---

| | British Columbia Securities Commission | QUARTERLY AND YEAR END REPORT 
        BC FORM 51-901
        (previously Form 61)
| | -------------------------------------- | ----------------------------------------------------------------------------------

|Freedom of Information and Protection of Privacy Act:The
      personal information requested on this form is collected under the authority
      of and used for the purpose of administering the Securities Act.
      Questions about the collection or use of this information can be directed
      to the Supervisor, Financial Reporting (604-899-6729), PO Box 10142, Pacific
      Centre, 701 West Georgia Street, Vancouver BC V7Y 1L2. Toll Free in British
      Columbia 1-800-373-5393
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

INSTRUCTIONS

This report must be filed by Exchange Issuers within 60 days
  of the end of their first, second and third fiscal quarters and within 140 days
  of their year end. Exchange Issuer means an issuer whose
  securities are listed and posted for trading on the Canadian Venture Exchange
  and are not listed and posted on any other exchange or quoted on a trading or
  quotation system in Canada. Three schedules must be attached to this report
  as follows:

SCHEDULE A: FINANCIAL STATEMENTS

Financial statements prepared in accordance with generally
  accepted accounting principles are required as follows:

For the first, second and third financial quarters:

Interim financial statements prepared in accordance with section
  1751 of the CICA Handbook, including the following: balance sheet, income statement,
  statement of retained earnings, cash flow statement, and notes to the financial
  statements.

The periods required to be presented, consistent with CICA Handbook section
  1751, are as follows:

- a balance sheet as of the end of the current interim
      period and a comparative balance sheet as of the end of the immediately
      preceding fiscal year;
- a statement of retained earnings cumulatively for the
        current fiscal year-to-date, with a comparative statement for the comparable
        year-to-date period of the immediately preceding fiscal year; and
- income statements and cash flow statements for the current interim period
    and cumulatively for the current fiscal year-to-date, with comparative statements
    for the comparable interim periods (current and year-to-date) of the immediately
    preceding fiscal year.

For the financial year end:

Annual audited financial statements prepared on a comparative basis.

Exchange Issuers with a fiscal year of less than or greater than 12 months
  should refer to National Policy No. 51 Changes in the Ending Date of a Financial
  Year and in Reporting Statusfor guidance.

Issuers in the development stage are directed to the guidance
  provided in CICA Accounting Guideline AcG-11 Enterprises in the Development
  Stagethat states enterprises in the development stage are encouraged
  to disclose in the income statement and in the cash flow statement cumulative
  balances from the inception of the development stage.

Issuers that have been involved in a reverse take-over should
  refer to the guidance found in BCIN #52-701 (previously NIN #91/21) with respect
  to such transactions including the requirement or disclosure of supplementary
  information regarding the legal parents prior financial operations.

SCHEDULE B: SUPPLEMENTARY INFORMATION

The supplementary information set out below must be provided
  when not included in Schedule A

|1. | Analysis of expenses and deferred costs
      Provide a breakdown of amounts presented in the financial
        statements for the following: deferred or expensed exploration, expensed
        research, deferred or expensed development, cost of sales, marketing expenses,
        general and administrative expenses, and any other material expenses reported
        in the income statement and any other material deferred costs presented
        in the balance sheet.
      The breakdown should separately present, at a minimum,
        each component that comprises 20% or more of the total amount for a material
        classification presented on the face of the financial statements. All
        other components of a material classification may be grouped together
        under the heading miscellaneous or other in the
        cost breakdown; the total for miscellaneous should not exceed
        30% of the total for a material classification.
      Breakdowns are required for the year-to-date period only.
      Breakdowns are not required for comparative periods.
      Issuers in the development stage are reminded that Section
        3(9)(b) of the BC Securities Commissions Rules requires a schedule
        or note to the financial statements containing an analysis of each of
        exploration, research, development and administration costs, whether expensed
        or deferred and if the issuer is a natural resource issuer, that analysis
        for each material property. Because the analysis required by Rule 3(9)(b)
        must be included in the financial statements, the information does not
        have to be repeated in Schedule B. Consistent with CICA Accounting Guidelines
        AcG-11, staff considers an issuer to be in the development stage when
        it is devoting substantially all of its efforts to establishing a new
        business and planned principal operations have not commenced. Further,
        in staffs view, the lack of significant revenues for the past two
        years normally indicates that an issuer is in the development stage.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | Related party transactions
      Provide disclosure of all related party transactions as specified in
        Section 3840 of the CICA Handbook.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | Summary of securities issued and options
        granted during the period
      Provide the following information for the year-to-date period:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | Summary of securities as at the end of
        the reporting period
      Provide the following information as at the end of the reporting period:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5. | List the names of the directors and officers
      as at the date this report is signed and filed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

SCHEDULE C: MANAGEMENT DISCUSSION AND ANALYSIS

|1. | General Instructions
|-- | --------------------
|   |                     
|   | (a)                 

---

|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Focus the discussion on material information,
        including liquidity, capital resources, known trends, commitments, events,
        risks or uncertainties, that is reasonably expected to have a material
        effect on the issuer.                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | For an issuer with active ongoing operations
        the discussion should be substantive (e.g. generally two to four pages
        in length); for an issuer with limited operations the discussion may not
        be as extensive (e.g. one page).                                 
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The discussion must be factual, balanced
        and non-promotional.                                                                                                                                                                                                                 
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Where the discussion relates to a mineral
        project, as defined in National Instrument 43-101 Standards of Disclosure
        for Mineral Projects, the disclosure must comply with NI 43-101.                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Description of Business
        Provide a brief description of the issuers business. Where an
          issuer is inactive and has no business, disclose these facts together
          with a description of any plans to reactivate and the business the issuer
          intends to pursue.                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Discussion of Operations and Financial Condition
        Provide a meaningful discussion and analysis of the issuers
          operations for the current year-to-date period presented in the financial
          statements. Discuss the issuers financial condition as at the
          date of the most recent balance sheet presented in the financial statements.
        The following is a list of items that should be addressed in managements
          discussion and analysis of the issuers operations and financial
          condition. This is not intended to be an exhaustive list of the relevant
          items.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                       
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | expenditures included in the analysis
        of expenses and deferred costs required under Securities Rule 3(9)(b)
        and Schedule B;                                                                                                                                           
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | acquisition or abandonment of resource
        properties material to the issuer including material terms of any acquisition
        or disposition;                                                                                                                                  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | acquisition or disposition of other
        material capital assets including material terms of the acquisition, or
        disposition;                                                                                                                                              
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | material write-off or write-down of
        assets;                                                                                                                                                                                                                                   
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | transactions with related parties, disclosed
        in Schedule B or the notes to the financial statements;                                                                                                                                                                          
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | material contracts or commitments;                                                                                                                                                                                                                                                    
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | material variances between the issuers
        financial results and information previously disclosed by the issuer,
        (for example if the issuer does not achieve revenue and profit estimates
        previous released, discuss this fact and the reasons for the variance);
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | material terms of any existing third
        party investor relations arrangements or contracts including:                                                                                                                                                                            

|   |                                                                                                                                                                                                                                   | i.                                                                                                                                                                                                                                               | the name of the person;                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------
|   |                                                                                                                                                                                                                                   | ii.                                                                                                                                                                                                                                              | the amount paid during the reporting period; and  
|   |                                                                                                                                                                                                                                   | iii.                                                                                                                                                                                                                                             | the services provided during the reporting period;
|   | (i)                                                                                                                                                                                                                               | legal proceedings;                                                                                                                                                                                                                              
|   | (j)                                                                                                                                                                                                                               | contingent liabilities;                                                                                                                                                                                                                         
|   | (k)                                                                                                                                                                                                                               | default under debt or other
        contractual obligations;                                                                                                                                                                                    
|   | (l)                                                                                                                                                                                                                               | a breach of corporate, securities
        or other laws, or of an issuers listing agreement with the Canadian
        Venture Exchange including the nature of the breach, potential ramifications
        and what is being done to remedy it;
|   | (m)                                                                                                                                                                                                                               | regulatory approval requirements
        for a significant transaction including whether the issuer has obtained
        the required approval or has applied for the approval;                                                                 
|   | (n)                                                                                                                                                                                                                               | management changes; or                                                                                                                                                                                                                          
|   | (o)                                                                                                                                                                                                                               | special resolutions passed
        by shareholders.                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                  
|4. | Subsequent Events
        Discuss any significant events and transactions that occurred during
          the time from the date of the financial statements up to the date that
          this report is certified by the issuer.
|   |                                                                                                                                                                                                                                  
|5. | Financings, Principal
        Purposes and Milestones                                                                                                                                                                            
|   |                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                 
|   | (a)                                                                                                                                                                                                                               | In a tabular format, compare
        any previously disclosed principal purposes from a financing to actual
        expenditures made during the reporting period.                                                                              
|   | (b)                                                                                                                                                                                                                               | Explain any material variances
        and the impact, if any, on the issuers ability to achieve previously
        disclosed objectives and milestones.                                                                                       
|   |                                                                                                                                                                                                                                  
|6. | Liquidity and Solvency
        Discuss the issuers working capital position and its ability
          to meet its ongoing obligations as they become due.                                                                       

How to File Under National Instrument 13-101  System
  for Electronic Document Analysis and Retrieval (SEDAR) 
  BC Form 51-901 Quarterly and Year End Reports are filed under Category of Filing:
  Continuous Disclosure and Filing Type: Interim Financial Statements or Annual
  Financial Statements. Schedule A (Financial Statements) is filed under Document
  Type: Interim Financial Statements or Annual Financial Statements. Schedule
  B (Supplementary Information) and Schedule C (management Discussion) are filed
  under Document Type: BC Form 51-901 (previously Document Type Form 61(BC)).

