SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 20-F

|_|  Registration  Statement  Pursuant to Section 12(b) or (g) of the Securities
     Exchange Act of 1934

|X|  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the year ended December 31, 2000.

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

Commission File Number 0-22617

                        MINCO MINING & METALS CORPORATION
             (Exact name of registrant as specified in its charter)

                      Province of British Columbia (Canada)
                 (Jurisdiction of incorporation or organization)

                        543 Granville Street, Suite 1200
                   Vancouver, British Columbia, Canada V6C 1X8
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


             N/A                                             N/A
            -----                                           -----
     Title of each class                            Name of each exchange
                                                     on which registered

Securities registered or to be registered pursuant to Section 12(g) of the Act.

                         Common Shares without par value
                                (Title of Class)

Indicate the number of  outstanding  shares of each of the  issuer's  classes of
capital  or common  stock as of the close of the  period  covered  by the annual
16,380,123.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes  X    No

Indicate by check mark which financial statement item the registrant has elected
to follow: Item 17 X    Item 18

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY  PROCEEDINGS  DURING THE PAST
FIVE YEARS)

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes   No    Not Applicable

<PAGE>2

                                TABLE OF CONTENTS

                                                                          Page

Introduction And Use of Certain Terms......................................3

Forward-Looking Statements.................................................3

Glossary of Mining Terms...................................................3

Item 1.  Identity of Directors, Senior Management and Advisers.............6

Item 2.  Offer Statistics and Expected Timetable...........................6

Item 3.  Key Information...................................................6

Item 4.  Information on the Company.......................................11

Item 5.  Operating and Financial Review and Prospects.....................28

Item 6.  Directors, Senior Management and Employees.......................32

Item 7.  Major Shareholders and Related Party Transactions................36

Item 8.  Financial Statements.............................................39

Item 9.  The Offering and Listing.........................................39

Item 10.  Additional Information..........................................40

Item 11.  Quantitative and Qualitative Disclosures About Market Risk......52

Item 12.  Description of Securities Other than Equity Securities..........53

Item 13.  Defaults, Dividend Arrearages and Delinquencies.................53

Item 14.  Material Modifications to the Rights of Security Holders
          and Use of Proceeds.............................................53

Item 15. [Reserved].......................................................53

Item 16  [Reserved].......................................................53

Item 17.  Financial Statements............................................53

Item 18.  Financial Statements............................................53

Item 19.  Exhibits........................................................53

<PAGE>3

                      Introduction And Use of Certain Terms

     Minco Mining & Metals  Corporation is a corporation  incorporated under the
laws of the province of British Columbia,  Canada. As used herein, except as the
context  otherwise  requires,  the term "Minco" or the "Company" refers to Minco
Mining & Metals  Corporation and its  consolidated  subsidiaries.  The Company's
consolidated  financial  statements  are prepared in  accordance  with  Canadian
generally  accepted  auditing  standards and are presented in Canadian  dollars.
Unless  otherwise  indicated,  reference to dollar amounts in this Annual Report
shall refer to Canadian dollars.

     Minco Mining & Metals  Corporation files reports and other information with
the Securities and Exchange  Commission  located at Judiciary  Plaza,  450 Fifth
Street, N.W.,  Washington,  D.C. 20549. You may obtain copies of Minco's filings
with the SEC by accessing their website located at www.sec.gov.  Further,  Minco
also files reports on Sedar.  You may access  Minco's  reports filed on Sedar by
accessing their website at www.sedar.com.

     The  principal  executive  office of the Company is located at Suite 1200 -
543  Granville  Street,  Vancouver,  British  Columbia,  Canada V6C 1X8, and its
telephone number is 604-688-8002.

                           Forward-Looking Statements

     The following  discussion  contains  forward-looking  statements  regarding
events and  financial  trends which may affect the  Company's  future  operating
results  and  financial  position.  Such  statements  are  subject  to risks and
uncertainties  that could  cause the  Company's  actual  results  and  financial
position  to  differ  materially  from  those  anticipated  in  forward  looking
statements.  These  factors  include,  but are not limited to, the fact that the
Company is in the exploration  stage, will need additional  financing to develop
its  properties  and will be subject to certain  risks since its  prospects  are
located  in China,  all of which  factors  are set  forth in more  detail in the
section entitled "Risk Factors" in Item 3.D. and "Operating and Financial Review
and Prospects" at Item 5.

                            Glossary of Mining Terms

Alteration          changes in the chemical or mineralogical composition of a
                    rock,  generally  produced by weathering or hydro-thermal
                    solutions.

Anomalous           inconsistent with or deviating from what is usual, normal or
                    expected.

Anomaly             the geographical area corresponding to anomalous geochemical
                    or geophysical values.

Assay               a chemical test performed on a sample of ores or minerals to
                    determine the amount of valuable metals contained.

Back-in             rights providing financing assistance in exchange for the
                    right to regain an interest at a later time under
                    predetermined terms.

Carried interest    an interest which does not require funding.

Chalcopyrite        copper sulphide mineral.

<PAGE>4

Drift               an underground passage, approximately horizontal, often
                    along a mineralized zone.

Drilling -          a drilling procedure using diamond-tipped bits which result
diamond drilling    in recovery of a drill core cylindrical section of rock from
                    beneath the earth's surface.

Fault               a fracture in a rock across which there has been
                    displacement.

Felsic intrusions   an intrusion of granite into surrounding rocks.

Geochemical         trace element analysis of residual soils which may be
sampling            interpreted to predict the composition of the underlying
                    bedrock.

Geology             a science that deals with the history of the earth and its
                    life especially a recorded in rocks.

Geophysical         survey means an exploration method that measures magnetic,
                    electrical or other physical  characteristics  of the earth,
                    the results of which can be interpreted  and used to predict
                    the possibility of economic mineral  concentrations  beneath
                    the surface of the earth.

Grade               the concentration of an ore metal in a rock sample, given
                    either as  weight  percent  for base  metals or in grams per
                    tonne  (g/t) or ounces  per short ton  (oz/t)  for  precious
                    metals.  The grade of an ore  deposit is  calculated,  often
                    using sophisticated statistical procedures, as an average of
                    the grades of a very large number of samples  collected from
                    throughout the deposit.

Ground magnetometer a geophysical survey carried out from the ground.
survey

Heap leach          a process whereby valuable metals are leached from a heap or
                    pad of crushed ore by leaching  solutions  percolating  down
                    through the heap and collected  from a sloping,  impermeable
                    liner below the pad.

Highly anomalous    an anomaly, which is 50 to 100 times average background.

Horizon             layer (as in massive sulphide horizon).

Intrusive           mineralization within a rock type that was once molten and
                    has "intruded"  into other rocks in that state,  after which
                    it cools.

Mineralization      minerals of value occurring in rocks.

Net                 smelter royalty a share of the net revenues received from a
                    smelter generated by the sale of metal produced by a mine.

<PAGE>5

Ore                 a natural aggregate of one or more minerals which may be
                    mined and sold at a profit,  or from  which some part may be
                    profitably separated.

Ore lenses          a lenticular concentration of valuable material.

Sedimentary         a type of deposit consisting of layers of massive sulphide
exhalative          (a rock composed of at least 60% sulphide minerals)
(or SedEx)          interbedded with layers of sedimentary rock.
type deposit

Skarn               type of altered rock which in some areas
                    contains commercially-recoverable amounts of metals.

Smelter             the treatment of sulphide concentrates to produce metal.

Sulphide            a compound of sulphur and some other elements.

Surficial oxide     the top portion of a deposit which has been oxidized by
zone                surface weathering.

Trenching           trenches excavated to bedrock which may be made by hand or
                    by machine.

<PAGE>6

                                     Part I

Item 1.  Identity of Directors, Senior Management and Advisers

     The  following  table sets forth as of May 31,  2001,  the names,  business
addresses and functions of Minco's directors and senior management.

<TABLE>
<CAPTION>

           Name                      Business Address                       Position
-------------------------- ------------------------------------- -------------------------------
<S>                       <C>                                   <C>
Ken Cai                    Suite 1200 - 543 Granville Street,    President, Chief Executive
                           Vancouver, British Columbia, Canada   Officer and Director
                           V6C 1X8

William Meyer              Suite 1200 - 543 Granville Street,    Chairman and Director
                           Vancouver, British Columbia, Canada
                           V6C 1X8

Robert M. Callander        43 Delhi Avenue                       Director
                           North York, Ontario, Canada
                           M5M 3B8

Hans Wick                  Rebhaldenstrasse 7                    Director
                           Zurich, Switzerland CH002

</TABLE>

     Minco's auditors are Ellis Foster, Chartered Accountants.  Their address is
1650 West 1st Avenue,  Vancouver,  British Columbia Canada V6J 1G1. Ellis Foster
has been Minco's auditors for at least the past three years.

Item 2. Offer Statistics and Expected Timetable

     Not Applicable

Item 3. Key Information

A.   Selected Financial Data

     The following  selected  financial  information  for the fiscal years ended
December 31, 1996,  1997,  1998,  1999,  and 2000 are derived from the financial
statements of Minco which is reported in Canadian  dollars and should be read in
conjunction with the financial statements and the notes thereto attached to this
Annual Report.  Minco's  financial  statements  are prepared in accordance  with
Canadian  Generally  Accepted   Accounting   Principles   ("GAAP").   There  are
significant  differences  between  Canadian  GAAP and U.S.  GAAP  including  the
recording of exploration costs, recognition of compensation expense upon release
of the  escrow  shares  and  issuance  of stock  options  and the  recording  of
marketable securities.  For a discussion between Canadian GAAP and United States
GAAP, see note 12 to the Company's financial statements.

<PAGE>7

<TABLE>
<CAPTION>


Canadian GAAP                                                           At December 31
                                         ----------------------------------------------------------------------------
                                               1996           1997             1998            1999           2000
<S>                                      <C>            <C>             <C>             <C>             <C>
Operations
Interest and Sundry Income                $    119,190   $    265,388     $    197,068    $    144,042   $    116,205
Exploration Expense                                 --        191,170        1,065,408         579,088             --
Operating Loss                              (1,117,105)    (1,476,887)      (1,996,584)     (1,389,759)      (624,679)
Loss for Period                             (1,117,105)    (1,476,342)      (1,996,584)     (1,506,108)      (624,679)
Income (loss) from Continuing
  Operations per Common Share                    (0.11)         (0.10)           (0.13)          (0.09)         (0.04)
Common Shares used in calculations           9,828,126     15,331,855       15,549,918      16,154,986     16,335,178
Consolidated Balance Sheet Data
Total Assets                                 8,326,356      6,465,465        5,180,841       4,382,428      3,912,973
Mineral Interests                              786,476      1,812,908        1,654,593       1,835,376      2,281,470
Total Liabilities                              763,008        167,959          139,554         284,749        328,873
Share Capital                             $  8,662,468   $  4,097,679     $  5,041,287    $  6,297,506   $  3,912,973

</TABLE>

<TABLE>
<CAPTION>


U.S. GAAP                                                            At December 31
                                         ----------------------------------------------------------------------------
                                               1996           1997             1998            1999           2000
<S>                                     <C>             <C>             <C>             <C>             <C>
Operations
Interest and Sundry Income                $    119,190   $    265,388     $    197,068    $  144,042     $    116,205
Exploration Expense                           (784,476)    (1,026,432)         158,315      (180,783)
Loss for Year                                              (3,742,015)      (3,315,242)   (2,544,584)      (1,070,773)
Income (loss) from Continuing
  Operations per Common Share                                   (0.38)           (0.31)        (0.21)           (0.08)
Common shares used in calculations           5,582,498      9,869,355       10,749,411    12,189,894       12,828,232
Consolidated Balance Sheet Data
Total Assets                              $  7,539,880   $  4,652,597     $  3,534,948   $ 2,547,092     $  1,648,933
Mineral Interests                                   --             --               --            --               --
Total Liabilities                              763,008        167,959          139,554       284,749          328,873
Share Capital                             $  8,680,268   $ 10,545,934     $ 12,763,272  $ 14,299,814     $ 14,410,914

</TABLE>

<PAGE>8

                                 Exchange Rates

     The following table sets forth  information as to the period end,  average,
the high and the low exchange rate for Canadian Dollars and U.S. Dollars for the
periods  indicated  based on the noon  buying  rate in New York  City for  cable
transfers in Canadian  Dollars as certified for customs  purposes by the Federal
Reserve Bank of New York (Canadian dollar =U.S. $1).


   Year Ended:
   December 31         Average         Period End          High         Low
   -----------         -------         ----------          ----         ---

       1995             1.3460           1.3655           1.2789       1.4132
       1996             1.3636           1.3696           1.3865       1.3287
       1997             1.3844           1.4305           1.4399       1.3345
       1998             1.4831           1.5305           1.5765       1.4096
       1999             1.4346           1.4440           1.5268       1.4512
       2000             l.4916           1.4995           1.5592       1.4379

        The following table sets forth the high and low exchange rate for the
past six months. As of May 31, 2001, the exchange rate was 1.5461.


    Month                High             Low
    -----                ----             ---
December 2000           1.5458           1.4995
January 2001            1.5162           1.4944
February 2001           1.5399           1.4933
March 2001              1.5784           1.5388
April 2001              1.5790           1.5360
May 2001                1.5541           1.5310

B.   Capitalization and indebtedness.

     The Company's capitalization as of December 31, 2000 is as follows:


Consolidated Balance Sheet Data                         December 31, 2000
                                                        -----------------
Long-Term Debt                                              $        0
Shareholder's Equity                                        $3,584,100
                                                            ----------
Total Capitalization                                        $3,584,100
                                                            ==========

C.   Reasons for the offer and use of proceeds.

     Not Applicable.

<PAGE>9

D.   Risk Factors

     In addition to the other information  presented in this Annual Report,  the
following  should be  considered  carefully  in  evaluating  the Company and its
business.  This Annual Report contains forward- looking  statements that involve
risks and uncertainties. The Company's actual results may differ materially from
the results  discussed  in the  forward-looking  statements.  Factors that might
cause such a difference  include,  but are not limited to, those discussed below
and elsewhere in this Annual Report.

     1. The Company Has Incurred Losses.  Since its  reorganization in 1996, the
Company has incurred  net losses and will  continue to incur losses until it can
derive sufficient revenues from its projects.

     2. The  Company Is In  Exploration  Stage And Has No Proven  Reserves.  The
Company is in the  exploration  stage.  None of the  properties  in which it has
interests are in commercial production,  or contain reserves. In order to obtain
more reliable  information on which to base decisions about possible development
of a property,  it is necessary to expend  significant  time and money, and many
such properties will turn out not to be worth further  expense.  The Company may
thus expend  significant  amounts of  financing  and effort on any or all of its
properties   without  finding   reserves  or  reaching  a  stage  of  commercial
production.

     3. The Company Must Obtain Additional  Financing to Conduct  Exploration on
Its  Properties.  Because the Company is in the  exploration  stage, it does not
have sufficient financial resources available to undertake extensive exploration
or, if  warranted,  development  programs.  Further  exploration  or  commercial
development,  if warranted,  would require additional financing. There can be no
assurance  that  needed  future  financing  will be  available  in a  timely  or
economically advantageous manner, or at all.

     4. The  Company's  Interests  in Their  Joint  Ventures  Will Be Subject to
Dilution.  Under the terms of their joint  venture  agreements,  the Company may
earn a  specified  percentage  in the joint  venture  provided  that the Company
spends a required amount on project  expenditures for the joint venture.  In the
event the Company ceases to make its project  expenditures,  its interest in the
joint venture will be subject to dilution.

     5. The  Company's  Interest  In  Projects  Will Be Diluted  Pursuant to the
Teck-Cominco  Agreements.  The Teck-Cominco Agreements grant those companies the
right to become the  operators of an aggregate of two future  properties  of the
Company as well as rights of first refusal to acquire  interests in other future
projects for a period of three years. See "The Teck-Cominco  Agreements" on page
15. The exercise of those  earn-in-rights  by either Teck or Cominco will dilute
the Company's interest in those projects.

     6. The Mining Industry Is Highly Speculative. The Company is engaged in the
exploration  for minerals which involves a high degree of geological,  technical
and economic  uncertainty,  because of the inability to predict  future  mineral
prices, as well as the difficulty of determining the extent of a mineral deposit
and the  feasibility of extracting it without the  expenditure  of  considerable
money. There is a high level of risk involved.

     7. It May Be Difficult to Enforce  Civil  Liabilities  Against the Company.
Because  all of the assets of the  Company  and its  subsidiary,  as well as the
Company's  jurisdiction of incorporation and  the residences of its officers and

<PAGE>10

directors,  are located  outside of the United  States,  it may be  difficult or
impossible to enforce  judgments granted by a court in the United States against
the assets of the Company and its  subsidiaries or the directors and officers of
the Company who reside outside the United States.

     8. Penny  Stock  Rules May Make It More  Difficult  to Trade the  Company's
Common Shares.  The Securities and Exchange  Commission has adopted  regulations
which  generally  define a "penny  stock" to be any equity  security  that has a
market price, as defined,  less than U.S.$5.00 per share or an exercise price of
less than U.S.$5.00 per share, subject to certain exceptions. Our securities may
be covered by the penny stock rules,  which  impose  additional  sales  practice
requirements  on  broker-dealers  who sell to  persons  other  than  established
customers and accredited  investors such as,  institutions with assets in excess
of U.S.$5,000,000 or an individual with net worth in excess of U.S.$1,000,000 or
annual income  exceeding  U.S.$200,000 or  U.S.$300,000  jointly with his or her
spouse. For transactions  covered by this rule, the  broker-dealers  must make a
special  suitability  determination for the purchase and receive the purchaser's
written agreement of the transaction prior to the sale.  Consequently,  the rule
may affect the ability of  broker-dealers to sell our securities and also affect
the ability of our investors to sell their shares in the secondary market.

     9. Minco is a Passive Foreign  Investment  Company for United State Federal
Income Tax  Purpose.  Minco  believes  that it is a passive  foreign  investment
company  ("PFIC") for United States Federal income tax purposes because it earns
75% or more of its gross income from passive sources. As a result, United States
holders of Minco's  common  shares may make a certain  election to have  Minco's
distributions or ordinary earnings and net capital gain treated  differently for
United States income tax purposes.  See Item 10.E. "Taxation - United States Tax
Consequences - Passive Foreign Investment Companies."

     10. Risks  Related to Doing  Business in China.  Various  matters which are
specific to doing business in China may create  additional risks or increase the
degree of such risks  associated with the Registrant's  activities.  These risks
are discussed below.

     a. The  Company  Must Seek  Governmental  Approval  to Develop  Mines.  The
establishment,  operation  and terms of the  joint  ventures  through  which any
particular  mineral  property is to be  explored or operated  are all subject to
obtaining  Chinese  governmental  approvals at various levels and for particular
matters, including mining rights, importation of equipment, hiring of labor, and
environmental regulations.  Currently, the joint ventures formed to explore and,
if  warranted,  develop the White Silver  Mountain and Gobi Gold  projects  have
obtained  a license  to  conduct  mineral  exploration  activities,  but will be
required  to obtain a mining  license  to, if  warranted,  develop  and  conduct
operations  at the  property.  Depending  on the  scope  of the  operation,  its
location and the particular issues involved,  the level of government from which
approvals  must  be  sought  and  the  process  involved  may  vary  potentially
restricting the joint venture's operation.

     b. Environmental  Regulations May Adversely Affect the Company's  Projects.
The Company's operations are subject to environmental regulations promulgated by
various Chinese government agencies from time to time.  Violation of existing or
future Chinese environmental rules may result in various fines and penalties. As
China's economy modernizes and expands, it is expected that regulations covering
environmental protection and the reclamation and remediation of industrial sites
would be strengthened which could increase the operation costs in China.

<PAGE>11

     It is industry  practice for North American mining  companies like Teck and
Cominco to apply the more stringent standards of their home countries to foreign
operations  regardless  of local  practices.  Should  Teck or Cominco  choose to
initiate  production  of a  property  in joint  venture  with the  Company,  its
operations would be carried out using North American environmental standards. It
is common  practice for the estimates  costs of reclamation  and  remediation of
mine sites to be included in the capital cost of a project. A project would have
to be able to provide an adequate  return on all  capital,  including  estimated
reclamation  costs, to be considered  viable. The Company's current projects all
surround  active mining  operations,  which add additional  considerations  that
would  be  dealt  with  on  a  case-by-case   basis.   See  the   "Environmental
Considerations"  section under the individual property  description in Item 4.D.
for more details.

     c. Politics of China May Adversely  Affect the Company's  Investments.  The
Company's  investments  may be  adversely  affected by  political,  economic and
social  uncertainties  in China.  Changes  in  leadership,  social or  political
disruption or unforseen circumstances affecting China's political,  economic and
social  structure could adversely affect the Company's joint venture interest or
restrict its operations.

     d. Lack Of A Legal System May Produce  Inconsistent  Results.  Enforcement,
operation and  interpretation  of existing  laws may be  uncertain,  sporadic or
inconsistent.  China's  judiciary is relatively  inexperienced in enforcing laws
that do exist,  leading to a higher than usual degree of  uncertainty  as to the
outcome of any  litigation.  Even where adequate law exists in China,  it may be
impossible to obtain swift and equitable  enforcement  of such law, or to obtain
enforcement of the judgment by a court of another jurisdiction.  As a result, if
the  Company is  adversely  effected,  the  Company  may be unable to seek legal
address in China.

     e. Property Information May Be Uncertain.  Much of the information on which
the  Company  and its  consultants  have based  their  decisions  regarding  the
Company's  mineral  prospects  is  based  on  information  provided  by  Chinese
governmental   officials,   geologists  and  mining   engineers  and  cannot  be
independently confirmed.  Accordingly, the reliability of geological and mineral
information  regarding  the  properties,  the  costs  of  labor,  operation  and
construction  may be uncertain since it has not been  independently  verified by
the Company.

Item 4. Information on the Company

Introduction

     Minco Mining & Metals  Corporation is a British Columbia  corporation whose
common  shares trade on the Toronto  Stock  Exchange  ("TSE")  under the trading
symbol MMM. The  principal  executive  office of the Company is located at Suite
1200 - 543 Granville Street,  Vancouver,  British Columbia,  Canada V6C 1X8, and
its  telephone  number is  604-688-8002.  Through  joint  ventures  with Chinese
governmental entities, and others, the Company is engaged in the exploration and
acquisition of base and precious metal mineral projects in the People's Republic
of China.  Minco has no affiliation  with 3M corporation.  Minco's  wholly-owned
subsidiary,  Triple Eight Mineral  Corporation  ("Temco"),  is a British  Virgin
Islands  corporation  also engaged in the exploration and acquisition of mineral
projects in China.

     At  present,  Minco  is  an  exploration-stage  company.  None  of  Minco's
properties  has a known body of commercial  ore, nor are any such  properties at
the commercial development or production stage.

<PAGE>12

No assurance can be given that commercially-viable mineral deposits exist on any
of Minco's  properties.  Minco's  properties are in the exploration  stage,  and
further  exploration  will  be  required  before  a final  evaluation  as to the
economic and legal feasibility can be determined.  Further,  Minco's interest in
joint ventures  which own properties  will be subject to dilution if Minco fails
to expend further funds on the project.  Minco has not generated cash flows from
operations. These facts increase the uncertainty and risks faced by investors in
Minco. See Item 3. for Risk Factors.

