UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

[ ]     Registration Statement pursuant to Section 12(b) or (g) of the
        Securities Exchange Act of 1934
                                       or

[X]     Annual Report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
                   For the fiscal year ended December 31, 2002
                                       or

[ ]     Transition Report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
              For the transition period from _________ to _________

                         Commission file number: 0-30464

                              IMA EXPLORATION INC.
             (Exact name of Registrant as specified in its charter)

                              IMA EXPLORATION INC.
                 (Translation of Registrant's name into English)

                                BRITISH COLUMBIA
                 (Jurisdiction of incorporation or organization)

      #709 - 837 WEST HASTINGS STREET, VANCOUVER, BRITISH COLUMBIA, V6C 3N6
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
NONE

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

                           COMMON SHARES, NO PAR VALUE
                                (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

                                 NOT APPLICABLE
                                (Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of December 31, 2002.

                26,550,606 COMMON SHARES AS OF DECEMBER 31, 2002

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes     X       No
    ---------      ---------

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


                                                                               1
<PAGE>


GENERAL INFORMATION:

UNLESS OTHERWISE INDICATED, ALL REFERENCES HEREIN ARE TO CANADIAN DOLLARS.

GLOSSARY OF TERMS

GENERAL TERMS
ARGILLIC ALTERATION:               Development  of  secondary  clay  minerals by
                                   weathering or hydrothermal activity.

BRECCIA:                           A rock containing generally angular fragments
                                   of itself or some other rock.

CATEO:                             In  Argentina,  a  cateo  is  an  exploration
                                   concession  granted  for  a  period  of up to
                                   1,100 days. In areas where field work seasons
                                   are limited,  only the available field season
                                   will be considered in  determining  the 1,100
                                   days. A cateo gives the holder the  exclusive
                                   right to explore the area, subject to certain
                                   pre-existing rights of owners of mines within
                                   the  area  and  abutting  owners  of  cateos.
                                   Through the process of exploration, the owner
                                   of   the    cateo    may    make   and   file
                                   "manifestations" of discovery (see below) and
                                   petition   the  mining   authority   for  the
                                   granting of mines (see below). A cateo may be
                                   up to 10,000 hectares in size. A single legal
                                   person  may not hold  more  than 20 cateos or
                                   200,000   hectares   of  cateos  in  any  one
                                   province.   When  the  cateo  is   officially
                                   granted, a one time payment of about US $0.35
                                   ( Pesos $0.80 ) per hectare is required.

CLASTIC:                           Rock  components  consisting   of   fragments
                                   derived by mechanical erosion of pre-existing
                                   rocks.

COLOR ANOMALY:                     An atypical or unusual color pattern  visible
                                   on air  photos  or  satellite  images of rock
                                   outcrop areas,  often caused by  hydrothermal
                                   alteration.

G/T:                               grams per tonne

HYDROTHERMAL ALTERATION:           Those chemical and mineral changes  resulting
                                   from the  interaction of hot water  solutions
                                   with pre-existing solid mineral phases.

Ignimbrite:                        Pumice-dominated  pyroclastic  flow  deposits
                                   with subordinate ash.

INTRUSIVE ROCKS:                   A body of rock, that while fluid,  penetrated
                                   into or between other rocks,  but  solidified
                                   before reaching the surface.

KM:                                Kilometer

M:                                 Meter

MAFIC:                             Dark  colored,  generally  iron  or magnesium
                                   rich, rock or mineral.

MANIFESTATIONS:                    In Argentina, manifestations  or   "manifest-
                                   aciones" of discovery  are  official  notices
                                   filed  with the mining  authority  indicating
                                   that the person filing (who must be the owner
                                   of the cateo in an area  covered  by a cateo)
                                   has  made  a   discovery.   The   filing  and
                                   acceptance by the mining  authority of such a
                                   notice,   constitutes   the  first   step  in
                                   converting a discovery to a mine (see below).
                                   A manifestation of discovery may cover one or
                                   more  claims  in the case of either a vein or
                                   disseminated   deposit.   The   size  of  the
                                   manifestations   and  the   annual   payments
                                   required  of the  owner  is the same as those
                                   for a mine.

MINE:                              In  Argentina,  a  mine  or  "mina" is a real
                                   property   interest.   It  is  a   right   of
                                   exploration  granted  on  a  permanent  basis
                                   after the completion of an official

                                                                               2

<PAGE>

                                   survey for as long as the right is diligently
                                   utilized and semi-annual payments of US$17.50
                                   (Pesos  $40) per claim  are made.  A mine may
                                   consist   of  one  or   several   claims   or
                                   "pertinencias". In the case of vein deposits,
                                   each  claim is a maximum of 200 by 300 meters
                                   or six hectares;  for disseminated  deposits,
                                   each claim is up to one square  kilometer  or
                                   100 hectares.