Meeting the Form Requirements 
  BC Form 510-901 consists of three parts: Instructions to schedules A, B and
  C, issuer details and a certificate. To comply with National instrument 132-101
  it is not necessary to reproduce the instructions that are set out in BC Form
  51-901. A cover page to the schedules titled BC Form 51-901 that includes the
  issuer details and certificate is all that is required to meet the BC Form 51-901
  requirements. The form of the certificate should be amended so as to refer to
  one or two of the three schedules required to complete the report.

|**ISSUER
      DETAILS**
|------------------------

|NAME
      OF ISSUER         | FOR
      QUARTER ENDED | DATE
      OF REPORT
|---------------------------- | ----------------------- | --------------------
|                             |                         | YY/MM/DD            
|ROCKWELL
      VENTURES INC. | May
      31, 2003      | 03/10/17            

|ISSUER'S
      ADDRESS | 1020
      - 800 West Pender Street
|---------------------- | -----------------------------------

|CITY                 | PROVINCE                 | POSTAL
      CODE     | ISSUER
      FAX NO. | ISSUER
      TEL NO.
|-------------------- | ------------------------ | --------------------- | -------------------- | --------------------
|Vancouver            | B.C.                     | V6C
      2V6         | 604-684-8094         | 604-684-6365        
|CONTACT
      PERSON | CONTACT'S
      POSITION | CONTACT
      TEL NO.
|Paul
      Mann      | Controller               | 604-684-6365         

|CONTACT
      E-MAIL ADDRESS | WEB
      SITE ADDRESS
|---------------------------- | ----------------------
|info@hdgold.com              | www.hdgold.com        

|CERTIFICATE
        The three schedules required to complete this Report are attached and
        the disclosure contained therein has been approved by the Board of Directors.
        A copy of this Report will be provided to any shareholder who requests
        it.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DIRECTOR'S
      SIGNATURE | PRINT
      FULL NAME  | DATE
      SIGNED
|-------------------------- | ---------------------- | -----------------
|/s/
      Jeffery R. Mason | Jeffery
      R. Mason | YY/MM/DD         
|                           |                        | 03/10/17         

|DIRECTOR'S
      SIGNATURE   | PRINT
      FULL NAME    | DATE
      SIGNED
|---------------------------- | ------------------------ | -----------------
|/s/
      Ronald W. Thiessen | Ronald
      W. Thiessen | YY/MM/DD         
|                             |                          | 03/10/17         

---

ROCKWELL VENTURES INC.ANNUAL REPORTMAY 31, 2003

SCHEDULE A:            FINANCIAL
  STATEMENTS

See Consolidated Financial Statements

SCHEDULE B:            SUPPLEMENTARY
  INFORMATION

|1. | Analysis of expenses and deferred costs:
|-- | ----------------------------------------
|   |                                         
|   | (a)                                     

| |  | Bank charges                                | $ | 300     | 
| |  | ------------------------------------------- | - | ------- | 
| |  | Insurance                                   |   | 38,781  | 
| |  | Management fees                             |   | 71,594  | 
| |  | Office expenses                             |   | 17,526  | 
| |  | Salaries  administration and support staff |   | 111,273 | 
| |  | Telephone and communications                |   | 2,607   | 
| |  |                                             | $ | 242,081 | 

|   | (b)                                                                       | Exploration expenses: See Schedule A, note 6                 
|-- | ------------------------------------------------------------------------- | -------------------------------------------------------------
|   |                                                                          
|2. | Related party transactions:See Schedule
      A, note 8                  
|   |                                                                          
|3. | Summary of securities issued and options granted
      during the period:
|   |                                                                           |                                                              
|   | (a)                                                                       | Summary of securities common shares issued during the period:

| |                 |                                                     |                   |           |       | Total    |               | Commission
| | --------------- | --------------------------------------------------- | ----------------- | --------- | ----- | -------- | ------------- | ----------
| |                 | Type of                                             |                   | Number of | Price | Proceeds | Type of       | Paid      
| | Date of Issue   | Security                                            | Type of Issue     | Shares    | ($)   | ($)      | Consideration | ($)       
| | August 27, 2002 | Common                                              | Private placement | 1,037,125 | 0.20  | 207,425  | Cash          | 22,531    
| |                 |                                                    
| | (b)             | Summary of stock warrants issued during the period:

| | Name
      ofOptionee/Type | Date of Issue                                       | Number of Shares | Exercise Price ($) | Expiry Date      
| | -------------------------- | --------------------------------------------------- | ---------------- | ------------------ | -----------------
| | Private placement          | August 27,2002                                      | 1,037,125        | 0.22               | December 27, 2003
| |                            |                                                    
| | (c)                        | Summary of stock options granted during the period:

|   | Name of Optionee/Type                              | Date of Issue                                                                                     | Number of Shares | Exercise Price ($) | Expiry Date      
|-- | -------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------- | ------------------ | -----------------
|   | Employees/consultants                              | Dec. 11, 2002                                                                                     | 45,000           | 0.10               | December 20, 2004
|   | Employees/consultants                              | May 9, 2003                                                                                       | 15,000           | 0.10               | May 9, 2005      
|   |                                                    |                                                                                                  
|4. | Summary of securities as at the end of the period:
|   |                                                    |                                                                                                  
|   | (a)                                                | Authorized capital:                200,000,000
      common shares without par value             
|   | (b)                                                | Shares issued:                          55,199,275
      common shares without par value         
|   | (c)                                                | Summary of options, warrants and convertible securities outstanding:
      See Schedule A, note 7
|   | (d)                                                | Number of common shares held in escrow:                
      Nil                                
|   |                                                    | Number of common shares subject to pooling:          Nil                                         

3

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ROCKWELL VENTURES INC.ANNUAL REPORTMAY 31, 2003

|5. | List of directors/officers: | Robert A. Dickinson | Director and Chairman               
|-- | --------------------------- | ------------------- | ------------------------------------
|   |                             | Ronald W. Thiessen  | Director, President and CEO         
|   |                             | Jeffrey R. Mason    | Director and Chief Financial Officer
|   |                             | Gordon J. Fretwell  | Director and Secretary              
|   |                             | Scott D. Cousens    | Director                            
|   |                             | Douglas B. Silver   | Director                            
|   |                             | Rene G. Carrier     | Director                            

SCHEDULE C:            MANAGEMENT
  DISCUSSION AND ANALYSIS

Rockwell Ventures Inc. (Rockwell or the Company)
  is a natural resource company engaged in the exploration of mineral properties.
  The Company holds a 100% interest in the Ricardo Property in the Republic of
  Chile.

The Ricardo Property is a porphyry copper prospect located
  near Calama, Chile. The property is situated on the West Fissure, a structural
  trend that hosts a number of porphyry copper deposits, including Corporación
  National del Cobre de Chiles (Codelco, Chiles national
  mining company) large operation called the Chuquicamata Mine. Rockwells
  wholly-owned subsidiary Minera Ricardo Resources Inc. S.A. ("Minera Ricardo")
  has obtained a provisory mining easement and has applied for two other easements
  plus an injunction in an attempt to prevent Codelco from building a housing
  project and infrastructure over the Companys mining rights, or alternatively
  to receive fair compensation from Codelco. Rockwell intends to continue to contact
  and negotiate with Codelco to resolve the impasse. The Company is optimistic
  that further exploration work, financed by Rockwell or in conjunction with other
  partners, will identify one or more deposits on the Ricardo Property.

In fiscal 2004, Rockwell will also seek to acquire a new mineral
  exploration project, to complement its Ricardo property, with the assistance
  of Hunter Dickinson Inc. (HDI), an experienced exploration and development
  firm with in-house geologists, engineers, and environmental and financial specialists.

Market Trends

Copper prices have increased in 2003; copper has been trading
  at over US$0.80/oz since the beginning of September 2003. Prices are expected
  to continue to increase in 2004 as global economic conditions improve.

Financial review

At May 31, 2003, Rockwell had a working capital deficiency
  of $134,247, as compared to a positive working capital position of $77,155 at
  the end of the previous quarter. The Company had 55,199,275 common shares issued
  and outstanding at the end of the third quarter of fiscal 2003. At the Companys
  annual general meeting held in November 2002, shareholders approved an increase
  in the authorized share capital from 100,000,000 to 200,000,000 common shares
  without par value.

One of the Companys current assets at May 31, 2003 was
  a $70,000 reclamation deposit that was held in trust pursuant to an agreement
  with Falconbridge Limited (Falconbridge) on the Haut Plateau property.
  The Company terminated its option on the Haut Plateau property during the second
  quarter of fiscal 2003, and commenced the process to have the deposit released.
  Subsequent to the year-end, on June 11, 2003, this $70,000 deposit was returned
  to the Company.

At May 31, 2003, the Company is committed to incur, on a best-efforts
  basis, $196,721 in qualifying Canadian exploration expenditures pursuant to
  a flow-through private equity placement.

4

---

ROCKWELL VENTURES INC. ANNUAL REPORT MAY 31, 2003

Management estimates that approximately $600,000 will be needed
  to maintain its corporate status and assets over the ensuing 12-month period,
  excluding property activities. Management recognizes that Rockwell must generate
  additional resources for Rockwells operations and exploration activities
  to continue. If the Company is not successful in obtaining such financing, it
  will need to curtail its operations.

The Company will endeavour to negotiate a funding arrangement,
  in the form of an equity purchase, joint venture, loan or some combination thereof,
  which may be supplemented by a public or private share offering to existing
  or new shareholders. There can be no certainty as to the outcome of any such
  arrangement.

Results of Operations

The Companys operating loss for the year is $854,308,
  as compared to $1,753,364 in fiscal 2002. Expenses for the year totaled $848,012,
  a decrease from the $1,785,321 the Company spent in fiscal 2002 when exploration
  activities were underway for most of the year at the Haut Plateau property,
  located in Quebec, Canada.

The main expenditures in fiscal 2003 were on exploration and
  salaries and benefits. Both of these decreased from the previous year. Two areas
  where expenditures increased were shareholder communications (2003 - $55,519;
  2002 - $32,013) and conference and travel (2003 - $34,125; 2002 - $33,883),
  associated with shareholder communication efforts on the Haut Plateau property
  early in the fiscal year, and travel to Chile to deal with legal and operational
  issues related to the Ricardo property.

Of the fiscal 2003 exploration expenditures, $220,340 was
  spent on the Haut Plateau property and $261,916 was spent on the Ricardo property.
  Exploration costs for the Ricardo Property were for property fees ($115,987)
  and site expenses, mainly related to maintaining the office in Chile and legal
  fees related to easement applications and other legal issues (site activities
  to date - $180,074). During the third quarter, the Company received a $40,104
  payment related to a right-of-way, which was recorded as income on the schedule
  of exploration expenses (note 7). The costs at Haut Plateau were mainly geological
  wages ($139,440) for technical staff for ongoing supervision and communication
  with Falconbridge regarding the project over the course of the 2002 calendar
  year, but which was billed by HDI in the fourth quarter.

Related Party Transactions

Hunter Dickinson Inc. (HDI) of Vancouver, British
  Columbia carries out geological, corporate development, investor services, administrative
  and management activities, and incurs third party expenses on behalf of the
  Company on a full cost-recovery basis. In fiscal 2003, Rockwell paid HDI $392,378,
  as compared to $490,291 in fiscal 2002. During the same period, Rockwell reimbursed
  Hunter Dickinson Group Inc. $19,375, as compared to $175,250 in fiscal 2002.
  The Company currently has accounts payable to HDI of $244,914.

