D U N D E E    B A N C O R P   I N C .

**M A N A G E M E N T ' S    D I S C U S S I O N    A N D    A N A L Y S I S**

**DUNDEE BANCORP INC.**(the"Company" or "Dundee Bancorp") is primarily a holding company dedicatedto wealth management, real estate and resources through a variety of activitiesand investments. Certain of these activities are carried out directly throughwholly or partially owned subsidiaries, while others are undertaken throughequity accounted or portfolio investment holdings. In each case, theseinvestments include both publicly traded and private companies, and depending onthe percentage ownership, will be afforded different accounting treatments inour consolidated financial statements.

Because we operate in three differentindustry sectors and because our investments differ by ownership, structure andassociated accounting requirements, it often appears complex to analyze ourresults. It is important to mention that we do not view our Company as a fund,nor do we concern ourselves about the daily trading prices in the marketplace.For the most part, we have founded and built the companies that we own and wetake an active role in the development, if necessary. As such, during anyperiod, the market value of our holdings may change and the amounts that werecord as investment gains and losses may fluctuate significantly.

**This Management's Discussion andAnalysis has been prepared to include the requirements of Form 51-102F1 issuedby the Canadian Securities Administrators and has been prepared with aneffective date of April 30, 2004.**

O P E R A T I N G     S E G M E NT S

During 2003, our business changed as aresult of significant transactions in both our *wealthmanagement*and *realestate*business units. In our *resources*business, we have concentrated ourinvestment holdings in a few larger investees and have disposed of others,including most of the less significant holdings. As a result, we reevaluated thecomposition of our operating segments and we have reclassified our resources andreal estate investments that were previously included in the "Corporate andInvestment Portfolio" segment into either the real estate or the resourcesoperating segment, as appropriate. We have reclassified the comparative figuresto be consistent with the new segmented presentation.

We are now reporting four operating segmentsas follows:

**WEALTH MANAGEMENT**

The wealth management segment consists ofthe wealth management operations of our 68% owned subsidiary, Dundee WealthManagement Inc. ("Dundee Wealth"), and its operating subsidiaries, as wellas the wealth management activities conducted through our wholly ownedsubsidiary, The Dundee Bank, which is located in the Cayman Islands.

**REAL ESTATE**

The real estate segment consists of the landand housing operations of our 85% owned subsidiary, Dundee Realty Corporation("Dundee Realty"), as well as our interest in Dundee Real Estate InvestmentTrust ("Dundee REIT").

----

**RESOURCES**

The resources segment consists of ourholdings in a variety of resource entities, including our 51% owned subsidiary,Eurogas Corporation ("Eurogas"), and our interests in Dundee Precious MetalsInc. ("Dundee Precious") and Breakwater Resources Ltd. ("Breakwater").

**OTHER INVESTMENTS AND CORPORATE COSTS**

Our corporate and other investment holdingssegment includes our remaining corporate investments which are either accountedfor on an equity basis if they are subject to significant influence, or areaccounted for at cost. This segment also includes our general corporate overheadcosts, which are not specifically allocated to any operating division.

S E L E C T E D    C O N S O L I D A TE D    F I N A N C I A L   I N F O R M A T I O N   O F    D U N D E E    B A N C O R P

| *(in thousands of dollars      except for number of shares and amounts per share)* |      |   |      |   |      |   |
|------------------------------------------------------------------------------------|-----------|--------|-----------|--------|-----------|--------|
|                                                                                    |           |   |           |   |           |   |
|                                                                               |      |   |      |   |      |   |
| For the years ended      December 31                                               | 2003      |   | 2002      |   | 2001      |   |
|                                                                                    |           |   |           |   |           |   |
| Total assets                                                                       | 1,738,230 |   | 1,216,405 |   | 1,050,132 |   |
| Corporate debt                                                                     | 295,622   |   | 238,628   |   | 203,799   |   |
| Future income tax      liabilities                                                 | 38,670    |   | 54,847    |   | 42,415    |   |
| Other liabilities                                                                  | 561,376   |   | 335,520   |   | 320,342   |   |
| Non controlling interest                                                           | 245,927   |   | 108,444   |   | 37,721    |   |
|                                                                               |           |   |           |   |           |   |
|                                                                               | 1,141,595 |   | 737,439   |   | 604,277   |   |
| Net assets represented by      common shares                                       | 596,635   |   | 478,966   |   | 445,855   |   |
|                                                                                    |           |   |           |   |           |   |
| Revenue                                                                            | 443,505   |   | 272,753   |   | 240,259   |   |
| Investment income                                                                  | 44,545    |   | 10,942    |   | 8,421     |   |
| Share of earnings (loss) of      equity accounted investments                      | 8,926     |   | 2,252     |   | (20,124)  |   |
| Investment provision                                                               | (4,655)   |   | (9,265)   |   | (31,379)  |   |
| Dilution gain                                                                      | 32,700    |   | 75,680    |   | -         |   |
| Extraordinary gain                                                                 | 19,951    |   | -         |   | -         |   |
|                                                                               |      |   |      |   |      |   |
|                                                                               |      |   |      |   |      |   |
| Net earnings (loss) before      extraordinary gain                                 | 100,959   |   | 50,256    |   | (56,965)  |   |
| Net earnings (loss) for the      year                                              | 120,910   |   | 50,256    |   | (56,965)  |   |
|                                                                               |      |   |      |   |      |   |
|                                                                               |      |   |      |   |      |   |
| Weighted average number of      common shares (in thousands of shares)             |      |   |      |   |      |   |
|    Basic                                                            | 25,217    |   | 25,436    |   | 26,212    |   |
|    Diluted                                                          | 25,475    |   | 25,640    |   | 26,212    |   |
|                                                                               |      |   |      |   |      |   |
|                                                                               |      |   |      |   |      |   |
| Earnings (loss) per share      before extraordinary gain                           |      |   |      |   |      |   |
|    Basic                                                            | 4.00      |   | 1.98      |   | (2.17)    |   |
|    Diluted                                                          | 3.96      |   | 1.96      |   | (2.17)    |   |
|                                                                               |      |   |      |   |      |   |
|                                                                               |      |   |      |   |      |   |
| Earnings (loss) per share                                                          |      |   |      |   |      |   |
|    Basic                                                            | 4.79      |   | 1.98      |   | (2.17)    |   |
|    Diluted                                                          | 4.75      |   | 1.96      |   | (2.17)    |   |
|                                                                                    |           |   |           |   |           |   |

----

P E R F O R MA N C E     M E A S U R E S    A N D   B A S I S    O F

P R E S E N TA T I O N

The Company's consolidated financialstatements are prepared in accordance with Canadian generally acceptedaccounting principles ("GAAP") and are reported in Canadian dollars. Dollaramounts referred throughout this Management's Discussion and Analysis,including tabular amounts, are reported in Canadian dollars. Management believesthat important measures of the Company's operating performance and that of itssubsidiaries include certain measures that are not defined under GAAP and assuch, may not be comparable to similar measures used by other companies.Throughout this discussion, there will be references to the followingperformance measures which management believes are relevant to an understandingof the economics of our business:

- " AUA" or    "Assets under    Administration" which represent the market value of client assets    administered in respect of which Dundee Wealth earns commissions, trailer    fees and administrative and other similar fees. AUA are not reflected on the    Company's balance sheet. To the extent that AUA are managed by Dundee    Wealth, such assets may also be included in their respective AUM.  
- " AUM" or    "Assets under    Management" which represent the market value of client assets managed by    Dundee Wealth on a discretionary basis in respect of which Dundee Wealth    earns an investment management fee. AUM are not reflected on the Company's    balance sheets.  
- " EBITDA" which represents earnings    before interest, taxes, depreciation and amortization earned directly by    Dundee Wealth. The Company uses this measure as a supplement for net    earnings and cash flows in the wealth management segment.  
- " Operating Earnings before Interest,    Taxes and Other Non Cash Items" and "Operating Earnings" are set out    in the consolidated statements of operations of the Company. While these    measures are non-GAAP, the Company uses them as supplementary measures to    net earnings of the Company.  

A C C O U N T I N G    P O L I C I E S   A N D    E S T I M A T E S

Certain accounting policies are critical tounderstanding the results of operations and financial condition of the Company,and some of these policies require our management, or management of investeecompanies, to make judgements and estimates on matters that are uncertain.Changes in these estimates may have a material impact on financial results andon the Company's financial condition. A summary of significant accountingpolicies and new policies adopted during 2003 are discussed in notes 1 and 17 tothe 2003 audited consolidated financial statements of the Company. Some of themore significant judgements and estimates made by management are discussedbelow:

**Carrying Value of Investments -**Weown investments in publicly and privately issued securities, which are generallycarried at cost. From time to time, management assesses whether a write-down isrequired to reflect an other than temporary decline in value. To complete itsassessment, management will look at a number of factors, including the marketprice of the security, if available, the conditions and prospects of theunderlying business, including its profitability, and comparable valuations. Wemay also use other valuation techniques such as discounted cash flow valuationmodels. Many of these factors require management to make subjective estimates.Where appropriate, an investment provision will be made against the carryingvalue

----

of the investment. Under current GAAP, anysubsequent recovery in the value of an investment that has been provided forcannot be realized until the investment is disposed of. Investment provisionsare reflected as a separate line item on the consolidated statements ofoperations.

**Allowance for Credit Losses -**Inaccordance with brokerage industry practice, client transactions within DundeeWealth are entered into on either a cash or margin basis. When credit isextended to a client to purchase securities, the securities are held ascollateral for the amounts loaned. Clients purchasing securities on margin mustmaintain collateral in their accounts in accordance with regulatory guidelines.Dundee Wealth has established an allowance for credit losses which consists ofspecific and general components based on management's estimate of such losses.Dundee Wealth compares the amount loaned to each client to the market value ofsecurities held in such accounts to determine the provision for credit losses.The market value of the securities held as collateral can fluctuate daily basedon market forces, which could lead to an unexpected increase in the provision oradditional credit losses.

**Provision for Litigation -**TheCompany and its subsidiaries are defendants in various legal actions, some ofwhich relate to activities of acquired entities that arose prior to the date ofacquisition. The Company's operating results include a provision for potentialliabilities in respect of these matters, which provision is determined usingmanagement's best estimates based on the facts and circumstances of each claimon a case by case basis, taking into consideration all information available tothe Company. The claims are reviewed every quarter or as new information becomesavailable. In certain cases, legal claims may be covered under the Company'svarious insurance policies.

**Goodwill and Other Intangible AssetsImpairment -**Goodwill and otherintangible assets with an indefinite life are subject to value-based impairmenttesting at least on an annual basis. Determining the useful lives and values ofintangible assets requires judgement by management. To assess possibleimpairment of intangible assets, we have developed several models that providefor changes in various business measures. In the case of Dundee Wealth, thesewould include changes in AUA and AUM as well as an estimate of forward earnings.These models are applied consistently from year to year.

**Business Combinations -**Managementuses judgement in applying the purchase method of accounting to businesscombinations and, specifically, in identifying and valuing identifiable assetsand liabilities acquired on an acquisition. In certain cases, identifiableassets are valued using a discounted cash flow model which is subject to avariety of assumptions. The value placed on the assets and liabilities acquiredwill have an effect on the amount of goodwill that the Company will record on anacquisition.

**Income Taxes -**Managementestimates income taxes payable and the values of future income tax assets andliabilities and assesses the realization of these deferred income tax assetsregularly to determine whether a valuation allowance is required. Based onevidence, both positive and negative, management determines whether it is morelikely than not that those future income tax assets will be realized prior totheir expiration. The factors considered include estimated future earnings basedon internal forecasts, cumulative losses in recent years, history of loss carryforwards as well as prudent feasible tax planning strategies. The amount of afuture income tax asset could be reduced in the future by a charge to currentincome if forecasted income during the carry forward period is not achieved, oris later determined not likely to be achieved. Tax balances may also change as aresult of governmental changes or proposed changes to the rate of taxation.

----

**Valuation of Other Assets -**Realestate assets such as land under development and housing and condominiums arestated at the lower of cost and net realizable value. In calculating netrealizable value, management must estimate future cash flows from land that isnot yet sold but under development, and discount these estimated cash flows at arate that includes a risk factor appropriate for each particular project.

In the case of oil and gas properties, theamounts recorded for depletion and depreciation, the provision for future siterestoration and abandonment costs and the ceiling test calculation are based onestimates of proven reserves, production rates, oil and natural gas prices,future costs and other relevant assumptions. Although some of these calculationsare supported by reports of third party independent consultants, they are insome instances, based on the net present value of future cash flows and taxrates which are subject to assumptions.