PORPHYRY:                          An igneous rock containing  mineral  crystals
                                   that are visibly  larger than other  crystals
                                   of the same or different composition.

PPB:                               parts per billion

PPM:                               parts per million

SATELLITE IMAGERY:                 Maps or images  produced from data  collected
                                   by  satellite   displaying   wavelength   and
                                   intensity  variations of visible and infrared
                                   radiation reflected from the Earth's surface.

SCREE:                             A slope of loose rock debris at the base of a
                                   steep incline or cliff.

SEDIMENTARY ROCKS:                 Descriptive   term   for  a  rock  formed  of
                                   sediment,  namely solid material both mineral
                                   and organic,  deposited from  suspension in a
                                   liquid.

STREAM SEDIMENT SAMPLE:            A  sample  of fine  sediment derived from the
                                   mechanical action of the stream.

SKARN                              A style of alteration  characterized  by iron
                                   and   magnesium    bearing    aluminosilicate
                                   materials such as garnet and diopside.

SUBVOLCANIC:                       An  intrusive  body  emplaced  close  to  the
                                   earth's surface within a volcano.

SULFIDE:                           A  compound  of  sulfur  combined with one or
                                   more metallic or semi-metallic elements.

VEINS:                             An  occurrence  of   minerals,  having   been
                                   intruded into another rock,  forming  tabular
                                   shaped bodies.

ELEMENTS:

AG:                                Silver

AS:                                Arsenic

AU:                                Gold

BA:                                Barium

CO:                                Cobalt

CU:                                Copper

MO:                                Molybdenum

PB:                                Lead

SB:                                Antimony

ZN:                                Zinc


                                                                               3
<PAGE>

MINERALS:

BIOTITE:                           An iron and magnesium bearing mica mineral.

CARBONATE:                         A mineral containing the radical CO3.

CHALCOPYRITE:                      A sulfide mineral containing copper and iron.

DIOPSIDE:                          A magnesium rich pyroxene mineral.

FELDSPAR:                          An  aluminosilicate  with variable amounts of
                                   potassium, sodium and calcium.

GYPSUM:                            A  calcium sulphate mineral, a common mineral
                                   of evaporates.

HEMATITE:                          An iron oxide mineral.

HORNBLENDE:                        A   complex   hydrated   aluminosilicate   of
                                   magnesium, iron and sodium.

MAGNETITE:                         A magnetic iron oxide mineral.

MICA:                              A  mineral  with  a  strongly  defined platey
                                   structure.

PLAGIOCLASE:                       A calcium-rich feldspar mineral.

PYRITE:                            An iron sulfide mineral.

PYROXENE:                          An aluminosilicate of magnesium and iron.

PYRRHOTITE:                        A magnetic sulfide of iron.

ROCK TYPES:

ANDESITE:                          A  volcanic  rock with the principal minerals
                                   being plagioclase.

CONGLOMERATE:                      A clastic sedimentary rock containing rounded
                                   fragments of gravel or pebble size.

DACITE:                            A volcanic or shallow intrusive rock with the
                                   principal minerals being plagioclase,  quartz
                                   and one or more mafic constituents.

DIORITE:                           An  intrusive  rock  composed  essentially of
                                   sodic plagioclase,  hornblende,  biotite,  or
                                   pyroxene.

LIMESTONE:                         A  sedimentary  rock  consisting  chiefly  of
                                   calcium carbonate.

SANDSTONE:                         A clastic sedimentary  rock composed  largely
                                   of sand-sized grains, principally quartz.

SHALE:                             A clastic  sedimentary rock derived from very
                                   fine-grained sediment (mud).

SILTSTONE:                         A clastic  sedimentary  rock similar to shale
                                   except comprised of slightly coarser material
                                   (silt).

TUFF:                              A   rock   formed   of   compacted   volcanic
                                   fragments,  generally  smaller  than  4mm  in
                                   diameter.


                                                                               4

<PAGE>


                                     PART I

ITEM 1.  DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
--------------------------------------------------------------------------------
Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
--------------------------------------------------------------------------------
Not applicable.

ITEM 3.  KEY INFORMATION.
--------------------------------------------------------------------------------
SELECTED FINANCIAL DATA

The selected  financial  data of IMA  Exploration  Inc. (the  "Company") for the
years ended December 31, 2002,  2001 and 2000 was derived from the  consolidated
financial   statements   of   the   Company   which   have   been   audited   by
PricewaterhouseCoopers  LLP, independent Chartered Accountants,  as indicated in
their report which is included  elsewhere  in this annual  report.  The selected
financial  data set forth for the years  ended  December  31,  1999 and 1998 are
derived  from the  Company's  audited  consolidated  financial  statements,  not
included herein.