Euro-American Capital Corp., a company controlled by a director
  of the Company, provided management and advisory services to the Company amounting
  to $43,727 during the fiscal year as compared to $25,352 in fiscal 2002. Also
  in fiscal 2003, Gordon J. Fretwell Law Corporation, a private company controlled
  by a director of the Company, provided legal services to the Company amounting
  to $7,026, as compared to $46,379 in the previous year.

5

---



ROCKWELL VENTURES INC.
  CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED 
  MAY 31, 2003, 2002 and 2001

(Expressed in Canadian Dollars)



---

|**DAVIDSON & COMPANY** |  | Chartered Accountants |  | A Partnership of Incorporated Professionals
|---------------------- |  | --------------------- |  | -------------------------------------------



INDEPENDENT AUDITORS' REPORT

To the Shareholders of 
  Rockwell Ventures Inc.

We have audited the consolidated balance sheets of Rockwell
  Ventures Inc. as at May 31, 2003 and 2002 and the consolidated statements of
  operations, deficit and cash flows for the years ended May 31, 2003, 2002 and
  2001. These consolidated financial statements, expressed in Canadian dollars,
  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 Canadian and United
  States generally accepted auditing standards. 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 consolidated
  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
  May 31, 2003 and 2002 and the results of its operations and its cash flows for
  the years ended May 31, 2003, 2002 and 2001 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 consistent
  basis.

|                  | "DAVIDSON & COMPANY" 
|----------------- | ---------------------
|Vancouver, Canada |                      
|                  | Chartered Accountants
|August 29, 2003   |                      

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA - U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph (following the opinion paragraph) when
  the financial statements are affected by conditions and events that cast substantial
  doubt on the Company's ability to continue as a going concern, such as those
  described in Note 1 to the financial statements. Our report to the shareholders
  dated August 29, 2003 is expressed in accordance with Canadian reporting standards
  which do not permit a reference to such events and conditions in the auditors'
  report when these are adequately disclosed in the financial statements.

|                  | "DAVIDSON & COMPANY" 
|----------------- | ---------------------
|Vancouver, Canada |                      
|                  | Chartered Accountants
|August 29, 2003   |                      

|                                                                                                                                                       | A Member of SCINTERNATIONAL | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------- | 
|1200 - 609 Granville Street, P.O. Box 10372,
      Pacific Centre, Vancouver, BC, Canada, V7Y 1G6 
      Telephone (604) 687-0947   Fax (604) 687-6172

---

ROCKWELL VENTURES INC. Consolidated Balance Sheets 
  (Expressed in Canadian Dollars)

|                                                                                             |   | As
      at May 31 |  
|-------------------------------------------------------------------------------------------- | - | ------------------ | -
|                                                                                             |   | 2003               |  
|                                                                                             |   |                    |  
|ASSETS                                                                                       |   |                    |  
|                                                                                             |   |                    |  
|Current assets                                                                               |   |                    |  
|Cash and equivalents                                                                         | $ | 18,536             |  
|Marketable securities (note 5)                                                               |   | 8,400              |  
|Amounts receivable and prepaids                                                              |   | 24,820             |  
|Reclamation deposit (note 11)                                                                |   | 70,000             |  
|Due
      from related parties (note 9)                                                      |   |                   |  
|                                                                                             |   | 121,756            |  
|                                                                                             |   |                    |  
|Security deposit(note 6(a))                                                                  |   | 28,935             |  
|Reclamation deposit(notes 6(c) and 11)                                                       |   |                   |  
|Mineral property
      interests(note 6)                                                     |   | 46,857             |  
|                                                                                             |   |                    |  
|                                                                                             | $ | 197,548            |  
|                                                                                             |   |                    |  
|LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY                                               |   |                    |  
|                                                                                             |   |                    |  
|Current liabilities                                                                          |   |                    |  
|Accounts payable and accrued liabilities                                                     | $ | 11,089             |  
|Due
      to related parties (note 9)                                                        |   | 244,914            |  
|                                                                                             |   | 256,003            |  
|                                                                                             |   |                    |  
|Shareholders' (deficit) equity                                                               |   |                    |  
|Share capital (note 8)                                                                       |   | 8,697,652          |  
|Deficit                                                                                      |   | (8,756,107         | )
|                                                                                             |   | (58,455            | )
|Nature and continuance of operations (note 1)                                                |   |                    |  
|Subsequent events
      (note 16)                                                            |   |                    |  
|                                                                                             | $ | 197,548            |  
|                                                                                             |   |                    |  
|The accompanying notes are an integral part of these consolidated financial
      statements |   |                    |  

|Approved by the Board of Directors |                     
|---------------------------------- | --------------------
|                                   |                     
|                                   |                     
|/s/ Ronald W. Thiessen             | /s/ Jeffrey R. Mason
|                                   |                     
|Ronald W. Thiessen                 | Jeffrey R. Mason    
|Director                           | Director            

---

ROCKWELL VENTURES INC. Consolidated Statements of Operations(Expressed in Canadian Dollars)

|                                              |   | Years ended May 31       |  
|--------------------------------------------- | - | ------------------------ | -
|                                              |   | 2003                     |  
|                                              |   |                          |  
|Expenses                                      |   |                          |  
|Exploration (note 7 and 9)                    | $ | 482,256                  |  
|Legal, accounting and audit (note
      9)    |   | 25,297                   |  
|Office and administration                     |   | 242,081                  |  
|Shareholder communications                    |   | 55,519                   |  
|Trust and filing                              |   | 8,734                    |  
|Travel
      and conferences                  |   | 34,125                   |  
|                                              |   | 848,012                  |  
|Other items                                   |   |                          |  
|Exchange loss (gain)                          |   | (12,936                  | )
|Gain on sale of subsidiaries (note
      2)   |   |                         |  
|Interest income                               |   | (2,368                   | )
|Loss on sale of marketable securities         |   |                         |  
|Write-down
      of marketable securities     |   | 21,600                   |  
|                                              |   | 6,296                    |  
|                                              |   |                          |  
|Loss for
      the year                       | $ | (854,308                 | )
|                                              |   |                          |  
|Basic and
      diluted loss per common share | $ | (0.02                    | )
|                                              |   |                          |  
|Weighted average number of                    |   |                          |  
|common
      shares outstanding               |   | 54,949,229               |  
|                                              |   |                          |  
|Consolidated Statements of Deficit            |   |                          |  
|(Expressed
      in Canadian Dollars)         |   |                          |  
|                                              |   | Years
      ended May 31 |  
|                                              |   | 2003                     |  
|                                              |   |                          |  
|Deficit, beginning of year, as restated       | $ | (7,901,799               | )
|Loss for
      the year                       |   | (854,308                 | )
|Deficit,
      end of year, as restated       | $ | (8,756,107               | )

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

---

ROCKWELL VENTURES INC. Consolidated Statements of Cash Flows 
  (Expressed in Canadian Dollars)

|                                                                                       |   | Years
      ended May 31 |  
|-------------------------------------------------------------------------------------- | - | ------------------------ | -
|                                                                                       |   | 2003                     |  
|Cash
      provided by (applied to):                                                   |   |                          |  
|                                                                                       |   |                          |  
|Operating activities                                                                   |   |                          |  
|Loss for the year                                                                      | $ | (854,308                 | )
|Items not affecting cash                                                               |   |                          |  
|Gain
      on sale of subsidiaries                                                     |   |                         |  
|Loss
      on sale of marketable securities                                            |   |                         |  
|Write-down
      of marketable securities                                              |   | 21,600                   |  
|Changes in non-cash working
      capital items                                        |   |                          |  
|Amounts
      receivable and prepaids                                                  |   | 49,516                   |  
|Accounts
      payable and accrued liabilities                                         |   | (92,698                  | )
|Net
      cash used in operating activities                                            |   | (875,890                 | )
|                                                                                       |   |                          |  
|Investing activities                                                                   |   |                          |  
|Security deposit                                                                       |   | (28,935                  | )
|Reclamation deposit                                                                    |   |                         |  
|Proceeds
      from sale of marketable securities                                      |   |                         |  
|Net
      cash (used in) provided by investing activities                              |   | (28,935                  | )
|                                                                                       |   |                          |  
|Financing activities                                                                   |   |                          |  
|Due from/payable to related
      parties                                              |   | 696,712                  |  
|Issuance
      of share capital                                                        |   | 184,894                  |  
|Net
      cash provided by financing activities                                        |   | 881,606                  |  
|                                                                                       |   |                          |  
|Decrease in cash and equivalents during the year                                       |   | (23,219                  | )
|Cash and equivalents,
      beginning of year                                          |   | 41,755                   |  
|                                                                                       |   |                          |  
|Cash and
      equivalents, end of year                                                | $ | 18,536                   |  
|                                                                                       |   |                          |  
|Supplemental disclosure of non-cash investing and financing activities
      (note 10) |   |                          |  
|                                                                                       |   |                          |  
|Supplemental disclosure:                                                               |   |                          |  
|Interest paid during the year                                                          | $ | -                        |  
|Income
      taxes paid during the year                                                | $ | -                        |  

