. The competition for qualified
personnel is strong. The Corporation considers Messrs. Fred George and Bradley H. Langille
to be key employees and maintains life insurance in the amount of $1,000,000 on the lives
of each of these officers. In order to attract and retain its key personnel, the
Corporation has sought to provide its personnel with challenging work and a variety of
opportunities for advancement through growth and expansion of the Corporations
business, and through equity participation.

11.    Lack of Active Market

There
can be no assurance that an active market for the common shares of the Corporation will
continue and any increased demand to buy or sell the common shares of the Corporation can
create volatility in price and volume.

12.    Currency

The
Corporation carries on its exploration activity outside of Canada. Accordingly, it is
subject to the risks associated with the fluctuation of the rate of exchange of the
Canadian dollar

---

41

and foreign currencies, in particular
the Mexican peso, the currency of Mexico. Such fluctuations may materially affect the
Corporations financial position and results.

13.    Dividends

To
date,  the  Corporation  has paid no  dividends  on its Common  Shares and does not
intend to pay  dividends  on its Common Shares in the foreseeable future.  See "Item 4:
 Dividends".

14.    Competition

The
international mining industry is subject to government controls and regulations which may
vary from time to time. The industry is highly competitive in all phases. The Corporation
competes with numerous other companies and individuals in the search for and the
acquisition of attractive mineral properties. The Corporations ability to acquire
properties and potential reserves in the future will depend not only on its ability to
develop its present properties, but also on its ability to select and acquire suitable
producing properties or prospects for mineral exploration. The Corporation will also be
required to compete in the future directly with other companies that may have greater
resources.

15.    Possible PFIC Status

Shareholders
who are U.S. taxpayers should be aware that the Corporation may be a passive foreign
investment company (PFIC) for the current fiscal year; and may have been a
PFIC in prior years or may become a PFIC in the future. If the Corporation is a PFIC for
any year during a U.S. taxpayers holding period, then such U.S. taxpayer, generally,
will be required to treat any so called excess distribution received on its
common shares, or any gain realized upon a disposition of common shares, as ordinary
income and to pay an interest charge on a portion of such distribution or gain, unless the
taxpayer makes a qualified electing fund (QEF) election or a mark-to-market
election with respect to the shares of the Corporation. In certain circumstances, the sum
of the tax and the interest charge may exceed the amount of the excess distribution
received, or the amount of proceeds of disposition realized, by the taxpayer. There can be
no assurance that the Corporation will satisfy such information reporting requirements or
the related record keeping requirements. A U.S. taxpayer who makes a QEF election
generally must report on a current basis its share of the Corporations net capital
gain and ordinary earnings for any year in which the Corporation is a PFIC, whether or not
the Corporation distributes any amounts to its shareholders. A U.S. taxpayer who makes the
mark-to-market election, generally, must include as ordinary income in each year, the
excess of the fair market value of the common shares over the taxpayers tax basis
therein.

ITEM 4:    DIVIDENDS

The
Corporation has not declared or paid any dividends on its Common Shares since the date of
its incorporation. The Corporation intends to retain its earnings, if any, to finance the
growth and development of its business and does not expect to pay dividends or make any
other distributions in the near future. The Corporations board of directors will
review this policy from time to time having regard to the Corporations financing
requirements, financial condition and other factors considered to be relevant.

---

42

ITEM 5:    DESCRIPTION OF
CAPITAL STRUCTURE

The
Corporations authorized capital consists of an unlimited number of common shares
without nominal or par value, an unlimited number of Class A preferred shares and an
unlimited number of Class B preferred shares. A total of 56,676,724 common shares are
issued and outstanding as at October 8, 2004. There are no Class A or Class B preferred
shares currently outstanding.

Common Shares

Each
common share ranks equally with all other common shares with respect to dissolution,
liquidation or winding-up of the Corporation and payment of dividends. The holders of
common shares are entitled to one vote for each share of record on all matters to be voted
on by such holders and are entitled to receive pro rata such dividends as may be declared
by the board of directors of the Corporation out of funds legally available therefor and
to receive pro rata the remaining property of the Corporation on dissolution. The holders
of common shares have no pre-emptive or conversion rights. The rights attaching to the
common shares can only be modified by the affirmative vote of at least two-thirds of the
votes cast at a meeting of shareholders called for that purpose.