Background

     Minco was  incorporated  under the laws of the Province of British Columbia
on November 5, 1982,  under the name "Caprock Energy Ltd." On February 19, 1996,
current  management  acquired its  interests in Minco  pursuant to the following
agreements:  the "PCR Agreement," and the "Teck-Cominco  Agreements,"  described
below. (See Item 4 - "The PCR Agreement" and "The Teck-Cominco Agreements.") The
purpose of the PCR Agreement was to transfer PCR's assets to Minco which allowed
Minco to explore and  evaluate  for  potential  acquisition  and, if  warranted,
development mineral properties in China.

Business

     Since  the  signing  of its first  co-operation  agreement  on the  Chapuzi
project  in China in 1995,  Minco has been  active in  mineral  exploration  and
property evaluations in China. Minco intends to build a portfolio of base metals
and  precious  metals  properties  in China.  As  discussed  below,  a strategic
alliance  was formed with Teck  Corporation  and its 50.1%  subsidiary,  Cominco
Ltd., for mineral  exploration  and  acquisition  in China.  Minco has conducted
exploration  work on  properties  located in  Sichuan,  Xinjiang,  Hebei,  Inner
Mongolia,  and Gansu provinces of China.  Currently,  Minco has interests in two
Sino-Foreign  co-operative  joint  ventures  and  intends to  establish  a third
Sino-Foreign  co- operation joint venture with Chinese mining  organizations  to
hold mineral rights in China.

     At  present  Minco  has no  income  from  its  operations  and  none of its
properties  have reserves or are in production.  Minco's  ability to finance the
exploration and development,  if warranted,  of its mineral properties,  to make
concession payments and to fund general and administrative expenses is therefore
dependent  upon  Minco's  ability to secure  financing.  The equity  markets for
junior mineral exploration companies are unpredictable. Alternatively, Minco may
enter into cost sharing  arrangements  through joint venture  agreements.  While
management  believes that the quality of the  concessions now held by Minco will
attract joint venture  partners in the short-term and  medium-term,  there is no
guarantee that the terms would be as favorable as management would like.

     While Minco  believes that it has  sufficient  working  capital to fund the
exploration  work commitments on currently held properties for fiscal year ended
2001, it cannot be determined what the funding  requirements will be necessarily
beyond that time and whether  Minco will  require  additional  financing to meet
such   requirements.   Minco  does  not  believe   that  there  are   particular
environmental  regulations  that will materially  impact its current or proposed
operations.

     As discussed below, for the year ended 2001, Minco is focusing on the White
Silver  Mountain and Gobi Gold projects.  Teck is funding  expenditures at White
Silver  Mountain at its sole  discretion and may  discontinue its funding at any
time. However,  Minco believes that results so far have been favorable and it is
expected  that  exploration  will  continue  until such time as Teck will make a

<PAGE>13

decision concerning possible  production.  The Gobi Gold project is being funded
by Minco at this time. Major increases in the exploration efforts outlined below
would require additional capital.

     A summary of Minco's  plan of  operations  for the fiscal year 2001 for the
White Silver Mountain project and Gobi Gold project is as follows.

     White Silver  Mountain.  The year 2000  program  consisted of 230 meters of
underground  excavation to establish  drill  stations from which 2,730 meters of
diamond  drilling in five holes was carried out with the  objective of outlining
the downward  extensions of the known massive  sulphide  horizons.  The drilling
further  outlined  the  extensions  of the  western  lobe  of  massive  sulphide
mineralization.  The  eastern  lobe  remains  open and will  require  additional
drilling to define its extent.

     In addition to the underground  program,  an extensive  surface program was
carried out in the area of geology  perspective  for the  occurrence  of massive
sulphide  mineralization.  Approximately  207 line-  kilometers  of  geophysical
surveys  (comprising  magnetic and  electromagnetic  surveys) was  completed.  A
number of anomalies  were outlined,  of which three occur in highly  perspective
geology and require testing by drilling. These three areas will be tested in the
year 2001 field  season by six surface  diamond  drill holes  aggregating  2,700
meters at an estimated cost of $400,000.  Additional drilling will be contingent
in part on the results of the proposed six-hole program.

     Additional  underground  drilling will be required and may be scheduled for
later in 2001.

     Gobi Gold  Project.  The 2000  Gobi Gold  project  field  program  included
regional scale geological and geochemical sampling programs followed by detailed
ground  magnetometer  surveys and  geological  mapping in a 20 square  kilometer
area.  Detailed rock  geochemical  sampling  focused on a seven square kilometer
area within this  broader  area.  Rock  samples  were assayed for gold and seven
other elements common to gold-skarn systems.

     The combination of geology,  intrusive  centers  interpreted  from magnetic
data and  geochemistry  indicates  a typical  gold skarn  system in a belt 1,500
meters long and 300 meters wide where rock  geochemical  samples grade two grams
per ton gold or better.

     A new  discovery  was made  during  the year  2000 in an area in thin  sand
covering 500 meters to the east of the main gold zone near  another  interpreted
intrusive  center.  A six meter wide zone was exposed in a trench which returned
an average  grade of six grams per ton gold.  Minco  believes  that  geochemical
values of two grams of gold per tonne are considered  highly anomalous and could
be an indication of economic  concentrations of gold in the sub-surface.  Values
of six grams per tonne are potentially economic if found in large enough volumes
to be  economically  extracted.  No  assurance  can be given  that the Gobi Gold
project  will be able to find a  sufficient  amount  of gold to be  economically
mined.

     The year 2001  program  will  consist of  expanded  sampling  programs by a
drilling  and/or  trenching  program  prior to designing  an  extensive  diamond
drilling program.

<PAGE>14

The PCR Agreement

     On February 19, 1996,  Minco entered into an agreement  with Pacific Canada
Resources,  Inc.  ("PCR").  PCR was a private company  controlled by Ken Cai and
Donald  Hicks,  both of whom became  directors of Minco upon  completion  of the
transaction.  Prior  to that  time,  PCR,  Ken Cai and  Donald  Hicks  were  not
affiliated  with  Minco.  Mr.  Hicks is no  longer a  director  of the  Company.
Pursuant to the PCR Agreement,  Minco acquired rights to PCR's entire  portfolio
of base and precious metal property  agreements and acquisition rights in China,
some  of  which  were  held  directly  and  some of  which  were  held by  PCR's
subsidiary,  Temco. At that time, Temco was a joint venture, of which Minco held
a 60% equity interest and China Clipper Gold Mines,  Ltd. ("China  Clipper"),  a
publicly traded Ontario corporation,  held the remaining 40% equity interest. On
February 27, 1997,  Minco purchased China Clipper's 40% equity interest in Temco
for $175,000, which was believed to be the fair market value at the time. PCR is
currently  largest and the  controlling  shareholder of Minco,  and has no other
operations other than its ownership in Minco.

The Teck-Cominco Agreements

     Simultaneously,  and in connection  with the PCR  agreement,  Minco and PCR
entered into separate, but related agreements respectively dated February 19 and
February  20,  1996  (collectively  the  "Teck-Cominco  Agreements")  with  Teck
Corporation ("Teck") and its 50.1% owned subsidiary,  Cominco Ltd.  ("Cominco"),
which are both public  Canadian  mining  companies  traded on the Toronto  Stock
Exchange.  Pursuant to these agreements, Teck and Cominco each invested $500,000
in Minco, and received  625,000 units,  each unit consisting of one common share
of Minco and one half of a non- transferable common share purchase warrant, each
whole share  purchase  warrant  entitling  the holder to acquire one  additional
common share at a price of $1.20 on or before  February 20, 1997, or $1.38 on or
before  February  20,  1998.  The  shares  purchased  by Teck and  Cominco  were
"restricted   shares"  under  the  rules  of  the  British  Columbia  Securities
Commission  until  February 20, 1997.  Teck  exercised  its warrants to purchase
125,000  common  shares at $1.20 per  share  prior to  February  20,  1997.  The
warrants issued to Cominco expired under their terms.

     As partial  consideration  for the  investments  by Teck and Cominco,  they
received  "earn-in  rights" as to the  Non-Chinese  Interest  ("NCI") in any two
mineral  property  rights  acquired  by  Minco in  China  after  the date of the
Teck-Cominco  Agreements  until March 1, 2004.  The  Non-Chinese  Interest  with
respect to a property  represents the direct or indirect  interest in a property
that is  available  for a non- Chinese  entity or a foreigner  to acquire  under
Chinese Law.

     The earn-in  rights  provide  that upon Minco  procuring a base or precious
metal project,  and after preliminary work by Minco, Teck and Cominco,  in their
sole discretion, shall first determine whether such project is to be governed by
the  Teck-Cominco  Agreements.  If they determine that the project is subject to
the  agreement,  Teck and Cominco shall hold earn-in rights with respect to such
project. If Teck and Cominco determine that the project is not to be governed by
the  Teck-Cominco  Agreements,  Minco shall  thereafter  have the right to elect
whether or not to have the project assigned to it at cost.

     If Teck and Cominco determine that a base or precious metal project will be
governed  by  the  Teck-Cominco  Agreements,   their  earn-in  rights  shall  be
exercisable  in one of two ways,  depending on whether the project is determined
by Teck and Cominco, in their sole discretion, to be a "development property" or
"exploration  property." If determined  to be a development  property,  Teck and
Cominco shall have the right to acquire 70% of the Non-Chinese  interest in such

<PAGE>15

property and to become the operator of the project by completing,  at their sole
cost, any further project work and the final feasibility  report on the project.
Teck and Cominco must then arrange for 70% of the costs  required to be provided
by the  non-Chinese  parties to place the property into  commercial  production.
Upon  completion  of all of the  foregoing,  Teck and Cominco shall be deemed to
have exercised their earn-in rights in respect to the development project. Minco
must  contribute  30%  of  the  costs  required  after  the  completion  of  the
feasibility study.

     If a  project  is  determined  to be an  exploration  property  by Teck and
Cominco, Teck and Cominco shall have the right, upon completion of a preliminary
feasibility  study by Minco, to acquire 51% of the non-Chinese  interest in such
exploration property and to become the operator of programs on the property.  To
earn this 51% interest,  Teck and Cominco must fund the final  feasibility study
on the  project and  arrange  for all  financing  required to be provided by the
non-Chinese  parties  to place  the  property  into  commercial  production,  as
determined in the  feasibility  study.  Upon completion of all of the foregoing,
Teck and  Cominco  shall be deemed to have  exercised  their  earn-in  rights in
respect to the exploration project.

     Each  property  for which Teck or Cominco have  exercised an earn-in  right
shall be governed by its own separate joint venture agreement which will include
a provision  that if Minco's  interest is diluted to 10% or less,  such interest
will be converted to a 1% net smelter return  royalty.  The  agreements  further
provide that Cominco (in the case of a base metal property) or Teck (in the case
of a precious metal property)  shall be the designated  operator of the property
on behalf of the  joint  venture  which  shall be  formed  to  exploit  any such
property.

     The Teck-Cominco Agreements contain provisions under which Teck and Cominco
agree,  subject to certain  limitations,  not to increase their collective share
holdings in Minco beyond 20% of the common shares, nor to reduce them beyond 50%
of their initial  ownership,  which  limitations  expire upon certain changes in
control of Minco.  As of March 31,  2001,  Teck owned  1,125,000  common  shares
representing  6.87% of the  outstanding  shares and Cominco owned 625,000 common
shares  representing  3.82% of the outstanding  shares.  Teck and Cominco have a
right of  first  refusal  to  purchase  common  shares  of  Minco in any  future
offerings, so as to maintain their percentage ownership in Minco.

     After Teck and Cominco have exercised  their earn-in rights in an aggregate
of two  projects  procured  by  Minco,  Teck  and  Cominco  shall  have  further
preferential  rights  of  first  refusal  with  respect  to  further  properties
identified  by Minco for a period of three  years  after the  exercise  of their
earn-in  rights.  These  preferential  rights of  purchase  will  apply  only in
circumstances  where Minco, if Minco has elected to acquire a project identified
by PCR,  intends to offer an interest to third  parties or has received an offer
to purchase,  earn or acquire an interest in such properties from third parties.
Minco is  required  to notify Teck and Cominco of its intent to sell an interest
in such project to a third party,  and provide Teck and Cominco all  information
which Minco  possesses  with  respect to the project as well as the terms of the
proposed  sale,  and Teck and Cominco may,  within  thirty days,  purchase  such
interest on the terms which Minco had proposed to accept from a third party.

The White Silver Mountain Teck Agreement

     On June 15,  1998,  Teck  exercised  its option  with  respect to the White
Silver  Mountain  Project (see Item 4 - Description of Property)  under which it
has the right to acquire up to 70% of Minco's  interest in, or a net 56% in, the
White Silver Mountain Project by purchasing  375,000 common shares of Minco at a
price of $2.00 per share,  which  occurred on July 10, 1998,  and by  exercising

<PAGE>16

warrants  to  purchase  125,000  common  shares of Minco at a price of $3.00 per
share,  within one year,  and  funding all of Minco's  obligations  on the White
Silver Mountain  project up to the point of production.  These warrants were not
exercised.  As a part of the transaction,  warrants were issued to Teck allowing
it to buy an additional  125,000  shares at a price of $2.00 per share,  for one
year, and warrants to buy a further 125,000 shares at a price of $3.45 per share
for two years. Cominco has "back-in rights" with respect to this project to earn
up to a 20% working  interest in the Non-Chinese  Interest in the property up to
the pre-feasibility  stage by repaying Teck and Minco one and one-half times the
total  project  expenditures  up to the  date  of  exercise  of its  rights  and
thereafter  funding its pro-rata share of feasibility and development  costs. If
Cominco  exercises these back in rights,  Minco's interest would be reduced to a
19% carried interest.

     The White  Silver  Mountain  agreements  with Teck and Cominco are separate
from the Earn-In Rights that are detailed in the section above. The White Silver
Mountain Agreement does not constitute an exercise of either Teck's or Cominco's
first right of refusal, which remain intact.

People's Republic of China - Background Information

     The following is a general  description  of China's  foreign  investment in
China and the history of gold mining therein.

     Foreign Investment

     China is in the process of  developing a  comprehensive  system of laws for
the development of a market-oriented  economy.  Since 1979, a significant number
of laws and regulations  dealing with foreign  investment and matters related to
foreign investment have been promulgated.

     The Constitution  authorizes and encourages foreign investment and protects
the "lawful  rights and  interests"  of foreign  investors  in China.  The Civil
Procedure Law of China (the "Civil  Procedure  Law"),  effective  April 9, 1991,
provides that if there is a conflict  between the  provisions  of  international
treaties to which China is a  signatory,  and  domestic  Chinese law, the treaty
provisions will prevail. In addition, the Foreign Economic Contract Law of China
(the  "FECL"),  effective  July 1, 1985,  provides  that  matters not covered by
Chinese law will be dealt with by reference to international practices.

     Direct  foreign  investment in China usually takes the form of equity joint
ventures ("EJVs"), co-operative joint ventures ("CJVs") and wholly-foreign-owned
enterprises.  These investment vehicles are collectively  referred to as foreign
investment enterprises ("FIEs").

     An EJV is a Chinese legal person and consists of at least one foreign party
and at least one Chinese  party.  The EJV generally  takes the form of a limited
liability  company.  It is required to have a  registered  capital to which each
party to the EJV  subscribes.  Each  party to the EJV is liable to the EJV up to
the amount of the registered capital  subscribed by it. The profits,  losses and
risks of the EJV are shared by the  parties in  proportion  to their  respective
contributions  to the registered  capital.  There are also rules and regulations
governing  specific  aspects  of EJVs or FIEs,  including  capital  contribution
requirements,  debt-equity  ratio,  foreign exchange control,  labor management,
land use and taxation.

     Unlike an EJV,  a CJV may be, but need not be,  incorporated  as a separate
legal entity. The relationship between the parties is contractual in nature. The
rights,  liabilities and  obligations  of the parties  are governed  by the  CJV

<PAGE>17

contract, as is each party's share of the goods produced or profits generated. A
CJV is considered a legal person with limited liability.

     The  establishment  of  FIEs  requires  the  approval  of  various  Chinese
government authorities.  Generally,  the approval authority is determined on the
basis of the total amount of investment involved and the location of the project
in question.  The State  Council must  approve any foreign  investment  projects
having  an  investment  of  U.S.$30  to  U.S.$100  million  or more.  The  State
Development  Planning  Commission and the Ministry of Foreign Trade and Economic
Go-operation  are authorized by the State Council to approve foreign  investment
projects of between U.S.$30 million and U.S.$100 million. Provincial authorities
are authorized to approve projects less than U.S.$30 million.

     Gold Mining in China

     Gold has been  produced in China for over 4,000 years.  In 1994,  China was
the world's sixth largest producer of gold at a reported 130 tonnes, immediately
following  Canada  which  was then the fifth  largest  producer  of gold.  It is
presumed  that early Chinese  production  was from placer  deposits,  and placer
reserves  still  account  for over 15% of China's  total gold  production.  Gold
mining is currently active in all of China's  provinces,  with over 460 official
operations.

     The  Chinese  mining  industry  has  traditionally  been  closed to foreign
participation.  However,  a  change  in  the  Mineral  Resources  Law  has  been
implemented by China's Central  Government which permits foreign  participation.
The  regulation  of mining,  including  gold  mining,  in China is in a state of
evolution  from a totally  planned,  state-controlled  condition  to free market
conditions as experienced in developed and most developing countries.

     The  Ministry of Geology and Mineral  Resources  ("MGMR"),  which  formerly
administered geological exploration and also carried out exploration through its
own  personnel,  has been  replaced  by the new  Ministry  of Lands and  Mineral
Resources.

Chinese-Foreign Co-Operative Joint Ventures

     Minco has entered into two joint ventures to explore, and if warranted,  to
develop the White Silver Mountain project and Gobi Gold project.  Minco believes
that  each of the  joint  ventures  has  complied  with the  required  statutory
regulations.

     The  following  is  a  general  description  of  the  legal  framework  for
Sino-foreign  co-operation  joint  ventures  pursuant  to  which  the  Company's
business is carried on in China or will be regulated.

     Legal  Framework.  Each of the various joint venture entities through which
the Company will carry on business in China has been or will be formed under the
laws of China as a Chinese-foreign  co-operative joint venture enterprise and is
or will be a "legal person" with limited  liability.  All joint ventures entered
into,  or to be entered  into,  by the  Registrant  must be approved by both the
Ministry of Foreign  Trade and Economic  Go-operation  ("MOFTEC")  and the State
Planning Commission ("SPC") in Beijing or their provincial bureaus.

     The  establishment  and  activities of each of the Company's  joint venture
entities  are  governed  by  the  Law of  the  People's  Republic  of  China  on
Chinese-foreign  co-operative  Joint  Ventures and the  regulations  promulgated
thereunder  (the  "China  Joint  Venture  Law").  As  with  all  Chinese-foreign

<PAGE>18

co-operative joint venture enterprises,  the Company's joint venture enterprises
will be subject to an extensive and reasonably  well-developed body of statutory
law relating to matters such as  establishment  and formation,  distribution  of
revenues, taxation, accounting, foreign exchange and labor management.

     On January 1, 1997,  an  amendment  to the Mineral  Resources  Law of China
became  effective.  Among  other  things,  the  amended  law deals with  foreign
ownership  of  Chinese  mines  and  mineral  rights,  and  allows,   under  some
circumstances, the transfer of exploration rights and mining rights. Pursuant to
this law, new  regulations  were made effective on February 12, 1998.  These new
regulations have effectively removed the limitations formerly imposed on foreign
investment in gold mining.

     Restructuring   within  central  government   bureaucracies   dealing  with
resources  has resulted in the  formation of one new  ministry,  the Ministry of
Land and  Resources,  which  replaces  the old  Ministry  of Geology and Mineral
Resources,  State  Bureau  of  Land  Administration,  State  Bureau  of  Oceanic
Administration and the State Bureau of Survey.  This new ministry  administers a
new  computerized  central mineral title registry  established in Beijing.  This
change has  streamlined  the  application  for exploration and mining permits so
that a maximum 40-day response time is now guaranteed.

     Under  existing  laws,  in order to form a mining  joint  venture,  foreign
companies must complete three levels of agreements.  In general, the first level
of agreement is a Letter of Intent or a Memorandum of Understanding,  which sets
forth broad areas of "mutual  co-operation."  The second level of agreement is a
more detailed  Co-operation  Agreement which outlines the essential terms of the
joint venture which will ultimately be formed. The third level of agreement is a
Joint Venture Contract which sets out the entire agreement among the parties and
contemplates  the  establishment  of a "Chinese  Legal Person," a separate legal
entity.

     Before a joint venture can be created,  an assessment or feasibility  study
of the  proposed  joint  venture  must be  prepared  and  approved  by the State
Development   Planning   Commission  (the  "SDPC")  or  its  provincial  bureau.
Therefore,  upon  completing  a  Cooperation  Agreement,  the parties  prepare a
feasibility  study of the  proposed  joint  venture and submit this  feasibility
study along with the Cooperation Agreement to the SDPC for what may be described
as an approval in  principle,  the  granting of which  depends  upon whether the
proposed  project  broadly  conforms  to  the  economic  policy  issued  by  the
government and any prescribed regulations.

     Upon receiving  this approval in principle,  the parties then negotiate and
prepare a Joint Venture  Contract and submit it to the Ministry of Foreign Trade
and Economic Cooperation  ("MOFTEC"),  or its provincial bureaus, which approves
the specific terms of all Joint Venture  Contracts  between  Chinese and foreign
parties.  Within one month after the receipt of a  certificate  of approval from
MOFTEC, a joint venture must register with the State  Administration of Industry
and Commerce (the "SAEC").  Upon  registration of the joint venture,  a business
license  is  issued to the  joint  venture.  The  joint  venture  is  officially
established on the date on which its business  license is issued.  Following the
receipt of its business license, the joint venture applies to the MLR to approve
and grant to the joint venture its exploration permits and/or mining licenses.

     Governance  and  Operations.  Governance  and  operations of a Sino-foreign
cooperative  joint venture  enterprise are governed by the Chinese Joint Venture
Law and by the parties' joint venture  agreement and the Articles of Association
of each joint venture entity.  Pursuant to relevant Chinese laws,  certain major
actions of the joint venture  entity  require  unanimous  approval by all of the
directors  present  at the  meeting  called  to  decide  upon  actions  such as:

<PAGE>19

amendments  to the joint  venture  agreement  and the  Articles of  Association;
increase in, or assignment  of, the registered  capital of the joint venture;  a
merger  of the  joint  venture  with  another  entity;  or the  termination  and
dissolution of the joint venture enterprise.

     Term. Under the joint venture  agreement,  the parties will agree to a term
of the joint  venture  enterprise  from the date a business  license is granted.
However,  the term may be extended with the  unanimous  approval of the board of
directors of the joint venture  entity and the approval of the relevant  Chinese
governmental entities.

     Employee   Matters.   Each   joint   venture   entity  is  subject  to  the
Chinese-Foreign   Cooperative   Joint  Venture   Enterprise   Labor   Management
Regulations.  In compliance with these regulations,  the management of the joint
venture   enterprise   may  hire  and   discharge   employees   and  make  other
determinations with respect to wages,  welfare,  insurance and discipline of its
employees.

     Generally,  in the joint venture agreement,  the standard of salary, social
welfare insurance and traveling expenses of senior management will be determined
by the board of directors of the joint venture  entity.  In addition,  the joint
venture  will  establish a special  fund for  enterprise  development,  employee
welfare and  incentive  fund,  and a general  reserve.  The amount of  after-tax
profits  allocated to the special funds is  determined at the  discretion of the
board of directors on an annual basis.

     Distributions.  After provision for a reserve fund, enterprise  development
fund and employee  welfare and incentive fund, and after provision for taxation,
the profits of a joint venture  enterprise will be available for distribution to
the Registrant and the relevant Chinese  governmental  entity, such distribution
to be authorized by the board of directors of the joint venture entity.