The  information  in the following  table was  extracted  from the more detailed
consolidated  financial  statements and related notes included herein and should
be read in conjunction  with such financial  statements and with the information
appearing  under  the  heading  "Item 5.  Operating  and  Financial  Review  and
Prospects".

Reference is made to Note 10 of the  consolidated  financial  statements  of the
Company included herein for a discussion of the material measurement differences
between Canadian Generally Accepted Accounting  Principles ("Canadian GAAP") and
United States Generally Accepted Accounting  Principles ("U.S. GAAP"), and their
effect on the Company's financial statements.

To date, the Company has not generated  sufficient  cashflow from  operations to
fund ongoing  operational  requirements  and cash  commitments.  The Company has
financed its operations  principally  through the sale of its equity securities.
The Company considers that it has adequate  resources to maintain its operations
and will  require  additional  financing  for planned  exploration  and property
acquisitions  for the  remainder of 2003.  See "Item 5.  Operating and Financial
Review and Prospects".

CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

                      (CDN$ IN 000, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                   YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
                                 2002          2001             2000           1999           1998
<S>                             <C>           <C>              <C>            <C>            <C>
Revenue                             $0            $0               $0             $0              $0

General Corporate
Expenditures                    (1,278)         (836)          (1,066)          (941)           (862)

General Exploration
Expenditures                      (180)         (110)            (137)          (160)           (157)


Foreign Exchange Gain               (8)           17               (9)           (25)             42
(Loss)


                                                                               5
<PAGE>

<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                   YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
                                 2002          2001             2000           1999           1998
<S>                             <C>           <C>              <C>            <C>            <C>

Interest and
Miscellaneous Income                27            97              157             47              97

Provision for
Marketable Securities                -           (22)            (179)          (417)              -

Gain (Loss) on Sale of
Marketable Securities                -            (7)               -           (162)             53

Write-off of Mineral
Properties                           -           (21)            (790)           (99)            (96)

Gain on Exchange of
Minas Barbados                       -             -                -              -           2,107

Equity Interests in
Affiliated Companies                 -             -                -              -            (683)

Net Income (Loss)               (1,440)         (882)          (2,024)        (1,746)            499

Earnings (Loss) per
Share
  Basic                          (0.06)        (0.06)           (0.17)         (0.23)           0.12
  Diluted                        (0.06)        (0.06)           (0.17)         (0.23)           0.11

Weighted Average
Number of Shares
Outstanding                     23,188        15,104           11,939          7,567           4,157

Working Capital                  1,431           733            1,435          1,261           1,660
(Deficiency)

Capital Assets                      46            57               74             90              89

Mineral Properties               5,848         4,581            3,282          2,083             714

Long-Term Debt                       -             -                -              -               -

Total Assets                     7,432         5,487            4,980          3,602           2,729

Net Assets -
Shareholder's
Equity                           7,324         5,372            4,790          3,434           2,628

</TABLE>

ADJUSTED TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Under U.S.  GAAP the  following  financial  information  would be adjusted  from
Canadian GAAP (references are made to Note 10 of the  accompanying  consolidated
audited financial statements):


                                                                               6

<PAGE>


<TABLE>
                                           (CDN$ IN 000, EXCEPT PER SHARE DATA)

<CAPTION>
                                 2002           2001            2000           1999            1998
CONSOLIDATED STATEMENT
OF OPERATIONS
<S>                            <C>            <C>             <C>            <C>              <C>

Earnings (Loss) for
the year under
Canadian GAAP                  $(1,440)         $(882)        $(2,054)       $(1,746)            $499


Mineral property and
deferred exploration
costs for the year              (1,267)        (1,321)         (1,989)          (786)            (224)

Mineral property and
deferred exploration
costs acquired from
acquisition of IMPSA                 -              -               -           (682)               -


Mineral property and
deferred exploration
costs written off
during the year which
would have been
expensed in the year
incurred                             -             22             790             99               96


Mineral property and
deferred exploration
costs disposed of
during the year which
would have been
expensed in the year
incurred                             -              -               -              -            2,933


Stock-based
compensation                      (102)             -               -              -                -

Earnings (Loss) for
the year under US GAAP
before comprehensive
income adjustments             $(2,809)       $(2,181)        $(3,224)       $(3,115)          $3,305


                                                                               7

<PAGE>

<CAPTION>
                                 2002           2001            2000           1999            1998
<S>                            <C>            <C>             <C>            <C>              <C>

Unrealized gains on
available-for-sale
securities                          55              -               -            (82)              82
                         -----------------------------------------------------------------------------
Comprehensive
Income (Loss)                  $(2,754)       $(2,181)        $(3,224)       $(3,197)          $3,387
                         =============================================================================


