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


                                   FORM 10-KSB


    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934

                      For the Year Ended December 31, 2004

                         Commission file number: 0-26217

                            CHINA NETTV HOLDINGS INC.
                        --------------------------------
        (Exact name of small business issuer as specified in its charter)

             Nevada                                     98-02031-70
             ------                                     -----------
(State or other jurisdiction of                (IRS Employee Identification No.)
 incorporation or organization)

  Suite 536, World Trade Centre, 999 Canada Place, Vancouver, B.C. V6C 3E2
          -------------------------------------------------------------
                    (Address of principal executive offices)

                                 (604) 641-1366
                                 --------------
                           (Issuer's telephone number)

Securities Registered pursuant to section 12(g) of the Act:   None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes   X                 No
    -----                  -----

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.

     X
   -----

State issuer's revenues for its most recent fiscal year.                 $0


                                       1
<PAGE>

Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 2004.                             $15,958,121


Number of outstanding shares of the registrant's par value $0.001 common stock,
as of December 31, 2004.                                        142,236,575




                                       2
<PAGE>

                            CHINA NETTV HOLDINGS INC.
                                   FORM 10-KSB
                                      INDEX

                                                                            Page
                                                                            ----
                                     Part I

Item 1.   Description of Business..............................................4

Item 2.   Description of Properties............................................7

Item 3.   Legal Proceedings....................................................8

Item 4.   Submission of Matters of a Vote of Security Holders..................8

                                     Part II

Item 5.   Market for Registrant's Common Equity and Related Stockholder
          Matters..............................................................8

Item 6.   Management's Discussion and Analysis or Plan
          of Operation.........................................................9

Item 7.   Financial Statements................................................18

Item 8.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure.................................18

Item 8A.  Controls and Procedures.............................................19

                                    Part III

Item 9.   Directors, Executive Officers, Promoters, and Control
          Persons; Compliance with Section 16(a) of the Exchange Act..........19

Item 10.  Executive Compensation..............................................22

Item 11.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters.....................................23

Item 12.  Certain Relationships and Related Transactions......................25

                                     Part IV

Item 13.  Exhibits and Reports on Form 8-K....................................26

Item 14.  Principal Accountant Fees and Services..............................26

Signatures....................................................................27


                                       3
<PAGE>



                                     Part I

ITEM 1.  DESCRIPTION OF BUSINESS

When used in this Form 10-KSB, the words "expects," "anticipates," "estimates"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to risks and uncertainties, including those set
forth below under "Risks and Uncertainties," that could cause actual results to
differ materially from those projected. These forward-looking statements speak
only as of the date hereof. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any statement is based. This discussion should be read together with the
financial statements and other financial information included in this Form
10-KSB.

(a) General Description and Development of Business

HISTORY OF COMPANY

The Company was incorporated on September 15, 1998 as Vancouver's Finest Coffee
Company for the purpose of building a retail premium coffee business to
sell premium quality coffee drinks through Company-owned and operated retail
kiosks. In early 2000, the Company commissioned a study into the viability of
the coffee kiosk business and, at the Company's Annual General Meeting in March,
2000, the shareholders approved a resolution for the directors to pursue another
line of business other than the originally proposed coffee kiosk business.

In May 2000, the Company acquired 100% control of China NetTV Inc., a British
Virgin Islands company. China NetTV had a Letter of Intent to form a Joint
Venture in China with Sichuan QianFeng Digital Audio/Video Equipment Co. Ltd.

In June 2000, China NetTV Inc. signed a Joint Venture contract with Sichuan
QianFeng Digital Audio/Video Equipment Co. Ltd.

In September 2000, the Joint Venture Company Chengdu Qianfeng NetTV Co., Ltd.
was formed after receiving approval from Moftec (Ministry of Foreign Trade and
Economic Cooperation).

The Company funded the Joint Venture with Sichuan QianFeng Digital Audio/Video
Equipment Co. Ltd., in the production of trial digital set-top boxes for Nanning
TV in Guangxi Province in China until 2002.

As of August 31, 2002 the Company had paid $1,280,000 of the $1,500,000 due to
complete the purchase of the initial interest in the joint venture, however,
thereafter it was unable to complete the terms of the agreement, abandon the
joint venture, and, therefore, management has elected to expense the joint
venture payments from the company's books.

The Company believes there will be no further liability in connection with the
agreement.


                                       4
<PAGE>

On November 28, 2003, the Board of Directors has approved to abandon the
inactive subsidiary, China NetTV Inc.

On July 4, 2003, the Company entered into a share exchange agreement
("Agreement") to acquire all of the issued and outstanding shares of Honglu
Investment Holdings, Inc. ("Honglu"), a Chinese company that held prospecting
permits and licenses on mineral prospects in Tibet, China. On November 5, 2004,
the Company and Honglu shareholders mutually agreed to terminate the Agreement
because the Tibet government had on August 10, 2004 rejected the application for
approval of the Agreement with the Company. All the shares issued under escrow
in relation to the Agreement, in total of 129,700,000, were returned to treasury
for cancellation on February 14, 2005.

On February 5, 2004, the Company had granted to Hunter Dickinson, Inc. ("HDI")
an exclusive option to acquire an aggregate 50% of the Property Rights to the
Xietongmen Gold-Copper Prospect in Tibet and a further option to acquire up to a
further 10% of Property Rights, for an aggregate of 60% of such Property Rights
under certain terms and conditions. On November 9, 2004, the Company and HDI
mutually agreed to terminate the exclusive option agreement due to the failure
to achieve approval of the Honglu transaction from the Tibet government.


CURRENT BUSINESS

On November 5, 2004, the Company and shareholders of Highland Mining Inc.
("Highland") entered into a Share Exchange Agreement whereby the Company agreed
to issue 85,000,000 of its common shares from treasury and a debenture
convertible into 65,000,000 of the Company's common shares in exchange for 50%
of the issued and outstanding shares of Highland held by Highland Shareholders,
pursuant to the terms and conditions hereafter set forth:

1.       If Highland Shareholders are unable to enter into a binding agreement
         on a share purchase and sale transaction (the "Definitive Agreement")
         with Hunter Dickinson Inc. ("HDI") to sell and transfer the other 50%
         of the issued and outstanding shares of Highland (the "Remaining
         Shares") to HDI on or before March 30, 2005 (the "Outside Date"), or if
         either or both HDI and Highland Shareholders decide to terminate the
         Definitive Agreement pursuant to the terms and conditions therein on or
         before the Outside Date, then unless Highland Shareholders and the
         Company otherwise agree, Highland Shareholders shall sell and transfer
         the Remaining Shares to the Company at a nominal price, pursuant to the
         same terms and conditions contained hereunder as applicable to the
         parties then.

2.       Highland Shareholders have direct or indirect rights or options to, or
         interests in, (the rights, options and interests together are called
         "Additional Rights") 25 mineral prospects in Tibet, China (the
         "Additional Properties"), subject to terms and conditions and
         regulatory requirements attached to the Additional Rights. Highland
         Shareholders agreed to transfer and assign, or shall cause to be
         transferred and assigned, to the Company the Additional Rights for
         $1.00, subject to terms and conditions and regulatory requirements
         attached thereto, and terms and conditions herein. No rights have yet
         been transferred.

Upon completion of the Exchange, the following individuals were elected or
appointed as directors of the Company: Zhi Wang, Jie Yang, Xiaojun Ma, Jing Wang
and Maurice Tsakok.

The Company agreed to pay a finder's fee in the form of a debenture convertible
into 9,639,000 common shares of the Company upon completion of the share
exchange.


                                       5
<PAGE>

On November 26, 2004, Highland shareholders entered into an option agreement
with Hunter Dickinson, Inc. ("HDI"). HDI obtained an option to acquire 50% of
the issued and outstanding shares of Highland through payment of $2,000,000 to
Highland shareholders and investment of $5,000,000 in Highland to fund the
exploration of the Xietongmen Copper Property located near Xiong Village,
Xietongmen County, Rikaze area, Tibet Autonomous Region, China. HDI may acquire
a further 10% of the issued and outstanding shares of Highland, through the
investment of $3,000,000 in Highland to fund exploration of the Xietongmen
Copper Property. The preliminary option agreement is subject to a feasibility
study by HDI and customary title matters, permits, and approvals.

HIGHLAND MINING INC.

Highland Mining Inc. fully and legally owns Tianyuan Mineral Exploration Ltd.
("Tianyuan"), as a wholly owned foreign enterprise registered in Tibet, China,
incorporated pursuant to relevant Chinese laws and regulations, which holds an
exploration license covering Xietongmen Mine in Tibet, China.

Highland Mining Shareholders has direct or indirect rights or options to, or
interests in, 25 mineral prospects (including Xietongmen) in Tibet, China,
subject to terms and conditions and regulatory requirements attached to the
Rights. Highland Shareholders, subject to terms and conditions and regulatory
requirements related to the rights.



MINERAL EXPLORATION AND EXTRACTION BUSINESS

The business of mineral deposit exploration and extraction involves a high
degree of risk. Few properties that are explored are ultimatedly developed into
production. At present, none of the Honglu's properties has a known body of
commercial ore. Other risks facing the Company include competition, reliance on
third parties and joint venture partners, environmental and insurance risks,
political and environmental instability, statutory and regulatory requirements,
fluctuations in mineral prices and foreign currency, share price volatility,
title risks, and uncertainty of additional financing.

The Company has sought to identify what it believes to be the most significant
risks to its business, but cannot predict whether or to what extent any of such
risks may be realized nor can there be any assurances that the Company has
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to the Company's stock.

CURRENT SITUATION

The Company, a junior mining company, has assembled a portfolio of 25
base/precious metal and industrial mineral prospects upon which it holds options
in Tibet, China through its 50% owned Chinese subsidiary Highland Mining Inc..
It is the Company's intention to focus exclusively on the exploration of these
base and precious metal mineral prospects in Tibet, China. The Company is
seeking joint venture partners to assist in the exploration and possible
development of these mineral prospects.

Initially, the Company will concentrate its efforts in the development of
mineral prospects in Tibet. Today, Chinese authorities are making unprecedented
efforts to open up the Tibetan plateau to large-scale mineral development in


                                       6
<PAGE>

order to meet domestic demand for raw materials. The Chinese Government is
increasingly seeking foreign investment and international co-operation to
facilitate this particular aspect of their economic policy. In order to
accommodate such development, the Qinghai-Tibet Railway, one of the regions most
important new construction projects, is expected to be completed by the end of
2006.


 The Company sought experienced and recognized joint venture partners, and the
Company negotiated a "Property Option Agreement" with Hunter Dickinson, Inc. An
initial Agreement was reached in February 2004, with Continental Minerals
Corporation ("Continental"), a member of the Hunter Dickinson Group, whereby
Continental has acquired the right to earn a 60% interest in the Company's
Xietongmen gold-copper prospect. The Xietongmen prospect consists of
porphyry-like disseminated and quartz stockwork mineralization.

Among the mineral properties, several exhibit copper, copper/gold, and
copper/molybdenum mineralization. Since its private placement in January of 2005
has given it current working capital and liquidity, The Company intends to
investigate and rank these properties in order to plan a comprehensive
exploration program and joint venture/financial arrangement in the next year.
The company raised $2.4m in private placement to meet its working capital
requirements.


In November 2004, the terms of the original Agreement had to be modified whereby
under the terms of the Property Option Agreement, Continental has acquired
options to purchase 50% or 60% of the shares of Highland Mining Inc.
("Highland"). Under this Agreement, Continental will provide US$5 million
investment in Highland to fund exploration of the property. Of this, prospect
expenditures of US$3 million must be funded by November 9, 2005 with a further
US$2 million of prospect expenditures funded by November 9, 2006. Continental
can then increase its interest in Highland to 60% within the following year
through investment of an additional US$3 million in Highland to fund
exploration.

The Xietongmen joint venture agreement is the first venture. Concurrently, the
Company is reviewing and prioritizing the other 24 mineral prospects with a view
to forming similar joint venture/financial arrangements. The prospects under
review represent a broad array of precious/base metal and industrial mineral
targets. The Company holds, through Highland, a 65% interest in each of these
properties except for three properties in which the Company retains a 100%
interest.

