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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB
(Mark One)
     [X]  Annual report under section 13 or 15(d) of the Securities Exchange Act
               of 1934 for the fiscal year ended December 31, 1999

     [ ]  Transition report under section 13 or 15(d) of the Securities Exchange
               Act of 1934 for the transition period from ________ to ________

                        Commission file number 000-22731

                                MINERA ANDES INC.
                 (Name of small business issuer in its charter)

                                 Alberta, Canada
         (State or other jurisdiction of incorporation or organization)

                                      None
                      ( I.R.S. Employer Identification No.)

                3303 N. Sullivan Road, Spokane, Washington 99216
                    (Address of principal executive offices)

                                 (509) 921-7322
                           (Issuer's telephone number)


Securities registered under Section 12(b) of the Act:
Title of each class                   Name of each exchange on which registered:
Common shares without par value       The Canadian Venture Exchange
                                      (Formerly The Alberta Stock Exchange)


Securities registered under Section 12(g) of the Act:
None


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

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

State issuer's revenues for its most recent fiscal year: Nil

The  aggregate  market  value of the voting stock held by  non-affiliates  as of
March 15, 2000 was $6,102,808.

(Issuers  involved in bankruptcy  proceedings  during the past five years) Check
whether the issuer has filed all documents  and reports  required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of March 15, 2000, the Registrant
had 30,000,030 common shares outstanding.

Documents incorporated by reference. If the following documents are incorporated
by  reference,  briefly  describe  them and identify the part of the Form 10-KSB
(e.g.,  Part I, Part II, etc.) into which the document is incorporated:  (1) any
annual report to security holders; (2) any proxy or information  statement;  and
(3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of
1933 ("Securities  Act").
                               Transitional Small Business Disclosure
                               Format (Check one:) Yes [_]  No [X]
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<PAGE>
                                TABLE OF CONTENTS




PART I                                                                      Page

     Item 1        Description of Business                                     2

     Item 2        Description of Properties                                   9

     Item 3        Legal Proceedings                                          32

     Item 4        Submission of Matters to a Vote
                   of Security Holders                                        32

PART II

     Item 5        Market for Common Equity and Related
                   Shareholder Matters                                        33

     Item 6        Management's Discussion and Analysis
                   of Financial Condition and Results of Operations           34

     Item 7        Financial Statements                                       37

     Item 8        Changes in and Disagreements With Accountants              57
                   on Accounting and Financial Disclosure

PART III

     Item 9        Directors, Executive Officers, Promoters and               57
                   Control Persons; Compliance with Section 16(a)
                   of the Exchange Act

     Item 10       Executive Compensation                                     59

     Item 11       Security Ownership of Certain Beneficial Owners
                   and Management                                             62

     Item 12       Certain Relationships and Related Transactions             63

     Item 13       Exhibits and Reports on Form 8-K                           64

                                        1
<PAGE>
                                     PART I

Preliminary Note Regarding Forward-Looking Statements; Currency Disclosure

The  information  set forth in this report in Item 1 - "Description of Business"
and in Item 6 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations" includes "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and  Section  21E of the  Securities  Exchange  Act of  1934,  as  amended  (the
"Exchange  Act").  Certain  factors that  realistically  could cause  results to
differ materially from those projected in the forward-looking statements are set
forth in Item 1 -  "Description  of  Business-Considerations  Related  to Minera
Andes' Business."

All currency  amounts in this report are stated in U.S. dollars unless otherwise
indicated.  On March 15, 2000,  the late New York  trading rate of exchange,  as
reported by The Wall Street Journal for conversion of United States dollars into
Canadian dollars was U.S. $1.00 = Cdn $1.47 or Cdn $1.00 = U.S. $0.68.

ITEM 1.     DESCRIPTION OF BUSINESS

Minera  Andes  Inc.  ("Minera  Andes" or the  "Corporation")  is  engaged in the
exploration  and  development  of mineral  properties  located  primarily in the
Republic of Argentina,  Colombia and Romania. The Corporation's  objective is to
identify and acquire properties with promising mineral  potential,  explore them
to an advanced stage or to the feasibility  study stage, and then, if warranted,
to pursue  development of the  properties,  typically  through joint ventures or
other  collaborative  arrangements  with partners that have  expertise in mining
operations.

The Corporation's business grew out of a program begun by N.A. Degerstrom, Inc.,
a contract  mining  company  based in  Spokane,  Washington  ("Degerstrom"),  to
identify  properties in Argentina that possessed  promising  mineral  potential.
Based on the study of available  remote  sensing  satellite  data and experience
gained from drilling work performed by Degerstrom,  beginning in 1991 Degerstrom
identified a number of areas which it believed  had  exploration  potential  and
began the process of filing  applications  for exploration  concessions with the
provincial  governments  in Argentina and  negotiating  option  agreements  with
private  landowners.   Degerstrom  conveyed  these  property  interests  to  the
Corporation in 1995. See "Description of Properties - The Degerstrom  Agreement"
and "Management's  Discussion and Analysis of Financial Condition and Results of
Operations."

The Corporation's  current properties and projects consist of mineral rights and
applications for mineral rights covering approximately 175,536 hectares in three
Argentine  provinces,  9,539 hectares in two  departments in Colombia and 23,000
hectares  in  Romania.   The  lands  comprise  option  to  purchase   contracts,
exploration and mining agreements and direct interests through the Corporation's
filings for exploration concessions.  The Corporation's properties are all early
stage  exploration  prospects.  No proven  or  probable  reserves  have yet been
identified.  See  "Description of Properties." The Corporation has no employees,
as it is  staffed by N.A.  Degerstrom,  Inc.  personnel  (4  persons)  under the
Operating Agreement.

Operating Structure

The  Corporation  is the product of an  amalgamation  in November 1995 of Minera
Andes  and  Scotia  Prime  Minerals,   Incorporated,  a  then  inactive  Alberta
corporation which had previously had its Common Shares listed for trading on The
Alberta Stock Exchange (presently,  the Canadian Venture Exchange ("CDNX")). The
Corporation's  interests  in its  Argentina  properties  are  held  through  two
Argentinean  subsidiaries:  Minera Andes S.A.  ("MASA") and NAD S.A.  ("NADSA").
MASA was  incorporated  under the laws of the Republic of Argentina in September
1994. NADSA was incorporated under the laws of the Republic of Argentina in July
1994.  The  Corporation's  interest in its Colombian  properties is held through
Minera Providencia Inc.. ("MPI"),  which was incorporated in December 1998 under
the Business Corporations Act (Alberta). The Corporation holds

                                        2
<PAGE>
71.11% of the issued and outstanding  shares of MPI and the remaining shares are
held by Jon Lehmann,  the President of MPI. MPI's Colombian  properties are held
through Minera Providencia S.A.  ("MPSA"),  incorporated in April 1998. MPI owns
92% of the issued and  outstanding  shares of MPSA and has  entered  into option
agreements to acquire the remaining  shares for $400.  Transylvania  Gold S.R.L.
("TGS") was incorporated  under the laws of Romania in October 1999, to hold the
Corporation's  Romanian  property  interests.  The Corporation holds 100% of the
issued and outstanding share of TGS.

The corporate structure of Minera Andes is as follows:


                 ---------------------
                 | Minera Andes Inc. |                 ----------------------
                 |    (Alberta)      | --------------  |      71.11%         |
                 ---------------------                 | Minera Providencia  |
                           |                           |       Inc.          |
                           |                           |    (Alberta)        |
                           |                           ----------------------
 -------------------------------------------------               |
     |                    |                  |                   |
---------------     ---------------    --------------   ---------------------
|    100%      |    |    95%       |   |    91.6%    |  |        92%         |
| Transylvania |    | Minera Andes |   |   NAD S.A.  |  | Minera Providencia |
|  Gold SRL    |    |    S.A.      |   | (Argentina) |  |        S.A.        |
| (Romania)    |    | (Argentina)  |   |             |  |     (Colombia)     |
---------------     ---------------    --------------   ---------------------


The Corporation holds 19 of the 20 issued and outstanding  shares of MASA and 11
of the 12  issued  and  outstanding  shares  of NADSA as well as an  irrevocable
transferable  option to purchase the one remaining MASA share and an irrevocable
transferable  option to purchase the one  remaining  NADSA share.  Each of those
single shares is held by a natural person shareholder as required by local law.

Degerstrom  provides management services to the Corporation and acts as operator
of the Corporation's  properties and projects pursuant to an operating agreement
entered  into  in  March  1995  ("Operating  Agreement").  Under  the  Operating
Agreement,  Degerstrom  operates  and  manages  the  exploration  program on all
properties and provides related offsite  administrative  assistance as required.
This agreement  allows the Corporation to minimize its overhead by providing for
reimbursement  to  Degerstrom  of direct  out of pocket  and  certain  allocated
indirect  costs and expenses and the payment of a management fee of 15% of total
costs.  See   "Description  of  Properties  -  the  Degerstrom   Agreement"  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."

Degerstrom  is  principally  involved in contract  mining and  operates  its own
independently  owned  mines  and  mines  in  joint  venture  with  other  mining
companies.  Degerstrom  provides a full  range of  contract  services  including
geological studies, site drilling,  metallurgical  analysis,  and engineering of
pit, process and recovery systems.

The  Corporation's  management  office is 3303  North  Sullivan  Road,  Spokane,
Washington,  99216,  while the principal  business address of the Corporation is
Coronel  Moldes 837,  (5500)  Mendoza,  Argentina.  The  Corporation's  business
address in Colombia  is Carrera 9 #74-08,  Oficina  504,  Bogota,  Colombia.  In
Romania,  the principal  business  address is Str. Av. Zorileanu Nr.39 Sector 1,
Bucharest,  Romania.  The registered address of the Corporation is 1600, 407 2nd
Street S.W., Calgary, Alberta, T2P 2Y3 Canada.

                                        3
<PAGE>
Considerations Related to Minera Andes' Business

Ownership of the  Corporation's  Common  Shares  involves a high degree of risk.
Shareholders should consider, among other things, the following factors relating
to  the  Corporation's   business  and  properties  and  its  present  stage  of
development:

Risks  Inherent in  Minerals  Exploration.  There are a number of  uncertainties
inherent  in any  exploration  or  development  program,  including  location of
economic ore bodies, the development of appropriate metallurgical processes, and
the receipt of necessary governmental permits.  Substantial  expenditures may be
required to pursue such exploration and, if warranted,  development  activities.
Assuming  discovery of an economic ore body and  depending on the type of mining
operation  involved,  several  years  may  elapse  from the  initial  stages  of
development until commercial  production is commenced.  New projects  frequently
experience  unexpected  problems during  exploration and development  stages and
frequently  result in  abandonment  of the  properties as potential  development
projects.  Most  exploration  projects do not result in the discovery of minable
deposits of ore.  There can be no assurance that the  Corporation's  exploration
efforts will yield reserves or result in any commercial mining operations.

Many of the  properties  that the  Corporation  intends to explore in Argentina,
Colombia  and  Romania  are the  subject of  applications  for  concessions  and
licenses,  many of which have not yet been granted. The filing of an application
for a concession  grants the holder the exclusive right to obtain the concession
conditioned on the outcome of the approval process.  In Argentina,  the approval
process is an  administrative  procedure  under the authority of the province in
which the property is located. The process includes a public notice and approval
procedure allowing third parties to give notice of opposition or prior claim, if
any,  before the title to the  concession  is granted.  The  application  for an
exploration  license in Colombia is handled by the Ministry of Mines and Energy,
plus the Ministry of the Environment.  The approval process may take many months
to complete.  In Romania,  the license of Concession for Exploration  comes into
full effect  following  compliance  with terms  regarding  the work  commitment,
environmental  mitigation  and  establishment  of  a  Romanian  subsidiary.  The
Concession are administered by the NAMR. Although the Corporation  believes that
it has taken all necessary steps with respect to the  application,  approval and
registration  process for the property concessions and licenses it has currently
applied  for and  property  transactions  to which  it is a  party,  there is no
assurance that any or all applications will result in issued concessions or that
the public registrations will be timely approved.

Risks  Inherent  in the Mining  Industry.  Exploration,  development  and mining
operations  are  subject  to a  variety  of laws  and  regulations  relating  to
exploration,  development,  employee safety and environmental protection; mining
activities are subject to substantial  operating  hazards including rock bursts,
cave-ins,  fires and  flooding,  some of which are not  insurable  or may not be
insured for economic reasons. The Corporation currently has no insurance against
such risks.  The  Corporation  may also incur liability as a result of pollution
and other  casualties  involved in the drilling and mining of ore.  There may be
limited  availability  of  water  and  power,  which  are  essential  to  mining
operations; and interruptions may be caused by adverse weather conditions.

The  Corporation or joint venture or investment  partners must obtain  necessary
governmental approvals and make necessary capital expenditures before production
may commence on most of its projects. Significant capital expenditures will also
be required to bring them into production.  The Corporation may obtain funds for
a portion  of these  capital  expenditures  from  joint  venture  or  investment
partners.  However,  there  can be no  assurance  that  such  joint  venture  or
investment  partners will provide such funds or that such project financing will
be available to the  Corporation  on acceptable  terms.  The number of potential
sources of third-party project financing for mining projects is limited.

                                        4
<PAGE>
Minera Andes is subject to additional  risks,  including  that a large number of
companies, many of which are significantly larger and have greater financial and
technical resources than Minera Andes,  compete in the acquisition,  exploration
and development of mining properties; mining projects are highly speculative and
involve  substantial  risks,  even when conducted on properties known to contain
significant quantities of mineralization.

Need for Additional Capital.  The exploration and, if warranted,  development of
Minera Andes' properties would require substantial financing.  The Corporation's
ability to obtain additional  financing will depend,  among other things, on the
price of gold, silver,  copper and other metals and the industry's perception of
their  future  price.  Therefore,  availability  of funding  depends  largely on
factors  outside  of  the  Corporation's   control,  and  cannot  be  accurately
predicted.  Failure  to obtain  sufficient  financing  could  result in delay or
indefinite postponement of exploration,  development or production on any or all
of Minera Andes'  projects or loss of  properties.  For example,  certain of the
agreements   pursuant  to  which  the  Corporation  has  the  right  to  conduct
exploration activities carry work commitments which, if not met, could result in
the Corporation losing its right to acquire an interest in the subject property.
There can be no assurance  that  additional  capital or other types of financing
will be available when needed or that, if available, the terms of such financing
will be favorable to Minera Andes.

Competitive  Business  Conditions.  The  exploration  and development of mineral
properties  in the Republic of  Argentina,  Colombia  and also in Romania,  is a
highly  competitive  business.  A large  number of  companies  compete  with the
Corporation  in  the   acquisition,   exploration   and  development  of  mining
properties.  Many of these competing companies are significantly larger than the
Corporation and have substantially greater economic and technical resources than
the  Corporation.   While  the  Corporation  seeks  to  compete  by  identifying
properties  for  exploration,   acquiring   exclusive  rights  to  conduct  such
exploration  and carrying out exploration and development of the properties with
joint  venture  or  investment  partners,  there  can be no  assurance  that the
Corporation will be successful in any of these efforts.

Foreign  Operations.  The majority of Minera  Andes'  properties  are located in
Argentina. Argentina has recently emerged from periods of political and economic
instability. While current indications are that such instability is diminishing,
there are no guarantees that this will continue. Foreign properties,  operations
and  investments  may be  adversely  affected by local  political  and  economic
developments,    including   nationalization,    exchange   controls,   currency
fluctuations,  taxation  and laws or policies as well as by laws and policies of
the United States and Canada affecting  foreign trade,  investment and taxation.
It is  important  that the  Corporation  maintain  good  relationships  with the
governments  in  Argentina.  The  Corporation  may not be able to maintain  such
relationships  if the  governments  change.  Argentina has and is developing new
bodies of law that will  impact the  conduct of  business  generally  and mining
operations  in  particular.  Future laws  (including  tax laws) could  adversely
affect the conduct of business and mining  operations.  Similar  conditions  and
uncertainties  pertain to the conduct of  operations  in Colombia  and  Romania,
although both countries are regarded as economically stable, compared with other
countries in their respective regions.

Difficulties  in  Developing  Remote  Areas.  Many of the  areas  in  which  the
Corporation is conducting exploration and, if warranted,  development activities
are in particularly remote and mountainous regions, with limited  infrastructure
and limited access to essential  resources.  Exploration or development projects
in these areas may  require the  Corporation  or its joint  venture  partners to
develop power sources, transportation systems and communications systems, and to
secure  adequate  supplies  of  fuel,  machinery,  equipment  and  spare  parts.
Consequently,  exploration  and  development  in  these  areas  is  particularly
difficult,  requiring  significant capital  expenditures,  and may be subject to
cost over-runs or unanticipated delays.

Fluctuation  in the Price of Minerals.  The market price of minerals is volatile
and beyond the control of the Corporation. If the price of a mineral should drop
dramatically, the value of the Corporation's properties which

                                        5
<PAGE>
are being  explored or developed for that mineral  could also drop  dramatically
and the  Corporation  might  not be able to  recover  its  investment  in  those
properties.  The decision to put a mine into  production,  and the commitment of
the  funds  necessary  for that  purpose,  must be made  long  before  the first
revenues from production will be received.  Price fluctuations  between the time
that such a  decision  is made and the  commencement  of  production  can change
completely the economics of the mine. Although it is possible to protect against
price  fluctuations  by hedging  in certain  circumstances,  the  volatility  of
mineral prices  represents a substantial  risk in the mining industry  generally
which no amount of planning or technical expertise can eliminate.

Environmental and Other Laws and Regulations.  Mining operations and exploration
activities  in Argentina,  Colombia and Romania are subject to various  federal,
provincial and local laws and regulations governing mineral rights, exploration,
development and mining, exports, taxes, labor, protection of the environment and
other  matters.  Compliance  with  such  laws and  regulations  may  necessitate
significant capital outlays, materially affect the economics of a given project,
or cause material changes or delays in the  Corporation's  intended  activities.
Minera  Andes has  obtained  or is in the  process of  obtaining  authorizations
currently required to conduct its operations. New or different standards imposed
by  governmental  authorities  in the future or  amendments  to current laws and
regulations  governing  operations  and  activities of mining  companies or more
stringent  implementation  thereof could have an adverse impact on Minera Andes'
activities.

Control by Single  Shareholder;  Conflicts  of  Interest.  At December  31, 1999
Degerstrom  beneficially  owns  approximately  21%  of  the  outstanding  voting
securities of the Corporation and therefore can exert  significant  influence in
the election of the  Corporation's  directors and have substantial  voting power
with  respect to other  matters  submitted  to a vote of the  shareholders.  The
interests of  Degerstrom  with respect to any  transaction  involving  actual or
potential change in control of the Corporation or other  transactions may differ
from those of the Corporation's other shareholders.

Certain  directors and officers of the Corporation are also directors,  officers
or employees of the Corporation's majority shareholder,  Degerstrom and of other
natural resource and mining companies. As a result,  conflicts may arise between
the  obligations  of these  directors  to the  Corporation  and to  these  other
entities. Certain directors and officers of the Corporation have other full time
employment  or  other  business  or  time   restrictions   placed  on  them  and
accordingly, these directors and officers may not be able to devote full time to
the affairs of the Corporation.

Transactions with Degerstrom;  Dependence on Key Personnel.  The Corporation has
entered  into an  Operating  Agreement  with  Degerstrom.  See  "Description  of
Properties  - The  Degerstrom  Agreement."  This  agreement is not the result of
arm's-length negotiations between independent parties. There can be no assurance
that the Operating  Agreement or any future agreements will be effected on terms
comparable  to  those  that  would  have  resulted  from  negotiations   between
unaffiliated  parties.  Such  agreements may be amended by the  Corporation  and
Degerstrom,  by mutual  agreement.  Degerstrom  is not  required  to devote  its
personnel and resources  exclusively to, or for the benefit of, the Corporation.
There can be no assurance that the services to be provided by Degerstrom will be
available to the Corporation at all times.  Moreover,  the Corporation's success
will be dependent  upon the services of certain  executive  officers,  including
Allen Ambrose and Brian Gavin, who are also employees of Degerstrom.  Degerstrom
pays compensation and provides other benefits to these individuals. Minera Andes
does not have  employment  contracts  with nor does it maintain  key person life
insurance for Mr. Ambrose or Mr. Gavin.

Liquidity;  Limited Trading Market.  There currently is a limited trading market
for the Corporation's  securities.  There is no assurance that an active trading
market will ever develop.  Investment in the Corporation is not suitable for any
investor who may have to liquidate such  investment on a timely basis and should
only be considered  by investors who are able to make a long-term  investment in
the Corporation.

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Glossary of Geologic and Mining Terms; Statement of Abbreviations and Conversion
Factors

"anomalous" means either a geophysical response that is higher or lower than the
average  background  or rock samples  that return assay values  greater than the
average background;

"Bankable  Feasibility Study" means the study,  prepared to industry  standards,
based upon which a bank or other lending  institution may loan the  Corporation,
MASA or NADSA funds for production development on the Claims;  "breccia" means a
course grained rock,  composed of angular broken rock fragments held together by
a finer grained matrix;

"Cateo"  means an  exploration  concession  for  mineral  rights  granted  to an
individual or company in the Republic of  Argentina,  as defined by the Republic
of Argentina Mining Code, as amended;

"Claims" means the Cateos,  Manifestacion de  Descubrimiento,  Mina, Estaca Mina
(as defined by the Republic of  Argentina  Mining  Code,  as amended)  described
herein issued to NADSA,  MASA or the  Corporation by the government of Argentina
or any provincial government;

"Colombian Claims" means the exploration licenses,  both granted and applied for
in Colombia;

"Estaca Mina" means areas granted to extend the area covered by existing Minas;

"grab sample" means one or more pieces of rock collected from a mineralized zone
that when analyzed do not  represent a particular  width of  mineralization  nor
necessarily  the  true  mineral   concentration  of  any  larger  portion  of  a
mineralized area;

"igneous  rock"  means a rock  formed  by the  cooling  of  molten  rock  either
underground or at the surface of the earth;

"intrusive  rock" means an igneous  rock that,  when in the molten or  partially
molten state,  penetrated  into or between other rocks,  but cooled  beneath the
surface;

"Manifestacion de Descubrimiento" (literally,  manifestation of discovery) means
the intermediate  stage between the exploration phase and exploitation  phase of
development;

"metamorphic rock" means an igneous or sedimentary rock that has been altered by
exposure to heat and pressure (resulting from deep burial,  contact with igneous
rocks, compression in mountain building zones or a combination of these factors)
but  without  complete  melting.  Metamorphosis  typically  results  in  partial
recrystallization  and the  growth  of new  minerals.  "Metasediment"  refers to
metamorphosed sedimentary rock. "Metavolcanics" refers to metamorphosed volcanic
rock;

"Mina" means an exploitation grant based on Manifestacion de Descubrimiento;

"net smelter return royalty" is a form of royalty payable as a percentage of the
value of the final product of a mine,  after deducting the costs of transporting
ore or concentrate to a smelter, insurance charges for such transportation,  and
all  charges  or costs  related  to  smelting  the ore.  Normally,  exploration,
development  and mining  costs are not  deducted  in  calculating  a net smelter
return royalty.  However,  such royalties are established by contract or statute
(in the case of property owned by  governments),  and the specific terms of such
contracts or statutes govern the calculation of the royalty;

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<PAGE>
"net profits  royalty" is a form of royalty  payable as a percentage  of the net
profits of a mining  operation.  In contrast to net  smelter  return  royalties,
costs relating to  exploration,  development and mining may be deducted from the
net  proceeds  of the  operation  in  calculating  the  royalty.  However,  such
royalties are  established by contract or statute (in the case of property owned
by governments), and the specific terms of such contracts or statutes govern the
calculation of the royalty;

"porphyry"  means an igneous rock of any composition  that contains  conspicuous
large mineral crystals in a fine-grained ground mass;

"Underlying  Royalty"  means any  royalties  on the Claims  that are part of the
lease, purchase or option of said Claim from the owner or any royalties that may
be imposed by the provincial government;

"vein"  means a  mineral  filling  of a fault  or  fracture  in the  host  rock,
typically in tabular or sheet-like form;

"VLF-EM" means a very low frequency electromagnetic  geophysical instrument used
in exploration to measure  variances of conductivity in surficial  sediments and
bedrock;

"volcanic  rock" (basalt,  pillowed-flows,  rhyolite) means an igneous rock that
has been poured out or ejected at or near the earth's surface;

"volcanoclastic  rock" (wacke, tuff, turbidite) means a sedimentary rock derived
from the  transportation and deposition of volcanic rock fragments by air (tuff)
or water (wacke or turbidite).

