---



**ROCKWELL VENTURES INC. 
  CONSOLIDATED FINANCIAL STATEMENTS**

YEARS ENDED MAY 31, 2005, 2004 and 2003

(Expressed in Canadian Dollars)

---

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
  FIRM

To the Shareholders of
  Rockwell Ventures Inc.

We have audited the consolidated balance sheets of Rockwell
  Ventures Inc. as at May 31, 2005 and 2004 and the consolidated statements of
  operations and deficit and cash flows for the years ended May 31, 2005, 2004
  and 2003. These consolidated financial statements are the responsibility of
  the Company's management. Our responsibility is to express an opinion on these
  consolidated financial statements based on our audits.

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

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  May 31, 2005 and 2004 and the results of its operations and cash flows for the
  years ended May 31, 2005, 2004 and 2003 in accordance with Canadian generally
  accepted accounting principles.

"DAVIDSON & COMPANY LLP"

|Vancouver, Canada | Chartered Accountants
|----------------- | ---------------------
|                  |                      
|August 17, 2005   |                      

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 17, 2005 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 LLP"

|Vancouver, Canada | Chartered Accountants
|----------------- | ---------------------
|                  |                      
|August 17, 2005   |                      

A Member of SC INTERNATIONAL

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 |  
|---------------------------------------------- | - | ------------ | -
|                                               |   | 2005         |  
|ASSETS                                         |   |              |  
|                                               |   |              |  
|Current assets                                 |   |              |  
|Cash and equivalents                           | $ | 352,677      |  
|Marketable
      securities (note 4)           |   | 109,514      |  
|Amounts receivable and
      prepaids          |   | 41,180       |  
|Due from related parties
      (note 8)        |   | 77,159       |  
|                                               |   | 580,530      |  
|                                               |   |              |  
|Security deposit(note 5(a))                    |   | 32,190       |  
|Mineral property interests(note 5)             |   | 46,857       |  
|                                               |   |              |  
|                                               | $ | 659,577      |  
|                                               |   |              |  
|LIABILITIES AND SHAREHOLDERS' EQUITY           |   |              |  
|                                               |   |              |  
|Current liabilities                            |   |              |  
|Accounts payable and accrued
      liabilities | $ | 29,976       |  
|                                               |   |              |  
|Shareholders' equity                           |   |              |  
|Share
      capital (note 7(b))                |   | 11,815,792   |  
|Contributed surplus (note
      7(e))          |   | 451,628      |  
|Deficit                                        |   | (11,637,819  | )
|                                               |   | 629,601      |  
|Nature and continuance of operations (note 1)  |   |              |  
|                                               |   |              |  
|                                               |   |              |  
|                                               | $ | 659,577      |  

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 and
Deficit(Expressed in Canadian Dollars)

|                                                            |   | Years ended May 31 |  
|----------------------------------------------------------- | - | ------------------ | -
|                                                            |   | 2005               |  
|                                                            |   |                    |  
|Expenses                                                    |   |                    |  
|Exploration (note 6)                                        | $ | 920,902            |  
|Foreign exchange
      loss (gain)                          |   | 3,105              |  
|Legal, accounting and audit                                 |   | 80,078             |  
|Office and
      administration                             |   | 285,618            |  
|Shareholder communications                                  |   | 19,896             |  
|Stock-based
      compensation - administration (note 7(c)) |   | 6,534              |  
|Stock-based compensation -
      exploration (note 7(c))    |   | 4,979              |  
|Travel and
      conferences                                |   | 30,293             |  
|Trust and filing                                            |   | 22,795             |  
|                                                            |   | 1,374,200          |  
|                                                            |   |                    |  
|Other items                                                 |   |                    |  
|Gain on sale of marketable
      securities                 |   | (6,138             | )
|Interest income                                             |   | (17,854            | )
|Write-down of marketable securities                         |   | 135,486            |  
|                                                            |   | 111,494            |  
|                                                            |   |                    |  
|                                                            |   |                    |  
|Loss for the year                                           |   | (1,485,694         | )
|                                                            |   |                    |  
|Deficit,
      beginning of year                            |   | (10,152,125        | )
|                                                            |   |                    |  
|Deficit, end of
      year                                  | $ | (11,637,819        | )
|                                                            |   |                    |  
|Basic and
      diluted loss per common share               | $ | (0.02              | )
|                                                            |   |                    |  
|Weighted average number of                                  |   |                    |  
|common shares
      outstanding                             |   | 93,504,487         |  

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 |  
|----------------------------------------------------------------------------- | - | ------------------ | -
|Cash provided by
      (used in)                                              |   | 2005               |  
|                                                                              |   |                    |  
|Operating activities                                                          |   |                    |  
|Loss for the year                                                             | $ | (1,485,694         | )
|Items not affecting
      cash                                                |   |                    |  
|Gain on sale of marketable
      securities                                   |   | (6,138             | )
|Disposition
      of Gibraltar exploration property interest                  |   |                   |  
|Write-down of marketable
      securities                                     |   | 135,486            |  
|Stock-based
      compensation                                                |   | 11,513             |  
|Changes in non-cash working
      capital items                               |   |                    |  
|Amounts
      receivable and prepaids                                         |   | 25,347             |  
|Accounts payable and accrued liabilities                                      |   | (3,430             | )
|Cash used in operating activities                                             |   | (1,322,916         | )
|                                                                              |   |                    |  
|Investing activities                                                          |   |                    |  
|Purchase of marketable securities                                             |   |                   |  
|Proceeds from
      sale of marketable securities                             |   | 11,563             |  
|Reclamation deposit                                                           |   |                   |  
|Security deposit                                                              |   |                   |  
|Cash provided by (used in) investing
      activities                         |   | 11,563             |  
|                                                                              |   |                    |  
|Financing activities                                                          |   |                    |  
|Issuance of
      share capital                                               |   | 163,000            |  
|Share issue costs                                                             |   |                   |  
|Amounts due from (payable
      to) related parties                           |   | (34,609            | )
|Cash provided by financing activities                                         |   | 128,391            |  
|                                                                              |   |                    |  
|Increase (decrease) in cash and equivalents during the year                   |   | (1,182,962         | )
|Cash and equivalents, beginning of year                                       |   | 1,535,639          |  
|                                                                              |   |                    |  
|Cash and equivalents, end of year                                             | $ | 352,677            |  
|                                                                              |   |                    |  
|Interest paid
      during the year                                           | $ |                   |  
|Income taxes paid during the
      year                                       | $ |                   |  
|                                                                              |   |                    |  
|Supplemental disclosure of non-cash investing and financing
      activities: |   |                    |  
|Marketable securities
      received pursuant to 2003                         |   |                    |  
|farmout
      agreement with Taseko Mines Limited (note 5 (c))                | $ | 220,000            |  
|Fair value of
      stock options allocated to shares issued                  |   |                    |  
|upon
      exercise                                                           | $ | 4,905              |  