Class A and Class B
Preferred Shares

The
Class A and Class B preferred shares are non-cumulative, non-participating, non-voting and
redeemable at their paid-in value. Dividends on the Class A and Class B preferred shares
are determined by the board of directors and are not to exceed 12% in the case of the
Class A preferred shares and 13% in the case of the Class B preferred shares. The Class A
and Class B preferred shares are entitled to preference over the Common Shares and any
other shares of the Corporation ranking junior to the Class A and Class B preferred shares
with respect to the payment of dividends and the distribution of assets in the event of
liquidation, dissolution or winding-up of the Corporation. Any amendment to the articles
of the Corporation to vary any rights, privileges, restrictions or conditions attaching to
the Class A or Class B preferred shares must, in addition to authorization by special
resolution, be authorized by at least two-thirds of the votes cast at a meeting of holders
of Class A or Class B preferred shares duly called for such purpose, each holder being
entitled to one vote for each preferred share held.

ITEM 6:    MARKET FOR
SECURITIES

# 6.1    Trading Price and
Volume

The
Common Shares of the Corporation have been listed and posted for trading on the Toronto
Stock Exchange (the TSE) since February 18, 2000, under the trading symbol
GAM. The Common Shares of the Corporation have been listed and posted for
trading on the American Stock Exchange since September 4, 2003, under the trading symbol
GRS. The following table sets forth the high and low trading prices and
trading volume of the Common Shares as reported by the TSE for the periods indicated:

---

43

|                    
|--------------------
|
|                    
|October 1 - 8, 2004
|                    
|September 2004      
|                    
|August 2004         
|                    
|July 2004           
|                    
|June 2004           
|                    
|May 2004            
|                    
|April 2004          
|                    
|March 2004          
|                    
|February 2004       
|                    
|January 2004        
|                    
|December 2003       
|                    
|November 2003       
|                    
|October 2003        
|                    
|September 2003      
|                    
|August 2003         
|                    

# 6.2    Prior Sales

The
following table contains details of the prior sales of securities of the Corporation
during the twelve months ended July 31, 2004 and to the date of this Annual Information
Form:

|                 
|-----------------
|
|                 
|August 15, 2003  
|                 
|November 21, 2003
|                 
|February 26, 2004
|                 
|                 
|                 
|                 

ITEM 7:  ESCROWED
SECURITIES

To
the knowledge of the Corporation, there are no securities of the Corporation which are
held in escrow other than as indicated below:

|             
|-------------
|
|             
|
|             
|Common Shares
|             

---

44

|Notes: | (1) |  | These shares are subject to an escrow agreement dated December 9, 1986, pursuant to which
Computershare Trust Company of Canada is the escrow agent. These shares may be released
from escrow upon such time as a mineral property of the Corporation commences commercial
operations or as otherwise permitted by securities regulators.
|------ | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) |  | Based
on a total of 56,676,724 common shares are issued and outstanding as at           October
8, 2004.
| | --- |  | --------------------------------------------------------------------------------------------------------

ITEM 8:  DIRECTORS AND
OFFICERS

The
management of the Corporation consists of four (4) executive officers and five (5)
directors. The table presented below provides the names of and related information
concerning each executive officer and director. Each director holds office until the close
of the next annual meeting of shareholders or until his successor is duly elected or
appointed.