     Assignment  of Interest.  Under joint  venture  agreements  and the Chinese
Joint Venture Law, any  assignment of an interest in a joint venture entity must
be approved by the relevant  governmental  authorities.  The China Joint Venture
Law also  provides  for  pre-emptive  rights and  consent of the other party for
proposed assignments by one party to a third party.

     Liquidation.  Under  the  Chinese  Joint  Venture  Law  and  joint  venture
agreements,  the joint  venture  entity may be  liquidated  in  certain  limited
circumstances  including  the  expiry  of its  term or any  term  of  extension,
inability to continue  operations  due to severe  losses,  failure of a party to
honor  its  obligations  under the  joint  venture  agreement  and  Articles  of
Association in such a manner as to impair the operations of Chinese governmental
entitles and force majeure.

     Resolution  of  Disputes.  In the event of a dispute  between the  parties,
attempts will be made to resolve the dispute through friendly consultation. This
is the practice in China and the Company  believes  that its  relationship  with
Chinese  governmental  entities  is such that it will be able to maintain a good
working  relationship  with  respect  to the  operations  of its  joint  venture
enterprises. In the absence of a friendly resolution of any dispute, the parties
have  agreed or will agree that the matter will first be referred to the Foreign
Economics and Trade  Arbitration  Commission of China Council  ("FETAL") for the
Promotion  of  International   Trade  for  Arbitration.   Awards  of  FETAL  are
enforceable in accordance with the laws of China before Chinese  courts.  Resort
to Chinese  courts to enforce a joint  venture  contract or to resolve  disputes
between the parties over the terms of the contract is permissible.  However, the
parties'  may jointly  select  another  internationally  recognized  arbitration
institution to resolve disputes.  All of the Company's joint venture  agreements
stipulate  that  disagreements  between the  parties  will be  arbitrated  by an
arbitration institution in Singapore.

<PAGE>20

     Expropriation.  The  Chinese  Joint  Venture Law also  provides  that China
generally  will  not  nationalize  and  requisition   enterprises  with  foreign
investment.  However,  in special  circumstances where demanded by social public
interest,  enterprises  with foreign  investment may be  requisitioned  by legal
procedures, but appropriate compensation will be paid.

     Division of Revenues.  Revenues derived from operating joint ventures, once
all necessary  agreements,  permits and licenses are  obtained,  will be divided
between the Company and the Chinese  governmental  entity or entities  which are
parties to the joint  venture  according to the terms of each  individual  joint
venture,  which  terms will vary from  project to project.  The Company  will be
subject to various taxes on its revenues.

C.   Organizational Structure

     Minco has one wholly-owned  subsidiary,  Temco, a corporation  organized on
September  1, 1995,  under the laws of the British  Virgin  Islands and having a
statutory office at Arawak Chambers,  P.O. Box 173, Road Town, Tortola,  British
Virgin Islands.

     The following chart sets forth Minco's corporate  structure,  including its
subsidiary,  their  jurisdiction  of  incorporation,  and  the  various  mineral
properties held by each of them:

                        [ORGANIZATIONAL STRUCTURE TABLE]

                      MINCO MINING AND METALS CORPORATION
                        (a British Columbia corporation)


A)   Triple Eight Mineral  Corporation (a British Virgin Islands company) (100%)
     owned by Minco).

B)   Gansu Keyin Mining Co. Ltd. (1), a Chinese joint venture with Minco's right
     to earn up to an 80%  interest  and who owns  rights  to the  White  Silver
     Mountain project.

C)   Inner  Mongolia  Damo Mining Co.,  Ltd.  (2), a Chinese  joint venture with
     Minco's  right to earn up to a 75% interest and who owns rights to the Gobi
     Gold project.

D)   Changba-Lijiajou  project  (3).  Minco  has the  option to earn up to a 75%
     interest.

(1)  Formed by Minco and  Baiyin  Non-Ferrous  Metals  Corporation  ("BNMC"),  a
     Chinese state-owned company.  Teck Corporation has the right to earn 70% of
     Minco's  interest for a net 56% interest.  As of March 31, 2001,  Minco has
     not yet earned its 80% interest.

(2)  Formed by Minco and the  Exploration  Institute  of Land and  Resources  of
     Inner  Mongolia  ("EILR"),  a department of the Chinese  government.  As of
     March 31, 2001, Minco has not yet earned its 75% interest.

(3)  Owned by BNMC.  Minco has the right to earn up to a 75%  interest  in joint
     venture. As of March 31, 2001, Minco has not yet earned its 75% interest.

<PAGE>21

D.   Property, Plant and Equipment

     For the year 2000, Minco actively  pursued  exploration at the White Silver
Mountain and Gobi Gold projects.

     At White Silver Mountain, a 250-meter horizontal tunnel was completed under
the direction of Minco and Teck Corporation personnel. The purpose of the tunnel
was to  allow  a  drill  to be  put in the  optimal  location  for  testing  the
extensions of the  Xiaotieshan  deposit.  Upon  completion  of the tunnel,  Teck
drilled  approximately  2,000 meters in several holes to test the zone. Based on
the results of this drill program,  a follow-up  program will be planned for the
year 2001.

     Concurrent  with the on-going  underground  program,  Teck will undertake a
program of surface  work on broader  areas of the  property  away from the known
deposits. These areas have seen little previous exploration. The initial mapping
program  completed  by  Minco  in the  year  1999  discovered  several  areas of
favorable geology that require follow-up. The year 2000 surface program included
a  broader  and more  comprehensive  mapping  project,  200 line  kilometers  of
geophysical surveys and, where applicable,  soil and rock sampling.  The results
of the surface  program will be followed up with  approximately  3,000 meters of
surface  drilling in the year 2001 at an estimated  cost of  $400,000,  which is
being funded by Teck.

     In addition to the White Silver Mountain program, Minco carried out work on
its own  account  on the  Gobi  Gold  project.  The  initial  exploration  phase
consisted of geological mapping,  soil and rock geochemical sampling and surface
magnetometer  surveys  designed  to aid in mapping the major  structures  on the
project  and assist in locating  buried  intrusive  bodies.  This  program  also
included follow-up prospecting of the anomalies generated by earlier work by the
Chinese joint venture  partner.  The Gobi Gold project  surrounds a small mining
permit  retained  by the  vendor.  The Phase I program is on  schedule,  will be
completed  at an  estimated  cost of $400,000  and will be funded  from  Minco's
existing  working  capital.  Further  exploration  work, if  warranted,  will be
contingent on an evaluation and interpretation of the geological and geophysical
data resulting form the Phase I program.

     At this time,  Minco  plans no  further  work  programs  on any of it other
properties  including the Changba-Lijiagou  project.  Minco may entertain offers
from third  parties  that wish to option or joint  venture the  Changba-Lijiagou
project.  At the present  time,  Minco is not  negotiating  any agreement on the
property  and there is no  assurance  that an offer will be  obtained  that will
enhance shareholder value.

White Silver Mountain

     Minco acquired its rights to the White Silver  Mountain  project located in
Gansu  Province,  China,  pursuant to the  "Co-operation  Agreement  for Mineral
Exploration and Development"  between the Company and Baiyin  Non-Ferrous Metals
Corporation ("BNMC") signed on November 17, 1997. A fully licensed  Sino-Foreign
joint  venture  company,  Gansu Keyin Mining Co. Ltd.  ("Gansu  Keyin") has been
formed to hold the mineral interests.  In order to earn up to an 80% interest in
Gansu Keyin which owns the rights to the White Silver  Mountain  project,  Minco
must spend a minimum of US$4.8  million  (40  million  RMB) on the White  Silver
Mountain  property  over a six year period.  If Minco fails to spend the minimum
amount,  Minco's  interest  in Gansu  Keyin  will be capped  by a  predetermined
formula  as  set  out in the  Joint  Venture  Agreement.  BNMC  contributed  the
exploration  permit held by it and the  geological  data and  research  results,
including  drill core  samples and maps,  for its 20%  interest in Gansu  Keyin.
Following  the  completion  of the above  expenditures,  each  party  shall make

<PAGE>22

contributions  to Gansu  Keyin in  proportion  to  their  respective  beneficial
interests.  Pursuant  to an option  agreement  dated  December  22,  1999,  with
effective date of June 10, 1998,  the date a letter  agreement was entered into,
Minco granted Teck an option to earn 70% of Minco's 80% interest,  for a 56% net
interest in Gansu Keyin, by assuming all of Minco's funding  requirements  until
commercial  production  has been  attained.  Since  inception,  Teck  has  spent
approximately  $1,674,858,  and Minco has spent $1,376,303,  respectively on the
White Silver Mountain project.

     Location and Description

     The 111 square kilometer White Silver Mountain project includes exploration
ground in or around a number of past and presently  producing  properties in the
Baiyin Ore Field located  close to the city of Baiyin,  Gansu  Province,  China.
Baiyin is located 1,000  kilometers west of Beijing.  The area is fully serviced
by road and rail and has the entire required infrastructure to support an active
mining  operation.  The  White  Silver  Mountain  project  is  located  near the
Xiaotieshan  deposit which is currently being mined and operated by BNMC.  Gansu
Keyin,  the joint  venture in which Minco has the right to earn an 80% interest,
has concluded an agreement to explore the  extensions of the  mineralized  zones
being  mined  at  Xiaotieshan  as  well as any new  discoveries  in the  region.
Drilling and  underground  exploration  undertaken by Gansu Keyin has focused on
the area immediately below the Xiaotieshan underground mine testing the downward
extensions  of the ore lenses being mined by BNMC.  The  agreement  includes the
areas  immediately  surrounding  past and present mine workings but excludes the
workings  themselves and the BNMC milling  and/or  smelting  operations.  Recent
surface exploration and geological mapping has uncovered other prospective areas
outside of the project  boundary.  In response to these  finds,  Gansu Keyin has
applied for an additional  70 square  kilometers  of mineral  rights,  which was
granted in March 2000.

     History, Deposit Type and Exploration Potential

     The White Silver Mountain deposits are of the Volcanogenic Massive Sulphide
(VMS) type. VMS deposits are formed in undersea settings by the precipitation of
metal  rich  fluids  expelled  by  volcanic  vents.   VMS  deposits   display  a
characteristic  "zoning" with more copper-rich  deposits found near the location
of the original  volcanic vents and more zinc-rich  deposits found at a distance
to them,  though the pattern is often  obscured by later faulting and folding of
the rocks that contain them. VMS deposits are "syngenetic," meaning they form at
the same time as the rocks that enclose them and they usually  occur in clusters
over a 20 to 40 km  radius.  Deposits  are  found  where the  volcanic  rock has
changed to a distinctive  quartz rich rock units known as  "exhalitives."  These
are indicators of VMS deposit forming activity;  exploration for new deposits in
known VMS camps therefore often focuses on finding the exhalative  horizons then
exploring within them for economic concentrations of metals.  Geological mapping
undertaken  as part of the 1999  exploration  program has located five  separate
exhalitive  horizons,  including the one that hosts the mined  deposits.  To the
best of Minco's  knowledge,  there had been virtually no past exploration of the
property away from the mines.

     Environmental Considerations

     The Gansu Keyin joint venture agreement  specifically excludes any areas of
past  or  present  mining  activity.   Minco  foresees  no  direct  or  indirect
liabilities  arising from the  activities of BNMC on its own mine sites.  In the
White Silver  Mountain  underground  exploration  area, Teck has hired BNMC as a
contractor to undertake all underground excavation.  BNMC is responsible for the
disposal of all mining waste (mainly  barren rock) in an  environmentally  sound

<PAGE>23

manner.  Similarly,  it is  expected  that BNMC would be  retained as the mining
contractor if the joint venture makes a positive production decision. BNMC would
have  operational  management  of the  project  and  would  be  responsible  for
adherence to sound environmental practice. If smelting is done by BNMC, it would
be governed by standard  commercial  contract  under which the handling and safe
disposal of any attendant waste products would be BNMC's sole responsibility.

     Gansu Keyin Mining Co. Ltd.

     Gansu  Keyin  Mining  Co.  Ltd  was  formed  and  operates  pursuant  to  a
Sino-Foreign   Joint  Venture   contract  between  Baiyin   Non-Ferrous   Metals
Corporation of the People's Republic of China and Minco.  Under the terms of the
joint  venture  contract,  Gansu  Keyin's  board of directors  consists of seven
directors of which Minco has the right to select four  directors,  including the
chairman.  Minco has selected Messrs. Ken Cai, William Meyer, Hans Wick and Fred
Daley as its representatives. Baiyin has the right to select the remaining three
directors.

     Because of Minco's majority  ownership and majority  representatives on the
Gansu Keyin's board,  Minco  controls  Gansu Keyin's  operations in the ordinary
course of business.  However, the following transactions by Gansu Keyin requires
the unanimous  approval by its board: (1) terminating or dissolving Gansu Keyin;
(2)  selling  or  mortgaging  assets  that have a value of 10% of Gansu  Keyin's
assets;  (3)  increasing or decreasing  Gansu Keyin's  registered  capital;  (4)
borrowing by Gansu Keyin; (5) merging Gansu Keyin; (6) guaranteeing on behalf of
Gansu Keyin; and (7) establishing organization under the board.

2000 Exploration Program and Planned Activities for 2001

     The White Silver Mountain  project program for 2000 consisted of 250 meters
of underground  excavation establish drill stations,  approximately 2,000 meters
of underground  drilling and a surface program which included geological mapping
and approximately 200 line kilometers of electromagnetic  surveying. The mapping
and  electromagnetic  surveys  generated  new  targets  for a  surface  drilling
campaign to be undertaken  in 2001 after the Keyin has received and  interpreted
the results of the surface work and the current  underground drill program.  The
cost of this program is estimated at $400,000 and will be  completely  funded by
Teck.  Similarly,  the  underground  program is  expected to continue as long as
favorable  results are being received and the potential size of the  mineralized
zone is being increased.

     In April 2001, Teck commenced a surface diamond drilling program comprising
of an  estimated  2,700  meters in  priority  zones  based on a  combination  of
electromagnetic   conductors  with  coincident   surface  alteration  zones  and
mineralization  in  geological  setting  prospective  for  volcanogenic  massive
sulphide minerals. Results are expected during the third quarter of 2001.

     Minco's costs related to the White Silver Mountain  project was $73,023 for
the December 31, 2000, year end and will be  approximately  $50,000 for the year
ended December 31, 2001,  consisting of $20,000 in geological  fees,  $15,000 in
management  fees and  $15,000  related  to travel  and  lodging  related  to the
project. These amounts are in addition to the amounts being expended by Teck.

Gobi Gold Project

     A regional exploration and property evaluation was carried out on the Inner
Mongolia  (Gobi Gold  project)  during  1998  culminating  in the joint  venture

<PAGE>24

agreement  in 1999  between  Minco  and the  Exploration  Institute  of Land and
Resources  of Inner  Mongolia  ("EILR").  In 1999,  Minco and EILR  created Damo
Mining Co. Ltd., a fully-licensed Sino-Foreign joint venture company, to explore
for metallic  mineral  deposits  within the Inner  Mongolia  Autonomous  Region.
Initially, Damo Mining will focus on exploring its existing license holding that
covers 550 km2. The Damo Mining joint venture  agreement allows Minco to earn up
to a 75% interest in joint venture by spending  US$2.5 million on exploration on
the Gobi Gold  project  over four  years.  In the event Minco does not spend the
specified amounts, its interest in the joint venture agreement may be subject to
being  capped  by a  predetermined  formula  as set  out in  the  Joint  Venture
Agreement.

     Inner Mongolia Damo Mining Co., Ltd.

     Inner  Mongolia  Damo  Mining  Co.,  Ltd.  ("Damo  Mining")  was formed and
operates  pursuant to a  Sino-Foreign  Joint Venture  contract  between EILR and
Minco.  Under the terms of the joint venture  contract,  Damo Mining's  board of
directors  consists  of seven  directors  of which Minco has the right to select
four  directors,  including the chairman.  Minco has selected  Messrs.  Ken Cai,
William Meyer,  Robert Callander and Ruijin Jiang as its  representatives.  EILR
has the right to select the remaining three directors.

     Because of Minco's majority ownership and majority  representatives on Damo
Mining's board,  Minco controls Damo Mining's  operations in the ordinary course
of business.  However,  the following  transactions  by Damo Mining requires the
unanimous  approval by its board: (1) terminating or dissolving Damo Mining; (2)
selling or mortgaging  assets that have a value of 10% of Damo Mining's  assets;
(3) increasing or decreasing Damo Mining's registered capital;  (4) borrowing by
Damo Mining; (5) merging Damo Mining; (6) guaranteeing on behalf of Damo Mining;
and (7) establishing organizations under the board.

     Location, History, Geology and Exploration Potential

     The  Gobi  Gold  project  is  the  culmination  of  a  series  of  regional
exploration  programs  undertaken  by EILR.  EILR carried out a broad program of
stream and drainage sampling.  This program  highlighted several areas with gold
concentrations  some of which were followed up by mapping,  prospecting and more
closely  spaced  geochemical  sampling.  Minco  believes  that the potential for
discovering more extensive, near surface skarn mineralization is good, given the
limited  exploration  that has taken place beyond the surficial  oxide zones. An
initial  program of detailed ground  magnetic  surveys  combined with geological
mapping  was  completed  to  give  better  resolution  of  features  controlling
mineralization.

<PAGE>25

     Other prospects  identified in the license blocks from regional geochemical
surveys have had limited to no follow-up work. Known mineralization is developed
in calcareous  sedimentary units and proximal to small felsic intrusions.  Field
examination of two prospects visited in 1999 showed features indicative of skarn
style mineralization.  The exploration program for 2000 involved ground magnetic
surveys and  geological  mapping  over the two  identified  skarn  prospects  to
establish drill targets. Field- checking remaining geochemical anomalies is also
planned. Total expenditures from inception to December 31, 2000, funded by Minco
on the Gobi Gold project were $379,987.

     Upon  completion of results from this  program,  the next phase of work, if
warranted, will likely involve more detailed work on the most favorable targets,
culminating in drilling. Expenditures for the year ended December 31, 2000, were
$335,255  consisting  of  approximately  $221,325 in  advances  to Damo  Mining,
$10,456  for  acquisition  costs,  $76,347  in  consulting  fees and  $27,127 in
administration  fees,  travel,  transportation  and lodging.  For the year ended
December 31, 2001,  expenditures  will be approximately  $250,000  consisting of
$125,000 in advances to Damo Mining, $37,500 for administrative fees, $50,000 in
consulting fees and $37,500 in travel, transportation and lodging.

     Environmental Considerations

     The exploration  activities  proposed for the Gobi gold project,  including
potential  drill  testing  of new  anomalies,  will  result  in  little  surface
disturbance,  and standard reclamation procedures will be used for areas such as
trenches or drill pads.  Minco does not believe that there will be any potential
environmental liability arising from these activities.

Changba-Lijiagou Property

     Minco acquired its rights to the Changba-Lijiagou Lead Zinc project located
in Ganzu  Province,  China,  through the  "Cooperation  Agreement  Regarding the
Development  of the Changba  Lijiagou Lead Zinc Deposit"  between Minco and BNMC
signed on November 17, 1997. Under this agreement, which has no expiration date,
Minco and BNMC will form a Chinese  joint  venture  company to explore,  and, if
warranted,  develop  and  exploit  the lead and zinc  deposits  of  Changba  and
Lijiagou  and  the  joint  area  between  them by  taking  the  project  through
development,  to production at a rate of 3,500 tonnes of ore per day. If a joint
venture  agreement is entered into,  Minco will  contribute  capital and advance
equipment to develop a 3,500 tonne per day  underground  mine for a 75% interest
in the joint  venture.  BNMC  operated the  Changba-Lijiagou  project as a 3,500
tonne per day open pit mine until the collapse of  underground  workings  forced
the downsizing of the operation to 750 tonnes per day. BNMC will  contribute the
mining rights relating to Changba and Lijiagou and net values of total assets at
the Changba milling system for a 25% interest in the joint venture.

     Since entering into the agreement,  Minco has  concentrated  its efforts on
the Lijiagou  mineralization.  The work  undertaken  to date is of a preliminary
nature only. Further third party work and a complete  feasibility study would be
required prior to any production decision. No exploration activities are planned
for the  Changba-Lijiagou  project the  remaining of this year 2001 and no joint
venture  has yet been  entered  into.  Because of its focus on the White  Silver
Mountain and Gobi gold projects,  Minco may entertain  offers from third parties
who wish to earn a portion of Minco's interest in the project by further funding
it.

<PAGE>26

     History, Geologic Model and Exploration Potential

     BNMC  originally  moved  into the  Changba  area in the  1940's  after  the
discovery  of copper in the region.  BNMC  started up  operations  at two copper
mines soon  afterwards,  which are now  virtually  depleted.  The search for new
copper reserves in the area lead to the discovery of the Changba,  then Lijiagou
zinc/lead mineralization.

     The  Changba-Lijiagou  project is located in Ganzu province in northwestern
China.  The  project  took its name from the town of Changba,  a small  regional
agricultural/government  center before the arrival of the miners. Changba is 350
kilometers  east of the  provincial  capitol of Ganzu and 400 kilometers by road
and rail to Baiyin,  the headquarters  town of BNMC and location of the smelting
complex.

     Changba and Lijiagou are  Sedimentary  Exhalative (or SedEx) type deposits.
SedEx deposits are characteristically zoned in a pattern with zinc rich material
in the center.  The  Changba-Lijiagou  deposits are zinc rich. They are open and
substantially  untested  to depth,  as well as  laterally  along  trend.  Though
exploratory  drilling is needed to confirm this, the zinc rich nature of the ore
and the long trend length  indicate  potential  for further  discoveries  in the
area.  BNMC has  completed  close to 250 surface  drill holes to test Changba to
depth and to outline the  Lijiagou  mineralization  and to test the  intervening
area at depth.

     Environmental Considerations

     All areas of past and present mining  activities are specifically  excluded
from the joint  venture.  Should Minco and/or its partners  decide to put all or
part of the  project  into  production,  there would be an  operating  agreement
negotiated  with BNMC. In negotiating  the joint venture  agreement,  Minco will
request  that a provision be included  that will  absolve the partners  from any
environmental hazards arising from BNMC's mining activities prior to the date of
the joint venture contract to be negotiated and finalized.  The structure of the
agreement with BNMC allows Minco to earn a direct  interest in the mill site and
other infrastructure. Should Minco make a positive production decision, it would
need to negotiate an agreement that defines its responsibilities  concerning the
ultimate rehabilitation of the mill site and include those costs in its decision
making.

Other Mineral Interests

     (a) Minco has entered into a cooperative  joint venture  agreement with the
Sichuan  Bureau of the Ministry of Geology and Mineral  Resources on the Chapuzi
property which is located in Sichuan Province, China.

     Pursuant to the  agreement,  Minco has the right to earn a 51%  interest by
spending $5 million on exploration  and development in the Chapuzi gold deposit.
A total of $153,416 has been spent on exploration and  metallurgical  testing as
of December 31, 1996.  Minco may earn a 75% interest by placing the Chapuzi gold
deposit project into  production.  Minco  discontinued  exploration  work on the
property in 1999.

     (b) Minco  has an  exclusive  right to  negotiate  and  enter  into a joint
venture contract with the Xinjiang Bureau of the Ministry of Geology and Mineral
Resources  and to invest in certain mineral properties located in Xinjiang Uygur

<PAGE>27

Autonomous Region in China. At this time, Minco has no plans to invest in any of
the properties.