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

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|1.  | NATURE AND CONTINUANCE
        OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Rockwell Ventures
        Inc. (the Company) is incorporated under the British Columbia
        Business Corporations Act(formerly the Company Actof
        British Columbia), and its principal business activity is the exploration
        of mineral properties. The Companys principal mineral property interests
        are located in Chile and Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | These consolidated
        financial statements have been prepared using Canadian generally accepted
        accounting principles assuming a going concern. At May 31, 2005, the Company
        had working capital of approximately $551,000 (2004  $1,862,000).
        However, the Company has incurred operating losses since its inception.
        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. 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 its 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., and Minera Ricardo Resources Inc. S.A. All material intercompany
        balances and transactions have been eliminated upon consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company's subsidiary,
        Minera Ricardo Resources Inc. S.A. ("Ricardo") is incorporated under the
        laws of Chile, and the Companys subsidiary, 549949 BC Ltd., is incorporated
        under the laws of British Columbia, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.  | SIGNIFICANT ACCOUNTING
        POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(a) | 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 and which are subject to an insignificant risk
        of change in value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(b) | Allowance for amounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company establishes
        an allowance for uncollectible amounts receivable on a specific account
        basis. No allowances for amounts receivable were recorded by the Company
        as at May 31, 2005 and 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
|

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|(c) | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Marketable securities are recorded at the lower of
        (i) cost less accumulated writedowns, and (ii) estimated market value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) | Reclamation and security deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Reclamation and security deposits are recorded at
        cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(e) | Mineral property interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The acquisition costs of mineral properties are deferred
        until the property is placed into production, sold, or abandoned, or when
        management has determined that there has been an impairment in value.
        Acquisition costs which have been deferred will be amortized on a unit-of-
        production basis, over the estimated useful life of the related property
        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 agreed terms for the mineral property interest. Costs for properties
        to 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 economic commercial production.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Exploration costs and option payments are expensed
        in the period incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Administrative expenditures are expensed in the period
        incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company reviews its long-lived assets for impairment
        whenever events or changes in circumstances indicate that the carrying
        value of an asset may not be recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(f) | 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.                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(g) | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Effective June 1, 2004, the Company adopted the provisions
        of the Canadian Institute of Chartered Accountants (CICA)
        Handbook Section 3110 (HB3110). HB 3110 requires the recognition
        of a liability at its fair value for the obligation associated with the
        retirement of a tangible long-lived asset.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company records the fair value of an asset retirement
        obligation as a liability in the period in which it incurs a legal obligation
        associated with the retirement of tangible long-lived assets that result
        from the acquisition, construction, development, and/or normal use of
        the long-lived assets. The Company also records a corresponding asset
        which is amortized over the life of the asset. Subsequent to the initial
        measurement of the asset retirement obligation, the obligation is adjusted                                             

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|    | at the end of each period to reflect the passage
        of time (accretion expense) and changes in the estimated future cash flows
        underlying the obligation (asset retirement cost).                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The adoption of this standard has no effect on amounts
        previously presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(h) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | All of the Companys foreign operations are
        fully 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 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. Amortization is translated at the same exchange rates as the
        assets to which it relates.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Foreign exchange gains and losses are recorded in
        the statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(i) | 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 (TSX-V) on the date
        of issue or as otherwise provided under the terms of the agreement to
        issue the shares. Share issue costs are deducted from share capital.                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Canadian tax legislation permits a company to issue
        flow-through shares whereby the deduction for tax purpose relating to
        qualified resource expenditures is claimed by the investors rather than
        the Company. Recording these expenditures for accounting purposes gives
        rise to taxable temporary differences.                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Effective March 19, 2004, the Emerging Issue Committee
        of the CICA requires that, when flow- through expenditures are renounced,
        a portion of the future income tax assets that were not recognized in
        previous years, due to the recording of a valuation allowance, be recognized
        as a recovery of income taxes in the statement of operations.                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(j) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has a share option plan which is described
        in note 7(c). The Company records all stock-based payments granted using
        the fair value method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Under the fair value method, stock-based payments
        are measured at the fair value of the consideration received or the fair
        value of the equity instruments issued, whichever is more reliably measurable,
        and are charged to operations over the vesting period, with an offsetting
        amount to contributed surplus. Consideration received on the exercise
        of stock options is recorded as share capital and the related contributed
        surplus is transferred to share capital.                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(k) | 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,                                                                                                                                                                                                                                                                                                                                        

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|    | 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.                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(l) | 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 receivable upon exercise of dilutive
        share purchase 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 outstanding options and warrants would be anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(m) | 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 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(n) | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Certain of the prior years comparative figures
        have been reclassified to conform to the financial statement presentation
        adopted for the current year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|4. | MARKETABLE SECURITIES                                
|-- | -----------------------------------------------------
|   |                                                      
|   | Marketable securities are comprised of the following:

| |                                                                         |   | As at May 31 | 
| | ----------------------------------------------------------------------- | - | ------------ | 
| |                                                                         |   | 2005         | 
| | Geostar Metals Inc.,                                                    |   |              | 
| | Nil (May 31, 2004  77,500)
      common shares                         |   |              | 
| | Market value
      nil (May 31, 2004  $10,075)                         | $ |             | 
| | Chatworth Resources Inc. (formerly GMD Resource Corp) (note
      5(b)) |   |              | 
| | 83,333 (post
      6 for 1 consolidation) (May 31, 2004  500,000 pre-  |   |              | 
| | consolidation) common shares                                            |   |              | 
| | Market value
      $15,833 (May 31, 2004  $25,000)                     |   | 15,833       | 
| | Chatworth Resources Inc. (formerly GMD Resource Corp) (note
      5(b)) |   |              | 
| | 83,333 (post
      6 for 1 consolidation) (May 31, 2004  500,000 pre-  |   |              | 
| | consolidation) warrants                                                 |   |              | 
| | Market value
      $3,000 (May 31, 2004  nil)                          |   | 3,000        | 
| | Taseko Mines Limited (note 5(c))                                        |   |              | 
| | 78,853 (May 31,
      2004  nil) common shares                         |   |              | 
| | Market
      value $90,681 (May 31, 2004  nil)                         |   | 90,681       | 
| |                                                                         | $ | 109,514      | 