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

---

|ROCKWELL VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------

|1.  | NATURE AND CONTINUANCE OF OPERATIONS
        Rockwell Ventures Inc. (the Company) is incorporated under
          the Company Act of British Columbia, and its principal business activity
          is the exploration of mineral properties. Its principal mineral property
          interests are located in Chile and have been in Canada and Brazil.
        These consolidated financial statements have been prepared using Canadian
          generally accepted accounting principles assuming a going concern. The
          Company has accumulated losses since inception of $8,756,107 (2002 
          $7,901,799, 2001  $6,148,435) and currently has a working capital
          deficit of $134,247 (2002  positive working capital of $494,102).
          Consequently the ability of the Company to continue as a going concern
          depends upon its ability to develop profitable operations, and to continue
          to raise adequate financing. The Company and its financial advisors
          are actively targeting sources of additional funding through alliances
          with financial, exploration and mining entities or other business and
          financial transactions which would generate sufficient resources to
          assure continuation of the Company's operations and exploration programs.
          However, there can be no assurance that the Company will be able to
          secure additional financial resources nor achieve profitability or positive
          cash flows. If the Company is unable to obtain adequate additional financing,
          the Company will be required to curtail operations and exploration activities.
          Furthermore, failure to continue as a going concern would require that
          the Companys assets and liabilities be restated on a basis which
          could differ significantly from the going concern basis.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2.  | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
        These consolidated financial statements have been prepared in accordance
          with Canadian generally accepted accounting principles. These consolidated
          financial statements include the accounts of the Company and its wholly-owned
          subsidiaries 549949 BC Ltd., 639154 BC Ltd. and Minera Ricardo Resources
          Inc. S.A., and for the year ended May 31, 2001 N3C Resources Inc., N4C
          Resources Inc. and Rockwell Mineracao Limitada. All material intercompany
          balances and transactions have been eliminated upon consolidation.
        The Company's subsidiary Minera Ricardo Resources Inc. S.A. ("Ricardo")
          was incorporated on August 5, 1997 under the laws of Chile and commenced
          active business on January 1, 1998.
        In March 2000, the Company incorporated two subsidiaries, N3C Resources
          Inc. (N3C) and N4C Resources Inc. (N4C) under
          the laws of the Cayman Islands. Rockwell Mineracao Limitada (Mineracao),
          a wholly-owned subsidiary of N4C Resources Inc., was incorporated on
          March 23, 2000 under the laws of Brazil. N4C Resources Inc. held 99.90%
          of the shares of Rockwell Mineracao Limitada and N3C Resources Inc.
          held the remaining 0.10% of the shares. In January 2002, the Company
          sold its interests in N3C, N4C and Mineracao for 120,000 free trading
          common shares of Geostar Metals Inc. at a then-fair-value of $0.25 per
          share, or net proceeds of $30,000 (note 5).                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|3.  | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(a) | Use of estimates
        The preparation of consolidated financial statements in conformity
          with Canadian generally accepted accounting principles requires management
          to make estimates and assumptions that affect the reported amounts of
          assets and liabilities and the disclosure of contingent assets and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | liabilities as at the balance sheet
        date, and the reported amounts of revenues and expenses during the reporting
        period. Significant areas requiring the use of management estimates relate
        to the impairment of mineral property interests, determination of reclamation
        obligations and the assumptions used in determining stock-based compensation
        expense. Actual results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(b) | Cash and equivalents
        Cash and equivalents consist of cash and highly liquid investments,
          having maturity dates of three months or less from the date of purchase,
          that are readily convertible to known amounts of cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(c) | Allowance for receivables
        The Company establishes an allowance for receivables on a specific
          account basis. No allowance for receivables were recorded by the Company
          as at May 31, 2003 and 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) | Marketable securities
        Marketable securities are recorded at the lower of cost and quoted
          market value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(e) | Reclamation deposits
        Reclamation deposits are recorded at cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(f) | Mineral property interests
        The acquisition costs of mineral properties are deferred until the
          property is placed into production, sold or abandoned or management
          has determined there to be an impairment in value. These deferred acquisition
          costs will be amortized on a unit-of-production basis over the estimated
          useful life of the related properties following the commencement of
          production, or written off if the property is sold, allowed to lapse
          or abandoned.
        Mineral property acquisition costs include the cash consideration
          and the fair market value of common shares, based on the trading price
          of the shares, on the date of issue or as otherwise provided under the
          agreement terms for the mineral property interest. Costs for properties
          for which the Company does not possess unrestricted ownership and exploration
          rights, such as option agreements, are expensed in the period incurred
          or until a feasibility study has determined that the property is capable
          of commercial production.
        Exploration costs and option payments are expensed in the period incurred.
        Administrative expenditures are expensed in the period incurred.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(g) | Values
        The amounts shown for the mineral property interests represent costs
          accumulated to date, and do not necessarily represent present or future
          values, as they are entirely dependent upon the economic recoverability
          of current and future ore reserves, of which the Company currently has
          none.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) | Environmental and reclamation costs
        Environmental, reclamation and site restoration costs are charged
          to operations in the period incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(i) | Foreign currency translation
        All of the Companys foreign operations are integrated.
        Monetary assets and liabilities of the Company's integrated foreign
          subsidiaries are translated into Canadian dollars at exchange rates
          in effect at the balance sheet date. Non-monetary assets and liabilities
          are translated at historical estimated exchange rates unless such items
          are carried at market, in which case they are translated at the exchange
          rates in effect on the balance sheet date. Revenues and expenses, except
          depreciation, are translated at the average exchange rates for the period.
          Depreciation is translated at the same exchange rates as the assets
          to which it relates.
        Foreign exchange gains or losses are expensed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(j) | Share capital
        Common shares issued for mineral property interests are recorded at
          the fair market value based upon the trading price of the shares on
          the TSX Venture Exchange on the date of issue or as otherwise provided
          under the agreement terms to issue the shares.
        The proceeds from common shares issued pursuant to flow-through share
          financing agreements are credited to share capital and the tax benefits
          of the exploration expenditures incurred pursuant to these agreements
          are transferred to the purchaser of the flow-through shares.
        Share issue costs are deducted from share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(k) | Stock-based compensation
        The Company accounts for all non-cash stock-based payments to non-employees,
          and employee awards that are direct awards of stock, that call for settlement
          in cash or other assets, or that are stock appreciation rights which
          call for settlement by the issuance of equity instruments, granted on
          or after June 1, 2002, using the fair value based method.
        Under the fair value based method, stock-based payments to non-employees
          are measured at the fair value of the consideration received, or the
          fair value of the equity instruments issued, or liabilities incurred,
          whichever is more reliably measurable. The fair value of non-cash stock-based
          payments to non-employees is periodically re-measured until counterparty
          performance is complete, and any change therein is recognized over the
          period and in the same manner as if the Company had paid cash instead
          of paying with or using equity instruments. The cost of non-cash stock-based
          payments to service providers that are fully vested and non-forfeitable
          at the grant date is measured and recognized at that date.
        No compensation cost is required to be recorded for all other non-cash
          stock-based employee compensation awards. Consideration paid by employees
          upon the exercise of stock options is credited to share capital. If
          applicable, the Company presents in the notes to the financial statements
          the pro forma loss and loss per share had the fair value method been
          used to account for employee non-cash stock-based compensation awards.

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | Under the fair value based method, compensation
        cost attributable to awards to employees that are direct awards of stock,
        or stock appreciation rights which call for settlement by the issuance
        of equity instruments, is measured at fair value at the grant date and
        recognized over the vesting period. Compensation cost attributable to
        awards to employees which call for settlement in cash or other assets
        is measured at fair value at the grant date and recognized over the vesting
        period. For awards that vest at the end of a vesting period, compensation
        cost is recognized on a straight-line basis; for awards that vest on a
        graded basis, compensation cost is recognized on a pro-rata basis over
        the vesting period.                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(l) | Future income taxes
        The Company uses the asset and liability method of accounting for
          income taxes. Under this method, future income tax assets and liabilities
          are computed based on differences between the carrying amount of assets
          and liabilities on the balance sheet and their corresponding tax values,
          generally using the enacted or substantively enacted income tax rates
          expected to apply to taxable income in the years in which those temporary
          differences are expected to be recovered or settled.
        Future income tax assets also result from unused loss carryforwards
          and other deductions. Future tax assets are recognized to the extent
          that they are considered more likely than not to be realized. The valuation
          of future income tax assets is adjusted, if necessary, by the use of
          a valuation allowance to reflect the estimated realizable amount.              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(m) | Loss per share
        Basic loss per share is calculated by dividing the loss for the period
          by the weighted average number of common shares outstanding during the
          period.
        Diluted loss per share is calculated using the treasury stock method.
          Under the treasury stock method, the weighted average number of common
          shares outstanding used for the calculation of diluted loss per share
          assumes that the proceeds to be received on the exercise of dilutive
          stock options and warrants are used to repurchase common shares at the
          average market price during the period.
        Diluted loss per share has not been presented as the effect of the
          outstanding options and warrants would be anti-dilutive.
        At May 31, 2003, a total of 3,921,625 (2002  13,556,925; 2001
           6,042,300) potentially dilutive shares were excluded from the
          determination of diluted loss per share.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(n) | Comparative figures
        Certain of the prior years comparative figures have been reclassified
          to conform to the financial statement presentation adopted for the current
          year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4.  | CHANGE IN ACCOUNTING POLICY
        During the fiscal year ended May 31, 2002, the Company changed its
          method of accounting for mineral property exploration costs from deferring
          expenditures, pending a decision as to the commercial viability of a
          property, to expensing such costs until the completion of a feasibility
          study. This change was applied retroactively with restatement of all
          prior periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|       | As a result of the change in accounting
        policy, adjustments were made to the Consolidated Statements of Operations
        and Deficit as follows:
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                           
|       | Consolidated Statements of Operations and Deficit                                                                                                         
|       | For the years ended May 31                                                                                                                                
|       | Deficit, beginning of year as previously reported                                                                                                         
|       | Exploration costs expensed                                                                                                                                
|       | Deficit, beginning of year as
      restated                                                                                                              
|       | Loss for the year as previously reported                                                                                                                  
|       | Exploration costs expensed                                                                                                                                
|       | Loss for the year as restated                                                                                                                             
|       | Deficit, end of year as restated                                                                                                                          
|       | Basic and diluted loss per common share as previously reported                                                                                            
|       | Effect of change in accounting
      policy                                                                                                               
|       | Basic and diluted loss per common share as restated                                                                                                       
|       |                                                                                                                                                           
|**5.** | MARKETABLE SECURITIES
      Marketable securities are comprised of the following:                                                                         
|       |                                                                                                                                                           

|   |                                                       |   | May 31, |  |   | May 31, | 
|-- | ----------------------------------------------------- | - | ------- |  | - | ------- | 
|   |                                                       |   | 2003    |  |   | 2002    | 
|   | Carrying value and market value, Geostar Metals Inc., |   |         |  |   |         | 
|   | 120,000 (2002  120,000)
      common shares          | $ | 8,400   |  | $ | 30,000  | 
|   |                                                       |   |         |  |   |         | 
|6. | MINERAL PROPERTY INTERESTS                           
|   |                                                      

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Ricardo  |  |   | Haut Plateau |  |   | Pedra Branca |  |   |        | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------- |  | - | ------------ |  | - | ------------ |  | - | ------ | 
| | Acquisition Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Property |  |   | Property     |  |   | Property     |  |   | Total  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |  |   |              |  |   |              |  |   |        | 
| | Balance at May 31, 2003 and
      2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $ | 46,857   |  | $ |             |  | $ |             |  | $ | 46,857 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | Title to mining properties involves
        certain inherent risks due to the difficulties in determining the validity
        of certain claims as well as the potential for problems arising from the
        frequently complicated conveyancing history characteristic of many mining
        properties. The Company does not have title insurance but has investigated
        title to all of its mineral properties and, to the best of its knowledge
        and belief, titles to all of its properties are in good standing.