The  following  is a list of  abbreviations  used  throughout  this  Report  for
technical terms:

Ag                silver
Au                gold
As                arsenic
Cu                copper
g/t Au            grams per tonne gold
g/t Ag            grams per tonne silver
g/t               grams per tonne
ha                hectare(s)
Hg                mercury
IP/RES            induced polarization and resistivity (survey)
kg                kilogram(s)
km                kilometer(s)
m                 meter(s)
Mo                molybdenum
NSR               Net Smelter Return
oz                ounce
Pb                lead
ppb               parts per billion
ppm               parts per million
Sb                antimony
sq.               square
VLF-EM            very low frequency electromagnetic (survey)
Zn                zinc

                                        8
<PAGE>
The  following  table sets forth  certain  standard  conversions  from  Standard
Imperial units to the International System of Units (or metric units).

To Convert From Imperial              To Metric                Multiply by
acres                                 hectares                 0.404686
feet                                  meters                    0.30480
miles                                 kilometers               1.609344
tons                                  tonnes                   0.907185
ounces (troy)/ton                     grams/tonne               34.2857
1 mile = 1.609 kilometers
1 yard = 0.9144 meters
1 acre = 0.405 hectares
2,204.62 pounds = 1 metric ton = 1 tonne
2,000 pounds (1 short ton) = 0.907 tonnes
1 ounce (troy) = 31.103 grams
1 ounce (troy)/ton = 34.2857 grams/tonne

ITEM 2.     DESCRIPTION OF PROPERTIES

The principal  business of the Corporation is the exploration and development of
mineral  properties  ("Claims")  located  primarily in the Republic of Argentina
plus two properties in Colombia and two in Romania. The Corporation's  interests
in the Argentinian  Claims are held through MASA and NADSA,  while the Colombian
Claims are held through MPSA. The Romanian  properties are held by  Transylvania
Gold SRL. MASA holds  properties  and is the company in which the daily business
operations  in Argentina  are  conducted.  NADSA holds  properties  and drilling
equipment in Argentina under a temporary importation permit. MASA and NADSA were
formed  and  registered  as mining  companies  in order for the  Corporation  to
receive  the  benefits  of the new  mining  laws  in  Argentina.  The  principal
properties  of the  Corporation  are  described  under  the  heading  "Principal
Properties" below.

The Degerstrom Agreement

A number of the Claims were originally held by Degerstrom. Pursuant to the March
1995 Asset and Share Acquisition Agreement to which the Corporation, MASA, NADSA
and Degerstrom are parties (the "Degerstrom Agreement"),  Degerstrom transferred
its interest in those Claims to NADSA and MASA in  consideration  for a royalty.
Degerstrom  also  conveyed  the  MASA  and  NADSA  capital  stock it held to the
Corporation.  In  consideration  for those  shares,  Minera  Andes (i) issued to
Degerstrom  4,000,000  Common  Shares  and the right to  acquire  an  additional
1,213,409  Common Shares if any of the  properties  comprising the Claims became
the subject of a Bankable Feasibility Study, (ii) agreed to pay a royalty on any
existing or future  properties  held by the  Corporation  or its  affiliates  as
described  below,  and (iii) agreed to pay the aggregate  amount of the cost and
expenses  incurred by Degerstrom on behalf of the Corporation  from July 1, 1994
through March 15, 1995.  Minera Andes also acquired from Brian Gavin, an officer
of the Corporation, the shares he held in MASA.

The royalty payable to Degerstrom by both NADSA and MASA will be a percentage of
the net smelter  return earned on those Claims or any future Claims  acquired by
those  parties.  The Claims are  subject  to a royalty  equal to the  difference
between 3% and the Underlying  Royalty,  subject to a maximum  royalty of 2%. If
any party acquires all or part of the Underlying  Royalty,  the royalty payable,
if any, to Degerstrom will not increase. If Degerstrom collects a royalty on any
of the Claims held by the parties, each party shall at any time have the option,
upon giving  notice to  Degerstrom,  to repurchase up to one-half of the royalty
payable to Degerstrom upon payment of $1,500,000, for each one 1% of the royalty
repurchased.

                                       9
<PAGE>
NADSA,  MASA,  Degerstrom  and the  Corporation  also  entered into an Operating
Agreement, appointing Degerstrom as operator of the Claims and any future Claims
acquired in Argentina.  Under the terms of the Operating  Agreement,  Degerstrom
operates  and manages the  exploration  program on all  properties  and provides
related offsite  administrative  assistance as required.  In  consideration  for
these operating services,  Degerstrom is entitled to reimbursement for its costs
of labor,  materials and supplies  incurred in connection with its services plus
an additional 15% of such costs as a management  fee.  Included in the Operating
Agreement  are  fixed  usage  rates  for  the  equipment  owned  by  Degerstrom.
Degerstrom has the right to terminate the Operating Agreement if the Corporation
does not maintain a program and budget in excess of Cdn  $300,000  per year.  If
the Corporation elects to develop a property and contract with a third party for
development or production, the Corporation must give notice to Degerstrom of the
terms and conditions of the proposed arrangement. Degerstrom has the right for a
period of 30 days to meet the contract bid by a third party.

PRINCIPAL PROPERTIES

I.   ARGENTINA

     Recent Mining and Economic History in Argentina

Argentina is the second largest  country in South America,  over 2.7 million sq.
km in area.  In 1983,  Argentina  returned  to a  multi-party  democracy,  which
brought to an end nearly a half century of military  intervention  and political
instability.  The country  then began to  stabilize;  however,  it was not until
1989,  with the election of the government  under President  Carlos Menem,  that
Argentina's  economy began to improve.  Menem initiated serious economic reforms
that included the  privatization of many state companies and the  implementation
of the  Convertibility  Plan, which fixed the Argentine peso to the US dollar at
par, fully backed by reserves of foreign exchange,  gold and  dollar-denominated
bonds of the  Central  Bank of  Argentina.  Results  of the  reforms  have  been
positive;  Argentina's  gross domestic product grew at up to 8% per annum in the
early  1990s and  inflation  dropped to  between  1% and 3% per annum.  However,
Argentina is currently in a recession  with GDP declining at -3%. The government
is  focused on  diversifying  the  economy  to  increase  exports  and  decrease
Argentina's   dependency  on  imports.   The  country  is  encouraging   foreign
investment.  In October of 1999, Fernando de la Rua was elected president on the
Alliance  party  ticket.  Mr. De la Rua has  pledged to  continue  the  economic
policies of his predecessor.

The government is actively  revitalizing the mineral sector. In 1993, the Mining
Investments  Act  instituted  a new system for mining  investment  to  encourage
mineral exploration and foreign investment in Argentina. Key incentives provided
by the Act include:  guaranteed tax stability for a 30 year period,  100% income
tax deductions on exploration costs,  accelerated amortization of investments in
infrastructure, machinery and equipment, and the exemption from import duties on
capital  goods,  equipment  and raw  materials  used in mining and  exploration.
Repatriation  of capital or transfer of profits  are  unrestricted.  Argentina's
mineral resources, administered by its 23 provinces, are subject to a provincial
royalty  capped  at 3% of the  "mouth  of mine"  value of  production,  although
provinces may opt to waive their royalties.

Argentina's mineral potential is largely unknown,  particularly in comparison to
that of its immediate neighbors.  Until recently,  Argentina has been relatively
under-explored and, as a consequence,  there is a lack of information pertaining
to the country's  resource base.  Copper and gold  mineralization  discovered to
date occurs  predominantly in the southern Andean copper belt which extends over
1,000 km  through  northwestern  Argentina.  The Bajo de la  Alumbrera  porphyry
copper deposit has been brought onstream.  Other copper deposits currently under
development  include the Agua Rica and El Pachon  deposits.  In  addition,  gold
deposits  are  concentrated  in the  Argentine  portion  of the  Central  Andes'
Maricunga-El  Indio gold belts and in the newly  discovered Santa Cruz gold belt
in southern Patagonia.

                                       10
<PAGE>
In 1989,  fewer  than a dozen  foreign  exploration  companies  had  offices  in
Argentina;  by 1996  there were  approximately  60 such  companies.  Exploration
expenditures  grew from $5 million in 1991 to over $90 million in 1995, but have
shrunk since with the prolonged low gold price market.  Currently,  there are no
more than a handful of exploration companies active in Argentina.

The Corporation  initiated gold exploration in Argentina in 1991, in conjunction
with  Degerstrom.  As of December,  1999,  the  Corporation  had Argentine  land
holdings  totaling  175,536  ha in three  Argentine  provinces  (Figure  1). The
Corporation's  exploration  efforts  initially  focused on evaluating  prospects
generated  by 1960's  United  Nations  development  exploration  programs and on
targets  generated  by  satellite  image  analysis.  The  Corporation  developed
techniques  of  processing  and  interpreting  satellite  imagery  to  assist in
identifying  promising  exploration  targets.   Currently,  the  Corporation  is
completing  exploration  work  that  includes  geophysical  surveys,  mechanical
trenching and  reverse-circulation  drilling on the most advanced targets in its
property portfolio,  and conducting grassroots exploration to evaluate its other
properties and to generate new targets.

     Property And Title in Argentina

The laws, procedures and terminology regarding mineral title in Argentina differ
considerably  from those in the United States and in Canada.  Mineral  rights in
Argentina  are  separate  from  surface  ownership  and are owned by the federal
government.  Mineral rights are  administered  by the  provinces.  The following
summarizes  some of the  Argentinean  mining law  terminology in order to aid in
understanding the Corporation's land holdings in Argentina.

     1.   Cateo:  A cateo is an  exploration  concession  which  does not permit
          mining but gives the owner a preferential right to a mining concession
          for the same area.  Cateos are measured in 500 ha unit areas.  A cateo
          cannot  exceed 20 units  (10,000 ha). No person may hold more than 400
          units in a single province.  The term of a cateo is based on its area:
          150 days for the  first  unit (500 ha) and an  additional  50 days for
          each unit thereafter. After a period of 300 days, 50% of the area over
          four units  (2,000 ha) must be dropped.  At 700 days,  50% of the area
          remaining must be dropped. Time extensions may be granted to allow for
          bad weather,  difficult  access,  etc. Cateos are identified by a file
          number or "expediente" number.

          Cateos are awarded by the following process:

          a)   Application   for  a  cateo  covering  a  designated   area.  The
               application describes a minimum work program for exploration;
          b)   Approval by the province and formal placement on the official map
               or graphic register;
          c)   Publication  in the  provincial  official  bulletin;  d) A period
               following  publication  for third parties to oppose the claim. e)
               Awarding of the cateo.

          The length of this  process  varies  depending  on the  province,  and
          commonly takes up to two years.  Accordingly,  cateo status is divided
          into those  that are in the  application  process  and those that have
          been awarded.  If two companies apply for cateos on the same land, the
          first to apply has the superior right.  During the application period,
          the first  applicant  has rights to any  mineral  discoveries  made by
          third  parties in the cateo  without  its prior  consent.  While it is
          theoretically  possible for a junior  applicant to be awarded a cateo,
          because  applications  can be  denied,  the  Corporation  knows  of no
          instances where this has happened.

                                       11
<PAGE>
          Applicants  for cateos  may be allowed to explore on the land  pending
          formal award of the cateo,  with the approval of the surface  owner of
          the land.  The time  periods  after  which  the owner of a cateo  must
          reduce the  quantity  of land held does not begin to run until 30 days
          after  a cateo  is  formally  awarded.  The  Corporation's  goal is to
          determine  whether its cateos  contain  commercial  grade ore deposits
          before portions of the cateos must be relinquished.  The Corporation's
          ability to do so is dependent upon adequate  financing for exploration
          activities. It is likely that several of the Corporation's cateos will
          be relinquished  after  preliminary  exploration  because no promising
          mineral deposits have been discovered.

          Until August 1995, a "canon fee", or tax, of $400 per unit was payable
          upon the  awarding of a cateo.  A recent  amendment  to the mining act
          requires that this canon fee be paid upon application for the cateo.

     2.   Mina: To convert an  exploration  concession  to a mining  concession,
          some or all of the  area of a cateo  must be  converted  to a  "mina".
          Minas are  mining  concessions  which  permit  mining on a  commercial
          basis. The area of a mina is measured in "pertenencias". Each mina may
          consist of two or more  pertenencias.  "Common  pertenencias"  are six
          hectares in size and "disseminated pertenencias",  100 ha (relating to
          disseminated  deposits of metals  rather  than  discrete  veins).  The
          mining authority may determine the number of pertenencias  required to
          cover the geologic  extent of the mineral  deposit in  question.  Once
          granted,   minas  have  an  indefinite   term   assuming   exploration
          development  or mining is in progress.  An annual canon fee of $80 per
          pertenencia is payable to the province.

          Minas are obtained by the following process:

          a)   Declaration of manifestation of discovery in which a point within
               a cateo is nominated as a discovery point.  The  manifestation of
               discovery is used as a basis for location of  pertenencias of the
               sizes described above.  Manifestations of discovery do not have a
               definite area until  pertenencias  are proposed.  Within a period
               following  designation  of  a  manifestation  of  discovery,  the
               claimant may do further exploration,  if necessary,  to determine
               the size and shape of the orebody.

          b)   Survey  ("mensura")  of the mina.  Following  a  publication  and
               opposition  period and approval by the province,  a formal survey
               of the  pertenencias  (together  forming  the mina) is  completed
               before the  granting  of a mina.  The  status of a surveyed  mina
               provides the highest  degree of mineral land tenure and rights in
               Argentina.

     3.   Estaca Minas:  These are six-hectare  extensions to existing  surveyed
          minas that were granted  under  previous  versions of the mining code.
          Estaca minas are equivalent to minas. New Estaca minas were eliminated
          from the mining code in August 1996.

     4.   Provincial Reserve Areas: Provinces are allowed to withdraw areas from
          the normal cateo/mina process. These lands may be held directly by the
          province or assigned to provincial  companies for study or exploration
          and development.

          All  mineral  rights  described  above  are  considered  forms of real
          property  and can be sold,  leased or assigned  to third  parties on a
          commercial  basis.  Cateos and minas can be  forfeited if minimum work
          requirements  are not  performed  or if annual  payments are not made.
          Generally,  notice and an  opportunity to cure defaults is provided to
          the owner of such rights.

                                       12
<PAGE>
          Grants of mining rights  including  water  rights,  are subject to the
          rights of prior users. Further, the mining code contains environmental
          and  safety  provisions,  administered  by  the  provinces.  Prior  to
          conducting  operations,  miners  must submit an  environmental  impact
          report to the provincial government, describing the proposed operation
          and the methods to be used to prevent undue environmental  damage. The
          environmental impact report must be updated biennially,  with a report
          on the  results  of  the  protection  measures  taken.  If  protection
          measures are deemed inadequate,  additional  environmental  protection
          may be required.  Mine operators are liable for environmental  damage.
          Violators of environmental standards may be caused to shut down mining
          operations.

Minera Andes Properties

The sections that follow discuss  certain  properties  that are or have been the
subject of joint venture  agreements  with third parties or which have been more
intensively explored by the Corporation.

                                   Figure 1
           [Graphic omitted - Map of exploration projects in Argentina]

                                       13
<PAGE>
A.   Santa Clara Project Summary
     ---------------------------

     The Santa Clara Project area is located  within  metamorphic  and intrusive
     rocks  of  the  Frontal   Cordillera   in   northwest   Mendoza   Province,
     approximately 63 km west of the city of Tupungato,

     From 1994 through 1996, MASA completed property-wide prospecting and stream
     sediment sampling surveys which clearly defined a porphyry copper center at
     Tres Quebradas .

     In 1997, prior to the termination of the joint venture,  the  Corporation's
     partner,  Cominco,  constructed access roads and drilled four diamond drill
     holes to explore the copper potential of the Quebrada del Azufre zone.

     Following attempts to joint venture the Santa Clara property,  the property
     was abandoned in mid-1998.  All underlying  contracts with  landowners were
     terminated and the Corporation  wrote-off deferred expenditures of $756,557
     in 1998.

B.   San Juan Project Summary
     ------------------------

     1. San Juan Project Location

     The San Juan Province Project  comprises six properties  totaling 39,488 ha
     in southwestern San Juan Province. Elevation ranges from 2,500 m to 5,500 m
     and moderate to high relief.

     2. San Juan Area Project Geology

     The project area extends from the western margin of the Cordillera  Frontal
     to  the  Cordillera  Principal.   The  area  is  principally  underlain  by
     Permo-Triassic  Choiyo Group volcanic rocks, a multi-phase igneous sequence
     comprising volcanic breccias, ignimbrites, tuffs and rhyolites, intruded by
     granites  and  overlain  by  extrusive  acidic  volcanic  rocks.   Jurassic
     continental,  marine and volcanic derived  sedimentary rocks  unconformably
     overly  Permo-Triassic  rocks.  The  youngest  rocks  in the  project  area
     comprise Tertiary  volcanic and intrusive rocks,  which are common hosts of
     epithermal  gold  mineralization  as  evidenced  by deposits in the Chilean
     Andes.

     3. San Juan Project Exploration

     No formal  records of  previous  exploration  in the  project  area  exist.
     Evidence of  prospecting  (small  trenches  or pits)  exists on some of the
     cateos.  The area is currently active with  predevelopment at the El Pachon
     copper  deposit and advanced  exploration  at the Araya (Cu), Los Piuquenes
     (Cu), and Cenicero (Au) projects.

     The San Juan Province Project is a regional reconnaissance program, focused
     on epithermal gold and gold porphyry targets in the eastern cordillera. All
     of the  lands  were  acquired  based  on the  results  of  satellite  image
     analysis.  Preliminary field examination,  including rock chip sampling and
     property-wide   stream  sediment  sampling,   has  been  completed  on  all
     properties.

     Detailed work at Los  Chonchones  included  reconnaissance  scale  geologic
     mapping and  geochemical  surveys.  Results  returned a number of anomalous
     gold and/or  copper values in all sample types,  scattered  throughout  the
     color anomalies and  concentrating in the center of the southwest  anomaly.
     Several major mining companies are looking at Los Chonchones for a possible
     joint venture.

                                       14
<PAGE>
     In April 1999, the  Corporation  signed an agreement  with Battle  Mountain
     Gold  Corporation  regarding  a joint  venture on Minera  Andes' Los Azules
     cateo  application  in Calingasta  Department,  San Juan.  Battle  Mountain
     controls land contiguous to the Los Azules property.

     Through  December 31, 1999, the Corporation  spent $314,661 on the San Juan
     Project (net of write-offs for properties abandoned).

     4. San Juan Area Project Ownership

     Six  applications  for  cateos  and 11  manifestations of  discovery  total
     39,488 ha. At present, these lands are not  subject to a royalty,  however,
     the government of San Juan has not waived its rights to  retain up  to a 3%
     "mouth  of mine"  royalty  from  production.  Property  canon fees for  the
     properties in 2000 are $29,560.

C.   Agua Blanca Project Summary
     ---------------------------

     The Agua Blanca  Project is located  approximately  220 km northwest of the
     city  of  San  Juan  in  San  Juan  Province.  The  property  lies  in  the
     southeastern  extension of the El Indio Gold Belt which hosts the El Indio,
     Tambo and Pascua (Nevada) epithermal Au-Ag deposits.

     Since 1994,  MASA  completed  four  exploration  programs at Agua Blanca to
     explore the  Quebrada  Mondaca and Arroyo del Agua Blanca  areas.  In 1995,
     MASA  constructed  a 25 km road to  access  the  property  from the head of
     Quebrada Mondaca  drainage.  Exploration  efforts  included  property-scale
     geologic mapping,  prospecting and detailed sampling. Results indicated the
     presence  of a gold or  copper-  gold  porphyry  system  in the area of the
     Quebrada Mondaca.

     The Corporation signed an agreement with Newcrest Resources,  Inc. creating
     a joint  venture  on the  property  in April  1996.  After  conducting  the
     drilling  program during 1996,  Newcrest  elected to return the property to
     the Corporation in March 1997.

     In December 1998 the Corporation  drilled seven  reverse-circulation  drill
     holes which encountered  sub-economic to  geochemically-anomalous  gold and
     copper mineralization in geologic environments similar to those encountered
     by Newcrest.

     The Corporation  evaluated the prospects for the property early in 1999 and
     decided that it no longer met its  exploration  criteria.  The property was
     abandoned and the  underlying  contract with the  landowners was terminated
     with write-offs to operations of $1,082,999 in 1998 and $31,268 in 1999.

D.   Mendoza Project Summary
     -----------------------

     The  Mendoza  Project  consisted  of  property   acquisition  and  geologic
     exploration  for precious metal and porphyry copper targets in the province
     of Mendoza. Cateos held or controlled by MASA were selected on the basis of
     satellite image anomalies,  compilation of available geologic  information,
     and/or the presence of known alteration or mineralization.

     Following a review of its Mendoza  properties in late 1999, the Corporation
     elected to drop its lands in the province,  with a corresponding  write-off
     in 1999 of $404,075.

                                       15
<PAGE>
E.   Santa Cruz Project Summary
     --------------------------

     1. El Pluma/Cerro Saavedra Project Location

     The El Pluma/Cerro  Saavedra  property package is located in the Santa Cruz
     province of Argentina,  230 km southwest of the city of Comodoro Rivadavia,
     near latitude  46(degree)41'S  and longitude  70(degree)17'W.  The property
     consists of 13 cateos and 32 manifestations  of discovery  covering a total
     of 88,028  ha  (approximately  880 km2),  100%  owned by Minera  Andes.  No
     environmental  liabilities exist on the property,  although Minera Andes is
     obligated to fill in all trenches prior to the cessation of exploration.

     Road  access to the  property  is good and  consists  of paved  highways to
     within 80 km and then via a well maintained gravel road.  Topography varies
     from gently rolling to locally rugged;  elevations  range from 300 to 700 m
     above sea  level.  The  Deseado  Massif is a cold  desert.  Most day to day
     supply requirements can be met by the settlements of Las Heras (130 km from
     the  property),  Caleta  Oliva  (250  km from  the  property)  or  Comodoro
     Rivadavia;  specialized supplies and equipment must be procured from Buenos
     Aires,  Mendoza,  or abroad.  Major  hydro  lines pass  within 50 km of the
     property.

     2. El Pluma/Cerro Saavedra Project Geology

     The project area occurs in the Deseado Massif, a package of Middle to Upper
     Jurassic  volcanic  rocks  locally  overlain by  Cretaceous  sediments  and
     Tertiary to  Quaternary  basalts.  The Jurassic  rocks are divided into the
     Bajo Pobre  Formation,  of intermediate  composition,  and the felsic Bahia
     Laura Group. The Bahia Laura Group is in turn subdivided into the Chon Aike
     Formation (dominantly ignimbrites) and the La Matilde Formation (dominantly
     volcaniclastic  rocks).  Several  potentially  important,  low  sulfidation
     epithermal deposits have recently been discovered in the massif,  including
     the Cerro Vanguardia deposit which has a reserve of greater than 3.2 Moz Au
     equivalent. Exploration by a number of companies is ongoing in the massif.

     On  the  El  Pluma/Cerro   Saavedra   property  the  prospective   Jurassic
     stratigraphy  is  exposed  in  erosional   windows  through  the  overlying
     sediments and basalts. The Bajo Pobre Formation,  the oldest unit, consists
     of massive  andesitic  flows,  volcaniclastic  material  and minor  dacite.
     Ignimbrites and lesser sediments tentatively correlated with the La Matilde
     Formation  occur in a synvolcanic  subsidence  graben known as the Saavedra
     West basin.  Pebble dikes,  varying in thickness from one centimetre to ten
     metres,  are  common in the  southwest  part of the  Saavedra  West  basin.
     Ignimbrites and minor  rhyolites of the Chon Aike  Formation,  younger than
     the La Matilde basin-fill material,  occur as a complicated series of dikes
     along the bounding faults of the west part of the Saavedra West basin, as a
     sequence of extrusive  ignimbrites at Cerro Celular and in isolated pockets
     elsewhere in the northern third of the property. In the southern two thirds
     of the project area (Southern  Cateos),  ignimbrites  and rhyolite domes of
     the Chon Aike Formation crop out extensively,  and the La Matilde Formation
     may be present locally.

     Cretaceous sediments locally overlie the Jurassic volcanics. Poorly exposed
     over  most of the  property,  these  sediments  are up to 50 m thick in the
     northern  part of the project  area.  The  youngest  rocks are  Tertiary to
     Quaternary  basalts  which form cliffs up to ten metres high and  extensive
     plateaus. Approximately 60% of the property is covered by five to 50 metres
     of post-mineralization, Cretaceous to Quaternary rocks.