|5. | MINERAL PROPERTY INTERESTS
|-- | --------------------------

| | Acquisition Costs                |   | Royce    |  |   | Ricardo  |  |   |       |  |   |        | 
| | -------------------------------- | - | -------- |  | - | -------- |  | - | ----- |  | - | ------ | 
| |                                  |   | Property |  |   | Property |  |   | Other |  |   | Total  | 
| | Balance at May 31, 2005 and 2004 | $ |         |  | $ | 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 often complicated
        conveyancing history characteristic of many mining properties. The Company
        does not have title insurance but has investigated title to its Ricardo
        mineral property and, to the best of its knowledge and belief, title to
        its property is in good standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(a) | Ricardo Property, Chile                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company holds a 100% interest in certain mineral
        exploration and exploitation concessions in the Calama Mining District
        in Chile. The Corporación Nacional del Cobre de Chile ("Codelco"),
        the Chilean national copper company, is erecting housing and other infrastructure
        in certain areas of the Ricardo Property, as part of a relocation project
        of its workers at its Chuquicamata mine. The Company believes this construction
        usurps the Company's constitutional mining rights. Accordingly, in order
        to preserve access to its mineral concessions, the Company applied for
        several easements on its Ricardo Property in November 2002. These matters
        are currently before the law courts of Chile. Pursuant to the terms of
        the easement application, a refundable deposit of 15 million Chilean pesos
        (2005  $32,190; 2004 - $32,190) was lodged with the authorities.

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|    | On January 30, 2004, Ricardo signed a Letter of Understanding
        with Rio Tinto Mining and Exploration Ltd. ("Rio Tinto"), whereby Rio
        Tinto could acquire a 100% interest in a majority of the claims which
        make up the Ricardo property. In January 2005, Rio Tinto terminated this
        option.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company continues to maintain the Ricardo Property
        in good standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(b) | Royce Diamond Property, Northwest Territories,
        Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In February 2004, the Company received approval from
        the TSX-V for a property option agreement with Chatworth Resources Inc.
        (Chatworth) (formerly GMD Resource Corp.), a TSX-V listed
        company, to acquire up to a 60% interest in the Royce Diamond Claims (the
        Royce Claims), which are located within the Slave Geological Province,
        near Yellowknife, Northwest Territories.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Pursuant to this agreement, the Company paid Chatworth
        $50,000 cash and also subscribed to a $50,000 private placement which
        consisted of 500,000 common shares and 500,000 warrants of Chatworth.
        In October 2004, Chatworth completed a 6-for-1 consolidation of its common
        shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Commencing April 2004, the Company conducted a work
        program and subsequently terminated its option to earn an interest in
        the Royce Claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(c) | Farmout agreement - Gibraltar exploration properties,
        British Columbia, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In December 2003, the Company entered into a farmout
        agreement (the "2003 farmout agreement") with Taseko Mines Limited ("Taseko"),
        a public company with certain directors in common with the Company. Under
        the terms of the 2003 farmout agreement, Taseko granted to the Company
        rights to earn joint venture working interests, subject to a maximum of
        $200,000, on certain exploration properties located in the vicinity of
        the Gibraltar mine property. For a period of 150 days after the Company
        had earned its working interest, Taseko had the right to purchase, at
        its option, the Company's earned interests for cash or common share consideration
        aggregating 110% of the Company's earn-in amount. If Taseko elected to
        issue common shares, the number of common shares to be issued upon exercise
        would be valued at the ten-day weighted average trading price as traded
        on the TSX-V.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In December 2003, the Company earned an interest
        in these properties to the extent of $200,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | During the Companys fiscal year ended May 31,
        2004, Taseko exercised its right to purchase the Company's interest, and
        on June 15, 2004, Taseko issued 78,853 of its common shares for total
        consideration of $220,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(d) | Farmout agreement - British Columbia exploration
        properties, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In November 2004, the Company entered into a farmout
        agreement (the "2004 farmout agreement") with Amarc Resources Ltd. ("Amarc"),
        a public company with certain directors in common with the Company. Under
        the terms of the 2004 farmout agreement, Amarc granted to the Company
        rights to earn joint venture working interests of 50%, subject to a maximum
        of $600,000 in exploration costs to be spent on certain mineral properties
        located in British Columbia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|    | For a period of 180 days after the Company had earned
        its working interest, Amarc had the exclusive right to purchase, at its
        option, the Company's earned interest for a number of Amarc common shares
        (or cash equivalent) not to be less than 110% of the qualified expenditures
        incurred by, or for the account of, the Company to earn its interest.
        If Amarc elected to issue common shares, the common shares to be issued
        upon exercise would be valued at the five-day weighted average trading
        price as quoted on the TSX-V prior to the date of the call.                                                                                                                                                                                                                                                                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In December 2004, the Company had earned its 50%
        interest in these properties. Amarc did not exercise its option to reacquire
        the Companys interest on any of the properties within the permitted
        180 days. Consequently, Amarcs right of call expired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(e) | Haut Plateau Property, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | On November 15, 2001, the Company entered into an
        assignment agreement with Hunter Dickinson Group Inc. ("HDGI"), a private
        company with certain directors in common with the Company, 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In November 2002 the Company decided to terminate
        its option to earn a 60% participating joint venture interest from Falconbridge
        Limited. The $70,000 reclamation deposit was returned to the Company in
        June 2003 .                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|6. | EXPLORATION EXPENSES
|-- | --------------------