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | Ricardo Property, Chile
        The Company holds a 100% interest in certain mineral exploration and
          exploitation concessions totaling approximately 16,400 hectares in the
          Calama Mining District in Chile. The Corporación Nacional del
          Cobre de Chile ("Codelco"), the Chilean national copper company, is
          currently erecting housing and other infrastructure, as part of a relocation
          of its workers for its Chuquicamata project, in certain areas of the
          Ricardo Property. The Company believes this construction usurps the
          Company's constitutional mining rights. Accordingly, in order to preserve
          access to its mineral concessions, in November 2002 the Company applied
          for several easements on its Ricardo Property, and an injunction to
          prevent Codelco from further developing its construction project over
          the Company's mining rights. These matters are before the law courts
          of Chile. Pursuant to the terms of the easement application, a refundable
          deposit of 15 million Chilean pesos ($28,935) was lodged with the authorities.
        The Company continues to maintain the Ricardo Property in good standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | Fox River Property, Canada
        On June 6, 2001, the Company obtained the right, subject to the fulfillment
          of certain conditions, to acquire from Hunter Dickinson Group Inc. (HDGI),
          a related party by virtue of certain directors in common, HDGIs
          option to earn a 60% participating joint venture interest in the 314,000
          hectare Fox River property located in Manitoba from Falconbridge Limited
          (Falconbridge). Consideration for the assignment was reimbursement
          to HDGI of its actual costs as at June 6, 2001 of approximately $800,000
          and the issuance to HDGI of 2,000,000 Rockwell common share purchase
          warrants exercisable at $0.40 per share for two years.
        On November 15, 2001, due to the uncertainty of securing sufficient
          financing in time to meet the first year earn-in requirements, the Company
          entered into a property reorganization agreement with HDGI and Amarc
          Resources Ltd. (Amarc), both non-arms-length parties
          by virtue of certain directors in common, Amarc took over the Fox River
          project by assuming exploration costs of approximately $2.5 million
          incurred by HDGI on its most recent exploration work programs. The Company
          cancelled the proposed issuance of 2,000,000 share purchase warrants
          to HDGI and Amarc agreed to issue to the Company up to 1,000,000 Amarc
          common share purchase warrants in tranches of 200,000 warrants upon
          completion of each $2.5 million of expenditures on the Fox River Property.
          The initial 200,000 warrants, which were received December 31, 2001,
          are exercisable at $1.00 until December 31, 2003. On January 10, 2003,
          Amarc terminated its option on the Fox River Property. Accordingly,
          there were no further warrants issued or issuable by Amarc relating
          to this property.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(c) | Haut Plateau Property, Canada
        On November 15, 2001, the Company entered into an assignment agreement
          with HDGI, whereby HDGI agreed to assign to the Company for nominal
          consideration its earn-in option from Falconbridge Limited on a nickel-copper-cobalt
          discovery located in eastern Canada. The Company had the right to operate
          and, at its option, acquire a 60% participating joint venture interest
          in the property by incurring $10 million in staged exploration expenditures
          by April 30, 2006. The first $1 million of expenditures, inclusive of
          a $70,000 reclamation deposit, was to be expended by May 31, 2002, which
          date was extended and the Company subsequently fulfilled the first year
          earn-in requirements during the year ended May 31, 2003. Upon the Company
          earning a 60% interest, a joint venture was to be formed with each party
          paying its proportionate share of expenses. Falconbridge had a back-in
          right to convert its 40% interest to a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | 60% interest by completing and funding a positive bankable feasibility
          study and arranging the financing and requisite completion guarantees
          for development of a mine.
        The Company considered the results from its exploration programs and
          decided in November 2002 to terminate its option to earn a 60% participating
          joint venture interest from Falconbridge Limited. At May 31, 2003 the
          Company had $70,000 held in trust as a reclamation deposit. Subsequent
          to the year end, on June 11, 2003 this deposit was returned to the Company
          (note 11).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(d) | Pedra Branca Property, Brazil
        On February 24, 2000, the Company entered into an assignment agreement
          with HDGI, whereby HDGI assigned its option to earn a 60% interest in
          the Pedra Branca property to the Company. As part of the agreement,
          the Company purchased 483,333 units in Altoro Gold Corp. (Altoro),
          through a private placement, for a total cost of $290,000. Each unit
          was comprised of one common share and one share purchase warrant. As
          sole consideration for HDGI's assignment of the option, the Company
          transferred to HDGI the benefit of the share purchase warrants in Altoro.
          To acquire its 60% interest, the Company was required to expend a total
          of US$7 million on the Pedra Branca Project within four years; and issue
          a minimum of 500,000 shares of the Company to Altoro, having a minimum
          value of US$500,000, over four years.
        As at May 31, 2001, the Company had disbursed US$90,000 and issued
          to Altoro 125,433 common shares, at a deemed value of US$50,000 for
          the option payment. Subsequently, the Company curtailed drilling due
          to unsatisfactory results. Accordingly, the Company decided not to exercise
          its option to acquire an interest in the Pedra Branca property and expensed
          all related costs.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|7.  | EXPLORATION EXPENSES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                             |   |           |   |   |              |  |   |           |  |   | Total     |   |   | Total     | 
| | --------------------------- | - | --------- | - | - | ------------ |  | - | --------- |  | - | --------- | - | - | --------- | 
| |                             |   | Ricardo   |   |   | Haut Plateau |  |   | Branca    |  |   | May 31    |   |   | May 31    | 
| |                             |   | Property  |   |   | Property     |  |   | Property  |  |   | 2003      |   |   | 2002      | 
| |                             |   |           |   |   |              |  |   |           |  |   |           |   |   |           | 
| | Assay and analysis          | $ |          |   | $ | 9,875        |  | $ |          |  | $ | 9,875     |   | $ | 40,112    | 
| | Drilling                    |   |          |   |   |             |  |   |          |  |   |          |   |   | 292,046   | 
| | Engineering                 |   |          |   |   | 8,963        |  |   |          |  |   | 8,963     |   |   | 26,705    | 
| | Geological                  |   | 5,760     |   |   | 139,440      |  |   |          |  |   | 145,200   |   |   | 313,427   | 
| | Graphics                    |   |          |   |   | 21,500       |  |   |          |  |   | 21,500    |   |   | 18,223    | 
| | Helicopter/fixed wing       |   |          |   |   |             |  |   |          |  |   |          |   |   | 97,783    | 
| | Property fees/assessments   |   | 115,987   |   |   | 8,238        |  |   |          |  |   | 124,225   |   |   | 186,433   | 
| | Right of way income         |   | (40,104   | ) |   |             |  |   |          |  |   | (40,104   | ) |   |          | 
| | Site activities             |   | 180,074   |   |   | 32,324       |  |   |          |  |   | 212,398   |   |   | 204,215   | 
| | Travel and accommodation    |   | 199       |   |   |             |  |   |          |  |   | 199       |   |   | 42,327    | 
| | Incurred during the year    |   | 261,916   |   |   | 220,340      |  |   |           |  |   | 482,256   |   |   | 1,221,271 | 
| | Cumulative exploration      |   |           |   |   |              |  |   |           |  |   |           |   |   |           | 
| | expenses, beginning of year |   | 1,230,367 |   |   | 902,291      |  |   | 3,343,069 |  |   | 5,475,727 |   |   | 4,254,456 | 
| |                             |   |           |   |   |              |  |   |           |  |   |           |   |   |           | 
| | Cumulative exploration      |   |           |   |   |              |  |   |           |  |   |           |   |   |           | 
| | expenses, end of year       | $ | 1,492,283 |   | $ | 1,122,631    |  | $ | 3,343,069 |  | $ | 5,957,983 |   | $ | 5,475,727 | 

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                             |   |           |  |   |              |  |   |           |  |   |           |  |   |           | 
| | --------------------------- | - | --------- |  | - | ------------ |  | - | --------- |  | - | --------- |  | - | --------- | 
| |                             |   |           |  |   |              |  |   |           |  |   | Total     |  |   | Total     | 
| |                             |   | Ricardo   |  |   | Haut Plateau |  |   | Branca    |  |   | May 31    |  |   | May 31    | 
| |                             |   | Property  |  |   | Property     |  |   | Property  |  |   | 2002      |  |   | 2001      | 
| |                             |   |           |  |   |              |  |   |           |  |   |           |  |   |           | 
| | Assay and analysis          | $ |          |  | $ | 36,137       |  | $ | 3,975     |  | $ | 40,112    |  | $ | 331,760   | 
| | Drilling                    |   |          |  |   | 292,046      |  |   |          |  |   | 292,046   |  |   | 206,611   | 
| | Engineering                 |   | 23,502    |  |   | 2,778        |  |   | 425       |  |   | 26,705    |  |   | 48,349    | 
| | Geological                  |   | 5,676     |  |   | 304,734      |  |   | 3,017     |  |   | 313,427   |  |   | 1,394,594 | 
| | Graphics                    |   |          |  |   | 18,223       |  |   |          |  |   | 18,223    |  |   | 179,507   | 
| | Helicopter/fixed wing       |   |          |  |   | 97,783       |  |   |          |  |   | 97,783    |  |   |          | 
| | Option payments             |   |          |  |   |             |  |   |          |  |   |          |  |   | 148,893   | 
| | Property fees/assessments   |   | 110,066   |  |   | 76,367       |  |   |          |  |   | 186,433   |  |   | 170,250   | 
| | Site activities             |   | 105,388   |  |   | 49,499       |  |   | 49,328    |  |   | 204,215   |  |   | 375,642   | 
| | Travel and accommodation    |   | 220       |  |   | 24,724       |  |   | 17,383    |  |   | 42,327    |  |   | 261,906   | 
| | Incurred during the year    |   | 244,852   |  |   | 902,291      |  |   | 74,128    |  |   | 1,221,271 |  |   | 3,117,512 | 
| | Cumulative exploration      |   |           |  |   |              |  |   |           |  |   |           |  |   |           | 
| | expenses, beginning of year |   | 985,515   |  |   |             |  |   | 3,268,941 |  |   | 4,254,456 |  |   | 1,136,944 | 
| |                             |   |           |  |   |              |  |   |           |  |   |           |  |   |           | 
| | Cumulative exploration      |   |           |  |   |              |  |   |           |  |   |           |  |   |           | 
| | expenses, end of year       | $ | 1,230,367 |  | $ | 902,291      |  | $ | 3,343,069 |  | $ | 5,475,727 |  | $ | 4,254,456 | 