Continental Minerals assembled its exploration team, and, with the drilling
contractor visited the Xietongmen property in December 2004. Subsequently,
Continental made preparation for a Phase I, 25-hole drilling program, comprising
10,000 meters to commence during the first quarter of 2005. This program is on
target.
EMPLOYEES

As of December 31, 2004, the Company has no employees. The Company continues to
rely on the expertise of the officers and directors to carry out its business
strategy. The Company anticipates the need for increased administrative and
other staff as the business of the Company grows.


ITEM 2.  DESCRIPTION OF PROPERTIES

The Company currently maintains an office at Suite 536 World Trade Centre, 999
Canada Place, Vancouver, B.C., Canada as its corporate headquarters.

As of December 31, 2004, The Registrant had the following tangible assets.
(The amount is quoted in US Dollar)

(a) Real Estate.  None

(b) Computer and Office Equipment $9,058


                                       7
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

The Company is not, and does not anticipate being a party to any legal
proceedings in the foreseeable future.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted during the fiscal year covered by this report to a
vote of security holders of the Company, through the solicitation of proxies or
otherwise.

                                     Part II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) The Company's common stock is traded on the NASD Electronic Bulletin Board
under the symbol "CTVH.OB". Prices reported represent prices between dealers, do
not include markups, markdowns or commissions and do not necessarily represent
actual transactions. The market for the Company's shares has been sporadic and
at times very limited.

The following table sets forth high and low bid quotations of the Company's
common stock for the financial years ended December 31, 2004 and 2003 as
follows:

                                       Bid

                                         2004

                                         High              Low
                                         ----              ---
First Quarter                            0.550              0.230
Second Quarter                           0.310              0.051
Third Quarter                            0.110              0.040
Fourth Quarter                           0.190              0.065



                                       Bid

                                         2003

                                         High              Low
                                         ----              ---
First Quarter                            0.085             0.010
Second Quarter                           0.095             0.010
Third Quarter                            0.210             0.060
Fourth Quarter                           0.700             0.120

Such Bulletin Board quotations reflect interdealer prices, without mark up, mark
down or commission and may not necessarily represent actual transactions.

(b) As of December 31, 2004, the Company had approximately 400 shareholders of
record of the common stock.


                                       8
<PAGE>

(c) No dividends on outstanding common stock have been paid within the last two
fiscal years, and interim periods. The Company does not anticipate or intend
upon paying dividends for the foreseeable future.

50,000 and 2,940,000 Series A warrants were exercised at $0.10 each on January
6, 2004 and January 27, 2004 respectively.

On October 1, 2004, 200,375 Series C warrants were exercised at $0.08 each.

On January 14,March 11, 2005, the Company completed a non-brokered private
placement for 48,000,000 units at $0.05 per unit for total proceeds of
$2,400,000. Each unit will consist of one common share and one non-transferable
share purchase warrant "E" entitling the holder to purchase one common share for
two years, at $0.08 per share in the first year or $0.25 in the second year. The
proceeds from this private placement will be used for working capital and
acquiring mining properties in the future. A 7% finder's fee will be paid in
shares.

3,040,000 Series "B" warrants expired on January 12, 2005.

As of February 24, 2005, the Company has 15,849,625, and 200,375 Series "C" and
"D" Stock Purchase Warrants outstanding, respectively.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The information presented here should be read in conjunction with China NetTV
Holdings Inc.'s financial statements and other information included in this Form
10-KSB. When used in this Form 10-KSB, the words "expects," "anticipates,"
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties, including
those set forth below under "Risks and Uncertainties," that could cause actual
results to differ materially from those projected. These forward-looking
statements speak only as of the date hereof. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any statement is based.

Critical Accounting Policies and Estimates

Our discussion and analysis or plan of operation is based upon our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.


                                       9
<PAGE>

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements. We believe the
following critical accounting policies reflect our more significant estimates
and assumptions used in the preparation of our financial statements:

Common stock held in escrow - The Company has issued 129,700,000 shares of
common stock that are held in escrow and the related 9,639,00 shares of common
stock for legal fees, which have not been valued pursuant to consummation of
certain agreements, which were subject to Chinese government regulatory
approval. All these shares were subsequently cancelled in February 2005.

Contingencies - We may be subject to certain asserted and unasserted claims
encountered in the normal course of business. It is our belief that the
resolution of these matters will not have a material adverse effect on our
financial position or results of operations, however, we cannot provide
assurance that damages that result in a material adverse effect on our financial
position or results of operations will not be imposed in these matters. We
account for contingent liabilities when it is probable that future expenditures
will be made and such expenditures can be reasonably estimated.

Income Taxes - We record a valuation allowance to reduce our deferred tax assets
to the amount that is more likely than not to be realized. We have considered
future market growth, forecasted earnings, future taxable income, and prudent
and feasible tax planning strategies in determining the need for a valuation
allowance. We currently have recorded a full valuation allowance against net
deferred tax assets as we currently believe it is more likely than not that the
deferred tax assets will not be realized.

Plan of Operations

The Company has had no revenues from operations since inception. The operations
of the Company have been financed through private placements and loans.

The Company has expended substantially all of its efforts during the last
fifteen months to achieve a participation in mineral prospect exploration in
Tibet with the appropriate Chinese government regulatory approval.


2005 BUDGET

Rent                                         $   44,444
Salaries and wages                              118,519
Traveling/conference/seminars, etc.              18,519
Communications and other expenses                18,519
Consulting fees                                  77,778
Audit and accounting fees                        18,519
Professional and legal fees                      74,074
Exploration expenses                            500,000
Investigation expenses                          500,000
                                                -------
                                             $1,370,372

The Company intends to develop gold and other mineral deposits in Tibet and
other areas of China recognizing that China's recent economic growth rate has
placed an increasing demand on the need for domestic production of metals.


                                       10
<PAGE>

Currently, China places fourth in the world wide production of copper but
substantially falls short of its domestic requirements. The development of
partially developed base and precious metal deposit in South Western China is
seen as an opportunity to aid China in meeting its domestic requirements.

The majority of the Company's expenses for the year ended December 31, 2004 have
consisted of the following major expenses: consulting fees, legal and
professional fees, and travel and promotion expenses. Such fees were incurred in
connection with efforts to consummate the acquisition of Honglu, negotiating an
Option Agreement with Hunter Dickinson, Inc., and the subsequent acquisition of
50% interest in Highland.

To date, we have not been profitable in any of our endeavors and we face all the
risks common to companies in their early stages of development, including
undercapitalization and uncertainty of funding sources, high initial expenditure
levels and uncertain revenue streams, an unproven business model, and
difficulties in managing growth. Our recurring losses raise substantial doubt
about our ability to continue as a going concern. Our financial statements do
not reflect any adjustments that might result from the outcome of this
uncertainty. We believe we will continue to incur losses for at least the next
12 months and will require additional cash to satisfy our operations. The
Company's future funding requirements will depend on numerous factors, many of
which are beyond our control.

Due to the "start up" nature of the Company's business, we expect to incur
losses as we expand. We expect to raise additional funds through private or
public equity investment in order to expand the range and scope of our business
operations. We will seek access to private or public equity but there is no
assurance that such additional funds will be available for the Company to
finance its operations on acceptable terms, if at all. We cannot assure you that
we will be able to raise funds through a sale or equity transaction, or if such
funding is available, that it will be on favorable terms. Our common stock is
currently traded on the over-the-counter market on an electronic bulletin board.

Change of Management

Maurice Tsakok has been a Director since May 2000. Ronald Xiuru Xie was
appointed to the Board effective July 5, 2003 and he resigned on November 3,
2004. Zhi Wang, Jie Yang and Anthony Garson were appointed to the Board on
August 4, 2003. Zhi Wang and Jie Yang resigned on August 23, 2004 and have been
reappointed as directors on November 5, 2004.

Ronald Xiuru Xie was the President of the Company from July 5, 2003 to May 4,
2004. Anthony Garson has been appointed as President on May 10, 2004. Maurice
Tsakok continues to act as Secretary of the Company.

Results of Operations

The Company has had no operations during the fiscal year ended December 31,
2004. The Company received no revenue and incurred expenses of $1,055,134
stemming from general, administrative and consulting expenditures related to its
negotiations to acquire mineral prospects in China as compared to $698,044 for
the same period of last year. The increase was mainly due to the consulting fees
paid to the directors and consultants for their services and legal fees
incurred.


                                       11
<PAGE>

The Company expects the trend of losses to continue at an increasing rate after
the acquisition of 50% interest in Highland until we can achieve commercial
production on some of the mineral properties or sell some of mineral properties,
of which there can be no assurance.

Liquidity and Working Capital

As of December 31, 2004, the Company had total current assets of $903,427 and
total current liabilities of $149,535. The Company has a working capital of
$753,892 at December 31, 2004. For the year ended December 31, 2004, the Company
received $299,000 and $16,030 in cash proceeds from the exercise of 2,990,000
and 200,375 Series A and C Stock Purchase Warrants respectively, $100,000 though
the execution of a promissory note and $1,200,000 share subscription for
24,000,000 units at $0.05 each. The Company has no other capital resources other
than the ability to use its common stock to achieve additional capital or
exercise of the warrants by the holders.

The Company has arranged a non-brokered private placement of 48,000,000 units at
$0.05 per unit for total proceeds of $2,400,000. Half of the subscriptions were
received on December 31, 2004 and another $850,000 has been received as of
February 25, 2005. Each unit consists of one common share and one
non-transferable share purchase warrant entitling the holder to purchase one
common share for two years, at $0.08 per share in the first year or $0.25 in the
second year. The proceeds from this private placement will be used for working
capital and acquiring mining properties in the future.
A 7% finder's fee will be paid in shares.

The Company has no other capital resources other than the ability to use its
common stock to achieve additional capital or exercise of the warrants by the
holders.

Recent Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") has issued the following
pronouncements, none of which are expected to have a significant affect on the
financial statements:

In March 2004, the EITF reached final consensuses on EITF 03-6 which provides
additional guidance to determine whether a security is a participating security
and therefore subject to the two-class method under SFAS 128. The guidance in
EITF 03-6 clarifies the notion of what constitutes a participating security, and
is effective for fiscal periods (interim or annual) beginning after March 31,
2004. EITF 03-06 provides guidance in applying the two-class method of
calculating earnings per share for companies that have issued securities other
than common stock that contractually entitle the holder to participate in any
dividends declared and earnings of the company. The opinion defines what
constitutes a participating security and how to apply the two-class method of
calculating earnings per share to those securities. In addition, the consensuses
in EITF 03-6 nullify the guidance in EITF Topic No. D-95, "Effect of
Participating Convertible Securities on the Computation of Basic Earnings Per
Share", and requires the use of the two-class method to compute basic EPS by
companies with participating convertible securities. The adoption did not have
an impact on our calculation of earnings per share.

In April 2004, the EITF reached consensus on EITF Issue No. 03-6, "Participating
Securities and the Two Class Method under FASB Statement No. 128" ("EITF 03-6").
EITF 03-6 addresses a number of questions regarding the computation of earnings


                                       12
<PAGE>

per share by companies that have issued securities other than common stock that
contractually entitle the holder to participate in the dividends and earnings of
the company when, and if, it declares dividends on its common stock. EITF 03-6
also provides further guidance in applying the two-class method of calculating
earnings per share, clarifying what constitutes a participating security and how
to apply the two-class method of computing earnings per share once it is
determined that a security is participating, including how to allocate
undistributed earnings to such a security. EITF 03-6 is effective for fiscal
periods beginning after March 31, 2004 and requires retroactive restatement of
prior earning per share amounts. This statement does not affect the Company.

In June 2004, the FASB issued EITF Issue No. 02-14, "Whether an Investor Should
Apply the Equity Method of Accounting to Investments Other Than Common Stock."
EITF Issue No. 02-14 addresses whether the equity method of accounting applies
when an investor does not have an investment in voting common stock of an
investee but exercises significant influence through other means. EITF Issue No.
02-14 states that an investor should only apply the equity method of accounting
when it has investments in either common stock or in-substance common stock of a
corporation, provided that the investor has the ability to exercise significant
influence over the operating and financial policies of the investee. The
accounting provisions of EITF Issue No. 02-14 are effective for the reporting
period beginning after September 15, 2004. The Company is in the process of
determining the effect, if any, of the adoption of EITF Issue No. 02-14 will
have on the Company's financial position, results of operations, or cash flows.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of ARB No. 43, Chapter 4." The amendments made by SFAS No. 151 clarify that
abnormal amounts of idle facility expense, freight, handling costs, and wasted
materials (spoilage) should be recognized as current-period charges and require
the allocation of fixed production overheads to inventory based on the normal
capacity of the production facilities. The guidance is effective for inventory
costs incurred during fiscal years beginning after November 23, 2004. The
Company does not believe the adoption of SFAS No. 151 will have a material
impact on our financial position, results of operations or cash flows.