| |                               |   |          |  |   |           |  |   | British    |  |   |           |  |   | Year
      ended | 
| | ----------------------------- | - | -------- |  | - | --------- |  | - | ---------- |  | - | --------- |  | - | ---------------- | 
| |                               |   | Royce    |  |   | Ricardo   |  |   | Columbia   |  |   |           |  |   | May 31,          | 
| |                               |   | Property |  |   | Property  |  |   | properties |  |   | Other     |  |   | 2005             | 
| |                               |   |          |  |   |           |  |   |            |  |   |           |  |   |                  | 
| | Drilling                      | $ |         |  | $ |          |  | $ | 205,922    |  | $ |          |  | $ | 205,922          | 
| | Freight                       |   |         |  |   |          |  |   | 2,859      |  |   |          |  |   | 2,859            | 
| | Geological                    |   | 31,011   |  |   | 7,065     |  |   | 238,706    |  |   | 1,886     |  |   | 278,668          | 
| | Graphics                      |   |         |  |   |          |  |   | 3,186      |  |   |          |  |   | 3,186            | 
| | Helicopter                    |   |         |  |   |          |  |   | 16,125     |  |   |          |  |   | 16,125           | 
| | Property fees and assessments |   |         |  |   | 115,705   |  |   | 210        |  |   |          |  |   | 115,915          | 
| | Site activities               |   | 7,667    |  |   | 154,892   |  |   | 101,494    |  |   |          |  |   | 264,053          | 
| | Staking                       |   |         |  |   |          |  |   | 14,931     |  |   |          |  |   | 14,931           | 
| | Travel and accommodation      |   | 1,038    |  |   | 1,638     |  |   | 16,567     |  |   |          |  |   | 19,243           | 
| | Subtotal                      |   | 39,716   |  |   | 279,300   |  |   | 600,000    |  |   | 1,886     |  |   | 920,902          | 
| | Stock-based compensation      |   |          |  |   |           |  |   |            |  |   |           |  |   |                  | 
| | (note 7(c))                   |   | 620      |  |   | 4,359     |  |   |           |  |   |          |  |   | 4,979            | 
| | Incurred during the year      |   | 40,336   |  |   | 283,659   |  |   | 600,000    |  |   | 1,886     |  |   | 925,881          | 
| | Cumulative expenses,          |   |          |  |   |           |  |   |            |  |   |           |  |   |                  | 
| | beginning of year             |   | 841,448  |  |   | 1,796,799 |  |   |           |  |   | 3,989,563 |  |   | 6,627,810        | 
| | Cumulative exploration        |   |          |  |   |           |  |   |            |  |   |           |  |   |                  | 
| | expenses, end of year         | $ | 881,784  |  | $ | 2,080,458 |  | $ | 600,000    |  | $ | 3,991,449 |  | $ | 7,553,691        | 

| |                          |   |          |  |   |           |  |   | British    |  |   |           |   |   | Year
      ended |  
| | ------------------------ | - | -------- |  | - | --------- |  | - | ---------- |  | - | --------- | - | - | ---------------- | -
| |                          |   | Royce    |  |   | Ricardo   |  |   | Columbia   |  |   |           |   |   | May 31,          |  
| |                          |   | Property |  |   | Property  |  |   | properties |  |   | Other     |   |   | 2004             |  
| |                          |   |          |  |   |           |  |   |            |  |   |           |   |   |                  |  
| | Assay and analysis       | $ | 2,950    |  | $ | 236       |  | $ |           |  | $ |          |   | $ | 3,186            |  
| | Drilling                 |   | 202,056  |  |   |          |  |   |           |  |   | 200,000   |   |   | 402,056          |  
| | Freight                  |   | 10,161   |  |   |          |  |   |           |  |   |          |   |   | 10,161           |  
| | Geological               |   | 182,316  |  |   | 19,160    |  |   |           |  |   |          |   |   | 201,476          |  
| | Graphics                 |   | 2,717    |  |   | 1,252     |  |   |           |  |   |          |   |   | 3,969            |  
| | Helicopter               |   | 151,524  |  |   |          |  |   |           |  |   |          |   |   | 151,524          |  
| | Property fees and        |   | 50,000   |  |   | 39,672    |  |   |           |  |   |          |   |   | 89,672           |  
| | assessments              |   |          |  |   |           |  |   |            |  |   |           |   |   |                  |  
| | Recoveries               |   |         |  |   |          |  |   |           |  |   | (700,500  | ) |   | (700,500         | )
| | Site activities          |   | 140,788  |  |   | 207,816   |  |   |           |  |   | 752       |   |   | 349,356          |  
| | Travel and accommodation |   | 10,385   |  |   | 4,334     |  |   |           |  |   |          |   |   | 14,719           |  
| | Subtotal                 |   | 752,897  |  |   | 272,470   |  |   |           |  |   | (499,748  | ) |   | 525,619          |  
| | Stock-based compensation |   |          |  |   |           |  |   |            |  |   |           |   |   |                  |  
| | (note 7(c))              |   | 88,551   |  |   | 32,046    |  |   |           |  |   | 23,611    |   |   | 144,208          |  
| | Incurred during the year |   | 841,448  |  |   | 304,516   |  |   |           |  |   | (476,137  | ) |   | 669,827          |  
| | Cumulative expenses,     |   |          |  |   |           |  |   |            |  |   |           |   |   |                  |  
| | beginning of year        |   |         |  |   | 1,492,283 |  |   |           |  |   | 4,465,700 |   |   | 5,957,983        |  
| | Cumulative exploration   |   |          |  |   |           |  |   |            |  |   |           |   |   |                  |  
| | expenses, end of year    | $ | 841,448  |  | $ | 1,796,799 |  | $ |           |  | $ | 3,989,563 |   | $ | 6,627,810        |  