|8.  | SHARE CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|(a) | Authorized share capital
        The Company's authorized share capital consists of 200,000,000 (2002
           100,000,000) common shares, without par value.
        At the Company's annual general meeting held in November 2002, shareholders
          approved an increase in the authorized share capital of the Company,
          from 100,000,000 to 200,000,000 common shares, without par value.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                
|(b) | Issued and outstanding common shares                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                                           |       |  | Number          |  |   |           | 
| | --------------------------------------------------------- | ----- |  | --------------- |  | - | --------- | 
| | Common shares
      issued:                               | Price |  | of
      Shares |  |   | Amount    | 
| | Balance May 31, 2000                                      |       |  | 37,399,936      |  | $ | 2,949,444 | 
| | Acquisition of mineral property (note 6(d))               |       |  | 125,433         |  |   | 73,893    | 
| | Private placement October 2000 (net
      of issue costs) | $0.65 |  | 4,519,231       |  |   | 2,735,672 | 
| | Private
      placement March 2001 (net of issue costs)   | $0.75 |  | 1,728,300       |  |   | 1,224,225 | 
| | Balance May 31, 2001                                      |       |  | 43,772,900      |  |   | 6,983,234 | 
| | Private placement January 2002 (net of issue costs)       | $0.16 |  | 6,545,500       |  |   | 979,407   | 
| | Private
      placement April 2002 (net of issue costs)   | $0.16 |  | 3,843,750       |  |   | 550,117   | 
| | Balance May 31, 2002                                      |       |  | 54,162,150      |  |   | 8,512,758 | 
| | Private
      placement August 2002 (net of issue costs)  | $0.20 |  | 1,037,125       |  |   | 184,894   | 
| | Balance May
      31 2003                                 |       |  | 55,199,275      |  | $ | 8,697,652 | 

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|      | On August 27, 2002, the Company completed a $207,425 private placement
          of 1,037,125 units at a price of $0.20 per unit. Each unit was comprised
          of one common share and one share purchase warrant. Each share purchase
          warrant entitles the holder to purchase an additional common share at
          a price of $0.22 until December 27, 2003. The share purchase warrants
          are subject to an accelerated expiry of 45 days if the closing price
          of the Companys shares, as traded on the TSX Venture Exchange
          over a ten consecutive day period, is greater than or equal to $0.33.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|*(c)* | Share purchase options
      The Company does not have a formal stock option plan
        but follows the policies of the TSX-V under which it is authorized to
        grant options for up to 10% of its outstanding shares to officers, directors,
        employees and consultants. Under the policies, the exercise price of each
        option equals or exceeds the market price of the Company's stock as calculated
        on the date of grant. The options are for a maximum term of five years.
      The continuity of share purchase options for the year
        ended May 31, 2003 is:                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Exercise |   |       | May 31    |  |   |         |  |   |           |  |   |            |   |   | May 31  | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | - | ----- | --------- |  | - | ------- |  | - | --------- |  | - | ---------- | - | - | ------- | 
| | Expiry date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Price    |   |       | 2002      |  |   | Granted |  |   | Exercised |  |   | Expired    |   |   | 2003    | 
| | February 20, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $0.60    |   |       | 15,000    |  |   |        |  |   |          |  |   | (15,000    | ) |   |        | 
| | May 30, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $0.16    |   |       | 1,113,000 |  |   |        |  |   |          |  |   | (1,113,000 | ) |   |        | 
| | June 11, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $0.16    |   |       | 27,000    |  |   |        |  |   |          |  |   |           |   |   | 27,000  | 
| | November 21, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $0.16    |   |       | 100,000   |  |   |        |  |   |          |  |   |           |   |   | 100,000 | 
| | December 20, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $0.10    |   |       |          |  |   | 45,000  |  |   |          |  |   |           |   |   | 45,000  | 
| | April 6, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $0.16    |   |       | 50,000    |  |   |        |  |   |          |  |   |           |   |   | 50,000  | 
| | May 9, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $0.10    |   |       |          |  |   | 15,000  |  |   |          |  |   |           |   |   | 15,000  | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |          |   |       | 1,305,000 |  |   | 60,000  |  |   |          |  |   | (1,128,000 | ) |   | 237,000 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |          |   |       |           |  |   |         |  |   |           |  |   |            |   |   |         | 
| | Weighted average exercise price                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |          |   | $     | 0.17      |  | $ | 0.10    |  | $ |          |  | $ | 0.17       |   | $ | 0.14    | 
| | Weighted average fair value of options granted during the year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |          | $ | 0.001 |          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | As at May 31, 2003, 195,000 of these options
        had vested with employees and consultants.
      Subsequent to May 31, 2003, 27,000 share purchase options
        expired unexercised.
      Stock-based compensation
      During the year ended May 31, 2003, the Company granted
        60,000 share purchase options to non-employees. The exercise prices of
        all share purchase options granted during the year were equal to $0.10
        and the market prices at the grant dates was $0.04. The compensation costs
        based on the fair value method of the share purchase options at the grant
        date using an option pricing model was immaterial and accordingly, no
        pro-forma results are presented.
      The weighted-average assumptions used to estimate the
        fair value of options granted during the year were:

| | Risk free interest rate | 3%         | 
| | ----------------------- | ---------- | 
| | Expected life           | 2.02 years | 
| | Expected volatility     | 50%        | 
| | Expected dividends      | nil        | 

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The continuity of share purchase options for the year ended
      May 31, 2002 is as follows:
| | ---------------------------------------------------------------------------------------------
| |                                                                                              
| |                                                                                              
| | Expiry date                                                                                  
| |                                                                                              
| | November 15, 2001                                                                            
| | May 30, 2003 (i)                                                                             
| | April 6, 2005 (ii)                                                                           
| | May 30, 2002                                                                                 
| | May 30, 2003 (iii)                                                                           
| | May 30, 2003 (iv)                                                                            
| | February 20, 2003                                                                            
| | May 30, 2003 (v)                                                                             
| | May 30, 2003 (vi)                                                                            
| | June 11, 2003 (vii)                                                                          
| | November 21, 2003                                                                            
| |                                                                                              
| |                                                                                              
| | Weighted average exercise price                                                              
| | Weighted average fair value of options granted during the year                               

| | (i)   | The Company amended the exercise price
        of 300,000 options from their original price of $0.32 to $0.16 and extended
        the expiry date from their original date of March 2, 2003 to May 30, 2003.           
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                         
| | (ii)  | The Company amended the exercise price
        of 35,000 options from their original price of $0.43 to $0.16.                                                                                                           
| |       |                                                                                                                                                                                                                         
| | (iii) | The Company amended the exercise price
        of 683,000 options from their original price of $0.60 to $0.16 and extended
        the expiry date from their original date of May 30, 2002 to May 30, 2003.            
| |       |                                                                                                                                                                                                                         
| | (iv)  | The Company amended the exercise price
        of 75,000 options from their original price of $0.60 to $0.16 and extended
        the expiry date from their original date of December 6, 2002 to May 30,
        2003. 
| |       |                                                                                                                                                                                                                         
| | (v)   | The Company amended the exercise price
        of 40,000 options from their original price of $0.60 to $0.16 and extended
        the expiry date from their original date of February 20, 2003 to May 30,
        2003.
| |       |                                                                                                                                                                                                                         
| | (vi)  | The Company amended the exercise price
        of 15,000 options from their original price of $0.74 to $0.16 and extended
        the expiry date from their original date of March 10, 2003 to May 30,
        2003.   
| |       |                                                                                                                                                                                                                         
| | (vii) | The Company amended the exercise price
        of 27,000 options from their original price of $0.40 to $0.16.                                                                                                           

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|      | The continuity of share purchase options for the year ended
      May 31, 2001 is as follows:                                                                       
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                     
|      |                                                                                                                                                                     
|      | Expiry date                                                                                                                                                         
|      | November 15, 2001                                                                                                                                                   
|      | May 30, 2002                                                                                                                                                        
|      | December 6, 2002                                                                                                                                                    
|      | February 20, 2003                                                                                                                                                   
|      | March 2, 2003                                                                                                                                                       
|      | March 10, 2003                                                                                                                                                      
|      | April 6, 2005                                                                                                                                                       
|      |                                                                                                                                                                     
|      |                                                                                                                                                                     
|      | Weighted average exercise price                                                                                                                                     
|      | Weighted average fair value of options granted during the year                                                                                                      
|      |                                                                                                                                                                     
|*(d)* | Share purchase warrants
      The continuity of share purchase warrants (each warrant exercisable
        into one common share) for the year ended May 31, 2003 is:

| |                                 |          |  |   |            |  |   |           |  |   |           |  |   |            |   |   |           | 
| | ------------------------------- | -------- |  | - | ---------- |  | - | --------- |  | - | --------- |  | - | ---------- | - | - | --------- | 
| |                                 | Exercise |  |   | May 31     |  |   | Issued    |  |   | Exercised |  |   | Expired    |   |   | May 31    | 
| | Expiry date                     | Price    |  |   | 2002       |  |   |           |  |   |           |  |   |            |   |   | 2003      | 
| | January 4, 2003                 | $0.16    |  |   | 6,398,000  |  |   |          |  |   |          |  |   | (6,398,000 | ) |   |          | 
| | March 9, 2003                   | $0.35    |  |   | 1,123,600  |  |   |          |  |   |          |  |   | (1,123,600 | ) |   |          | 
| | March 9, 2003                   | $0.80    |  |   | 604,700    |  |   |          |  |   |          |  |   | (604,700   | ) |   |          | 
| | April 19, 2003                  | $0.16    |  |   | 1,478,125  |  |   |          |  |   |          |  |   | (1,478,125 | ) |   |          | 
| | July 4, 2003 (i)                | $0.16    |  |   | 147,500    |  |   |          |  |   |          |  |   |           |   |   | 147,500   | 
| | October 19, 2003                | $0.16    |  |   | 2,500,000  |  |   |          |  |   |          |  |   |           |   |   | 2,500,000 | 
| | December 27, 2003               | $0.22    |  |   |           |  |   | 1,037,125 |  |   |          |  |   |           |   |   | 1,037,125 | 
| |                                 |          |  |   | 12,251,925 |  |   | 1,037,125 |  |   |          |  |   | (9,604,425 | ) |   | 3,684,625 | 
| |                                 |          |  |   |            |  |   |           |  |   |           |  |   |            |   |   |           | 
| | Weighted average exercise price |          |  | $ | 0.21       |  | $ | 0.22      |  | $ |          |  | $ | 0.22       |   | $ | 0.18      | 

| | (i) | Subsequent to the year end, these share purchase warrants expired unexercised.
| | --- | ------------------------------------------------------------------------------