     (c) Minco had an interest in Savoyardinskii  gold/antimony property located
in the  Savoyardinskii  area  in  Karakuldzinskii  Region,  Osh  Oblast,  Kyrgyz
Republic. Minco abandoned the project in 1998.

     (d) Pursuant to a joint venture agreement, Minco can earn a 55% interest in
the  Emperor's  Delight  and  Lengkou  properties,  which are  located  in Hebei
Province, China, by spending US$4.4 million over a five-year period beginning in
1996. Minco  discontinued  exploration work on the Emperor's Delight property in
1999 and on the Lengkou property in 1998.

     (e) The  Crystal  Valley and Stone  Lake  properties  are  located in Hebei
Province,  China.  These projects are subject to the approval of the appropriate
Chinese government authorities.

     All  Minco's  properties  are  located  in China and fall into two  general
groups: the Chapuzi,  West Tian Shan,  Xinjiang,  White Silver Mountain and Gobi
Gold  properties  were acquired by direct  negotiations  and agreements  between
Minco and the Chinese authorities and the  Changba-Lijiagou,  Emperor's Delight,
Lengkou,  Crystal Valley and Stone Lake  properties  were acquired in connection
with the PCR Agreement.

     In setting up a joint  venture  to operate a mining  venture in China,  the
general  procedure  involves  three  levels of  agreements.  The first  level of
agreement is a Letter of Intent or a  Memorandum  of  Understanding,  which sets
forth broad areas of "mutual  co-operation."  The second level of agreement is a
more detailed  Co-operation  Agreement which outlines the essential terms of the
joint venture which will ultimately be formed. The third level of agreement is a
Joint Venture Contract which sets out the entire agreement among the parties and
contemplates  the  establishment  of a "Chinese  Legal Person," a separate legal
entity.

     To date,  Minco  has not  entered  into a final  agreement  on a  producing
property.  Consequently, Minco has not generated a cash flow from operations. In
management's  opinion,  given that the nature of Minco's  business  consists  of
mineral  exploration,  development  and the  evaluation of resource  properties,
meaningful  financial  information  consists  primarily of Minco's liquidity and
solvency.  The  results  of  operations  of an  exploration  company  are almost
entirely  measured  by the extent and quality of the  mineralization  discovered
compared with the related costs of such discoveries.

Expenditures on Properties of Minco for 1998, 1999, and 2000.

     The following  table sets forth Minco's  expenditures  on it properties for
the years ended December 31, 1998, 1999 and 2000.

<PAGE>28

                                                        December 31,
                                         ---------------------------------------
                                         1998          1999         2000
--------------------------------------------------------------------------------
Changba Lijiagou Lead-Zinc Deposit    $   52,107   $            $
Chapuzi                                    1,456
Emperor's Delight                                      25,051
Heavenly Mountains                        33,412
Inner Mongolia (Gobi)                     40,456       49,922      358,645
Lengkou                                   44,561
Savoyardinskii                            82,216
West Kunlun
White-Silver Mountain                    619,381      684,898       87,449
Xifanping Gold Deposits                   33,504
--------------------------------------------------------------------------------
Total                                $   907,093   $  759,871   $  446,094
================================================================================

Item 5. Operating and Financial Review and Prospects

     This  discussion  and analysis of the  operating  results and the financial
position of Minco for the three years ended  December 31, 2000,  1999, and 1998,
and should be read in conjunction with the Consolidated Financial Statements and
the related Notes thereto.

A.   Operating results.

General

     Since  the  signing  of its first  co-operation  agreement  on the  Chapuzi
project in China in 1995,  Minco has been very active for  mineral  exploration,
property  evaluation  and  acquisition  in China.  Minco  intends on  building a
portfolio of base metals and precious  metals  properties in China.  A strategic
alliance  was  formed  with  Teck  Corporation  and  Cominco  Ltd.  for  mineral
exploration and development in China.  Minco has conducted  exploration  work on
properties  located in  Sichuan,  Xinjiang,  Hebei,  Inner  Mongolia,  and Gansu
provinces of China,  and  investigated  or evaluated  about 300 Chinese  mineral
properties.   Minco  has  rights  to  earn   interests  in  three   Sino-Foreign
co-operative joint ventures that have been established with Chinese mining.

Results of Operations

Year ended December 31, 2000, compared to year ended December 31, 1999

     The Company is in the exploration  stage and had no revenue during 2000 and
1999.  During the year ended December 31, 2000,  Minco had no mineral  interests
written off  compared to mineral  interests  written off of $579,088  during the
year ended  December 31,  1999.  Mineral  interests  written off during the year
ended December 31, 1999,  consisted of the Emperor's  Delight,  Changba Lijiajou
Lead-Zinc Depot and Chapuzi interests.

     Total  administrative  expenses were $740,884 for fiscal year 2000 compared
to $954,713 for fiscal year 1999. During fiscal year 2000, the Company continued
its  ongoing  effort to  reduce  expenses.  Expenses  decreased  in  almost  all
administrative  categories including  advertising by  $17,557,  consulting  fees

<PAGE>29

by $19,984,  promotion and government relations by $55,834, and rent by $30,502.
These  decreases were offset,  in part, by the increase in legal fees by $23,000
related to the Company's  Annual Report  registering  its common shares with the
SEC.

     During 2000,  mineral property  expenditures were $446,094 of which $87,449
was spent on  White-Silver  Mountain and  $358,645  was spent on Inner  Mongolia
(Gobi Gold).

     Net loss from  operations for 2000 was $624,679 or $0.04 per share compared
to $1,506,108 or $0.09 per share in 1999.

     US GAAP Reconciliation

     For the year ended  December 31, 2000, the Company had a loss of $1,070,773
or $0.08 per share  calculated  under US GAAP compared to a net loss of $624,679
or $0.04 per share calculated under Canadian GAAP. The difference in calculation
of loss is primarily  attributed to the write-off of deferred  exploration costs
of $446,094 under US GAAP.

Year ended December 31, 1999, compared to year ended December 31, 1998

     The Company is in the exploration stage and had no revenues during 1999 and
1998.  Mineral  interests  written off of $579,088  during 1999 consisted of the
Emperor's  Delight,  Changba Lijiagou  Lead-Zinc Deposit and Chapuzi  interests.
This is a reduction of mineral  interests  written off during 1998 consisting of
the Lengkou,  Heavenly  Mountains  and  Savoyardinskii  mineral  interests.  The
mineral   interests   write-offs  relate  to  Minco's  decision  to  discontinue
exploration at Emperor's Delight and Chapuzi  properties,  and to the write down
of the Changba- Lijiagou property to a nominal carrying value.  Mineral property
expenditures  for 1999  amounted to $760,000,  of which  $700,000  went to White
Silver Mountain project, and $60,000 was spent on the Gobi Gold project in Inner
Mongolia.

     Total administrative expenses were $954,713 for 1999 compared to $1,128,244
for 1998. On- going cost  reductions were mainly in overhead items such as rent,
telephone  and travel  costs as well as a reduction  in listing  fees due to the
need to only maintain the Toronto Stock  Exchange  listing.  This cost reduction
included  decreasing  management  fees and  property  investigation  activities.
Minco's  efforts on cost control in the past three years have lead to a decrease
of approximately  $400,000 in administrative and overhead costs. A large portion
of the decrease is attributed to a reduction in property  investigation costs of
$77,583 due to a decrease in the number of properties being investigated.

     During 1999, mineral property  expenditures were $759,871,  primarily spent
on the White-Silver  Mountain  project.  Mineral property  expenditures for 1998
were $910,000 with the bulk of such mineral  property  expenditures  of $620,000
was spent on White Silver  Mountain  project,  and the  remainder  spread across
several other properties.

     Net loss  from  operations  for  1999 was  $1,506,108  or $0.09  per  share
compared to $1.99 million or $0.13 per share in 1998.

     US GAAP Reconciliation

     For the year ended  December 31, 1999, the Company had a loss of $2,544,584
or $0.21per share  calculated under US GAAP compared to a net loss of $1,506,188

<PAGE>30

or $0.09 per share calculated under Canadian GAAP. The difference in calculation
of loss is primarily  attributed to (1) the release of escrow shares of $974,042
which is recorded as  compensation  expense under US GAAP;  (2) the write-off of
$180,788 of deferred exploration costs under US GAAP; and (3) the recognition of
$116,347 under US GAAP of securities written off under Canadian GAAP.

Exchange Rates

     Minco  maintains its accounting  records in functional  currency:  Canadian
dollar. Minco translates foreign currency  transactions into functional currency
in the following manner: At the transaction date, each asset, liability, revenue
and expense is translated  into Canadian  dollars at the exchange rate in effect
on that date.  At each period  end,  all  monetary  assets and  liabilities  are
translated into the functional  currency by using the exchange rate in effect at
that date. The resulting  foreign  exchange gains and losses are included in the
consolidated Statement of Operation.

     Minco  pays for its  expenses  related to its  Chinese  joint  ventures  in
Canadian dollars which are then converted into Chinese  dollars.  Based on prior
years'  experience,  Minco does not believe that foreign  currency  fluctuations
have had a material impact on its financial condition. However, no assurance can
be given  that  material  foreign  currency  fluctuations  will not occur in the
future. The Company does not engage in foreign currency hedging transaction.

Inflation

     Based on prior  history for at least the two fiscal  years,  Minco does not
believe that  inflation  will have a material  adverse  effect on its  financial
condition.  However,  no assurance can be given that Minco will not experience a
substantial increase in inflation.

B.   Liquidity and Capital Resources

     Currently,  none of the Company's  projects are  producing  revenues and no
revenues are anticipated to be generated in the near future.  To provide working
capital for its  operations  and project  development,  Minco needs to raise new
funds within twelve to eighteen  months.  Traditionally,  the Company has raised
capital through the issuance of common shares.  It is contemplated  that it will
continue to raise capital  primarily  private  through  investors  consisting of
resource  investment  groups,  senior  mining  companies,  and public  financing
through the facilities of the Toronto Stock Exchange. No assurance, however, can
be given that Minco's  future  capital  requirements  can be  obtained.  Minco's
access to capital is always dependent upon future  financial market  conditions,
especially  those  pertaining  to  venture  capital  situations  such as  mining
exploration  companies.  There can be no guarantee that Minco will be successful
in obtaining future financing, when necessary, on economically acceptable terms.

     For the year ended  December 31, 2001,  the Company  believes  that it will
need  approximately  $900,000,  of which  $600,000 is  administrative  costs and
$300,000 is for ongoing  programs  consisting of $250,000 and $50,000 related to
the Gobi Gold and White Silver Mountain projects, respectively. No assurance can
be given that the Company will make the anticipated exploration  expenditures on
the Gobi Gold and White Silver Mountain  projects which will depend, in part, on
actual results of exploration.

     The  Company  anticipates  that it will  pay  for  its  administrative  and
exploration  costs for 2001 from its  current  working  capital.  Based upon the
completion  of its prior  private placement,  the Company  believes that  it has

<PAGE>31

sufficient working capital to complete its anticipated  expenditures  during the
remaining portion of 2001.

     At March 31, 2001,  and December  31,  2000,  Minco had working  capital of
$1,039,903  and  $1,167,966,  respectively.  During  the period of 1999 to 2000,
capital additions totaled $111,100 through the exercise of warrants.

     The particulars of all capital raising transactions since 1997 are detailed
as follows:

     In June 1996,  Minco  completed a private  placement of 3.2 million special
warrants  at a price  of  $2.55  per  special  warrant  for  gross  proceeds  of
$8,160,000.  Each  unit  consisted  of  one  common  share  and  one  half  of a
non-transferable  common  share  purchase  warrant.  Each whole  share  purchase
warrant entitled the holder to acquire one additional common share at a price of
$2.55 per share until one year after the date of  issuance  of the warrant  upon
exercise  of the special  warrant.  The  expiration  date of such  warrants  was
subsequently extended until 4:30P.M. on June 30, 2000, and the exercise price of
the warrants was reduced to $2.00. These warrants expired under their terms.

     Common shares issued for cash in 1997 totaled  $158,000.  $150,000 from the
exercise of share  purchase  warrants  and $8,000 from the  exercise of employee
options. 133,000 shares were issued in regards to these transactions.

     On July 10, 1998,  Minco  completed a private  placement of 375,000  common
shares to Teck  Corporation  at a price of $2.00  per  share.  Proceeds  of this
placement  were  expended  entirely on the White Silver  Mountain  Project.  The
placement also included warrants to purchase 125,000 common shares at a price of
$2.00 per share for one year and a further  125,000  common shares at a price of
$3.45 per share for two years.

     Financing  in 1999  included  the  exercise by Teck of 125,000  warrants to
purchase shares at $1.60 as part of its exercise of its option to become a joint
venture partner and operator of the White Silver Mountain project.  Teck had the
right but not the  obligation to acquire an additional  125,000  shares at $3.45
until  July  9,  2000,  and  did  not  acquire  the  additional  common  shares.
Additionally,  the Company undertook private placements of 250,000 common shares
at $0.85 per share and 150,000 common shares at $1.00 per share.

     During fiscal year 2000, Arbora Portfolio  Management exercised warrants to
acquire 110,000 common shares at $1.01 per share  representing gross proceeds of
$111,100.

     Proceeds of the financing  listed above are being used for  exploration and
for  development  expenditures  (only when and if warranted) in connection  with
Minco's  mineral  projects  located  in  China,  for  working  capital  and  for
acquisition  of  additional  projects.  The one  exception  to this was the 1997
placement  of  375,000  shares  at  $2.00 to Teck  Corp.  The  proceeds  of this
placement were entirely expended on the White Silver Mountain project.

<PAGE>32

Item 6. Directors, Senior Management and Employees

A.   Directors and senior management.

     The following table sets forth all current directors and executive officers
of Minco as of May 31,  2000,  with each  position  and  office  held by them in
Minco,  their terms of office and the period of service as such. Each director's
term of office expires at the next annual general  meeting of shareholders to be
held on June 28,  2001.  At such  meeting,  each  current  director  is  seeking
re-election.


<TABLE>
<CAPTION>
                                                     Number of Shares       Principal Occupation
                                                    Beneficially Owned,    and if Not at Present
                                                  Directly or Indirectly,   an Elected Director,
                                                       or Over Which         Occupation During
    Name and Present                               Control Or Direction      the Past Five (5)
      Office Held            Director Since            is Exercised                Years
------------------------ -----------------------  ----------------------- ------------------------
<S>                     <C>                        <C>                    <C>
Ken Cai                      February 1996              6,288,500(1)        Geologist
President, Chief
Executive Officer and
Director

William Meyer                July 13, 1999                250,000(2)        Professional Engineer
Chairman and Director

Robert M. Callander          August 1996                  197,550(3)        Vice President,
Director                                                                    Caldwell Securities
                                                                            Ltd.

Hans Wick                    March 1997                   262,300(3)        Financial Advisor
Director

</TABLE>

(1)  Includes  5,917,500  common  shares  held by Pacific  Canada  Resources,  a
     private  company,  of which Dr. Ken Cai has more than a 10% interest.  Also
     includes 371,000 common shares subject to options.

(2)  Represents 250,000 common shares subject to options.

(3)  Includes 97,300 common shares subject to options.

     Positions held by Minco's directors and officers other than with Minco:


        Name                                Positions Held
-------------------------------------------------------------------------------
Ken Cai                      Director, Chineseworldnet.com
                             Director, Dragon Pharmaceutical Inc.
                             Director, Aquasol Environtech Ltd.
                             President & Director, Kaisun Investment &
                             Development
                             President & Director, Pacific Canada Resources Inc.

<PAGE>33

        Name                                Positions Held
-------------------------------------------------------------------------------

William Meyer                Director, Silver Standard Resources Inc.
                             Director, Gerle Gold Ltd.
                             Director, Lysander Minerals Corporation
                             Director, Cantech Ventures Inc.
                             Director, Standard Mining Inc.
                             Director, Trans American Industries Inc.

Robert Callander             Director, Urbana Corporation
                             Director, Pacific Canada Resources Inc.
                             Director, Environwaste Technologies Inc.
                             Director, Member Savings Credit Union
                             Director, Intraconnect Inc.


     The business  background and principal  occupations of Minco's officers and
directors for the preceding five years are as follows:

     Ken Z. Cai. Dr. Cai has served as president,  chief executive officer and a
director of Minco since February 29, 1996. Dr. Cai devotes  approximately 90% to
100% of his time to Minco's business. Dr. Cai holds a Ph.D. in mineral economics
from Queens University in Kingston, Ontario, Canada. Dr. Cai, a Chinese national
now living in Canada, has 15 years of experience in mineral exploration, project
evaluation,  corporate  financing  and  company  management.  Dr.  Cai has  been
responsible  for  negotiating  the  property  agreements  in China  through  his
contacts in the Chinese  mining  communities.  This has allowed  Minco to access
data on a large  number of projects  throughout  China.  Dr. Cai has served as a
director of several  publicly-traded and private Canadian and Chinese companies.
In  addition,  Dr. Cai is a director of Dragon  Pharmaceutical,  Inc., a company
whose shares of common stock are registered under the Securities Exchange Act of
1934.

     William  Meyer.  Mr. Meyer has served as Chairman and director  since 1999.
Mr. Meyer  devotes  approximately  80% of his time to Minco's  business.  He was
formerly Vice-President,  Exploration for Teck Corporation and President of Teck
Exploration  Ltd. He graduated  from the  University of British  Columbia with a
B.Sc. in geology in 1962.  After  graduation,  he was employed as an exploration
geologist with Phelps Dodge  Corporation of Canada and later as senior geologist
with  Gibraltar  Mines  Ltd.  In 1967 he joined the  consulting  firm of Western
Geological Services as a partner, and in 1975 formed his own consulting firm, W.
Meyer  and  Associates.  Mr.  Meyer  joined  Teck  Exploration  Ltd.  in 1979 as
Exploration  Manager for Western Canada and the United  States.  In 1991, he was
appointed Vice-President,  Exploration, for Teck Corporation responsible for the
direction  of  exploration  activities  for  Teck and its  associated  companies
worldwide.  He is a director  and  officer  of a number of public and  privately
owned Canadian companies.

     Robert  Callander.  Mr. Callander has been a director since August 1996. He
holds an MBA from York University,  Toronto,  Ontario,  Canada, as well as a CFA
from the Institute for Investment Management, Charlotte, Virginia. Mr. Callander
has worked for Caldwell  Securities  Ltd.  since 1992 and currently  serves as a
Vice-President  with that firm. Prior to his engagement with Caldwell Securities
Ltd., Mr. Callander served as a corporate finance analyst with Nesbitt Burns. He
has worked in the investment industry for 25 years.

<PAGE>34

     Hans J.  Wick.  Mr.  Wick has been a director  since  March  1997.  He is a
resident of Zurich,  Switzerland.  For the past five years, Mr. Wick has been an
independent portfolio manager.

B.   Compensation

     The  aggregate  direct or indirect  remuneration  paid to the directors and
officers of Minco,  as a group  during the fiscal year ended  December 31, 2000,
for service to Minco in all capacities,  was $110,300. Certain information about
payments to Minco's executive officers is set out in the following table:

                             EXECUTIVE COMPENSATION
                           SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>

                                                                                    Long Term
                                               Annual Compensation                Compensation
                                    ------------------------------------------   ---------------
                                                                                                    All Other
Name and Principal                                                                Shares Under     Compensation
Position                     Year      Salary        Bonus         Other             Options           ($)
-------------------------- ---------------------- ---------------------------- - --------------- ----------------
<S>                          <C>     <C>           <C>            <C>              <C>              <C>
Ken Cai                      2000        Nil          Nil           $110,300(1)          371,000              Nil
President, Chief Executive   1999        Nil          Nil           $111,500(1)          371,000              Nil
Officer and Director         1998        Nil          Nil           $121,276(1)          371,000              Nil

</TABLE>

(1)  Consulting fees paid and amounts paid as a travel allowance.

C.   Board practices

     The current  directors of the board were  elected to their  position at the
annual  meeting  of  shareholders  held on June 29,  2000.  Each  director  will
continue to serve as such until the next meeting of the  shareholders to be held
on June 28, 2001. The officers of the Company are elected by the board and serve
at the board's  pleasure.  Directors are elected  annually at the Annual General
Meeting of  shareholders,  whereas  officers'  appointments  are approved by the
Board of Directors and terminate upon resignation or termination by the Board.

     The Company  has no contract  with any of its  officers or  directors  that
provide for payments upon termination.

     The  Company  has an  Audit  committee  consisting  of  Messrs.  Meyer  and
Callander.  The roles and  responsibilities  of the  Audit  committee  have been
specifically  defined  and  include  responsibility  for  overseeing  management
reporting on internal  control.  The Audit  committee  has direct  communication
channels with the external auditors.

D.   Employees

     The Company has ten full-time employees and one part-time employee. Most of
the Company's  employees are located in Vancouver,  British  Columbia with three
employees located in China.

<PAGE>35

E.   Share ownership

     There were no options granted during the year ended December 31, 2000.

     During the fiscal year of Minco ended  December 31,  2000,  no amounts were
set aside or accrued by Minco or its  subsidiaries  during  such year to provide
pension,  retirement  or similar  benefits for  directors and officers of Minco,
pursuant  to any  existing  plan  provided  or  contributed  to by  Minco or its
subsidiaries.

     The following  table sets forth,  as of May 31, 2001,  common stock held by
Minco's  officers  and  directors  and all  outstanding  options and warrants to
purchase common shares of Minco;  there are no options to purchase shares of any
other class of security:

Common Shares Owned by Officers and Directors


        Name                           Number of Common Shares Owned
        ----                           -----------------------------

        Ken Cai                                  5,917,500*
        William Meyer                                   -0-
        Robert M. Callander                         100,250
        Hans Wick                                   165,000

*    Represents  shares  owned by  Pacific  Canada  Resources  Inc.,  a  private
     company, in which Ken Cai beneficially owns more than 10%.

Outstanding Options

<TABLE>
<CAPTION>
                                                       Exercise
Name                                     Options         Price               From                      To

<S>                                     <C>           <C>              <C>                      <C>
Ken Cai                                      321,500     $1.41(1)        March 5, 1996            March 5, 2006
                                              49,500     $1.41(1)        June 20, 1997            June 20, 2007

Wayne Spilsbury                              185,000     $1.41(1)        March 5, 1996            March 5, 2006

Robert Callander                              97,300     $1.41(1)       October 8, 1996          October 8, 2006

Hans Wick                                     97,300     $1.41(1)        March 6, 1997            March 6, 2007

William Meyer                                150,000     $1.65(1)        July 16, 1999            July 16, 2006
                                             100,000     $1.12(1)      December 2, 1999         December 1, 2006

Ruijin Jiang                                 100,000        $0.55       January 2, 2001          January 2, 2006

Anna Liu                                      75,000        $0.55       January 2, 2001          January 2, 2006

Susan Parker                                  50,000        $0.55       January 2, 2001          January 2, 2006

</TABLE>

<PAGE>36

<TABLE>
<CAPTION>
                                                       Exercise
Name                                     Options         Price               From                      To

<S>                                     <C>           <C>              <C>                      <C>
Wilma Gao                                     20,000        $0.55       January 2, 2001          January 2, 2006

Lynette Rudichuk                              15,000        $0.55       January 2, 2001          January 2, 2006

Total                                      1,260,600

</TABLE>

(1)  Subject to shareholder  approval at Minco's  annual  general  meeting to be
     held on June 28, 2001,  Minco is seeking to reprice the  exercise  price of
     the options to $.55 per share.

Item 7. Major Shareholders and Related Party Transactions

A.   Major shareholders

     As of May 31, 2001, Minco believes that approximately 589,214 of the issued
and outstanding common shares were held by 20 shareholders with addresses in the
United States.