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

| |                                  |   |           |   |   |              |  |   | Pedra     |  |   | Year
      ended |  
| | -------------------------------- | - | --------- | - | - | ------------ |  | - | --------- |  | - | ---------------- | -
| |                                  |   | Ricardo   |   |   | Haut Plateau |  |   | Branca    |  |   | May 31,          |  
| |                                  |   | Property  |   |   | Property     |  |   | Property  |  |   | 2003             |  
| |                                  |   |           |   |   |              |  |   |           |  |   |                  |  
| | Assay and analysis               | $ |          |   | $ | 9,875        |  | $ |          |  | $ | 9,875            |  
| | Engineering                      |   |          |   |   | 8,963        |  |   |          |  |   | 8,963            |  
| | Geological                       |   | 5,760     |   |   | 139,440      |  |   |          |  |   | 145,200          |  
| | Graphics                         |   |          |   |   | 21,500       |  |   |          |  |   | 21,500           |  
| | Property fees and assessments    |   | 115,987   |   |   | 8,238        |  |   |          |  |   | 124,225          |  
| | Right of way income              |   | (40,104   | ) |   |             |  |   |          |  |   | (40,104          | )
| | Site activities                  |   | 180,074   |   |   | 32,324       |  |   |          |  |   | 212,398          |  
| | Travel and accommodation         |   | 199       |   |   |             |  |   |          |  |   | 199              |  
| | Incurred during the year         |   | 261,916   |   |   | 220,340      |  |   |           |  |   | 482,256          |  
| | Cumulative exploration expenses, |   |           |   |   |              |  |   |           |  |   |                  |  
| | beginning of year                |   | 1,230,367 |   |   | 902,291      |  |   | 3,343,069 |  |   | 5,475,727        |  
| | Cumulative exploration expenses, |   |           |   |   |              |  |   |           |  |   |                  |  
| | end of year                      | $ | 1,492,283 |   | $ | 1,122,631    |  | $ | 3,343,069 |  | $ | 5,957,983        |  

|7.  | SHARE CAPITAL                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                 
|(a) | Authorized share capital                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                 
|    | The Companys authorized share capital consists of unlimited common
          shares, without par value.
        At the Companys Annual and Extraordinary General Meeting held
          on December 29, 2004 shareholders approved an increase in authorized
          share capital from 200,000,000 to an unlimited number of common shares.
|
|
|
|    |                                                                                                                                                                                                                                                                                                                                                 
|(b) | Issued and outstanding
        common shares                                                                                                                                                                                                                                                                                                    

| |                                                                  |   |       |  | Number          |  |   |            | 
| | ---------------------------------------------------------------- | - | ----- |  | --------------- |  | - | ---------- | 
| | Common shares issued                                             |   | Price |  | of
      shares |  |   | Amount     | 
| | Balance, May 31, 2003                                            |   |       |  | 55,199,275      |  | $ | 8,697,652  | 
| | Warrants exercised                                               | $ | 0.22  |  | 96,500          |  |   | 21,230     | 
| | Private placement
      December 2003 (net of issue costs)(i)    | $ | 0.08  |  | 37,500,000      |  |   | 2,925,255  | 
| | Options exercised                                                | $ | 0.10  |  | 15,000          |  |   | 1,500      | 
| | Options exercised                                                | $ | 0.15  |  | 15,000          |  |   | 2,250      | 
| | Balance, May 31, 2004                                            |   |       |  | 92,825,775      |  |   | 11,647,887 | 
| | Warrants exercised                                               | $ | 0.10  |  | 1,600,000       |  |   | 160,000    | 
| | Options exercised                                                | $ | 0.10  |  | 30,000          |  |   | 3,000      | 
| | Contributed surplus allocated
      to shares issued on exercise |   |       |  |                |  |   | 4,905      | 
| | Balance, May 31,
      2005                                      |   |       |  | 94,455,775      |  | $ | 11,815,792 | 

| | (i) | On December 31, 2003, the Company completed a private
        placement of 37,500,000 units at a price of $0.08 per unit for gross proceeds
        of $3,000,000. Of these, 17,250,000 were
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

| |  | flow-through units. Each unit consisted of one common
        share and one share purchase warrant exercisable to purchase an additional
        common share at a price of $0.10 until December 31, 2005. The warrants
        are subject to an accelerated expiry provision (note 7(d)).
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Share purchase options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | At its Annual and Extraordinary General Meeting held
        in December 2004, shareholders of the Company approved a Share Incentive
        Plan in accordance with the policies of the TSX-V. Under this plan, the
        Company is authorized to grant options for up to 10% of its outstanding
        shares to officers, directors, employees and consultants. The exercise
        price of each option normally equals or exceeds the market price of the
        Company's shares as calculated on the date of grant. Options granted are
        for a term of no greater than five years.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The continuity of share purchase options for the
        year ended May 31, 2005 is:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                                                      |   | Exercise |  |   | May 31,   |  |   |         |      |   |           |  |   | Expired/  |  |   | May 31, | 
| | -------------------------------------------------------------------- | - | -------- |  | - | --------- |  | - | ------- | ---- | - | --------- |  | - | --------- |  | - | ------- | 
| | Expiry date                                                          |   | price    |  |   | 2004      |  |   | Granted |      |   | Exercised |  |   | cancelled |  |   | 2005    | 
| | April 6, 2005                                                        | $ | 0.16     |  |   | 50,000    |  |   |        |      |   |          |  |   | 50,000    |  |   |        | 
| | May 20, 2005 (i)                                                     | $ | 0.10     |  |   | 45,000    |  |   |        |      |   |          |  |   | 45,000    |  |   |        | 
| | May 20, 2005                                                         | $ | 0.12     |  |   | 25,500    |  |   |        |      |   |          |  |   | 25,500    |  |   |        | 
| | May 20, 2005                                                         | $ | 0.15     |  |   | 4,945,000 |  |   |        |      |   |          |  |   | 4,945,000 |  |   |        | 
| | May 20, 2005                                                         | $ | 0.16     |  |   | 45,000    |  |   |        |      |   |          |  |   | 45,000    |  |   |        | 
| | July 29, 2005                                                        | $ | 0.10     |  |   | 30,000    |  |   |        |      |   | 30,000    |  |   |          |  |   |        | 
| | May 19, 2006                                                         | $ | 0.08     |  |   |          |  |   | 120,000 |      |   |          |  |   | 10,000    |  |   | 110,000 | 
| |                                                                      |   |          |  |   | 5,140,500 |  |   | 120,000 |      |   | 30,000    |  |   | 5,120,500 |  |   | 110,000 | 
| |                                                                      |   |          |  |   |           |  |   |         |      |   |           |  |   |           |  |   |         | 
| | Weighted average exercise price                                      |   |          |  | $ | 0.15      |  | $ | 0.08    |      | $ | 0.10      |  | $ | 0.15      |  | $ | 0.08    | 
| |                                                                      |   |          |  |   |           |  |   |         |      |   |           |  |   |           |  |   |         | 
| | Weighted average
      fair value of options granted during the year |   |          |  |   |           |  |   | $       | 0.10 |  

| | (i)                                                                                  | The Company extended the expiry from the original
        date of December 20, 2004 to May 20, 2005.
| | ------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------
| |                                                                                      |                                                                                                     
| | As at May 31, 2005, all of the
        options outstanding had vested with grantees.