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|   | The continuity of share purchase warrants (each
      warrant exercisable into one common share) for the year ended May 31, 2002
      is:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                           
|   |                                                                                                                                           
|   | Expiry date                                                                                                                               
|   | April 22, 2002                                                                                                                            
|   | April 22, 2002                                                                                                                            
|   | January 4, 2003                                                                                                                           
|   | March 9, 2003                                                                                                                             
|   | March 9, 2003                                                                                                                             
|   | April 19, 2003                                                                                                                            
|   | July 4, 2003                                                                                                                              
|   | October 19, 2003                                                                                                                          
|   |                                                                                                                                           
|   |                                                                                                                                           
|   | Weighted average
      exercise price                                                                                                     
|   |                                                                                                                                           
|9. | RELATED PARTY TRANSACTIONS AND BALANCES                                                                                                   

| |                                             |   |                    |  |   |         |  |   |           | 
| | ------------------------------------------- | - | ------------------ |  | - | ------- |  | - | --------- | 
| |                                             |   | Years ended May 31 | 
| | Transactions                                |   | 2003               |  |   | 2002    |  |   | 2001      | 
| | Services rendered and expenses reimbursed   |   |                    |  |   |         |  |   |           | 
| | Hunter Dickinson Inc. (a)                   | $ | 392,378            |  | $ | 490,291 |  | $ | 1,650,658 | 
| | Hunter Dickinson Group Inc. (b)             |   | 19,375             |  |   | 175,250 |  |   |          | 
| | Gordon J. Fretwell Law Corporation (c)      |   | 7,026              |  |   | 46,379  |  |   | 88,773    | 
| | Euro-American Capital Corporation
      (d) |   | 43,727             |  |   | 25,352  |  |   | 73,670    | 
| |                                             |   |                    |  |   |         |  |   |           | 

| |                                         |   | Years ended May 31 |  
| | --------------------------------------- | - | ------------------ | -
| | Balances receivable (payable)           |   | 2003               |  
| | Exploration advance balances receivable |   |                    |  
| | from (payable to) a related party       |   |                    |  
| | Hunter Dickinson Inc. (a)               | $ | (244,914           | )

| | (a) | Hunter Dickinson Inc. ("HDI") and its
        wholly-owned subsidiaries are private companies with certain directors
        in common that provide geological, corporate development, administrative
        and management services to, and incur third party costs on behalf of,
        the Company on a full cost recovery basis pursuant to an agreement dated
        January 1, 2001. Exploration advances to and from Hunter Dickinson Inc.
        have arisen, in the normal course, due to in-progress and near-term planned
        exploration work primarily on the Companys exploration properties.
        There are no specific terms of repayment.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (b) | Hunter Dickinson Group Inc. (HDGI),
        is a private company with certain directors in common, that provides consulting
        services at market rates to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (c) | Gordon J. Fretwell Law Corporation is
        a private company controlled by a director that provides legal services
        to the Company based on the fair market value of those services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Euro-American Capital Corporation is
        a private company controlled by a director that provides management services
        to the Company based on the fair market value of those services.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                   
|10. | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
        There were no significant non-cash transactions during the year May
          31, 2003.
        Significant non-cash transaction during the year ended May 31, 2002
          consisted of the Compay receiving 120,000 common shares from Geostar
          Metals Inc., at a value of $30,000, as consideration for the sale of
          its subsidiaries as described in note 2.
        Significant non-cash transactions during the year ended May 31, 2001,
          consisted of the Company issuing 125,433 common shares, with an agreed
          value of US$50,000 as partial payment of the first option payment to
          Altoro Gold Corp. (note 6(d)).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11. | RECLAMATION DEPOSIT
        In May 2002, the Company deposited $70,000 in trust with Gordon J.
          Fretwell Law Corporation as a reclamation deposit related to the Haut
          Plateau Property (note 6(c)). On November 22, 2002, the Company terminated
          the option with Falconbridge on the Haut Plateau property. The reclamation
          deposit of $70,000 was returned to the Company subsequent to year end.                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12. | INCOME TAXES
        A reconciliation of income taxes calculated at applicable statutory
          rates is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                              |                    |          |   |   |            |   |   |            |  
| | -------------------------------------------- | ------------------ | -------- | - | - | ---------- | - | - | ---------- | -
| |                                              | Years ended May 31
| |                                              |                    | 2003     |   |   | 2002       |   |   | 2001       |  
| |                                              |                    |          |   |   |            |   |   |            |  
| | Loss for the year                            | $                  | (854,308 | ) | $ | (1,753,364 | ) | $ | (4,134,142 | )
| |                                              |                    |          |   |   |            |   |   |            |  
| | Expected income tax recovery                 | $                  | (321,220 | ) | $ | (746,933   | ) | $ | (1,843,827 | )
| | Exploration not deducted for tax purposes    |                    | 181,328  |   |   | 520,261    |   |   | 1,390,410  |  
| | Non-deductible amounts                       |                    | 8,122    |   |   | (12,227    | ) |   | 119        |  
| | Deductible expenses                          |                    | (47,670  | ) |   | (52,090    | ) |   | (42,694    | )
| | Unrecognized benefit of net operating losses |                    |          |   |   |            |   |   |            |  
| | carried forward                              |                    | 179,440  |   |   | 290,989    |   |   | 495,992    |  
| |                                              |                    |          |   |   |            |   |   |            |  
| | Net income tax recovery                      | $                  |         |   | $ |           |   | $ |           |  

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The significant component of the Companys future tax
      assets are as follows:
| | ----------------------------------------------------------------------------------
| |                                                                                   
| |                                                                                   
| |                                                                                   
| | Net operating loss carry forwards                                                 
| | Cumulative exploration and development expenses                                   
| | Other                                                                             
| |                                                                                   
| | Less: valuation allowance                                                         
| |                                                                                   
| | Net
      future tax assets                                                       
| |                                                                                   

|    | The Company has available for deduction
        against future taxable income non-capital losses of approximately $2,785,000
        (2002  $2,369,000, 2001  $1,955,000). These losses, if not
        utilized, will expire in various years ranging from 2004 to 2010. Subject
        to certain restrictions, the Company also has resource expenditures, net
        of flow-through financing renounced to shareholders, of approximately
        $3,600,000 available to reduce taxable income in future years.                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|13. | FINANCIAL INSTRUMENTS
        The Company's financial instruments consist of cash and equivalents,
          marketable securities, amounts receivable, reclamation deposit, security
          deposit, accounts payable and accrued liabilities and due from and to
          related party. It is management's opinion the Company is not exposed
          to significant interest, currency or credit risk arising from these
          financial instruments. The fair values of these financial instruments
          approximate their carrying values, unless otherwise noted.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|14. | COMMITMENT
        At May 31, 2003, the Company is committed to incur, on a best-efforts
          basis, $196,721 in qualifying Canadian exploration expenditures pursuant
          to a flow-through private equity placement.                                                                                                                                                                                                                                                                                                                                                      

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|**15.** | SEGMENTED INFORMATION
      Operating segments are defined as components of an enterprise
        about which separate financial information is available that is evaluated
        regularly by the chief operation decision maker, or decision-making group,
        in deciding how to allocate resources and in assessing performance. All
        of the Company's operations are within the mineral exploration sector.
        The Company's mining operations are centralized whereby the Company's
        head office is responsible for the exploration results and to provide
        support in addressing local and regional issues. The Company's operations
        are therefore segmented on a geographic basis. The Company's resource
        properties are significantly located in Canada and in Chile and formerly
        in Brazil.
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                     |   |         |  |   |           |  |   |           | 
| | ------------------- | - | ------- |  | - | --------- |  | - | --------- | 
| |                     |   | 2003    |  |   | 2002      |  |   | 2001      | 
| | Loss for the year   |   |         |  |   |           |  |   |           | 
| | Canada              | $ | 605,570 |  | $ | 1,434,384 |  | $ | 1,016,630 | 
| | Chile               |   | 248,738 |  |   | 244,852   |  |   | 367,668   | 
| | Brazil              |   | -       |  |   | 74,128    |  |   | 2,749,844 | 
| |                     | $ | 854,308 |  | $ | 1,753,364 |  | $ | 4,134,142 | 
| |                     |   |         |  |   |           |  |   |           | 
| | Identifiable assets |   |         |  |   |           |  |   |           | 
| | Canada              | $ | 97,014  |  | $ | 646,746   |  |   |           | 
| | Chile               |   | 100,534 |  |   | 68,000    |  |   |           | 
| |                     |   |         |  |   |           |  |   |           | 
| |                     | $ | 197,548 |  | $ | 714,746   |  |   |           | 

|16. | SUBSEQUENT EVENTS
      Subsequent to the year end, the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
          ACCOUNTING PRINCIPLES
        These consolidated financial statements have been prepared in accordance
          with generally accepted accounts principles in Canada ("Canadian GAAP").
          Material variations in the accounting principles, practices and methods
          used in preparing these financial statements from principles, practices
          and methods accepted in the United States (United States GAAP)
          and in SEC Regulation S-X are described and quantified below.