     As far as known to Minco,  and  except as  disclosed  herein,  Minco is not
directly or indirectly owned or controlled by another  corporation(s)  or by any
foreign government. As disclosed below, Pacific Canada Resources Inc., a private
company  controlled by a director and a former  director of Minco, as at May 31,
2001, owned  approximately  36% of the issued and outstanding  shares of Minco's
common stock.

     The  following  table sets  forth,  as of May 31,  2001,  information  with
respect to (i) any person who is known to Minco to be the owner of more than 10%
of any class of Minco's  outstanding voting securities and (ii) the total amount
of any class of Minco's voting securities owned by the officers and directors as
a group.


Title of Class      Identity of Holder       Amount Owned      Percent of Class
--------------      ------------------       ------------      ----------------
Common Shares       Teck Corporation(1)      1,875,000(2)      11.45%

Common Shares       Pacific Canada           5,917,500(3)      36.0%
                    Resources Inc.

Common Shares       Dr. Ken Cai              6,288,500(4)      37.54%

Common Shares       All officers and         6,998,300         40.70%
                    directors as a group
                    (four persons)(5)

(1)  Teck  Corporation has a right of first refusal to purchase common shares of
     Minco in any future offerings so as to maintain its ownership.

(2)  Also  includes  625,000  common  shares  owned  by  Cominco  Ltd.  which is
     controlled by Teck Corporation.

(3)  Dr. Ken Cai  beneficially  owns more than 10% of Pacific Canada  Resources,
     Inc. See also note (4) below.

<PAGE>37

(4)  Dr. Ken Cai, a director and officer of Minco,  beneficially  owns more than
     10% of Pacific  Canada  Resources  Inc., a private  company.  Also includes
     options to purchase 371,000 common shares.

(5)  Includes  Dr.  Ken Cai's  beneficial  interest  in shares  owned by Pacific
     Canada Resources, Inc.

Performance Shares or Escrow Securities

        As at May 31, 2001, there were a total of 2,991,322 common shares of
Minco held at Montreal Trust Company of Canada, 510 Burrard Street, Vancouver,
British Columbia, subject to escrow share restrictions under a Performance
Escrow Agreement dated August 17, 1995 (the "1995 Escrow Agreement") and an
Escrow Agreement dated February 19, 1996 (the "1996 Escrow Agreement"). As of
March 31, 2001, the escrow shares represent approximately 18.0% of the total
issued and outstanding shares of Minco.

                             Table Of Escrow Shares

<TABLE>
<CAPTION>
                                                Pacific Canada   Peter P.    Hans       Fotios    Petros S.      Colin
                                                Resources Inc.   Tsaparas    Wick     Kandianis  E. Tsaparas   McAleenan      Total

<S>                                             <C>             <C>       <C>        <C>         <C>         <C>           <C>
Balance December 31, 1996                          4,880,000     262,500    90,000      60,000      60,000        90,000   5,442,500
Released at $1.20 per share, June 1998               949,561     131,250    45,000      30,000      30,000        45,000   1,230,811
Released at $1.50 per share, August 1999             508,736      65,625    22,500      15,000      15,000        22,500     649,361
Released at $0.97 per share, March 2001              430,381      65,625    22,500      15,000      15,000        22,500     571,006
Balance May 31, 2001                               2,991,322         -0-       -0-         -0-         -0-           -0-   2,991,322

</TABLE>

The escrow shares may be released upon the following conditions.

1.   One  escrow  share  for each  $0.97 in the  value of the  interests  in the
     mineral  properties  acquired by the Company  from PCR  pursuant to the PCR
     Agreement  (the  "PCR  Properties"),  based  on a  valuation  report  to be
     prepared  by a  qualified  independent  consultant,  less any  expenditures
     required  to be made by the  Company,  pursuant  to the  PCR  Agreement  or
     otherwise,  in order to earn its interests in the PCR Properties  (provided
     that all required  Chinese  governmental  approvals in order to perfect the
     interests to be acquired by the Company  hereunder  have been  obtained for
     each of the PCR Properties that are the subject of the valuation report);

2.   One  escrow  share for each $0.97 in the value of the  interest  in any new
     mineral properties acquired by the Company pursuant to the PCR Agreement or
     the TCIP Agreements  ("New  Projects"),  such value to be determined on the
     same basis and subject to the same provisions as described in note 1 above.

3.   One escrow  share for every  $1.81  expended  by the  Company,  PCR,  Teck,
     Cominco, Temco or any other third party expending monies on exploration and
     development  of the PCR  Properties  or of any New  Projects,  exclusive of
     general and  administrative  expenses,  determined in  accordance  with the
     provisions  applicable  to natural  resources  issuers  under Local  Policy
     Statement #3-07 of the British Columbia Securities Commission; and

<PAGE>38

4.   One  escrow  share  for  every  $0.97  in  cumulative  cash  flow  from the
     operations of the Company on the PCR Properties and any New Projects and as
     determined in accordance  with generally  accepted  accounting  principles,
     provided  that each PCR Property  and each New Project  will be  considered
     separately  without  taking into  account any  negative  cash flow that may
     exist in any other PCR Property or New Project.

     Generally,  requests for escrow release are made as a matter of course once
per year accompanied by the audited  financial  statements for the previous year
showing  verifiable  expenditures on mineral  properties or cash flow from those
properties.   Upon  review  and  approval  of  the  statements,  the  Regulatory
Authorities  approve the release of the escrow shares in a quantity that matches
the actual spending or cash flow divided by the "exploration spending per share"
or "cash  flow per  share." If all the escrow  shares  are not  released  to PCR
within ten years of issuance, all unreleased escrow shares shall be forfeited by
PCR and canceled.  The foregoing escrow shares are held subject to the direction
and determination of the Regulatory Authorities.

B.   Related party transaction

     As a  result  of the  PCR  acquisition,  Minco  entered  into a  consulting
agreement  dated June 25,  1996,  with a Kaisun  Investment,  a private  company
controlled by Ken Cai,  Minco's current  President and Chief Executive  Officer,
under the terms of which such company  receives $8,333 per month in exchange for
Mr.  Cai  serving  as  president  and  chief  executive  officer  and  providing
consulting,   management  and  supervision   services  in  connection  with  the
development  of overall  corporate  strategy.  In  addition,  Kaisun  Investment
receives  expenses  of $100 a day while  Mr.  Cai is in  China.  The  consulting
agreement has a three-year  term and was renewed for an  additional  three years
effective June 25, 1999.

     During the years ended  December 31, 2000,  1999 and 1998, the Company paid
Kaisun Investment,  a total of $117,817,  $117,831, and $117,715,  respectively,
for management services, property investigation,  geological consulting and rent
in China.  Kaisun Investment is a company  controlled by Dr. Ken Cai,  president
and director of the Company.  The amounts  paid to Kaisun  Investment  include a
management fee of $8,333 per month discussed in the preceding paragraph.

     None of the  directors or senior  officers of the Company and no associates
or  affiliates  of any of them,  is or has been  indebted  to the Company or its
subsidiaries at any time during the year ended December 31, 2000.  However,  the
Company has entered into a Loan Agreement with its president, Mr. Ken Cai, dated
as of October 8, 1997 (the "Loan  Agreement").  Pursuant to the Loan  Agreement,
the  Company  has agreed to advance to Mr. Cai up to $225,000 as a loan in order
to assist Mr. Cai in moving from Toronto to Vancouver and purchasing a residence
in either Vancouver or Beijing. The loan will be fully secured and repaid by Mr.
Cai upon the  occurrence  of  certain  stated  events as  described  in the Loan
Agreement. The Loan Agreement remains in full force and effect; however, Mr. Cai
has not yet exercised his right under the terms of the Loan Agreement.

     Minco  believes that the consulting  agreement  with Kaisun  Investment and
Loan  Agreement with Mr. Cai are on terms as favorable as could be obtained from
an unaffiliated third party. Other than the previously disclosed agreements with
Teck and Cominco, Minco has not entered into any other transactions with Teck or
Cominco.

<PAGE>39

Item 8. Financial Statements

A.   Consolidated Statements and Other Financial Information

     The  following  financial  statements  of Minco are attached to this Annual
Report:

        Auditors' Report.

        Consolidated Balance Sheet at December 31, 2000 and 1999.

        Consolidated Statement of Operations and Deficit for the years ended
        December 31, 2000, 1999 and 1998.

        Consolidated Statement of Cash Flows for the years ended December 31,
        2000, 1999 and 1998.

        Notes to Consolidated Financial Statements

Dividend policy.

     The  Company  has never paid any  dividends  and does not intend to pay any
dividends in the near future.

Item 9. The Offering and Listing

     Since  February 24,  1998,  Minco's  common  shares have been listed on the
Toronto Stock  Exchange.  Previously,  Minco's common shares were dual listed on
the CDNX (formerly the Vancouver Stock Exchange) and Toronto Stock Exchange.  On
January 29, 1999,  voluntary delisted its common shares from the CDNX. The Board
of Directors of Minco deemed a continued  listing on a Canadian junior exchange,
such as the CDNX to be an  unnecessary  requirement  both from a  financial  and
management perspective.

     Minco's common shares are not currently  trading on any U.S. stock exchange
or in the  over-the-  counter  market,  and  accordingly,  there is currently no
public market for the common shares of Minco in the United States. Minco intends
to have  its  common  shares  quoted  on the OTC  Bulletin  Board.  However,  no
assurance  can be given that Minco's  common shares will qualify to be quoted on
the OTC Bulletin Board,  nor that a market will develop if Minco's common shares
are quoted on the OTC Bulletin Board.

     The following tables set forth the reported high and low prices for (a) the
five most recent fiscal years; (b) each quarterly period for the past two fiscal
years and for the first  quarter  of 2001;  and (c) each  month for the past six
months.  Beginning in December  1998,  Minco's common stock began trading on the
Toronto Stock Exchange.  Prior to that time,  Minco's common shares were trading
on the CDNX.

<PAGE>40

     High and low price for the five most recent fiscal years.


Years Ended                                       High       Low
-----------                                       ----       ---
December 31, 1996                                $4.20      $0.95
December 31, 1997                                $3.15      $1.00
December 31, 1998                                $2.00      $2.40
December 31, 1999                                $2.50      $0.95
December 31, 2000                                $1.88      $0.30

     High and low prices for each quarterly period for the past two fiscal years
ended December 31, 1999 and 2000.


Year and Quarter                                  High        Low
----------------                                  ----        ---
March 31, 1999                                   $2.25      $0.95
June 30, 1999                                    $2.50      $1.50
September 30, 1999                               $1.80      $1.40
December 31, 1999                                $1.50      $1.10

March 31, 2000                                   $1.88      $1.35
June 30, 2000                                    $1.35      $0.70
September 30, 2000                               $0.80      $0.40
December 31, 2000                                $0.70      $0.30

March 31, 2001                                   $0.65      $0.31

     High and low prices for each month for the past six months.

Month Ended                                       High        Low
-----------                                       ----        ---
October 2000                                     $0.70      $0.40
November 2000                                    $0.55      $0.41
December 2000                                    $0.59      $0.30

January 2001                                     $0.65      $0.35
February 2001                                    $0.45      $0.32
March 2001                                       $0.55      $0.31

Item 10. Additional Information

A.   Share capital

     Minco has 100,000,000 common shares authorized, without par value, of which
16,380,123 shares were issued and outstanding as of May 31, 2001.

     Each of the  common  shares  has equal  dividend,  liquidation  and  voting
rights.  Voters of the common  shares are  entitled to one vote per share on all
matters that may be brought before them.

<PAGE>41

Holders of the common shares are entitled to receive  dividends when declared by
the Board of Directors from funds legally available therefor.  The common shares
are not redeemable,  have no conversion rights and carry no pre-emptive or other
rights to subscribe for additional  shares.  The  outstanding  common shares are
fully paid and non-assessable.

     Of Minco's common shares outstanding, 2,991,322 are held in escrow, subject
to release or  cancellation  upon certain  conditions.  See Item 7  "Performance
Shares or Escrow Securities."

     The transfer  agent and registrar  for the common shares is Montreal  Trust
Company of Canada, 510 Burrard Street,  Vancouver,  British Columbia, Canada V6B
5A1.

     The  following  table  sets forth a history  of the share  capital  for the
Company for the last three years, and through March 31, 2001.

<TABLE>
<CAPTION>

                                              Issuance                               Common Share
                                              --------                               ------------
<S>                                          <C>                                     <C>
Balance, December 31, 1997                                                            15,370,123

                                 Private placement of common shares to Teck              375,000
                                 Corporation

Balance, December 31, 1998                                                            15,745,123

                                 Private placement of common shares                      250,000

                                 Private placement of common shares                      150,000

                                 Exercise of warrants                                    125,000

Balance, December 31, 1999                                                            16,270,123

                                 Exercise of warrants                                    110,000

Balance, December 31, 2000                                                            16,380,123

Balance, March 31, 2001                                                               16,380,123

</TABLE>

B.   Memorandum and articles of association

     On July 8, 1996,  Minco adopted a revised Articles of Minco Mining & Metals
Corporation under the Province of British Columbia Company Act.

Common Shares

     All issued and outstanding common shares are fully paid and non-assessable.
Each  holder of record of common  shares is entitled to one vote for each common
share so held on all matters  requiring a vote of  shareholders,  including  the
election  of  directors.  The  holders  of common  shares  will be  entitled  to
dividends  on a  pro-rata  basis,  if and  when  as  declared  by the  board  of
directors.  There are no  preferences,  conversion  rights,  preemptive  rights,
subscription rights, or restrictions or transfers attached to the common shares.
In the  event of liquidation, dissolution,  or winding up  of the  Company,  the

<PAGE>42

holders  of common  shares  are  entitled  to  participate  in the assets of the
Company  available  for  distribution   after  satisfaction  of  the  claims  of
creditors.

Powers and Duties of Directors

     The directors  shall manage or supervise the  management of the affairs and
business of Minco and shall have  authority to exercise all such powers of Minco
as are not, by the Company Act or by the Memorandum or the Article,  required to
be exercised by Minco in a general meeting.

     Directors will serve as such until the next annual meeting.  In general,  a
director who is, in any way, directly or indirectly interested in an existing or
proposed  contract or  transaction  with the Company  whereby a duty or interest
might be created to conflict with his duty or interest  director,  shall declare
the nature and extent of his  interest in such  contract or  transaction  or the
conflict or potential  conflict  with his duty and interest as a director.  Such
director shall not vote in respect of any such contract or transaction  with the
Company in which he is interested  and if he shall do so, his vote shall note be
counted,  but he shall be counted in the quorum  present at the meeting at which
such vote is taken. However, notwithstanding the foregoing, directors shall have
the right to vote on determining the remuneration of the directors.

     The directors may from time to time on behalf of Minco; (a) borrow money in
such manner and amount from such sources and upon such terms and  conditions  as
they think fit; (b) issue bonds,  debentures and other debt obligations;  or (c)
mortgage, charge or give other security on the whole or any part of the property
and assets of Minco.

     The majority of the directors of Minco must be persons ordinarily  resident
in Canada and one  director  of Minco  must be  ordinarily  resident  in British
Columbia.  There is no age limitation,  or minimum share ownership,  for Minco's
directors.

Shareholders

     An annual general meeting shall be held once in every calendar year at such
time and  place as may be  determined  by the  directors.  A quorum at an annual
general  meeting and special  meeting shall be two  shareholders  or one or more
proxy holder  representing  two  shareholders,  or one  shareholder  and a proxy
holder representing another  shareholder.  There is no limitation imposed by the
laws of Canada or by the charter or other constituent  documents of Minco on the
right  of a  non-resident  to hold or vote  the  common  shares,  other  than as
provided in the Investment  Canada Act, (the  "Investment  Act") discussed below
under "Item 10. Additional Information, D. Exchange Controls."

     In accordance with British  Columbia law,  directors shall be elected by an
"ordinary resolution" which means (a) a resolution passed by the shareholders of
Minco in general  meeting by a simple majority of the votes cast in person or by
proxy, or (b) a resolution that has been submitted to the  shareholders of Minco
who would  have been  entitled  to vote on it in person or by proxy at a general
meeting of Minco and that has been consented to in writing by such  shareholders
of Minco holding  shares  carrying not less than 3/4 of the votes entitled to be
cast on it.

     Under  British  Columbia law certain  items such as an amendment to Minco's
articles or entering into a merger,  requires  approval by a special  resolution
which shall mean (a) a  resolution  passed by a majority of not less than 3/4 of
the  votes cast by the shareholders of  Minco who, being entitled to do so, vote

<PAGE>43

in person or by proxy at a  general  meeting  of the  company  (b) a  resolution
consented  to in  writing  by every  shareholder  of Minco who  would  have been
entitled  to vote in  person or by proxy at a general  meeting  of Minco,  and a
resolution  so  consented  to is deemed to be a special  resolution  passed at a
general meeting of Minco.

C.   Material Contracts

     1. Assignment of Contracts and Share Purchase  Agreement  between Minco and
     PCR dated  February  19, 1996,  assigning  all of PCR's direct and indirect
     exploration and development  rights to properties located in China to Minco
     in exchange for  7,280,000  common  shares of Minco and the  assumption  of
     PCR's liabilities to third parties.

     2. Investment and  Participation  Agreement among PCR, Teck Corporation and
     Cominco dated February 19, 1996. Under the agreement,  PCR granted Teck and
     Cominco a right to participate in direct and indirect  interests in mineral
     properties  acquired  by PCR in  consideration  of an  investment  in  PCR.
     Investment  and  Participation  Agreement  dated  February 20, 1996,  among
     Minco,  Teck  Corporation  and Cominco Ltd.  granting Teck  Corporation and
     Cominco Ltd. an  investment  in Minco Mining & Metal and certain  rights to
     properties  that may be  developed  by Minco.  The  February  19,  1996 and
     February  20,  1996,  are  collectively  referred  to  the  "Teck-  Cominco
     Agreements."

     Pursuant  to the terms of the  Teck-Cominco  Agreements,  Teck and  Cominco
     received "earn-in rights" as to the Non-Chinese Interest in any two mineral
     property  rights  acquired  by  Minco  in  China  after  the  date  of  the
     Teck-Cominco  Agreements until March 1, 2004. The Non-Chinese Interest with
     respect  to a property  represents  the direct or  indirect  interest  in a
     property  that is  available  for a  non-Chinese  entity or a foreigner  to
     acquire under Chinese Law.

     The earn-in  rights  provide  that upon Minco  procuring a base or precious
     metal project,  and after preliminary work by Minco, Teck and Cominco shall
     first determine  whether such project is to be governed by the Teck-Cominco
     Agreements.  If they  determine  that  it is to be so  governed,  Teck  and
     Cominco shall hold earn-in  rights in respect to such project.  If Teck and
     Cominco   determine  that  the  project  is  not  to  be  governed  by  the
     Teck-Cominco  Agreements,  Minco shall  thereafter  have the right to elect
     whether or not to have the project assigned to it at cost.

     If Teck and Cominco  determine  that a base or precious metal project is to
     be governed by the Teck-Cominco  Agreements,  their earn-in rights shall be
     exercisable  in one of two  ways,  depending  on  whether  the  project  is
     determined to be a  "development  property" or an  "exploration  property",
     which determination is made solely by Teck and Cominco. If determined to be
     a  development  property,  Teck and Cominco shall have the right to acquire
     70% of the  Non-  Chinese  Interest  in such  property  and to  become  the
     operator  of the  project by  completing,  at their sole cost,  any further
     project  work and the final  feasibility  report on the  project.  Teck and
     Cominco must then  arrange for 70% of the costs  required to be provided by
     the non-Chinese  parties to place the property into commercial  production.
     Upon  completion of all of the foregoing,  Teck and Cominco shall be deemed
     to have  exercised  their  earn-in  rights in  respect  to the  development
     project.  Minco  must  contribute  30%  of the  costs  required  after  the
     completion of the feasibility study.

<PAGE>44

     If the  project  is  determined  to be an  exploration  property,  Teck and
     Cominco shall have the right, upon completion of a preliminary  feasibility
     study  by  Minco,  to  acquire  51% of the  Non-Chinese  Interest  in  such
     exploration  property  and  to  become  the  operator  of  programs  on the
     property.  To earn this 51% interest,  Teck and Cominco must fund the final
     feasibility study on the project and arrange for all financing  required to
     be  provided  by  the  non-Chinese  parties  to  place  the  property  into
     commercial  production,  as  determined  in  the  feasibility  study.  Upon
     completion  of all of the  foregoing,  Teck and Cominco  shall be deemed to
     have exercised their earn-in rights in respect to the exploration project.

     Each  property  for which Teck or Cominco have  exercised an earn-in  right
     shall be governed by its own separate  joint venture  agreement  which will
     include a  provision  that if Minco's  interest  is diluted to 10% or less,
     such interest  will be converted to a 1% net smelter  return  royalty.  The
     agreements  further  provide  that  Cominco  (in the  case of a base  metal
     property) or Teck (in the case of a precious metal  property)  shall be the
     designated  operator of the property on behalf of the joint  venture  which
     shall be formed to exploit any such property.

     The Teck-Cominco Agreements contain provisions under which Teck and Cominco
     agree,  subject to certain  limitations,  not to increase their  collective
     share holdings in Minco beyond 20% of the common shares, nor to reduce them
     beyond  50% of their  initial  ownership,  which  limitations  expire  upon
     certain changes in control of Minco. Teck and Cominco have a right of first
     refusal to purchase common shares of Minco in any future  offerings,  so as
     to maintain their percentage ownership in Minco.

     After Teck and Cominco have exercised  their earn-in rights in an aggregate
     of two  projects  procured by Minco,  Teck and Cominco  shall have  further
     preferential  rights of first  refusal in  respect  to  further  properties
     identified by Minco for a period of three years after the exercise of their
     earn-in rights.  These  preferential  rights of purchase will apply only in
     circumstances  where  Minco,  if Minco  has  elected  to  acquire a project
     identified  by PCR,  intend to offer an interest  to their  parties or have
     received  an  offer  to  purchase,  earn or  acquire  an  interest  in such
     properties from third parties. Minco is required to notify Teck and Cominco
     of its intent to sell an interest in such a project to a third  party,  and
     provide Teck and Cominco all information which Minco possesses with respect
     to the  project  as well as the terms of the  proposed  sale,  and Teck and
     Cominco may, within thirty days,  purchase such interest on the terms which
     Minco had proposed to accept from a third party.

     The rights of Teck and Cominco under the Teck-Cominco Agreements shall only
     apply to projects secured by Minco on or before March 1, 2004.