In December 2004, the FASB issued a revision of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123R). SFAS 123R supersedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and its related implementation guidance. SFAS 123R establishes
standards for the accounting for transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
those equity instruments. SFAS 123R does not change the accounting guidance for
share-based payment transactions with parties other than employees provided in
SFAS 123 as originally issued and EITF Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services." SFAS 123R is effective for interim
reporting period that begins after June 15, 2005. The Company is in the process
of determining the effect of the adoption of SFAS 123R will have on its
financial position, results of operations, or cash flows.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29." The guidance in APB Opinion No. 29,
"Accounting for Nonmonetary Transactions," is based on the principle that
exchanges of nonmonetary assets should be measured based on the fair value of
the assets exchanged and provided an exception to the basic measurement
principle (fair value) for exchanges of similar productive assets. That
exception required that some nonmonetary exchanges, although commercially
substantive, be recorded on a carryover basis. This Statement eliminates the
exception to fair value for exchanges of similar productive assets and replaces
it with a general exception for exchange transactions that do not have
commercial substance--that is, transactions that are not expected to result in
significant changes in the cash flows of the reporting entity. The provisions of
this Statement are effective for nonmonetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005, applied prospectively. This statement
does not affect the Company.


                                       13
<PAGE>

RISK FACTORS

We have sought to identify what we believe to be the most significant risks to
our business. However, we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our Common Stock.
We provide the following cautionary discussion of risks, uncertainties and
possible inaccurate assumptions relevant to our business. These are factors that
we think could cause our actual results to differ materially from expected
results. Other factors besides those listed here could adversely affect us.

PENNY STOCK RISK

The Company's stock differs from many stocks, in that it is a "penny stock." The
Securities and Exchange Commission has adopted a number of rules to regulate
"penny stocks." These rules include, but are not limited to, Rules 3a5l-l,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and
Exchange Act of 1934, as amended.

Because our securities probably constitute "penny stock" within the meaning of
the rules, the rules would apply to us and our securities. The rules may further
affect the ability of owners of our stock to sell their securities in any market
that may develop for them. There may be a limited market for penny stocks, due
to the regulatory burdens on broker-dealers. The market among dealers may not be
active. Investors in penny stock often are unable to sell stock back to the
dealer that sold them the stock. The mark-ups or commissions charged by the
broker-dealers may be greater than any profit a seller may make. Because of
large dealer spreads, investors may be unable to sell the stock immediately back
to the dealer at the same price the dealer sold the stock to the investor. In
some cases, the stock may fall quickly in value. Investors may be unable to reap
any profit from any sale of the stock, if they can sell it at all.

Stockholders should be aware that, according to the Securities and Exchange
Commission Release No. 34- 29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. These patterns include:

        o      Control  of  the  market  for  the  security  by  one  or  a  few
               broker-dealers that are often related to the promoter or issuer;

        o      Manipulation of prices through prearranged  matching of purchases
               and sales and false and misleading press releases;

        o      Boiler room" practices  involving high pressure sales tactics and
               unrealistic price projections by

               (i)  Excessive and undisclosed bid-ask  differentials and markups
                    by selling broker-dealers; and inexperienced sales persons;

               (ii) The wholesale dumping of the same securities by promoters
                    and broker-dealers after prices have been manipulated to a
                    desired level, along with the inevitable collapse of those
                    prices with consequent investor losses.

Furthermore, the "penny stock" designation may adversely affect the development
of any public market for the Company's shares of common stock or, if such a
market develops, its continuation. Broker-dealers are required to personally
determine whether an investment in "penny stock" is suitable for customers.

Penny stocks are securities (i) with a price of less than five dollars per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed
stocks must still meet requirement (i) above); or (iv) of an issuer with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than
$6,000,000 for the last three years.


                                       14
<PAGE>

Section 15(g) of the Exchange Act, and Rule 15g-2 of the Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."

Rule 15g-9 of the Commission requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any
penny stock to that investor. This procedure requires the broker-dealer to (i)
obtain from the investor information concerning his or her financial situation,
investment experience and investment objectives; (ii) reasonably determine,
based on that information, that transactions in penny stocks are suitable for
the investor and that the investor has sufficient knowledge and experience as to
be reasonably capable of evaluating the risks of penny stock transactions; (iii)
provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a sign-
ed and dated copy of such statement from the investor, confirming that it
accurately reflects the investor's financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult for the Company's stockholders to resell their shares to third parties
or to otherwise dispose of them.

Limited Operating History; Anticipated Losses; Uncertainty of Future Results

China NetTV Holdings Inc. has only a limited operating history upon which an
evaluation of the Company and its prospects can be based. The Company's
prospects must be evaluated with a view to the risks encountered by a company in
an early stage of development and with which the Company intends to operate, and
the acceptance of the Company's business model. To the extent that such expenses
are not subsequently followed by commensurate revenues, the Company's business,
results of operations and financial condition will be materially adversely
affected. If cash generated by operations is insufficient to satisfy the
Company's liquidity requirements, the Company may be required to sell additional
equity or debt securities. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's stockholders.

Limited Public Market, Possible Volatility of Share Price

The Company's Common Stock is currently quoted on the NASD OTC Bulletin Board
under the ticker symbol CTVH. As of December 31, 2004, there were approximately
57,236,578 shares of Common Stock outstanding. There can be no assurance that a
trading market will be sustained in the future.

Potential Fluctuations in Quarterly Results

Significant variations in our quarterly operating results may adversely affect
the market price of our common stock. Our operating results have varied on a
quarterly basis during our limited operating history, and we expect to
experience significant fluctuations in future quarterly operating results. These
fluctuations have been and may in the future be caused by numerous factors, many
of which are outside of our control. We believe that period-to-period
comparisons of our results of operations will not necessarily be meaningful and
that you should not rely upon them as an indication of future performance. Also,
it is likely that our operating results could be below the expectations of
public market analysts and investors. This could adversely affect the market
price of our common stock.


                                       15
<PAGE>

Dependence on Executive Officers and Technical Personnel

The success of our business plan depends on attracting qualified personnel, and
failure to retain the necessary personnel could adversely affect our business.
Competition for qualified personnel is intense, and we may need to pay premium
wages to attract and retain personnel. Attracting and retaining qualified
personnel is critical to our business. Inability to attract and retain the
qualified personnel necessary would limit our ability to implement our business
plan successfully.

Management of Growth

The Company expects to experience significant growth in the number of employees
and the scope of its operations. In particular, the Company intends to hire
additional staff for mineral exploration and administrative support. Such
activities can result in increased responsibilities for management. The Company
expects to experience difficulty in filling its needs for qualified personnel.

The Company's future success depends upon its ability to raise adequate
financing to meet its mineral exploration and operation expenses. This need to
manage its expenses will place a significant strain on the Company's management
and operational resources. If the Company is unable to manage its expenses
effectively, the Company's business, results of operations, and financial
condition will be materially adversely affected.

Need for Additional Financing

The Company believes it has sufficient capital to meet its short-term cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. However, if losses continue
it may have to seek loans or equity placements to cover longer term cash needs
to continue operations and expansion.

No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover operation expenses.

If future operations are unprofitable, it will be forced to develop another line
of business, or to finance its operations through the sale of assets it has, or
enter into the sale of stock for additional capital, none of which may be
feasible when needed. The Company has no specific management ability or
financial resources or plans to enter any other business as of this date.

The effects of inflation have not had a material impact on its operation, nor is
it expected to in the immediate future.


Political Risks

The market in China is monitored by the government, which could impose taxes or
restrictions at any time which would make operations unprofitable and infeasible
and cause a write-off of investment in the mineral properties. Other factors
include political policy on foreign ownership, political policy to open the
doors to foreign investors, and political policy on mineral claims and metal
prices.


                                       16
<PAGE>

POLITICAL, ECONOMIC AND REGULATORY RISKS IN THE PRC
---------------------------------------------------

THERE ARE ECONOMIC RISKS  ASSOCIATED  WITH DOING BUSINESS IN THE PRC WHICH COULD
AFFECT OUR OPERATIONS

     The Chinese economy has experienced significant growth in the past decade,
but this growth has been uneven across geographic and economic sectors and has
recently been slowing. There can be no assurance that this growth will not
continue to decrease or that the slow down will not have a negative effect on
our business. The Chinese economy is also experiencing deflation which may
continue in the future. The current economic situation may adversely affect our
ability to do business or sell minerals, if ever the Company produces, as a
result of slowing domestic demand and deflation.


REGULATION  OF THE  MINERALS  INDUSTRY  IN THE PRC MAY  ADVERSELY  AFFECT OUR
BUSINESS

     The PRC enacted regulations governing minerals extraction. Because many
Chinese laws, regulations and legal requirements with regard to foreign
investments in the minerals industry are relatively new and untested, their
interpretation and enforcement by Chinese authorities may involve significant
uncertainty. In addition, the Chinese legal system is a civil law system in
which decided legal cases have little precedential value. As a result in many
cases it is difficult to predict outcomes. We cannot predict the effect of
further developments in the Chinese legal system, particularly with regard to
the minerals industry, including the promulgation of new laws, changes to
existing laws or the interpretation or enforcement, or the preemption of local
regulations by national laws.

RESTRICTIONS  ON CURRENCY  EXCHANGE  COULD LIMIT OUR ABILITY TO  REPATRIATE  OUR
REVENUES FROM CHINA

     Although Chinese governmental policies were introduced in 1996 to allow
greater convertibility of the Renminbi, significant restrictions still remain.
We can provide no assurance that the Chinese regulatory authorities will not
impose greater restrictions on the convertibility of the Renminbi to western
currencies. The government could refuse to allow the exchange, or could restrict
the amount or volume of exchange. Because the majority of our future revenues
may be in the form of Renminbi, any future restrictions on currency exchange may
limit our ability to utilize revenue generated in Renminbi to fund our business
activities outside the PRC, if we ever have any. This restriction, if it occurs,
may affect our ability to pay repatriate any profits in U.S. dollars or other
acceptable currency.

A GENERAL ECONOMIC DOWNTURN IN PRC COULD ADVERSELY AFFECT OUR BUSINESS

         In the last few years the general health of the economy, in PRC where
we have conducted all of our operations to date, has been relatively strong and
growing, a consequence of which has been increasing capital spending by
individuals and growing companies to keep pace with rapid technological
advances. To the extent the general economic health of PRC declines from recent
levels, or to the extent individuals or companies fear a decline is imminent,
these individuals and companies may reduce demand for minerals. Any decline or
concern about an imminent decline could delay decisions among certain of our
customers to purchase production if we ever have any or could delay decisions by
our prospective customers to make initial commitments to purchase. Such downturn
would have a material and adverse effect on our business, prospects, operating
results and financial condition.


                                       17
<PAGE>

Other Risks and Uncertainties

The business of mineral deposit exploration and extraction involves a high
degree of risk. Few prospects that are explored are ultimately developed into
production. At present, none of Highland's prospects has a known body of
commercial ore. Other risks facing the Company include competition, reliance on
third parties and joint venture partners, environmental and insurance risks,
political and environmental instability, statutory and regulatory requirements,
fluctuations in mineral prices and foreign currency, share price volatility,
title risks, and uncertainty of additional financing.

The Company has sought to identify what it believes to be the most significant
risks to its business, but cannot predict whether or to what extent any of such
risks may be realized nor can there be any assurances that the Company has
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to the Company's stock.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not have any market risk sensitive instruments. Since operations in Canada
are in Canadian dollar denominated accounts, we do believe that we have foreign
currency risk in that as the Canadian dollar increases in value against the
United Sates dollar our operating costs increase when reported in United States
dollars.