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The impact of the differences between
        Canadian GAAP and United States GAAP on the consolidated balance sheets
        would be as follows:
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                   
| |                                                                                                                                                   
| |                                                                                                                                                   
| |                                                                                                                                                   
| |                                                                                                                                                   
| |                                                                                                                                                   
| | Current assets                                                                                                                                    
| | Security deposit                                                                                                                                  
| | Reclamation deposit                                                                                                                               
| | Mineral property                                                                                                                                  
| |                                                                                                                                                   
| |                                                                                                                                                   
| |                                                                                                                                                   
| | Current liabilities                                                                                                                               
| | Stockholders'                                                                                                                                     
| | (deficit) equity                                                                                                                                  
| |                                                                                                                                                   
| |                                                                                                                                                   
| | The impact of the differences between
        Canadian GAAP and United States GAAP on the statements of operations would
        be as follows:   

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |            |   |   |            |  
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2003       |   |   | 2002       |   |   | 2001       |  
| | Loss for the year, Canadian GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $ | (854,308   | ) | $ | (1,753,364 | ) | $ | (4,134,142 | )
| | Adjustments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |            |   |   |            |   |   |            |  
| | Mineral properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |           |   |   |           |   |   | (46,857    | )
| | Compensation expense on granting stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |           |   |   | (205,540   | ) |   | (252,852   | )
| | Unrealized gain (loss) in marketable
      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | (7,200     | ) |   | 7,200      |   |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |            |   |   |            |  
| | Loss for the year, United States
      GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $ | (861,508   | ) | $ | (1,951,704 | ) | $ | (4,433,851 | )
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |            |   |   |            |  
| | Basic and diluted loss per
      share, United States GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $ | (0.02      | ) | $ | (0.04      | ) | $ | (0.11      | )
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |            |   |   |            |   |   |            |  
| | Weighted average number of common shares outstanding,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |            |   |   |            |   |   |            |  
| | United States GAAP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 54,949,229 |   |   | 46,862,339 |   |   | 39,898,315 |  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | The adjustments recorded under United
        States GAAP on the Consolidated Balance Sheets and Consolidated Statements
        of Operations and Deficit have no effect on the cash flows under United
        States GAAP.
      Mineral properties and deferred exploration costs
      Under Canadian GAAP, mineral properties, including exploration,
        development and acquisition costs, may be carried at cost and written
        down if the properties are abandoned, sold or if management decides not
        to pursue the properties or deems there to have been an impairment in
        value. The Company has chosen to expense its exploration and option costs.
        Under United States GAAP, mineral property expenditures are expensed as
        incurred. Once a final feasibility study has been completed, additional
        costs incurred to bring the mine into production are capitalized as development
        costs. Costs incurred to access ore bodies identified in the current mining
        plan after production has commenced are considered production costs and
        are expensed as incurred. Costs incurred to extend production beyond those
        areas identified in the mining plan where additional reserves have been
        established are deferred as development costs until the

---

|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | incremental reserves are produced. Capitalized costs
        are amortized using the unit-of-production method over the estimated life
        of the ore body based on proven and probable reserves. Accordingly, there
        is no difference between Canadian GAAP and United States GAAP in the accounting
        for mineral properties and deferred exploration costs for the year ended
        May 31, 2003.
      Stock-based compensation
      Under United States GAAP, Statement of Financial Accounting
        Standard No. 123, Accounting for Stock-based Compensation
        (SFAS 123) requires companies to establish a fair market value
        based method of accounting for stock-based compensation plans. Accounting
        Principles Board Opinion No. 25 Accounting for Stock Issued to Employees
        (APB 25) permits the measurement of compensation cost for
        stock options as the excess, if any, of the quoted market price of the
        Companys stock at the date of grant over the option price. The Company
        has chosen to account for stock based compensation under SFAS 123.
      Under Canadian GAAP, the reporting of stock-based compensation
        expense in the Companys financial statements was not required for
        the years ended May 31, 2002 and 2001. New accounting and disclosure standards
        were introduced under Canadian GAAP (note 3 and note 8) for the fiscal
        year ending May 31, 2003. The Company has chosen the intrinsic value method
        for Canadian GAAP and the fair value method for the United States GAAP.
        Accordingly, there is a difference between Canadian GAAP and United States
        GAAP on the accounting for stock-based compensation. For the year ended
        May 31, 2003 there is no stock-based compensation recorded as the fair
        value of stock options issued during the year was immaterial.
      In calculating compensation expense on granting stock
        options for 2002 and 2001, the Company has utilized the Black-Scholes
        option pricing model to estimate the fair value of the options granted
        in the year using the following key assumptions:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |         |  |         | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- |  | ------- | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 2002    |  | 2001    | 
| | Risk free interest rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 4.700%  |  | 5.450%  | 
| | Expected life                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2 years |  | 2 years | 
| | Expected volatility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 139%    |  | 119%    | 
| | Expected dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |        |  |        | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |         |  |         | 
| | Marketable securities
      Under Canadian GAAP purposes, short term marketable
        securities are carried at the lower of aggregate cost or current market
        value, with any unrealized loss included in the statements of operations.
        Long-term investments are carried on the cost or equity basis and are
        only written-down when there is evidence of a decline in value that is
        other than temporary.
      Under United States GAAP, Statement of Financial Accounting
        Standard No. 115, Accounting for Certain Investments in Debt and
        Equity Securities (SFAS 115) requires that certain equity
        investments must be classified into available-for-sale or trading securities
        and stated at fair market values. Any unrealized holding gains or losses
        are reported as a separate component of

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|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | shareholders equity until realized for available-for-sale
        securities, and included in earnings for trading securities. For United
        States GAAP purposes the Company's investment in marketable securities
        have been classified as trading securities. Under SFAS 115, there would
        have been an unrealized loss of $7,200 (2002  unrealized gain of
        $7,200; 2001 - $nil) in the Companys investment in marketable securities.
      New accounting pronouncements
      In June 2001, the Financial Accounting Standards Board
        (FASB) approved the issuance of Statements of Financial Accounting
        Standards No. 142, Goodwill and Other Intangible Assets (SFAS
        142). SFAS 142 requires that goodwill no longer be amortized to
        earnings, but instead be reviewed for impairment. The statement is effective
        for fiscal years beginning after December 15, 2001, and is required to
        be applied at the beginning of an entity's fiscal year and to be applied
        to all goodwill and other intangible assets recognized in its financial
        statements at that date. Impairment losses for goodwill and indefinite-lived
        intangible assets that arise due to the initial application of this statement
        (resulting from a transitional impairment test) are to be reported as
        resulting from a change in accounting principle. Under an exception to
        the date at which this statement becomes effective, goodwill and intangible
        assets acquired after June 30, 2001, will be subject immediately to the
        non-amortization and amortization provisions of this statement.
      In June 2001, FASB issued Statements of Financial Accounting
        Standards No. 143, Accounting for Asset Retirement Obligations
        (SFAS 143) that records the fair value of the liability for
        closure and removal costs associated with the legal obligations upon retirement
        or removal of any tangible long-lived assets. The initial recognition
        of the liability will be capitalized as part of the asset cost and depreciated
        over its estimated useful life. SFAS 143 is required to be adopted effective
        January 1, 2003.
      In August 2001, FASB issued Statements of Financial
        Accounting Standards No. 144, Accounting for the Impairment on Disposal
        of Long-lived Assets (SFAS 144), which supersedes Statements
        of Financial Accounting Standards No. 121, Accounting for the Impairment
        of Long-lived Assets and for Long-lived Assets to be Disposed of.
        SFAS 144 requires that long-lived assets that are to be disposed of by
        sale be measured at the lower of book value or fair value less cost to
        sell. Additionally, SFAS 144 expands the scope of discontinued operations
        to include all components of an entity with operations that (1) can be
        distinguished from the rest of the entity and (2) will be eliminated from
        the ongoing operations of the entity in a disposal transaction. SFAS 144
        is effective for fiscal years beginning after December 15, 2001, and,
        generally, its provisions are to be applied prospectively.
      In April 2002, FASB issued Statements of Financial Accounting
        Standards No. 145, Rescission of FASB Statements No. 4, 44 and 64,
        Amendment of FASB Statement No. 13, and Technical Corrections (SFAS
        145). SFAS 145 eliminates the requirement that gains and losses
        from the extinguishment of debt be aggregated and, if material, classified
        as an extraordinary item, net of the related income tax effect and eliminates
        an inconsistency between the accounting for sale-leaseback transactions
        and certain lease modifications that have economic effects that are similar
        to sale-leaseback transactions. Generally, SFAS 145 is effective for transactions
        occurring after May 15, 2002.
      In June 2002, FASB issued Statements of Financial Accounting
        Standards No. 146, Accounting for Costs Associated with Exit or
        Disposal Activities (SFAS 146) that nullifies Emerging
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|ROCKWELL
      VENTURES INC. 
      Notes to the Consolidated Financial Statements
      For the year ended May 31, 2003 
      (Expressed in Canadian Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Issues Task Force No. 94-3, Liability Recognition
        for Certain Employee Termination Benefits and Other Costs to Exit an Activity
        (Including Certain Costs Incurred in a Restructuring) (EITF
        94-3). SFAS 146 requires that a liability for a cost associated
        with an exit or disposal activity be recognized when the liability is
        incurred, whereby EITF 94-3 had recognized the liability at the commitment
        date to an exit plan. The provisions of this statement are effective for
        exit or disposal activities that are initiated after December 31, 2002
        with earlier application encouraged.
      In October 2002, FASB issued Statements of Financial
        Accounting Standards No. 147, Accounting of Certain Financial Institutions
         an amendment of FASB Statements No. 72 and 44 and FASB Interpretation
        No. 9 (SFAS 147). SFAS 147 requires the application
        of the purchase method of accounting to all acquisitions of financial
        institutions, except transactions between two or more mutual enterprises.
        SFAS 147 is effective for acquisitions for which the date of acquisition
        is on or after October 1, 2002.
      In December 2002, FASB issued Statements of Financial
        Accounting Standards No. 148, Accounting for Stock-Based Compensation
         Transition and Disclosure  an amendment of FASB Statement
        No. 123 (SFAS 148). SFAS 148 amends FASB Statement No.
        123 to provide alternative methods of transition for a voluntary change
        to the fair value based method of accounting for stock-based employee
        compensation. In addition, SFAS 148 amends the disclosure requirements
        of FASB Statement No. 123 to require prominent disclosures in both annual
        and interim financial statements about the method of accounting for stock-based
        employee compensation and the effect of the method used on reported results.
        SFAS 148 is effective for fiscal years ending after December 15, 2002.
      In April 2003, FASB issued Statements of Financial Accounting
        Standards No. 149 Amendment of Statement 133 on Derivative Instruments
        and Hedging Activities (SFAS 149). SFAS 149 amends and
        clarifies financial accounting and reporting for derivative instruments,
        including certain derivative instruments embedded in other contracts and
        for hedging activities under FASB Statement No. 133 Accounting for
        Derivative Instruments and Hedging Activities. SFAS 149 is generally
        effective for contracts entered into or modified after June 30, 2003.
      In May 2003, FASB issued Statements of Financial Accounting
        Standards No. 150 Accounting for Certain Financial Instruments with
        Characteristics of both Liabilities and Equity (SFAS 150).
        SFAS 150 establishes standards for how an issuer classifies and measures
        certain financial instruments with characteristics of both liabilities
        and equity. SFAS 150 is effective for financial instruments entered into
        or modified after May 31, 2003.
      The adoption of these new pronouncements is not expected
        to have a material effect on the Company's consolidated financial position
        or results of operations.
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