                                       16
<PAGE>
     3. El Pluma/Cerro Saavedra Project Exploration

     Santa Cruz is one of Argentina's least  well-explored  provinces.  The area
     was  explored  under  the  Argentine   government-United  Nations  regional
     exploration Plan  Patagonia-Comahue  in the 1970s. In the 1980s,  FOMICRUZ,
     S.E.,  a state  owned  company,  completed  reconnaissance  surveys  in the
     province to delineate areas of interest for mineral reserves.

     The El Pluma/Cerro  Saavedra property has not previously been staked. There
     is no record of any previous sustained  exploration,  although samples have
     been taken during at least one regional reconnaissance program.

     A  structural  study  was  carried  out over the  entire  project  area and
     prospecting/geological  reconnaissance  done on the southern cateos and the
     bulk of the work has been on the northern  third of the  property.  In this
     area, a 1:50,000 mapping/satellite interpretation and extensive prospecting
     has been done. This work led to the recognition of nine target areas.  Rock
     samples from the entire  property have been assayed  (2,536 rock and trench
     samples),  with particular attention to the target areas. Soil sampling has
     been  undertaken  on grids at La Sorpresa,  El Pluma West,  Cerro  Celular,
     Saavedra  West and Cerro  Saavedra  (total of 2,302  samples) and an enzyme
     leach soil survey was completed over part of the Huevos Verdes target. Some
     368 stream sediment  samples were taken.  Approximately 42 line km of CSAMT
     (deep penetration resistivity) were run, and 8.76 km2 (74 line km) gradient
     array IP surveying  was completed in the Huevos  Verdes,  Cerro Celular and
     Saavedra  West  areas.   This  was  supplemented  by  three  kilometres  of
     RealSection IP surveying along selected lines. Some 186 line km of magnetic
     data was collected at Huevos Verdes, Saavedra West, Cerro Celular and Cerro
     Saavedra.  Detailed  mapping was done at Huevos  Verdes,  Saavedra West and
     Cerro Saavedra. Twenty- five trenches,  totaling 2,550 m, were excavated at
     Saavedra West, and another 30 trenches (2,125 m) at Huevos Verdes.  Most of
     these  trenches  were sampled at one to two metre  intervals.  All drilling
     done to date has been  reverse  circulation,  using a  MPD-1000  track rig.
     Three  holes,  totaling  270 m, were  drilled at La Sorpresa and nine at El
     Pluma West (941 m). Two holes (201 m) were drilled at Cerro Saavedra and 24
     holes,  totaling  2,550 m, were drilled at Saavedra  West.  The above holes
     were drilled in 1998;  PIMA analysis,  petrographic  examination  and fluid
     inclusion  work were  undertaken  on  selected  samples.  Drilling  in 1999
     concentrated on the Huevos Verdes prospect,  where 21 holes were completed,
     for a total of 1,643 m.

     Reconnaissance  work in the southern  two thirds of the property  (Southern
     Cateos) focused on areas of alteration inferred from Landsat images. Stream
     sediment  sampling defined three anomalous  zones,  each with at least four
     samples  containing greater than 25 ppb Au, with a maximum value of 158 ppb
     Au.

     In the northern third of the property,  nine areas have been designated for
     follow-up  work,  based  on  surface   indications  of  alteration   and/or
     mineralization.  Huevos  Verdes  and  Saavedra  West are the most  advanced
     targets.

     Huevos   Verdes  is  a  system  of  en   echelon,   variably   mineralized,
     north-northwest  trending  quartz  veins with  associated  strong  argillic
     alteration,  cutting  Bajo Pobre  Formation.  In this area,  the Bajo Pobre
     Formation  consists  of  massive  and  fragmental   andesite.   Preliminary
     indications  are that the massive  andesite  constitutes a more  favourable
     host rock for the  veins  and that  stockwork  mineralization  develops  at
     north-northwest  and  west-northwest  structural  intersections.  The  vein
     system  occurs over a strike length of at least 2.2 km and possibly as much
     as 3.5 km. The  central  and  northwest  parts of the system are covered by
     Cretaceous tuffs and sediments and locally by Tertiary basalt;  geophysical
     work has  confirmed the  continuity  of the system below cover.  Additional
     targets  established  by recent enzyme leach and gradient  array IP surveys
     have not yet been drill tested.

                                       17
<PAGE>
     Mineralized  quartz veins with true thicknesses up to eleven metres (36.1')
     have been  intersected in drillholes and trenches over the entire length of
     the Huevos Verdes vein system. The best trench results were 4.0 m (13.1') @
     18.6 g/t Au and 498.8 g/t Ag and 6.5 m (21.3') @ 12.06 g/t Au and 330.3 g/t
     Ag.  Nineteen  holes were drilled on the main vein system,  of which twelve
     intersected   significant   precious  metal   mineralization.   Best  drill
     intersections  were 7.4 m  (24.3')  @ 2.19 g/t Au and  170.0 g/t Ag in hole
     EP-38,  6.3 m  (20.7')  @ 9.74  g/t Au and  630.3  g/t Ag in  EP-39,  4.1 m
     (13.45')  @ 3.85 g/t Au and 249.8 g/t Ag in EP-40,  and 11.3 m  (37.17')  @
     2.01 g/t Au and 102.6 g/t Ag in EP-54 (true thicknesses).

     Subsequently,  a drill  program  completed  in January and February of 2000
     consisted of 14 reverse-circulation  holes (EP-60 to EP 73), totaling about
     5,240 feet (1,598 m), drilled on the Huevos Verdes gold-silver vein system.
     All holes,  with the  exception  of EP-60 and EP-63,  intersected  the vein
     structure.  EP-60 was  drilled in the  extreme  north of the area to test a
     blind  geophysical  target  and EP-63 was  abandoned  due to poor  drilling
     conditions before encountering the vein system.  Significant intercepts are
     summarized  in the table Vein  thickness  for these  holes  ranged  from an
     estimated  true width of less than 3.28 feet (one meter) to up to 36.4 feet
     (11.1 m).

                       Significant Gold/Silver Intercepts
                            Huevos Verdes, Argentina

<TABLE>
<CAPTION>

                                                                                                                       Gold
                                          Intersection      Drilled       True                                        Equiv.
  Drill      TD                          To        From    Interval    Thickness        Gold          Silver         g/t (opt)
  Hole       (m)      Azim     Angle     (m)        (m)       (m)        m (ft)       g/t (opt)     g/t (opt)       Au+(Ag/50)
--------------------------------------------------------------------------------------------------------------------------------
<S>          <C>      <C>       <C>       <C>      <C>        <C>       <C> <C>     <C>   <C>       <C>  <C>        <C>   <C>
EP-61        151.5    N240      -60       135.5    136.5      1.0       0.9    (3)   7.4  (0.24)    99.5  (3.2)      9.40 (0.30)
--------------------------------------------------------------------------------------------------------------------------------
EP-62         81.5    N240      -60          68       72      4.0       3.8 (12.5)   2.9  (0.09)    88.4  (2.8)      4.7  (0.15)
--------------------------------------------------------------------------------------------------------------------------------
EP-64        111.0    N240      -50          89       93      4.0       3.9 (12.7)   7.8  (0.25)   568.5 (18.3)     19.16 (0.62)
--------------------------------------------------------------------------------------------------------------------------------
EP-65        153.0     --       -90         124      126      2.0       1.0  (3.3)   9.3  (0.30)   286.4  (9.2)     15.04 (0.48)
------------------------ -------------------------------------------------------------------------------------------------------
EP-69          115    240       -60          64       65       1        0.8  (2.6)   2.16 (0.06)   201.6  (5.9)      6.05 (0.18)
EP-69                                       100      103       3        2.5  (8.2)   4.10 (0.12)   479.0 (14.0)     13.68 (0.40)
--------------------------------------------------------------------------------------------------------------------------------
EP-70          135    240       -70         117      124       7        5.4 (17.7)  15.92 (0.46)  1634.1 (47.7)     48.60 (1.42)
 Includes:                                  120      123       3        2.3  (7.6)  30.73 (0.90)  3166.3 (92.3)     94.01 (2.74)
</TABLE>


     The assay  results and the width of the vein  intersected  in the remaining
     holes confirm the relatively strong continuity of the vein along strike and
     down-dip and its well-mineralized nature.

     Saavedra West is interpreted as a synvolcanic  graben  developed within the
     Bajo Pobre  Formation,  and infilled by pyroclastic and lesser  sedimentary
     rocks correlated with the La Matilde  Formation.  Pebble dikes are abundant
     within the graben and  ignimbrites  that may be  correlative  with the Chon
     Aike  Formation  occur as dikes along one edge.  Grab samples with up to 22
     g/t Au and 10,000 g/t Ag occur,  as well as numerous trench and 1.52 m (5')
     drill sample  intervals with >1 g/t Au and/or 500 g/t Ag,  generally within
     north- northwest trending structures.  Illite-silica alteration, typical of
     low sulfidation epithermal systems,  surrounds the structures.  Significant
     mineralization is located at Sinter Flats and on Discovery Hill, the latter
     of  which  appears  to have  been a locus  for  magmatic  and  hydrothermal
     explosive  activity.  The easternmost graben- bounding fault, which has not
     been drill  tested,  contains  anomalous Au (176 to 599 ppb) and Hg (360 to
     2,000 ppb).

                                       18
<PAGE>
     Drill  intersections  on Discovery Hill include 3.0 m (10') @ 115.04 g/t Au
     and 3,509 g/t Ag in hole EP-21, 16.8 m (55') @ 8.05 g/t Au and 1,163 g/t Ag
     (includes 1.52 m (5') @ 50.3 g/t Au) in EP-12,  15.2 m (50') @ 13.48 g/t Au
     and 719.9 g/t Ag (includes  1.52 m (5') @ 70.8 g/t Au) in EP-20,  and 3.0 m
     (10') @ 1.88 g/t Au in EP- 18.  Gradient  array IP surveying  shows several
     >=600  m  (1,968')  long  resistors  within  the  graben,   and  a  strong,
     subhorizontal  chargeability/apparent resistivity anomaly beneath Discovery
     Hill  thought  to  be  caused  by  a  siliceous,  sulfide-bearing  zone  of
     mineralization within a permeable stratigraphic unit, possibly an avalanche
     deposit on the floor of the  graben.  Such a zone,  if  economic,  might be
     bulk-mineable. Previous drilling in Sinter Flats intersected quartz-bearing
     structures  with 3.0 m (10') @ 2.19 g/t Au and 209 g/t Ag in EP-15 and 1.52
     m (5') @ 2.9 g/t Au and 36.1 g/t Ag in EP-35.  This drilling was undertaken
     prior to the acquisition of geophysical information.

     In January  1999,  three deep  diamond  drill  holes  tested a  geophysical
     anomaly  beginning  about 328 feet (100 m) beneath the surface at Discovery
     Hill. Sulfide-bearing rocks and silicification,  which can be indicators of
     precious metal  mineralization,  were encountered in all three holes. Assay
     results ranged from nil to anomalous.

     El Pluma West is an area with parallel  stockwork  quartz veins of the Bajo
     Pobre  Formation.  Up to 5.0 g/t Au occurs in vein samples,  and up to 0.95
     g/t Au in soils.  Abundant Au anomalies (>100 ppb) were  encountered over a
     wide  area  during  drilling,   but  no  significant   mineralization   was
     intersected.  The El Pluma West may  represent the marginal zone of a large
     hydrothermal  system centered on Huevos Verdes or between Huevos Verdes and
     El Pluma West.

     La Sorpresa is a zone of  stockwork  and  northwest-trending  quartz  veins
     which  cut  Bajo  Pobre  andesite  in a  small  window  through  Cretaceous
     sediments.  The best surface  sample assayed 15.4 g/t Au, and one drillhole
     intersected 1.52 m (5') @ 10.2 g/t Au, and 1.52 m (5') @ 5.2 g/t Au. Two of
     three holes  contained  elevated Hg (up to 750 ppb in a background of <20).
     The  mineralized  zone is open to the northwest under a cover of Cretaceous
     sediments.

     Cerro  Saavedra is a 1.5 km wide,  100 m high hill,  rising from a plain of
     Bajo Pobre andesite and Quaternary  basalt. The bulk of the hill is altered
     to soft  white  clay with a number of  elongate,  one to 20 m wide zones of
     siliceous  rock.  Alteration  minerals  belong  to  the  advanced  argillic
     assemblage,  with hydrothermal  kaolinite and dickite  predominating.  This
     widespread  advanced  argillic  alteration  is  interpreted  as a partially
     eroded lithocap.  The deep erosion level within the lithocap means that any
     epithermal  mineralization  should  outcrop.  The  prospectivity  at  Cerro
     Saavedra  is  thus   considered  low.  There  is  some  potential  for  low
     sulfidation epithermal mineralization adjacent to Cerro Saavedra.

     Cerro  Celular  is a 70 m high hill of Chon Aike  ignimbrites  overlying  a
     plateau  of Bajo Pobre  andesite.  A  structure  with  associated  dickite,
     kaolinite and possible  diaspore  passes  through the hill and accounts for
     its  resistance  to  erosion.  A hill 800 m south of  Cerro  Celular  has a
     similar   lithology  and  alteration,   and  several  outcrops  nearby  are
     silicified.   The  target  here  would  be  high   sulfidation   epithermal
     mineralization.

     Roadside,  West  Portugese  and Breccia  Hills,  have so far received  only
     minimal attention. Roadside and West Portugese are north-northwest striking
     vein systems  cutting  andesite of the Bajo Pobre  Formation.  The Roadside
     system can be traced for 200 m, and its best assay to date is 48 ppb Au and
     0.77 g/t Ag;  the West  Portugese  system  can be  traced  for  almost  two
     kilometres and has a best assay of 917 ppb Au and 57.4 g/t Ag. The interest
     in these two prospects comes not from any single feature noted to date, but
     rather from their overall at least  superficial  similarity with the highly
     prospective Huevos Verdes area. Breccia Hills hosts a rhyolite breccia;  as
     a possible volcanic center it is prospective.

     Total  expenditure on the total  property  package to December 31, 1999 was
     $2,150,604.

                                       19
<PAGE>
     4. El Pluma/Cerro Saavedra Project Ownership

     The El  Pluma/Cerro  Saavedra  Project  area is made up of 13 cateos and 32
     manifestations  of discovery  totaling 88,028 ha. The cateos are located in
     the western half of the province of Santa Cruz.

     All of the  cateos  are  controlled  100% by MASA and may be  subject  to a
     provincial royalty. Holding costs for 2000 are estimated to be $10,000.

F.   Chubut Project Property Summary
     -------------------------------

     1. Chubut Project Location

     Minera Andes  currently holds two cateos,  threeapplications  for cateo and
     two  manifestations  of discovery in the  Precordilleran  region of Chubut.
     These  properties are located at moderate  elevations  (500 to 1500 m above
     sea  level) in  western  Chubut  Province  in a belt 60 km north and 100 km
     south of the city of Esquel.  Access to the  properties is by dirt road and
     trail.

     2. Chubut Project Geology

     Jurassic-Cretaceous volcanic terranes have been the focus of exploration in
     the  southern  Chilean  Cordillera  over the past  decade.  These rocks are
     potential  hosts of  epithermal  gold and gold  rich  replacement  deposits
     attested to by the discoveries,  in Chile, at Fachinal  (epithermal  Au-Ag)
     and El Toque (base  metal,  strata bound  replacement  deposit with a minor
     precious metal credit). In Argentina,  rocks of the same age and type occur
     in both Andean and extra-Andean Patagonia which are relatively unexplored.

     3. Chubut Project Exploration

     Chubut was included in the United Nations and Argentina  government's  Plan
     Patagonia-Comahue exploration program in the 1960s and 1970s. This campaign
     delineated  several  prospects with weak to moderate base metal  anomalies.
     The samples were not analyzed for their precious metal content.

     In 1997,  Minera completed  reconnaissance  surface sampling and mapping on
     five  properties  in the  western  Chubut  Province,  Argentina.  This work
     indicates  the  potential  for  mineralized   epithermal  and  porphyry  or
     intrusive-related systems.

     At the El Valle property, the initial exploration located a north-northeast
     trending zone of illitic  alteration and  mineralization  about 1.5 km wide
     and three km long. Numerous northwest and northeast trending veins, some up
     to five  meters  wide and more than 500 m long,  have also been  located in
     tuffaceous  rocks  within the zone of  alteration.  The zone is open to the
     west and south under Quaternary alluvium in valleys,  and open-ended to the
     north and east under Quaternary alluvium and post-mineral Tertiary basalt.

     Results from the  40-sample  reconnaissance  program on this  property show
     gold values  ranging from below  detection  limit to 7.9 g/t.  Several high
     values,  above 3 g/t gold,  are from  outcrops  and float from  multi-stage
     epithermal  quartz  veins.  Some of the  samples  with low gold values show
     strongly anomalous pathfinder elements such as mercury (in the low 2,000 to
     13,000 ppb range) that may indicate higher levels in the gold system.

     The Corporation had spent $211,664 through December 31, 1999, on the Chubut
     Project.

                                       20
<PAGE>
     4. Chubut Project Ownership

     The  Corporation  currently  controls two cateos,  three  applications  for
     cateos and two  manifestations of discovery  (totaling 38,420 ha) in Chubut
     Province.

G.   Northern Argentina Project Summary
     ----------------------------------

     The  Northern  Argentina  Project  includes  the  provinces  of  La  Rioja,
     Catamarca,  Salta,  Jujuy and  Tucuman.  Located in north and  northwestern
     Argentina  these provinces  cover a variety of  physiographic  and geologic
     terrains ranging from the high desert of the Puna region of Jujuy and Salta
     to the principal cordillera of La Rioja.

     The  Corporation  had conducted  exploration  in this region  consisting of
     generative  reconnaissance   exploration,   satellite  image  analysis  and
     evaluation of airborne geophysical data and property submittals. At the end
     of 1999, however,  the Corporation dropped its activities in the region and
     wrote-off expenditures of $187,078.

H.   Arroyo Verde Project
     --------------------

     Arroyo Verde is located in northeast  Chubut Province 70 km north northeast
     of the coastal town of Puerto Madryn.

     In October  1997,  the  Corporation  and Pegasus Gold  International,  Inc.
     signed a definitive joint venture agreement on the Arroyo Verde Project for
     Minera Andes to earn into an 80% property interest.

     In October 1998, the Corporation completed a seven-hole reverse-circulation
     drilling  program at Arroyo  Verde in order to confirm  and expand upon the
     mineralization encountered by Pegasus.

     After  spending  $365,849 on Arroyo  Verde up to  December  31,  1998,  the
     Corporation  reviewed  the  results of its  exploration  and decided not to
     continue with the joint venture and the agreement was terminated on January
     19, 1999, with a write-off in 1998 of $365,849,  and a further write-off of
     $9,481 in 1999.

II.  COLOMBIA

Recent Mining and Economic History in Colombia

Colombia is the fourth largest country in South America, over 1.4 million square
km in area and the second most populous  country with  approximately  40 million
inhabitants.  Apart from the four year  period  1953-1957,  when the country was
under military rule, Colombia has had a democratic form of government since 1849
which continues to this day.

The country  endured a civil war during the period  1948-1953  which spawned the
emergence of  separatist  guerilla  movements  which endure today in the form of
several leftist guerilla  organizations which operate and/or exercise control in
remote rural areas where there is minimal state presence.

The  constitution  was  reformed  in 1991,  affirming  a more open,  pluralistic
concept of democracy,  incorporating  minority  ethnic and religious  groups and
providing the citizens with a legal resource to protect their constitutional and
civil rights.

                                       21
<PAGE>
Colombia  has enjoyed a pattern of  sustained  economic  growth since the 1950s.
During  the last 20 years,  the gross  domestic  product  ("GDP")  has more than
doubled while growing at an average rate of 5%. Colombia is currently  suffering
from a recession which has lowered GDP growth to the 1%-3% range in the last few
years.

The  Colombian  economy  has changed  dramatically  since the  launching  of the
economic liberalization known as "apertura" in 1991. Along with the loosening of
import and other controls and the  privatization of state-owned  enterprises has
come economic  expansion and new domestic and foreign  investment.  Colombia has
signed free trade  agreements with many of its neighbors and has stated its wish
to be an early entrant into a hemispheric free trade agreement.

The government is in the process of revitalizing the mineral sector to encourage
foreign investment. A new mining code is pending in congress which offers a more
streamlined  and  transparent  bureaucratic  process in the regulation of mining
activities and possibly additional tax incentives. Currently in-place incentives
include  100%  foreign  ownership,  unrestricted  repatriation  of  capital  and
profits,   accelerated   depreciation  and  amortization,   exclusion  from  the
value-added tax and the ability to lock-in tax rates for periods up to 10 years.
There are no  restrictions  on gold or other  metal  sales  subject  to a 4% NSR
royalty on precious metals and 3% NSR royalty on base metals.

Colombia's mining history until recently had been dominated by the production of
gold and  platinum in which it was the  leading  producer  worldwide  during the
mid-1800s.  Current mineral production is dominated by coal,  emeralds,  nickel,
gold, and platinum.  Coal  production is dominated by large,  modern mines which
include  Exxon's  Cerrejon Norte,  the largest  open-pit coal mine in the world.
Colombia  is the  world's  largest  producer  of gem  quality  emeralds.  Nickel
production comes exclusively from Billiton's Cerro Matoso mine. Gold production,
averaging 955,000 ounces/yr and platinum production,  averaging 30,000 ounces/yr
are  predominantly  produced by numerous  small,  inefficient  operations run by
local miners.

Other than some copper exploration  programs executed during the 1970s and 1980s
by the United Nations and various  multinational  mining companies,  very little
modern systematic exploration has been conducted in the country.

The Corporation  initiated exploration in Colombia in 1996. As of December 1998,
the  Corporation  had Colombian  land holdings  totaling  4,739  hectares in one
prospect area and an application-in-process  for an exploration license of 4,800
hectares  on  another  prospect  area.  The  Corporation's  exploration  efforts
consisted of an in-depth  review of  available  published  and private  geologic
information,  initial  site visits  with  preliminary  sampling of outcrops  and
acquiring mining rights to the prospects.

     Property and Title in Colombia

The laws, procedures, and terminology regarding mineral title in Colombia differ
considerably  than those in the  United  States and  Canada.  Mineral  rights in
Colombia are separate from surface  ownership and are owned  exclusively  by the
federal government. Mineral rights are administered by the Ministry of Mines and
Energy. The following summarizes some of the Colombian mining law terminology in
order to aid in understanding of the Corporation's holdings in Colombia.

     Exploration  License: An exploration license is a concession which does not
     permit  mining but gives the owner the right to determine  the quantity and
     quality of mineral rights  deposits  present and a preferential  right to a
     mining concession for the same area.  Exploration licenses are divided into
     three categories depending on the size of the area. Small Mining (up to 100
     ha),  Medium  Mining (100 to 1,000 ha) and Large Mining (1,000 to a maximum
     of 5,000  ha).  The  term of an  exploration  license  is based on its size
     category. Small

                                       22
<PAGE>
     licenses are 1 year,  Medium licenses are 3 years, and Large licenses are 5
     years.  The  Ministry of Mines and Energy is  empowered to grant one or two
     year extensions to these periods if so petitioned by the owner.

     Exploration licenses are awarded by the following process:

     a)   Application for a license  covering a designated area. The application
          must be signed by a Colombian  geologist or engineer  registered  with
          the Ministry of Mines and Energy.

     b)   A  resolution  is decreed by the  regional  office of the  Ministry of
          Mines and Energy  which grants the  exploration  license over the area
          requested, minus any area covered by valid pre-existing licenses.

     c)   The  applicant  must submit an  Environmental  Management  Plan to the
          Ministry  of the  Environment  (in the case of large  mining  category
          licenses) or the Regional Autonomous  Environmental  Agency (for small
          and medium category  licenses)  describing  exploration  work planned,
          potential  environmental  impacts and measures to minimize or mitigate
          those impacts.

     d)   Once the  Environmental  Management  Plan is approved,  the license is
          forwarded to the Ministry of Mines and Energy for  inscription  in the
          Official Mining Registry.

     The length of this process varies  depending on the areas and  bureaucratic
     offices involved and commonly takes one or more years. Non-invasive surface
     exploration  (mapping,  geochemistry,  geophysics)  can  commence  upon the
     granting of the license by the Regional  Ministry of Mines  office.  If two
     companies  apply for  exploration  licenses on the same land,  the first to
     apply has the superior right.

     The duration period of the  Exploration  license does not begin until it is
     inscribed in the Official Mining Registry. Payment of an annual "canon fee"
     or tax, of one minimum legal daily salary per hectare  (roughly  U.S.$4.50)
     must be paid within 10 days after the license is  inscribed in the Official
     Mining Registry and annually thereafter.