C H A N G E S    I N   A C C O U N T I N G    P O L I C I E S    A D O PT E D    I N    2 0 0 3

In 2003, the CICA amended the provisions ofSection 3870 "Stock based Compensation and Other Stock based payments". Theprovisions now require the use of the fair value method to measure and recognizestock based compensation in fiscal years beginning on or after January 1, 2004.The amendments require application on a retroactive basis, with or withoutrestatement of prior periods, for stock options and other stock basedcompensation issued on or after January 1, 2002. Alternatively, the newrequirements permit prospective application if a company elects to adopt the newrequirements in a fiscal year ending prior to January 1, 2004. The Company haselected to adopt prospectively, the requirements of Section 3870 in 2003, andrecord as compensation expense the fair value of stock based compensation issuedon or after January 1, 2003. Certain subsidiaries of the Company have grantedstock options during 2003, resulting in additional compensation expense of$91,000.

In addition, the Company adopted therequirements of CICA Accounting Guideline 14 which requires additionaldisclosure in the financial statements about a guarantor's obligations undercertain guarantees. Guarantees issued by the Company are disclosed in notes 12and 17 to the audited consolidated financial statements.

----

S E G M E N TE D     O P E R A T I N G     R E S U LT S

Forthe year ended December 31, 2003 

comparedwith the year ended December 31, 2002

| *(in      thousands of dollars)*                |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   | 2      0 0 3 |        |
|-------------------------------------------------|--------------------|------------------------|--------|-----------|--------|--------|--------------|---------|--------------------------------------------------|--------|----------|--------|--------|---------|--------|--------------|-------------|
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |        |
|                                            |               |                   |   |      |   |   |         |         |                                             |   |     |   |   |    |   |
|                                            | Wealth

Management |                   |   |      |   |   |         |    | Other      Investments
and      Corporate

Costs |   |     |   |   |    |   |         |
|                                            |               | Real      Estate  |   | Resources |   |   | Intersegment |    |                                             | TOTAL  |     |
|                                                 |                    |                   |        |      |        |        |         |         |                                                  |   |          |   |        |         |   |
| **REVENUES**                                    |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   |         |        |   |
| Management and      administration fees         | $                  | 195,220                |   | $         | -      |   | $            | -       |                                             | $      | -        |   | $      | -       |   | $            | 195,220     |   |
| Redemption fees                                 |               | 10,515                 |   |      | -      |   |         | -       |                                             |   | -        |   |   | -       |   |         | 10,515      |   |
| Financial      services                         |               | 147,622                |   |      | -      |   |         | -       |                                             |   | 5,843    |   |   | (4,816) |   |         | 148,649     |   |
| Real estate      revenue                        |               | -                      |   |      | 77,761 |   |         | -       |                                             |   | -        |   |   | -       |   |         | 77,761      |   |
| Oil and gas      sales, net of royalties        |               | -                      |   |      | -      |   |         | 11,360  |                                             |   | -        |   |   | -       |   |         | 11,360      |   |
| Investment      income (loss)                   |               | 236                    |   |      | -      |   |         | 39,642  |                                             |   | 5,869    |   |   | (1,202) |   |         | 44,545      |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
|                                            |               | 353,593                |   |      | 77,761 |   |         | 51,002  |                                             |   | 11,712   |   |   | (6,018) |   |         | 488,050     |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| **EXPENSES**                                    |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   |         |        |   |
| Selling,      general and administrative        |               | 140,882                |   |      | 2,311  |   |         | 1,576   |                                             |   | 11,044   |   |   | (3,366) |   |         | 152,447     |   |
| Variable      compensation                      |               | 82,144                 |   |      | -      |   |         | -       |                                             |   | -        |   |   | -       |   |         | 82,144      |   |
| Trailer fees                                    |               | 33,448                 |   |      | -      |   |         | -       |                                             |   | -        |   |   | -       |   |         | 33,448      |   |
| Operating      costs, real estate               |               | -                      |   |      | 58,990 |   |         | -       |                                             |   | -        |   |   | -       |   |         | 58,990      |   |
| Operating      costs, oil and gas properties    |               | -                      |   |      | -      |   |         | 4,452   |                                             |   | -        |   |   | -       |   |         | 4,452       |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
|                                            |               | 256,474                |   |      | 61,301 |   |         | 6,028   |                                             |   | 11,044   |   |   | (3,366) |   |         | 331,481     |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| **OPERATING      EBITDA**                       |               | 97,119                 |   |      | 16,460 |   |         | 44,974  |                                             |   | 668      |   |   | (2,652) |   |         | 156,569     |   |
| Amortization of      deferred sales commissions |               | 42,404                 |   |      | -      |   |         | -       |                                             |   | -        |   |   | -       |   |         | 42,404      |   |
| Depreciation,      depletion and amortization   |               | 5,179                  |   |      | 1,067  |   |         | 2,234   |                                             |   | 1,059    |   |   | -       |   |         | 9,539       |   |
| Interest      expense                           |               | 5,225                  |   |      | 554    |   |         | 33      |                                             |   | 12,771   |   |   | (2,652) |   |         | 15,931      |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| **OPERATING      EARNINGS (LOSS)**              |               | 44,311                 |   |      | 14,839 |   |         | 42,707  |                                             |   | (13,162) |   |   | -       |   |         | 88,695      |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| Equity earnings                                 |               | -                      |   |      | 10,591 |   |         | (2,228) |                                             |   | 563      |   |   | -       |   |         | 8,926       |   |
| Investment      (provision) recovery            |               | 158                    |   |      | -      |   |         | (747)   |                                             |   | (4,066)  |   |   | -       |   |         | (4,655)     |   |
| Non controlling      interest                   |               | (8,184)                |   |      | -      |   |         | (281)   |                                             |   | -        |   |   | -       |   |         | (8,465)     |   |
| Extraordinary      gain                         |               | -                      |   |      | 19,951 |   |         | -       |                                             |   | -        |   |   | -       |   |         | 19,951      |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
|                                            | $                  | 36,285                 |   | $         | 45,381 |   | $            | 39,451  |                                             | $      | (16,665) |   | $      | -       |   |         | 104,452     |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| Dilution gain                                   |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   |         | 32,700      |   |
| Income taxes                                    |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   |         | (16,242)    |   |
|                                                 |                    |                        |   |           |        |   |              |         |                                             |        |          |   |        |         |   |              |             |   |
| **NET EARNINGS      FOR THE YEAR**              |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   | **$**        | **120,910** |   |
|                                                 |               |                   |   |      |   |   |         |    |                                             |   |     |   |   |    |   |              |             |   |

----

| *(in thousands of      dollars)*                |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   | 20      0 2 |       |
|-------------------------------------------------|--------------------|-------------|--------|--------|-----------|--------|--------|--------------|--------------------------------------------------|--------|----------|--------|--------|---------|--------|-------------|------------|
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
|                                            |               |        |   |   |      |   |   |              |                                             |   |     |   |   |    |   |
|                                            | Wealth

Management |        |   |   |      |   |   |         | Other      Investments
and      Corporate

Costs |   |     |   |   |    |   |        |
|                                            |               | Real Estate |   |   | Resources |   |   | Intersegment |                                             |   | TOTAL    |   |
|                                                 |                    |        |        |   |           |        |   |              |                                                  |   |          |   |        |         |   |
| **REVENUES**                                    |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   |        |       |   |
| Management and      administration fees         | $                  | 130,460     |   | $      | -         |   | $      | -            |                                             | $      | -        |   | $      | -       |   | $           | 130,460    |   |
| Redemption fees                                 |               | 9,867       |   |   | -         |   |   | -            |                                             |   | 543      |   |   | -       |   |        | 10,410     |   |
| Financial services                              |               | 124,987     |   |   | -         |   |   | -            |                                             |   | 4,730    |   |   | (4,730) |   |        | 124,987    |   |
| Real estate revenue                             |               | -           |   |   | -         |   |   | -            |                                             |   | -        |   |   | -       |   |        | -          |   |
| Oil and gas sales, net of      royalties        |               | -           |   |   | -         |   |   | 6,896        |                                             |   | -        |   |   | -       |   |        | 6,896      |   |
| Investment income (loss)                        |               | 4,684       |   |   | -         |   |   | 2,984        |                                             |   | 3,650    |   |   | (376)   |   |        | 10,942     |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
|                                            |               | 269,998     |   |   | -         |   |   | 9,880        |                                             |   | 8,923    |   |   | (5,106) |   |        | 283,695    |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| **EXPENSES**                                    |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   |        |       |   |
| Selling, general and      administrative        |               | 123,090     |   |   | -         |   |   | 1,472        |                                             |   | 5,726    |   |   | (4,730) |   |        | 125,558    |   |
| Variable compensation                           |               | 71,307      |   |   | -         |   |   | -            |                                             |   | -        |   |   | -       |   |        | 71,307     |   |
| Trailer fees                                    |               | 22,973      |   |   | -         |   |   | -            |                                             |   | -        |   |   | -       |   |        | 22,973     |   |
| Operating costs, real      estate               |               | -           |   |   | -         |   |   | -            |                                             |   | -        |   |   | -       |   |        | -          |   |
| Operating costs, oil and      gas properties    |               | -           |   |   | -         |   |   | 2,037        |                                             |   | -        |   |   | -       |   |        | 2,037      |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
|                                            |               | 217,370     |   |   | -         |   |   | 3,509        |                                             |   | 5,726    |   |   | (4,730) |   |        | 221,875    |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| **OPERATING EBITDA**                            |               | 52,628      |   |   | -         |   |   | 6,371        |                                             |   | 3,197    |   |   | (376)   |   |        | 61,820     |   |
| Amortization of deferred      sales commissions |               | 34,571      |   |   | -         |   |   | -            |                                             |   | -        |   |   | -       |   |        | 34,571     |   |
| Depreciation, depletion and      amortization   |               | 6,230       |   |   | -         |   |   | 1,893        |                                             |   | 786      |   |   | -       |   |        | 8,909      |   |
| Interest expense                                |               | 2,897       |   |   | -         |   |   | 44           |                                             |   | 11,486   |   |   | (376)   |   |        | 14,051     |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| **OPERATING EARNINGS      (LOSS)**              |               | 8,930       |   |   | -         |   |   | 4,434        |                                             |   | (9,075)  |   |   | -       |   |        | 4,289      |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| Equity earnings                                 |               | -           |   |   | 4,600     |   |   | (2,768)      |                                             |   | 420      |   |   | -       |   |        | 2,252      |   |
| Investment provision                            |               | (793)       |   |   | -         |   |   | (2,811)      |                                             |   | (5,661)  |   |   | -       |   |        | (9,265)    |   |
| Non controlling interest                        |               | (12,933)    |   |   | -         |   |   | (2,319)      |                                             |   | -        |   |   | -       |   |        | (15,252)   |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
|                                            | $                  | (4,796)     |   | $      | 4,600     |   | $      | (3,464)      |                                             | $      | (14,316) |   | $      | -       |   |        | (17,976)   |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| Dilution gain                                   |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   |        | 75,680     |   |
| Income taxes                                    |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   |        | (7,448)    |   |
|                                                 |                    |             |   |        |           |   |        |              |                                             |        |          |   |        |         |   |             |            |   |
| **NET EARNINGS FOR THE      YEAR**              |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   | **$**       | **50,256** |   |
|                                                 |               |        |   |   |      |   |   |         |                                             |   |     |   |   |    |   |             |            |   |

R E S U L T S    O F   O P E R A T I O N S

YEAR ENDED DECEMBER 31, 2003 compared toYEAR ENDED DECEMBER 31, 2002

W E A L T H     M A N A G E M E NT

Dundee Wealth is our largest holding. It isa financially large, fully integrated wealth management organization listed onthe TSX that focuses on growing its AUM by creating a unique platform forfinancial advisors and their clients and by providing them with innovative andefficient investment solutions. Dundee Wealth sells its products and investmentsolutions through over 30,000 independent financial advisors across Canada,including approximately 3,300 of its own registered financial advisors.

Today, Dundee Wealth has approximately $40billion of combined fee generating AUA and AUM. On December 30, 2003, DundeeWealth completed the acquisition of Cartier Partners Financial Group Inc.("Cartier") for $217.2 million in a combination of cash and shares. Thissignificant acquisition transformed Dundee Wealth into one of the largestindependent wealth management companies in Canada. To complete the Cartieracquisition, Dundee Wealth raised $190 million in an equity offering prior toyear end. The public subscribed for $100 million of the offering and we tookdown $90 million.

----

Due to our controlling interest, we reportDundee Wealth's results on a line by line consolidated basis. Additionalinformation on the results of Dundee Wealth, as reported by Dundee Wealth, canbe found at www.sedar.com or www.dundeewealth.com.