Earnings (Loss) per
share under US GAAP             $(0.12)        $(0.14)         $(0.26)        $(0.36)           $0.80
                         =============================================================================

Diluted Earnings
(Loss) per share under
US GAAP                         $(0.12)        $(0.14)         $(0.26)        $(0.36)           $0.79
                         =============================================================================

                                 2002        2001            2000           1999            1998
                          ----------------------------------------------------------------------------
SHAREHOLDERS' EQUITY

Balance per Canadian
GAAP                            $7,324         $5,372          $4,790         $3,435           $2,628

Mineral property and
deferred exploration
costs expensed                  (5,848)        (4,581)         (3,282)        (2,083)            (714)

Unrealized gains on
available-for-sale
securities                           -              -               -              -               82

Accumulated other
comprehensive income                54              -               -              -               -
                          ----------------------------------------------------------------------------

Balance per US
GAAP                            $1,530           $790          $1,508         $1,352          $1,996
                          ============================================================================


MINERAL PROPERTIES AND
RELATED DEFERRED COSTS

Balance per Canadian
GAAP                            $5,848         $4,581          $3,282         $2,083            $714

Mineral Property
exploration costs and
expenses per US GAAP           $(5,848)       $(4,581)        $(3,282)       $(2,083)          $(714)
                         -----------------------------------------------------------------------------

BALANCE PER US
GAAP                               $-             $-              $-             $-              $-
                         =============================================================================

                                                                               8

<PAGE>
<CAPTION>
                                 2002           2001            2000           1999            1998
<S>                            <C>            <C>             <C>            <C>              <C>

CONSOLIDATED
STATEMENTS OF CASH
FLOWS

OPERATING ACTIVITIES

Cash (used) provided
per Canadian GAAP              $(1,306)         $(898)          $(987)       $(1,567)          $(867)

Mineral property and
exploration
expenditures                    (1,267)        (1,321)         (1,989)          (786)           (224)

Mineral property and
exploration
expenditures - IMPSA                 -              -               -           (650)              -


Cash used per US GAAP          $(2,573)       $(2,219)        $(2,976)       $(3,003)        $(1,091)

INVESTING ACTIVITIES

Cash used per Canadian
GAAP                           $(1,278)       $(1,312)        $(2,004)         $(373)          $(396)

Mineral property and
exploration
expenditures                     1,267          1,321           1,989            786             224

Mineral property and
exploration
expenditures - IMPSA                 -              -               -            650               -
                         -----------------------------------------------------------------------------

Cash provided (used)
per US GAAP                       $(11)            $9            $(15)        $1,063           $(172)
                         =============================================================================


FINANCING ACTIVITIES

Cash provided per
Canadian and US GAAP            $3,264         $1,463          $3,380         $2,553          $1,741
                         =============================================================================

</TABLE>

See Note 10 of the Company's consolidated financial statements.

                                                                               9

<PAGE>



EXCHANGE RATE HISTORY

The noon rate of exchange on May 12, 2003, reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States dollars was CDN$1.3885 (US$0.7202 = CDN$1.00).

The  following  table sets forth high and low  exchange  rates for one  Canadian
dollar  expressed  in terms of one U.S.  dollar for the  six-month  period ended
April 30, 2003.

       MONTH                            HIGH                    LOW

       November 2002                    .6362                  .6241

       December 2002                    .6362                  .6267

       January 2003                     .6289                  .6200

       February 2003                    .6295                  .6217

       March 2003                       .6325                  .6266

       April 2003                       .6397                  .6252

The following table sets forth the average exchange rate for one Canadian dollar
expressed in terms of one U.S. dollar for the past five fiscal years.


                    PERIOD                               AVERAGE

      January 1, 1998 - December 31, 1998                 0.6940
      January 1, 1999 - December 31, 1999                 0.6731
      January 1, 2000 - December 31, 2000                 0.6746
      January 1, 2001 - December 31, 2001                 0.6456
      January 1, 2002 - December 31, 2002                 0.6368


Exchange  rates are based upon the noon  buying  rate in New York City for cable
transfers in foreign currencies as certified for customs purposes by the Federal
Reserve Bank of New York.

RISK FACTORS

Due to the nature of the Company's business and the present stage of exploration
on its mineral  resource  properties,  the  following  risk factors apply to the
Company's operations:

LIQUIDITY AND CASH FLOW: To date the Company has not generated any revenues from
operations to fund ongoing  operational  requirements and cash commitments.  The
Company has financed its operations  principally  through the sale of its equity
securities,  and the disposition of its interest in Minas  Argentinas SA and the
sale of Viceroy Resource  Corporation  Common Shares.  As at April 30, 2003, the
Company had working capital of approximately $4,000,000.  See "Item 5. Operating
and  Financial  Review and  Prospects - Liquidity  and Capital  Resources".  The
Company  believes  is does have  adequate  resources  to  maintain  its  ongoing
operations and will require  additional  financing for planned  exploration  and
property  acquisitions  for the remainder of fiscal 2003. See "Item 5. Operating
and Financial Review and Prospects".