Our product is quoted for sale in United States dollars.

Market Risk

As of the date of this report, the Company does not hold any
derivatives or other investments that are subject to market risk. The carrying
values of any financial instruments, approximate fair value as of those dates
because of the relatively short-term maturity of these instruments which
eliminates any potential market risk associated with such instruments.


ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this Item is included as a separate Exhibit to this report.
Please see pages F-1 through F-10.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

In connection with the audits of the most recent fiscal years and any interim
period preceding resignation, no disagreements exist with any former accountant
on any matter of accounting principles or procedure, which disagreements if not
resolved to the satisfaction of the former accountant would have caused them to
make reference in connection with their report to the subject matter of the
disagreement(s).


                                       18
<PAGE>

The principal accountant's report on the financial statements for any of the
past two years contained no adverse opinion or a disclaimer of opinion nor was
qualified as to uncertainty, audit scope or accounting principles.

Item 8A.  CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company's management,
including our principal executive officer and the principal financial officer,
the Company conducted an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the period covered by this report (the "Evaluation Date"). Based on this
evaluation, the Company's principal executive officer and principal financial
officer concluded as of the Evaluation Date, that the Company's disclosure
controls and procedures were effective such that the material information
required to be included in our Securities and Exchange Commission ("SEC")
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to the Company, including our
consolidating subsidiaries, and was made known to them by others within those
entities, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the Evaluation Date. We have not identified any significant
deficiencies or material weaknesses in our internal controls, and therefore
there were no corrective actions taken.


                                    Part III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION (16a) OF THE EXCHANGE

(a) The following table furnishes the information concerning the Company's
directors and officers as of December 31, 2004. The directors of the Company are
elected every year and serve until their successors are elected and qualify.

Name                   Age       Title                                Term
------------------     ---       ------------------                   ---------

Anthony Garson         61        President & Director                  Annual

Jie Yang               41        Vice President & Director             Annual

Zhi Wang               47        Chairman & Director                   Annual

Maurice Tsakok         53        Secretary & Director                  Annual

The following table sets forth the portion of their time the Officers and
Directors devote to the Company:

Anthony Garson             40%
Jie Yang                   90%
Zhi Wang                   30%
Maurice Tsakok             50%


                                       19
<PAGE>

The term of office for each director is one (1) year, or until his/her successor
is elected at the Company's annual meeting and is qualified. The term of office
for each officer of the Company is at the pleasure of the board of directors.

The board of directors does not have a nominating committee. Therefore, the
selection of persons or election to the board of directors was neither
independently made nor negotiated at arm's length.

(b) Identification of Certain Significant Employees.

Strategic matters and critical decisions are handled by the directors and
executive officers of the Company.

(c) Family Relationships. None

(d) Business Experience.

The following is a brief account of the business experience during the past five
years of each director and executive officer of the Company, including principal
occupations and employment during that period and the name and principal
business of any corporation or other organization in which such occupation and
employment were carried on.

Zhi Wang,  Chairman, Director

Zhi completed diploma in business administration at China Radio & Television
University ("CRTVU") in 1984 and pursued further studies in business administra-
tion under an exchange program in Australia 1988.

From 2001 to present, he has been Chairman and President of Honglu Investment
Holdings, Inc., Tianyubofeng Science & Technology, Inc., a Chinese company in
aluminum and carbon coke producing business, and Standard Hotel Management, Co.
He is President and General Manager, Ziyuewentao Enterprises Inc., 1997 to
present; General Manager, Tianjin Zangtong Trading Co., 1993; Managing Director
of Hong Kong Zangtong Trading Co., 1990; CEO of Tibet Autonomous Region Economic
& Trade Bureau, Beijing Office, 1987; Member, the Leading Team on Tibetan
Economy, the State Council of China, 1984.

Jie Yang, Director and Vice President of Operations

Jie graduated from the Beijing University of International Business & Economics,
Beijing, China in 1984 with a Bachelor of Economics degree.

He has been a director and Vice President of Honglu Investment Holdings, Inc.
since 2001; President of Sundecine Enterprises Inc. (1997-2001); General
Manager, Jianxin Trading Co., 1988-97 and Assistant Customs Supervisor, Beijing
Customs Administration, 1984-87.


                                       20
<PAGE>

Anthony Garson, Vice-Chairman, President and Director

Anthony obtained a B.Sc. in Earth Science in 1969 from University of Waterloo,
Ontario. He received a MBA from University of Toronto, Ontario in 1983.

He began his career with the Ontario Department of Mines and subsequently with
Derry, Michener and Booth, a geological consulting firm in Toronto. For the past
30 years, Mr. Garson has been extensively involved in the brokerage industry
having served as a Mines & Metals Analyst. Previous positions include: Mines and
Metals analyst, Equities Investment Division of Bank of Nova Scotia, Toronto
(1975-80); Vice President and Senior Mining Analyst for Canadian operations of
Dean Witter Reynolds (Canada) Ltd. (1981-85); and Vice-President and Senior Min-
ing Analyst of Canaccord Capital (1990-1993); London, England.

Mr. Garson was a principal and founding partner of Union Capital Markets (U.K.)
Ltd, licensed under the Securities and Futures Authority of London, England
(1993-95); He has acted as a director of several public companies that include
Chairman and director of Global Pacific Minerals, Vancouver, BC (1995-97).
He is currently a director of Grayd Resources Corporation; a director of
DiscFactories Corporation; a director of Colibri Resource Corp. and a director
of Toba Industries Inc. He is an Associate of Mining Capital Corporation, a
private research and equity mining finance company located in Toronto, Ontario.

Maurice Tsakok, Director and Secretary

Maurice received a Mechanical Engineering degree from the University of
Minnesota (1974) and an MBA in Management Information Systems (MIS) from Hofstra
University (1976).

Previous positions include: Staff Application Performance Analyst with the Bank
of Montreal (1976-1994); Vice-President (1994 -1996) with Sagit Mutual Funds, a
mutual fund company, in which he was responsible for computer operations and
research on global technology companies. He served as a Director of Richco
Investors Inc. from 1995 to October 2003.

Since 1997, he has acted as a consultant to the high-tech industry by providing
technical analysis on high-tech companies. He is a principal director in Gemsco
Management, Ltd. He was currently a Director of Xin Net Corp. until May, 2004.

(e) Directors' Compensation

Directors who are also officers of the Registrant receive no cash compensation
for services as a director. On May 31, 2000, the Company granted 5,000,000 stock
options at $0.40 per share with an expiry date of May 31, 2005, of which
2,250,000 of the options were issued indirectly to the Company's Officers and
Directors through separate management companies. As of December 31, 2004, no
options had yet been exercised.

On July 5, 2003, the Company granted stock options to three directors of the
Company for the sale of 6,000,000 shares of the Company's common stock at $0.05
per share with expiry date on August 1, 2006 for their services in the past.
These options were subsequently cancelled on November 4, 2004.

On September 11, 2003, the Company granted stock options to a director of the
Company for the sale of 1,000,000 shares of the Company's common stock at $0.10
per share with expiry date on August 31, 2006 for his services in the past. No
option has yet been exercised.

As of December 31, 2004, there are 6,000,000 stock options outstanding.
6,000,000 options were cancelled and no options were forfeited or exercised
during the year ended December 31, 2004. The weighted average exercise price of
the options outstanding and exercisable is $0.35 and the weighted average
remaining contractual life is 0.8 years.

Shares owned by Richco Investors are beneficially owned by Raoul Tsakok.


                                       21
<PAGE>

Section 16(a) of the Securities Exchange Act of 1934, as amended (The "Exchange
Act"), requires the Registrant's officers and directors, and persons who own
more than 10% of a registered class of the Registrant's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Registrant with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish to Registrant with copies of all
Section 16(a) that they file. All of the current officers and directors have
filed Sec. 16(a) disclosures.

ITEM 10. EXECUTIVE COMPENSATION

Other persons who hold more than 10% of the outstanding shares who have not
filed or filed late:  None

Some of the officers and directors of the Company will not devote more than a
portion of their time to the affairs of the Company. There will be occasions
when the time requirements of the Company's business conflict with the demands
of their other business and investment activities. Such conflict may require
that the company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.

EXECUTIVE COMPENSATION

(a) Cash Compensation.

Compensation paid by the Company for all services provided up to December 31,
2004 to each of its executive officers:

<TABLE>
<CAPTION>

                                        SUMMARY COMPENSATION TABLE OF EXECUTIVES

                                        Annual Compensation                           Long Term Compensation
                       ------------------------------------------------------    ---------------------------------
     Name and                                                Other Annual           Restricted
     Principal                                               Compensation         Stock Options/     Securities
     Position           Year   Salary ($)     Bonus ($)       Awards ($)               SARs          Underlying
<S>                     <C>    <C>            <C>            <C>                 <C>                 <C>

    Ronald Xie,         2004   -                  30,000             57,600      -                   9,639,000

President/Director      2003   -                  20,000             60,000      -                  -

   (resigned on         2002   -            -              -                     -                  -
  Nov. 03, 2004)


  Anthony Garson        2004   -            -                        38,714      1,000,000          -

President/Director      2003   -            -                        12,089      -                  -

                        2002   -            -              -                     -                  -


     Jie Yang           2004   -                  10,000             48,043      -                  2,350,000

  Vice President/       2003   -                  10,000             30,000      -

     Director           2002   -            -              -                     -


  Maurice Tsakok        2004   -            -                        38,520       750,000           -

    Secretary/          2003   -            -                        19,260               -         -

     Director           2002   -            -              -                     -                  -


     Gary Gui           2004   -            -                        39,677      -                  -

  Vice President        2003   -            -                        11,754      -                  -

                        2002   -            -              -                     -                  -

                                       22

<PAGE>

   Ernest Cheung        2004   -            -              -                     -                  -

President/Director      2003   -            -              -                     -
(resigned on July 4,
       2003             2002   -            -              -                     -
</TABLE>


The following table sets forth certain information concerning the remuneration
paid by the Company for the fiscal year ended December 31, 2004.

<TABLE>
<CAPTION>

                                        DIRECTORS' COMPENSATION

                             Annual Compensation                      Security Grants
                     -------------------------------------    ---------------------------------
   Name and            Annual                Consulting           Number           Number
   Principal          Retainer    Meeting    Fees/Other             of         of Underlying
   Position           Fees ($)   Fees ($)     Fees ($)            Shares        Options/SARs

<S>                   <C>        <C>        <C>               <C>             <C>
  Ronald Xie,            -       -          -                 -               -
 (resigned on
 May 4, 2004)


Anthony Garson           -       -          -                 -               1,000,000


   Jie Yang              -       -          -                 -               2,350,000


   Zhi Wang              -       -                39,000      -               9,400,000


Maurice Tsakok           -       -          -                 -               750,000


Loong Keng Lim           -       -          -                 -               -
 (resigned on
March 30, 2004)
</TABLE>

The Company has made no Long Term Compensation payouts (LTIP or other) in the
past year.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

a) Beneficial owners of five percent (5%) or greater, of the Company's common
stock: (No preferred stock is outstanding at the date of this report.) The
following sets forth information with respect to ownership by holders of more
than five percent (5%) of the Registrant's common stock known by the Registrant
based upon 193,596,575 shares outstanding at March 7, 2005.


                                       23
<PAGE>

                                                       Amount of
  Title of           Name and Address of               Beneficial     Percent of
    Class              Beneficial Owner                 Interest        Class


Common         Zhi Wang                                10,600,000          5.48%
               116 - 2205 Bridgeport Parkway
               CA USA 94404


Common         Richco Investors Inc.                   15,000,000          7.75%
               Suite 900 - 789 West Pender Street
               Vancouver, B.C., V6C 1H2


b) The following sets forth information with respect to the Company's common
stock beneficially owned by each Officer and Director, and by all Directors and
Officers as a group, at March 7, 2005.

                                                        Amount of
Title of              Name and Address of              Beneficial    Percent of
  Class                Beneficial Owner                 Interest        Class

Common       Anthony Garson                              1,000,000        0.70%
             Suite 536, World Trade Centre
             999 Canada Place, Vancouver,
             B.C., V6C 3E2

Common       Jie Yang                                    2,650,000        1.86%
             Suite 536, World Trade Centre
             999 Canada Place, Vancouver,
             B.C., V6C 3E2

Common       Maurice Tsakok                                750,000        0.53%
             Suite 900 - 789 West Pender Street
             Vancouver, B.C., V6C 1H2

             Options for 750,000 shares (including
             Beneficial ownership through Gemsco
             Management LTD.)