     3.  Performance  Shares  Escrow  Agreement  dated August 17, 1995,  between
     Minco,  Montreal Trust Company of Canada and certain  shareholders of Minco
     describing  the  condition  under which  certain  outstanding  Minco common
     shares  may be  released.  The  escrow  shares  may be  released  upon  the
     following conditions.

     a.   One escrow  share for each $0.97 in the value of the  interests in the
          mineral  properties  acquired by the Company  from PCR pursuant to the
          PCR Agreement (the "PCR  Properties"),  based on a valuation report to
          be  prepared  by  a  qualified   independent   consultant,   less  any
          expenditures  required to be made by the Company,  pursuant to the PCR
          Agreement  or  otherwise,  in order to earn its  interests  in the PCR

<PAGE>45

          Properties (provided that all required Chinese governmental  approvals
          in order to  perfect  the  interests  to be  acquired  by the  Company
          hereunder have been obtained for each of the PCR  Properties  that are
          the subject of the valuation report);

     b.   One escrow  share for each $0.97 in the value of the  interest  in any
          new mineral  properties  acquired  by the Company  pursuant to the PCR
          Agreement or the TCIP Agreements  ("New  Projects"),  such value to be
          determined  on the same basis and  subject to the same  provisions  as
          described in note 1 above.

     c.   One escrow share for every $1.81  expended by the Company,  PCR, Teck,
          Cominco,   Temco  or  any  other  third  party  expending   monies  on
          exploration  and  development  of the  PCR  Properties  or of any  New
          Projects, exclusive of general and administrative expenses, determined
          in accordance  with the  provisions  applicable  to natural  resources
          issuers  under Local Policy  Statement  #3-07 of the British  Columbia
          Securities Commission; and

     d.   One  escrow  share for every  $0.97 in  cumulative  cash flow from the
          operations of the Company on the PCR  Properties  and any New Projects
          and as determined in accordance  with  generally  accepted  accounting
          principles,  provided that each PCR Property and each New Project will
          be considered separately without taking into account any negative cash
          flow that may exist in any other PCR Property or New Project.

     4. Consulting Agreement dated June 25, 1996, between Minco and Kaisun Group
     Canada,  Inc.  engaging  Kaisun to act as  president  and  chief  executive
     officer and to provide Minco with such other  consulting  services as Minco
     and Kaisun agree upon. The term of the consulting agreement is for a period
     commencing  March 1, 1996,  and ending June 25, 1999, for a fee of $500 per
     day to a maximum of $100,000 per year.

     5. Cominco, Teck and Minco letter agreement regarding White Silver Mountain
     dated June 15, 1998. Under the letter  agreement,  Cominco has the right to
     elect to acquire an interest in the White  Silver  Mountain  property up to
     20%, provided that Cominco incurs expenditures on the White Silver Mountain
     property  of 1.5  times  the  expenditures  made by  Teck  and  pays  Minco
     $1,125,000 upon the closing of a project financing.

     6. Sino-Foreign Joint Venture Agreement forming Gansu Keyin Mining Co. Ltd.
     to explore and develop the White Silver Mountain project.  A fully licensed
     Sino-Foreign  joint venture  company,  Gansu Keyin Mining Co. Ltd.  ("Gansu
     Keyin") has been formed to hold the mineral interests.  In order to earn up
     to an 80% interest in Gansu Keyin which owns the rights to the White Silver
     Mountain project,  Minco must spend a minimum of US$4.8 million (40 million
     RMB) on the White Silver Mountain property over a six year period. If Minco
     fails to spend the minimum amount,  Minco's interest in Gansu Keyin will be
     capped  by a  predetermined  formula  as  set  out  in  the  Joint  Venture
     Agreement.

     Under the terms of the  joint  venture  contract,  Gansu  Keyin's  board of
     directors  consists  of seven  directors  of which  Minco  has the right to
     select four directors,  including the chairman.  Minco has selected Messrs.
     Ken Cai,  William Meyer,  Hans Wick and Fred Daley as its  representatives.
     Baiyin has the right to select the remaining three directors.

<PAGE>46

     Because of Minco's majority  ownership and majority  representatives on the
     Gansu  Keyin's  board,  Minco  controls  Gansu  Keyin's  operations  in the
     ordinary course of business.  However, the following  transactions by Gansu
     Keyin  requires the unanimous  approval by its board:  (1)  terminating  or
     dissolving Gansu Keyin; (2) selling or mortgaging  assets that have a value
     of 10% of Gansu Keyin's assets;  (3) increasing or decreasing Gansu Keyin's
     registered capital;  (4) borrowing by Gansu Keyin; (5) merging Gansu Keyin;
     (6)   guaranteeing  on  behalf  of  Gansu  Keyin;   and  (7)   establishing
     organization under the board.

     7.  Sino-Foreign  Joint  Venture  Agreement  forming Damo Mining Co. Ltd to
     explore and develop the Gobi Gold project.  Inner Mongolia Damo Mining Co.,
     Ltd.  ("Damo  Mining") was formed and operates  pursuant to a  Sino-Foreign
     Joint Venture contract between EILR and Minco. Under the terms of the joint
     venture  contract,  Damo  Mining's  board of  directors  consists  of seven
     directors of which Minco has the right to select four directors,  including
     the chairman.  Minco has selected Messrs.  Ken Cai,  William Meyer,  Robert
     Callander  and Ruijin Jiang as its  representatives.  EILR has the right to
     select the remaining three directors.

     Because of Minco's majority ownership and majority  representatives on Damo
     Mining's  board,  Minco  controls Damo Mining's  operations in the ordinary
     course of business.  However,  the  following  transactions  by Damo Mining
     requires the unanimous approval by its board: (1) terminating or dissolving
     Damo Mining;  (2) selling or mortgaging  assets that have a value of 10% of
     Damo Mining's assets; (3) increasing or decreasing Damo Mining's registered
     capital;  (4)  borrowing  by Damo  Mining;  (5) merging  Damo  Mining;  (6)
     guaranteeing on behalf of Damo Mining;  and (7) establishing  organizations
     under the board.

     8. Co-operation  Agreement regarding the Development of the Changa Lijiagou
     Land Zinc  Deposit  dated  November  17,  1997,  between  Minco and  Baiyin
     Non-Ferrous Metals company, a corporation incorporated under the law of the
     People's Republic of China ("BNMC").  Under this agreement,  Minco and BNMC
     will  prepare  and  file  an  application  with  the  Chinese  governmental
     authorities to form a joint venture company to explore,  and, if warranted,
     develop and exploit the lead and zinc  deposits of Changba and Lijiagou and
     the joint area between  them.  If a joint  venture  company is approved and
     formed,  Minco will contribute  capital and advance  equipment to develop a
     3,500  tonne  per day  underground  mine for a 75%  interest  in the  joint
     venture  and BNMC will  contribute  its  mining  right to the  Changba  and
     Lijiagou area for its 25% joint venture interest.

D.   Exchange Controls

     There is no law, governmental decree or regulation in Canada that restricts
the export or import of capital or affects the remittance of dividends, interest
or  other  payments  to a  non-resident  holder  of  common  shares  other  than
withholding tax  requirements.  Any such  remittances to United States residents
are subject to withholding tax. See "Taxation."

     There is no  limitation  imposed by the laws of Canada or by the charter or
other  constituent  documents of Minco on the right of a non-resident to hold or
vote the common  shares,  other than as  provided  in the  Investment  Act.  The
following discussion summarizes the principal features of the Investment Act for
a non-resident who proposes to acquire the common shares.

<PAGE>47

     The  Investment  Act  generally  prohibits  implementation  of a reviewable
investment  by  an  individual,   government  or  agency  thereof,  corporation,
partnership,  trust or joint venture (each an "entity") that is not a "Canadian"
as defined in the Investment Act (a  "non-Canadian"),  unless after review,  the
Director of Investments appointed by the minister responsible for the Investment
Act is satisfied  that the  investment is likely to be of net benefit to Canada.
An investment in the common shares by a non-Canadian other than a "WTO Investor"
(as that term is defined by the Investment Act, and which term includes entities
which are  nationals of or are  controlled  by nationals of member states of the
World Trade Organization) when Minco was not controlled by a WTO Investor, would
be  reviewable  under the  Investment  Act if it was an  investment  to  acquire
control  of Minco  and the  value of the  assets  of  Minco,  as  determined  in
accordance  with the  regulations  promulgated  under the  Investment  Act,  was
$5,000,000 or more, or if an order for review was made by the federal cabinet on
the  grounds  that the  investment  related to  Canada's  cultural  heritage  or
national identity, regardless of the value of the assets of Minco. An investment
in the common  shares by a WTO  Investor,  or by a  non-Canadian  when Minco was
controlled by a WTO Investor, would be reviewable under the Investment Act if it
was an  investment  to  acquire  control of Minco and the value of the assets of
Minco, as determined in accordance with the  regulations  promulgated  under the
Investment  Act was not less  than a  specified  amount,  which for 1996 was any
amount in excess of $168 million.  A non-Canadian would acquire control of Minco
for the purposes of the Investment Act if the  non-Canadian  acquired a majority
of the common  shares.  The  acquisition  of one third or more,  but less than a
majority of the common shares would be presumed to be an  acquisition of control
of Minco unless it could be established that, on the acquisition,  Minco was not
controlled in fact by the acquirer through the ownership of the common shares.

     Certain transactions relating to the common shares would be exempt from the
Investment Act,  including:  (a) an acquisition of the common shares by a person
in the  ordinary  course  of that  person's  business  as a trader  or dealer in
securities;  (b) an  acquisition  of  control  of Minco in  connection  with the
realization of security granted for a loan or other financial assistance and not
for a purpose  related  to the  provisions  of the  Investment  Act;  and (c) an
acquisition  of  control  of  Minco  by  reason  of  an  amalgamation,   merger,
consolidation or corporate reorganization following which the ultimate direct or
indirect  control in fact of Minco,  through the ownership of the common shares,
remained unchanged.

     Chinese Currency

     The  Chinese  currency  is the  Renminbi  yuan  ("RMB").  It is not  freely
convertible   although  the  Chinese   government  has   emphasized   that  full
convertibility is the long-term goal. Full  convertibility,  probably after some
transitional  period,  will be a condition  precedent to membership in the World
Trade  Organization,  for which China has applied.  The People's  Bank of China,
China's central banking authority,  publishes the Renminbi exchange rate against
the U.S.  dollar every day based on the trading price between the two currencies
of the previous day on the Inter-Bank  Foreign  Exchange  Market  established in
Shanghai in 1994. In addition, the People's Bank of China publishes the Renminbi
exchange  rates  against  other  major  foreign  currencies.   Designated  banks
participate on the Inter-Bank Foreign Exchange Market through a computer network
connected with major cities in China.

     Foreign  exchange is  administered  by the State  Administration  Bureau of
Exchange Control (SAEC), and its local branch offices,  all of which are subject
to the  supervision  of the  People's  Bank of China.  The SAEC has  established
regulations  relating to outward  remittance by foreign investors of their share
of net profits or dividends  and final  repatriation  of their  investments,  in
foreign currency.  Subject to payment of applicable taxes, foreign investors may
remit out of China,  in foreign  exchange,  profits or dividends  derived from a
source  within China.  The Swap  Centers  were  established  to  assist  foreign

<PAGE>48

     investment  enterprises  to  balance  their  foreign  currency  income  and
     expenses  by  converting  surplus  local  currency  earnings  into  foreign
     exchange  and  vice  versa   without  their  having  to  wait  for  central
     allocation.  The central foreign exchange  adjustment  center is in Beijing
     and other  centers have been  established  in the coastal  cities,  Special
     Economic  Zones and  other  major  cities,  municipalities  and  autonomous
     regions.  Remittance by foreign investors of any other amounts  (including,
     for  instance,  principal and interest on debt and proceeds of sale arising
     from a disposal by a foreign  investor of any of its or his  investments in
     China) out of China is subject to the approval of the SAEC.

     Minco finances its Chinese  operations by  transferring  Canadian  dollars,
which are then converted into Chinese  dollars,  or RMB. Based on prior history,
the Company does not believe that the Canadian  dollar and RMB  conversion to be
currency risk. No assurance, however, can be given that a currency risk will not
occur in the future.

E.   Taxation

Canadian Federal Income Tax Consequences

     The  following   summarizes  the  principal  Canadian  federal  income  tax
consequences  applicable to the holding and  disposition of common shares in the
capital of Minco by a United States resident, and who holds common shares solely
as capital  property  (a "U.S.  Holder").  This  summary is based on the current
provisions  of the Income Tax Act  (Canada)  (the "Tax  Act"),  the  regulations
thereunder,  all  amendments  thereto  publicly  proposed by the  government  of
Canada,  the  published  administrative  practices of Revenue  Canada,  Customs,
Excise and Taxation,  and on the current provisions of the Canada-United  States
Income Tax  Convention,  1980,  as amended (the  "Treaty").  Except as otherwise
expressly  provided,  this summary  does not take into  account any  provincial,
territorial  or  foreign  (including  without  limitation,  any U.S.) tax law or
treaty.  It has been  assumed that all  currently  proposed  amendments  will be
enacted  substantially as proposed and that there is no other relevant change in
any  governing  law or  practice,  although no  assurance  can be given in these
respects.

     Each U.S.  Holder is advised to obtain tax and legal advice  applicable  to
such U.S. Holder's particular circumstances.

     Every  U.S.  Holder is liable to pay a  Canadian  withholding  tax on every
dividend  that is or is deemed to be paid or credited to the U.S.  Holder on the
U.S. Holder's common shares. The statutory rate of withholding tax is 25% of the
gross amount of the dividend  paid.  The Treaty  reduces the statutory rate with
respect to dividends paid to a U.S. Holder for the purposes of the Treaty. Where
applicable,  the general rate of withholding  tax under the Treaty is 15% of the
gross amount of the dividend,  but if the U.S.  Holder is a company that owns at
least 10% of the voting stock of Minco and beneficially  owns the dividend,  the
rate of withholding  tax is 5% for dividends paid or credited after 1996 to such
corporate U.S. Holder. Minco is required to withhold the applicable tax from the
dividend  payable  to the  U.S.  Holder,  and to remit  the tax to the  Receiver
General of Canada for the account of the U. S. Holder.

     Pursuant  to the Tax Act, a U.S.  Holder  will not be  subject to  Canadian
capital  gains  tax  on  any  capital  gain  realized  on an  actual  or  deemed
disposition of a common share, including a deemed disposition on death, provided
that the U.S.  Holder did not hold the common share as capital  property used in
carrying on a business in Canada,  and that neither the U. S. Holder nor persons
with whom the U.S.  Holder did not deal a arms length (alone or together)  owned

<PAGE>49

or had the right or an option to acquire 25% or more of the issued shares of any
class  of  Minco  at any  time  in the  five  years  immediately  preceding  the
disposition.

United States Tax Consequences

Passive Foreign Investment Companies

     The  Treaty   essentially   calls  for  taxation  of  shareholders  by  the
shareholder's  country of  residence.  In those  instances in which a tax may be
assessed by the other country,  a  corresponding  credit against the tax owed in
the country of residence is generally available, subject to limitations.

     Under ss.1296, of the Internal Revenue Code of the United States, a foreign
investment  corporation is treated as a passive  foreign  investment  company (a
"PFIC") if it earns 75% or more of its gross income from  passive  sources or if
50% or more of the value of its  assets  produce  passive  income.  The  Company
believes that it is a passive  foreign  investment  company  ("PFIC") for United
States federal income tax purposes with respect to a United States Investor.

     Because the Company is a PFIC,  unless a United  States  Investor  who owns
shares in the  Company  elects (a section  1295  election)  to have the  Company
treated  as a  "qualified  electing  fund" (a "QEF")  as  described  below,  the
following rules apply:

     1.  Distributions  made by the  Company  during a taxable  year to a United
States Investor who owns shares in the Company that are an "excess distribution"
(defined  generally  as the excess of the amount  received  with  respect to the
shares in any taxable  year over 125% of the average  received in the shorter of
either the three previous years or such United States Investor's  holding period
before  the  taxable  year)  must  be  allocated  ratably  to  each  day of such
shareholder's  holding period.  The amount allocated to the current taxable year
and to years when the  corporation  was not a PFIC must be  included as ordinary
income in the  shareholder's  gross  income  for the year of  distribution.  The
remainder  is not  included  in  gross  income  but the  shareholder  must pay a
deferred tax on that portion. The deferred tax amount, in general, is the amount
of tax that would have been owed if the  allocated  amount had been  included in
income in the earlier year,  plus interest.  The interest  charge is at the rate
applicable to deficiencies in income taxes.

     2.  The  entire  amount  of any  gain  realized  upon  the  sale  or  other
disposition of the share will be treated as an excess  distribution  made in the
year of sale or  other  disposition  and as a  consequence  will be  treated  as
ordinary income and, to the extent  allocated to years prior to the year of sale
or disposition, will be subject to the interest charge described above.

     A shareholder that makes a section 1295 election will be currently  taxable
on his or her pro rata share of the Company's  ordinary earnings and net capital
gain (at ordinary income and capital gains rates, respectively) for each taxable
year of the Company,  regardless of whether or not distributions  were received.
The shareholder's  basis in his or her shares will be increased to reflect taxed
but undistributed income. Distributions of income that had previously been taxed
will result in a corresponding  reduction of basis in the shares and will not be
taxed against as a distribution to the shareholder.

     A  shareholder  may make a section 1295 election with respect to a PFIC for
any taxable year of the  shareholder  (shareholder's  election  year). A section
1295  election  is  effective  for  the  shareholder's  election  year  and  all
subsequent taxable years of the shareholder. (In temporary regulations, Treasury

<PAGE>50

provides  procedures  for both  retroactive  and protective  elections).  Once a
section 1295  election is made it remains in effect,  although  not  applicable,
during  those  years that the Company is not a PFIC.  Therefore,  if the Company
requalifies as a PFIC, the section 1295 election  previously made is still valid
and the  shareholder is required to satisfy the  requirements  of that election.
Once a shareholder makes a section 1295 election, the shareholder may revoke the
election only with the consent of the Secretary.

     If the  shareholder  makes the section 1295 election for the first tax year
of the Company as a PFIC that is included in the  shareholder's  holding period,
the result will be that the PFIC will qualify as a "pedigreed  QEF" with respect
to  the  shareholder.  If a QEF  is an  unpedigreed  QEF  with  respect  to  the
shareholder,  the  shareholder is subject to both the non-QEF and QEF treatment.
Certain  elections  are  available  which  enable  shareholders  to  convert  an
unpedigreed QEF into a pedigreed QEF thereby avoiding such dual application.

     A shareholder making the section 1295 election must make the election on or
before the due date, as extended, for filing the shareholder's income tax return
for the first taxable year to which the election will apply. A shareholder  must
make a section 1295 election by completing Form 8621; attaching said Form to its
federal income tax return;  and reflecting in the Form the information  provided
in the PFIC Annual  Information  Statement or if the shareholder  calculated the
financial information, a statement to that effect; and filing a copy of the Form
with the Philadelphia Service Center. As provided in IRS Notice 88-125, the PFIC
Annual  Information  Statement must include the shareholder's pro rata shares of
the ordinary  earnings  and net capital gain of the PFIC for the PFIC's  taxable
year or information  that will enable the  shareholder to calculate its pro rata
shares.  In  addition,  the  PFIC  Annual  Information  Statement  must  contain
information  about  distributions  to shareholders and a statement that the PFIC
will permit the  shareholder to inspect and copy its permanent books of account,
records,  and  other  documents  of the PFIC  necessary  to  determine  that the
ordinary  earnings  and  net  capital  gain of the  PFIC  have  been  calculated
according to federal income tax  accounting  principles.  Temporary  regulations
have recently  clarified  that a shareholder  may obtain the books,  records and
other  documents of the foreign  corporation  necessary for the  shareholder  to
determine  the correct  earnings  and  profits and net capital  gain of the PFIC
according to federal income tax principles and calculate the  shareholder's  pro
rata shares of the PFIC's ordinary  earnings and net capital gain. In that case,
the PFIC must include a statement in its PFIC Annual Information  Statement that
it has  permitted  the  shareholder  to  examine  the PFIC's  books of  account,
records,  and other  documents  necessary for the  shareholder  to calculate the
amounts of ordinary earnings and net capital gain.

     Because the Company's stock is "marketable"  under section 1296(e),  a U.S.
Investor  may elect to mark the stock to market each year.  In  general,  a PFIC
shareholder who elects under section 1296 to mark the marketable stock of a PFIC
includes in income each year an amount equal to the excess,  if any, on the fair
market  value of the PFIC  stock as of the  close of the  taxable  year over the
shareholder's  adjusted  basis in such stock.  A shareholder  is also  generally
allowed a deduction  for the excess,  if any, of the adjusted  basis of the PFIC
stock over the fair market value as of the close of the taxable year. Deductions
under this rule,  however,  are allowable  only to the extent of any net mark to
market gains with  respect to the stock  included by the  shareholder  for prior
taxable years.  While the interest  charge regime under the PFIC rules generally
does not apply to  distributions  from and dispositions of stock of a PFIC where
the  U.S.  Investor  has  marked  to  market,  coordination  rules  for  limited
application will apply in the case of a U.S.  Investor that marks to market PFIC
stock later than the beginning of the shareholder's  holding period for the PFIC
stock.

<PAGE>51

     Special  rules apply with respect to the  calculation  of the amount of the
foreign tax credit with respect to excess  distributions by a PFIC or inclusions
under a QEF.

     Each U.S.  Holder should consult a tax advisor with respect to how the PFIC
rules may affect such shareholder's tax situation. In particular,  a U.S. Holder
should determine whether such shareholder  should elect to have Minco be treated
as a Qualified Electing Fund.

Other Consequences

     To the extent a  shareholder  is not  subject to the tax  regimes  outlined
above with  respect  to  foreign  corporations  that are  PFICs,  the  following
discussion  describes the United States federal income tax consequences  arising
from the holding and disposition of Minco's Common Shares.

U.S. Holders

     As used herein, a "U.S.  Holder," includes a holder of Common Shares who is
a citizen or resident of the United States,  a corporation  created or organized
in or under  the  laws of the  United  States  or of any  political  subdivision
thereof  and any other  person or entity  whose  ownership  of Common  Shares is
effectively  connected  with the  conduct of a trade or  business  in the United
States. A U.S. Holder does not include persons subject to special  provisions of
federal income tax laws, such as tax exempt organizations,  qualified retirement
plans,  financial  institutions,  insurance  companies,  real estate  investment
trusts,  regulated  investment  companies,  broker-dealers,  non-resident  alien
individuals  or foreign  corporations  whose  ownership of common  shares is not
effectively  connected  with the  conduct of a trade or  business  in the United
States and  shareholders  who  acquired  their  stock  through  the  exercise of
employee stock options or otherwise as compensation.

Distribution of Common Shares

     U.S.  Holders  receiving  dividend  distributions  (including  constructive
dividends)  with  respect to Minco's  common  shares are  required to include in
gross income for United States  federal  income tax purposes the gross amount of
such  distribution to the extent that Minco has current or accumulated  earnings
or profits,  without  reduction  for any Canadian  income tax withheld from such
distributions.  Such  Canadian tax withheld may be credited,  subject to certain
limitations,  against  the  U.S.  Holder's  United  States  federal  income  tax
liability  or,  alternatively,  may be deducted in computing  the U.S.  Holder's
United  States  federal  income tax by those who itemize  deductions.  (See more
detailed  discussions  at  "Foreign  Tax  Credit"  below).  To the  extent  that
distributions  exceed current or accumulated earnings and profits of Minco, they
will be treated  first as a return of capital up to the U.S.  Holder's  adjusted
basis in the common  shares and  thereafter as gain from the sale or exchange of
such  shares.  Preferential  tax  rates  for the  long-term  capital  gains  are
applicable to a U.S. Holder which is an individual,  estate or trust.  There are
currently  no  preferential  tax rates for  long-term  capital  gains for a U.S.
Holder which is a corporation.

     Dividends  paid on Minco's common shares will not generally be eligible for
the dividends received deduction  provided to corporations  receiving  dividends
from certain United States  corporations.  A U.S.  Holder which is a corporation
may, under certain  circumstances,  be entitled to a 70% deduction of the United
States source portion of dividends  received from Minco if such U.S. Holder owns
shares representing at least 10% of the voting power and value of Minco.