EXPLORATION STAGE COMPANY: An investment in a natural resources company involves
a high  degree of risk.  The degree of risk  increases  substantially  where the
Company's properties are in the exploration stage.


                                                                              10

<PAGE>


ADDITIONAL  FINANCING:  The Company presently has sufficient financial resources
to meet property  commitments on its existing property holdings.  The Company at
present does not, however, have sufficient funds to conduct exploration programs
on all these  properties  and will need to obtain  additional  financing or find
joint venture partners in order to initiate any such programs.

On April 3, 2003,  the  Company  announced  a $2.61  million  dollar  financing,
subject to regulatory approval. The proceeds from the financing will be used for
projects in South America and for working  capital.  The financing was completed
on  April  28,  2003  and will  not  provide  adequate  funds to meet all of the
Company's  operating and planned  exploration costs proposed for the remaider of
the year.

There  is no  assurance  that  the  Company  will  be  successful  in  obtaining
additional  financing or negotiating  agreements  with  potential  joint venture
partners.  The  failure to obtain  such  financing  or  complete  joint  venture
arrangements  could result in the loss or substantial  dilution of the Company's
interests  (as  existing or as proposed to be  acquired)  in its  properties  as
disclosed herein.  The Company's business strategy  contemplates  investments in
joint ventures to fund exploration activities on the Company's properties. Joint
ventures may involve  significant  risks and the Company may lose any investment
it makes in a joint venture,  including the Company's interest in any properties
it  contributes.  Except for the agreement  between the Company and Barrick Gold
Corporation  (See "Item 4.  Information on the Company - Properties,  Plants and
Equipment - Principal Properties - Argentinean  Properties - Property Agreements
and Exploration Activities - Barrick Agreement"),  the Company does not have any
definitive commitment or agreement concerning any material investment, strategic
alliance or related effort, on any of the Company's properties. Any investments,
strategic alliances or related efforts are accompanied by risks such as:

           i)      the  difficulty  of  identifying  appropriate  joint  venture
                   partners or opportunities;

           ii)     the  time  the  Company's   senior   management   must  spend
                   negotiating   agreements   and   monitoring   joint   venture
                   activities;

           iii)    the  possibility  that the  Company  may not be able to reach
                   agreement on  definitive  agreements,  with  potential  joint
                   venture partners;

           iv)     potential   regulatory   issues  applicable  to  the  mineral
                   exploration business;

           v)      the investment of the Company's capital or properties and the
                   loss of control over the return of the  Company's  capital or
                   assets;

           vi)     the  inability  of  management  to  capitalize  on the growth
                   opportunities presented by joint ventures; and

           vii)    the insolvency of any joint venture partner.

There are no assurances that the Company would be successful in overcoming these
risks or any other problems encountered with joint ventures, strategic alliances
or related efforts.

EXPLORATION RISKS: Mineral exploration is highly speculative in nature, involves
many risks and frequently is  nonproductive.  There can be no assurance that the
Company's efforts to identify reserves will be successful. Moreover, substantial
expenditures are required to establish  reserves through drilling,  to determine
metallurgical  processes  to  extract  the metal  from the ore and to  construct
mining  and  processing  facilities.  During  the  time  required  to  establish
reserves,  determine suitable metallurgical  processes and construct such mining
and  processing  facilities,  the economic  feasibility of production may change
because of fluctuating  prices. The Company would like to establish reserves but
does not intend to construct or operate a mine.

PROJECT  DELAY:  The  Company's  minerals  business  is  subject  to the risk of
unanticipated  delays in permitting  its projects.  Such delays may be caused by
fluctuations in commodity prices,  mining risks,  difficulty in arranging needed
financing,  unanticipated  permitting  requirements or legal  obstruction in the
permitting process by project opponents.


                                                                              11
<PAGE>

In addition to adding to project capital costs (and possibly  operating  costs),
such delays,  if protracted,  could result in a write-off of all or a portion of
the carrying value of the delayed project.

TITLE  TO  PROPERTIES:  The  validity  of  mining  claims,  which  constitute  a
significant  portion of the Company's  undeveloped  property holdings,  is often
uncertain  and may be  contested.  Although the Company has attempted to acquire
satisfactory  title to its undeveloped  properties,  the Company,  in accordance
with mining industry practice,  does not intend to obtain title opinions until a
decision  is made to  develop  a  property,  with the  attendant  risk that some
titles, particularly titles to undeveloped properties, may be subject to contest
by other parties. As of April 30, 2003, the Company has not lost title to any of
its properties, nor is it contesting any challenges to its ownership.