Dundee Wealth had a stellar year, generatingEBITDA of $99 million in 2003 compared with $53 million in 2002. Results in 2003are before including Cartier as Cartier was acquired on the second last day ofthe year. This increase in EBITDA is due to growth in average fee generating AUMfrom $7.0 billion in 2002 to $9.2 billion in 2003, performance fees earned in2003 of $28.9 million and from higher financial service revenues in the currentyear.

| *(in millions of dollars)*                                            |   |   |   |   |   |   |
|-----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                       |        |        |   |        |        |   |
|                                                                  |   | 2003   |   |   | 2002   |   |
|                                                                       |        |        |   |        |        |   |
| Assets under management,      January 1                               | $      | 8,632  |   | $      | 6,476  |   |
| Net sales                                                             |   | 436    |   |   | 210    |   |
| Acquisitions:                                                         |   |   |   |   |   |   |
|    Cartier                                             |   | 551    |   |   | -      |   |
|    DynamicNova                                         |   | -      |   |   | 1,941  |   |
|    Canada      Dominion LPs                            |   | -      |   |   | 124    |   |
| Market appreciation /      (depreciation)                             |   | 1,915  |   |   | (119)  |   |
| Discretionary assets under      administration                        |   | 466    |   |   | 268    |   |
|                                                                       |        |        |   |        |        |   |
| Assets under management,      December 31                             | $      | 12,000 |   | $      | 8,900  |   |
|                                                                       |        |        |   |        |        |   |
|                                                                  |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |
| Assets under      administration, December 31                         |   | 26,420 |   |   | 8,458  |   |
| Combined assets under      management and administration, December 31 | $      | 38,420 |   | $      | 17,358 |   |
|                                                                       |        |        |   |        |        |   |

Dundee Wealth's business consists ofinvestment management, financial advisory and capital markets. The investmentmanagement business comprises the portfolio management and advisory function toa variety of investment products, including mutual funds, fee-based products,closed-end funds, tax-assisted products and private client assets. Dundee Wealthearns management fees, calculated as a percentage of the current market value ofthe assets managed, and in respect of certain portfolios, may also earnperformance fees if the performance of the portfolio exceeds its benchmark.Transactions for purchases of mutual funds are conducted on an initial salescharge basis, with the investor paying commissions directly to the financialadvisor, or on a deferred sales charge basis. Under a deferred sales chargebasis, Dundee Wealth pays a commission to financial advisors, but when mutualfund units are redeemed within a certain period, a redemption fee is charged tothe investor. Dundee Wealth also pays trailer fees, calculated as a percentageof managed assets, to financial advisors to assist them in providing ongoingservice to clients in respect of assets managed. In accordance with GAAP, to theextent that fees, commissions or trailer fees are paid to Dundee Wealthpersonnel or agents, they are not reflected in the consolidated financialstatements as they are eliminated as intercompany transactions. Therefore,certain industry comparisons would not be precise.

The financial advisory business includes awide range of wealth management products and services that are provided toclients. Investment products include those managed by the investment managementdivision as well as third party sub-advisors. Dundee Wealth's subsidiaries areregistered as securities dealers, mutual fund dealers, managing generalinsurance agents or mortgage brokers, and through these various regulatedentities, are capable of providing a full suite of wealth management solutionsto clients. Revenues from the financial advisory business consist ofcommissions, trailer fees, administrative fees and interest, and are included as"financial service revenues" in our consolidated operating results.Commission revenues are dependent on the level of sales activity, while trailerrevenues are dependent on the level of AUA, which as at December 31, 2003, stoodat $26.4 billion (2002 - $8.4 billion).

----

The capital markets business consists ofinvestment banking, institutional sales and trading and research. Dundee Wealthearns commissions, fees and trading profits as a result of these activities.

Variable compensation is directly related tothe level of financial service revenues and represents the amount paid tofinancial advisors or other professionals who are remunerated on a commissionbasis.

Our international wealth managementoperations are conducted through The Dundee Bank, incorporated under the laws ofthe Cayman Islands, which holds a Category B Banking License and a trust licensefrom the Cayman Island Monetary Authority. The Dundee Leeds Group, wholly ownedsubsidiaries of The Dundee Bank, are companies incorporated under the laws ofBermuda, Cayman Islands and the British Virgin Islands and provideadministrative services to over $14 billion of mutual funds, hedge funds andother investment clients. The Dundee Leeds Group also provides accounting,administration, registrar and transfer agency, corporate secretarial and otherservices relating to the management of offshore companies.

**ACQUISITIONS AND RESULTING DILUTION GAINS**

The wealth management division has expandedits investment management and advisory businesses through strategic acquisitionsas well as through internal growth. Dundee Wealth completed three significantacquisitions in 2003 and 2002, which had the effect of increasing AUA and AUM.Details of these acquisitions are provided in note 2 to the consolidatedfinancial statements of the Company. The business operations acquired in 2002were successfully integrated into Dundee Wealth's operations during 2003. Theintegration of Cartier, which was acquired on December 30, 2003, is expected tobe lengthy, continuing through mid-2005. The Cartier acquisition added $16.7billion of AUA, $500 million of AUM and 2,900 financial advisors to the wealthmanagement business. The integration of Cartier will allow Dundee Wealth toachieve economies of scale and realize operating synergies by eliminatingduplicated infrastructure costs, and by providing better products and servicesto its newly acquired financial advisors, ultimately leading to increased AUAand AUM. Dundee Wealth's selling, general and administrative costs willincrease as a result of the Cartier transaction, due to both new costs that weacquired and costs that we will have to expend in order to integrate the Cartierbusiness operations with our own. Offsetting these costs will be increasedfinancial service revenues, net of associated increased variable compensation,largely in the form of retail commissions and trailer revenues from thesignificant AUA administered by these financial advisors.

In 2002, we reported a dilution gain of$75.7 million which resulted from the issuance of shares by a Dundee Wealthsubsidiary at a price in excess of Dundee Wealth's carrying value as the shareissuance had the effect of diluting our indirect interest in the underlyingbusiness. The share issuance was in consideration for Dundee Wealth'sacquisition of DynamicNova Inc. ("DynamicNova"), a mutual fund managementcompany with $2.1 billion of assets under management. The shares were issued tothe Caisse de depot et placement du Quebec ("Caisse"), the formermajority shareholder of DynamicNova.

As a result of both the acquisition ofCartier, which was partially settled by the issuance of shares of Dundee Wealth,and a $190 million equity financing completed by Dundee Wealth during 2003 ($100million of which was issued to the public and $90 million of which was acquireddirectly by Dundee Bancorp), our interest in Dundee Wealth was diluted from 84%to 68%. This resulted in a dilution gain of $32.7 million in 2003, as theseshares were also issued at a price in excess of the Company's carrying valuein Dundee Wealth.

**OPERATING RESULTS**

Revenues in the wealth management segmentgrew 31% from $270.0 million in 2002 to $353.6 million in 2003. Higher averageAUM, improved management fee rates, enhanced efficiencies in administration andsignificant performance fee revenues in 2003 account for

----

$63.8 million of this increase. Revenuesfrom financial service activity also increased by a further $22.6 million, whileredemption fee revenue and revenue from investments decreased by $3.8 million ona combined basis.

Selling, general and administrative expensesof the wealth management division increased from $123.1 million in 2002 to$140.9 million in 2003. Included in this increase is approximately $6.0 millionin compensation costs relating to higher performance fees revenues as well asover $4.0 million in sub-advisory fee arrangements, most of which were inheritedon acquisitions completed in 2002.

Increases in variable compensation andtrailer fees are consistent with increases in financial service revenues andAUM, respectively. Increases in amortization of deferred sales commissionsrelate to the addition to the commission pool of $32.7 million from theacquisition of DynamicNova, and higher amounts of gross sales. These commissionsare deferred for accounting purposes and amortized over a five-year period. Theacquisition of Cartier added a further $9.0 million to the commission pool atthe end of 2003.

The Dundee Leeds Group, a subsidiary of TheDundee Bank, provides administration and accounting services to third partyhedge and investment funds with approximately $14.3 billion in assets. In thefourth quarter of 2002, there were extensive changes made to the management andoperations of the Dundee Leeds Group. These initiatives have resulted inimproved efficiencies and a 35% increase in management and administration feesto $3.7 million in 2003 compared with $2.7 million in 2002, accounting for theremaining increase in management and administrative fee revenues. Theimprovement in revenue was achieved without significant increases in operatingcosts.

R E A L    E S T A T E

**DUNDEE REALTY PLAN OF ARRANGEMENT**

Our real estate operations represent anothersignificant business for us and are conducted through our 85% owned subsidiary,Dundee Realty Corporation ("Dundee Realty") and our 37% ownership interestin Dundee Real Estate Investment Trust ("Dundee REIT"). Dundee Realty waspreviously an equity accounted investment. On June 30, 2003, we acquired all ofthe Dundee Realty shares we did not own, through a court-authorized plan ofarrangement and, as a result, Dundee Realty is now required to be reported on aconsolidated basis. Pursuant to the arrangement, substantially all of DundeeRealty's revenue properties were transferred to Dundee REIT, a newly created,publicly traded, real estate investment trust. The remaining business of DundeeRealty, consisting of a land and housing operation and certain other assetswhich were not appropriate for a REIT, was acquired by and became a privatesubsidiary of Dundee Bancorp, with certain of Dundee Realty's managementretaining a 15% interest. Our continuing interest in the assets that are nowpart of Dundee REIT continue to be accounted for using the equity method.

GAAP requires that we report the increase inownership in Dundee Realty as a "step purchase" and allocate the cost of thepurchase to each of the individual assets acquired and liabilities assumed basedon their fair values at the date of acquisition according to the proportionacquired. GAAP also requires that when the estimated amounts assigned to assetsacquired, net of liabilities assumed, exceed the cost of purchase, the excess,referred to as "negative goodwill", should be eliminated by making a prorata reduction of such amounts that would otherwise be assigned to all of theacquired assets, except for certain financial assets, assets to be disposed ofby sale, future income taxes, and other current assets. Any remaining excess ispresented as an extraordinary gain.

----

At the time of the plan of arrangement, weowned 43% of Dundee Realty as a result of purchases made historically. The oneline carrying value of our investment at that time was comprised of our purchaseprice at cost, along with our share of Dundee Realty's earnings throughout ourholding period, reduced by historical negative goodwill. As we are nowconsolidating Dundee Realty, our consolidated assets and liabilities related toDundee Realty consist of the assignable costs from our previous purchases aswell as the assignable costs in respect of the June 30, 2003 step purchase ofthe remaining interest.

In our June 30 and September 30, 2003interim financial statements, we reflected the estimated details of the purchaseprice and the purchase price allocation to the various assets and liabilitiesbased on the information that was available to us as of those dates. Based onthat information, we estimated that the negative goodwill would amount to $127million, including associated taxes. We deducted this excess from the carryingvalue of real estate assets as at June 30, 2003 in both the June 30 andSeptember 30, 2003 interim financial statements. We have since finalized thepurchase equation. As a result, it has been determined that the aggregatepurchase excess, or negative goodwill, should be $115 million. We have applied$95 million of this excess to reduce the carrying value of various individualassets. The balance, amounting to $20 million, is being reported as anextraordinary gain. The main reasons for this adjustment from our preliminaryestimates were the complexities involved in management's calculation ofestimated fair values, including the necessary time to analyze and performvaluations on a property by property basis, the identification of long-termassets to which the negative goodwill could be allocated, and certain taxrelated calculations that could not have been finalized prior to year end. Ofthe total $115 million noted above, $32 million relates to our historicpurchases of interests in Dundee Realty prior to June 30, 2003 and, by virtue ofconsolidation accounting versus our previous method of equity accounting, is nowreflected on a line by line basis in the assets and liabilities of DundeeRealty. The $95 million that has been applied to reduce the carrying value ofassets will be amortized to income on the same basis as the underlying assets orwill be recognized as income when assets are sold.

**LAND AND HOUSING BUSINESS**

The operating business remaining in DundeeRealty consists of land development operations in Saskatoon, Regina, Edmontonand Calgary. Dundee Realty also has land development projects in Toronto andColorado, including a high-rise condominium project in Toronto, and it owns asmall number of revenue properties. These operations consist of acquiring,owning and developing land for sale. The vacant serviced land is either sold toa third party who then handles the construction or in some instances DundeeRealty may conduct the construction of the home, condominium or other suchproject itself. Land is initially purchased and considered "held fordevelopment" and its carrying value will include pre-development costs,certain interest costs and property taxes. Land is transferred to "land underdevelopment" when a construction project commences. All development costs arecapitalized to the cost of land under development. Housing and condominiumassets are either under construction, or completed and held for sale. DundeeRealty also earns income from revenue properties owned, and from management andother fees in respect of its 50% interest in the management company thatservices Dundee REIT and other third parties.

**DUNDEE REIT**

Dundee REIT owns over $1.2 billion of highquality, affordable office, industrial and retail assets. It focuses on owning,acquiring, leasing and managing mid-sized urban and suburban office andindustrial properties in Canada. Its portfolio consists of approximately 13.1million square feet in Toronto, Ottawa, Montreal, Calgary and Edmonton. DundeeREIT aims to provide unitholders with a stable and growing return on theirinvestment through a monthly distribution equal to at least 80% of distributableincome earned from an office and industrial property revenue-producing portfoliothat is diversified by geographic location. Dundee REIT owns the other 50%interest in the management company that manages rental properties. Our interestin Dundee

----

REIT is represented by limited partnershipunits of a subsidiary of Dundee REIT which are convertible into Dundee REITunits at any time. The limited partnership holds all of the rental properties ofDundee REIT. During 2003, Dundee REIT distributions of $6.6 million received byus were reinvested into additional units of Dundee REIT. Our interest in DundeeREIT, which stood at 42% at the time of the arrangement has been diluted to 37%at December 31, 2003, and further to 31% post year end as a result of equityissuances that have been completed by Dundee REIT since its formation. Theequity issuances were used primarily for acquisitions.