|Name, Position with the Corporation and/or Principal Occupation | Common
Shares | Stock
Options(5)
|--------------------------------------------------------------- | ------------- | ----------------
|
|FRED GEORGE                                                     |               | 1,147,200       
|Resident of Bedford, Nova Scotia                                |              
|Chairman & President of the Corporation                         |              
|Director of the Corporation since June, 1996                    |              
|
|BRADLEY H. LANGILLE(4)                                          |               | 839,900         
|Resident of Halifax, Nova Scotia                                |              
|Chief Executive Officer of the Corporation                      |              
|Director of the Corporation since June, 1996                    |              
|
|GREGORY K. LILLER                                               |               | nil             
|Resident of Tuscon, Arizona                                     |              
|Vice President, Exploration                                     |              
|Officer of the Corporation since January, 2000                  |              
|
|COLIN P. SUTHERLAND, C.A                                        |               | 1,000           
|Resident of Halifax, Nova Scotia                                |              
|Chief Financial Officer                                         |              
|Officer of the Corporation since October, 2004                  |              
|Director of the Corporation since March 2004                    |              
|
|RODOLFO NIEBLAS(1)(2)(3)                                        |               | nil             
|Resident of Mexico City, Mexico                                 |              
|Chief of Staff, Federal Electricity Commission, Mexico          |              
|Director of the Corporation since June, 2002                    |              
|
|ALEJANDRO CARAVEO(1)(2)(4)                                      |               | 29,550          
|Resident of Chihuahua City, Mexico                              |              
|President, Compania Tecnica Minera S.A. de C.V                  |              
|Director of the Corporation since June, 2002                    |              
|

---

45

|Name, Position with the Corporation and/or Principal Occupation | Common
Shares | Stock
Options(5)
|--------------------------------------------------------------- | ------------- | ----------------
|
|                                                                |               |                 
|DALE M. HENDRICK (1)(2)(3)(4)                                   |               | 500             
|Resident of Toronto, Ontario                                    |              
|President of Dale M. Hendrick & Associates Inc.                 |              
|Director of the Corporation since January, 2000                 |              

Notes:

|(1) |  | Member of the Audit Committee.
|--- |  | ------------------------------

|(2) |  | Member of the Nominating and Corporate Governance Committee.
|--- |  | ------------------------------------------------------------

|(3) |  | Member of the Compensation Committee.
|--- |  | --------------------------------------

|(4) |  | Member of the Health, Safety and Environment Committee.
|--- |  | -------------------------------------------------------

|(5) |  | A portion of above-noted options held by directors and senior officers are
               subject to shareholder approval: Fred George (1,080,000), Bradley H. Langille
               (1,160,000), Gregory K. Liller (20,000), Colin P. Sutherland (50,000), Alejandro
               Caraveo (10,000) and Dale M. Hendrick (10,000).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Each
of the directors and officers has had the principal occupation listed under his name above
for the last five years.

As
at October 8, 2004, the directors and senior officers of the Corporation, as a group,
beneficially own, directly or indirectly, or exercise control or direction over an
aggregate of 2,018,150 Common Shares (8,892,650 Common Shares if all options held by them
are exercised), representing 3.6% of the currently outstanding Common Shares (15.7% of the
Common Shares on a fully diluted basis).

ITEM 9:  PROMOTERS

Messrs.          Fred
George, the President, Chairman and a director of the Corporation, and           Bradley
H. Langille, the Chief Executive Officer and a director of the           Corporation, are
the promoters of the Corporation by virtue of the initiative           they have taken in
founding the business of the Corporation. Messrs. George and           Langille hold the
shares and options as indicated under Item 8: Directors           and Officers.
Messrs. George and Langille have received salary payments as           described under,
Item 11: Interest of Management and Others in Material           Transactions.

ITEM 10:  LEGAL PROCEEDINGS

There
are no legal proceedings involving the Corporation or its property as at the date of this
prospectus and, to the best knowledge of management, no such proceedings are contemplated.

ITEM 11:  INTEREST OF
MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

No
director, senior officer, principal holder of securities or any associate or affiliate
thereof of the Corporation has any interest, directly or indirectly, in material
transactions with the Corporation or any of its direct or indirect wholly-owned
subsidiaries, other than the following transactions, which were in the normal course of
operations:

---

46

| | 1. |  | During
the year ended July 31, 2004, the Corporation paid a total of $2,628,516           (2003
 $388,278) to companies controlled by directors of the Corporation           for
management fees, mineral property exploration expenditures, promotional fees
          and professional fees, as follows:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | 2004 | 2003       
|----------------------------------------- | ---- | -----------
|                                          |      |            
|Management fees                           |      | $   412,500
|Mineral property exploration expenditures |      | 2,186,478  
|Professional fees                         |      | 29,538     
|                                          |      |            
|                                          |      | $2,628,516 
|                                          |      |            

| | Management
believes that related party transactions for management, professional fees and mineral
property exploration are recorded at fair market value.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. |  | Commencing
in the 2004 period, the Corporation has retained mineral exploration           and mining
contracting services through a company owned by a related party of a           director
of the Corporation. As at July 31, 2004 these non-arms length           mineral
exploration expenditures totalled $2,186,478 (2003  $nil), as           noted
above. These expenditures are recorded at fair value calculated at cost           plus
10%. The Corporation believes that this arrangement gives the Corporation
          better quality and control for mineral exploration and mining contracting
          services than it could otherwise receive through third party independent
          contractors.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. |  | As
at July 31, 2004 and 2003, the Corporation had bonuses payable to directors           in
the amount of $225,000 which amounts are included in the management fees           noted
above;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. |  | Directors
and officers of the Corporation are entitled to hold management           incentive stock
options. For this purpose, the Corporation has adopted a Stock           Option Plan for
directors, officers, employees and consultants of the           Corporation and its
subsidiaries. The purpose of the Stock Option Plan is to           encourage ownership of
the Corporations common shares by the persons who           are primarily
responsible for the management and profitable growth of the           Corporations
business, as well as provide additional incentive for           superior performance by
such persons and attract and retain valued personnel.           The plan provides that
eligible persons thereunder include any director, senior           officer, consultant or
employee of the Corporation. A consultant is defined as           an individual that is
engaged by the Corporation, under a written contract, to           provide services on an
ongoing basis and spends a significant amount of time on           the Corporations
business and affairs. The definition of consultant also           includes an individual
whose services are engaged through a personal holding           corporation.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
general, see "Item 3:  Description of the Business - 3.3 Risk Factors - 9.  Conflicts of
Interest".

---

47

ITEM 12:  TRANSFER AGENTS
AND REGISTRARS

The
Corporations transfer agent and registrar is Computershare Trust Company of Canada
(Computershare). Computershares register of transfers for the
Corporations Common Shares is located at 1500 University Street, Suite 700,
Montreal, Quebec, H3A 3S8.

ITEM 13:  MATERIAL
CONTRACTS

Except
for the Minera Fuerte Buy-Out Agreement of February 21, 2003, described under Item
3: Description of the Business  3.2 Mineral Projects  1. Ocampo Project 
f) The Concessions  Minera Fuerte Agreement, and for contracts entered into in
the ordinary course of business, the Corporation has not entered into any material
contracts for the twelve months ended July 31, 2004, and to the date of this annual
information form.

ITEM 14:  INTERESTS OF
EXPERTS

The
following persons and companies have prepared or certified a statement, report or
valuation on behalf of the Corporation as follows during the twelve months ended July 31,
2004, and to the date of this Annual Information Form:

| | a) |  | Grant
Thornton, LLP, Chartered Accountants, are the auditors of the Corporation;
| | -- |  | --------------------------------------------------------------------------------

| | b) |  | Pincock
Allen & Holt, Consulting Geologists, prepared a technical report                dated
April 8, 2003 entitled, Ocampo Gold-Silver Project Preliminary
               Assessment Chihuahua Mexico Technical Report; and
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) |  | Glenn
R. Clark & Associates Limited, Consulting Engineers, prepared a
               technical report dated March 31, 2004 as amended July 15, 2004 entitled,
               Ocampo Gold-Silver Project Review, Chihuahua, Mexico.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

None
of the above-noted persons or companies hold a registered or beneficial interest, direct
or indirect, in any securities or other property of the Corporation and its associates and
affiliates.

ITEM 15:  ADDITIONAL
INFORMATION

|(1) |  | Additional
information may be found on SEDAR at www.sedar.com.
|--- |  | --------------------------------------------------------------

|(2) |  | Additional
information, including directors and officers                    remuneration
and indebtedness, principal holders of the Corporations
                    securities and securities authorized for issuance under equity
compensation                     plans is contained in the Corporations information
circular for the                     Corporations most recent annual meeting of
securityholders that involved                     the election of directors, which is to
be held on October 27, 2004.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additional
information is provided in the Corporations financial statements and MD&A for
the most recently completed financial reporting periods.

---