<PAGE>52

Foreign Tax Credit

     A U.S. Holder who pays (or has withheld from distribution)  Canadian income
tax with respect to the ownership of Minco's  common shares may be entitled,  at
the option of the U.S.  Holder,  to either a deduction  or a tax credit for such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a
tax credit,  because a credit  reduces  United States  federal income taxes on a
dollar-for-dollar  basis, while a deduction merely reduces the taxpayer's income
subject to tax.  This  election is made on a  year-by-year  basis and  generally
applies to all foreign income taxes paid by (or withheld  from) the U.S.  Holder
during that year. There are significant and complex  limitations  which apply to
the credit,  among which is the general limitation that the credit cannot exceed
the proportionate  share of the U.S. Holder's United States income tax liability
that the U.S.  Holder's  foreign  source  income  bears to his or its  worldwide
taxable income. In the determination of the application of this limitation,  the
various  items of income and  deduction  must be  classified  into  foreign  and
domestic sources.  Complex rules govern this classification  process.  There are
further  limitations on the foreign tax credit for certain types of income, such
as "passive  income,"  "high  withholding  tax  interest,"  "financial  services
income,"  "shipping  income," and certain other  classifications  of income. The
availability of foreign tax credit and the application of the limitations on the
credit are fact  specific and holders and  prospective  holders of common shares
should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares

     A U.S.  Holder  will  recognize  gain and loss upon the sale of the  common
shares equal to the difference,  if any, between (i) the amount of cash plus the
fair market value of any property  received and (ii) the shareholder's tax basis
in the  common  shares.  The gain or loss  will be  capital  gain or loss if the
shares  are a  capital  asset in the  hands of the  U.S.  Holder,  and will be a
short-term  or long-term  capital gain or loss  depending on each U.S.  Holder's
holding  period.  Gains and losses are netted and combined  according to special
rules in arriving at the overall capital gain or loss for a particular tax year.
Deductions for net capital losses are subject to  significant  limitations.  For
U.S.  Holders who are  individuals,  any unused portion of such net capital loss
may be carried over to be used in later tax years until such net capital loss is
thereby  exhausted.   For  U.S.  Holders  which  are  corporations  (other  than
corporations subject to Subchapter S of the Code), an unused capital loss may be
carried back three years from the loss year and carried  forward five years from
the loss year to be offset against  capital gains until such net capital loss is
thereby exhausted.

     The foregoing  discussion is based upon the sections of the Code,  Treasury
Regulations,    published   Internal   Revenue   Service   rulings,    published
administrative  positions of the Internal  Revenue  Service and court  decisions
that are currently applicable, any or all of which could be materially adversely
changed,  possibly  on a  retroactive  basis,  at any time.  In  addition,  this
discussion does not consider the potential effects, both adverse and beneficial,
of recently proposed legislation which, if enacted could be applied, possibly on
a  retroactive  basis,  at any time. A holder or  prospective  holder of Minco's
common shares should consult his or her own tax advisors  about  federal,  state
local and foreign tax  consequences  of purchasing,  owning and disposing of the
common shares of Minco.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

     Minco is exposed to market  risk,  primarily  related to foreign  exchange.
Minco  uses the  Canadian  dollar as its  reporting  currency  and is  therefore
exposed  to  foreign  exchange  movements  in China  where  Minco is  conducting
exploration activities.

<PAGE>53

     The following  table sets forth the  percentage  of Minco's  administrative
expense by currency for the years ended December 31, 1999 and 2000.

By Currency

                                                    1999                 2000
                                                    ----                 ----
Canadian Dollar                                      86%                  84%
Renminbi yuan ("RMB")                                14%                  16%
                                                     ---                  ---
Total                                               100%                 100%

     Such  administrative  expense by  currency  may  change  from time to time.
Further, Minco incurred exploration costs of $740,150 and $443,512 for the years
ended December 31, 1999 and 2000, respectively, all of which we paid in RMB.

     The Company has not entered into any material foreign exchange contracts to
minimize  or  mitigate  the  effects of  foreign  exchange  fluctuations  on the
Company's operations. The Company exchanges Canadian dollars to fund its Chinese
operations.  Based on prior  years,  the  Company  does not  believe  that it is
subject to material foreign exchange fluctuations.  However, no assurance can be
given that this will not occur in the future.

     The Company has no long-term debt, therefore,  the Company does not believe
that the interest rate market risk to be material.

Item 12. Description of Securities Other than Equity Securities

     Not Applicable

Item 13. Defaults, Dividend Arrearages and Delinquencies

     Not Applicable

Item 14.  Material  Modifications  to the Rights of Security  Holders and Use of
          Proceeds

     Not Applicable

Item 15. [Reserved]

Item 16. [Reserved]

Item 17. Financial Statements

     Attached hereto

Item 18. Financial Statements

<PAGE>54

Item 19. Exhibits

Index

3.(i)         Articles of Incorporation and all amendments(1)

3.(ii)        Bylaws(1)

10.1          Investment and Participation Agreement dated February 20, 1996,
              Among the Registrant, Teck Corporation and Cominco Ltd.(1)

10.2          Consulting Agreement dated June 25, 1996, between Registrant and
              Kaisun Group Canada, Inc.(1)

10.3          Stock Escrow Agreement dated December 24, 1992, between Montreal
              Trust Company of Canada, Consolidated Caprock Resources, Ltd. and
              certain shareholders of Consolidated Caprock Resources, Ltd.(1)

10.4          Performance Shares Escrow Agreement dated August 17, 1995,between
              Registrant, Montreal Trust Company of Canada and certain
              shareholders of Registrant(1)

10.5          Assignment of Contracts and Share Purchase Agreement between Minco
              Mining & Metals and Pacific Canada Resources dated February 19,
              1996 (3)

10.6          Investment and Participation Agreement among Pacific Canada
              Resources, Teck Corporation and Cominco dated February 19, 1996(2)

10.7          Teck and Cominco agreement regarding White Silver Mountain dated
              June 15, 1998(2)

10.8          Sino-Foreign Joint Venture Agreement forming Gansu Keyin Mining
              Co. Ltd.(3)

10.9          Sino-Foreign Joint Venture Agreement forming Damo Mining Co. Ltd.
              (Gobi Gold)(3)

10.10         Cooperation Agreement regarding the Development of the Changba
              Lijiagou Lead Zinc Deposit dated November 17, 1997 (2)

(1)  Incorporated by reference to the Company's Form 20-F/R-A,  amendment number
     1 filed on October 18, 2000.

(2)  Incorporated by reference to the Company's Form 20-F/R-A,  amendment number
     2 filed on May 4, 2001.

(3)  Incorporated by reference to the Company's Form 20-F/R-A,  amendment number
     3 filed July 6, 2001.

<PAGE>55

                                   SIGNATURES

     The registrant  hereby  certifies that it meets all of the requirements for
filing  this  Annual  Report  on Form  20-F  and  that it has  duly  caused  the
undersigned to sign this Annual Report on its behalf.

                                            Minco Mining & Metals Corporation


Dated: July 3, 2001                        /s/   Dr.  Ken Z. Cai
                                           ----------------------------------
                                           Dr. Ken Z. Cai

<PAGE>F-1


ELLIS FOSTER
CHARTERED ACCOUNTANTS

1650 West 1st Avenue
Vancouver, BC  Canada   V6J 1G1
Telephone:  (604) 734-1112  Facsimile: (604) 714-5916
E-Mail: generaldelivery@ellisfoster.bc.ca
-------------------------------------------------------------------------------


AUDITORS' REPORT


To the Shareholders of

MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)


We have  audited  the  consolidated  balance  sheets  of  Minco  Mining & Metals
Corporation as at December 31, 2000 and 1999 and the consolidated  statements of
operations  and deficit  and cash flows for each of the years in the  three-year
period ended December 31, 2000. These consolidated  financial statements are the
responsibility of the company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in United States.  Those standards  require that we plan and perform an audit to
obtain  reasonable  assurance  whether  the  financial  statements  are  free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 2000
and 1999 and the results of its  operations and cash flows for each of the years
in the  three-year  period ended  December 31, 2000 in accordance  with Canadian
generally  accepted  accounting  principles.  As  required by the Company Act of
British  Columbia,  we report that, in our opinion,  these  principles have been
applied on a basis consistent with that of preceding year.

Accounting  principles  generally accepted in Canada vary in certain significant
respects  from  accounting  principles  generally  accepted  in  United  States.
Application of accounting  principles  generally accepted in United States would
have affected the company's  financial position and its shareholders'  equity as
at  December  31, 2000 and 1999 and its  results of  operations  for each of the
years in the three-year period ended December 31, 2000, to the extent summarized
in Note 12 to the consolidated financial statements.




Vancouver, Canada                                       "ELLIS FOSTER"
March 7, 2001                                           Chartered Accountants


-------------------------------------------------------------------------------
EFA partnership of incorporated professionals
An independently owned and operated member of Moore Stephens North America Inc.,
a member of Moore Stephens International Limited
       - members in principal cities throughout the world

<PAGE>F-2

MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)

Consolidated Balance Sheets
December 31, 2000 and 1999
(Expressed in Canadian Dollars)
                                                      2000              1999
                                                  ------------     ------------
ASSETS

Current
  Cash and cash equivalents                       $    219,333     $    268,224
  Marketable securities                              1,142,829        1,931,633
  Sundry receivable                                     78,076           92,883
  Prepaid expenses and deposits                         56,601           64,475
                                                  ------------     ------------
                                                     1,496,839        2,357,215
Mineral interests (Note 3)                           2,281,470        1,835,376
Capital assets (Note 4)                                134,664          189,837
                                                  ------------     ------------
                                                  $  3,912,973     $  4,382,428
                                                  ============     ============
LIABILITIES
Current
   Accounts payable and accrued liabilities       $    328,873     $    284,749
                                                  ------------     ------------
SHAREHOLDERS' EQUITY
Share capital (Note 5)                              10,286,933       10,175,833
Deficit                                             (6,702,833)      (6,078,154)
                                                  ------------     ------------
                                                     3,584,100        4,097,679
                                                  ------------     ------------
                                                  $  3,912,973     $  4,382,428
                                                  ============     ============
Commitments (Note 8)


<PAGE>F-3

MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Operations and Deficit
Years Ended December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>

                                                          2000                1999               1998
------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                <C>
Interest and sundry income                        $    116,205        $    144,042       $    197,068
------------------------------------------------------------------------------------------------------
Mineral interests written off                                -             579,088          1,065,408
------------------------------------------------------------------------------------------------------
Administrative expenses
  Accounting and audit                                  69,171              75,231             82,540
  Advertising                                           18,665              36,222             20,826
  Amortization of capital assets                        35,187              51,788             60,132
  Capital taxes                                          5,765              11,581             15,015
  Conference                                             2,377              16,364              5,409
  Consulting fees                                      137,651             157,635             90,097
  Donation                                                   -                   -              3,800
  Legal                                                 48,255              25,250             40,820
  Listing, filing and transfer agents                   16,460              32,094             51,841
  Management fees                                       48,474              40,758             97,559
  Office and miscellaneous                              58,909              51,683             50,295
  Promotion and government relations                   115,599             171,433            137,987
  Property investigation                                     -              52,229            129,812
  Rent                                                  72,723             103,225            138,486
  Salaries and benefits                                 65,837              67,832             97,217
  Telephone                                             14,289              20,868             55,851
  Travel and transportation                             28,892              35,492             52,811
  Foreign exchange loss (gain)                           2,630               5,028            (2,254)
------------------------------------------------------------------------------------------------------
                                                       740,884             954,713          1,128,244
------------------------------------------------------------------------------------------------------
Operating loss                                        (624,679)         (1,389,759)        (1,996,584)

Write down of marketable securities                          -            (116,349)                 -
------------------------------------------------------------------------------------------------------
Loss for the year                                     (624,679)         (1,506,108)        (1,996,584)

Deficit, beginning of year                          (6,078,154)         (4,572,046)        (2,575,462)
------------------------------------------------------------------------------------------------------
Deficit, end of year                              $ (6,702,833)       $ (6,078,154)      $ (4,572,046)
======================================================================================================
Loss per share                                    $      (0.04)       $      (0.09)      $      (0.13)
======================================================================================================
Weighted average number of
  Common shares outstanding                         16,335,178          16,154,986         15,549,918
======================================================================================================

</TABLE>

<PAGE>F-4


MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Cash Flows
Years Ended December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>

                                                     2000                 1999               1998
-------------------------------------------------------------------------------------------------------

<S>                                             <C>                  <C>                <C>
Cash flows from (used in)
  Operating activities
  Loss for the year                                $   (624,679)       $ (1,506,108)      $ (1,996,584)
  Adjustment for items not involving cash:
  - amortization                                         35,187              51,788             60,132
  - non-controlling interest's shares of loss                 -                   -                  -
  - writeoff of mineral interests                             -             579,088          1,065,408
  - write down of marketable securities                       -             116,349                  -
  - gain on sale of marketable securities               (42,325)
  Change in working capital items:
  - funds restricted for mineral explorations                 -             213,598           (148,269)
  - sundry receivable                                    14,807             (75,253)            33,135
  - prepaid expenses and deposits                         7,874                (458)           (25,754)
  - accounts payable and accrued liabilities             44,124             145,195            (28,405)
-------------------------------------------------------------------------------------------------------
                                                       (565,012)           (475,801)        (1,040,337)
-------------------------------------------------------------------------------------------------------
Cash flows from financing activities
  Shares issued for cash                                111,100             562,500            740,365
-------------------------------------------------------------------------------------------------------
Cash flows from (used in)
  investing activities
  Acquisition of capital assets                          (1,725)             (8,303)          (130,800)
  Deferred exploration costs                           (424,383)           (729,148)          (889,141)
  Proceeds from sales of
    marketable securities                             2,298,889             531,848          1,514,379
  Purchase of marketable securities                  (1,467,760)                  -                  -
-------------------------------------------------------------------------------------------------------
                                                        405,021            (205,603)            494,438
-------------------------------------------------------------------------------------------------------
Increase (Decrease) in cash and
  cash equivalents                                      (48,891)           (118,904)            194,466

Cash and cash equivalents,
  beginning of year                                     268,224             387,128             192,662
-------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
  end of year                                      $    219,333        $    268,224       $    387,128
=======================================================================================================

</TABLE>

<PAGE>F-5

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


1.   Nature of Operations

     The Company was incorporated under the laws of British Columbia, Canada and
     is in the business of mining exploration.

     These   consolidated   financial   statements   have  been  prepared  on  a
     going-concern  basis which assumes that the Company will be able to realize
     assets and  discharge  liabilities  in the normal  course of business.  The
     continued operations of the Company and the recoverability of amounts shown
     for mineral  interests  are dependent  upon the  discovery of  economically
     recoverable  reserves,  the ability of the Company to obtain  financing  to
     complete  the  development  of  the  projects,  and  on  future  profitable
     production or proceeds from the disposition thereof.


2.   Significant Accounting Policies

     (a)  Consolidation

          These  consolidated  financial  statements include the accounts of the
          Company and its wholly-owned British Virgin Island subsidiary,  Triple
          Eight  Mineral  Corporation  ("Temco").   All  material  inter-company
          balances have been eliminated.

     (b)  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  amount  of  assets  and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial  statements and the reported  amount of revenues
          and expenses  during the period.  Actual results may differ from those
          estimates.

     (c)  Capital Assets

          Amortization is provided as follows:

          Motor vehicles                  30% per annum, declining-balance basis
          Mining equipment                30% per annum, declining-balance basis
          Computer  equipment             30% per annum, declining-balance basis
          Office equipment and furniture  20% per annum, declining-balance basis
          Leasehold  improvements         Term of the lease (5 years), straight-
                                          line basis

          Amortization  is  provided  at half  the  annual  rate in the  year of
          acquisition except for leasehold improvements.

<PAGE>F-6

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)

2.   Significant Accounting Policies (continued)

     (d)  Cash Equivalents

          Cash equivalents  usually consist of highly liquid  investments  which
          are readily  convertible  into cash with maturities of three months or
          less  when  purchased.   As  at  December  31,  2000  and  1999,  cash
          equivalents consist of bank redeemable term investment certificates.

     (e)  Marketable Securities

          Marketable  securities  are  stated  at the  lower of cost and  market
          value. As at December 31, 2000, marketable securities consist of bonds
          issued by the  provincial  government of Ontario.  The market value is
          $1,160,259 (1999 - $1,931,633).

     (f)  Earnings (Loss) Per Share

          Earnings  (loss)  per share is  computed  using the  weighted  average
          number of common shares outstanding  during the period.  Fully-diluted
          earnings  (loss)  per share has not been  disclosed  as the  effect of
          common shares issuable upon the exercise of warrants and options would
          be anti-dilutive.

     (g)  Foreign Currency Transactions

          The  Company  maintains  its  accounting  records  in  its  functional
          currency (i.e.,  Canadian  dollars).  It translates  foreign  currency
          transactions into its functional currency in the following manner.

          At the transaction date, each asset, liability, revenue and expense is
          translated  into the  functional  currency by the use of the  exchange
          rate in effect at that date.  At the period end,  monetary  assets and
          liabilities are translated  into the functional  currency by using the
          exchange rate in effect at that date. The resulting  foreign  exchange
          gains and losses are included in operations.

     (h)  Mineral Interests

          The Company follows the method of accounting for its mineral interests
          whereby all costs related to acquisition,  exploration and development
          are capitalized on a  property-by-property  basis. These costs will be
          amortized against revenue from future production or written off if the
          mineral interest is abandoned or sold.

<PAGE>F-7

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


2.   Significant Accounting Policies (continued)

     (h)  Mineral Interests (continued)

          The carrying values of mineral  interests,  on a  property-by-property
          basis,  are reviewed by management  at least  annually to determine if
          they have  become  impaired.  If  impairment  is deemed to exist,  the
          mineral  property will be written down to its net  recoverable  value.
          The ultimate recoverability of the amounts capitalized for the mineral
          properties  is  dependent  upon  the   delineation   of   economically
          recoverable  ore  reserves,   the  Company's  ability  to  obtain  the
          necessary   financing  to  complete  their   development  and  realize
          profitable  production  or  proceeds  from  the  disposition  thereof.
          Management's  estimates of recoverability of the Company's  investment
          in various projects have been based on current conditions. However, it
          is reasonably possible that changes could occur in the near term which
          could adversely affect management's estimates and may result in future
          write-downs of capitalized property carrying values.

     (i)  Income Taxes

          Income taxes are accounted  for using the asset and  liability  method
          pursuant  to  Section  3465,  Income  Taxes,  of The  Handbook  of the
          Canadian  Institute  of  Chartered   Accountants.   Future  taxes  are
          recognized  for the tax  consequences  of "temporary  differences"  by
          applying  enacted  or  substantively   enacted   statutory  tax  rates
          applicable  to  future  years to  differences  between  the  financial
          statement  carrying  amounts  and tax  basis of  existing  assets  and
          liabilities. The effect on deferred taxes for a change in tax rates is
          recognized in income in the period that includes the date of enactment
          or  substantive  enactment.  In addition,  Section  3465  requires the
          recognition  of future tax benefits to the extent that  realization of
          such benefits is more likely than not.

          In 1999,  the  Company  changed its policy for  accounting  for income
          taxes by adopting the provision of CICA Handbook Section 3465,  Income
          Taxes.  Under this  standard,  current income taxes are recognized for
          the  estimated  income taxes  payable for the current  period.  Future
          income  tax  assets  and  liabilities  are  recognized  for  temporary
          differences  between  the tax  and  accounting  basis  of  assets  and
          liabilities  as well as for the  benefit  of  losses  available  to be
          carried forward to future years for tax purposes that are likely to be
          realized.

          The  adoption of Section 3465 did not impact  amounts  reported in the
          prior period.

<PAGE>

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


3.   Mineral Interests

<TABLE>
<CAPTION>

        ------------------------------------------------------------------------------------------
                                              Deferred                                   Deferred
                                                 Costs           2000                       Costs
                                               Dec. 31    Exploration         Amount      Dec. 31
                                                  1999          Costs    Written Off         2000
        ------------------------------------------------------------------------------------------
<S>                                          <C>             <C>         <C>         <C>
        Emperor's Delight                     $    100         $    -      $       -   $      100

        Crystal Valley                             100              -              -          100

        Stone Lake                                 100              -              -          100

        Changba Lijiagou
          Lead-Zinc Deposit                        100              -              -          100

        White-Silver Mountain                1,307,979         87,449              -    1,395,428

        Chapuzi                                    100              -              -          100

        Heavenly Mountains                     436,519              -              -      436,519

        Inner Mongolia (Gobi Gold)              90,378        358,645              -      449,023
        ------------------------------------------------------------------------------------------
                                            $1,835,376       $446,094      $       -   $2,281,470
        ==========================================================================================
</TABLE>

<TABLE>
<CAPTION>
        ------------------------------------------------------------------------------------------
                                              Deferred                                   Deferred
                                                 Costs           1999                       Costs
                                               Dec. 31    Exploration         Amount      Dec. 31
                                                  1998          Costs    Written Off         1999
        ------------------------------------------------------------------------------------------
<S>                                            <C>           <C>           <C>            <C>
        Emperor's Delight                      $89,316       $ 25,051      $(114,267)     $   100

        Crystal Valley                             100              -              -          100

        Stone Lake                                 100              -              -          100

        Changba Lijiagou
        Lead-Zinc Deposit                      134,803              -       (134,703)         100

        White-Silver Mountain                  623,081        684,898              -    1,307,979

        Chapuzi                                330,218              -       (330,118)         100

        Heavenly Mountains                     436,519              -              -      436,519

        Inner Mongolia (Gobi Gold)              40,456         49,922              -       90,378
        ------------------------------------------------------------------------------------------
                                            $1,654,593       $759,871      $(579,088)  $1,835,376
        ==========================================================================================
</TABLE>

<PAGE>

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


3.   Mineral Interests (continued)

     (a)  Expenditures on the Emperor's Delight,  Crystal Valley, Stone Lake and
          Chapuzi have been  discontinued due to negative results and no further
          work is planned. However, the Company retains rights to the projects.

     (b)  The  Company  acquired  its rights to the  Changba-Lijiagou  Lead Zinc
          Project  located in Ganzu  Province,  China  through the  "Cooperation
          Agreement  Regarding the Development of the Changba Lijiagou Lead Zinc
          Deposit" between the Company and Baiyin Non-Ferrous Metals Corporation
          ("Baiyin")  signed on November  17,  1997.  The  Company  discontinued
          further  work on this  project  in 1999 and will seek a joint  venture
          partner to develop it.

     (c)  The Company  acquired its rights to the White Silver Mountain  project
          located  in  Gansu  Province,  China,  pursuant  to  a  Joint  Venture
          Agreement  signed on August 28, 1998. A joint venture  company,  Gansu
          Keyin Mining Co. Ltd. ("Keyin"),  was formed to hold the above mineral
          interests. In order to earn an 80% interest in Keyin, the Company must
          expend  40  million  RMB   (approximately   US$4.8   million)  on  the
          properties.  Baiyin will contribute the exploration  permit held by it
          and the geological  data and research  results,  including  drill core
          samples  and  maps,  for its 20%  interest  in  Keyin.  Following  the
          completion of the above  expenditures,  each party shall contribute to
          Keyin in proportion to their respective beneficial interests.

          Pursuant to an option  agreement  dated December 22, 1999, with effect
          from June 10, 1998, the Company granted Teck Corporation of Vancouver,
          B.C.,  Canada,  an option to earn a 56%  interest in Keyin by assuming
          all of the Company's funding requirements until commercial  production
          has been attained.  Pursuant to the term of the same option agreement,
          Cominco Ltd.  ("Cominco")  of Vancouver,  B.C.,  Canada,  has "back-in
          rights"  with  respect to this project to earn up to a 20% interest in
          Keyin  up to the  pre-feasibility  stage  by  repaying  Teck  one  and
          one-half  times  the  total  project  expenditures  up to the  date of
          exercise of its rights and making a cash payment to the  Company,  and
          thereafter  funding its pro-rata share of feasibility  and development
          costs.