It should be noted that given that oureffective ownership interest in the Dundee REIT assets did not change as aresult of the plan of arrangement, we continue to use our historical carryingvalue for that investment. The carrying value for the investment in Dundee REIThas been adjusted to reflect a reallocation for certain taxes associated withthe change in the underlying structure of the assets that has occurred as aresult of the plan of arrangement. As a result of these adjustments, the June30, 2003 balance which was reported as $131 million has been reduced to $126million as at that date.

Additional information on the results ofDundee REIT, as reported by Dundee REIT, can be found at www.sedar.com or atwww.dundeereit.com.

| **REAL ESTATE OPERATING RESULTS**                           |   |    |   |   |      |   |   |      |   |
|-------------------------------------------------------------|--------|---------|--------|--------|-----------|--------|--------|-----------|--------|
|                                                        |   |    |   |   |      |   |   |      |   |
| *(in thousands of      dollars)*                            |   |    |   |   |      |   |   |      |   |
|                                                             |        |         |   |        |           |   |        |           |   |
|                                                        |   |    |   |   |      |   |   |      |   |
| **Components of Real      Estate Operations***              |   |    |   |   | Operating |   |   | Operating |   |
| From acquisition on June      30, 2003 to December 31, 2003 |   | Revenue |   |   | Costs     |   |   | Margin    |   |
|                                                             |        |         |   |        |           |   |        |           |   |
| Revenue properties                                          | $      | 4,036   |   | $      | 5,152     |   | $      | (1,116)   |   |
| Land                                                        |   | 37,880  |   |   | 28,544    |   |   | 9,336     |   |
| Housing and condominiums                                    |   | 24,128  |   |   | 23,403    |   |   | 725       |   |
| Management operations                                       |   | 2,442   |   |   | 1,891     |   |   | 551       |   |
| Gain on sale                                                |   | 7,758   |   |   | -         |   |   | 7,758     |   |
| Other                                                       |   | 1,517   |   |   | -         |   |   | 1,517     |   |
|                                                             |        |         |   |        |           |   |        |           |   |
|                                                        | $      | 77,761  |   | $      | 58,990    |   | $      | 18,771    |   |
|                                                        |        |         |   |        |           |   |        |           |   |

** Excludes general and administrativeexpenses, interest expense and depreciation and amortization*

Real estate operating margins of $18.8million for 2003 include $11.6 million of income relating to negative goodwillin respect of our historic purchase price discrepancies. The $11.6 million ofincome consists of $0.2 million of reduced amortization, $7.6 million in gainsfrom revenue properties sold and $3.8 million from land inventory sold in 2003.Although the $7.6 million related to revenue properties were sold in the thirdquarter, this amount, along with the associated taxes, has been reported in thefourth quarter after finalization of the purchase price allocation. In additionto these amounts, we earned equity earnings of $10.6 million in 2003 from realestate operations, including $6.3 million from Dundee Realty prior to the planof arrangement and $4.3 million from Dundee REIT since its formation on June 30,2003. Dundee REIT has been making monthly distributions of $0.183 per unit andour monthly distribution has been approximately $1.3 million. For 2003, we haveelected to receive additional units in lieu of our cash distributions.

Housing starts throughout Canada were atunprecedented 12 year highs throughout 2003. Dundee Realty sold more lots thanoriginally budgeted and the interest for lots to be developed in 2004 remainshigh. In Edmonton, we agreed to acquire approximately 450 acres of land adjacentto an existing project in order to refresh our land bank and continue thedevelopment program as existing lands are sold. In Calgary, our inventory isbeing reduced and although we continue to find small parcels to develop in theshort term, our inventory is limited, and this will affect profitability in 2004and 2005. We own 320 acres of land and agreed to purchase another

----

160 acres for $14 million in the south endof Calgary, which has not yet been approved for development. In Saskatoon, weare in the pre-development stage of two new projects; one being the developmentof exclusive housing lots surrounding a golf course and the other being a 660acre development site. These projects will provide a stable supply of lots inall price brackets. In Regina, we continue to develop on lands that arecurrently being built out.

In Colorado, we pre-sold 22 units of a 26unit luxury condominium project that will commence development in late spring2004, and is expected to be completed in the fall of 2005. We also anticipatethe marketing of a 14 unit townhouse development in Keystone, Colorado in thesummer of 2004.

The first tower of the Pantages condominiumproject in downtown Toronto is substantially completed and the building isawaiting registration in order to close on the sold units. The 21 storeyadjacent Opus Tower is expected to be substantially completed by the end of2004. In the Opus Tower, 102 out of 150 units have been pre-sold. Subsequent toyear end, we acquired a 50% interest in the second and third phase of a luxurycondominium development in downtown Calgary for $7 million. The first phase iscompleted, the second phase consists of 77 units and the third phase isanticipated to have 110 units. Construction of phase two is anticipated tocommence in 2004. Dundee Realty is the co-developer of the project.

R E S O U R C E S

Results from our resources segment increasedsignificantly in 2003 with operating earnings growing from $4.4 million in 2002to $42.7 million in 2003. Most notable were realized investment gains from thedisposition of certain resource holdings in 2003, including our entire positionof Zemex Corporation and a large part of our interest in IAMGOLD. These gainsfor 2003 amounted to $39.6 million as compared to $3.0 million in 2002. Resultsof 51% owned Eurogas Corporation ("Eurogas") also improved during 2003 withoil and gas revenues increasing to $11.4 million compared with $6.9 million in2002. Eurogas' operating costs have increased from $2.0 million in 2002 to$4.5 million in 2003.

In addition to our interest in Eurogas, ourresource holdings also include our interest in Dundee Precious Metals Inc.("Dundee Precious"), which as at December 31, 2003 stood at 11% but whichwas increased subsequent to year end to 21% (see below), our 18% interest inBreakwater Resources Ltd. ("Breakwater"), and several smaller investments inthe resource sector. Each one of these companies is currently undergoing or hasundergone some form of transformation or major event during 2003.

The board of directors of Eurogas hasproposed a plan to reorganize the company by separating the assets andoperations into two parts, Canadian and foreign, with each part existing in aseparate public company. Management of Eurogas believes that this will maximizeshareholder value by having separate management teams focus on the uniquebusiness opportunities in each of the business units. This reorganization willbe subject to various approvals, including approval of Eurogas' shareholders.Currently, Eurogas receives revenues in the form of oil and gas sales, net ofroyalties, on properties located in Canada. Properties owned in Spain andTunisia are in various stages of exploration and development and severalengineering and geo-technical studies are underway. The Spanish assets includean abandoned oil reservoir, which Eurogas is planning to convert into astrategic underground natural gas storage facility. In Tunisia, Eurogas and itsjoint venture partner have been awarded a permit for an area located offshore inTunisia's Gulf of Gabes where Eurogas intends to drill and, if feasible,develop oil reserves.

----

At year end, we owned 11% of DundeePrecious, a closed-end investment company that was managed by Dundee Wealth'sinvestment management subsidiary. Dundee Precious acquired certain Bulgarianmining assets during 2003 and intends to develop and operate these assets. As aresult, Dundee Precious, with the approval of its shareholders which wasobtained on April 15, 2004, terminated its investment management contract withDundee Wealth and elected to transform its business into an operating goldmining company. In consideration for the termination of the investmentmanagement agreement, Dundee Precious paid aggregate consideration of $27.8million to Dundee Wealth, consisting of the issuance of 925,000 shares and anoption to acquire a further 500,000 shares at $36.57 per share (before aproposed 5 for 1 share split). Subsequent to approval of the Dundee Preciousshareholders, and as we had previously announced, we acquired from Dundee Wealthboth the 925,000 shares of Dundee Precious at an aggregate of $27.8 million andthe option to acquire additional 500,000 shares. As a result, our interest inDundee Precious increased to approximately 21% and we will begin to equityaccount for this investment in the second quarter of 2004. The terminationcreated a gain to Dundee Wealth of $26.8 million, which will also be recognizedin the second quarter of 2004. The Bulgarian properties of Dundee Precious aregold mining properties that have been undercapitalized and therefore notdeveloped to their full potential. Dundee Precious is enthusiastically lookingforward to the prospects of developing these assets.

Breakwater is a publicly listed mineralresource company with four producing zinc mines in the Americas and North Africawhich produced 365 million pounds of zinc in 2003. The 2003 year saw a markedimprovement in the US dollar zinc price from the 2002 record lows, which greatlyincreased the prospects and profitability of Breakwater, whose business isdependent on the price of zinc. As a result of the price improvement, Breakwaterwas successful in raising equity financing of $30 million, part of which wasused to pay down its bank debt. In January 2004, Breakwater raised an additional$40 million in equity financing. Our interest in Breakwater has decreased from26% in the third quarter to 18% at year end due to these financings. However, wecontinue to own warrants which enable us to acquire an additional 31.8 millionshares of Breakwater, or 8%, at prices varying between $0.19 and $0.20 pershare, which warrants will mature between March 2006 and May 2007. The Companyhad previously guaranteed a portion of Breakwater's debt. With therenegotiation and repayment of part of Breakwater's bank debt following itsequity financing, this guarantee has been terminated. Net earnings in 2003 were$7.1 million as opposed to a net loss in 2002 of $19.9 million. Our share ofincome in 2003 was $1.7 million, offset by a dilution loss of $3.5 million.

O T H E R    I N V E S T M E N T   A N D    C O R P O R A T E    C O S T S

**Corporate Investments**

The Company also owns other investments ofpublic and private investment holdings. Revenues earned from these investmentsinclude net realized gains on sales of investments, dividend and interestincome. Certain of the investments are accounted for using the equity method,which will result in the Company recognizing its proportionate interest in theoperating results of the underlying investment. Unrealized gains and losses oninvestments are not recognized in income until realized, although provisions forimpairment in value are made at the time that a provision is deemed appropriate.

| *(in thousands of      dollars)*     |   |      |   |   |        |   |
|--------------------------------------|--------|-----------|--------|--------|-------------|--------|
|                                      |        |           |   |        |             |   |
| For the years ended      December 31 |   | 2003      |   |   | 2002        |   |
|                                      |        |           |   |        |             |   |
| Investment income                    | $      | 5,869     |   | $      | 3,650       |   |
| Equity earnings                      |   | 563       |   |   | 420         |   |
| Investment provision                 |   | (4,066)   |   |   | (5,661)     |   |
|                                      |        |           |   |        |             |   |
|                                 | **$**  | **2,366** |   | **$**  | **(1,591)** |   |
|                                 |        |           |   |        |             |   |

----

We continue to hold 2.0 million shares ofLaurentian Bank of Canada ("Laurentian"), representing approximately 9% ofthe total common shares issued and outstanding. During 2003, the Company earneddividends from its investment in Laurentian of $2.3 million (2002 - $2.3million).

Higher selling, general and administrativeexpenses in this division represent increased public company costs and headoffice costs that have not been allocated to the other operating segments.

I N T E R E S T     E X P E N S E

Consolidated interest expense, afterintersegment eliminations, was $15.9 million in 2003 compared with $14.1 millionin 2002. Over 60% of the Company's total interest expense, or $10.1 million,relates to the Company's $150 million, 6.70% senior debentures issued inSeptember 1997. The balance of interest expense relates primarily to interestpaid on the Company's credit facility with a Canadian chartered bank. During2003, the Company paid interest rates ranging from 2.73% to 5.00% compared with2.12% to 4.50% in 2002.