---



|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

The continuity of share purchase options
  for the year ended May 31, 2004 is:

| |                                                                      |   | Exercise |  |   | May 31, |  |   |           |      |   |               |   |   | Cancelled/ |   |   | May 31,   | 
| | -------------------------------------------------------------------- | - | -------- |  | - | ------- |  | - | --------- | ---- | - | ------------- | - | - | ---------- | - | - | --------- | 
| | Expiry date                                                          |   | price    |  |   | 2003    |  |   | Granted   |      |   | **Exercised** |   |   | expired    |   |   | 2004      | 
| | June 11, 2003                                                        | $ | 0.16     |  |   | 27,000  |  |   |          |      |   |              |   |   | (27,000    | ) |   |          | 
| | November 21, 2003                                                    | $ | 0.16     |  |   | 100,000 |  |   |          |      |   |              |   |   | (100,000   | ) |   |          | 
| | April 6, 2005                                                        | $ | 0.16     |  |   | 50,000  |  |   |          |      |   |              |   |   |           |   |   | 50,000    | 
| | May 9, 2005                                                          | $ | 0.10     |  |   | 15,000  |  |   |          |      |   | (15,000       | ) |   |           |   |   |          | 
| | May 20, 2005 (i)                                                     | $ | 0.10     |  |   | 45,000  |  |   |          |      |   |              |   |   |           |   |   | 45,000    | 
| | May 20, 2005                                                         | $ | 0.12     |  |   |        |  |   | 25,500    |      |   |              |   |   |           |   |   | 25,500    | 
| | May 20, 2005                                                         | $ | 0.15     |  |   |        |  |   | 4,965,000 |      |   | (15,000       | ) |   | (5,000     | ) |   | 4,945,000 | 
| | May 20, 2005                                                         | $ | 0.16     |  |   |        |  |   | 45,000    |      |   |              |   |   |           |   |   | 45,000    | 
| | July 29, 2005                                                        | $ | 0.10     |  |   |        |  |   | 30,000    |      |   |              |   |   |           |   |   | 30,000    | 
| |                                                                      |   |          |  |   | 237,000 |  |   | 5,065,500 |      |   | (30,000       | ) |   | (132,000   | ) |   | 5,140,500 | 
| |                                                                      |   |          |  |   |         |  |   |           |      |   |               |   |   |            |   |   |           | 
| | Weighted average exercise price                                      |   |          |  | $ | 0.14    |  | $ | 0.15      |      | $ | 0.13          |   | $ | 0.16       |   | $ | 0.15      | 
| |                                                                      |   |          |  |   |         |  |   |           |      |   |               |   |   |            |   |   |           | 
| | Weighted average
      fair value of options granted during the year |   |          |  |   |         |  |   | $         | 0.10 |  

| | (i) | The Company extended the expiry from the original date of December 20,
      2004 to May 20, 2005.
| | --- | --------------------------------------------------------------------------------------------------

As at May 31, 2004, 5,055,250 of these
  options had vested with grantees.

Using the Black-Scholes option pricing
  model with the assumptions noted below, the fair value of all options estimated
  by the model have been reflected in the statement of operations as follows:

| |                                                 |   | Year ended May 31 | 
| | ----------------------------------------------- | - | ----------------- | 
| |                                                 |   | 2005              | 
| | Exploration and engineering                     | $ | 4,979             | 
| | Operations and administration                   |   | 6,534             | 
| | Total compensation cost expensed to operations, |   |                   | 
| | with the offset credited to contributed surplus | $ | 11,513            | 

The weighted-average assumptions used to estimate the fair value
  of options granted during the period were:

|                        | 2005      | 2004      | 2003     
|----------------------- | --------- | --------- | ---------
|Risk free interest rate | 3%        | 3%        | 3%       
|Expected life           | 1.9 years | 1.5 years | 2.0 years
|Expected volatility     | 162%      | 163%      | 50%      
|Expected dividends      | nil       | nil       | nil      

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|(d) | Share purchase warrants                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                     
|    | The continuity of share purchase warrants (each warrant exercisable into
      one common share) for the year ended May 31, 2005 is:

| |                                 |   | Exercise |  |   | May 31,    |  |   |        |  |   |            |   |   |         |  |   | May 31,    | 
| | ------------------------------- | - | -------- |  | - | ---------- |  | - | ------ |  | - | ---------- | - | - | ------- |  | - | ---------- | 
| | Expiry                          |   | price    |  |   | 2004       |  |   | Issued |  |   | Exercised  |   |   | Expired |  |   | 2005       | 
| | December 31, 2005 7(b)(i)       | $ | 0.10     |  |   | 37,500,000 |  |   |       |  |   | (1,600,000 | ) |   |        |  |   | 35,900,000 | 
| |                                 |   |          |  |   |            |  |   |        |  |   |            |   |   |         |  |   |            | 
| | Weighted average exercise price |   |          |  | $ | 0.10       |  | $ |       |  | $ | 0.10       |   | $ |        |  | $ | 0.10       | 

These warrants are subject to a 45 day
  accelerated expiry provision, at the Companys option, if the closing price
  of the common shares of the Company is at least $0.18 for ten consecutive trading
  days.