Common       Gary Gui                                            -        0.00%
             Suite 536, World Trade Centre
             999 Canada Place, Vancouver,
             B.C., V6C 3E2


Common       Zhi Wang                                   10,600,000        7.45%
             116 - 2205 Bridgeport Parkway
             CA USA 94404


Total as a group                                        13,250,000        9.32%
If all options are exercised                            15,000,000        10.52%


                                       24
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


There were no salary or benefits paid to Zhi Wang by Highland Mining Inc.
("Highland") during the fiscal year 2004. Zhi Wang is the only common director /
officer of Highland and China NetTV Holdings Inc. ("CTVH").

Zhi Wang, Director of CTVH, and Richco Investors Inc., a company of which Raoul
Tsakok, a beneficial owner, holds more than 5% of the shares of CTVH which is
disclosed in Item 11 of the 10-KSB.

<TABLE>
<CAPTION>

                                        Number of
        Name/                           options         Exercise        Date of         Expiry
        Position                        granted         price           grant           date
<S>                                     <C>             <C>             <C>             <C>

Tony Garson                             1,000,000       $0.10           9/11/2003       8/31/2006
President/Director

Gemsco Management Ltd.                    750,000        0.40           5/31/2000       5/31/2005
(controlled by Maurice
Tsakok, Secretary/Director)

Archer Pacific Management Ltd.          1,500,000        0.40           5/31/2000       5/31/2005
(controlled by Ernest Cheung,
former President/former Director)

Marc Hung (former Director)               500,000        0.40           5/31/2000       5/31/2005
                                        ---------
                                        3,750,000
                                        =========
</TABLE>

CTVH executed a promissory note for $100,000 with interest at 0% thereon to a
company controlled by Zhi Wang, a Director and Chairman of the Company. The
amount is repayable on May 15, 2005. The Company has the right to prepay the
note in whole or in part at any time without premium or penalty. The funds were
obtained to further support working capital requirements. The note was repaid in
January 2005.

Under the contract for share exchange between Highland shareholders and CTVH
dated November 5, 2004, a finder's fee in the form of a debenture convertible
into 9,639,000 common shares of CTVH upon completion of the share exchange will
be paid to Ronald Xie, the ex-Director and ex-President of CTVH. At the CTVH's
option, at any time within 90 days of the date of the debenture (November 5,
2004), CTVH could send a notice to the holder indicating its intention to pay
the holder a cash payment in lieu of shares on the basis of $0.25 per share.
CTVH did not exercise the option.


                                       25
<PAGE>


                                    Part IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

        A.  Exhibits

            Exhibit 31 - Sarbanes Oxley Certification
            Exhibit 32 - Sarbanes Oxley Certification

        B.  Reports on Form 8-K

            8-K filed on February 27, 2004
            8-K filed on March 2, 2004
            8-K filed on March 18, 2004
            8-K filed on March 31, 2004
            8-K/A filed on May 11, 2004
            8-K filed on July 14, 2004
            8-K filed on August 9, 2004
            8-K filed on August 31, 2004
            8-K filed on September 2, 2004
            8-K/A filed on December 3, 2004
            8-K filed on December 17, 2004


ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees - The aggregate fees billed for professional services rendered for
the audit of our annual financial statements and review of our quarterly
financial statements included in our periodic and other reports filed with the
SEC were $27,300 and $16,500 for the years ended December 31, 2004 and 2003,
respectively.

Audit-Related Fees - The Company paid Clancy & Co. $15,000 for audit related
fees.

Tax Fees -   The Company paid Clancy & Co. $5,600 for tax returns.

All Other Fees - None

Audit Committee Pre-Approval Policies and Procedures

The Company does not currently have an Audit Committee. The Company's current
policy is that the Board of Directors pre-approves all audit and non-audit
services that are to be performed and fees to be charged by our independent
auditor to assure that the provision of these services does not impair the
independence of such auditor. The Board of Directors pre-approved of all audit
services and fees of our independent auditor for the years ended December 31,
2004 and 2003. Our independent auditors did not provide us with any non-audit
services during the periods indicated above.


                                       26
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date:    February 28, 2005                     CHINA NETTV HOLDINGS INC.

                                            By: /s/ Anthony Garson
                                                ----------------------------
                                                Anthony Garson
                                                President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.


/s/ Anthony Garson               President and Director     February 28, 2005

-------------------------
Anthony Garson

/s/ Maurice Tsakok                Secretary and Director     February 28, 2005

-------------------------
Maurice Tsakok


/s/ Jie Yang                      Vice President & Director  February 28, 2005
-------------------------
Jie Yang


/s/ Zhi Wang                       Director & Chairman         February 28, 2005
-------------------------
Zhi Wang




                                       27

<PAGE>

                            CHINA NETTV HOLDINGS INC.
                          INDEX TO FINANCIAL STATEMENTS

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


Report of Independent Registered Public Accounting Firm......................F-1

Balance Sheet................................................................F-2

Statement of Operations......................................................F-3

Statement of Changes in Stockholders' Equity...........................F-4 - F-6

Statement of Cash Flows................................................F-7 - F-8

Notes to the Financial Statements.....................................F-9 - F-17


<PAGE>








             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
China NetTV Holdings Inc.

We have audited the balance sheet of China NetTV Holdings Inc. (a development
stage company) (a Nevada corporation) as of December 31, 2004, and the related
statement of operations, changes in stockholders' equity and cash flows for the
preceding two years then ended, and the cumulative amounts from inception. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The related statements of operations, stockholders' equity, and cash
flows from inception of the development stage on September 6, 1998 through
August 31, 2002, were audited by other auditors whose report, dated December 4,
2002, expressed an unqualified opinion, qualified with a going concern
uncertainty. Our opinion on the statements of operations, stockholders' equity
and cash flows from inception of the development stage through December 31,
2004, insofar as it relates to amounts for prior periods through August 31,
2002, is based solely on the report of other auditors.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of China NetTV Holdings Inc. at
December 31, 2004, and the results of its operations and its cash flows for the
periods indicated in conformity with accounting principles generally accepted in
the United States of America.

As discussed in Note 1 to the financial statements, the Company has been in the
development stage since its inception on September 15, 1998, and has incurred
significant losses resulting in a deficit accumulated during the development
stage. Unless the Company attains future profitable operations and/or obtains
additional financing, there is substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regards to these matters are
discussed in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


/s/ Clancy and Co., P.L.L.C.
Clancy and Co., P.L.L.C.
Phoenix, Arizona

February 25, 2005





                                      F-1

<PAGE>

<TABLE>
<CAPTION>

                                            CHINA NETTV HOLDINGS INC.
                                          (A Development Stage Company)
                                                  BALANCE SHEET
                                                DECEMBER 31, 2004

Stated in U.S. dollars
------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>
ASSETS

Current Assets
   Cash and cash equivalents                                                                $             900,309
   Prepaid expenses and other current assets                                                                2,287
   Prepaid expenses - related party                                                                           831
                                                                                             ---------------------
Total Current Assets                                                                                      903,427

Investment in Highland Mining Inc. (Note 2)                                                            12,000,000

Fixed assets, net (Note 3)                                                                                  9,058

                                                                                             ---------------------
Total Assets                                                                                $          12,912,485
                                                                                             =====================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable and accrued expenses                                                    $              47,082
   Promissory note payable - related party (Note 4)                                                       100,000
   Due to related parties                                                                                   2,453
                                                                                             ---------------------
Total current liabilities                                                                                 149,535
                                                                                             ---------------------

Commitments and contingencies (Note 9)                                                                          -

Stockholders' Equity
   Common stock : $0.001 par value, authorized: 200,000,000
       Issued and outstanding: 57,236,575 shares                                                           57,236
       Common stock subscribed for:  85,000,000 (Note 2)                                                   85,000
       Common stock subjected to cancellation: 139,339,000 (Note 2 and 8)                                       -
   Additional paid-in capital                                                                           8,771,207
   Convertible Debentures (Note 2)                                                                      5,971,120
   Common stock subscription received (Note 8)                                                          1,200,000
   Accumulated deficit during the development stage                                                   (3,321,613)
                                                                                             ---------------------
Total Stockholders' Equity                                                                             12,762,950
                                                                                             ---------------------
                                                                                             ---------------------

Total Liabilities and Stockholders' Equity                                                  $          12,912,485
                                                                                             =====================



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

                                                        F-2
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                            CHINA NETTV HOLDINGS INC.
                          (a Development Stage Company)
                             STATEMENT OF OPERATIONS
               FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003, AND
                        CUMULATIVE AMOUNTS FROM INCEPTION

                                                                Cumulative
Stated in U.S. dollars                                        From Inception          2004                 2003
------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                    <C>                     <C>

Revenues                                                            $     1,448        $         -          $         -

General and administrative expenses                                   2,016,786          1,055,134              698,044
                                                            ------------------------------------------------------------

Operating loss                                                      (2,015,338)        (1,055,134)            (698,044)

Other expenses
   Interest income                                                           62                 62                    -
   Accounts payable written off                                           3,453              3,453                    -
   Loss on disposal of fixed assets                                    (16,009)           (16,009)                    -
   Interest expense                                                    (13,781)            (6,078)             (10,048)
   Loss on investment                                               (1,280,000)                  -                    -
                                                            ------------------------------------------------------------
Total other expenses                                                (1,306,275)           (18,572)             (10,048)
                                                            ------------------------------------------------------------

Provision for income taxes                                                    -                  -                    -
                                                            ------------------------------------------------------------

Net loss available to common stockholders                        $  (3,321,613)    $   (1,073,706)       $    (708,092)
                                                            ============================================================

Basic and diluted loss per share                                                     $      (0.02)        $      (0.02)
                                                                               =========================================

Weighted average common shares outstanding                                              66,664,529           43,311,044
                                                                               =========================================




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

                                                       F-3

</TABLE>





<PAGE>

<TABLE>
<CAPTION>


                                                         CHINA NETTV HOLDINGS INC.
                                                       (a Development Stage Company)
                                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                    FROM INCEPTION TO DECEMBER 31, 2004

                                                   Common     Additional                Common stock
                                     ommon        Stock at     Paid-In     Convertible  Subscription    Accumulated
Stated in U.S. dollars               hares        Par Value    Capital      Debenture     Received        Deficit         Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>          <C>         <C>          <C>           <C>             <C>
Balance, September 15, 1998                   -       $    -     $     -      $     -                      $      -        $     -
(inception)                                                                                $       -
Issuance of common stock for cash
    $0.004 on February 5, 1999       15,000,000       15,000     (9,000)            -              -              -          6,000
Issuance of common stock for cash
    $0.008 on February 7, 1999       18,750,000       18,750     (3,750)            -              -              -         15,000
Issuance of common stock for cash
    $0.04 on February 23, 1999          156,200          156       6,092            -              -              -          6,248
Capital contributions - expenses                                                                   -
paid by officers                              -            -       4,500            -                             -          4,500
Comprehensive loss:                           -                                     -              -
   Net loss, year ended August 31,                                                                 -
1999                                          -            -           -            -                      (18,593)       (18,593)
                                    -----------------------------------------------------------------------------------------------
Balance, August 31, 1999             33,906,200       33,906     (2,158)            -              -       (18,593)         13,155
Capital contributions - expenses                                                                   -
paid by officers                              -            -       4,500            -                             -          4,500
Comprehensive loss:
   Net loss, year ended August 31,                                                                 -
2000                                          -            -           -            -                      (78,995)       (78,995)
                                    -----------------------------------------------------------------------------------------------
Balance, August 31, 2000             33,906,200       33,906       2,342            -              -       (97,588)       (61,340)
Issuance of common stock for cash
    $0.40 - December 2000 through                                                                  -
    June 2001                         2,902,500        2,903   1,158,097            -                             -      1,161,000
Comprehensive loss:                                                                 -
   Net loss, year ended August 31,                                                                 -
    2001                                      -            -           -            -                      (68,153)       (68,153)
                                    -----------------------------------------------------------------------------------------------
Balance, August 31, 2001             36,808,700       36,809   1,160,439            -              -      (165,741)      1,031,507
Issuance of common stock for cash
    $0.40 on October 17, 2001           387,500          387     154,613            -              -              -        155,000
Issuance of common stock for
    expenses @ $0.20 on November 2,                                                                -
    2001                                250,000          250      49,750            -                                       50,000
Comprehensive loss:                                                                 -
   Net loss, year ended August 31,                                                                 -
    2002                                      -            -           -            -                   (1,359,397)    (1,359,397)
                                    -----------------------------------------------------------------------------------------------
Balance, August 31, 2002             37,446,200       37,446   1,364,802            -                   (1,525,138)      (122,890)
Issuance of common stock for
    acquisition costs on July 23,
    2003 - related party              6,839,000        6,839     (6,839)            -              -              -              -
Comprehensive loss:
   Net loss, year ended August 31,                                                                 -
    2003                                      -            -           -            -                     (131,900)      (131,900)
                                    -----------------------------------------------------------------------------------------------
Balance, August 31, 2003, as         44,285,200       44,285   1,357,963            -              -    (1,657,038)      (254,790)
    originally reported