D E P R E C IA T I O N ,    D E P L E T I O N    A N D   A M O R T I Z A T I O N   

E X P E N S E

| *(in thousands of      dollars)*                                                     |   |    |   |       |    |       |   |       |    |       |   |   |   |
|--------------------------------------------------------------------------------------|--------|---------|--------|------------|---------|------------|--------|------------|---------|------------|--------|--------|--------|
|                                                                                      |        |         |        |            |         |            |        |            |         |       |        |        |   |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
| As at December 31                                                                    |   |    |   |       |    |       |   |       | 2003    |       |   | 2002   |   |
|                                                                                      |        |         |        |            |         |            |        |            |         |       |        |        |   |
| Capital assets                                                                       |   |    |   |       |    |       |   | $          | 5,844   |       | $      | 6,859  |   |
| Deferred trademark costs                                                             |   |    |   |       |    |       |   |       | 237     |       |   | -      |   |
| Bond issue costs                                                                     |   |    |   |       |    |       |   |       | 157     |       |   | 157    |   |
| Real estate assets                                                                   |   |    |   |       |    |       |   |       | 1,067   |       |   | -      |   |
| Oil and gas properties                                                               |   |    |   |       |    |       |   |       | 2,234   |       |   | 1,893  |   |
|                                                                                      |        |         |        |            |         |            |        |            |         |       |        |        |   |
|                                                                                 |   |    |   |       |    |       |   | $          | 9,539   |       | $      | 8,909  |   |
|                                                                                      |        |         |        |            |         |            |        |            |         |       |        |        |   |
| E A R N I N GS          PE R         SHAR E  |   |    |   |       |    |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
| *(in      thousands of dollars, except for number of shares and amounts per share)*  |   |    |   |       |    |       |
|                                                                                      |        |         |   |            |         |       |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
| For the years      ended December 31                                                 |   |    |   |       |    |       | 2003   |       |    | 2002       |   |
|                                                                                      |        |         |        |            |         |            |        |       |         |            |   |
| Net earnings      before extraordinary gain                                          |   |    |   |       | $       | 100,959    |   | $          | 50,256  |       |
| Net earnings                                                                         |   |    |   |       |    |       |   | $          | 120,910 |       | $      | 50,256 |   |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
| Weighted      average number of shares outstanding                                   |   |    |   | 25,217,314 |    | 25,436,218 |   |
| Effect of      dilutive securities to weighted average number of shares outstanding  |   | 257,733 |   |       | 204,206 |       |
|                                                                                 |   |    |   |       |    |       |   | 25,475,047 |    | 25,640,424 |   |
| Earnings per      share before extraordinary gain                                    |   |    |   |       |    |       |   |       |    |       |
|    Basic                                                              |   |    |   |       |    |       |   | $          | 4.00    |       | $      | 1.98   |   |
|    Diluted                                                            |   |    |   |       |    |       |   | $          | 3.96    |       | $      | 1.96   |   |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
|                                                                                 |   |    |   |       |    |       |   |       |    |       |   |   |   |
| Earnings per share                                                                   |   |    |   |       |    |       |   |       |    |       |   |   |   |
|    Basic                                                              |   |    |   |       |    |       |   | $          | 4.79    |       | $      | 1.98   |   |
|    Diluted                                                            |   |    |   |       |    |       |   | $          | 4.75    |       | $      | 1.96   |   |
|                                                                                      |   |    |   |       |    |       |   |            |         |       |        |        |   |

----

S U M M A R Y     O F    Q U A R T E R L Y    R E S U L T S

| *(in thousands of dollars      except per share amounts)* |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|---------------------------------------------|--------|--------|---------------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|
|                                                           |        |                                             |   |        |                                                         |   |        |        |   |        |         |   |        |        |   |        |         |   |        |        |   |        |        |   |
|                                                      |   |  2003

For      the three months ended |   |   |  2002

 For      the three months ended  |   |
|                                                      |   | 31-Dec                                      |   |   | 30-Sep                                                  |   |   | 30-Jun |   |   | 31-Mar  |   |   | 31-Dec |   |   | 30-Sep  |   |   | 30-Jun |   |   | 31-Mar |   |
|                                                           |        |                                             |   |        |                                                         |   |        |        |   |        |         |   |        |        |   |        |         |   |        |        |   |        |        |   |
| Revenue                                                   | $      | 183,553                                     |   | $      | 123,721                                                 |   | $      | 86,691 |   | $      | 94,085  |   | $      | 88,116 |   | $      | 57,596  |   | $      | 73,962 |   | $      | 64,021 |   |
| Dilution gain (loss)                                      |   | 34,012                                      |   |   | 318                                                     |   |   | (10)   |   |   | (1,620) |   |   | 75,680 |   |   | -       |   |   | -      |   |   | -      |   |
| Net earnings, before      extraordinary gain              |   | 59,003                                      |   |   | 4,918                                                   |   |   | 23,852 |   |   | 13,186  |   |   | 52,089 |   |   | (7,306) |   |   | 4,154  |   |   | 1,319  |   |
| Net earnings                                              |   | 78,954                                      |   |   | 4,918                                                   |   |   | 23,852 |   |   | 13,186  |   |   | 52,089 |   |   | (7,306) |   |   | 4,154  |   |   | 1,319  |   |
|                                                      |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
|                                                      |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Earnings per share, before      extraordinary gain        |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
|    Basic                                   | $      | 2.35                                        |   | $      | 0.20                                                    |   | $      | 0.94   |   | $      | 0.52    |   | $      | 2.06   |   | $      | (0.29)  |   | $      | 0.16   |   | $      | 0.05   |   |
|    Diluted                                 | $      | 2.30                                        |   | $      | 0.19                                                    |   | $      | 0.94   |   | $      | 0.52    |   | $      | 2.05   |   | $      | (0.29)  |   | $      | 0.16   |   | $      | 0.05   |   |
|                                                      |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
|                                                      |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Earnings per share                                        |   |                                        |   |   |                                                    |   |   |   |   |   |    |   |   |   |   |   |    |   |   |   |   |   |   |   |
|    Basic                                   | $      | 3.14                                        |   | $      | 0.20                                                    |   | $      | 0.94   |   | $      | 0.52    |   | $      | 2.06   |   | $      | (0.29)  |   | $      | 0.16   |   | $      | 0.05   |   |
|    Diluted                                 | $      | 3.07                                        |   | $      | 0.19                                                    |   | $      | 0.94   |   | $      | 0.52    |   | $      | 2.05   |   | $      | (0.29)  |   | $      | 0.16   |   | $      | 0.05   |   |
|                                                           |        |                                             |   |        |                                                         |   |        |        |   |        |         |   |        |        |   |        |         |   |        |        |   |        |        |   |

Revenues and net earnings in the fourthquarter of 2003 were significantly above amounts reported in prior quarters. Thefactors relating to this increase are outlined in more detail below. Revenuesand net earnings also increased in the first three quarters of 2003 comparedwith the first three quarters of 2002, due principally to increased activityresulting from the acquisition of DynamicNova, a company acquired by the wealthmanagement segment in October 2002.

Fourth quarter earnings in each of 2003 and2002 were also favourably affected by the realization of dilution gains from theissuances of shares by subsidiary companies. Also favourably impacting ourfourth quarter earnings in 2003, was the extraordinary gain of $20 millionresulting from the Dundee Realty plan of arrangement.

----

R E V I E W    O F    TH E    F O U R T H    Q U A R T E R   O F    2 0 0 3

Net earnings for the fourth quarter of 2003were $79.0 million, or $3.14 per share, including an extraordinary gain of $20.0million. This is an increase of $74.0 million from earnings in the third quarterof 2003.

| *(in millions of dollars)*                                                  |   |   |   | **2003** |   |
|-----------------------------------------------------------------------------|--------|--------|--------|----------|--------|
|                                                                             |        |        |   |          |   |
|                                                                        |   |   |   | % Change |   |
|                                                                        |   | Q4     |   | over Q3  |   |
|                                                                             |        |        |   |          |   |
| Wealth management revenues                                                  | $      | 121.0  |   | 46%      |   |
| Real estate revenue                                                         |   | 47.8   |   | 60%      |   |
| Oil and gas sales, net of      royalties                                    |   | 2.2    |   | 5%       |   |
| Investment income                                                           |   | 12.6   |   | 47%      |   |
|                                                                             |        |        |   |          |   |
|                                                                        |   | 183.6  |   | 48%      |   |
|                                                                             |        |        |   |          |   |
| Other expenses                                                              |   | 84.8   |   | 24%      |   |
| Operating costs, real      estate                                           |   | 30.4   |   | 6%       |   |
| Operating costs, oil and      gas properties                                |   | 0.4    |   | (43%)    |   |
|                                                                             |        |        |   |          |   |
|                                                                        |   | 115.6  |   | 19%      |   |
|                                                                             |        |        |   |          |   |
| **Operating earnings      before interest, taxes and other non cash items** |   | 68.0   |   | 160%     |   |
| Interest and amortization                                                   |   | 17.9   |   | 5%       |   |
|                                                                             |        |        |   |          |   |
| **Net earnings, before      extraordinary item**                            |   | 59.0   |   | 1,104%   |   |
| Extraordinary gain                                                          |   | 20.0   |   | NA       |   |
| **Net earnings**                                                            | $      | 79.0   |   | NA       |   |
|                                                                             |        |        |   |          |   |
| **Cash flows from      operations before changes in working capital items** | $      | 31.3   |   | 374%     |   |
|                                                                             |        |        |   |          |   |
| **Shareholders' equity**                                                    | $      | 596.6  |   | 15%      |   |
|                                                                             |        |        |   |          |   |

Revenues in the fourth quarter of 2003 were$183.6 million, an increase of 48% from revenue levels of $123.7 million in thethird quarter. Significant components of this increase are:

- Management and administration fees    increased 73% from $42.5 million to $73.6 million in the fourth quarter due    to performance fees earned in the wealth management division.  
- Investment income was $12.6 million    compared to $8.6 million in the third quarter as a result of sales of    portfolio investments.  
- Revenues from real estate operations    increased by $17.9 million, of which $7.6 million was actually earned in the    third quarter, but was not reported at that time as the purchase equation in    respect of Dundee Realty had not been completed.  

Expenses, excluding direct expenses of realestate and oil and gas properties, increased from $68.2 million to $84.8 millionin the fourth quarter of 2003. Approximately $12 million is attributable toincreases in the wealth management division and relates to the public issue ofsubscription receipts, increased financial service activity and the acquisitionof Cartier. The corporate division incurred higher costs in respect of itsacquisition of Dundee Realty's land and housing business.

----

 

 

 

Interest and amortization during the fourthquarter remained constant at approximately $18 million.

Cash flows from operating activities beforeaccounting for changes in working capital were $31.3 million compared with $6.6million in the previous quarter, reflecting increased profitability.

F I N A N C I A L      C O ND I T I O N

**EFFECT OF THE DUNDEE REALTY PLAN OF ARRANGEMENT ONTHE CONSOLIDATED BALANCE SHEET**

The following table details the carryingvalue of real estate assets acquired as part of Dundee Realty's plan ofarrangement on June 30, 2003, and their corresponding carrying values as atDecember 31, 2003.

| *(in thousands of      dollars)*            |              |   |   |     |   |   |
|---------------------------------------------|-------------------|--------|--------|----------|--------|--------|
|                                             |                   |        |   |          |        |   |
|                                        |              |   |   |     |   |   |
|                                        | December      31, |   |   | June 30, |   |
|                                        | 2003              |   |   | 2003     |   |
|                                             |                   |   |        |          |   |
| Land                                        |              |   |   |     |   |   |
|    Under      development    | $                 | 14,678 |   | $        | 7,791  |   |
|    Held for      development |              | 1,934  |   |     | 6,935  |   |
| Housing and condominiums                    |              | 63,872 |   |     | 52,599 |   |
| Revenue properties                          |              | -      |   |     | 10,537 |   |
|                                             |                   |        |   |          |        |   |
|                                        | $                 | 80,484 |   | $        | 77,862 |   |
|                                        |                   |        |   |          |        |   |

As a result of the plan of arrangement andsubsequent consolidation of Dundee Realty, we recorded the following assets, netof liabilities:

| *(in thousands of      dollars)*                |   |                   |   |                    |     |   |   |     |   |
|-------------------------------------------------|--------|------------------------|--------|-------------------------|----------|--------|--------|----------|--------|
|                                                 |        |                        |   |                         |          |   |        |          |   |
|                                            |   |                   |   |                    |     |   |   |     |   |
|  Assigned Values      Prior to             |   | Allocation      of     |   | Assigned      Values as |     |
|  Allocation of      Negative Goodwill      |   | Negative      Goodwill |   | at      June 30, 2003   |     |
|                                                 |        |                   |        |                    |          |   |
| Real estate assets                              | $      | 204,907                |   | $                       | 127,045  |   | $      | 77,862   |   |
| Other assets acquired                           |   |                   |   |                    |     |   |   |     |   |
|    Cash                          |   | 25,549                 |   |                    | -        |   |   | 25,549   |   |
|    Accounts      receivable      |   | 58,380                 |   |                    | -        |   |   | 58,380   |   |
|    Future      income tax assets |   | (5,671)                |   |                    | (46,952) |   |   | 41,281   |   |
|    Other                         |   | 44,113                 |   |                    | 15,410   |   |   | 28,703   |   |
| Liabilities assumed                             |   |                   |   |                    |     |   |   |     |   |
|    Accounts      payable         |   | (64,808)               |   |                    | -        |   |   | (64,808) |   |
|    Real      estate debt         |   | (63,647)               |   |                    | -        |   |   | (63,647) |   |
|                                                 |        |                        |   |                         |          |   |        |          |   |
|                                            | $      | 198,823                |   | $                       | 95,503   |   | $      | 103,320  |   |
| Extraordinary gain                              |   |                   |   |                    | 19,951   |   |   |     |   |
|                                                 |        |                        |   |                         |          |   |        |          |   |
|                                            |   |                   |   | $                       | 115,454  |   |   |     |   |
|                                            |   |                   |   |                         |          |   |   |     |   |

The balances as of June 30, 2003, have beenrecorded net of $95.5 million of negative goodwill, $142.5 million of which hasbeen allocated to real estate and other assets, with the balance of $47.0million included as a future income tax asset in respect of this negativegoodwill.