PRICE  FLUCTUATIONS AND SHARE PRICE VOLATILITY:  In recent years, the securities
markets in Canada have experienced a high level of price and volume  volatility,
and the  market  price of  securities  of many  companies,  particularly  junior
mineral  exploration   companies,   like  the  Company,  have  experienced  wide
fluctuations   which  have  not  necessarily   been  related  to  the  operating
performance,  underlying  asset  values  or  prospects  of  such  companies.  In
particular, the per share price of the Company's common shares fluctuated from a
high of $0.94 to a low of $0.34 during the 12-month  period ending  December 31,
2002.  There can be no assurance that continual  fluctuations  in price will not
occur.

OPERATING HAZARDS AND RISKS:  Mining operations involve many risks, which even a
combination of experience,  knowledge and careful  evaluation may not be able to
overcome. Operations in which the Company has a direct or indirect interest will
be subject to all the hazards and risks normally  incidental to exploration  for
metals, any of which could result in damage to or destruction of mines and other
producing  facilities,  damage to life and  property,  environmental  damage and
possible legal liability for any or all damage.  Although the Company  maintains
liability  insurance  in an amount which it  considers  adequate,  the nature of
these risks is such that liabilities  could exceed policy limits, in which event
the Company could incur significant  costs that could have a materially  adverse
effect upon its financial condition.

INSURABLE  RISKS AND  LIMITATIONS  OF INSURANCE:  The Company  maintains a Total
Office Policy in Canadian dollars on its principal offices. Generally, the Total
Office Policy provides a 90% coverage on office contents, up to $128,000, with a
$500 deductible.  In addition, the policy provides general liability coverage of
up to $5,000,000 for personal injury,  per occurrence,  and $2,000,000 for legal
liability for any one  premises,  with a $500  deductible.  The Company also has
insurance coverage of up to $5,000,000 for non-owned automobile liability.

The Company  maintains a Foreign  Commercial  General  Liability  policy in U.S.
dollars  which  provides a  US$5,000,000  coverage for bodily injury or property
damage per occurrence and coverage up to  US$5,000,000  per offense for personal
injury or advertising  injury (libel,  slander,  etc.). The policy has a general
aggregate limit for all claims during each consecutive policy period, except for
those  resulting  from  product  hazards or  completed  operations  hazards,  of
US$5,000,000. The policy has a US$5,000,000 aggregate limit for each consecutive
policy period,  for bodily injury or property  damage  liability  arising out of
completed operations and products.  In addition,  the Foreign Commercial General
Liability  policy provides for coverage of up to US$10,000 in medical  expenses,
per person,  with a US$10,000 limit per accident,  and up to US$100,000 for each
occurrence of tenants' fire legal liability. The policy does not apply to injury
or damages occurring within Canada, the United States (including its territories
and  possessions),  Puerto Rico, any countries or territories  against which the
United States has an embargo,  sanction or ban in effect,  territorial waters of
any of the foregoing,  the Gulf of Mexico,  or international  waters or airspace
when an injury or damage occurs in the course of travel or transportation to any
country or place  included  in the  foregoing.  The  policy  also does not cover
asbestos  related  claims or  liability  for bodily  injury or property  damages
arising out of the  discharge,  dispersal,  release or escape of smoke,  vapors,
soot, fumes, acids, alkalis, toxic chemicals,  liquids or gases, waste materials
or  other  irritants,   contaminants  or  pollutants  into  or  upon  land,  the
atmosphere,  or any  water-course  or body of water.  The policy also contains a
professional  liability  exclusion  which  applies to bodily  injury or property
damage  arising  out of  defects  in  maps,  plans,  designs  or  specifications
prepared,  acquired  or  used  by the  Company  or  arising  out  of any  act of
negligence,  error,  mistake  or  omission  in  rendering  or  failing to render
professional  consulting  or  engineering  services,  whether  performed  by the
Company or other for whom the Company is responsible.

The Company maintains a Foreign Commercial Automobile Liability Insurance policy
on owned, leased,  hired and non-owned  automobiles with the following liability
limitations:


                                                                              12

<PAGE>

         $5,000,000 bodily injury liability for each person.
         $5,000,000 bodily injury liability for each occurrence.
         $5,000,000 property damage liability for each occurrence.
         $10,000 medical expense coverage, per person.
         $10,000 medical expense coverage, per accident.

The foregoing descriptions of the Company's insurance policies do not purport to
be complete and does not cover all of the exclusions to such policies.