     An application to convert an Exploration license to an Exploitation license
     must include work plans, mine plans, an economic  feasibility study, and in
     the case of the large mines, an  environmental  and  socio-economic  impact
     study.  If no objections  are raised by the Ministry of Mines and Energy or
     the Ministry of the Environment within 60 days, the plan is deemed approved
     and the license is converted to an  Exploitation  license.  An exploitation
     license  has a  duration  of 10 years  which can be  extended  twice for an
     additional twenty years.

A.   California-Vetas Project Summary
     --------------------------------

     1. California-Vetas Project Location

     The   California-Vetas   Project  area  is  located  in  eastern  Santander
     Department,  approximately 55 km northeast of the city of Bucaramanga. Good
     road access  exists to the project area.  Elevations  range from 2,100 m to
     4,200 m with moderated to rugged relief.

     2. California-Vetas Project Geology

     The  California-Vetas  Project is located within  metamorphic and intrusive
     rocks of the Santander Massif in the Eastern Cordillera. Basement rocks are
     comprised of  metamorphic  rocks more than 1 billion years old. These rocks
     are intruded by monzonite and other  intrusive rocks with ages ranging from
     180 million years old to 30 million years old.

                                       23
<PAGE>
     3. California-Vetas Project Exploration

     The  California-Vetas  Project area has been intermittently  mined for gold
     since at least the mid-1500s and possibly by indigenous people before that.
     Several hundred small underground mines have been worked over the centuries
     and  approximately 40 small operations run by local miners and families are
     presently active.

     In 1973, the United States  Geological  Survey  conducted a  reconnaissance
     survey of the area,  mapping the general  geologic  features and conducting
     geochemical  surveys (stream  sediment,  soil, and rock chip). In 1975, the
     Colombian  Geological  Survey  (INGEOMINAS)  conducted  further mapping and
     geochemical  sampling  outlining  numerous area anomalous in gold,  silver,
     copper, and molybdenum.

     In 1997, the Corporation  conducted an initial  reconnaissance visit to the
     area  taking  rock-chip  geochemical  samples  and  confirming  the overall
     characteristics described in the Geological Survey reports.

     4. California-Vetas Ownership

     The  California-Vetas  Project is  comprised of a total of 4,739 ha in five
     exploration  licenses.  Two of the five licenses have been purchased by the
     Corporation  and  three are under  option-to-purchase  agreements.  Holding
     costs for 2000 are estimated at $22,750.

B.   Mocoa Project Summary
     ---------------------

     1. Mocoa Project Location

     The Mocoa Project is located in western Putumayo  Department  approximately
     10 km north of the town of Mocoa. Elevations range from 500 m to 1,500 m in
     precipitous rainforest terrain.

     2. Mocoa Project Geology

     The  Mocoa  Project  area  is  situated   where  the  Western  and  Central
     Cordilleras  of the  Andes  Mountains  merge  into a  single  range.  It is
     underlain  by Triassic  limestone of the Payande  Formation  which has been
     intruded by Jurassic granodiorite to dacite intrusives and volcanics.

     3. Mocoa Project Exploration

     The Mocoa  Project  area was first  explored  in the late  1970s  under the
     United  Nations-Colombian  Government  base metals  exploration  plan.  The
     property  was  recognized  as  having  copper  porphyry  potential  and  an
     exploration  campaign  comprised  of  stream  sediment  sampling,  geologic
     mapping, and induced polarization surveys was completed.  High-grade copper
     and  molybdenum  ore was discovered in the first diamond drill hole and the
     subsequent  drilling of 30 additional diamond drill holes to depths ranging
     from 306 to 926 meters  outlined a substantial  copper-molybdenum  porphyry
     deposit. The Mocoa Project area had been inactive since the U.N. work, held
     in a government reserve which was lifted in February 1997.

                                       24
<PAGE>
     4. Mocoa Project Ownership

     The Mocoa Project is comprised of a 4,800 ha application for an exploration
     license.

III.     ROMANIA

         Recent Mining and Economic History in Romania

Romania,  located in southeast,  Central Europe,  north of the Balkan Peninsula,
covers  approximately  240,000 sq. km and has a population of 22.9 million.  The
population is mostly ethnic Romanian with Hungarian (7%),  German (1%) and other
(3%)  minorities.  The  capital  city is  Bucharest  which has a  population  of
2,350,000.  Romania is bordered by the Republic of Moldavia,  Bulgaria, Hungary,
Ukraine, the former Yugoslavia,  and the Black Sea on the southeast.  Mountains,
hills and plains each cover about one third of the country's area.  Forest still
covers significant parts of the country, and the fauna is one of the richest and
most varied in Europe.

Romania officially became a nation-state in 1859 with the union of Wallachia and
Moldavia. Previous to this event, the Romanian territories (Wallachia,  Moldavia
and Transylvania) had been occupied and ruled by the Roman Empire, Hungarian and
Polish kingdoms,  Ottoman Empire,  Russian and Hapsburg Empires. In 1918, at the
end of first  World  War,  all three  territories  were  united to form  Greater
Romania.  Romania  was  invaded by Germany at the  outbreak of World War II, and
after the war, came under the Soviet Union's sphere of influence. The Revolution
of December  1989 paved the way for the  restoration  of democracy  and a market
economy.   A  constitution   was  validated  in  1991   proclaiming   Romania  a
parliamentary democracy.  Since this time, Romania has embarked on an aggressive
series of reforms and privatizations which is propelling the country to a market
economy.

On June 15, 1998,  Romania  enacted a new mining law. The law was designed  with
the help of the World Bank's  foreign  experts and represents a synthesis of the
recent mining legislation adopted in Peru and Argentina.  Presently, all mineral
lands in  Romania  are  owned by the  state.  This new  legislation  is aimed at
attracting foreign capital and technology to Romania's  historically  important,
but  beleaguered  mining  industry.  Overall,  the law as written is  relatively
straightforward  and  transparent,  but is broadly worded and gives the National
Agency for Mineral Resources ("NAMR") a great deal of discretionary power.

The law allows foreign  companies to directly hold mining leases and exploration
concessions.  The law also  establishes  that foreign  companies will be treated
fairly.  Key tax benefits have been initiated to include:  corporate tax rate of
15%  (normally  38%),  an exemption  from import duties for capital good for two
years, investments of $5 million or more receive an additional five years at 15%
for corporate  income tax and three years or 50% exemption from import duties. A
royalty tax of 2% is applied on mineral  production,  and  exploration  fees for
permits are cheaper than in most other countries.

Romania is endowed with a variety of mineral resources  (including copper, lead,
gold, silver,  iron, coal, sulfur,  aluminum,  salt, and oil) and has a long and
colorful mining history.  Gold is found in a number of locations in the country,
but it is  within  the South  Apuseni  Mountains  (also  called  the  Metaliferi
Mountains)  that the largest and richest gold deposits in Europe are found. In a
500 sq. km area called the "Golden  Quadrilateral",  it is  estimated  that over
1,500  metric  tonnes of gold (40  million  ounces)  have been mined in the last
2,000  years.  Most of this gold has been  mined by "pick and  shovel"  methods,
starting in 106 A.D. by the Romans and  reaching  maximum  development  and peak
production during the Austrian-Hungarian Empire (1700 to 1918). Production since
that time has been  sporadic and not well  documented.  Current gold  production
from the area is probably less than 140,000 ounces a year.

                                       25
<PAGE>
Since the  enactment  of the new  mining  law,  a number of  western  mining and
exploration  companies have begun exploring for minerals  (particularly gold) in
Romania.  Exploration  opportunities  within  Romania fall into two  categories:
Firstly by contractual arrangement  (joint-ventures) with previously state-owned
companies which recently have been privatized;  and secondly,  by acquisition of
perimeter  concessions offered for license by competitive bid, based on proposed
work programs.

     Property And Title in Romania

In Romania, all mineral resources,  both subsurface and on the continental shelf
of the Black Sea (in accordance with international laws and conventions) are the
property of the state. The NAMR grants rights to explore for and exploit mineral
resources.  Under the new mining law (Law no.  61/1998)  foreign  companies  can
directly hold mining leases and  exploration  concessions.  It also  establishes
that  foreign  companies  will be  treated  fairly  and  that  there  will be no
constraints on  repatriation  of investments or use of profits.  The legislation
ensures that permits and licenses are fully  assignable  and holders are free to
form  partnerships,  with  formal  approval  from the NAMR.  The law  covers all
mineral  resources with some special  provisions for construction  materials and
radioactive  minerals.  The law also  provides  concession  holders the right to
explore  for all mineral  resources  within the  concession  and to apply for an
exploitation license to mine any discovered resource. Environmental liability is
limited to work done by the concession  holder. The laws calls for a three-stage
concession process  (Prospecting  Permits,  Exploration License and Exploitation
License)  which is  administered  by NAMR with final approval from the Executive
Branch of the government.

     1.   Prospecting Permit: Three year, non-exclusive prospecting permits will
          be issued on a minimum 50 sq. km  rectangular  unit  nominated  by the
          permitee  or by the NAMR.  Permits  cost Lei 5,000 per sq. km annually
          ($1.00 USD = 8,300 Lei), payable in advance.  Rights include access to
          the area, the right to perform  minimal-impact surface exploration and
          access to relevant information held by the NAMR. There is no automatic
          right to any subsequent exploration license.  Annual and final reports
          are  required.  According  to  interpretations  by the  NAMR,  surface
          exploration does not include sampling and geochemical  analysis.  Data
          controlled  or  generated  by any past and or present  state agency is
          available for a fee.

     2.   Exploration  License: An Exploration License gives the exclusive right
          to conduct all types of  exploration  up to an  including  feasibility
          studies (on a particular awarded concession).  Licenses are granted to
          prospecting  permit holders upon request or may be offered by the NAMR
          through a public offering  process.  Licenses are valid for up to five
          years and are renewable for an additional  three years.  The area held
          under an  Exploration  License  must be reduced by 50% after two years
          and an additional 50% after four years.  An Exploration  License gives
          the holder the right to perform all  exploration  activities up to and
          including  a  feasibility  study.  Annual  fees per square  kilometre,
          payable in  advance,  are Lei 20,000 in year one,  Lei 40,000 in years
          two and three, and Lei 100,000  thereafter.  The main criteria for the
          granting of licenses is a suitable  work plan (as judged by the NAMR),
          a bank  guarantee to cover  mitigation  and  reclamation,  an approved
          reclamation   plan  and  the  license  holder  must  have  a  Romanian
          registered  subsidiary  or be doing a  joint-venture  with a  Romanian
          registered  company.  Annual  and  final  reports  are  required.  The
          licensee has the exclusive right to apply for an exploitation license.

     3.   Exploitation License: Exploitation (or Mining Concession) licenses are
          awarded at the request of the exploration  license holder or by direct
          public  offering by the NAMR on the basis of: a) a  feasibility  study
          and development plan; and b) an environmental  impact study and a bank
          guarantee to cover reclamation and mitigation.  Exploitation  Licenses
          have a term of 20 years and can be renewed  for  additional  five year
          periods, as production continues.  A 2% royalty based on the "value of
          the  mining  production  obtained  by the title  holder  annually"  is
          payable quarterly. The annual fee for an exploitation license is Lei 5
          million  ($5,900) per sq. km. Fiscal  stability is guaranteed over the
          life of the project.

                                       26
<PAGE>
The mining law as written is relatively straightforward and transparent,  but is
also broadly worded which gives the NAMR a great deal of discretionary power.

A.   Voia Project Summary
     --------------------

     1. Voia Project Location

     The Voia  project is located in the  Metaliferi  Mountains  (South  Apuseni
     Mountains)  of  the  Transylvania  region  of  Romania.   The  property  is
     approximately  22 to 30 km east of Deva, ten to 15 km southeast of Brad and
     390 to 400 km northwest of Bucharest.  See Figure 2. Administratively,  the
     Voia property is within Hunedoara County.

     Access to the Voia  project  is from  Bucharest  along  National  road E 68
     Bucharest-Brasov-Sibu-Deva,  400 km, or  National  roads E 68, E 81, E 70 -
     Bucharest-Pitesti-Sibiu-Deva,  365 km. Locally,  access to the eastern part
     of the  property is from the town of Goeagui  Bai Spa,  25 miles  southeast
     along an asphalt  secondary  road.  The  western  part of the  property  is
     accessed  via  secondary  asphalt  and dirt roads  from  Deva,  22 to 30 km
     southwest.  Travel within the property is by four wheel drive (all terrain)
     vehicles  along a number  of dirt  trails,  and by foot  along a series  of
     trails and drainages.

     Logistical  support  for  exploration  activities  is  available  in  Deva,
     Orastie, Geoagui Bai and Bucharest.

     The physiography of the Voia property is comprised of mountainous  volcanic
     uplands to rolling  hills and fields.  The relief  varies from 400 to 1,080
     metres  above sea level and is  covered in part by a dense,  second  growth
     mixed deciduous forest, rare coniferous plantations,  cultivated fields and
     orchards.  Outcrops are sparse, with most areas overlain by a thick organic
     soil.  The area has a typical  mountainous  temperate  zone climate of cold
     winters  (-3(degree)  mean) with  considerable  snow, wet rainy springs and
     mild-warm summer autumn conditions (22-24(degree) mean).

     2. Voia Project Previous Exploration

     Past  exploration  work on the  Voia  property  was  conducted  by  various
     Romanian  state-owned  companies  and  institutions.  This work took  place
     between  1935  and  1996.  The  work   consisted  of  geological   mapping,
     geophysical studies (aeromagnetic,  detailed ground magnetic,  gravity, and
     electromagnetic  surveys),  soil and rock chip sampling as part of a copper
     porphyry and high-grade  gold-base metal vein  exploration  programs.  Past
     exploration work on the property included the following:

     o    Construction of exploration  adits and tunnels  (galleries) at Dracia,
          looking  for  Au-Ag  and base  metal  veins  (1935 to 1937 and 1965 to
          1972).

     o    Construction  of exploration  adits and shafts in the Voia Valley area
          (Curmaturii Creek and Brusturii  Creek),  looking for Au-Ag-base metal
          vein systems (1935 to 1940) with limited success and no production.

     o    Construction of two exploration adits on Coasta Mare Hill, looking for
          Au-Ag-Cu veins.

     o    Exploration drilling conducted (1960 to 1986) in the Voia Valley area,
          exploring  for Cu-Au  porphyry  systems.  Between 19 to 24 drill holes
          were completed, and an uneconomic Cu-Au porphyry was identified.  None
          of the overlying or surrounding country rock was analyzed for gold but
          there was limited analysis for gold within the porphyry system.

                                       27
<PAGE>
     These  programs  delineated  and outlined  zones of intense  alteration and
     mineralized  areas on the  property  that  have yet to be fully  evaluated.
     Presently,  there is no  mining  being  conducted  on the  property  and no
     economic, mineable mineral deposits have been identified. To date, no large
     scale  precious  metal  (gold-silver)  exploration  program  has ever  been
     conducted on the Voia property.

     3. Voia Project Geology

     The Metaliferi Mountains (South Apuuseni Mountains) have a complex geologic
     structure  and  composition  and  contain  rocks of  diverse  origin  which
     include:   Precambrian   and   Paleozoic   metamorphic   rocks  (flysh  and
     ophiolites), igneous rocks (ultramafics, rhyolites, dacites, andesites, and
     basalts) of Jurassic to Tertiary in age, and sedimentary rocks (sandstones,
     shales, conglomerates, calcareous sediments, and limestones) of Mesozoic to
     Tertiary age.

     The  region is  structurally  complex  with four  major  northwest-trending
     volcanic-plutonic  structural  alignments  which control and host the major
     gold  producing  area  called  the  "Golden  Quadrilateral".  It  has  been
     estimated that as much as 40 million ounces of gold have been produced from
     this area in the last 2,000  years  (mostly by pick and  shovel).  The four
     major  mineralized  volcanic-plutonic  alignments which comprise the Golden
     Quadrilateral   are:   Baia   de   Aires-Poieni,    Bucium-Rosia   Montana,
     Zlanta-Stanija,  and  Brad-Sacarimb.  The Voia  perimeter is located on the
     Brad-Sacarimb  alignment. The mines located on this alignment are estimated
     to have produced between 15 to 20 million ounces of gold.

     The local  geology of the Voia  perimeter  is similar to  properties  found
     elsewhere on the Brad-Sacarimb trend and consists of a dissected and eroded
     Lower  Tertiary  volcanic  field,  which  contains  Tertiary   sedimentary,
     volcano-sedimentary  and volcanic rocks. These rocks unconformably  overlie
     eroded Upper Jurassic-Lower Cretaceous basalt and andesite of an island arc
     pile.  Sediments  (conglomerates,  tuffs,  sandstones,  clay and marls) are
     found   associated  with  these  rocks  and  are  generally  found  in  the
     subsurface.

     The  overlying  volcano-sedimentary  complex  includes  abundant  andesite,
     quartz  andesite flows and  pyroclastics  and in turn is cut by subvolcanic
     intrusive  bodies and irregular  northwest  trending dikes.  The area has a
     strong  tectonic  fabric and a series of six volcanic  necks with  circular
     distribution  pierce the  landscape.  The volcanic peaks appear to indicate
     possible caldera-like characteristic in the area.

     The tectonic  structure  of the area is  dominated by two strong,  parallel
     volcano-plutonic  alignments,  oriented  northwest-southeast  which  have a
     graben-like  appearance and are  intersected  by numerous  older  fractures
     oriented  east-west and  northeast-southwest.  This graben-like  feature is
     readily  identified on geophysical  surveys as pronounced  magnetic  highs.
     Hydrothermal  alteration is common with prophylitic,  pottassium  silicate,
     phyllic,  silicification,   and  intense,  argillic  and  advance  argillic
     assemblages being widespread.

     Mineralized   occurrences   within  the  Voia   Perimeter  are  varied  and
     widespread.  The following is a list of recognized  occurrences  which have
     been documented:

     o    Volcanic  breccia  bodies  containing  pyrite-marcasite  +/-  gold  in
          Curmaturii Creek.

     o    Stockworks and disseminations of  pyrite+/-marcasite-gold  in outcrops
          of argillized and silicified  hornblende-biotite-quartz andesite found
          on the east  slope of Germana  Hill.  It is  reported  that some short
          intervals of core from drillhole F-5, drilled at this site,  contained
          gold between 0.1 and 1.6 g/t.

                                       28
<PAGE>
     o    Pyrite-chalcopyrite-+/-Fe  oxides+/- gold disseminations in stockworks
          related to a buried subvolcanic structure and microdiorite in the Voia
          Valley Basin reportedly  contain 0.1 to 0.5% Cu and 0.16 to 5.6g/t Au.
          This buried occurrence has been drilled.

     o    Pyrite-sphalerite-molybdenite  disseminations  occur  in  Badenian-age
          sandstone,   marl,   and   conglomerate   in  the  Voia  Valley.   The
          mineralization  was  reported  to haven  intersected  by drilling at a
          number of intervals.

     o    Gypsum-anhydrite-pyrite-Pb-Zn  sulphides-Ag  in  veins  penetrated  by
          drilling.

     o    Quartz veins containing pyrite+/-gold-Pb-Zn  outcropping in the saddle
          between Coasta Mare and Germana Hills, in Brusturel  Creek, and in the
          Voia Valley Basin.

     o    A    vein     containing     quartz-carbonate-pyrite-spalerite-galena-
          chalcopyrite-tethraedrite-native gold was penetrated by drillhole F17.
          The mineralized interval is small, not exceeding five centimetres, but
          was reported to assay over 100 g/t gold.

     o    Quartz-barite-pyrite-marcasite-enargite-famatinite-luzonite  veins  at
          Coasta  Mare.   Outcrops  of  intensely   argillized  quartz  andesite
          containing three short, thin veins.  These veins which were penetrated
          by an exploration gallery were reported to contain gold assaying up to
          100 g/t.

     o    Veins containing  quartz,  carbonate,  native gold,  silver,  and base
          metals,  occurring  westward of a quartz andesite  intrusion on Dracia
          Hill.  The main vein has a strike  length of 600  meters,  a thickness
          averaging 0.5 m and is oriented NW-SE / 65-85 NE. The vein,  described
          as   being   discontinuous,   is   comprised   of   quartz,   calcite,
          maganocalcite,   ankerite,  barite,  pyrite,   arsenopyrite,   galena,
          tetrahedrite,  argentite, silver and native gold. A second vein in the
          area is shorter  (200 m) but thicker  (0.03 to 5.0 m) and is comprised
          of maganocalcite,  pyrite, sphalerite,  galena, marcasite,  argilleous
          minerals,  and +/- free gold.  The vein at Dracia has been explored by
          adits and galleries.

     o    Jasperoid  bodies  containing  barite  and  base  metal  sulfides  and
          anomalous  in gold are found at Vulpus  Hill near  Dracia and as float
          boulders in Valle Ursului and Valle Stogului.

     The  following  briefly  summarizes  the  mineral  potential  of  the  Voia
     Concession:

     The Voia property contains widespread,  intense zones of alteration,  known
     economically   productive   geologic   units,   precious   and  base  metal
     occurrences,  and is close to precious  metal  producing  mines at Sacarimb
     (three to five million ounces of gold  produced) and Coranda  (reported one
     million ounces of gold).  To date, a limited  amount of exploration  effort
     has been directed towards the discovery of precious metal deposits at Voia.
     There are no producing  mines on the property and very limited  exploration
     drilling has been  conducted.  The Voia  perimeter is  considered to be the
     most  promising  but least  explored and exploited  area in the  Metaliferi
     Mountains.  The  following  target  types  are  possible  within  the  Voia
     perimeter:

     o    Copper-gold porphyry.
     o    Gold-silver-tellurium   "bonanza"   vein   system,   similar   to  the
          multi-million ounce Sacarimb deposit.
     o    Gold-silver base metal vein system.
     o    High sulfidation  gold-enargite  epithermal system similar to El Indio
          or the Chelopech deposit.
     o    Gold hosted in volcanic breccia bodies.
     o    Disseminated gold within silicified volcanic and volcanic  sedimentary
          rock.

                                       29
<PAGE>
     o    Lead-zinc-gold-silver   deposit  hosted  in   brecciated,   Cretaceous
          sediments, similar to the Coranda Pit.
     o    Disseminated gold in Tertiary age calcareous  sandstones,  siltstones
          and shales.
     o    Gold hosted in silicified  Jurassic-age  limestones.  o Gold hosted by
          calc-silicate skarns.

     Summary of Work Completed

     In April and May of 1999, data, reports, maps and additional information on
     the Voia  concession  was  evaluated  and  compiled.  Much of this data was
     acquired from the Romanian authorities.

     In June and July, 1999 (after  conditions in the field allowed  access),  a
     brief  reconnaissance  and  sampling  program  was  conducted  on the  Voia
     property.  A total of 135 samples (53 stream  sediment and 82 rock samples)
     were taken throughout the perimeter.  Also areas of significant  alteration
     and  potential  mineralization  within  the  concession  were  visited  and
     evaluated.  The stream sediment sampling and rock sampling  delineated four
     areas within the perimeter which may contain anomalous gold mineralization.
     These  areas  require  immediate   follow-up   reconnaissance   exploration
     consisting of additional  stream  sediment  sampling,  rock chip  sampling,
     mapping, soil sampling and possibly geophysics.

     4. Voia Project Ownership

     On March 12,  1999,  the  Corporation  and NAMR  representatives  signed an
     exclusive  License  Of  Concession  For  Exploration  No. 153  (Voia).  The
     following  requirements to bring the  Exploration  License into full effect
     have been met: a) formation of a Romanian  subsidiary  (Transylavania  Gold
     S.R.L.);  b) posting of a bond for reclamation and mitigation in a Romanian
     bank (or a foreign bank with an Romanian  branch) c)  resubmitting  of more
     detailed work plans for Voia; and d) development of a reclamation work plan
     and study.

     The Voia property is 4,900 hectares in area. Through December 31, 1999, the
     Corporation has spent $61,935 on the Voia project.

B.   Ostoros-Ciumani-Fierastraie Project Summary
     -------------------------------------------

     1. Ostoros Project Location

     The Ostoros project (181 sq. km) is located in Harghita County,  Romania in
     the  Eastern  Carpathian  mountains  some 30 km  northwest  of the  city of
     Miercurea Ciuc (the capital city of Harghita County) and  approximately 320
     km north of Bucharest. See Figure 2.

     Access to the  property  is by road from  Bucharest,  Brasov and  Miercurea
     Ciuc.  Access within the perimeter is by four wheel drive  vehicles along a
     dense network of forest roads.  The closest  airport to the perimeter is in
     Targu Mure,  190 km  northwest.  The area within and around the property is
     sparsely  populated.  Logistical support for exploration can be obtained in
     the towns of Miercurea Ciuc, Odorheiu Secuiesc and Gheorgheni.