Since June 30, 2003, all revenue propertiesremaining in Dundee Realty following the plan of arrangement were sold forproceeds of approximately $8.0 million. Additional net investments have beenmade in both land and housing and condominiums, aggregating approximately $19.1million.

----

We paid $24.4 million to acquire the DundeeRealty shares held by the public shareholders and also agreed to assume $18.5million of transaction and other acquisition related costs, net of applicabletaxes, which were paid by Dundee Realty to complete the arrangement. Inaddition, we accepted a less tax efficient structure for our Dundee REITholdings and guaranteed certain debt of the Dundee REIT.

**OTHER SIGNIFICANT BALANCE SHEET ITEMS**

**Corporate Investments**

We own our business interests throughinvestment holdings. Other than our consolidated investments, all otherinvestments are recorded as "*corporateinvestments*" on our balance sheet.As at December 31, 2003, the market value of these corporate investments,excluding the value of our consolidated investments, was $475 million. Marketvalue has been determined using quoted market values for listed securities andcarrying values for non-quoted securities and debt instruments.

| *(in thousands of      dollars)*  |   |    |   |   |    |   |   |    |   |   |    |   |
|-----------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
|                                   |        |         |   |        |         |   |        |         |   |        |         |   |
|                              |   |    |   |   |    |   |   |    |   |   |    |   |
| As at December 31                 |   |    |   |   | 2003    |   |   |    |   |   | 2002    |   |
|                                   |        |         |   |        |         |   |        |         |   |        |         |   |
|                              |   | Book    |   |   | Market  |   |   | Book    |   |   | Market  |   |
|                              |   | Value   |   |   | Value   |   |   | Value   |   |   | Value   |   |
|                                   |        |         |   |        |         |   |        |         |   |        |         |   |
| Equity accounted      investments | $      | 158,267 |   | $      | 210,681 |   | $      | 232,274 |   | $      | 224,721 |   |
| Marketable securities             |   | 24,027  |   |   | 24,958  |   |   | 65,043  |   |   | 55,082  |   |
| Other portfolio investments       |   | 145,859 |   |   | 238,947 |   |   | 131,608 |   |   | 160,577 |   |
|                                   |        |         |   |        |         |   |        |         |   |        |         |   |
|                              | $      | 328,153 |   | $      | 474,586 |   | $      | 428,925 |   | $      | 440,380 |   |
|                              |        |         |   |        |         |   |        |         |   |        |         |   |

During 2003, we sold certain investments forproceeds of $137.4 million, realizing gains of $39.1 million. Included in thesetransactions are proceeds of $37.4 million generated on the sale of our entireinterest in Zemex Corporation, $60.1 million on the sale of various publiccompany portfolio investments and $39.7 million on the sale of marketablesecurities. The increased activity in the corporate portfolio results primarilyfrom increased market values in 2003 and our decision to liquidate some of ourinvestment holdings in order to subscribe for $90 million of additional equityin Dundee Wealth.

**BROKERAGE SECURITIES RELATED BALANCES**

**Client Accounts Receivable and ClientDeposits and Related Liabilities -**Clientaccount balances in Dundee Wealth's brokerage subsidiary represent fundsbelonging to or owing from clients, or amounts that are pending settlement.These amounts may vary significantly on a day-to-day basis, although suchvariance does not necessarily reflect any change to the Company's financialposition. As at December 31, 2003, client accounts receivable were $354.3million (2002 - $230.7 million) including $54.5 million acquired in theCartier transaction. Client deposits and related liabilities as at December 31,2003 were $336.1 million (2002 - $260.7 million), including $54.5 millionacquired in the Cartier transaction.

**Call Loan -**DundeeWealth's securities dealer subsidiary has a call loan facility of $100 millionwith a Canadian chartered bank, secured by either unpaid client securitiesand/or securities borrowed or owned by the subsidiary. The call loan facility isused primarily to facilitate the securities settlement process for both clientand firm inventory positions and/or to finance margin account activity. Similarto client account balances, amounts borrowed pursuant to this call loan facilitymay vary significantly on a day-to-day basis depending on securities tradingactivity, without necessarily representing a change to the Company's financialposition. Amounts borrowed pursuant to this call loan facility which, atDecember 31, 2003, totaled $21.2 million (2002 - $7.4 million), have beenincluded in bank indebtedness.

----

**CAPITAL AND OTHER ASSETS**

Capital and other assets have increased by$90.1 million in 2003, of which $77.9 million relates to the completion of theplan of arrangement with Dundee Realty.

The Company's oil and gas properties were$39.8 million as at December 31, 2003 (December 31, 2002 - $37.2 million), ofwhich $14.5 million related to Canadian operations, $8.5 million related toprojects in Spain and $16.8 million related to projects in Tunisia. In Canada,amounts are reported after deducting depreciation and depletion of $26.8million. In Spain and Tunisia, the Company, through Eurogas, owns 71% and 45% ofthe projects and all capitalized expenditures to date relate to pre-developmentcosts.

**GOODWILL AND OTHER INTANGIBLE ASSETS**

As a result of acquisitions completed in2003, goodwill and other intangible assets increased by $240.8 million. Changesin goodwill and other intangible assets are detailed in the table below:

| *(in thousands of      dollars)*                           |           |   |      |       |    |     |   |    |   |   |    |   |
|------------------------------------------------------------|----------------|--------|-----------|------------|---------|----------|--------|---------|--------|--------|---------|--------|
|                                                            |                |        |      |            |         |     |        |         |   |        |         |   |
|                                                       |           |   |      |       |    |     |   |    |   |   |    |   |
|                                                       |           | Funds  |      | Investment |    |     |   |    |   |   |    |
|                                                       |           | under  |      | Management |    |     |   |    |   |   |    |
|                                                       | Administration |   | Contracts |       |    | Goodwill |   |    | Total  |   |
|                                                            |                |   |           |       |         |          |   |         |        |   |
| Balance, December 31, 2001                                 | $              | -      |      | $          | 2,836   |     | $      | 87,930  |   | $      | 90,766  |   |
| Acquisition of DynamicNova                                 |           | -      |      |       | 54,493  |     |   | 70,602  |   |   | 125,095 |   |
| Acquisition of CFFG                                        |           | -      |      |       | -       |     |   | 12,926  |   |   | 12,926  |   |
| Other adjustments                                          |           | -      |      |       | -       |     |   | (4,473) |   |   | (4,473) |   |
|                                                            |                |        |      |            |         |     |        |         |   |        |         |   |
| Balance, December 31, 2002                                 |           | -      |      |       | 57,329  |     |   | 166,985 |   |   | 224,314 |   |
|                                                            |                |        |      |            |         |     |        |         |   |        |         |   |
| Acquisition of Cartier                                     |           | 30,573 |      |       | 47,686  |     |   | 143,905 |   |   | 222,164 |   |
| Step acquisition of DWM                                    |           | -      |      |       | -       |     |   | 15,876  |   |   | 15,876  |   |
| Acquisition of non      controlling interest of subsidiary |           | -      |      |       | -       |     |   | 3,609   |   |   | 3,609   |   |
| Other adjustments                                          |           | -      |      |       | -       |     |   | (828)   |   |   | (828)   |   |
|                                                            |                |        |      |            |         |     |        |         |   |        |         |   |
| Balance, December 31, 2003                                 | $              | 30,573 |      | $          | 105,015 |     | $      | 329,547 |   | $      | 465,135 |   |
|                                                            |                |        |      |            |         |     |        |         |   |        |         |   |

The company paid $217.2 million to acquireCartier. The purchase price was allocated to assets and liabilities acquiredbased on management's estimates of their values appropriate for balance sheetpurposes as of the date of acquisition. On acquisition, Dundee Wealth identifiedcertain intangible assets, including investment management contracts relating toAUM acquired, and funds under administration relating to AUA acquired. Theseintangible assets were valued using a net present value model of future cashflows from assets acquired and were tax effected. Unlike investment managementcontracts that have an indefinite life, funds under administration are beingamortized over their estimated life of 15 years.

The intangible assets acquired as part ofthe DynamicNova transaction have been adjusted to segregate the balance ofinvestment management contracts from its goodwill component.

**CORPORATE DEBT**

We have two borrowing arrangements at theDundee Bancorp level, with all other corporate debt residing in subsidiarycompanies. Our $150 million, 6.7% unsecured debentures mature on September 24,2007. We are currently rated by Standard & Poor's as BB+/Stable and byDominion Bond Rating Service Limited as BB(high). The debentures are unsecuredhowever, and place certain restrictions on us and on certain of our subsidiariesto incur additional secured debt. We also have a revolving term credit facilitywith a Canadian chartered bank that was renegotiated on April 24, 2003,increasing the line from $30 million to $55 million. Similar to the Company'sprevious arrangements, the new facility bears interest on a tiered basis inaccordance with the Company's debt rating. The Company is in compliance withits financial covenants in respect of this facility. We utilize the line forcash flow purposes when it is impractical to liquidate holdings, and to bettercontrol cash flows in general.

----

Dundee Wealth had a term credit facility for$20 million which was repaid on April 24, 2003, and replaced with a $50 millionline that we provided to Dundee Wealth and its subsidiary, DWM Inc. In earlyJanuary 2004, and following its equity financing, Dundee Wealth repaid the $32.4million which was owed against the $50 million and the facility was cancelled.In November 2003, for the purposes of completing the Cartier acquisition, wecommitted to lend Dundee Wealth $190 million, of which $90 million would be anequity subscription, as Dundee Wealth was obliged to demonstrate that it had thepurchase price in available funds. In exchange for this commitment, we receiveda $1.5 million loan commitment and arrangement fee and a three-year warrant topurchase 1,800,000 common shares of Dundee Wealth at $7.75 per share. As DundeeWealth was successful in completing its $190 million equity financing in advanceof the Cartier acquisition, no amount was borrowed under this facility.

Dundee Realty's debt consists primarily ofland mortgages and housing advances and totals $51.9 million as at December 31,2003. All of the real estate debt is secured by the specific real estate assetsto which it relates and in some cases is supplemented by an unsecured covenantfrom Dundee Realty or its subsidiaries. Debt includes housing advances of $39.3million which will expire in 2004.

Eurogas has a revolving credit facility of$4.5 million with a Canadian chartered bank which is secured by a demanddebenture in the amount of $20 million with a first charge on its Canadianassets. There is no amount drawn under the facility as at December 31, 2003(December 31, 2002 - $539).

S H A R E     C A P I T A L

As at December 31, 2003, there were24,106,378 Class A subordinate voting shares and 1,049,193 Class B common sharesoutstanding. During 2003, we purchased and cancelled 314,301 Class A subordinatevoting shares under our normal course issuer bid at an average cost of $14.94per share. Additionally, we issued 141,018 Class A subordinate voting sharesunder our Share Incentive Plan, adding $1.7 million to stated capital and weissued a further 58,866 deferred share units to employees, each unit entitlingthe holder to one Class A subordinate voting share of Dundee Bancorp uponretirement. We recorded share based compensation expense of $1.0 million inrespect of these units.