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

                                                        F-4

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                         CHINA NETTV HOLDINGS INC.
                                                       (a Development Stage Company)
                                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                    FROM INCEPTION TO DECEMBER 31, 2004

                                                     Common       Additional                Common stock
                                      Common        Stock at       Paid-In     Convertible  Subscription    Accumulated
Stated in U.S. dollars                Shares        Par Value      Capital      Debenture     Received        Deficit         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>          <C>         <C>             <C>           <C>

Compensation cost - stock options               -           -       210,000            -            -      (210,000)              -
    (Note 7)
                                    ------------------------------------------------------------------------------------------------
Balance, August 31, 2003, as                                                                        -
    restated                           44,285,200      44,285     1,567,963            -                 (1,867,038)      (254,790)
Issuance of common stock for cash
    $0.06 on October 29, 2003          15,000,000      15,000       885,000            -            -              -        900,000
Issuance of common stock for 7%
    finders fee for shares issued                                                                   -
    on October 29, 2003                 1,050,000       1,050       (1,050)            -                           -              -
Exercise of Series A stock purchase
    warrants @ $0.10 on December                                                                    -
    11, 2003                               50,000          50         4,950            -                           -          5,000
Exercise of Series B stock purchase
    warrants @ $0.15 on December                                                                    -
    23, 2003                              250,000         250        37,250            -                           -         37,500
Exercise of Series A stock purchase
    warrants @ $0.10 on December                                                                    -
    23, 2003                              250,000         250        24,750            -                           -         25,000
Compensation cost - stock options               -           -        10,000            -            -              -         10,000
Comprehensive loss:                                                                    -            -              -
   Net loss, four months ended                                                                      -
    December 31, 2003                           -           -             -            -                   (380,869)      (380,869)
                                    ------------------------------------------------------------------------------------------------
Balance, December 31, 2003             60,885,200      60,885     2,528,863            -            -    (2,247,907)        341,841
Exercise of Series A stock purchase
    warrants at $0.10 per share on                                                                  -
    January 6, 2004                        50,000          50         4,950            -                           -          5,000
Exercise of Series A stock purchase
    warrants at $0.10 per share on                                                                  -
    January 27, 2004                    2,940,000       2,940       291,060            -                           -        294,000
Issuance of common stock for legal
    services at $0.10 per share on                                                                  -
    April 12, 2004                      2,800,000       2,800       277,200            -                           -        280,000
Exercise of Series C stock purchase
    warrants at $0.08 per share on                                                                  -
    October 1, 2004                       200,375         200        15,830            -                           -         16,030
Cancellation of common stock issued
    for finder's fee on July 23,
    2003 (6,839,000 shares) and
    legal costs on April 12, 2004
    (2,800,000 shares)                (9,639,000)     (9,639)     (270,361)            -             -                    (280,000)
Issuance of common stock for the
    partial acquisition of Highland
    Mining Inc. at $0.08 per share
    on December 28, 2004                                                                            -
    (85,000,000 shares)                85,000,000      85,000     6,715,000            -                           -      6,800,000

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

                                                        F-5
</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                                                         CHINA NETTV HOLDINGS INC.
                                                       (a Development Stage Company)
                                               STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                    FROM INCEPTION TO DECEMBER 31, 2004

                                                    Common       Additional                Common stock
                                     Common        Stock at       Paid-In     Convertible  Subscription    Accumulated
Stated in U.S. dollars               Shares        Par Value      Capital      Debenture     Received        Deficit         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>               <C>      <C>         <C>            <C>             <C>           <C>

Issuance of convertible debentures                         -                 5,200,000                             -      5,200,000
                                               -
    for partial acquisition of
    Highland Mining Inc. at $0.08
    per shares on December 28, 2004                                     -                           -
Issuance of convertible debentures
    for finder's fee on acquisition
    of Highland Mining Inc.  at                -
    $0.08 per share on December 28,
    2004                                                   -    (771,120)      771,120              -              -              -
Legal fees incurred for issuance of
    common stock on December 28,
    2004 in connection with the                -
    partial acquisition of Highland
    Mining Inc.                                            -     (20,215)            -              -              -       (20,215)

Subscription received on December              -
    31, 2004 for private placement
    of 24,000,000 shares at $0.05                          -            -            -      1,200,000              -      1,200,000
Comprehensive loss:
   Net loss, year ended December               -                                                    -
    31, 2004                                               -            -            -                   (1,073,706)    (1,073,706)
                                    ------------------------------------------------------------------------------------------------
Balance, December 31, 2004           142,236,575    $142,236   $8,771,207   $5,971,120   $  1,200,000  $ (3,321,613)    $12,762,950
                                    ================================================================================================




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

                                                        F-6

</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                            CHINA NETTV HOLDINGS INC.
                          (a Development Stage Company)
                            STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003, AND
                        CUMULATIVE AMOUNTS FROM INCEPTION

                                                                      Cumulative
Stated in U.S. dollars                                              from inception           2004                2003
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                 <C>                  <C>
Cash flows from operating activities
  Net loss                                                            $   (3,321,613)     $   (1,073,706)      $    (708,092)
  Adjustments to reconcile net loss to net cash
        used in operating activities
    Depreciation                                                               17,623              13,004               4,620
    Capital contribution for expenses                                           9,000                   -                   -
    Compensation cost - stock options                                         220,000                                 220,000
    Loss on investment                                                      1,280,000                   -                   -
    Common stock issued for expenses                                           50,000                   -                   -
    Accounts payable written off                                              (3,453)             (3,453)                   -
   Loss on disposal of fixed assets                                            16,009              16,009                   -
    Changes in assets and liabilities:
     (Increase) decrease in prepaid expenses                                  (2,287)             (1,593)               (694)
     (Increase) decrease in prepaid expenses - related party                    (831)              28,154            (28,985)
     (Increase) decrease in security deposit                                        -               6,128             (6,128)
      Increase (decrease) in accounts payable and accrued
      expenses                                                                 40,604            (24,439)               4,939
      Increase (decrease) in accrued expenses - related party                       -            (78,000)              78,000
                                                                 -------------------------------------------------------------
  Net cash flows used in operating activities                             (1,694,948)         (1,117,896)           (436,340)

Cash flows from investing activities
    Investment in joint venture                                           (1,280,000)                   -                   -
    Capital expenditures                                                     (45,269)             (2,061)            (43,208)
    Proceeds from disposal of fixed assets                                     44,525              44,525                   -
                                                                 -------------------------------------------------------------
  Net cash flows used in investing activities                             (1,280,744)              42,464            (43,208)

Cash flows from financing activities
    Advances (repayments) - amounts due from related parties                    2,453           (100,018)              24,263
    Principal payments - installment loans payable                           (52,230)            (50,130)             (2,100)
    Cash received under promissory note payable - related party               100,000             100,000                   -
    Proceeds from the issuance of common stock                              2,625,778             315,030             967,500
    Proceeds from subscription received                                     1,200,000           1,200,000                   -
                                                                 -------------------------------------------------------------
  Net cash flows provided by financing activities                           3,876,001           1,464,882             989,663
                                                                 -------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                              900,309             389,450             510,115
Cash and cash equivalents - beginning of period                                     -             510,859                 744
                                                                 -------------------------------------------------------------
Cash and cash equivalents - end of period                               $     900,309       $     900,309       $     510,859
                                                                 =============================================================

Supplemental information
Cash paid for:
    Interest                                                             $      6,239       $       6,078         $       343
                                                                 =============================================================
    Income taxes                                                                    -                   -                   -
                                                                 =============================================================

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

                                                        F-7
</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                            CHINA NETTV HOLDINGS INC.
                          (a Development Stage Company)
                            STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003, AND
                        CUMULATIVE AMOUNTS FROM INCEPTION

                                                                      Cumulative
Stated in U.S. dollars                                              from inception               2004               2003
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                 <C>                              <C>

Non-cash investing and financing activities:
    Capital contributions on expenses paid by officer                    $      9,000                   -                   -
                                                                 =============================================================
    Common stock issued for expenses                                    $      50,000                   -                   -
                                                                 =============================================================
    Common stock issued for acquisition of Highland Mining Inc.        $    6,800,000      $    6,800,000                   -
                                                                 =============================================================
    Convertible debenture issued for acquisition of Highland
         Mining Inc.                                                   $    5,200,000      $    5,200,000                   -
                                                                 =============================================================
    Convertible debenture issued for finder's fee paid for                                  $     771,120                   -
         acquisition of Highland Mining Inc.                            $     771,120
                                                                 =============================================================

















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

                                                                F-8
</TABLE>


<PAGE>



                            CHINA NETTV HOLDINGS INC.
                          (a Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business and Basis of Presentation

China NetTV Holdings Inc. ("the Company") was incorporated under the laws of the
State of Nevada on September 15, 1998, under the name "Vancouver's Finest Coffee
Company," with an authorized capital of 200,000,000 shares of $0.001 par value
common stock. On May 30, 2000, the name was changed to China NetTV Holdings Inc.
On November 28, 2003, the Company's board of directors voted to abandon the
Company's inactive subsidiary, China NetTV Inc. with immediate effect. There
were no assets or liabilities in this inactive subsidiary.

The Company was originally organized for the purpose of marketing retail
specialty coffee. The Company later changed its business direction to the
operations of digital technology in May 2000 and then to the acquisition of
interests in mineral properties in July 2003 (See Notes 2 and 8). On December 1,
2003, the Company changed its fiscal year end from August 31 to December 31.

The Company is a development stage company as defined by Financial Accounting
Standards Board No. 7. The accompanying financial statements have been prepared
in conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company has limited
operations and has sustained substantial operating losses in recent years
resulting in a substantial accumulated deficit. In view of these matters,
realization of a major portion of the assets in the accompanying balance sheet
is dependent upon the continued operations of the Company, which in turn is
dependent upon the Company's ability to meet its financing requirements, and the
success of its future operations.

To meet these objectives, the Company has arranged to raise $2,400,000 pursuant
to a non-brokered private placement of 48,000,000 shares of common stock at
$0.05 per share. (See Notes 8 and 10) The Company may seek additional equity as
necessary and it expects to raise funds through private or public equity
investment in order to support existing operations and expand the range and
scope of its business. There is no assurance that such additional funds will be
available for the Company on acceptable terms, if at all. Additionally, the
Company has also consummated the partial acquisition of Highland Mining Inc.,
which has certain rights or options to, or interests in 25 mineral properties in
Tibet, China. (See Note 2) Management believes that actions presently taken to
revise the Company's operating and financial requirements provide the
opportunity for the Company to continue as a going concern. The Company's
ability to achieve these objectives cannot be determined at this time.


Summary of Significant Accounting Policies

Accounting method - The financial statements are prepared under the accrual
method of accounting.

Use of estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and cash equivalents - The Company considers all highly liquid debt
instruments with original maturities of three months or less to be cash
equivalents.