MANAGEMENT:  The Company is  dependent  on the  services of Joseph  Grosso,  the
President and a director of the Company,  Gerald G. Carlson, the Chairman of the
Company's  Board of Directors,  and William Lee, the Company's  Chief  Financial
Officer.  The loss of any of these  people  could have an adverse  affect on the
Company.  Joseph  Grosso  provides  his  services to the Company  through  Oxbow
International Marketing Corp. ("Oxbow"). Gerald G. Carlson provides his services
to the Company  through KGE Management  Ltd. All of the Company's other officers
and directors are employed directly by the Company. The Company has entered into
consulting agreements with Oxbow and KGE Management Ltd. The Company has entered
into an employment  agreement with William Lee. See "Item 6.  Directors,  Senior
Management  and  Employees"  and "Item 7. Major  Shareholders  and Related Party
Transactions".  The Company does not maintain "key-man"  insurance in respect of
any of its principals.

DEPENDENCE UPON OTHERS: The success of the Company's operations will depend upon
numerous factors, many of which are beyond the Company's control,  including (i)
the  ability  of the  Company  to  enter  into  strategic  alliances  through  a
combination of one or more joint ventures,  mergers or acquisition transactions,
(ii) the ability to discover and produce minerals;  (iii) the ability to attract
and retain additional key personnel in investor relations,  marketing, technical
support,  and  finance;  and (iv) the ability  and the  operating  resources  to
develop and maintain the properties held by the Company. These and other factors
will require the use of outside  suppliers as well as the talents and efforts of
the  Company.  There can be no  assurance  of  success  with any or all of these
factors on which the Company's operations will depend.

CONFLICTS  OF  INTEREST:  All of the  Company's  directors  are also  directors,
officers or shareholders of other companies.  Such associations may give rise to
conflicts of interest from time to time. Such a conflict poses the risk that the
Company may enter into a transaction on terms which could place the Company in a
worse  position  than if no conflict  existed.  The directors of the Company are
required  by law to act  honestly  and in good  faith  with a view  to the  best
interest of the Company and to disclose any interest which they many have in any
project or  opportunity  of the Company.  However,  each  director has a similar
obligation to other  companies  for which such director  serves as an officer or
director.  The Company has no specific  internal policy  governing  conflicts of
interest. See "Item 6. Directors,  Senior Management and Employees - Conflict of
Interest".

FOREIGN COUNTRIES AND REGULATORY REQUIREMENTS:  Certain of the projects in which
the  Company  has an  interest  are  located  in  Argentina  and  Peru.  Mineral
exploration  and mining  activities  in  Argentina  and Peru may be  affected in
varying degrees by political instability and government  regulations relating to
the  mining  industry.  Any  changes  in  regulations  or  shifts  in  political
conditions  are beyond the control of the Company and may  adversely  affect its
business.  The  Company  does  not  maintain  and does not  intend  to  purchase
political  risk  insurance.  Operations  may be affected  in varying  degrees by
government  regulations  with  respect  to  restrictions  on  production,  price
controls,   export   controls,   income  taxes,   expropriations   of  property,
environmental  legislation  and mine  safety.  See "Item 4.  Information  on the
Company  -  Business   Overview  -  Government   Regulations  on  the  Company's
Business.". The status of Argentina and Peru as developing countries may make it
more difficult for the Company to obtain any required exploration  financing for
its projects. The effect of all of these factors cannot be accurately predicted.
Both the Argentine and Peruvian economies have experienced  recessions in recent
years and there can be no assurance that their  economies will recover from such
recessions.

As a result of the  Provincial  and  Municipal  elections  in Peru to be held in
November  2002  and the  substantial  investment  required  to  advance  the Rio
Tabaconas  project through the next exploration  stage, in June 2002 the Company
announced its intention to take a more measured  approach to  exploration on the
Rio  Tabaconas  project to ensure  that all local  cultural,  developmental  and
environmental  concerns in the region have been  addressed  which may pertain to
mining  activities.  See  "Item  4.  Information  on  the  Company  -  Principal
Properties - Peruvian

                                                                              13

<PAGE>


Properties."  The Company intends to conduct further  exploration  only after an
agreement  with the local  community of Tamborapa has been  finalized.  Aided by
several Peruvian Social-Economic consultants, a draft Company-Community plan has
been prepared and the Company  intends to present the plan for  discussion  with
the community leaders,  government  officials and other interested party leaders
in the  second  quarter  of 2003.  See  "Item 4.  Information  on the  Company -
Business Overview - Government Regulations on the Company's Business."

In  addition,   Argentina  has  recently   experienced  economic  and  political
instability.  An economic crisis has developed since December 2001. As a result,
Argentina  has  defaulted  on its loans and is  working  with the  International
Monetary Fund on a bail-out loan agreement.  The Company  maintains the majority
of its  funds in  Canada  and only  forwards  sufficient  funds to meet  current
obligations  and  overhead in  Argentina.  The Company does not believe that any
current  currency  restrictions  which may be imposed in Argentina will have any
immediate impact on the Company's exploration activities.