The following table illustrates issuances ofshares subsequent to December 31, 2003.

| *(in      thousands of dollars except for number of shares)* |                   |   |               |    |                        |      |   |   |   |   |       |   |   |    |   |
|--------------------------------------------------------------|------------------------|--------|--------------------|---------|-----------------------------|-----------|--------|--------|--------|--------|------------|--------|--------|---------|--------|
|                                                              |                        |   |                    |         |                        |           |   |        |        |   |            |   |        |         |   |
|                                                         |                   |   |               |    |                        |      |   |   |   |   |       |   |   |    |   |
|                                                         | **SUBORDINATE SHARES** |   | **CLASS B SHARES** |    |   **TOTAL**  |      |
|                                                         | Number                 |   |               | Amount  |                        | Number    |   |   | Amount |   | Number     |   |   | Amount  |   |
|                                                              |                        |   |                    |         |                        |           |   |        |        |   |            |   |        |         |   |
| Outstanding      December 31, 2003                           | 24,106,378             |   | $                  | 280,502 |                        | 1,049,193 |   | $      | 8,238  |   | 25,155,571 |   | $      | 288,740 |   |
|                                                              |                        |   |                    |         |                        |           |   |        |        |   |            |   |        |         |   |
| **Issued      subsequent to December 31, 2003**              |                   |   |               |    |                        |      |   |   |   |   |       |   |   |    |   |
| Issuance of      shares under the                            |                   |   |               |    |                        |      |   |   |   |   |       |   |   |    |   |
|    employee      Share Incentive Plan         | 4,286                  |   |               | 78      |                        | -         |   |   | -      |   | 4,286      |   |   | 78      |   |
| Options      exercised                                       | 123,094                |   |               | 1,864   |                        | -         |   |   | -      |   | 123,094    |   |   | 1,864   |   |
|                                                              |                        |   |                    |         |                        |           |   |        |        |   |            |   |        |         |   |
| **Total Share      Capital**                                 |                   |   |               |    |                        |      |   |   |   |   |       |   |   |    |   |
|    **Outstanding      April 30, 2004**        | 24,233,758             |   | $                  | 282,444 |                        | 1,049,193 |   | $      | 8,238  |   | 25,282,951 |   | $      | 290,682 |   |
|                                                              |                        |   |                    |         |                        |           |   |        |        |   |            |   |        |         |   |

----

 

Subsequent to year end, the Board ofDirectors approved the issuance of an additional 550,000 stock options at anexercise price of $27.51. These new options will become exercisable as to 20%,on a cumulative basis, over the five years and will expire five and a half yearsfrom the date of grant. Since December 31, 2003, employees and directors haveexercised 470,251 options at an average price of $13.49 and the Company hascancelled 10,000 options at an average price of $14.63. Options outstanding asat April 30, 2004 are detailed in the tables below:

|                                  |  As at April 30,      2004 |   | As at December 31, 2003                |      |
|---------------------------------------|---------------------------------|--------|----------------------------------------|-----------|
|                                       |                                 |   |                                        |      |  |   |
|                                  |  

Number      of

Options |   | Weighted

Average

Exercise      Price |      |  

Number      of

Options |   | Weighted

Average

Exercise      Price |   |
|                                  |                            |   |                                   |      |
|                                  |                            |   |                                   |      |
|                                       |                                 |   |                                        |      |  |   |  |   |
| Outstanding,      beginning of period | 2,076,834                       |   | $                                      | 15.16     |   | 2,484,169 |   | $ | 16.07 |   |
| Granted                               | 550,000                         |   | $                                      | 27.51     |   | - |   | $ | - |   |
| Exercised                             | (470,251)                       |   | $                                      | 13.49     |   | (216,335) |   | $ | 13.07 |   |
| Cancelled                             | (10,000)                        |   | $                                      | 14.63     |   | (191,000) |   | $ | 29.39 |   |
|                                       |                                 |   |                                        |           |   |  |   |  |  |   |
| **Outstanding,      end of period**   | **2,146,583**                   |   | **$**                                  | **18.69** |   | **2,076,834** |   | **$** | **15.16** |   |
|                                       |                                 |   |                                        |           |   |  |   |  |  |   |
| Exercisable,      end of period       | 1,554,915                       |   | $                                      | 15.68     |   | 2,023,499 |   | $ | 15.17 |   |
|                                       |                                 |   |                                        |           |   |  |   |  |  |   |

 

 

|                                     |            |        |    |                |     |         |      |        |                | As at   |   |
|------------------------------------------|-----------------|-------------|---------|---------------------|----------|--------------|-----------|-------------|---------------------|---------|--------|
|                                     |            |        |    |                | Weighted |         | Remaining |        | April 30,      2004 |    |
|                                     |            |        | Options |                |     | Average      |      | Contractual |                | Options |   |
| Exercise Price      Range                |            | Outstanding |    | Exercise      Price |     | Life (Years) |      | Exercisable |                |
|                                          |            |             |    |                     |     |              |      |             |                |
| $                                        | 8.63 to $9.50   |        | 135,333 |                | $        | 8.66         |      | 0.64        |                | 135,333 |   |
| $                                        | 13.15 to $14.85 |        | 986,798 |                | $        | 14.45        |      | 5.09        |                | 965,131 |   |
| $                                        | 15.40 to $17.75 |        | 372,952 |                | $        | 17.30        |      | 3.33        |                | 352,951 |   |
| $                                        | 27.25 to $40.75 |        | 651,500 |                | $        | 27.99        |      | 5.17        |                | 101,500 |   |
|                                          |                 |        |         |                |          |              |      |             |                |         |   |
|                                     |            |        |    |                |     |         |      |        |                |    |   |
|                                     |            |        |    |                |     |         |      |        |                |    |   |
| **Other Dilutive      Securities**  |            |        |    |

There were no other dilutive securitiesoutstanding as at April 30, 2004.

L I Q U I D I T Y    A N D   C A P I T A L    R E S O U R C E S

**DUNDEE WEALTH ISSUANCE OF SUBSCRIPTION RECEIPTSAND SUBSEQUENT EXCHANGE FOR COMMON SHARES**

On December 22, 2003, Dundee Wealth raised$190 million in a public offering of 24,516,129 subscription receipts at a priceof $7.75 per subscription receipt. Dundee Bancorp purchased $90 million of thesubscription receipts at the offering price, while the remaining $100 millionwere underwritten and sold by a syndicate of underwriters. Proceeds from theoffering were placed in escrow pending closing of Dundee Wealth's acquisitionof Cartier, which was completed on December 30, 2003. Immediately thereafter,each subscription receipt was exchanged for one common share of Dundee Wealth.Proceeds raised, net of issue costs of approximately $6.3 million, were used tofund the cash component of the Cartier acquisition of approximately $168million. The balance of proceeds were used for general working capital purposes.

Dundee Wealth provided an over-allotmentoption to each of the underwriters and to Dundee Bancorp, each over-allotmentoption providing for the purchase of up to an additional 1,290,323 subscriptionreceipts at the offering price. These options were exercised for common sharesin January 2004 and, as a result, Dundee Wealth raised an additional $20million, net of issue costs of approximately $0.5 million. In January 2004, DWMInc. ("DWM"), Dundee Wealth's 86.0% owned subsidiary, received anadditional cash subscription of $25 million from Caisse pursuant to theirpre-emptive right.

----

**SIGNIFICANT SOURCES AND USES OF CASH AND SHORTTERM INVESTMENTS**

Cash and short term investments haveincreased from $119.5 million at the end of 2002 to $148.7 million as atDecember 31, 2003. In addition to cash and short term investments, corporateinvestments with a carrying value of $40 million (2002 - $77 million) areredeemable funds managed by Dundee Wealth.

Dundee Wealth's subsidiaries operate in aregulated environment and are therefore subject to requirements whereby theymust maintain required levels of capital, which is usually maintained in cash orother liquid assets. At December 31, 2003, all regulated entities were incompliance with regulatory capital requirements and reported capital of $31.1million in excess of requirements.

Significant changes in our cash position andsignificant uses or sources of cash since December 31, 2002 are detailed below:

- In June 2003, $24.4 million was paid to    the public shareholders of Dundee Realty as part of the plan of arrangement.    On the date of acquisition, Dundee Realty added $25.5 million to the    consolidated cash position of the Company. Since acquisition, cash outflows    due to investing activities in the real estate division were $11.5 million,    and proceeds from the sale of revenue producing properties was $8.0 million.    Dundee Realty repaid $7.6 million of debt since the plan of arrangement.  

- Cash flows from operations before changes    in working capital items increased to $77.2 million in 2003 from $41.4    million in 2002. These operating cash flows include $9.4 million generated    by the real estate division since the plan of arrangement.  
- Proceeds from sales of investments were    $137.4 million, of which $20.6 million were used to acquire other corporate    investments.  
- During 2003, $37.7 million was used to    finance deferred sales commissions in Dundee Wealth.  
- Dundee Bancorp made two semi-annual    interest payments totaling $10.1 million to its debenture holders in respect    of its $150 million, 6.70% senior debentures.  

**CASH REQUIREMENTS**

Management is of the view that cash flowsgenerated from operations, together with the Company's borrowing facilities,will be sufficient to meet ongoing working capital requirements, includingplanned capital spending and debt servicing requirements.

----

C O N T I N GE N C I E S   , C O M M I T M E N T S   A N D   OF F   B A L A N C E   

S H E E T  O B L I G A T I O N S

The following table summarizes payments duefor the next five years and thereafter in respect of our contractual obligationsand the obligations of our subsidiaries:

| *(in thousands of      dollars)*           |   |                                       |   |   |    |   |   |    |   |   |       |   |   |    |   |
|--------------------------------------------|--------|--------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|------------|--------|--------|---------|--------|
|                                            |        |                                            |   |        |         |   |        |         |   |        |            |   |        |         |   |
|                                       |   |                                       |   |   |    |   |   |    |   |   |       |   |   |    |   |
|                                       |   |  Expected      Payment Schedule  |   |
|                                       |   |                                       |   |   | 2005 to |   |   | 2007 to |   |   |       |   |   |    |   |
|                                       |   | 2004                                       |   |   | 2006    |   |   | 2008    |   |   | Thereafter |   |   | TOTAL   |   |
|                                            |        |                                            |   |        |         |   |        |         |   |        |            |   |        |         |   |
| 6.70% Senior Debentures                    | $      | -                                          |   | $      | -       |   | $      | 150,000 |   | $      | -          |   | $      | 150,000 |   |
| Bank Debt (note i)                         |   | -                                          |   |   | 77,182  |   |   | -       |   |   | -          |   |   | 77,182  |   |
| Real estate debt                           |   | 47,721                                     |   |   | 1,206   |   |   | 483     |   |   | 2,476      |   |   | 51,886  |   |
| Capital lease obligations                  |   | 524                                        |   |   | 927     |   |   | 463     |   |   | -          |   |   | 1,914   |   |
| Operating lease obligations      (note ii) |   | 16,616                                     |   |   | 25,424  |   |   | 14,066  |   |   | 9,656      |   |   | 65,762  |   |
| Other debt (note iii and      iv)          |   | 1,000                                      |   |   | 2,000   |   |   | -       |   |   | -          |   |   | 3,000   |   |
|                                            |        |                                            |   |        |         |   |        |         |   |        |            |   |        |         |   |
|                                       | $      | 65,861                                     |   | $      | 106,739 |   | $      | 165,012 |   | $      | 12,132     |   | $      | 349,744 |   |
|                                       |        |                                            |   |        |         |   |        |         |   |        |            |   |        |         |   |

| (i)          | Subsequent to year end,      outstanding bank debt of $22,294 in a subsidiary of Dundee Wealth was      renegotiated and the maturity was extended to January 1, 2005. On April      29, 2004, the Company renegotiated its bank facility and extended the      maturity date to April 28, 2005. At December 31, 2003, amounts outstanding      under the Company bank facility were $54,888. |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)         | Operating lease      obligations include minimum commitments to landlords, suppliers and      service providers. Several of these leases oblige the Company to pay      additional amounts if usage or transaction activity exceeds specified      levels.                                                                                                                                    |

| (iii)                  |  Other      debt is reported exclusive of obligations under the Income Trust or Prime      Trust arrangements (see note 9 to the audited consolidated financial      statements) aggregating $12.6 million as at December 31, 2003, as these      obligations are contingent on the underlying net asset value of mutual      fund units financed by these arrangements.

  |
|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iv)         | Other debt does not      include the Company's obligations under the rent supplement arrangements      with Dundee REIT as obligations will vary based on vacated space of      certain of Dundee REIT's revenue producing properties (see note 12 to      the audited consolidated financial statements).                                                                            |

As a part of the creation of Dundee REIT,Dundee Realty entered into the following contractual arrangements with DundeeREIT:

- Dundee Realty retained the ownership of    50% of the property management company which provides property management    services to Dundee REIT. Under the property management arrangements, Dundee    Realty agreed to provide Dundee REIT with a rent supplement that is computed    using a formula based on vacant space of certain of Dundee REIT's revenue    producing properties. The term of the rent supplement is five years for    office and retail space and three years for industrial space. For the six    months ended December 31, 2003, the Company paid $2.2 million in respect of    this rent supplement.  
- Dundee Realty has agreed to guarantee    certain debt associated with some of the properties that have been    transferred to an indirect subsidiary of Dundee REIT. As at December 31,    2003, the aggregate of such guarantees was $32.9 million. Dundee Realty has    been indemnified by Dundee REIT in respect of these guarantees.  

In addition, we entered into ashareholders' agreement with the management shareholders of Dundee Realty andagreed to repurchase their shares in certain circumstances. If the repurchaseoccurs prior to June 30, 2005, the purchase price is deemed to be $24,395 pershare or $3.6 million in the aggregate, otherwise it is at fair market value.The management shareholders also have an option to purchase an additional 1%interest in Dundee Realty each year for a five year period at a price of $85,000per 1%.

----

The Company and its subsidiaries have leaseagreements in respect of premises. Minimum payments in respect of theseobligations are detailed in note 12 to the audited consolidated financialstatements.

Certain of Dundee Wealth's subsidiarieshave previously entered into agreements for the financing of sales commissionson mutual fund sales. Some of these agreements are in the form of distributionarrangements whereby the financing entity financed the sales commissionsdirectly. We pay a distribution fee as consideration under these agreements,which is calculated as a percentage of the net asset value of the related mutualfund units, and recorded as an expense in the period incurred.