     The  physiography  of the area is  dominated  by relict  volcanic  cone and
     caldera structures.  The area is rugged with moderate to steep slopes, with
     elevations  ranging from 900 to 1,400 m above sea level.  Approximately 70%
     of the property is covered by dense fir forest.  Outcrops are sparse,  with
     most areas being  overlain by a thick  organic  soil cover.  The area has a
     typical  mountainous  temperate  zone climate of cold winters with abundant
     snow (November to April), wet rainy springs,  mild summers and falls. Heavy
     rainfall generally occurs in July and August.

                                       30
<PAGE>
     2. Ostoros Project Exploration History

     Past exploration work on the Ostoros property has been conducted by various
     Romanian  state-owned  companies  and  institutions.  This work took  place
     between  1961 and 1983 and  consisted  of  geological  mapping  (at various
     scales),  geophysical  studies  (aeromagnetic,  detailed  ground  magnetic,
     gravity,  and  electromagnetic  surveys),  and  limited  soil and rock chip
     sampling as part of a copper porphyry exploration program.

     These programs  delineated and outlined zones of intense  alteration within
     the Ostoros and Ciumani-Fierastraie  stratovolcanic  complexes.  Subsequent
     drilling  of  these   altered  zones  in  the  Ostoros   complex   (sixteen
     drillholes),  and  in the  Ciumani-Fierastraie  complex  (two  drillholes),
     discovered  uneconomic   mineralization.   These  mineralized  zones  occur
     primarily  as  two  types:  a)  base  metal  (Pb-Zn):  galena,  sphalerite,
     chalcopyrite,  molybdenite,  pyrite, and magnetite occurring as veinlets or
     vugs   in  the   upper   volcanic   cones;   and  b)   porphyry-copper-gold
     mineralization: chalcopyrite, molybdenite, pyrite, pyrrotite, magnetite +/-
     cinnabar +/- gold. Other, altered geochemically  anomalous areas identified
     within the area have yet to be drilled. Presently, there is no mining being
     conducted on the property and no  economical,  mineable,  mineral  deposits
     have been identified.  To date, no large scale precious metal (gold-silver)
     exploration program has been conducted on the Ostoros perimeter.

     3. Ostoros Project Geology

     The  Ostoros  project  is  in  the  160  km  long,   north-south  trending,
     Calimani-Gurghiu-Harghita  volcanic  chain,  which  represents  the largest
     occurrence of Neogene volcanics in the Carpathian Mountains. The age of the
     volcanic  chain is 3.9 to 8.4 million  years,  with older  volcanics in the
     north,  getting  progressively  younger  southwards.   Calc-alkaline  rocks
     (basalt-andesite-dacite)  form  the bulk of the  volcanic  chain as well as
     most of the rocks within the Ostoros perimeter.

     The Ostoros  property  contains three major volcanic  structures  (Sumuleu,
     Ciumani-Fierastraie and Ostoros).  These major volcanic edifices (composite
     stratavolcanoes)  consist of three  zones:  a) an internal  (central)  zone
     containing subvolcanic intrusive bodies (dacite,  microdiorite,  andesite);
     b) an intermediate  zone of volcanic cones or calderas with lava flows; and
     c) a peripheral  zone comprised of  volcaniclastic  aprons which adjoin and
     overlap the main volcanic edifices.

     Hydrothermal  alteration is encountered near subvolcanic intrusives located
     at different levels within the stratovolcanic edifices (both at surface and
     at depth).  The  alteration  types that have been reported  are:  potassic,
     chloritic, sericitic, argillic, silicic, and tourmaline.

     Reported  mineralization  within the  Ostoros  perimeter  is found with the
     hydrothermal  alteration,  and occurs primarily as two types: a) base metal
     (Pb-Zn): galena, sphalerite, chalcopyrite,  molybdenite, pyrite, magnetite,
     occurring as veinlets or vugs in the upper volcanic cones;  and b) porphyry
     copper-gold mineralization:  chalcopyrite,  molybdenite, pyrite, pyrrotite,
     magnetite  +/- cinnabar +/- gold,  usually seen as  disseminations  located
     under the base of cones and calderas.

     Drilling has been conducted (by  state-owned  companies) on the interior of
     the "crater" area of the Ostoros volcanic edifice (16 drillholes),  between
     1972  and  1980,  and  on the  Ciumani-Feerastraie  volcanic  edifice  (two
     drillholes),  for copper porphyry  mineralization.  Anomalous gold has been
     reported  from these holes,  as the result of later  analytical  testing of
     drillhole  material,  some years after the initial  drilling  campaign.  No
     exploitable,  economic  occurrences have been discovered within the Ostoros
     property to date, and very limited

                                       31
<PAGE>
     testing of the area for precious metal  (gold-silver)  has been  conducted.
     Essentially,  the Ostoros  perimeter  has never been  explored for precious
     metal (gold-silver) targets.

     The following target types are possible on the Ostoros property.

     o    Copper porphyry and copper-gold porphyry.
     o    Hot-spring Au-Ag hosted by volcanics similar to Round Mountain, Nevada
          or Delamar, Idaho.
     o    Gold-silver hosted in volcanic breccia bodies.
     o    Gold hosted by Tertiary andesitic flows and domes (acid sulfate)
          similar to Yanacocha, Peru. o Gold-silver-base metal vein systems.
     o    Gold-silver in epithermal vein systems.

     Summary of Work Completed

     Work to date on the perimeter has consisted of data compilation and review.
     Minera Andes completed a first- pass reconnaissance and sampling program of
     the OCF  perimeter  (October-November,  1999).  A total of 87  samples  (74
     stream  sediment and 13 rock samples) were taken  throughout the perimeter.
     The stream sediment  sampling  delineated  eight areas within the perimeter
     that appear to contain anomalous gold  mineralization.  These areas require
     immediate  follow-up  reconnaissance  exploration  consisting of additional
     stream sediment sampling,  rock chip sampling,  mapping,  soil sampling and
     possibly geophysics.

     4. Ostoros Project Ownership

     On March 12, 1999, the Corporation  and NAMR signed an Exploration  License
     on the Ostoros  concession  (License of Concession for Exploration No 152).
     The  following  requirements  necessary  to bring the  agreement  into full
     effect have been met: a) formation of a Romanian subsidiary,  Transylavania
     Gold  S.R.L.;  b) posting of a bond for  reclamation  and  mitigation  in a
     Romanian bank (or a foreign bank with an Romanian branch);  c) resubmitting
     of more detailed  workplan;  and d) development of a reclamation  work plan
     and study.

     The Ostoros property is 18,100 hectares in area. Through December 31, 1999,
     the Corporation has spent $32,723 on the Ostoros project.

ITEM 3.     LEGAL PROCEEDINGS

The Corporation is not currently aware of any material legal proceeding, actual,
contemplated or threatened, to which the Corporation is party or of which any of
its property interests is subject.

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

There were no matters  submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 1999.

                                       32
<PAGE>
                                     PART II

ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The  Corporation's  Common  Shares are traded on the Canadian  Venture  Exchange
("CDNX") (formerly The Alberta Stock Exchange) under the trading symbol MAI and,
since  November  5, 1997,  the Common  Shares  have also been traded on the NASD
over-the-counter market under the trading symbol MNEAF.

The high and low prices for the Common  Shares  reported by the CDNX for each of
the quarters  during the years ended December 31, 1999 and 1998 are set forth in
the table below:

                                               High ($Cdn)       Low($Cdn )

     1999     January - March                     0.85             0.49
              April - June                        0.90             0.46
              July - September                    0.59             0.31
              October - December                  0.50             0.17

     1998     January - March                     2.30             1.10
              April - June                        1.82             1.05
              July - September                    1.00             0.40
              October - December                  1.19             0.65

The  high  and  low  prices  for  the  Common  Shares   reported  for  the  NASD
over-the-counter market for each of the quarters during the years ended December
31, 1999 and December 31, 1998 are set forth in the table below:

                                                High ($US)       Low($US )

     1999     January - March                     0.53             0.33
              April - June                        0.69             0.31
              July - September                    0.39             0.22
              October - December                  0.32             0.10

     1998     January - March                     1.77             0.69
              April - June                        1.33             0.73
              July - September                    0.75             0.27
              October - December                  0.81             0.32

These quotations reflect inter-dealer prices, without retail mark-up,  mark-down
or commission, and may not represent actual transactions.

As of December 31, 1999 there were approximately 374 holders of Common Shares of
the  Corporation.  No dividends  have ever been paid on the Common Shares of the
Corporation,  and the Corporation  intends to retain its earnings for use in the
business and does not expect to pay dividends in the foreseeable future.

In two  closings,  the first on December  14, 1999 and the second on January 31,
2000,  the  Corporation  issued an  aggregate  of  9,200,000  units to investors
outside of the United States in reliance on  Regulation  S. Each unit  comprised
one  common  share and one common  share  purchase  warrant.  The  warrants  are
exercisable for one year

                                       33
<PAGE>
at an  exercise  price of  Cdn$0.35.  The  offering  raised  gross  proceeds  of
Cdn$2,300,000.  Canaccord Capital Corporation,  Toronto, Ontario, acted as agent
for the  offering  and  received  a cash  commission  equal to 7.5% of the gross
proceeds raised as well as common shares equal to  approximately 4% of the units
sold as additional commission.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

The following  discussion  should be read in conjunction with the  Corporation's
audited consolidated  financial statements and notes thereto for the years ended
December 31, 1999 and 1998 which have been prepared in accordance with generally
accepted accounting  principles  ("GAAP") in Canada.  Differences from U.S. GAAP
are described in Note 13 to the audited consolidated  financial statements.  The
Corporation's  financial condition and results of operations are not necessarily
indicative of what may be expected in future years.

Overview

The principal business of the Corporation is the locating, acquiring, exploring,
and, if  warranted,  developing  mineral  properties  located in the Republic of
Argentina  and also in Colombia and  Romania.  The  Corporation  carries out its
business by acquiring,  exploring, and evaluating mineral properties through its
ongoing  exploration  program,  and either  joint-venturing  or developing these
properties  further,  or  disposing  of them if the  properties  do not meet the
Corporation's requirements.

The Corporation's  current properties and projects consist of mineral rights and
applications for mineral rights covering approximately 175,536 hectares in three
Argentine provinces, approximately 9,500 hectares in two departments in Colombia
and 23,000 hectares in Romania. The lands comprise option-to-purchase contracts,
exploration,   and  mining   agreements   and  direct   interests   through  the
Corporation's filings for exploration concessions.  The Corporation's properties
are all early stage exploration  prospects.  No proven or probable reserves have
yet been identified. See "Description of Properties."

The Corporation was  incorporated in Alberta in July 1994. In November 1995, the
Corporation  effected an amalgamation with Scotia Prime Minerals,  Incorporated,
also an Alberta corporation,  which at that time was an inactive corporation and
was a  reporting  issuer  under  the  Securities  Act  (Alberta)  (Scotia  was a
reporting issuer in several other  jurisdictions),  and its common shares traded
on The Alberta Stock Exchange  (presently,  the Canadian Venture Exchange).  The
business  combination  between  Minera  Andes  and  Scotia  Prime  Minerals  was
accounted for using the purchase  method of accounting,  whereby Minera Andes is
identified  as the  acquiror.  See  "Note 2 to Notes to  Consolidated  Financial
Statements."

Plan of Operations

The  Corporation has budgeted and plans to spend  approximately  $0.8 million on
its mineral property and exploration  activities and general and  administrative
expenses  through 2000, with most properties being kept on care and maintenance.
See  "Description of Properties."  The  Corporation's  existing funds plus funds
from the  second  closing  of its  Canadian  offering  in  January  2000 will be
sufficient to finance  these  activities  through 2000. If additional  funds are
raised  during  2000,  through the  exercise  of warrants or options,  through a
further equity financing,  by the sale of property interests or by joint venture
financing,  additional  exploration  could be  planned  and  carried  out on the
Corporation's  properties over the northern  hemisphere  summer in Romania,  and
beginning  before year-end for the Latin American  projects.  If the Corporation
were to  develop a property  or a group of  properties  beyond  the  exploration
stage, substantial additional financing would be necessary. Such financing

                                       34
<PAGE>
would  likely be in the form of equity,  debt,  or a  combination  of equity and
debt. The Corporation has no current plan to seek such financing and there is no
assurance  that  such  financing,  if  necessary,  would  be  available  to  the
Corporation on favorable terms.

Results of Operations

1999 Compared to 1998

The  Corporation's  net loss of $1.8  million (9 cents per  share) in 1999,  was
substantially  less than the loss of $3.4  million (17 cents per share) in 1998.
The net loss decreased mainly as a result of reduced property write-offs in 1999
of $0.9 million  compared with $2.2 million in 1998.  The  Corporation  had also
initiated a program of cost cutting early in 1999,  when it became apparent that
the  period of low gold  prices  was  going to  continue,  with a  corresponding
reduction in expenses.

General and administrative  costs were reduced from $1.2 million in 1998 to $0.9
million in 1999.  While office  overhead,  consulting  fees and wage and benefit
costs were all down from the prior year,  slightly higher travel expenses offset
some of these gains.  The  Corporation  also saw its foreign  exchange loss from
1998 change to a gain in 1999 (as the Canadian dollar,  in which the Corporation
had certain invested balances denominated, held its own during the year compared
to the US dollar), resulting in a saving of $0.3 million over last year.

The Corporation undertook a complete review of its exploration properties at the
end of 1999, and elected to write-off a total of $0.9 million in deferred costs.
With limited funds and staffing  available,  the Corporation elected to focus on
its  properties  in the three  provinces  of Santa  Cruz,  Chubut  and San Juan.
Discontinuing  exploration activities in the provinces of Mendoza,  Neuquen, Rio
Negro and in the northern provinces resulted in a write-off of $0.9 million. The
Corporation's  exploration  program has involved nearly continuous  prospecting,
acquisition,  exploration and evaluation of property interests. If a property or
program does not meet the  Corporation's  requirements,  costs  associated  with
abandonment  of the property or program  will result in a charge to  operations.
The  Corporation  expects  to incur  additional  write-offs  in future  periods,
although the amounts of such write-offs are difficult to predict as they will be
determined by the results of future exploration activities.

Mineral  property and  deferred  exploration  costs  amounted to $1.2 million in
1999,  down from $2.3 million in 1998. As a result of cut-backs in all projects,
even on the El  Pluma/Cerro  Saavedra  property,  there were savings  across the
board,  but the  biggest  reductions  were in  drilling,  assay and  analytical,
consulting  and  travel  expenses.  With  a  reduced  property  portfolio,   the
Corporation  also  reduced its property and mineral  rights  payments  from $0.2
million in 1998 to $0.01 million in 1999.

1998 Compared to 1997

The Corporation had a net loss of $3.4 million in 1998 compared to a net loss of
$4.3 million in 1997.  This amounted to a net loss of 17 cents per share in 1998
compared  to a 24 cents per share  loss in 1997.  The  principal  reason for the
decrease  in the net  loss  was the  reduced  level  of  write-offs  of  mineral
properties  and  deferred  exploration  costs,  which were $2.2  million in 1998
compared to $3.0 million in 1997.

General and administrative expenses decreased from $1.3 million in 1997, to $1.2
million  in 1998 as the  Corporation  reduced  its  office  overhead  and travel
expenses.  Additional  audit and accounting,  insurance and consulting fees were
partially offset by decreases in costs for legal fees.

As at the end of 1997, the  Corporation  again carried out a detailed  review of
its  exploration  properties  at the end of 1998 and  wrote  off a total of $2.2
million  in  deferred  costs.  The  properties  abandoned  and  returned  to the
underlying  landowners  included the Agua Blanca property ($1.1 million),  Santa
Clara ($0.8 million), and the

                                       35
<PAGE>
Arroyo  Verde  property  which had been joint  ventured  from Pegasus Gold ($0.4
million).  The  carrying  value of these  properties  was  considerable  and the
Corporation  considered  that it would be unlikely that the additional  work the
Corporation could undertake would result in the discovery of economic  reserves.
The Corporation may incur additional write-offs in future periods,  although the
amounts of such write-offs cannot be predicted as they will be determined by the
results of future exploration.

Mineral  property and deferred  exploration  costs totaled $2.3 million in 1998,
down from $2.7 million in 1997.  Almost half of the 1998 expenditures were spent
on the El  Pluma/Cerro  Saavedra  property  in Santa  Cruz  province,  where the
Corporation discovered encouraging levels of gold and silver mineralization over
a large  area,  from  surface  exploration,  trenching  and  drilling  programs.
Deferred  expenditures for mineral properties and exploration increased slightly
from $3.2 million at the end of 1997 to $3.3 million at the end of 1998.

Year 2000 Issue

The  Corporation  recognized  the  importance  of  ensuring  that  its  business
operations were not disrupted as a result of Year 2000 problems. The Corporation
addressed  the issues based on its prepared plan and completed its plan prior to
December 31, 1999. The  Corporation  experienced  limited and isolated  internal
effects  from the Year 2000 date  change and these  were  easily  resolved.  The
Corporation  has  also  experienced  no  effects  from  third-party   suppliers,
financial institutions, vendors and joint venture partners.

Liquidity and Capital Resources

Due to the nature of the mining  business,  the  acquisition,  exploration,  and
development of mineral properties require significant  expenditures prior to the
commencement of production. To date, the Corporation has financed its activities
through  the sale of equity  securities  and  joint  venture  arrangements.  The
Corporation expects to use similar financing techniques in the future,  however,
there  can be no  assurance  that  the  Corporation  will be  successful  in its
financing activities in the future.

The   Corporation's   exploration   and   development   activities  and  funding
opportunities, as well as those of its joint venture partners, may be materially
affected by precious  and base metal price  levels and changes in those  levels.
The market  prices of precious and base metals are  determined  in world markets
and are affected by numerous factors which are beyond the Corporation's control.

At  December  31, 1999 the  Corporation  had cash and cash  equivalents  of $0.5
million,  compared to cash and cash  equivalents  of $1.9 million as of December
31, 1998. Working capital at December 31, 1999 was $0.3 million. The Corporation
believes  that,  following  the  successful  second  closing  under its Canadian
offering on January 31, 2000 of $1.0 million, available funds will be sufficient
to fund its 2000 exploration activities and general corporate overhead.

Net cash used in operating activities during 1999 was $0.6 million compared with
$1.2  million in 1998.  This change  reflects  the  savings in office  overhead,
consulting  fees and wage and benefit costs,  plus the foreign  exchange gain in
1999.  Investing  activities  in 1999 used $1.1  million  ,  compared  with $2.2
million in 1998.  This decrease can be attributed  to  management's  decision to
conserve  the  Corporation's  resources  in this  period of low  metals  prices,
concentrating exploration activities on the El Pluma/Cerro Saavedra discovery.

The principal  financing activity during 1999 was the receipt of net proceeds of
$0.4 million  from the first  closing in December  1999 under the  Corporation's
Canadian offering.  As noted above, the Corporation also received gross proceeds
of a further  $1.0  million in  January  2000  under  this  offering.  Financing
activities  of $1.3  million in 1998  resulted  from the exercise of options and
share purchase warrants issued in 1996 private placement financings.

                                       36
<PAGE>
ITEM 7.       FINANCIAL STATEMENTS

Index to Consolidated Financial Statements
                                                                            Page

     Auditor's Report                                                         38

     Consolidated Balance Sheets at December 31, 1999 and 1998                39

     Consolidated Statements of Operations and Accumulated Deficit
     for the years ended December 31, 1999 and 1998 and for the
     period July 1, 1994 (commencement) through December 31, 1999             40

     Consolidated  Statements  of Mineral  Properties  and Deferred
     Exploration Costs for the years ended December 31, 1999 and 1998
     and for the period July 1, 1994 (commencement) through
     December 31, 1999                                                        41

     Consolidated Statements of Cash Flows for the years ended
     December 31, 1999 and 1998 and for the period July 1, 1994
     (commencement) through December 31, 1999                                 42

     Notes to Consolidated Financial Statements                               43

                                       37
<PAGE>
                           PRICEWATERHOUSECOOPERS LLP



AUDITOR'S REPORT

To the Shareholders of Minera Andes Inc.:

We have  audited  the  consolidated  balance  sheets of Minera  Andes  Inc.  and
subsidiaries,  as at December 31, 1999 and 1998 and the consolidated  statements
of  operations and  accumulated   deficit, of mineral  properties  and  deferred
exploration  costs and of cash  flows for each of the years  then  ended.  These
financial statements are the responsibility of the Corporation'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.  Those standards  require that we plan and perform an audit to obtain
reasonable  assurance  whether  the  financial  statements  are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects,  the financial position of Minera Andes Inc. and subsidiaries
as at December 31, 1999 and 1998 and the results of their  operations  and their
cash  flows for  each of  the  years  then  ended in  accordance  with  Canadian
generally accepted accounting principles.




Vancouver, B.C.                            By: /S/ PRICEWATERHOUSECOOPERS LLP
Canada                                         ---------------------------------
February 25, 2000                              PricewaterhouseCoopers LLP
                                               Chartered Accountants

                                       38
<PAGE>
                                MINERA ANDES INC.
                       "An Exploration Stage Corporation"
                           CONSOLIDATED BALANCE SHEETS
                                 (U.S. Dollars)
<TABLE>
<CAPTION>
                                                                              December 31,                  December 31,
                                                                                  1999                          1998
                                                                         ----------------------        ----------------------
                                                           ASSETS

Current:
<S>                                                                                 <C>                           <C>
          Cash and cash equivalents                                                 $   483,471                   $ 1,869,765

          Receivables and prepaid expenses                                               32,031                       123,706
                                                                         ----------------------        ----------------------
                Total current assets                                                    515,502                     1,993,471

Mineral properties and deferred exploration costs (Note 5)                            3,622,902                     3,305,711

Capital assets, net (Note 6)                                                             62,059                       153,240
                                                                         ----------------------        ----------------------
                Total assets                                                        $ 4,200,463                   $ 5,452,422
                                                                         ======================        ======================

                                                         LIABILITIES

Current:

          Accounts payable and accruals                                            $    155,748                 $      62,883

          Due to related parties (Note 9)                                                83,412                        36,278
                                                                         ----------------------        ----------------------
                Total current liabilities                                               239,160                        99,161
                                                                         ----------------------        ----------------------
Commitments and contingencies (Note 8)

                                                    SHAREHOLDERS' EQUITY

Share capital (Note 7)

Preferred shares, no par value, unlimited number authorized,
none issued

Common shares, no par value, unlimited number authorized

    Issued 1999--23,733,152 shares
    Issued 1998--20,390,030 shares                                                   16,960,540                    16,414,666

Accumulated deficit                                                                 (12,999,237)                  (11,061,405)
                                                                         ----------------------        ----------------------
                Total shareholders' equity                                            3,961,303                     5,353,261
                                                                         ----------------------        ----------------------
                Total liabilities and shareholders' equity                          $ 4,200,463                   $ 5,452,422
                                                                         ======================        ======================

Approved by the Board of Directors:

             /S/ ALLEN V. AMBROSE                                                     /S/ ALLAN J. MARTER
-------------------------------------------------------------               ----------------------------------------
           Allen V. Ambrose, Director                                                 Allan J. Marter, Director

                The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       39
<PAGE>
                                MINERA ANDES INC.
                       "An Exploration Stage Corporation"
            CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                                 (U.S. Dollars)
<TABLE>
<CAPTION>

                                                                                                                   Period from
                                                                             Years Ended                           July 1, 1994
                                                      ----------------------------------------------------        (commencement)
                                                          December 31,                    December 31,               through
                                                             1999                            1998                December 31, 1999


<S>                                                       <C>                          <C>                          <C>
Administration fees                                       $    28,202                  $     32,527                 $     180,764
Audit and accounting                                           60,651                        69,182                       227,143
Consulting fees                                               159,868                       182,562                       782,790
Depreciation                                                   40,440                         6,345                        49,929
Equipment rental                                                6,070                         6,070                        19,012
Foreign exchange (gain) loss                                  (28,537)                      230,101                       394,075
Insurance                                                      65,044                        69,956                       153,576
Legal                                                         110,277                       108,419                       462,112
Maintenance                                                        77                           101                           343
Materials and supplies                                              0                         2,235                        45,512
Office overhead                                               163,479                       280,235                     1,209,046
Telephone                                                      48,039                        69,541                       304,952
Transfer agent                                                 11,196                        13,243                        73,594
Travel                                                         60,458                        42,262                       297,119
Wages and benefits                                            187,157                       212,896                       901,859
Write-off of deferred costs                                   917,052                     2,205,405                     7,607,105
                                                      --------------------             --------------------    ---------------------
Total expenses                                              1,829,473                     3,531,080                    12,708,931
Gain on sale of capital assets                                (35,004)                            0                       (35,004)
Interest income                                               (27,952)                     (141,872)                     (430,735)
                                                      --------------------             --------------------    ---------------------
Net loss                                                    1,766,517                     3,389,208                    12,243,192
Accumulated deficit, beginning of the period               11,061,405                     7,665,814                             0
Share issue costs                                             171,315                         6,383                       738,830
Deficiency on acquisition of subsidiary                             0                             0                        17,215
                                                      --------------------             --------------------    ---------------------
Accumulated deficit, end of the period                    $12,999,237                  $ 11,061,405                   $12,999,237
                                                      ====================             ====================    =====================