                                      F-9

<PAGE>

Fixed assets - Fixed assets, stated at cost, are depreciated over the asset's
estimated useful life, ranging from three to five years. Significant
improvements and betterments are capitalized where it is probable that the
expenditure resulted in an increase in the future economic benefits expected to
be obtained form the use of the asset beyond its originally assessed standard of
performance. Routine repairs and maintenance are expensed when incurred. Gains
and losses on disposal of fixed assets are recognized in the statement of
operations based on the net disposal proceeds less the carrying amount of the
assets.

Impairment or Disposal of Long-lived Assets - The Company reports the impairment
of long-lived assets and certain identifiable intangibles in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-lived Assets". Certain long-lived assets and
identifiable intangibles held by the Company are reviewed for impairment
whenever assets or changes in circumstances indicate the carrying amount of an
asset may not be recoverable. Accordingly, an impairment loss is recognized in
the period it is determined. A component of an entity that is classified as held
for sale or that has been disposed of is presented as a discontinued operation
if the operations and cash flows of the component will be (or have been)
eliminated from the ongoing operations of the entity and the entity will not
have any significant continuing involvement in the operations of the component.

Advertising costs - Advertising costs are expensed as incurred. There were no
advertising costs for the periods presented.

Offering costs - Costs directly attributable to any proposed or actual offering
of securities are charged against the gross proceeds of the offering. Costs of
an aborted offering are expensed.

Revenue recognition - Revenue is recognized on the sale and delivery of a
product or the completion of a service rendered.

Income taxes - The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes." Under SFAS No. 109, deferred income tax assets and liabilities
are computed for differences between the financial statements and tax bases of
assets and liabilities that will result in taxable or deductible amounts in the
future, based on enacted tax laws and rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred income tax assets to the amount
expected to be realized.

Foreign currency translations - The assets and liabilities of the Company's
foreign operations are generally translated into U.S. dollars at current
exchange rates, and revenues and expenses are translated at average exchange
rates for the year. Resulting translation adjustments are reflected as a
separate component of stockholders' equity. Transaction gains and losses that
arise from exchange rate fluctuations on transactions denominated in a currency
other than the functional currency, except those transactions which operate as a
hedge of an identifiable foreign currency commitment or as a hedge of a foreign
currency investment position, are included in the results of operations as
incurred.

Fair value of financial instruments - For certain of the Company's financial
instruments, including cash and cash equivalents, prepaid expenses, accounts
payable and other accrued liabilities, and promissory notes payable, the
carrying amounts approximate fair value due to their short maturities.

Earnings per share - Basic earnings or loss per share are based on the weighted
average number of common shares outstanding. Diluted earnings or loss per share
is based on the weighted average number of common shares outstanding and
dilutive common stock equivalents. Basic earnings/loss per share is computed by
dividing income/loss (numerator) applicable to common stockholders by the
weighted average number of common shares outstanding (denominator) for the
period. All earnings or loss per share amounts in the financial statements are
basic earnings or loss per share, as defined by SFAS No. 128, "Earnings Per
Share." Diluted earnings or loss per share does not differ materially from basic
earnings or loss per share for all periods presented. Convertible securities
that could potentially dilute basic earnings per share in the future such as
options and warrants are not included in the computation of diluted earnings per
share because to do so would be antidilutive. All per share and per share
information are adjusted retroactively to reflect stock splits and changes in
par value.

                                      F-10

<PAGE>

Stock-based compensation - The Company accounts for stock-based compensation
using the intrinsic value method prescribed in Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." Compensation
cost for stock options, if any, is measured as the excess of the quoted market
price of the Company's stock at the date of grant over the amount an employee
must pay to acquire the stock. SFAS No.123, "Accounting for Stock-Based
Compensation," established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation
plans. The Company has elected to remain on its current method of accounting as
described above, and has adopted the disclosure requirements of SFAS No. 123. In
December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure, amending FASB No. 123, and "Accounting
for Stock-Based Compensation". This statement amends Statement No. 123 to
provide alternative methods of transition for an entity that voluntarily changes
to the fair value based method of accounting for stock-based employee
compensation. SFAS No. 148 amends APB Opinion No. 28 "Interim Financial
Reporting" to require disclosure about those effects in interim financial
information. The Company adopts the disclosure provisions and the amendment to
APB No. 28 effective for interim periods beginning after December 15, 2002.

Had compensation expense for the Company's stock-based compensation plans been
determined under FAS No. 123, based on the fair market value at the grant
dates, the Company's pro forma net loss and pro forma net loss per share would
have been reflected as follows at December 31:

                                                            2004         2003
                                                        ------------  ----------

Net loss
    As reported                                         $1,073,706   $  708,092
    Stock-based employee compensation cost, net of tax           -      576,467
                                                        ------------ -----------
    Pro forma                                           $1,073,706   $1,284,559
                                                        ============ ===========

Loss per share
    As reported                                         $     0.02   $     0.02
                                                        ============ ===========
    Pro forma                                           $     0.02   $     0.03
                                                        ============ ===========

Comprehensive income - The Company includes items of other comprehensive income
(loss) by their nature, such as translation adjustments, in a financial
statement and displays the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of the balance sheet. The Company discloses total comprehensive loss,
its components and accumulated balances on its statement of stockholders'
equity.

Related party transaction - A related party is generally defined as (i) any
person that holds 10% or more of the Company's securities and their immediate
families, (ii) the Company's management, (iii) someone that directly or
indirectly controls, is controlled by or is under common control with the
Company, or (iv) anyone who can significantly influence the financial and
operating decisions of the Company. A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between
related parties.

Recent Accounting Pronouncements - The Financial Accounting Standards issued the
following pronouncements during 2004, none of which are expected to have a
significant affect on the financial statements:

In March 2004, the EITF reached final consensuses on EITF 03-6 which provides
additional guidance to determine whether a security is a participating security
and therefore subject to the two-class method under SFAS 128. The guidance in
EITF 03-6 clarifies the notion of what constitutes a participating security, and
is effective for fiscal periods (interim or annual) beginning after March 31,
2004. EITF 03-06 provides guidance in applying the two-class method of

                                      F-11

<PAGE>

calculating earnings per share for companies that have issued securities other
than common stock that contractually entitle the holder to participate in any
dividends declared and earnings of the company. The opinion defines what
constitutes a participating security and how to apply the two-class method of
calculating earnings per share to those securities. In addition, the consensuses
in EITF 03-6 nullify the guidance in EITF Topic No. D-95, "Effect of
Participating Convertible Securities on the Computation of Basic Earnings Per
Share", and requires the use of the two-class method to compute basic EPS by
companies with participating convertible securities. The adoption did not have
an impact on our calculation of earnings per share.

In April 2004, the EITF reached consensus on EITF Issue No. 03-6, "Participating
Securities and the Two Class Method under FASB Statement No. 128" ("EITF 03-6").
EITF 03-6 addresses a number of questions regarding the computation of earnings
per share by companies that have issued securities other than common stock that
contractually entitle the holder to participate in the dividends and earnings of
the company when, and if, it declares dividends on its common stock. EITF 03-6
also provides further guidance in applying the two-class method of calculating
earnings per share, clarifying what constitutes a participating security and how
to apply the two-class method of computing earnings per share once it is
determined that a security is participating, including how to allocate
undistributed earnings to such a security. EITF 03-6 is effective for fiscal
periods beginning after March 31, 2004 and requires retroactive restatement of
prior earning per share amounts. This statement does not affect the Company.

In June 2004, the FASB issued EITF Issue No. 02-14, "Whether an Investor Should
Apply the Equity Method of Accounting to Investments Other Than Common Stock."
EITF Issue No. 02-14 addresses whether the equity method of accounting applies
when an investor does not have an investment in voting common stock of an
investee but exercises significant influence through other means. EITF Issue No.
02-14 states that an investor should only apply the equity method of accounting
when it has investments in either common stock or in-substance common stock of a
corporation, provided that the investor has the ability to exercise significant
influence over the operating and financial policies of the investee. The
accounting provisions of EITF Issue No. 02-14 are effective for the reporting
period beginning after September 15, 2004. The Company is in the process of
determining the effect, if any, of the adoption of EITF Issue No. 02-14 will
have on the Company's financial position, results of operations, or cash flows.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of ARB No. 43, Chapter 4." The amendments made by SFAS No. 151 clarify that
abnormal amounts of idle facility expense, freight, handling costs, and wasted
materials (spoilage) should be recognized as current-period charges and require
the allocation of fixed production overheads to inventory based on the normal
capacity of the production facilities. The guidance is effective for inventory
costs incurred during fiscal years beginning after November 23, 2004. The
Company does not believe the adoption of SFAS No. 151 will have a material
impact on our financial position, results of operations or cash flows.

In December 2004, the FASB issued a revision of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123R). SFAS 123R supersedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and its related implementation guidance. SFAS 123R establishes
standards for the accounting for transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
those equity instruments. SFAS 123R does not change the accounting guidance for
share-based payment transactions with parties other than employees provided in
SFAS 123 as originally issued and EITF Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services." SFAS 123R is effective for interim
reporting period that begins after June 15, 2005. The Company is in the process
of determining the effect of the adoption of SFAS 123R will have on its
financial position, results of operations, or cash flows.

                                      F-12

<PAGE>

In December 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate
Time-Sharing Transactions - an amendment of FASB Statements No. 66 and 67,"
which discusses the accounting and reporting of real estate time-sharing
transactions. This Statement is effective for financial statements for fiscal
years beginning after June 15, 2005, and restatement of previously issued
financial statements is not permitted. This statement does not affect the
Company.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29." The guidance in APB Opinion No. 29,
"Accounting for Nonmonetary Transactions," is based on the principle that
exchanges of nonmonetary assets should be measured based on the fair value of
the assets exchanged and provided an exception to the basic measurement
principle (fair value) for exchanges of similar productive assets. That
exception required that some nonmonetary exchanges, although commercially
substantive, be recorded on a carryover basis. This Statement eliminates the
exception to fair value for exchanges of similar productive assets and replaces
it with a general exception for exchange transactions that do not have
commercial substance--that is, transactions that are not expected to result in
significant changes in the cash flows of the reporting entity. The provisions of
this Statement are effective for nonmonetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005, applied prospectively. This statement
does not affect the Company.


NOTE 2 - INVESTMENT IN HIGHLAND MINING INC.

On November 5, 2004, the Company and shareholders of Highland Mining Inc.
("Highland") entered into a binding share exchange agreement whereby the Company
agreed to issue 85,000,000 of its common shares from treasury and a debenture
convertible into 65,000,000 of the Company's common shares in exchange for 50%
of the issued and outstanding shares of Highland held by Highland Shareholders,
pursuant to the terms and conditions as hereinafter set forth:

1.   If Highland Shareholders are unable to enter into a binding agreement on a
     share purchase and sale transaction (the "Definitive Agreement") with
     Hunter Dickinson Inc. ("HDI") to sell and transfer the other 50% of the
     issued and outstanding shares of Highland (the "Remaining Shares") to HDI
     on or before March 30, 2005 (the "Outside Date"), or if either or both HDI
     and Highland Shareholders decide to terminate the Definitive Agreement
     pursuant to the terms and conditions therein on or before the Outside Date,
     then unless Highland Shareholders and the Company otherwise agree, Highland
     Shareholders shall sell and transfer the Remaining Shares to the Company at
     a nominal price, pursuant to the same terms and conditions contained
     hereunder as applicable to the parties then.

2.   Highland Shareholders have direct or indirect rights or options to, or
     interests in, (the rights, options and interests together are called
     "Additional Rights") 25 mineral properties in Tibet, China (the "Additional
     Properties"), subject to terms and conditions and regulatory requirements
     attached to the Additional Rights. Highland Shareholders agree to transfer
     and assign, or shall cause to be transferred and assigned, to the Company
     the Additional Rights for $1.00, subject to terms and conditions and
     regulatory requirements attached thereto, and terms and conditions herein.

The Company agreed to pay a finder's fee in the form of a debenture convertible
into 9,639,000 common shares of the Company upon completion of the share
exchange. At the Company's option, at any time within 90 days of the date of the
debenture (November 5, 2004), it can send a notice to the holder indicating its
intention to pay the holder a cash payment in lieu of shares on the basis of
$0.25 per share.