On the creation of DWM, we entered into ashareholders' agreement along with Dundee Wealth and with Caisse, the minorityshareholder of DWM The agreement provides that in certain circumstances, Caissewill have the right to require DWM, Dundee Wealth or the Company to repurchaseall or part of its interest in DWM at fair market value.

We are subject to a trust indenture inrespect of the $150 million unsecured debentures that are issued andoutstanding. The trust indenture contains various covenants and provisions whichmay include restrictions on our ability or on certain of our subsidiaries toincur additional debt.

Each of Dundee Bancorp, Dundee Wealth andEurogas has established share incentive plans for employees, officers anddirectors and in the case of Dundee Wealth, for independent financial advisorsand service providers. These share incentive plans, the number of shares grantedand issuable and their impact on current reported net earnings are outlined innote 11 to the audited consolidated financial statements. Dundee Wealth has alsogranted shares to employees and independent financial advisors that will beissued in the future, contingent on certain conditions that are generallydesigned to encourage retention of employees over time, or to encourage theattaining of predetermined sales or production targets. Included in current yearincome is $0.5 million (2002 - $0.4 million) accrued in anticipation of theissuance of these shares.

Subsequent to year end, as part of theCartier acquisition, Dundee Wealth granted 1,997,332 stock options to acquirecommon shares of the Company at exercise prices ranging between $7.55 and $21.04to certain financial advisors.

R E L A T E D   P A R T Y   T R AN S A C T I O N S

We may, from time to time, have routinetransactions with subsidiaries or affiliates including our equity accountedinvestees. The following is a summary of additional related party transactionsthat have not been disclosed elsewhere in this Management's Discussion andAnalysis:

- In normal course, Dundee Wealth's    investment management activities will include the purchase or sale of    securities through registered brokers for the benefit of mutual fund clients    and other discretionary client portfolios. These transactions may be    conducted through Dundee Wealth's brokerage subsidiary. These transactions    are conducted at negotiated discounted rates.  
- Dundee Wealth's brokerage subsidiary    may also participate in corporate finance activities with or on behalf of    our equity accounted investees or on behalf of fiduciary accounts that are    managed by Dundee Wealth's investment management subsidiaries.  

----

- Included in corporate investments are    mutual funds with a cost of $40.5 million (2002 -$77.0 million) which are    managed by a subsidiary of Dundee Wealth.  
- Our directors and officers, our investee    companies, and officers and directors of our investee companies may choose    to use the brokerage facilities of Dundee Wealth subsidiaries. Such    transactions are conducted on normal market terms.  
- We have issued loans to shareholders    aggregating $2.1 million, primarily to acquire shares of the Company. The    underlying shares acquired generally secure these shareholder loans.  

M A N A G I N G   R I S K

**WEALTH MANAGEMENT**

The wealth management industry hasexperienced considerable growth in the past decade. In recent years, investorshave endeavored to increase their knowledge of available investment products andservices. Simultaneously, there has been an increase in the number, type andsophistication of products and services offered by financial institutions.Dundee Wealth believes that these factors will result in an increased number ofinvestors seeking some level of professional financial and investment advice inmanaging their investments, and that it is well positioned to meet thischallenge as it continues to establish itself as a fully integrated wealthmanagement business, combining professional investment management products andservices with knowledgeable financial advisory professionals. Notwithstandingthese facts, we perceive the following risks relating to Dundee Wealth and thewealth management division:

**Creating, Attracting and Retaining AUMand AUA**

The profitability of Dundee Wealth isdirectly related to its ability to create, attract and retain AUM and AUA. Theseassets are subject to a fee, generally calculated as a percentage of the netasset value. Should a sizable number of clients seek to terminate theirarrangements with Dundee Wealth and withdraw assets, our profitability would beadversely affected.

**Market Influences**

Volatility in domestic and internationalmarkets and changes in interest rates may challenge the Company. These factorsare generally beyond the control of the Company but, to a significant degree,could impact on the Company's overall profitability.

**Operating in a Regulated Environment**

The regulatory operating environment forwealth management and financial services operations continues to expand,becoming more regimented, onerous and complex. We believe that Dundee Wealth'sability to comply with these emerging changes is dependent upon theestablishment, implementation and maintenance of extensive compliance policiesand procedures. Regardless of our effectiveness in monitoring and administeringestablished compliance policies and procedures, we may still be subject toclaims by clients. We maintain various types of insurance to cover thispotential risk and continuously evaluate the adequacy of such insurancecoverage. In recent years, the cost of obtaining insurance has increased whilethe number of insurance providers has decreased. The ability to obtain insuranceon reasonable economic terms may be more difficult in the future.

**2** **00****3**   **A****N N****UA****L   R****EP****O R****T**

**49**

----

**Competition**

Dundee Wealth operates in a highlycompetitive environment. In order to remain competitive, Dundee Wealth mustcontinue to be innovative in the development of financial products and solutionsfor its clients, it must continue to maintain consistency in its investmentperformance and it must provide the highest level of service to its clients. TheCompany believes that Dundee Wealth's current fee structure is competitivewith its industry peers.

**REAL ESTATE**

Real estate assets are relatively illiquid.Such illiquidity may limit our ability to vary our real estate portfolio inresponse to changing economic or investment conditions. In recessionary times,it may be difficult to dispose of certain types of real estate. The costs ofholding real estate could be considerable, and as a holder of real estate duringa recessionary period we may be faced with ongoing expenditures with a decliningprospect of incoming receipts.

As a result of market conditions, we may notbe able to, or may not wish to develop our land holdings. Development of landholdings and properties that are to be constructed are subject to a variety ofrisks, some not within our control. Such risks include lack of funding,variability in construction costs or unforeseeable delays.

As an owner of real property, we are subjectto various federal, provincial and state laws relating to environmental matters.Such laws provide that we could be liable for the costs of removal andremediation of certain hazardous, toxic substances released on or in theCompany's properties, or disposed of at other locations. The Company hasinsurance and other policies and procedures in place to review and monitorenvironmental exposure which it believes mitigates these risks to an acceptablelevel.

**RESOURCES**

The resource industry is highly competitiveand, in addition, exposes us to a number of risks. Revenues and profits dependon market prices for resource commodities, which can fluctuate materially.Adverse fluctuations can have a significant negative effect on our revenues andprofitability. Resource mining and exploration involves a high degree of risk,which even a combination of experience, knowledge and careful evaluation may notbe able to overcome. It is also highly capital intensive and the ability tocomplete a development or exploration project may be dependent on the entity'sability to raise additional capital. In certain cases this may be achieved onlythrough joint venture or other relationships which would reduce the entity'sownership interest in the project. There is no assurance that additionalresources or reserves in commercial quantities will be discovered by any of thecompanies or that developmentoperationswill prove successful. Further, many of our resource investees operate inforeign jurisdictions which cause these operations to be subject to businessrisks inherent in those countries which may involve matters arising out ofgovernment policies, imposition of special taxes or similar charges byregulatory bodies, regulations with respect to clean up and rectification costs,foreign exchange rate fluctuations and controls, access to capital markets,civil disturbances, deprivation or unenforceability of contract rights or thetaking of property without fair compensation.

----

**INVESTMENT HOLDINGS**

Our investments are in a variety of industrysegments and therefore, each investment will be subject to specific risksinherent in the unique business environment in which it operates. In the case ofequity accounted investments, we are required to record our share of income orloss from these investments and accordingly, our earnings may be negativelyaffected. Further, to the extent that the investment is a public company, theinvestment is subject to market forces which may fluctuate beyond our control.Certain of our private company holdings are illiquid and disposition may bedifficult. We may realize lower proceeds of disposition in the event that we arerequired to dispose of an investment at a point in time when market prices arelow. We mitigate this risk by utilizing our revolving credit facilities so thatwe can maximize the timing of any dispositions.

F U T U R E    A C C O U N T I N G   C H A N G E S

**Consolidation of Variable InterestEntities**

In June 2003, the CICA issued AccountingGuideline 15, *"**Consolidation ofVariable Interest Entities"*("AcG15"), which provides guidance for applying consolidation to certain entitiesthat are subject to control on a basis other than ownership or voting interest.AcG 15 will become effective for all reporting periods beginning on or afterNovember 1, 2004. We are currently evaluating the impact of applying thesestandards.

**Real Estate Revenue Recognition**

At present, revenues from leases thatinclude contractual increases in basic rents are only accounted for on astraight line basis where such increases exceed expected increases in theprojected Consumer Price Index. Under the new policy to be adopted by DundeeREIT, the total amount of revenue to be received from such leases will beaccounted for on a straight line basis over the term of the respective lease.This change will be adopted on a prospective basis commencing on January 1,2004.

**Depreciation of Real Estate RevenueProducing Properties**

At present, the sinking fund method ofdepreciating revenue producing properties is used. Effective January 1, 2004,Dundee REIT will depreciate its revenue properties on a straight line basis overtheir remaining estimated useful life. This change will be adopted on aprospective basis commencing on January 1, 2004.

**Asset Retirement Obligations**

The CICA recently issued CICA HandbookSection 3110 *"**Asset RetirementObligations"*. The recommendationis effective for fiscal years beginning on or after January 1, 2004, andrequires liability recognition for retirement obligations associated withtangible long lived assets. These obligations are initially measured at fairvalue, which is the discounted future value of the liability. This fair value iscapitalized as part of the cost of the related asset and is amortized to expenseover its useful life. The liability accretes until the entity expects to settlethe retirement obligation. The total impact of this standard on our resourceoperations has not yet been determined.

----

**Impairment of Long-Lived Assets**

Under CICA Handbook Section 3063 "*Impairmentof Long-Lived Assets*", which wasissued in 2003, sets new standards for determining the amount of impairment, ifany, of long-lived assets. Assets are grouped at the lowest level for which cashflows can be independently identified. Impairment should be recognized when thecarrying value of an asset exceeds the sum of undiscounted cash flows expectedfrom its use and eventual disposition. We do not expect this standard to have asignificant impact to our consolidated financial results.

**Hedging Relationships**

In December 2001, the CICA issued CICAAccounting Guideline 13 "*HedgingRelationships*" ("AcG 13")which deals with the identification, designation, documentation andeffectiveness of hedging relationships for the purposes of applying hedgeaccounting. This guideline is effective for fiscal years beginning on or afterJuly 1, 2003. We anticipate that the adoption of AcG 13 will not have a materialimpact on our consolidated financial statements.

**Oil and Gas Accounting - Full Cost**

In September 2003, the CICA issued CICAAccounting Guideline 16 *"**Oil andGas Accounting -Full Cost"*("AcG16") which is applicable to fiscal years beginning on or after January 1,2004. The cumulative amount that would have been recognized in prior years hadthis Guideline been applied, less any amount previously recognized, should berecognized as a change in accounting policy and charged to opening retainedearnings for the fiscal year in which this section is initially applied, withoutrestatement of prior periods. The total impact on our financial statements hasnot yet been determined. The main features of AcG 16 are as follows:

- Reserve definitions have been made    consistent with those in the Society of Petroleum Evaluation Engineers    Handbook. These definitions are also utilized in the Canadian Securities    Administrators' National Instrument 51-101.  
- The impairment of a cost centre is    recognized when its carrying amount is greater than its undiscounted future    cash flows. In the recognition step, only proven reserves are allowed, and    the prices used in estimating future cash flows should be based on the best    information available to the enterprise. This would normally be consistent    with quoted benchmark prices in the futures market, or based on reputable    industry forecasts.  

If impairment is recognized, the amount ofimpairment is determined as the excess of the carrying amount over the fairvalue. Fair value is based on the present value of expected cash flows,reflecting discounting at the risk-free rate of interest. Both proven and someportion of probable reserves are also used in estimating fair value.

----

**FORWARD LOOKING STATEMENTS**

This Management's Discussion and Analysiscontains forward looking statements about the Company, including its businessoperations, strategy and expected financial performance and conditions. Forwardlooking statements include statements that are predictive in nature, depend uponor refer to future events or conditions, or include words such as "expects", "anticipates","intends", "plans", "believes", "estimates"or similar expressions. Such statements are based on the current expectations ofmanagement, and inherently involve numerous risks and uncertainties, known andunknown, including economic factors and the financial services industry,generally. These forward looking statements are not guarantees of futureperformance, and actual events and results could differ materially from thoseexpressed or implied by forward looking statements made by the Company. Thereader is cautioned to consider these and other factors carefully and not placeundue reliance on forward looking statements. The Company has no specificintention to update any forward looking statements whether as a result of newinformation, future events or otherwise. The risks, uncertainties and otherfactors that could influence actual results are described in the "ManagingRisk" section of this Management's Discussion and Analysis and are based oninformation available as at April 30, 2004.

I N F O R M A T I O N   C O N C E R N I N G  D U N D E E   B A N C O R P

Additional information concerning DundeeBancorp, including a copy of the Company's Annual Information Form ("AIF")may be found on SEDAR at www.sedar.com. The Company's 2003 AIF will beavailable in May 2004.

Toronto, Canada April 30, 2004.