Basic and diluted net loss per common share               $      0.09                  $       0.17                 $        0.83
                                                      ====================             ====================    =====================

Weighted average shares outstanding                        20,545,737                    20,056,945                    14,686,139
                                                      ====================             ====================    =====================

               The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       40
<PAGE>
                                MINERA ANDES INC.
                       "An Exploration Stage Corporation"
                  CONSOLIDATED STATEMENTS OF MINERAL PROPERTIES
                         AND DEFERRED EXPLORATION COSTS
                                 (U.S. Dollars)
<TABLE>
<CAPTION>

                                                                                                                   Period from
                                                                             Years Ended                           July 1, 1994
                                                      ----------------------------------------------------        (commencement)
                                                          December 31,                    December 31,               through
                                                             1999                            1998                December 31, 1999
                                                      --------------------             -------------------     ---------------------

<S>                                                       <C>                             <C>                       <C>
Administration fees                                       $     20,038                    $    21,744               $    324,501
Assays and analytical                                          120,355                        195,099                    887,356
Construction and trenching                                       2,484                         38,780                    507,957
Consulting fees                                                 73,850                        171,408                    837,618
Depreciation                                                    10,170                         73,263                    142,720
Drilling                                                        83,661                        309,131                    730,385
Equipment rental                                                 6,465                         21,907                    243,372
Geology                                                        318,752                        488,473                  2,791,230
Geophysics                                                      61,314                         61,961                    309,902
Insurance                                                       38,822                         49,874                    206,702
Legal                                                           83,500                        113,544                    576,383
Maintenance                                                     20,634                         29,150                    147,339
Materials and supplies                                          43,672                         39,158                    407,777
Project overhead                                                44,138                         30,189                    283,631
Property and mineral rights                                     12,762                        228,226                  1,259,440
Telephone                                                       10,318                         14,466                     58,807
Travel                                                         148,172                        252,448                    924,354
Wages and benefits                                             135,136                        145,439                    714,394
                                                      --------------------             ------------------           ---------------

Costs incurred during the period                             1,234,243                      2,284,260                 11,353,868

Deferred costs, beginning of the period                      3,305,711                      3,226,856                          0

Deferred costs, acquired                                             0                              0                    576,139

Deferred costs written off                                    (917,052)                    (2,205,405)                (7,607,105)

Mineral property option proceeds                                     0                              0                   (700,000)
                                                      --------------------             ------------------           ---------------

Deferred costs, end of the period                         $  3,622,902                     $3,305,711                 $3,622,902
                                                      ====================             ==================           ===============

               The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       41
<PAGE>
                                MINERA ANDES INC.
                       "An Exploration Stage Corporation"
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (U.S. Dollars)
<TABLE>
<CAPTION>
                                                                                                                   Period from
                                                                             Years Ended                           July 1, 1994
                                                      ----------------------------------------------------        (commencement)
                                                          December 31,                    December 31,               through
                                                             1999                            1998                December 31, 1999
                                                      --------------------             -------------------     ---------------------

<S>                                                       <C>                          <C>                          <C>

Operating Activities:
    Net loss for the period                               $(1,766,517)                 $   (3,389,208)              $(12,243,192)
    Adjustments to reconcile net loss to net cash
    used in operating activities:
        Write-off of incorporation costs                            0                               0                        665
        Write-off of deferred expenditures                    917,052                       2,205,405                  7,607,105
        Depreciation                                           40,440                           6,345                     49,929
        Gain on sale of capital assets                        (35,004)                              0                    (35,004)
        Change in:
           Receivables and prepaid expense                     91,675                          88,827                    (30,045)
           Accounts payable and accruals                       92,865                         (16,285)                   136,547
           Due to related parties                              47,134                         (81,995)                    83,412
                                                      --------------------             -------------------     ---------------------
    Cash used in operating activities                        (612,355)                     (1,186,911)                (4,430,583)
                                                      --------------------             -------------------     ---------------------

Investing Activities:
    Incorporation costs                                             0                               0                       (665)
    Sale (purchase) of capital assets                          75,575                         (11,867)                  (219,704)
    Mineral properties and deferred exploration            (1,224,073)                     (2,210,997)               (11,211,148)
    exploratio costs
    Acquisition of subsidiaries                                     0                               0                       (602)
    Mineral property option proceeds                                0                               0                    700,000
                                                      --------------------             -------------------     ---------------------
    Cash used in investing activities                      (1,148,498)                     (2,222,864)               (10,732,119)
                                                      --------------------             -------------------     ---------------------

Financing Activities:
    Shares issued for cash, less issue costs                  374,559                       1,276,021                 15,646,173
                                                      --------------------             -------------------     ---------------------
    Cash provided by financing activities                     374,559                       1,276,021                 15,646,173
                                                      --------------------             -------------------     ---------------------

Increase (decrease) in cash and cash equivalents           (1,386,294)                     (2,133,754)                   483,471
Cash and cash equivalents, beginning of period              1,869,765                       4,003,519                          0
                                                      --------------------             -------------------     ---------------------
Cash and cash equivalents, end of period                  $   483,471                      $1,869,765               $    483,471
                                                      ====================             ===================     =====================

See Notes 3, 7 and 13 for non-cash financing and investing activities.

                   The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       42
<PAGE>
                                MINERA ANDES INC.
                       "An Exploration Stage Corporation"
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
                                 (U.S. Dollars)


1.  NATURE OF OPERATIONS

The  Corporation  is in the  business of  acquiring,  exploring  and  evaluating
mineral  properties,  and either joint venturing or developing  these properties
further or disposing of them when the  evaluation is completed.  At December 31,
1999,  the  Corporation  was in the  exploration  stage and had  interests in 14
properties in three  provinces in the Republic of Argentina,  two  properties in
Colombia, and two properties in Romania.

The   recoverability  of  amounts  shown  as  mineral  properties  and  deferred
exploration  costs is dependent upon the existence of  economically  recoverable
reserves,  the  ability of the  Corporation  to obtain  necessary  financing  to
complete  their  development,  and future  profitable  production or disposition
thereof.

Although the Corporation  has taken steps to verify title to mineral  properties
in which it has an interest,  in  accordance  with  industry  standards  for the
current  stage  of  exploration  of such  properties,  these  procedures  do not
guarantee the Corporation's title. Property title may be subject to unregistered
prior agreements and non- compliance with regulatory requirements.

2.  ORGANIZATION

The  Corporation,  Minera Andes Inc.,  was  incorporated  in Alberta on July 19,
1994,  although operations are considered to have commenced on July 1, 1994, the
effective date of the acquisition of the Argentine  properties (see Note 4a). On
November 6, 1995,  the  amalgamation  of Minera  Andes Inc.  with  Scotia  Prime
Minerals,  Incorporated (Scotia), a reporting issuer, pursuant to section 186 of
the  Business  Corporations  Act  (Alberta),   became  effective.  The  business
combination  was accounted for using the purchase  method of  accounting.  Under
this  method  of  accounting,  Minera  Andes  Inc.  has been  identified  as the
acquiror.

3.  SIGNIFICANT ACCOUNTING POLICIES

These  consolidated   financial  statements  are  prepared  in  accordance  with
accounting principles generally accepted in Canada. The statements are expressed
in United States dollars because the majority of the  Corporation's  exploration
activities are incurred in U.S. dollars.

     a)  Consolidation/Reporting
         These consolidated  financial statements include the accounts of Minera
         Andes Inc., its  wholly-owned  subsidiaries  (see Note 4), Minera Andes
         S.A.  (MASA) and NAD S.A.  (NADSA),  both Argentine  corporations,  and
         Transylvania Gold S.R.L., (TGS) a Romanian  corporation,  its 71% owned
         subsidiary,  Minera Providencia Inc., an Alberta corporation,  and that
         company's 92% owned Colombian  subsidiary,  Minera Providencia S.A. All
         significant intercompany transactions and balances have been eliminated
         from the consolidated financial statements.

     b)  Foreign Currency Translation The Corporation's  consolidated operations
         are integrated and balances  denominated in currencies  other than U.S.
         dollars are  translated  into U.S.  dollars using the temporal  method.
         This method translates monetary balances at the rate of exchange at the
         balance sheet date, non-monetary balances at historic

                                       43
<PAGE>
         exchange  rates and  revenues  and  expense  items at average  exchange
         rates.  The resulting gains and losses are included in the statement of
         operations in the reporting period.

     c)  Cash Equivalents
         The Corporation  considers cash equivalents to consist of highly liquid
         investments  with a  remaining  maturity  of three  months or less when
         purchased.

     d)  Mineral Properties and Deferred Exploration Costs
         Mineral  properties  consist of  exploration  and  mining  concessions,
         options and contracts.  Acquisition and leasehold costs and exploration
         costs are  capitalized  and deferred until such time as the property is
         put into  production or the  properties  are disposed of either through
         sale or abandonment.  If put into production,  the costs of acquisition
         and  exploration  will be  written  off over the life of the  property,
         based on estimated economic  reserves.  Proceeds received from the sale
         of any  interest  in a property  will  first be  credited  against  the
         carrying value of the property,  with any excess included in operations
         for the period.  If a property is abandoned,  the property and deferred
         exploration costs will be written off to operations.

     e)  Capital Assets and Depreciation
         Capital assets are recorded at cost, and  depreciation is provided on a
         declining balance basis over their estimated useful lives of up to five
         years at an annual rate of up to 40% to a residual value of 10%.

     f)  Share Issue Costs
         Commissions  paid to underwriters on the issuance of the  Corporation's
         shares are charged directly to share capital.  Other share issue costs,
         such as legal, accounting,  auditing and printing costs, are charged to
         accumulated deficit.

     g)  Basic and Diluted Loss Per Common Share
         Basic   earnings  per  share  (EPS)  is  calculated  by  dividing  loss
         applicable to common  shareholders  by the  weighted-average  number of
         common  shares  outstanding  for the year.  Diluted  EPS  reflects  the
         potential dilution that could occur if potentially  dilutive securities
         were exercised or converted to common stock.  Due to the losses in 1999
         and  1998,  potentially  dilutive  securities  were  excluded  from the
         calculation  of diluted  EPS,  as they were  anti-dilutive.  Therefore,
         there was no difference in the  calculation of basic and diluted EPS in
         1999 and 1998.

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

     i)  Fair Value of Financial Instruments
         The  carrying  values  of cash and cash  equivalents,  receivables  and
         prepaid  expenses,  accounts  payable and  accruals  and due to related
         parties, approximate their fair values.

     j)  Accounting for Stock Options
         The  Corporation  provides  the disclosure only  requirements for stock
         options in  accordance with The Emerging  Issues Committee  Abstract 98
         "Stock-Based Compensation Plans-Disclosures."

     k)  New Accounting  Pronouncement
         In January 1999, the  Corporation adopted the  requirements of Canadian
         Institute of Chartered Accountants (CICA) 1540, "Cash Flow Statements",
         in preparing the statement of cash flows. The

                                       44
<PAGE>
         comparative  information  for the year ended  December 31, 1998 and for
         the period from July 1, 1994  (commencement)  through December 31, 1999
         has been restated to reflect the presentation in the current year.

4.   ACQUISITION AND FORMATION OF SUBSIDIARIES

     a)  Pursuant to an agreement dated March 8, 1995, the Corporation  acquired
         from N.A. Degerstrom, Inc. on March 15, 1995,  95% (19 of the 20 shares
         issued) of MASA and 91.66% (11 of the 12  shares  issued)  of NADSA  in
         exchange  for the issue of 4,000,000 shares, an  additional bonus issue
         of shares payable if any of the  properties  reach bankable feasibility
         (which shall  be 11% or 1,213,409 shares of the issued and  outstanding
         common shares of the Corporation after  the  amalgamation--see Note 2),
         a royalty on all existing and future properties equal to the difference
         between 3% of net smelter returns and any underlying  royalties subject
         to  a maximum  of 2% of net smelter returns,  and  reimbursement of all
         property  costs incurred  from July 1, 1994 through the closing date of
         March 15, 1995. An additional $602 was paid in cash to certain minority
         shareholders  of MASA and  NADSA.  Concurrent  with the agreement,  the
         Corporation  also  entered  into option  agreements,  having an initial
         term of four years each and renewable every four years  to acquire  the
         remaining  shares of MASA  and of NADSA  for an  exercise price of $100
         per  share.  For accounting and reporting purposes,  MASA and NADSA are
         considered to be wholly-owned subsidiaries of the Corporation.

         MASA and  NADSA  have no  assets  or  liabilities  other  than  mineral
         property rights which had been purchased or directly staked. The deemed
         value of the  4,000,000  shares  issued  was  equal to the  accumulated
         property  acquisition  costs and exploration  expenditures  incurred by
         MASA and NADSA  effective  July 1, 1994,  which totaled  $575,537.  The
         acquisition  was  accounted  for  using  the  purchase  method  with an
         effective  date of July 1, 1994  through the closing  date of March 15,
         1995, being the date from which the Corporation agreed to reimburse the
         property costs incurred.

         The  4,000,000  shares were required to be held in escrow in accordance
         with the Escrow  Agreement  between the Corporation,  N.A.  Degerstrom,
         Inc. and Montreal  Trust of Canada.  Common  shares were  released from
         escrow upon obtaining the consent of The Alberta Stock Exchange, at the
         earn-out  rate of  Cdn$0.375  per  share of  deferred  expenditures  as
         defined in the Escrow  Agreement,  with a maximum of  1,333,334  shares
         released per year.

     b)  As disclosed in Note 2, the business  combination  of Minera Andes Inc.
         and  Scotia,  which  was made  effective  November  6,  1995,  has been
         accounted  for using the  purchase  method  whereby  Minera  Andes Inc.
         acquired  all of the  issued  and  outstanding  shares of  Scotia.  The
         acquisition has been recorded as follows:

             Assets acquired                                         $    1,986
             Less: liabilities assumed                                   19,201
                                                                     -----------
             Net liabilities assumed                                    (17,215)
             Asset deficiency allocated to accumulated deficit           17,215
                                                                     -----------
             Purchase price                                          $        0
                                                                     ===========

             Consideration given: 336,814 common shares              $        0
                                                                     ===========

         As a result of the acquisition (amalgamation), Minera Andes Inc. became
         a  reporting  issuer.  All fees paid with  respect to the  amalgamation
         (legal, audit, accounting,  printing) were considered to be share issue
         costs.  Scotia was an inactive  company which from December 31, 1994 to
         the date of acquisition had

                                       45
<PAGE>
         only the following transactions: general and administrative expenses of
         $6,248,  forgiveness of  indebtedness  owed of $13,391 and the issue of
         shares to settle debts of $20,000.

     c)  Minera  Providencia Inc. (MPI) was formed on December 2, 1998 under the
         Business  Corporations Act (Alberta).  The Corporation  holds 71.11% of
         the issued and outstanding shares of MPI (the remaining shares are held
         by Jon H.  Lehmann,  the  president  of  MPI).  MPI's  interest  in the
         Colombian  properties is held through Minera  Providencia  S.A. (MPSA),
         which was incorporated under the laws of Colombia on April 17, 1998, as
         a  private  Colombian  corporation.  MPI  owns  92% of the  issued  and
         outstanding  shares of MPSA and has entered into option  agreements  to
         acquire the remaining shares for $400.

     d)  Transylvania Gold S.R.L.  (TGS) was incorporated on October 15, 1999 as
         a  private  Romanian  corporation  to hold  the  Corporation's  mineral
         interests in Romania. The Corporation owns 100% of TGS.

5.   MINERAL PROPERTIES AND DEFERRED EXPLORATION COSTS

At December 31, 1999, the Corporation,  through its subsidiaries, held interests
in a total of  175,536  hectares  of mineral  rights  and mining  lands in three
Argentine   provinces  and  two  properties   totaling  9,539  hectares  in  two
departments in Colombia and two properties  totaling 23,000 hectares in Romania.
Under its present  acquisition  and  exploration  programs,  the  Corporation is
continually  acquiring  additional  mineral property interests and exploring and
evaluating its properties.  If, after  evaluation,  a property does not meet the
Corporation's requirements, then the property and deferred exploration costs are
written off to operations.  All properties in Argentina are subject to a royalty
agreement  as  disclosed  in  Note  8.  Mineral   property  costs  and  deferred
exploration costs are as follows:

<TABLE>
<CAPTION>

                                                                                 Exploration
                                           Carrying Value     Acquisition            and                             Carrying Value
   Province/                                December 31,         Costs            Overhead          Write-Offs        December 31,
    Region              Property                1998              1999              1999               1999               1999
=============== ========================  ================  ================  =================  =================  ================
                                                              ARGENTINA
                ========================  ================  ================  =================  =================  ================
<S>             <C>                           <C>                <C>               <C>                   <C>        <C>
San Juan        Agua Blanca                   $          0       $         0       $     31,268           $(31,268) $              0
                Cateos                             433,872                 0             30,478           (149,689)          314,661
Mendoza         Cateos                             399,183                 0              4,892           (404,075)                0
Neuquen         Cateos                              62,541                 0                 14            (62,555)                0
                El Pluma                           507,940             2,478                             1,150,157
Santa Cruz
                335,704
                Cerro Saavedra                     765,770             1,888            232,789                  0         1,000,447
                Cateos                             402,861             2,190             66,488                  0           471,539
Rio Negro       Cateos                              71,822                 0              1,084            (72,906)                0
Chubut          Arroyo Verde                             0               601              8,880             (9,481)                0
                Cateos                             196,641                80             14,943                  0           211,664
Northern        Cateos                             187,048                 0                 30           (187,078)                0
                                                              COLOMBIA
Santander and   California-Vetas                   156,270             5,154             13,715                  0           175,139
Putumayo        Mocoa

                                                              ROMANIA

Hunedoara       Voia                               121,763               371            177,161                  0           299,295
Harghita        Ostoros

TOTAL                                           $3,305,711           $12,762         $1,221,481          $(917,052)       $3,622,902
=============== ========================  ================  ================  =================  ================== ================

                                       46
<PAGE>
                                                                                 Exploration
                                           Carrying Value     Acquisition            and                             Carrying Value
   Province/                                December 31,         Costs            Overhead          Write-Offs        December 31,
    Region              Property                1997              1998              1998               1998               1998
=============== ========================  ================  ================  =================  =================  ================
                                                              ARGENTINA
                ========================  ================  ================  =================  =================  ================
San Juan        Agua Blanca                    $   680,717          $111,139        $   291,143        $(1,082,999) $              0
                Cateos                             367,431             2,867             63,574                  0           433,872
Mendoza         Santa Clara                        713,285            35,000              8,272           (756,557)                0
                Cateos                             343,788                 0             55,395                  0           399,183
Neuquen         Cateos                               4,839             2,844             54,858                  0            62,541
Santa Cruz      El Pluma/Cerro Saavedra            335,704            19,616            918,390                  0         1,273,710

                Cateos                             239,753            41,627            121,481                  0           402,861
Rio Negro       Cateos                              64,119                 0              7,703                  0            71,822
Chubut          Arroyo Verde                        81,943             3,183            280,723           (365,849)                0
                Cateos                             127,256             8,962             60,423                  0           196,641
Northern        Cateos                             178,632                 0            130,179                  0           308,811
                                                              COLOMBIA
Santander and   California-Vetas                    89,389             2,989             63,892                  0           156,270
Putumayo        Mocoa

TOTAL                                           $3,226,856          $228,227         $2,056,033        $(2,205,405)       $3,305,711
=============== ========================  ================  ================  =================  ================== ================
</TABLE>

     a)  Agua Blanca Project
         The Agua Blanca  project was located  northwest of the city of San Juan
         in San Juan Province.  Agua Blanca was held by the Corporation  under a
         four year option-to-purchase agreement, dated June 21, 1995.

         Following  drilling  programs  on the Agua  Blanca  property  from 1996
         though late 1998,  the  Corporation  evaluated  the  prospects  for the
         property early in 1999, and the property was abandoned,  the underlying
         contract with the landowner was  terminated and the  Corporation  wrote
         off $1,082,999 in 1998 and $31,268 in 1999.

     b)  Santa Clara Projects
         The Santa Clara project was located in northwest Mendoza Province.  The
         Corporation  had  an  option-to-  purchase  agreement  to  earn  a 100%
         interest in the property.

         In March 1996,  the  Corporation  signed a Memorandum of  Understanding
         with Cominco Ltd. regarding the Santa Clara property. After exploration
         programs on the Santa Clara property, Cominco terminated the Memorandum
         of Understanding with respect to Santa Clara in July 1997.

         Following  attempts to joint venture the property,  it was abandoned in
         mid-1998, and all underlying contracts with landowners were terminated,
         with a write-off to operations in 1998 of $756,557.

     c)  El Pluma/Cerro Saavedra Projects
         The  contiguous El Pluma and Cerro  Saavedra  properties are located in
         north  central  Santa  Cruz  Province.  The  properties,   made  up  of
         applications for cateos, were located during the Corporation's regional
         exploration  program.  The Corporation  conducted drill programs on the
         properties in 1998 and 1999. The

                                       47
<PAGE>
         Corporation  acquired  additional  applications for cateos during 1998.
         Jointly,   at  December  31,   1999,   the   properties   now  comprise
         approximately 88,000 hectares.

     d)  Arroyo Verde Project
         The Arroyo Verde project was located in northeast Chubut Province.  The
         Corporation  entered  into a  joint  venture  agreement  in  1997  but,
         following a drilling  program on the property in 1998, the  Corporation
         withdrew  from the joint  venture  with  write-offs  to  operations  of
         $365,849 in 1998 and $9,481 in 1999.

     e)  Colombian Projects
         The  California-Vetas  project is located in the Eastern  Cordillera of
         the Andes Mountains in the eastern part of the Department of Santander.
         The property  totals  approximately  4,700  hectares  consisting of two
         wholly-owned and three  option-to-purchase  agreements for five granted
         exploration licenses.

         The Mocoa  project is comprised of a 4,800 hectare  application  for an
         exploration  license.  The  project is located  in  southern  Colombia,
         approximately  100 km north of the Ecuador border, in the Department of
         Putumayo.

     f)  Romanian Projects
         The  Voia  project  is  located  in  the  Golden  Quadrilateral  of the
         Transylvania  region of Romania,  northwest of Bucharest.  On March 12,
         1999,  the  Corporation  signed an exclusive  License of Concession for
         Exploration on the 4,900 hectare Voia property.  The Ostoros project is
         located in the eastern  Carpathian  mountains,  north of Bucharest.  On
         March  12,  1999,  the  Corporation  signed  an  exclusive  License  of
         Concession for Exploration on the 18,100 hectare Ostoros property.

     g)  Write-Off of Mineral Property and Deferred Exploration Costs
         The  Corporation  has acquired  exploration  concessions,  entered into
         option agreements and contracts, and carried out exploration on certain
         properties  where it has  determined  that it would  be  unlikely  that
         additional  work would result in the  discovery  of economic  reserves.
         Accordingly,  any  acquisition  payments  and the  accumulated  cost of
         exploration  on those  properties  have been written off to operations.
         These write-offs totaled $917,052 in 1999 and $2,205,405 in 1998 (which
         included the amounts for Agua  Blanca,  Santa Clara and Arroyo Verde as
         noted above).

6.   CAPITAL ASSETS
<TABLE>
<CAPTION>

                                   December 31, 1999                              December 31, 199
                                   -----------------                              -----------------
                                      Accumulated                                    Accumulated
                         Cost        Depreciation         Net           Cost         Depreciation          Net
                      --------       ------------         ---           ----         ------------          ---
<S>                   <C>             <C>              <C>            <C>              <C>               <C>
  Vehicles            $163,151        $111,251         $51,900        $269,408         $132,430          $136,978
  Office Equipment      25,871          15,712          10,159          25,871            9,609            16,262

                      $189,022        $126,963         $62,059        $295,279         $142,039          $153,240
                      ========        ========         =======        ========         ========          ========
</TABLE>

7.   SHARE CAPITAL

     a)  Authorized
         The Corporation has authorized capital of an unlimited number of common
         shares, with no par value, and an unlimited number of preferred shares,
         with no par value.