The continuity of share purchase warrants
  (each warrant exercisable into one common share) for the year ended May 31,
  2004 is:

| |                                 |   | Exercise |  |   | May 31,   |  |   |            |  |   |           |   |   |            |   |   | May 31,    | 
| | ------------------------------- | - | -------- |  | - | --------- |  | - | ---------- |  | - | --------- | - | - | ---------- | - | - | ---------- | 
| | Expiry date                     |   | price    |  |   | 2003      |  |   | Issued     |  |   | Exercised |   |   | Expired    |   |   | 2004       | 
| | July 4, 2003                    | $ | 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 |  |   |           |  |   | (96,500   | ) |   | (940,625   | ) |   |           | 
| | December 31, 2005
      7(b)(i) | $ | 0.10     |  |   |          |  |   | 37,500,000 |  |   |          |   |   |           |   |   | 37,500,000 | 
| |                                 |   |          |  |   | 3,684,625 |  |   | 37,500,000 |  |   | (96,500   | ) |   | (3,588,125 | ) |   | 37,500,000 | 
| |                                 |   |          |  |   |           |  |   |            |  |   |           |   |   |            |   |   |            | 
| | Weighted average exercise price |   |          |  | $ | 0.18      |  | $ | 0.10       |  | $ | 0.22      |   | $ | 0.18       |   | $ | 0.10       | 

|(e) | Contributed surplus
|--- | -------------------

| | Balance, May 31, 2003                                             | $ |        |  
| | ----------------------------------------------------------------- | - | ------- | -
| | Changes during 2004                                               |   |         |  
| | Non-cash stock-based compensation                                 |   | 445,020 |  
| | Balance, May 31, 2004                                             |   | 445,020 |  
| | Changes during 2005                                               |   |         |  
| | Non-cash
      stock-based compensation (note 7(c))               |   | 11,513  |  
| | Share purchase options exercised, credited to
      share capital |   | (4,905  | )
| | Balance, May 31, 2005                                             | $ | 451,628 |  

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|8. | RELATED PARTY BALANCES AND TRANSACTIONS
|-- | ---------------------------------------

| |                                              |   | As at              |  |   | As at              | 
| | -------------------------------------------- | - | ------------------ |  | - | ------------------ | 
| | Balances receivable                          |   | May 31,
      2005 |  |   | May 31,
      2004 | 
| | Exploration advance balances receivable      |   |                    |  |   |                    | 
| | Hunter
      Dickinson Inc. (a)              | $ | 77,159             |  | $ | 42,550             | 
| |                                              |   |                    |  |   |                    | 
| |                                              |   |                    |  |   |                    | 
| |                                              |   | Year ended         |  |   | Year ended         | 
| | Transactions                                 |   | May 31,
      2005 |  |   | May 31,
      2004 | 
| | Services rendered and expenses reimbursed    |   |                    |  |   |                    | 
| | Hunter Dickinson Inc. (a)                    | $ | 163,317            |  | $ | 362,377            | 
| | Euro-American Capital Corporation
      (b)  |   | 16,164             |  |   | 9,957              | 
| | Gordon
      J. Fretwell Law Corporation (c) |   | 1,060              |  |   | 26,083             | 

| | (a) | Hunter Dickinson Inc. ("HDI") is a private company
        with certain directors in common with the Company that provides geological,
        technical, 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 HDI 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) | 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.                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                
| | (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.                                                                                                                                                                                 

|9. | INCOME TAXES                                                                                  
|-- | ----------------------------------------------------------------------------------------------
|   |                                                                                               
|   | A reconciliation of income taxes calculated at applicable statutory rates
      is as follows:

| |                                              |   | Years ended May 31 |  
| | -------------------------------------------- | - | ------------------ | -
| |                                              |   | 2005               |  
| |                                              |   |                    |  
| | Loss for the year                            | $ | (1,485,694         | )
| |                                              |   |                    |  
| | Expected income tax recovery                 | $ | (532,607           | )
| | Difference in foreign tax rates              |   | 3,452              |  
| | Non-deductible amounts                       |   | 293,528            |  
| | Deductible expenses                          |   | (35,875            | )
| | Unrecognized benefit of net operating losses |   |                    |  
| | carried forward                              |   | 271,502            |  
| |                                              |   |                    |  
| | Net income tax recovery                      | $ |                   |  

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

The significant component of the Companys
  future tax assets are as follows:

| |  |                                                 |   | As at May 31 |  
| |  | ----------------------------------------------- | - | ------------ | -
| |  |                                                 |   | 2005         |  
| |  |                                                 |   |              |  
| |  | Net operating loss carry forwards               | $ | 1,285,000    |  
| |  | Cumulative exploration and development expenses |   | 1,940,000    |  
| |  | Other                                           |   | 148,000      |  
| |  |                                                 |   | 3,373,000    |  
| |  | Less: valuation allowance                       |   | (3,373,000   | )
| |  |                                                 |   |              |  
| |  | Net future tax assets                           | $ |             |  

|    | The Company has available for deduction against future
        taxable income non-capital losses of approximately $3,610,000 (2004 
        $3,300,000, 2003  $2,785,000). These losses, if not utilized, will
        expire in various years ranging from 2006 to 2015. Subject to certain
        restrictions, the Company also has Canadian resource expenditures, net
        of flow-through financing renounced to shareholders, of approximately
        $3,300,000 (2004  $4,450,000, 2003  nil), which are available
        to reduce taxable income in future years.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company's financial instruments consist of cash
        and equivalents, marketable securities, amounts receivable, security deposit,
        accounts payable and accrued liabilities and balances receivable from
        related parties. 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.                                                  

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|11. | 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 for providing
        support in addressing local and regional issues. The Company's resource
        properties are significantly located in Canada and in Chile.

| |                     |   | 2005       |   |   | 2004       |   |   | 2003     |  
| | ------------------- | - | ---------- | - | - | ---------- | - | - | -------- | -
| |                     |   |            |   |   |            |   |   |          |  
| | Loss for the year   |   |            |   |   |            |   |   |          |  
| | Canada              | $ | (1,239,140 | ) | $ | (1,157,753 | ) | $ | (605,570 | )
| | Chile               |   | (246,554   | ) |   | (238,265   | ) |   | (248,738 | )
| |                     | $ | (1,485,694 | ) | $ | (1,396,018 | ) | $ | (854,308 | )
| |                     |   |            |   |   |            |   |   |          |  
| | Identifiable assets |   |            |   |   |            |   |   |          |  
| | Canada              | $ | 558,951    |   | $ | 1,870,357  |   | $ | 97,014   |  
| | Chile               |   | 100,626    |   |   | 103,831    |   |   | 100,534  |  
| |                     | $ | 659,577    |   | $ | 1,974,188  |   | $ | 197,548  |  