On November 9, 2004, the Highland shareholders entered into a preliminary option
agreement with HDI. The preliminary option agreement was subject to a full due
diligence study by HDI, which was completed on December 24, 2004. HDI has an
option to acquire 50% of the issued and outstanding shares of Highland through
payment of $2,000,000 to Highland shareholders and investment of $5,000,000
(with the first $3,000,000 due no later than November 10, 2005 and the remaining
$2,000,000 due no later than November 10, 2006) in Highland to fund the
exploration of the Xietongmen Copper Property located near Xiong Village,
Xietongmen County, Rikaze area, Tibet Autonomous Region, China. HDI may acquire
a further 10% of the issued and outstanding shares of Highland, through the
investment of $3,000,000 in Highland to fund exploration of the Xietongmen
Copper Property, for a period of twenty-four (24) months following the date of
the final option agreement.

                                      F-13

<PAGE>

Upon completion of the Definitive Agreement between the Highland Shareholders
and HDI, the Highland Shareholders transferred a total of 50% of the outstanding
and issued shares of Highland to the Company on December 28, 2004. As of
December 31, 2004, the Company had not yet issued the 85,000,000 shares to

Highland Shareholders as its shares held in escrow had not been cancelled to
release room for the issuance of new shares (Note 8). The share exchange
agreement between the Company and Highland Shareholders was consummated on
December 28, 2004. The financial statements for the year ended December 31, 2004
do not include any post-acquisition income or loss of Highland as the
transactions of Highland occurring from December 28, 2004 to December 31, 2004
were immaterial.

Cost of investment in Highland Mining, Inc.                    $  12,000,000


NOTE 3 - FIXED ASSETS

Fixed assets consist of the following:

Office and computer equipment                                  $      14,207
Less : accumulated depreciation                                       (5,149)
                                                               ---------------
                                                               $       9,058
                                                               ===============

Depreciation charged to operations for year ended December 31, 2004 and 2003,
and the cumulative amounts from inception amounted to $13,004, $4,620 and
$17,623, respectively.


NOTE 4 - PROMISSORY NOTE PAYABLE

The Company executed a promissory note for $100,000 with interest at 0% thereon
to a company controlled by Zhi Wang, a Director and Chairman of the Company. The
amount is repayable on May 15, 2005. The Company has the right to prepay the
note in whole or in part at any time without premium or penalty. The funds were
obtained to further support working capital requirements. The note was repaid in
January 2005.


NOTE 5 - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2004, the Company incurred consulting fees of
$318,834 (2003: $241,103) to certain directors, ex-director and/or officers of
the Company. The Company has consulting agreements with a director and an
officer of the Company as detailed in Note 9.


NOTE 6 - INCOME TAXES

There is no current or deferred tax expense for the years ended December 31,
2004 and 2003, due to the Company's loss position. The Company has fully
reserved for any benefits of these losses. The deferred tax consequences of
temporary differences in reporting items for financial statement and income tax
purposes are recognized, as appropriate. Realization of the future tax benefits
related to the deferred tax assets is dependent on many factors, including the
Company's ability to generate taxable income within the net operating loss
carryforward period. Management has considered these factors in reaching its
conclusion as to the valuation allowance for financial reporting purposes. The
income tax effect of temporary differences comprising the deferred tax assets on
the accompanying balance sheet is as follows:

                                      F-14

<PAGE>

Deferred tax asset from net operating loss carryforwards         $  1,129,000
Valuation allowance                                                (1,129,000)
                                                                 ---------------
Net deferred tax assets                                          $          -
                                                                 ===============


The Company has available net operating loss carryforwards of approximately
$2,200,000 for tax purposes to offset future taxable income, which expire
through 2024. Pursuant to the Tax Reform Act of 1986, annual utilization of the
Company's net operating loss carryforwards may be limited if a cumulative change
in ownership of more than 50% is deemed to occur within any three-year period.

The difference between income taxes at statutory rates and the amount presented
in the financial statements for the years ended December 31, 2004 and 2003, and
cumulative from inception, is a result of the following approximated amounts:

<TABLE>
<CAPTION>

                                                                                                       Cumulative
                                                                   2004               2003           From Inception
<S>                                                        <C>                 <C>               <C>
Statutory federal income tax rate - expense (benefit)      $     365,000       $    241,000      $      1,129,000
Change in valuation allowance                                    (365,000)          (241,000)           (1,129,000)
                                                           ------------------- ----------------- ---------------------
                                                           $          -        $          -      $              -
                                                           =================== ================= =====================
</TABLE>


NOTE 7 - STOCK-BASED COMPENSATION

Stock options

On May 31, 2000, the Company's board of directors approved a stock option plan
for the sale of 5,000,000 shares of the Company's common stock at $0.40 per
share. There are 5,000,000 options outstanding under the plan and none have been
exercised to date. The stock option plan will expire on May 31, 2005, and the
directors have retained the right to cancel the plan at any time before May 31,
2005, and can make awards to the officers and directors, employees, and others
as designated by the directors. The fair value of the stock options granted was
approximately $1,619,000 and has been recorded as compensation expense for pro
forma purposes only.

On July 5, 2003, the Company granted stock options to three directors of the
Company for the sale of 6,000,000 shares of the Company's common stock at $0.05
per share with expiry date on August 1, 2006, for their services in the past.
Compensation cost recognized in these financial statements for options granted
below fair market value amounted to $210,000. The originally issued financial
statements for the year ended August 31, 2003, did not include recognition of
compensation cost and accordingly, have been restated for that amount. There was
no effect on previously reported total stockholders' deficiency. Net loss for
the year ended August 31, 2003, increased by $210,000, but there was no
significant effect on previously reported loss per share. The fair value of the
stock options granted was approximately $477,149 and has been recorded as
compensation expense for pro forma purposes only. These options were
subsequently cancelled on November 4, 2004.

On September 11, 2003, the Company granted stock options to a director of the
Company for the sale of 1,000,000 shares of the Company's common stock at $0.10
per share with expiry date on August 1, 2006, for his services in the past.
Compensation cost recognized in these financial statements for options granted
below fair market value amounted to $10,000. The fair value of the stock options
granted was approximately $99,318 and has been recorded as compensation expense
for pro forma purposes only.

As of December 31, 2004, there are 6,000,000 stock options outstanding.
6,000,000 options were cancelled and no options were forfeited or exercised
during the year ended December 31, 2004. The weighted average exercise price of
the options outstanding and exercisable is $0.35 and the weighted average
remaining contractual life is 0.8 years.

                                      F-15

<PAGE>

Stock warrants

The Company has issued 3,540,000 Series "A" Stock Purchase Warrants with an
exercise price of $0.10 each that can be exercised at the earlier of:

1. August 15, 2004; or
2. the 90th day after the day on which the weighted  average trading price of
   the Company's  shares exceed $0.13 per share for 10 consecutive trading days.

Upon exercise of the Series "A" Stock Purchase Warrant at $0.10, the holder will
receive one Common Share of the Company and an additional Series "B" Stock
Purchase Warrant exercisable at $0.15. The term of the Series "B" warrant will
be adjusted accordingly to expire one year after the occurrence of either (i) or
(ii) as described above.

The Company also issued 16,050,000 units Series "C" Stock Purchase Warrants on
completion of a non-brokered private placement on October 16, 2003. Each Series
"C" warrant entitles the holder to purchase one additional share within the
first year at $0.08 or $0.25 in the second year. Upon exercise of a Series "C"
Stock Purchase Warrant, the purchaser will receive an additional
non-transferable Series "D" Stock Purchase Warrant to purchase an additional
share for $0.75 until September 30, 2006.

During the year ended December 31, 2004, 2,990,000 Series "A" warrants and
200,375 Series "C" warrants were exercised at $0.10 and at $0.08 per share,
respectively, for cash proceeds of $299,000 and $16,030, respectively, and
250,000 Series "A" warrants that expired.

As of December 31, 2004, the Company has 3,040,000, 15,849,625 and 200,375
Series "B", "C" and "D" Stock Purchase Warrants outstanding, respectively.


NOTE 8 - STOCKHOLDERS' EQUITY

Stock split - On December 12, 2001, the Company completed a forward common stock
split of 2 1/2 shares for 1 outstanding share. The financial statements have
been retroactively restated to reflect the split.

Private Placements of Common Stock

        (i)    On October 16, 2003, the Company completed  non-brokered  private
               placement of 15,000,000  units of common stock at $0.06 per share
               for cash  proceeds of  $900,000.  Each unit consist of one common
               share and one non-transferable  Series "C" Stock Purchase Warrant
               entitling  the holder to purchase one common share for two years,
               at $0.08 per  share in the  first  year or $0.25 per share in the
               second year.  Upon  exercising  each warrant,  the holder of each
               warrant will receive one additional  non-transferable  Series "D"
               Stock Purchase  Warrant to purchase an additional share for $0.75
               until  September 30, 2006.  The Company paid a 7% finder's fee by
               issuing  1,050,000 units with the same terms and conditions.  The
               finder's  fee common  stock  issued was valued at the fair market
               value  of  the  common  stock   ($63,000)  and  charged   against
               additional paid-in capital as a cost of the offering.
        (ii)   The Company has arranged a non-brokered  private placement for up
               to  48,000,000  units at $0.05  per unit for  total  proceeds  of
               $2,400,000.  Each unit will  consist of one common  share and one
               non-transferable  share purchase warrant  entitling the holder to
               purchase  one common  share for two years,  at $0.08 per share in
               the first year or $0.25 in the second  year.  The  proceeds  from
               this  private  placement  will be used for  working  capital  and
               acquiring mining properties in the future. A 7% finder's fee will
               be paid in shares.  The Company  received the first $1,200,000 on
               December 31, 2004,  which is classified as subscription  received
               under  stockholders'  equity  on the  balance  sheet as the share
               certificates have not been received. (See Note 10)

                                      F-16

<PAGE>


Share Exchange Agreement - On July 4, 2003, the Company entered into a share
exchange agreement ("Agreement") to acquire all of the issued and outstanding
shares of Honglu Investment Holdings, Inc. ("Honglu"), a Chinese company that
owns prospecting permits and licenses on mineral prospects in Tibet, China. On
November 5, 2004, the Company and Honglu shareholders mutually agreed to
terminate the Agreement as the Tibet government had on August 10, 2004, rejected
the application for approval of the Agreement with the Company. All of the
shares issued under escrow in relation to the Agreement, in total of
129,700,000, were returned to treasury and physically cancelled on February 7,
2005, of record with the Company's transfer agent. The Company also issued
9,639,000 shares as legal fees and finder's fees in connection with the
transaction. Due to the termination of the Agreement, these shares were also
returned to treasury and physically cancelled on February 14, 2005, of record
with the Company's transfer agent.


NOTE 9 - COMMITMENTS AND CONTINGENCIES

Operating leases - In December 2003, the Company entered into a lease for office
space under a non-cancelable operating lease for a term of 3 years beginning
January 2004 and expiring on December 31, 2006, with two free months rent.
Future commitments for the years ended December 31 are approximately as follows:
(2005-2006: $17,000 per year). Rent expense charged to operations for years
ended December 31, 2004 and 2003, and the cumulative amounts from inception
amounted to $13,588, $nil, and $13,588, respectively.

Commitments - (i) The Company has a consulting agreement with a director of the
Company for his services at $3,000 per month until December 31, 2006.; (ii) The
Company has a consulting agreement with an officer of the Company for his
consulting services at C$3,500 per month until December 31, 2006.; (iii) The
Company also has a consulting agreement with a geologist for his consulting
services at C$3,200 per month until December 31, 2006.; (iv) On February 5,
2004, the Company granted to Hunter Dickinson, Inc. ("HDI") an exclusive option
to acquire an aggregate 50% of the Property Rights to the Xietongmen Gold-Copper
Prospect in Tibet and a further option to acquire up to a further 10% of
Property Rights, for an aggregate of 60% of such Property Rights under certain
terms and conditions. On November 9, 2004, the Company and HDI mutually agreed
to terminate the exclusive option agreement.

Stock options and warrants - See details in Note 7 and 10.


NOTE 10 - SUBSEQUENT EVENTS

Subsequent to year end, the Company received $850,000 of the $1,200,000
non-brokered private placement for the remaining 24,000,000 units subscribed for
at $0.05 per unit.

3,040,000 Series "B" warrants expired in January 2005.








                                      F-17