                                       48
<PAGE>
     b)  Issued, Allotted and/or Subscribed:
<TABLE>
<CAPTION>

                                                                                          Number
                                                                                       of Shares                  Amount
                                                                                     -----------             -----------
Common shares issued:
<S>                                                                             <C>                         <C>
  Issued for cash on incorporation                                                             1             $         1
  Issued for acquisition of subsidiaries
  (Issued March 15, 1995-see Note 4)                                                   4,000,000                 575,537
  Subscriptions received for private placement                                                 0                  57,069
                                                                                     -----------             -----------
Balance, December 31, 1994                                                             4,000,001                 632,607
  Issued for cash (Cdn$0.10 each)                                                      1,000,000                  70,850
  Issued for cash (Cdn$0.40 each)                                                      2,345,094                 669,058
  Issued for cash (Cdn$1.00 each)                                                      3,031,000               2,237,071
  Issued for finder's fee                                                                150,000                       0
  Issued for services                                                                    168,000                       0
  Issued for subsidiary (see Note 4)                                                     336,814                       0
  Subscriptions applied                                                                        0                 (57,069)
                                                                                     -----------             -----------
Balance, December 31, 1995                                                            11,030,909               3,552,517
  Issued for cash (Cdn$1.50 each)                                                      1,433,333               1,535,553
  Issued for broker special warrants                                                      90,400                       0
  Issued for cash (Cdn$3.42 each)                                                        877,194               2,174,388
  Issued to N.A. Degerstrom, Inc.
    For cash (Cdn$1.44 each)                                                             500,000                 514,608
    For cash on exercise of warrants (Cdn$1.75 each)                                     500,000                 625,392
  Issued for cash on exercise of warrants (Cdn$1.80 each)                                 67,500                  89,220
  Subscriptions received for private placement                                                 0               4,873,336
                                                                                     -----------             -----------
Balance, December 31, 1996                                                            14,499,336              13,365,014
  Issued for cash on exercise of warrants (Cdn$1.80 each)                              1,271,233               1,689,102
  Issued for cash (private placement-Cdn$2.10 each)                                    3,370,481               4,873,336
  Subscriptions applied                                                                        0              (4,873,336)
  Issued for cash on exercise of options (Cdn$1.44 each)                                  75,000                  78,146
                                                                                     -----------             -----------
Balance, December 31, 1997                                                            19,216,050              15,132,262
  Issued for cash on exercise of warrants (Cdn$1.60 each)                                720,383                 806,136
  Issued for cash on exercise of options (Cdn$1.15 each)                                  15,000                  11,936
  Issued for cash on exercise of warrants (Cdn$1.53 each)                                438,597                 464,332
                                                                                     -----------             -----------
Balance, December 31, 1998                                                            20,390,030              16,414,666
  Issued for cash (by prospectus Cdn$0.25)                                             3,214,540                 545,874
  Issued for broker's fees                                                               128,582                       0
                                                                                     -----------             -----------
Balance, December 31, 1999                                                            23,733,152             $16,960,540
                                                                                     ===========             ===========

</TABLE>

                                       49
<PAGE>
              i)  In  February  1996,  the   Corporation   concluded  a  private
                  placement of 1,433,333 special warrants at a price of Cdn$1.50
                  per special warrant for total gross proceeds of  Cdn$2,150,000
                  (US$1,565,265).   Each  special   warrant   comprised  a  unit
                  consisting of one common share and one share purchase warrant.
                  Each warrant  entitled  the holder to purchase one  additional
                  common  share  at any time up to  February  1997 at a price of
                  Cdn$1.80 per share.  The agents received 90,400 broker special
                  warrants (each convertible into one common share and one share
                  purchase warrant),  cash commission of Cdn$25,650,  Cdn$15,000
                  as a corporate  finance fee, and a finder's fee of  Cdn$16,500
                  was also paid.

              ii) In May 1996,  the  Corporation  concluded a private  placement
                  with Cominco Ltd.  with the issuance of 877,194  common shares
                  and 877,194 Cominco  warrants at a price of Cdn$3.42 for gross
                  proceeds of Cdn$3,000,003 (US$2,174,388). Two Cominco warrants
                  entitled Cominco to acquire one additional common share at any
                  time on or  before  May 10,  1997 at a price of  Cdn$3.98  per
                  share. In May 1997, the Corporation  extended the date for the
                  exercise of the Cominco  warrants  until May 10, 1998.  In May
                  1998, the  Corporation  amended the exercise price to Cdn$1.53
                  and Cominco fully exercised the warrants.

              iii)Following  regulatory and shareholder  approval,  in July 1996
                  the  Corporation  issued  500,000  units under the  Degerstrom
                  Subscription  Agreement  (see Note 9b) at a price of  Cdn$1.44
                  per unit.  Each unit was comprised of one common share and one
                  share purchase  warrant.  Each warrant entitled the holder, N.
                  A. Degerstrom,  Inc. (NAD), to purchase one additional  common
                  share for  Cdn$1.75 at any time until  January 11,  1998.  The
                  warrants were also exercised in July 1996.

              iv) On December 13, 1996 and December  19, 1996,  the  Corporation
                  raised  gross  proceeds  of  Cdn$7,078,010  (US$5,197,540)  in
                  aggregate by way of a private placement of special warrants at
                  a price of Cdn$2.10 per unit.  Each unit  comprised one common
                  share  and one  share  purchase  warrant.  Two  warrants  will
                  entitle the holder to purchase one additional  common share at
                  a price of  Cdn$2.50  per  share  if  exercised  on or  before
                  December  13,  1997 or at a price  of  Cdn$2.88  if  exercised
                  before  December  13,  1998.  In  connection  with the private
                  placement,  the  Corporation  granted  140,420  broker special
                  warrants for commission, 200,000 broker special warrants for a
                  corporate  finance  fee  (with  each  broker  special  warrant
                  convertible  into a broker share purchase  warrant),  and cash
                  commissions  totaling  Cdn$441,501.  The  Corporation  filed a
                  prospectus  to qualify the shares and warrants on the exercise
                  of the special  warrants  and the  warrants on exercise of the
                  broker  special  warrants and received  final  approval of the
                  prospectus  on May 8, 1997.  Upon the  exercise of the special
                  warrants,  the Corporation issued 3,370,481 common shares. The
                  Corporation  amended the terms of the share purchase  warrants
                  in December 1997 to allow the first  exercise of warrants at a
                  price of  Cdn$1.60  on or before  February  27,  1998,  and in
                  February  1998  further  amended  the terms to allow the first
                  exercise on or before March 31, 1998. In March 1998, 1,440,766
                  warrants were exercised for the issuance of 720,383 shares.

              v)  On December 14, 1999, the Corporation raised gross proceeds of
                  Cdn$803,635  (US$545,874)  through a unit offering by way of a
                  Canadian  offering in late 1999 with the issuance of 3,214,540
                  units at a price of Cdn$0.25 per unit. Each unit comprised one
                  common share and one share  purchase  warrant,  which entitles
                  the holder to purchase one further common share at an exercise
                  price  of  Cdn$0.35  on  or  before   December  14,  2000.  In
                  connection  with the  financing,  the  Corporation  paid a 7.5
                  percent  commission  on the gross  proceeds and issued  common
                  shares equal to 4 percent of the units sold  (128,582  shares)
                  as additional commission.

                                       50
<PAGE>
     c)  Stock Options
         At December 31, 1999,  there were options held by  directors,  officers
         and employees of the  Corporation  for the purchase of common shares as
         follows:

                Number of Shares         Exercise Price          Expiry Date
                ----------------         --------------          -----------
                      190,000               Cdn$0.68            January 10, 2001
                      220,000               Cdn$0.68            March 2, 2003
                    1,251,000               Cdn$0.55            June 3, 2004
                      179,000               Cdn$0.59            June 3, 2004
                   ----------
                    1,840,000

     See Note 13f for stock-based compensation disclosure.

     d)  Warrants
         At December 31, 1999,  warrants were  outstanding to acquire  3,214,540
         common  shares at an exercise  price of Cdn$0.35 per share on or before
         December 14, 2000.

     e)  Escrow
         During 1998,  the final  1,333,334  million shares were released to NAD
         from escrow (see Note 4a).

8.   AGREEMENTS, COMMITMENTS AND CONTINGENCIES

     a)  Mineral  rights in Argentina  are owned by the federal  government  and
         administered  by the  provinces.  The  provinces  can levy a maximum 3%
         "mouth of mine" (gross proceeds) royalty.  The provinces of Mendoza and
         Neuquen  have waived  their right to a royalty.  The  provinces  of Rio
         Negro,  San Juan,  Santa  Clara and Chubut have not yet  established  a
         policy regarding the royalty.

     b)  While the operating  agreement  between the  Corporation  and NAD is in
         effect (see Note 9a), a net smelter  royalty on all existing and future
         properties is payable to NAD equal to the difference between 3% and any
         underlying  royalties,  subject to a maximum of 2% payable to NAD.  The
         Corporation  may purchase up to one half of the royalty upon payment of
         $1,500,000 per percent purchased.

     c)  Under the terms of the acquisition  agreement disclosed in Note 4a, the
         Corporation  may be  obligated  to issue  additional  common  shares as
         consideration  for the acquisition of its  subsidiaries.  The number of
         shares  that would be issued to NAD upon a property  reaching  bankable
         feasibility would be 1,213,409 common shares of the Corporation.

9.   RELATED PARTY TRANSACTIONS

     a)  Concurrent  with  the  acquisition  of the  Corporation's  wholly-owned
         subsidiaries as disclosed in Note 4a, the Corporation also entered into
         an operating  agreement  effective March 15, 1995 with the vendor, NAD.
         As a  result  of  the  acquisition  agreement,  NAD  is  currently  the
         controlling  shareholder  of the  Corporation.  Under  the terms of the
         operating  agreement,  NAD will  operate  and  manage  the  exploration
         program on all properties and provide related  off-site  administrative
         assistance,  as  required.  Consideration  will  be 15%  of  the  costs
         incurred by NAD on behalf of the  Corporation.  Costs paid  directly by
         the Corporation  are not subject to the fee.  Included in the agreement
         are fixed rental  rates for  equipment  owned by NAD.  During the years
         ended December 31, 1999 and 1998,  administrative fees were paid to NAD
         of $48,240 and $54,271 on total costs  incurred by the  Corporation  of
         $492,325 and $749,041,  respectively.  Equipment  rentals of $6,070 and
         $6,070   were   included   in  the  total  costs  for  1999  and  1998,
         respectively.

                                       51
<PAGE>
     b)  On  November 6, 1995,  certain  debt the  Corporation  had with NAD was
         formalized into a promissory  note.  Terms of payment to NAD called for
         $365,000 to be paid on November 15, 1995,  and this payment was made as
         specified.  The  remainder  of the debt,  $1,140,000,  was carried as a
         convertible interest bearing note. The Corporation and NAD entered into
         a Debt Settlement  Agreement on January 11, 1996 and an amendment dated
         May 13, 1996, whereby a promissory note dated May 13, 1996 replaced the
         earlier note.  Under the May 13, 1996 promissory  note, the Corporation
         agreed to make payments of Cdn$720,000 by July 15, 1996 and Cdn$875,000
         by August 15, 1996. As per Note 7b(iii)  above,  under the terms of the
         Degerstrom Subscription Agreement, in July 1996, the Corporation issued
         500,000  units  to NAD  and  NAD  exercised  the  500,000  warrants  it
         received.  The  funds  received  from  NAD  on the  Degerstrom  Private
         Placement were used to repay the debt outstanding, pursuant to the Debt
         Settlement Agreement, as amended.

     c)  During  1999  and  1998,   the   Corporation   incurred  the  following
         transactions with related parties:  financial  consulting to a director
         and officer totaling  $38,395 and $39,130,  and legal fees to a firm in
         which a director  and officer is an  associate,  totaling  $114,144 and
         $49,435, respectively.

10.  INCOME TAXES

Due to the losses incurred by the Corporation,  there is no income tax provision
or benefit  recorded for all periods  presented.  The  Corporation  has Canadian
non-capital  losses  available to carry forward to apply against  future taxable
income of approximately Cdn$4.2 million expiring as follows:

     2000  Cdn        $454,000
     2001  Cdn        $660,000
     2002  Cdn        $782,000
     2003  Cdn      $1,147,000
     2004  Cdn      $1,153,000

11.  COMPARATIVE FIGURES

Certain  financial  statement line items from prior years have been reclassified
to conform with the current year's presentation.  These reclassifications had no
effect on the net loss and accumulated deficit as previously presented.

12.  SUBSEQUENT EVENTS

On January 31,  2000,  the  Corporation  raised gross  proceeds of Cdn$1,496,365
(US$1,032,973)  through a further  unit  offering by way of a Canadian  offering
with the issuance of 5,985,460  units at a price of Cdn$0.25 per unit. Each unit
comprised one common share and one common share purchase warrant, which entitles
the holder to purchase one further common share at an exercise price of Cdn$0.35
on or before January 31, 2001. In connection with the financing, the Corporation
paid 7.5 percent  commission  on the gross  proceeds and issued  191,418  common
shares as additional commission.

On February 7, 2000, the Corporation  announced that for all the warrants issued
as part of the fully  marketed  prospectus  offering,  the expiry  date would be
January 31, 2001.

                                       52
<PAGE>
13.  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
     ACCOUNTING PRINCIPLES

As discussed in Note 3, these consolidated  financial statements are prepared in
accordance with accounting principles generally accepted in Canada.

Differences  in  accounting  principles  as they  pertain to these  consolidated
financial statements are as follows:

     a)  Accounting for Share Issue Costs
         All costs related to the issuance of shares are offset against proceeds
         under U.S. generally accepted accounting  principles (GAAP) and the net
         amount is credited to share capital.

     b)  Non-Cash Issuance of Common Shares
         Under U.S.  GAAP,  value is assigned to issuances of common  shares for
         non-cash  consideration  and the basis for valuing the consideration is
         stated.

           i)   During 1995, the  Corporation  issued 150,000 common shares as a
                finder's  fee  and  168,000  common  shares  for  services,   in
                connection  with a financing.  Under U.S. GAAP,  these issuances
                would be valued at Cdn$1.00 per share or $110,710 and  $123,995,
                respectively, being the fair market value of the shares issued.

           ii)  During 1996,  the  Corporation  issued  90,400 common shares for
                broker special warrants,  in connection with a financing.  Under
                U.S. GAAP, these shares would be valued at Cdn$1.50 per share or
                $96,847, being the fair market value of the shares issued.

           iii) During 1999, the Corporation  issued 128,582 common shares for a
                broker's fee, in  connection  with the offering of common shares
                by way of a prospectus.  Under U.S. GAAP,  these shares would be
                valued at Cdn$0.25  per share  (about  $22,000),  being the fair
                market value of the shares issued.

          iv)   Share issuance costs are offset against share proceeds resulting
                in no net change to share capital.

     c)  Acquisition of Scotia
         During 1995,  the  Corporation  issued  336,814  common  shares for the
         acquisition  of Scotia (see Note 4b).  Under U.S.  GAAP,  these  shares
         would be  valued  at  $248,590,  the fair  market  value of the  shares
         issued.  This  value,  plus the  $17,215 of net  liabilities  of Scotia
         assumed by the Corporation, would have been recorded as property rights
         at the acquisition date under U.S. GAAP.

     d)  Compensation Expense Associated with Release of Shares from Escrow
         Under U.S. GAAP, stock compensation  expense is recorded as shares held
         in escrow  become  eligible for release based upon the number of shares
         eligible for release and the market value of the shares at that

                                       53
<PAGE>
         time.  Under  Canadian  GAAP,  no value is  attributed  to such  shares
         released  and  no  compensation  expense  is  recorded.  Shares  become
         eligible  for  release  from  escrow  based  on  deferred   exploration
         expenditure in accordance  with the Escrow  Agreement (see Note 4a) and
         with the consent of The Alberta Stock Exchange.  During the years ended
         December  31,  1999 and  1998  and for the  period  from  July 1,  1994
         (commencement)  through  December 31, 1999, the Corporation  would have
         recorded  compensation  expense of $0, $0 and $6,324,914, respectively,
         under U.S. GAAP.

     e)  Mineral Properties and Deferred Exploration Costs
         The  U.S.  Securities  and  Exchange  Commission  staff  has  taken the
         position that a U.S.  registrant without  proven and probable  economic
         reserves, in most cases, could not support the recovery of the carrying
         value of deferred  exploration  costs. Therefore,  the  Corporation has
         presented the effect of expensing all deferred  exploration  costs as a
         reconciling  item  between  U.S. and Canadian GAAP.

     f)  Stock-Based Compensation
         At December 31, 1999,  the  Corporation  has one stock option plan. The
         aggregate  number of shares to be  delivered  upon the  exercise of all
         options   granted   under  the  plan   shall  not  exceed  10%  of  the
         Corporation's  issued and outstanding common shares, up to a maximum of
         3,000,000 shares. The options vest immediately and are exercisable over
         terms  of up to a  maximum  of five  years.  Under  Canadian  generally
         accepted  accounting  principles,  the  Corporation  is not required to
         report, and has not reported,  any stock-based  compensation expense in
         the consolidated financial statements. Had compensation expense for the
         stock option plan been determined  based on the fair market value based
         method, in accordance with the FASB SFAS No. 123, the Corporation's net
         loss  for the  year  and net loss per  common  share  would  have  been
         increased to the pro forma amounts below:

                                                         1999             1998
                                                         ----             ----
         Net loss for the year          As reported:   $1,766,517     $3,389,208
                                        Pro forma:     $2,277,699     $3,759,985
         Net loss per common share      As reported:        $0.09          $0.17
                                        Pro forma:          $0.11          $0.19

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

                                                 1999          1998
                                                 ----          ----
         Dividend yield (%)                         0             0
         Expected volatility (%)                  152           134
         Risk-free interest rates (%)            5.68          5.05
         Expected lives (years)                     5             5

         Approximately  $20,000 of the compensation expense in 1999 ($207,000 in
         1998) resulted from  modifications to the exercise prices and remaining
         lives of previously granted options.

         A summary of the status of the  Corporation's  stock  option plan as of
         December 31, 1999 and 1998, and changes during the years ended on those
         dates is:

                                       54
<PAGE>
<TABLE>
<CAPTION>

                                                       1999                                 1998
                                                       ----                                 ----
                                                                (Cdn)                                (Cdn)
                                                              Weighted                              Weighted
                                                                Ave.                                  Ave.
                                                              Exercise                              Exercise
                                             Options            Price             Options            Price
------------------------------------------------------------------------------------------------------------
Outstanding and exercisable at
<S>                                         <C>                 <C>             <C>                    <C>
beginning of year                           1,610,000           $1.19           1,375,000              $1.96
Granted                                     1,445,000           $0.56             250,000              $1.10
Exercised                                           0               0             (15,000)             $1.15
Forfeited                                  (1,215,000)              0                   0                  0
                                          ------------        -------          -----------         ---------
Outstanding and exercisable at
end of year                                 1,840,000           $0.58           1,610,000              $1.19
                                          ============          =====          ===========         =========
Weighted average fair value of                                  $0.51                                  $0.97
                                                                =====                              =========
options granted during the year
</TABLE>

          The range of  exercise  prices is from  Cdn$0.55  to  Cdn$0.68  with a
          weighted average remaining  contractual life of 3.92 years at December
          31, 1999.

     g)  Impact on Consolidated Financial Statements

         The impact of the above on the consolidated financial statements is  as
         follows:

<TABLE>
<CAPTION>
                                                        December 31, 1999                  December 31, 1998
                                                        -----------------                  -----------------
Accumulated deficit, end of period, per Canadian
<S>                                                        <C>                                <C>
GAAP                                                       $12,999,237                        $11,061,405
Adjustment for acquisition of Scotia                           248,590                            248,590
Adjustment for compensation expense                          6,324,914                          6,324,914
Adjustment for share issue costs                              (738,830)                          (567,515)
Adjustment for deferred exploration costs                    3,482,068                          3,175,473
                                                        ---------------                     --------------
Accumulated deficit, end of period, per U.S.               $22,315,979                        $20,242,867
                                                        ===============                     ==============
GAAP


Share capital, per Canadian GAAP                           $16,960,540                        $16,414,666
Adjustment for acquisition of Scotia                           248,590                            248,590
Adjustment for compensation expense                          6,324,914                          6,324,914
Adjustments for share issue costs                             (738,830)                          (567,515)
                                                        ---------------                    ---------------
Share capital, per U.S. GAAP                               $22,795,214                        $22,420,655
                                                        ===============                    ===============
</TABLE>

                                       55
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                   Period from
                                                                             Years Ended                           July 1, 1994
                                                      ----------------------------------------------------        (commencement)
                                                          December 31,                    December 31,               through
                                                             1999                            1998                December 31, 1999
                                                      --------------------             -------------------     ---------------------

<S>                                                       <C>                             <C>                       <C>
Net loss for the period, per
Canadian GAAP                                             $1,766,517                      $3,389,208                $ 12,243,192
Adjustment for acquisition of
Scotia                                                             0                               0                     248,590
Adjustment for compensation
expense                                                            0                               0                   6,324,914
Adjustment for deferred
exploration costs                                            306,595                          (2,915)                  3,482,068
                                                          ----------                      -----------               ------------
Net loss for the period, per U.S.
GAAP                                                      $2,073,112                      $3,386,293                $ 22,298,764
                                                          ==========                      ===========               ============
Basic and diluted net loss per                            $     0.10                      $     0.17
                                                          ==========                      ===========
common share, per U.S. GAAP
</TABLE>

                                       56
<PAGE>
ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Information  with respect to the directors,  executive  officers and significant
employees of the Corporation is set forth below.

<TABLE>
<CAPTION>
Name                             Age         Positions Held

<S>                              <C>         <C>
Allen Ambrose                    43          President and Director, Director and CEO of MPI,
                                             Director of MPSA

Brian Gavin                      46          Vice-President of Exploration, Director of MASA
                                             Director of MPSA

Allan J. Marter                  52          Director, Director of MPSA

Jorge Vargas                     58          Director and President of MASA & NADSA

Armand Hansen                    64          Director

John Johnson Crabb               74          Director

A.D. (Darryl) Drummond           63          Director

Bonnie L. Kuhn                   34          Secretary and Director, Secretary and Director of  MPI

Jon H. Lehmann                   43          President of MPI, Secretary of MPSA
</TABLE>

Allen  Ambrose,  President  and Director,  Director and CEO of MPI,  Director of
MPSA, has 20 years of experience in the mining  industry  including his position
as Exploration Manager with Degerstrom. Prior to joining Degerstrom in 1988, Mr.
Ambrose was a geologist for Cyprus Minerals,  Kidd Creek Mines, Molycorp,  Boise
Cascade and Dennison Mines.  Mr. Ambrose has extensive  experience in all phases
of exploration,  project  evaluation and project  management and has worked as a
geologist  consultant in the U.S.,  Venezuela and most  recently  Argentina.  He
holds a B. Sc. degree in Geology from Eastern Washington University (EWU). While
consulting  for  Gold  Reserve  Corporation,  he  was  a  co-discoverer  of  the
auriferous  massive sulfide exposure that led to their acquisition of the Brisas
project  in  Venezuela.  Mr.  Ambrose  sits on the board of  directors  of Cadre
Resources  Ltd.  (1994 to  present),  a company  listed on the  Vancouver  Stock
Exchange with mining  interests in Venezuela.  Mr.  Ambrose sits on the board of
trustees for the Northwest Mining  Association a mining industry  association of
approximately 3,000 members.

Brian Gavin, Vice President of Exploration,  Director of MASA, Director of MPSA,
has 20 years of  experience  in  exploration  geology.  Mr. Gavin has  extensive
experience in all phases of exploration, project evaluation and

                                       57
<PAGE>
project  management  in the  search for  precious  and base  metals,  industrial
minerals and has worked in the field as project  manager and  consultant  in the
U.S., Mexico,  Nigeria,  Argentina and most recently,  in Romania. He holds a B.
Sc.  (Honours)  degree in Geology from the University of London and M. S. degree
in Geology and Geophysics from the University of Missouri. From 1981 to 1993, he
was a  consultant  with Ernest K.  Lehman &  Associates,  which is a  geological
mining consulting firm. From 1993, he has been employed by Degerstrom.