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

|12. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
        GENERALLY ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | These consolidated financial statements have been
        prepared in accordance with Canadian generally accepted accounting principles
        ("Canadian GAAP"). Material variations in the accounting measurement principles,
        practices and methods used in preparing these financial statements from
        measurement principles, practices and methods accepted in the United States
        (US GAAP) are described and quantified below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 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 US 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 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Under US GAAP, Statement of Financial Accounting
        Standards No. 143, Accounting for Asset Retirement Obligations
        (SFAS 143) requires companies to record the fair value of
        the liability for closure and removal costs associated with the legal
        obligations upon the retirement or removal of any tangible long-lived
        assets effective June 1, 2003. Under this standard, the initial recognition
        of the liability is capitalized as part of the asset cost and amortized
        over its estimated useful life.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | For Canadian GAAP purposes, effective June 1, 2004,
        the Company adopted the provisions of CICA HB 3110 which are substantially
        similar to those of SFAS 143.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company has determined that there were no material
        differences in the measurement and presentation of asset retirement obligations
        between Canadian GAAP and US GAAP as at May 31, 2005 and 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Under US GAAP, Statement of Financial Accounting
        Standard No. 123, Accounting for Stock- Based Compensation
        (SFAS 123) encourages companies to establish a fair market
        value based method of accounting for stock-based compensation plans. Accounting
        Principles Board Opinion No. 25 (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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

option price. The Company has chosen
  to account for stock-based compensation under SFAS 123.

New accounting and disclosure standards
  were introduced under Canadian GAAP (notes 3 and 7) for the fiscal year ending
  May 31, 2003. Accordingly, there were differences in the treatment by the Company
  with respect to stock-based compensation under US GAAP and Canadian GAAP for
  the year ended May 31, 2003. However, no stock-based compensation was recorded
  as the fair value of stock options issued during 2003 was immaterial.

Marketable securities

Under Canadian GAAP, 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 US 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 carried at fair market value. Any unrealized holding gains or losses are
  reported as a separate component of shareholders equity until realized
  for available-for-sale securities, and included in earnings for trading securities.
  Under SFAS 115, for the year ended May 31, 2005 there is no difference between
  the Canadian GAAP and US GAAP (2004  unrealized gain of $4,650; 2003 
  unrealized loss of $7,200) in the Companys investment in marketable securities.

The impact of the differences between
  Canadian GAAP and US GAAP on the consolidated balance sheets would be as follows:

| |                     |   | 2005     |  |   | 2004        |  
| | ------------------- | - | -------- |  | - | ----------- | -
| |                     |   | Balance, |  |   |             |  
| |                     |   | Canadian |  |   |             |  
| |                     |   | GAAP     |  |   | Adjustments |  
| |                     |   |          |  |   |             |  
| | Current assets      | $ | 580,530  |  | $ |            |  
| | Security deposit    |   | 32,190   |  |   |            |  
| | Mineral property    |   | 46,857   |  |   | (46,857     | )
| |                     |   |          |  |   |             |  
| |                     | $ | 659,577  |  | $ | (46,857     | )
| |                     |   |          |  |   |             |  
| | Current liabilities | $ | 29,976   |  | $ |            |  
| | Stockholders'       |   |          |  |   |             |  
| | equity              |   | 629,601  |  |   | (46,857     | )
| |                     | $ | 659,577  |  | $ | (46,857     | )

---

|ROCKWELL VENTURES INC.                          
|------------------------------------------------
|Notes to the Consolidated Financial Statements  
|For the years ended May 31, 2005, 2004, and 2003
|(Expressed in Canadian Dollars)                 
|                                                
|                                                

The impact of the differences between
  Canadian GAAP and US GAAP on the statements of operations and deficit would
  be as follows:

| |                                                       |   | 2005       |   |   | 2004       |   |   | 2003       |  
| | ----------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| | Loss for the year, Canadian GAAP                      | $ | (1,485,694 | ) | $ | (1,396,018 | ) | $ | (854,308   | )
| |                                                       |   |            |   |   |            |   |   |            |  
| | Unrealized gain (loss) in marketable securities       |   |           |   |   | 4,650      |   |   | (7,200     | )
| |                                                       |   |            |   |   |            |   |   |            |  
| | Loss for the year, US GAAP                            | $ | (1,485,694 | ) | $ | (1,391,368 | ) | $ | (861,508   | )
| |                                                       |   |            |   |   |            |   |   |            |  
| | Basic and diluted loss per share, US GAAP             | $ | (0.02      | ) | $ | (0.02      | ) | $ | (0.02      | )
| |                                                       |   |            |   |   |            |   |   |            |  
| | Weighted average number of common shares outstanding, |   |            |   |   |            |   |   |            |  
| | US GAAP                                               |   | 93,504,487 |   |   | 70,978,179 |   |   | 54,949,229 |  

The adjustments recorded under US GAAP
  on the consolidated balance sheets and the consolidated statements of operations
  and deficit have no effect on the cash flows presented under US GAAP.

Impact of recent United States accounting
  pronouncements:

| | (i)   | During 2004, FASB issued revised Statement of Financial
        Accounting Standards No. 123R, "Share-Based Payment" ("SFAS123R").
        This amended statement eliminates the alternative to use the intrinsic
        value method of accounting pursuant to APB 25 as was provided in the original
        issue of SFAS 123. Accordingly, public entities are required to use the
        fair value method of accounting for stock-based compensation and other
        share- based payments. As disclosed in note 7(c), the Company currently
        applies a fair value based methodology to stock-based compensation. The
        adoption of this amended US standard is not expected to result in a material
        difference between Canadian GAAP and US GAAP.                                                                                                                    
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii)  | During 2004, FASB issued SFAS 153 "Exchanges of
        Non-monetary Assets", which amends APB 29, Accounting for Non-monetary
        Transactions, to eliminate the exception for non-monetary exchanges
        of similar productive assets and replaces it with a general exception
        for exchanges on non-monetary assets that do not have commercial substance.
        Adoption of this standard is not expected to have a material effect on
        the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (iii) | At June 1, 2005, for US GAAP purposes, the Company
        adopted FIN 46R, "Consolidation of Variable Interest Entities".
        Pursuant to FIN 46R, under US GAAP the Company is required to consolidate
        variable interest entities ("VIEs") where the Company is the entitys
        Primary Beneficiary. A VIE is an entity in which equity investors do not
        have the characteristics of a controlling financial interest nor have
        sufficient equity at risk for the entity to finance its activities without
        additional subordinated financial support from other parties. The Primary
        Beneficiary is the party that has exposure to a majority of the expected
        losses and/or expected residual returns of the VIE. There has been no
        impact on the Companys consolidated financial statements from the
        adoption of FIN 46R.

---