          The  White  Silver  Mountain  agreements  with  Teck and  Cominco  are
          separate from the Earn-in  Rights that are detailed in Note 8(c).  The
          White Silver  Mountain  Agreement  does not  constitute an exercise of
          either  Teck's or  Cominco's  first  right of  refusal,  which  remain
          intact.

     (d)  The Heavenly  Mountains  properties are located in Xinjiang  Province,
          China.  The Company has an exclusive right to negotiate and enter into
          a joint venture  contract with the Xinjiang  Bureau of the Ministry of
          Geology  and  Mineral  Resources  and to  invest  in  certain  mineral
          properties  located in Xinjiang Uygur Autonomous  Region in China. The
          Company discontinued further work and suspended the project in 1999.

<PAGE>F-10

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


3.   Mineral Interests (continued)

     (e)  The Inner  Mongolia  property  (Gobi Gold Project) is located in Inner
          Mongolia  Autonomous  Region,  China.  Pursuant to a Cooperative Joint
          Venture Agreement, the Company can earn a 75% interest in the property
          by spending  US$2.5 million over a four-year  period.  A joint venture
          company  called Inner Mongolia Damo Mining Co. Ltd. was formed to hold
          the above noted mineral interests.

4.   Capital Assets

<TABLE>
<CAPTION>
                                                                      2000
                                                 -------------- ----------------- --------------
                                                                     Accumulated       Net book
                                                          Cost      Amortization          value
        ---------------------------------------- -------------- ----------------- --------------
<S>                                                 <C>               <C>             <C>
        Computer equipment                            $ 62,948          $ 46,684        $16,264
        Office equipment and furniture                  81,436            50,924         30,512
        Leasehold improvements                          25,648            25,048              -
        Motor vehicles                                  59,309            42,018         17,291
        Mining equipment                               191,292           120,695         70,597
        ---------------------------------------- -------------- ----------------- --------------
                                                      $420,633          $285,369       $134,664
        ======================================== ============== ================= ==============
</TABLE>

<TABLE>
<CAPTION>
                                                                      1999
                                                 -------------- ----------------- --------------
                                                                     Accumulated       Net book
                                                          Cost      Amortization          value
        ---------------------------------------- -------------- ----------------- --------------
<S>                                                 <C>              <C>            <C>
        Computer equipment                            $ 59,801          $ 40,388       $ 19,413
        Office equipment and furniture                  82,858            43,119         39,739
        Leasehold improvements                          25,648            20,518          5,130
        Motor vehicles                                  59,309            34,607         24,702
        Mining equipment                               191,292            90,439        100,853
        ---------------------------------------- -------------- ----------------- --------------
                                                      $418,908          $229,071       $189,837
        ======================================== ============== ================= ==============

</TABLE>

<PAGE>F-11

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


5.   Share Capital

     (a)  Authorized: 100,000,000 common shares without par value

     (b)  Issued:

<TABLE>
<CAPTION>
                                                                          Shares        Amount
               ---------------------------------------------------- ------------- -------------
<S>                                                                <C>           <C>
               Balance, December 31, 1998                             15,745,123    $9,613,333

               Private placement at $0.85 per share                      250,000       212,500

               Private placement at $1.00 per share                      150,000       150,000

               Share purchase warrants exercised at $1.60 per
               share                                                     125,000       200,000
               ---------------------------------------------------- ------------- -------------
               Balance, December 31, 1999                             16,270,123    10,175,833

               Share purchase warrants exercised at $1.01 per
               share                                                     110,000       111,100
               ---------------------------------------------------- ------------- -------------
               Balance, December 31, 2000                             16,380,123   $10,286,933
               ==================================================== ============= =============
</TABLE>

     (c)  As at December  31, 2000,  3,562,328 of the shares  issued are held in
          escrow,  the  release  of which is  subject  to the  direction  of the
          regulatory  authorities.  Subsequent to the year-end,  571,006  shares
          were released from escrow.

     (d)  Stock options outstanding at December 31, 2000 are as follows:

                  Number of Options      Exercise Price        Expiry Date
                  -----------------      --------------        -----------
                      506,500                  $1.41           March 5, 2006
                      150,000                  $1.65           July 16, 2006
                       97,300                  $1.41           October 8, 2006
                      100,000                  $1.12           December 1, 2006
                       97,300                  $1.41           March 6, 2007
                       49,500                  $1.41           June 20, 2007
                  -----------
                    1,000,600

          Each stock  option  entitles the holder to acquire one common share of
          the Company.  Subsequent  to the year-end,  the exercise  price of the
          above stock options were amended to $0.55 per share.

<PAGE>F-12

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


6.   Income Taxes

     The components of the future income tax assets are as follows:

<TABLE>
<CAPTION>

                                                                          2000            1999
        ------------------------------------------------------- -------------- ----------------
<S>                                                             <C>              <C>
        Future income tax assets:

          Non-capital loss carryforwards                          $  6,166,149    $  5,501,892

          Unused foreign exploration and
            development expenses                                     2,765,383       2,299,934

          Unused cumulative Canadian exploration
            expenses                                                     2,591           2,591

          Unused cumulative Canadian development
            expenses                                                   148,461         148,461

          Undepreciated capital cost of capital assets
           over their net book value                                   284,820         227,922
        ------------------------------------------------------- -------------- ----------------
        Less: Valuation allowance                                   (9,367,404)     (8,180,800)
        ------------------------------------------------------- -------------- ----------------
        Net future income tax assets                              $          -    $          -
        ======================================================= ============== ================
</TABLE>

     The  valuation  allowance  reflects  the  Company's  estimate  that the tax
     assets, more likely than not, will not be realized.

     The  non-capital  losses  are  carried  forward  for tax  purposes  and are
     available to reduce  taxable  income of future  years.  These losses expire
     commencing in 2001 through 2007. The exploration  and development  expenses
     can be carried forward indefinitely.

7.   Related Party Transactions

     (a)  The  Company   incurred  the  following   expenses  to  a  corporation
          controlled by a director and an individual related to a director:

                                                2000     1999      1998
          ---------------------------------------------------------------
          Management fees                    $ 86,263  $ 89,392  $ 90,059
          Deferred exploration costs           59,577    77,073    83,383
          Property investigation                    -        -     13,825
          Rent                                      -        -     12,667
          ---------------------------------------------------------------
                                             $145,840  $166,465  $199,934
          ===============================================================

     (b)  Included in accounts  payable  and accrued  liabilities  is a total of
          $63,117  (1999 -  $62,689)  due to two  corporations  controlled  by a
          director of the Company.

<PAGE>F-13

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


8.   Commitments

     (a)  The  Company has  commitments  in respect of office  leases  requiring
          minimum payments of $159,373 within the next two years, as follows:


          2001                      $150,177
          2002                         9,196
          ----------------------------------
                                    $159,373
          ==================================

     (b)  The Company  entered into a Loan  Agreement (the  "Agreement")  with a
          director of the Company in October, 1997. Pursuant to the terms of the
          Agreement,  the  Company  agreed to  advance a sum up to  $225,000  to
          assist the director in moving from Toronto to Vancouver,  Canada,  and
          purchasing a residence in either Vancouver or Beijing, China. The loan
          will be fully secured and repaid by the director  upon the  occurrence
          of certain stated events as described in the  Agreement.  The director
          has not yet exercised his rights under the terms of the Agreement.

     (c)  The Teck-Cominco Agreements

          The Company has entered into agreements with Teck Corporation ("Teck")
          and Cominco  Ltd.  ("Cominco"),  both of  Vancouver,  B.C.,  Canada on
          February 19, 1996 and February  20, 1996,  respectively  (collectively
          the "Teck-Cominco Agreements").

          Pursuant to the terms of the Teck-Cominco Agreements, Teck and Cominco
          received  "earn-in  rights" as to the Non-Chinese  Interest in any two
          mineral  property  rights  acquired  by the Company in China after the
          date of the Teck-Cominco Agreements until March 1, 2004.

          Teck  and  Cominco  have  the  right to  "earn-in"  to 51% of  Minco's
          interest in a property deemed to be an exploration  property or 70% of
          Minco's  interest in a property  deemed to be a development  property.
          After Teck and  Cominco  have  exercised  their  earn-in  rights in an
          aggregate  of two projects  procured by the Company,  Teck and Cominco
          shall have further  preferential rights of first refusal in respect to
          further  properties  identified  by the  Company for a period of three
          years after the exercise of their earn-in rights.

<PAGE>F-14


MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


9.   Financial Instruments

     The carrying  value of cash and cash  equivalents,  sundry  receivable  and
     accounts payable and accrued liabilities approximates the fair value due to
     the short-term  nature of these  financial  instruments.  The fair value of
     marketable  securities  is  equivalent  to the market  value.  The  Company
     operates in China and some of its  material  exploration  expenditures  are
     payable  in  either  U.S.  dollars  and the  Chinese  currency  RMB and is,
     therefore,  subject  to  foreign  currency  risk  arising  from  changes in
     exchange rates among Canadian dollars, U.S. dollars and RMB. The Company is
     not exposed to significant interest risk. The Company places its marketable
     securities with government debt securities and is subject to minimal credit
     risk. The Company also considers  itself not subject to high  concentration
     of credit risk to its debtors  and does not require  collateral  to support
     these financial instruments.


10.  Comparative Figures

     Certain 1998 and 1999 comparative figures have been reclassified to conform
     with the financial statement presentation adopted for 2000.


11.  Subsequent Event

     Subsequent to year-end,  the Company  granted  320,000 stock options to its
     directors and employees at $0.55 per share expiring on January 2, 2006.


12.  Reconciliation of Canadian and United States Generally Accepted  Accounting
     Principles

     (a)  The  Consolidated  Statement  of  Shareholders'  Equity,  prepared  in
          accordance  with the U.S.  GAAP as  required,  is now  presented as an
          additional schedule.

     (b)  Reconciliation of Consolidated Balance Sheet items:

<TABLE>
<CAPTION>

                                                                      2000             1999
               ---------------------------------------------------------------------------------
<S>                                                                <C>             <C>
               Mineral interests (Canadian GAAP)                   $ 2,281,470     $ 1,835,376

               Capitalized deferred exploration costs
               written-off                                          (2,281,470)     (1,835,376)
               ---------------------------------------------------------------------------------
               Mineral interests (US GAAP)                                   -               -
               ---------------------------------------------------------------------------------
               Securities available for sale (Canadian GAAP)         1,142,829       1,931,633

               Unrealized gain                                          17,430               -
               ---------------------------------------------------------------------------------
               Securities available for resale (US GAAP)                             1,931,633
               ---------------------------------------------------------------------------------
               Total assets (US GAAP)                                1,648,933       2,547,052
               ---------------------------------------------------------------------------------
               Total liabilities (US GAAP)                             328,873         284,749
               ---------------------------------------------------------------------------------
</TABLE>

<PAGE>F-15

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


12.  Reconciliation of Canadian and United States Generally Accepted  Accounting
     Principles (continued)

     (c)  Reconciliation of Consolidated Statement of Operations Items:

<TABLE>
<CAPTION>

                                                                2000           1999          1998
         -----------------------------------------------------------------------------------------

<S>                                                     <C>             <C>           <C>
         Loss for the year (Canadian GAAP)              $   (624,679)   $(1,506,108)  $(1,996,584)

         Capitalized deferred exploration costs
         written-off                                        (446,094)      (180,783)      158,315

         Write down of marketable securities added back            -        116,349             -

         Release of escrow shares as compensation                  -       (974,042)   (1,476,973)
         -----------------------------------------------------------------------------------------
         Loss for the year (US GAAP)                      (1,070,773)    (2,544,584)   (3,315,242)
         -----------------------------------------------------------------------------------------
         Loss per share - basic and diluted (US GAAP)          (0.08)         (0.21)        (0.31)
         -----------------------------------------------------------------------------------------
         Weighted average number of common shares
         Outstanding - basic and diluted (US GAAP)        12,828,232     12,189,874    10,749,411
         -----------------------------------------------------------------------------------------
</TABLE>

     (d)  Marketable Securities

          All  of  the  Company's   marketable   securities  are  classified  as
          available-for-sale   securities  under  US  GAAP.   Available-for-sale
          securities are recorded at market value.  Unrealized holding gains and
          losses on  available-for-sale  securities are excluded from income and
          charged  to  accumulated  other  comprehensive  income  as a  separate
          component  of  shareholders'  equity  until  realized.  A  summary  of
          available-for-sale securities by major security type are as follows:

<TABLE>
<CAPTION>
                                                                            Gross
                                                                       unrealized
                                                                          holding        Market
                                                             Cost  gains (losses)         value
               ----------------------------------- -------------- ---------------- ------------
<S>                                                <C>            <C>              <C>
               2000:
                 Bonds issued by provincial
                   government in Canada                $1,142,829         $17,430    $1,160,259
               =================================== ============== ================ ============
               1999:
                 Bonds issued by provincial
                   government in Canada                $2,047,982       $(116,349)   $1,931,633
               =================================== ============== ================ ============
</TABLE>

     (e)  Mineral Interests

          U.S. GAAP requires that exploration  cost of mineral  interests not be
          deferred  and  capitalized  until there is  evidence  of  economically
          recoverable resources. The Company only incurred exploration costs for
          mineral  interests.  These costs will not be capitalized for U.S. GAAP
          purposes as the Company is at present  exploring  its  properties  for
          economically recoverable ore reserves. The effect of these capitalized
          costs write-off is presented in Notes 12(b) and 12(c).

<PAGE>F-16

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


12.  Reconciliation of Canadian and United States Generally Accepted  Accounting
     Principles (continued)

     (f)  Escrow Shares

          562,500 escrow shares may be released, upon application,  on the basis
          of 15% of the  original  number of escrow  shares  for every  $100,000
          expended  on  exploration  and  development  of  a  resource  property
          provided that no more than 50% of the original number of escrow shares
          may be  released  in  any  twelve-month  period.  In  addition,  where
          administrative  expenses exceed 33% of total  expenditures  during the
          period of application,  then the release factor of 15% will be reduced
          to 7.5% and the  percentage  of the original  number of escrow  shares
          available  for release in any  twelve-month  period will be reduced to
          25%. 281,250 shares and 140,625 shares were released in 1998 and 1999,
          respectively.  As at December  31, 1999 and 2000,  there were  140,625
          such escrow shares outstanding.

          Pursuant to another escrow share  agreement,  4,880,000  escrow shares
          may be released,  upon  application,  on the basis of one escrow share
          for every $1.81 expended on exploration  and development of a resource
          property,  including  expenditures on mining equipment,  but excluding
          expenditures on Chapuzi and Savoyardinskii properties.  949,561 shares
          and 508,736 shares were released in 1998 and 1999, respectively. As at
          December 31, 1999 and 2000,  there were  3,421,703  such escrow shares
          outstanding.

          U.S.  GAAP requires that the fair value of the shares at the time they
          are released from escrow should be recognized as a charge to income as
          a  compensation  expense.  A summary of the escrow shares  released is
          presented as follows:

<TABLE>
<CAPTION>
               ------------------------------------------------- -------------- ---------------
                                                                                   Compensation
                                                                        Shares          expense
               ------------------------------------------------- -------------- ---------------
<S>                                                               <C>             <C>
               Balance, December 31, 1997                            5,442,500

               Released from escrow at $1.20 per share              (1,230,811)      $1,476,973
                                                                                     ==========
               ------------------------------------------------- --------------
               Balance, December 31, 1998

               Released from escrow at $1.50 per share                (649,361)        $974,042
                                                                                       ========
               ------------------------------------------------- --------------
               Balance, December 31, 1999 and 2000                   3,562,328
               ================================================= ==============
</TABLE>

          As escrow shares are contingently cancellable,  they are excluded from
          the  calculation of weighted  average number of shares for purposes of
          loss per share under U.S. GAAP. The effect of accounting  treatment on
          escrow shares on the Company's consolidated financial statements under
          US GAAP are presented in Note 12(c) and the Consolidated  Statement of
          Shareholders' Equity.

<PAGE>F-17


MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)


12.  Reconciliation of Canadian and United States Generally Accepted  Accounting
     Principles (continued)

     (g)  Stock Options Compensation

          The Company has been granting stock options to directors, officers and
          employees  from  1995  onwards.   All  options   granted  were  vested
          immediately  and will be exercised from the date of grant for a period
          from one year to ten years.

          In 1999,  the Company  adopted  another  Stock  Option Plan ("the 1999
          Plan") for the grant of options to certain employees.  Options granted
          under the 1999 Plan will be  exercisable  from the date of grant for a
          period  from one year to seven  years  and  would  vest  upon when the
          Company's  share price reached  certain level.  These options  granted
          were subsequently cancelled in 2000.

          There were no stock options  granted in 2000. A summary of the options
          granted is as follows:

                                                                Weighted
                                                                 average
                                                     Number     exercise
                                                  of shares        price
         ----------------------------------------------------- -------------
         Outstanding, December 31, 1997                           $1.42

         Granted                                     75,000        1.50

         Cancelled                                 (300,800)       1.48
         --------------------------------------------------
         Outstanding, December 31, 1998           1,311,200        1.41

         Granted                                    670,000        1.45

         Cancelled                                  (75,000)       1.50
         --------------------------------------------------
         Outstanding, December 31, 1999           1,906,200        1.42

         Cancelled                                 (905,600)       1.42
         --------------------------------------------------
         Outstanding, December 31, 2000           1,000,600        1.42
         --------------------------------------------------

<TABLE>
<CAPTION>

               -----------------------------------------------------    ------------------------
                               Options Outstanding                        Options Exercisable
               -----------------------------------------------------    ------------------------
                                                  Weight
                                                 Average   Weighted                    Weighted
                     Range of                  Remaining    Average                     Average
                     Exercise        Number  Contractual   Exercise          Number    Exercise
                        Price   Outstanding  Life (Year)      Price     Exercisable       Price
               --------------- ------------- ------------ ----------    ------------ -----------
<S>            <C>              <C>                <C>      <C>         <C>             <C>
                $1.01 - $2.00     1,000,600          5.5      $1.42       1,000,600       $1.42
               --------------- ------------- ------------ ----------    ------------ -----------

</TABLE>

<PAGE>F-18

MINCO MINING & METALS CORPORATION
(A exploration stage enterprise)

Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(Expressed in Canadian Dollars)



12.  Reconciliation of Canadian and United States Generally Accepted  Accounting
     Principles (continued)

     (g)  Stock Options Compensation (continued)

          The  Company  applies  Accounting  Principles  Board  ("APB")  No.  25
          "Accounting for Stock Issued to Employees" and related interpretations
          in accounting  for stock  options.  Under APB 25, no  compensation  is
          recognized in connection with options  granted to employees  except if
          options  are  granted  at a  strike  price  below  fair  value  of the
          underlying  stock.  The  adoption  of  APB 25 has  nil  effect  on the
          Company's consolidated financial statements.

          Pro-forma information regarding Loss for the period and Loss per Share
          is required under SFAS 123, and has been determined if the Company has
          accounted  for its stock  options  under the fair value method of SFAS
          123.  If  compensation  cost  for  the  stock  option  plan  had  been
          determined based on the fair value at the grant dates for awards under
          the plan,  consistent with the alternative method set forth under SFAS
          123, the Company's loss for the year, basic and diluted loss per share
          would have been increased on a pro-forma basis as indicated below:

<TABLE>
<CAPTION>
               ---------------------------------------------------------------------------------
                                                            2000           1999          1998
               ---------------------------------------------------------------------------------
<S>                                                   <C>            <C>           <C>
               Loss for the year:

                 -as reported                           $(1,070,773)   $(2,544,584) $(3,315,242)
               ---------------------------------------------------------------------------------
                 - pro-forma                            $(1,070,773)   $(3,388,184) $(3,455,492)
               ---------------------------------------------------------------------------------
               Basic and diluted loss per share:

                 - as reported                               $(0.08)        $(0.21)      $(0.31)
               ---------------------------------------------------------------------------------
                 - pro-forma                                 $(0.08)        $(0.28)      $(0.32)
               ---------------------------------------------------------------------------------
</TABLE>

          The fair value of each option  grant is estimated on the date of grant
          using  the  Black-Scholes  option-pricing  model  with  the  following
          weighted-average  assumptions  used for the grants rewarded in 1998 to
          1999, respectively:

<TABLE>
<CAPTION>
               ---------------------------------------------------------------------------------
                                                                                       Weighted
                              Number of                        Risk-free   Expected     average
                   Year         options   Dividend    Expected  interest   lives in  fair value
                 granted        granted     yields  volatility      rate      years  of options
               ---------------------------------------------------------------------------------
<S>            <C>            <C>            <C>        <C>      <C>          <C>       <C>
                  1998           75,000         0%         57%     6.50%        5.0       $1.87
                  1999          670,000         0%         76%     5.00%        4.4       $1.26
               ---------------------------------------------------------------------------------
</TABLE>

<PAGE>



MINCO MINING & METALS CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Shareholders' Equity
Years Ended December 31, 2000 and 1999
(Expressed in Canadian Dollars)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Accumulated
                                                                            Compre-                          other          Total
                                                           Additional        hensive                        compre-        Share-
                                          Common shares       paid-in         income         Deficit        hensive      holders'
                                        Shares     Amount     capital         (loss)     accumulated   income (loss)       equity
---------------------------------------------------------------------------------------------------------------------------------

<S>                               <C>            <C>     <C>            <C>            <C>           <C>            <C>
Balance, December 31, 1998           15,745,123        -  $ 12,763,272   $          -   $ (9,376,578)  $    8,300    $  3,394,994

Shares issued on February 4, 1999,
  pursuant to a private placement
  at $0.85 per share                    250,000        -       212,500              -              -            -         212,500

Shares issued on March 8, 1999,
  pursuant to a private placement
  at $1.00 per share                    150,000        -       150,000              -              -            -         150,000

Shares issued on July 9, 1999
  for exercise of warrants at
  $1.60 per share                       125,000        -       200,000              -              -            -         200,000

Release of escrow share as
  compensation                                -        -       974,042              -              -            -         974,042

Other comprehensive income
  - unrealized gain (loss) on
  available-for-sale securities               -        -             -       (124,649)             -     (124,649)       (124,649)

Comprehensive income
  - net (loss) for the year                   -        -             -     (2,544,584)    (2,544,584)           -      (2,544,584)
---------------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                              $ (2,669,233)
                                                                         ============

Balance, December 31, 1999           16,270,123        -    14,299,814                   (11,921,162)    (116,349)      2,262,303

Shares issued on April 11, 2000
  for exercise of warrants at
  $1.01 per share                        30,000        -        30,300              -              -            -          30,300

Shares issued for cash on
  April 23, 2000 for exercise of
  warrants at $1.01 per share            15,000        -        15,150              -              -            -          15,150

Shares issued for cash on
  June 27, 2000 for exercise of
  warrants at $1.01 per share            65,000        -        65,650              -              -            -          65,650

Other comprehensive income
  - unrealized gain (loss) on
    available-for-sale securities             -        -             -         17,430              -       17,430          17,430

Comprehensive income
  - net (loss) for the year                   -        -             -     (1,070,773)    (1,070,773)           -      (1,070,773)
---------------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                              $ (1,053,343)
                                                                         ============

Balance, December 31, 2000           16,380,123        -  $ 14,410,914                 $ (12,991,935)  $  (98,919)   $  1,320,060
======================================================================                 ==========================================

</TABLE>