Allan J. Marter, Director,  Director of MPSA, was Chief Financial Officer of the
Corporation from June 1997 to March 2000 and a director of the Corporation since
June 1997.  On November  9, 1999,  he was  appointed  Vice  President  and Chief
Financial  Officer of Golden  Star  Resources  Ltd.  Mr.  Marter was a financial
advisor in the mining  industry and  Principal of Waiata  Resources,  from April
1996 to November 9, 1999 and has  provided  financial  advisory  services to the
Corporation  since April 30, 1996. Mr. Marter is a finance  professional with 22
years experience in the mining industry. From 1992 through 1996, he was employed
as a director of Endeavor  Financial Inc., a mining financial advisory firm. Mr.
Marter  also  serves as a director  of  Addwest  Minerals  International,  Ltd.,
Latitude Minerals Corp., Golden Phoenix Minerals Inc., and holds the position of
Treasurer for the Northwest Mining Association.

Bonnie L. Kuhn, Secretary and Director,  Secretary and Director of MPI, has been
the Secretary and a director of the Corporation  since June 1997. She has been a
solicitor with the firm Ogilvie and Company, Barristers and Solicitors, Calgary,
Alberta,  from January 1994 to December 31, 1998. Ogilvie and Company of Calgary
changed its name to Armstrong  Perkins Hudson in 1999.  From January 1, 1999 on,
Ms. Kuhn has been a partner with Armstrong  Perkins Hudson.  From August 1993 to
December 1994, Ms. Kuhn was a Crown  prosecutor  with the Government of Alberta,
Department  of  Justice.  Ms. Kuhn is a member of the Law Society of Alberta and
the  Canadian Bar  Association.  She  obtained  her LLB from the  University  of
Manitoba in 1989. Ms. Kuhn was a director of Talon  Petroleums  Ltd., an oil and
gas exploration company, from September 1997 to September 1999.

Armand  Hansen,   Director,  is  currently  Vice  President  of  Operations  for
Degerstrom. He has held that position for 18 years. His responsibilities include
managing  350  employees  at various  job sites  throughout  the U.S.  and Latin
America.  Mr.  Hansen has 29 years of  experience  in the mining  industry.  Mr.
Hansen also serves as Vice-  President and director to Aresco Inc. since 1989, a
private company with  approximately  35 employees and $6 to $7 million in annual
sales  in  1998.  Aresco  is  a  manufacturing   company  conducting  speciality
fabrication of mining equipment.

John Johnson Crabb, Director, was a director of Inland Resources, Inc. from 1985
to November  1995.  Mr.  Crabb was the  director of Pegasus  Gold Inc.  and Vice
President of Exploration for Crowsnest Resources Ltd., a wholly owned subsidiary
of Shell Canada.  Mr. Crabb graduated from the University of British Columbia in
1951 with a Masters Degree in Geology.

A.D. (Darryl)  Drummond,  Director,  is a Ph.D and a professional  engineer.  He
graduated from the University of British  Columbia with a B.A.Sc.  in Geological
Engineering in 1959 and with a M.A.Sc. in 1961. He obtained his Doctorate degree
in 1966 from the University of California at Berkeley.  As an undergraduate  and
graduate,  he worked with Kennco  Explorations  (Western) Ltd. during the period
1958 to  1961.  He has been  associated  with the  Placer  Development  Group of
Companies  since 1963,  first with Craigmont  Mines Ltd.,  then Endako Mines and
Gibraltar  Mines.  At the Placer head  office  since 1967,  he  initially  was a
Research Geologist and then Assistant  Exploration Manager,  Western Canada, for
Canex Placer Ltd.  During 1977 to 1979,  he was Manager of Placer  Development y
Cia.  Ltda.  in  Santiago,  Chile,  then  returned  to the  position of Research
Geologist  with the Technical  Services  Advisory  Group for the Placer Group of
Companies in Vancouver.  On March 1, 1981, he and David Howard became principals
in a mineral exploration  management firm called D.D.H.  Geomanagement Ltd. with
offices in  Vancouver,  British  Columbia.  Since  1981,  consulting  tasks have
concentrated  on all aspects of mineral  deposit  evaluation  covering  precious
metal, base metal and industrial mineral types in such countries

                                       58
<PAGE>
as  Argentina,  Canada,  Chile,  China,  Costa Rica,  Ecuador,  Guyana,  Mexico,
Philippines,  United  States of  America  and  Venezuela.  He is a member of the
Society of Economic  Geology and a member of the Geology Section of the Canadian
Institute of Mining and Metallurgy. He is the President of D.D.H.  Geomanagement
from 1981 to the present; Director of Cadre Resources Ltd. from November 1994 to
February 1995; and a Director of All North  Resources Ltd. from May 1995 to July
9, 1996;  Director of International  All-North Resources Ltd. from July 10, 1996
to present; Director of The Quinto Mining Corporation from September 11, 1996 to
present.

Jorge Vargas, President and Director of MASA and NAD, received his law degree in
1967 from the National  University  of Buenos Aires,  Argentina.  He has been in
private  practice  since 1967.  Dr.  Vargas also  studied  mining law at the Law
Faculty of the University of Mendoza and was on the organizing  committee of the
First  International Water Rights Conference in Mendoza in 1968. Dr. Vargas is a
registered attorney in the provinces of Mendoza and San Juan, and at the Federal
level.

Jon Lehmann,  President of MPI, Secretary of MPSA, has 23 years of experience in
exploration  and mine  geology  including  his  position  as  General  Manager -
Northern Andes with the  Corporation.  Prior to joining the Corporation in 1996,
Mr.  Lehmann was a geologist for Echo Bay Mines,  Cyprus-Amax  Minerals,  Inland
Gold and  Silver,  Meridian  Minerals  and  Conoco  Minerals.  He has  extensive
experience in all phases of exploration,  project  management,  mine development
and mine  geology.  Mr.  Lehmann was the project  manager of the  predevelopment
feasibility  study of the Cerro  Queina gold  deposit in Panama for  Cyprus-Amax
Minerals. He holds a B.Sc. Degree in geology from Washington State University.

The Corporation has six directors, two of whom are executive officers. Directors
serve terms of one year or until their  successors are elected or appointed.  No
remuneration of any kind has been paid to any director, in his capacity as such,
and there is no intention  that they will be remunerated in that capacity in the
immediate  future.  Expenses  incurred by  directors  in  connection  with their
activities on behalf of the Corporation are reimbursed by the Corporation.

ITEM 10.    EXECUTIVE COMPENSATION

Summary of Executive  Compensation.  The following table sets forth compensation
paid,  directly or  indirectly,  by Minera Andes during the last fiscal year for
services rendered by Allen Ambrose, President, and for services rendered by each
other executive officer whose  compensation in the last fiscal year was $100,000
or more ("Named Executives").

                           Summary Compensation Table
<TABLE>
<CAPTION>

                                      Annual Compensation                  Long Term Compensation
                                      -------------------
                                                       Other Annual
                              Fiscal      Salary       Compensation         Securities Underlying
                                          ------       ------------
                               Year         ($)             ($)               Options/SARs (#)
                               ----         ---             ---               ----------------

<S>                            <C>       <C>              <C>                     <C>
Allen Ambrose (1)              1999       92,302           8,960(2)               210,000(4)
President                      1998       96,200           9,660                   30,000
                               1997       89,126          11,436                   80,000
Brian Gavin (1)                1999      105,502           9,620(3)               210,000(4)
Vice President of              1998      122,600          11,112                   30,000
Exploration                    1997      117,510          13,762                   80,000
</TABLE>

                                       59
<PAGE>
Notes:

(1)    Allen  Ambrose and Brian  Gavin,  as employees  of  Degerstrom,  provided
       services  under  the  Operating   Agreement  (See   "Description  of  the
       Business")  which  services  were invoiced to the  Corporation  under the
       Operating Agreement.

(2)    During the 1999 fiscal year, the following  benefits were provided to Mr.
       Ambrose by Degerstrom and invoiced to the Corporation:
           401K Base                   $2,748
           401K Match                  $1,832
           Medical Insurance           $4,380

(3)    During the 1999 fiscal year, the following  benefits were provided to Mr.
       Gavin by  Degerstrom  and invoiced to the  Corporation:
          401K Base                    $3,144
          401K Match                   $2,096
          Medical Insurance            $4,380

(4)    During  1999,  190,000  of these  options  granted  in prior  years  were
       canceled.

Stock  Options   Granted  in  1999.  The  following  table  sets  forth  certain
information  concerning individual stock options granted to the Named Executives
during the year ended December 31, 1999.

                      Option Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
                                              Percentage of
                                              Total Options
                           Number of            Granted to             Exercise
                     Securities Underlying     Employees in             Price              Expiration
                      Options Granted (#)      Fiscal Year             (Cdn$/Sh)              Date
                      -------------------      -----------             ---------              ----

<S>                          <C>                     <C>                <C>               <C>
Allen Ambrose                210,000                 15%                $0.55(1)          June 3, 2004

Brian Gavin                  210,000                 15%                $0.55(1)          June 3, 2004
</TABLE>

Notes:

(1)    During 1999, 190,000 options at Cdn$1.15 were canceled.

Aggregated Option Exercises.  The following table sets forth certain information
concerning the number of shares covered by both  exercisable  and  unexercisable
stock   options  as  of  December  31,  1999.   Also   reported  are  values  of
"in-the-money" options that represent the positive spread between the respective
exercise  prices of  outstanding  stock options and the fair market value of the
Corporation's Common Shares as of December 31, 1999.

                                       60
<PAGE>
                          Fiscal Year-End Option Values

<TABLE>
<CAPTION>

                         Shares                                                             Value of Unexercised
                        acquired                     Number of Unexercised                In-the-Money Options at
                           on          Value       Options at Fiscal Year End             Fiscal Year-End ($)(1)(2)
                                                   --------------------------             -------------------------
                        Exercise      Realized    Exercisable      Unexercisable       Exercisable       Unexercisable
                        --------      --------    -----------      -------------       -----------       -------------
<S>                        <C>          <C>          <C>                 <C>                <C>               <C>
Allen Ambrose              0            $0           290,000             0                  $0                $0
Brian Gavin                0            $0           290,000             0                  $0                $0
</TABLE>

Notes:

(1)    The value of unexercised  in-the-money  options was calculated  using the
       closing  price of  common  shares on The  Canadian  Venture  Exchange  on
       December 31, 1999, less the exercise price of in-the-money stock options.
       On  December  31,  1999 the  closing  price of the  Common  Shares on The
       Canadian Venture Exchange was Cdn$0.18.

(2)    The  currency   exchange  rate  applied  in  calculating   the  value  of
       unexercised  in-the-money  options was the late New York  trading rate of
       exchange for December 31, 1999 as reported by the Wall Street Journal for
       conversion of United States dollars into Canadian  dollars was U.S. $1.00
       = Cdn$1.44 or Cdn$1.00 = U.S. $0.69.

Stock Option Plan

The Board of  Directors  adopted a stock  option  plan  (the  "Plan")  which was
approved with  amendments by the  shareholders  of the Corporation at the Annual
and  Special  Meeting  of  Shareholders   held  on  June  26,  1996,  which  was
subsequently  amended  at  the  Corporation's  Annual  and  Special  Meeting  of
Shareholders  held on June 26,  1998.  The  purpose of the Plan is to afford the
persons who provide  services to the  Corporation or any of its  subsidiaries or
affiliates,  whether directors,  officers or employees of the Corporation or its
subsidiaries or affiliates,  an opportunity to obtain a proprietary  interest in
the  Corporation by permitting them to purchase Common Shares of the Corporation
and to aid in  attracting,  as well as retaining and  encouraging  the continued
involvement of such persons with the  Corporation.  Under the terms of the Plan,
the board of directors has full  authority to administer  the Plan in accordance
with the terms of the Plan and at any time amend or revise the terms of the Plan
provided,  however,  that no  amendment  or  revision  shall  alter the terms of
options  already  granted.  The aggregate  number of shares to be delivered upon
exercise  of all  options  granted  under the Plan  shall not  exceed 10% of the
Corporation's  issued and outstanding Common Shares up to a maximum of 3,000,000
shares. No participant may be granted an option under the Plan which exceeds the
number of shares  permitted  to be granted  pursuant to rules or policies of any
stock exchange on which the Common Shares is then listed.

Under the Plan, the exercise price of the shares covered by each option shall be
determined  by the directors and shall be not less than the closing price of the
Corporation's  shares  on the stock  exchange  or stock  exchanges  on which the
shares are listed on the last trading day immediately preceding the day on which
the stock  exchange  is notified of the  proposed  issuance of option,  less any
discounts  permitted  by the policy or policies of such stock  exchange or stock
exchanges. If an option is granted within six months of a public distribution of
the Corporation's  shares by way of prospectus,  then the minimum exercise price
of such option shall,  if the policy of such stock  exchange or stock  exchanges
requires,  be the greater of the price determined  pursuant to the provisions of
the Plan and the price per share paid by the investing  public for shares of the
Corporation acquired by the public

                                       61
<PAGE>
during such public  distribution,  determined in  accordance  with the policy of
such stock exchange or stock exchanges.  Options granted under the Plan will not
be  transferable  and,  if they  are not  exercised,  will  expire  one (1) year
following  the date the  optionee  ceases to be director,  officer,  employee or
consultant  of the  Corporation  by reason of death,  or ninety  (90) days after
ceasing to be a director, officer, employee or consultant of the Corporation for
any reason other than death.

At December 31, 1999, 1,160,000 options were available for grant under the Plan.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth  certain  information  regarding the  beneficial
ownership,  as of March 15, 2000,  of the Common Shares by (i) each person known
by the Corporation to own beneficially  more than 5% of the Common Shares,  (ii)
each director of the  Corporation,  (iii) the Chief  Executive  Officer and each
other officer named in the Summary Compensation Table and (iv) all directors and
executive  officers  as a group.  Except as  otherwise  noted,  the  Corporation
believes  the persons  listed below have sole  investment  and voting power with
respect to the Common Shares owned by them.

<TABLE>
<CAPTION>
                                                 Shares
                                              Beneficially       Percentage of
Name and Address                                Owned (1)      Common Shares (1)
----------------                                ---------     -----------------

<S>                                           <C>                  <C>
Named Executive Officers and Directors

Allen Ambrose                                 407,200 (2)          1.34%
3303 North Sullivan Road
Spokane, WA 99216

Armand Hansen                                 291,000 (3)          0.96%
3303 North Sullivan Road
Spokane, WA 99216

John Johnson Crabb                            190,000 (3)          0.63%
3303 North Sullivan Road
Spokane, WA 99216

Brian Gavin                                   410,400 (2)          1.35%
3303 North Sullivan Road
Spokane, WA 99216

A.D. (Darryl) Drummond                        140,000 (4)          0.46%
3303 North Sullivan Road
Spokane, WA 99216

Bonnie L. Kuhn                                 91,000 (5)          0.30%
1600 Canada Place
407 - 2nd Street S.W.
Calgary, Alberta
T2P 2Y3

                                       62
<PAGE>
Allan J. Marter                               140,000 (4)          0.46%
4828 W. Fair Place
Littleton, CO 80123

5% or Greater Shareholders
Neal A. and Joan L. Degerstrom              5,100,000 (6)(7)       17.0%
3303 North Sullivan Road
Spokane, WA 99216

All directors and
executive officers
as a group (7 persons)                      1,669,800 (8)          5.07%

</TABLE>

Notes:

(1)   Shares  which the person or group has the right to acquire  within 60 days
      after  March 15,  2000 are deemed to be  outstanding  in  determining  the
      beneficial  ownership  of he  person  or  group  and  in  calculating  the
      percentage  ownership  of the  person or group,  but are not  deemed to be
      outstanding as to any other person or group.

(2)   Includes stock options  entitling the holder to acquire 80,000 shares upon
      payment of Cdn$0.68, and 210,000 shares upon payment of Cdn$0.55.

(3)   Includes stock options  entitling the holder to acquire 40,000 shares upon
      payment of Cdn$0.68, and 120,000 shares upon payment of Cdn$0.55.

(4)   Includes stock options  entitling the holder to acquire 20,000 shares upon
      payment of Cdn$0.68, and 120,000 shares upon payment of Cdn$0.55.

(5)   Includes stock options  entitling the holder to acquire 10,000 shares upon
      payment of Cdn$0.68, and 80,000 shares upon payment of Cdn$0.55.

(6)   The Common  Shares are owned  beneficially  by Mr. and Mrs.  Degerstrom by
      virtue of their  combined  majority  control  of the  record  owner,  N.A.
      Degerstrom, Inc.

(7)   Does  not  include  1,213,409  Common  Shares  reserved  for  issuance  to
      Degerstrom upon the  satisfaction  of certain  performance  criteria.  See
      "Description of Properties - the Degerstrom Agreement."

(8)   Includes stock options to acquire  290,000 shares upon payment of Cdn$0.68
      and 980,000 shares upon payment of Cdn$0.55.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Corporation,  MASA, NADSA and Degerstrom are party to an Operating Agreement
whereby Degerstrom  operates and manages the exploration program relating to the
Corporation   Claims  in  return  for  a  management   fee  and  certain   other
consideration. See "Description of Properties The Degerstrom Agreement."

                                       63
<PAGE>
Allen Ambrose and Brian Gavin both serve as employees of Degerstrom  and receive
all of their  compensation for management  services  provided to the Corporation
under the Operating Agreement from Degerstrom. Neither Mr. Ambrose nor Mr. Gavin
perform any services as employees of Degerstrom  other than in their  capacities
as President and Vice President of Exploration of the Corporation  respectively.
All of the compensation paid to Messrs. Ambrose and Gavin has been invoiced back
to the Corporation by Degerstrom.  See  "Description  of the Business  Operating
Structure" and "Executive Compensation."

During the years ended December 31, 1999 and 1998, administrative fees were paid
to NAD of $48,240  and $54,271 on total costs  incurred  by the  Corporation  of
$492,325 and $749,041, respectively. Equipment rentals of $6,070 and $6,070 were
included in the total costs for 1999 and 1998, respectively.

During 1999 and 1998, the Corporation  incurred the following  transactions with
related parties: financial consulting to a director and officer totaling $38,395
and  $39,130,  and legal  fees to a firm in which a director  and  officer is an
associate, totaling $114,144 and $49,435, respectively.

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8K

     a)  Exhibits
         The  Exhibits  as indexed  on pages 65  through  66 of this  report are
         included as part of this Form 10-KSB.

     b)  Reports on Form 8K
         There were no reports on Form 8K filed in the  quarter  ended  December
         31, 1999.

                                       64
<PAGE>
                                INDEX TO EXHIBITS

Exhibit
Number        Description
-------       -----------

2.1           Asset and Share  Acquisition  Agreement  between MASA,  NADSA, the
              Corporation  Degerstrom,  Brian Gavin,  Jorge Vargas,  and Enrique
              Rufino Marzari Elizalde,  dated March 8, 1995, as amended on April
              19,  1996  (incorporated  by  reference  to  Exhibit  2.1  to  the
              Corporation's  Registration  Statement  on Form 10-SB,  Commission
              File No. 000-22731 (the "Form 10-SB")).

2.2           Arrangement  between the  Corporation  and Scotia Prime  Minerals,
              Inc. (incorporated by reference to Exhibit 2.2 to the Form 10-SB).

3.1           Articles of  Incorporation  (incorporated  by reference to Exhibit
              3.1 to the Form 10-SB).

3.2           Bylaws  (incorporated  by  reference  to  Exhibit  3.2 to the Form
              10-SB).

4.1           Warrant  Certificate  describing  the  rights  of  Broker  Special
              Warrants  (incorporated  by  reference  to Exhibit 4.1 to the Form
              10-SB).

4.2           Warrant  Certificate  describing  the rights of  Cominco  Warrants
              (incorporated by reference to Exhibit 4.2 to the Form 10-SB).

10.1          Conveyance  Agreement  between  NADSA and N.A.  Degerstrom,  Inc.,
              dated July 1, 1994  (incorporated  by reference to Exhibit 10.1 to
              the Form 10-SB).

10.2          Conveyance  Agreement  between  NADSA and N.A.  Degerstrom,  Inc.,
              dated July 1, 1994  (incorporated  by reference to Exhibit 10.2 to
              the Form 10-SB).

10.3          Operating  Agreement between the Corporation and N.A.  Degerstrom,
              Inc.  dated March 15, 1995  (incorporated  by reference to Exhibit
              10.3 to the Form 10-SB).

10.4          Share Option  Agreement  between the Corporation and Jorge Vargas,
              dated March 15, 1995  (incorporated  by the  reference  to Exhibit
              10.4 to the Form 10-SB).

10.5          Share Option Agreement  between the Corporation and Enrique Rufino
              Marzari Elizalde,  dated March 15, 1995 (incorporated by reference
              to Exhibit 10.5 to the Form 10-SB).

10.6          Option to Purchase (Santa Clara) between the N.A. Degerstrom, Inc.
              and Martin  Antonio  Carotti and Carlos  Giustozzi,  dated May 12,
              1994,  as amended on June 30, 1995 and again on December  13, 1995
              (incorporated by reference to Exhibit 10.7 to the Form 10-SB).

10.7          Letter   Agreement  (Agua  Blanca)  between  the  Corporation  and
              Newcrest Minera Argentina S.A., dated April 4, 1996  (incorporated
              by reference to Exhibit 10.9 to the Form 10-SB).

10.8          Option to Purchase (Agua Blanca)  between MASA and Adonis Cantoni,
              dated June 21, 1995 (incorporated by reference to Exhibit 10.10 to
              the Form 10-SB).

                                   65
<PAGE>
10.9          Debt  Restructuring  Agreement  between the  Corporation  and N.A.
              Degerstrom,  Inc., dated January 11, 1996, as amended May 13, 1996
              (incorporated by reference to Exhibit 10.15 to the Form 10-SB).

10.10         Escrow Agreement between the Corporation,  N.A.  Degerstrom,  Inc.
              and  Montreal  Trust  Company of Canada,  dated  November 30, 1995
              (incorporated by reference to Exhibit 10.16 to the Form 10-SB).

10.11         Agency Agreement  between the  Corporation,  C.M. Oliver & Company
              Limited and Majendie Charlton  Securities Ltd., dated November 22,
              1996  (incorporated  by  reference  to  Exhibit  10.17 to the Form
              10-SB).

10.12         Special  Warrant  Indenture  between the  Corporation and Montreal
              Trust Company of Canada,  dated December 13, 1996 (incorporated by
              reference to Exhibit 10.18 to the Form 10-SB).

10.13         Purchase  Warrant  Indenture  between the Corporation and Montreal
              Trust Company of Canada,  dated December 13, 1996 (incorporated by
              reference to Exhibit 10.19 to the Form 10-SB).

10.14         Agreement  dated April 30, 1996 between the Corporation and Waiata
              Resources  for  the  provision  of  financial   advisory  services
              (incorporated by reference to Exhibit 10.20 to the Form 10-SB).

10.15         Amended  Stock Option Plan,  dated June 26, 1996,  as amended June
              26,  1998  (incorporated  by  reference  to  Exhibit  10.15 to the
              Corporation's  report on Form 10-KSB for the period ended December
              31, 1998).

10.16         Limited  Liability  Company Agreement (Arroyo Verde) dated October
              23, 1997 between the Corporation  and Pegasus Gold  International,
              Inc.  (incorporated  by reference to Exhibit  10.16 to Form 10-KSB
              for fiscal year ended December 31, 1997).

11.1          Statement regarding the computation of per share loss.*

21.1          List of subsidiaries.*

23.1          Consent of PricewaterhouseCoopers LLP.*

27.1          Financial Data Schedule.*

*    Exhibits filed herewith

                                       66
<PAGE>
                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf be the undersigned, thereunto duly
authorized, effective March 29, 2000.

     MINERA ANDES INC.
     Registrant


By:     /S/ ALLEN V. AMBROSE
        ---------------------------
        Allen V. Ambrose, President


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


Date:  March 29, 2000                  By:  /S/ ALLEN V. AMBROSE
       ----------------------               ------------------------------------
                                            Allen V. Ambrose, Director


Date:  March 29, 2000                  By:  /S/ JOHN JOHNSON CRABB
       ----------------------               ------------------------------------
                                            John Johnson (Jack) Crabb, Director


Date:  March 29, 2000                  By:  /S/ A.D. DRUMMOND
       ----------------------               ------------------------------------
                                            A.D. (Darryl) Drummond, Director


Date:  March 29, 2000                  By:  /S/ ARMAND G. HANSEN
       ----------------------               ------------------------------------
                                            Armand G. Hansen, Director


Date:  March 29, 2000                  By:  /S/ BONNIE L. KUHN
       ----------------------               ------------------------------------
                                            Bonnie L. Kuhn, Director


Date:  March 29, 2000                  By:  /S/ ALLAN J. MARTER
       ----------------------               ------------------------------------
                                            Allan J. Marter, Director

                                       67