CURRENCY  FLUCTUATIONS:  The Company's operations in Argentina,  Peru and Canada
make it  subject to  foreign  currency  fluctuations  and such  fluctuation  may
adversely  affect the Company's  financial  position and results.  The Company's
property,  option and mining expenses are generally denominated in U.S. dollars.
As such, the Company's  principal  foreign  exchange  exposure is related to the
conversion of the Canadian dollar into U.S. dollars.  The Canadian dollar varies
under market conditions.  In recent years, the Canadian dollar has experienced a
devaluation  against the U.S.  dollar,  which requires the Company to spend more
Canadian dollars on its projects.  Continued  devaluation of the Canadian dollar
against the U.S.  dollar could  materially  and  adversely  affect the Company's
operations and financial position. The Company's foreign subsidiaries comprise a
direct and integral  extension of the Company's  operations.  These subsidiaries
are also  entirely  reliant  upon the Company to provide  financing in order for
them to continue their  activities.  Consequently,  the  functional  currency of
these  subsidiaries  is considered  by management to be the Canadian  dollar and
accordingly  exchange  gains and losses are  included in net income.  Management
does not believe the Company is subject to material  exchange rate exposure from
any  fluctuation of the Argentine or Peruvian  currencies.  The Company does not
engage in hedging  activities.  See "Item 5. Operating and Financial  Review and
Prospects".

ENVIRONMENTAL REGULATIONS: The Company's operations are subject to environmental
regulations promulgated by government agencies from time to time.  Environmental
legislation  provides for restrictions  and prohibitions on spills,  releases or
emissions of various  substances  produced in  association  with certain  mining
industry  operations,  such as seepage from tailings disposal areas, which would
result in  environmental  pollution.  A breach of such legislation may result in
the imposition of fines and penalties.  At present, the Company does not believe
that compliance  with  environmental  legislation  and  regulations  will have a
material  affect  on  the  Company's   operations;   however,   any  changes  in
environmental  legislation or  regulations,  or in the Company's  business,  may
cause  compliance  with such  legislation  and/or  regulation to have a material
impact on the  Company's  operations.  In addition,  certain types of operations
require  the  submission  and  approval  of  environmental  impact  assessments.
Environmental   legislation  is  evolving  in  a  manner  which  means  stricter
standards,  and  enforcement,  fines and penalties for  non-compliance  are more
stringent.  Environmental  assessments  of proposed  projects carry a heightened
degree of  responsibility  for companies and directors,  officers and employees.
The cost of compliance with changes in governmental  regulations has a potential
to reduce the profitability of operations. The Company intends to ensure that it
complies fully with all environmental  regulations relating to its operations in
Argentina and Peru.

NO DIVIDENDS: The Company has not paid out any cash dividends to date and has no
plans to do so in the immediate future.

PENNY STOCK  REGULATION:  The SEC has adopted rules that regulate  broker-dealer
practices in connection with  transactions in "penny stocks".  Generally,  penny
stocks are  equity  securities  with a price of less than  US$5.00  (other  than
securities  registered on certain national securities exchanges or quoted on the
NASDAQ system). If the Company's shares are traded for less than US$5 per share,
as they currently are, the shares will be subject to the SEC's penny stock rules
unless (1) the Company's  net tangible  assets  exceed  US$5,000,000  during the
Company's first three years of continuous  operations or US$2,000,000  after the
Company's first three years of continuous operations; or (2) the Company has had
average  revenue of at least  US$6,000,000  for the last three years.  The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise  exempt  from the rules,  to deliver a  standardized  risk  disclosure
document prescribed by the SEC that provides  information about penny stocks and
the nature and level of risks in the penny stock market.  The broker-dealer also
must provide the customer with


                                                                              14

<PAGE>

current bid and offer  quotations for the penny stock,  the  compensation of the
broker-dealer  and  its  salesperson  in the  transaction  and  monthly  account
statements  showing the market value of each penny stock held in the  customer's
account. In addition,  the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the  broker-dealer  must
make a  special  written  determination  that  the  penny  stock  is a  suitable
investment for the purchaser and receive the  purchaser's  written  agreement to
the transaction. These requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules.  As long as the  Company's  common  shares are subject to the
penny stock  rules,  the holders of common  shares may find it difficult to sell
the common shares of the Company.

ENFORCEMENT OF LEGAL PROCESS:  Service of process upon individuals or firms that
are not  resident in the United  States may be  difficult  to obtain  within the
United  States.  All of the  members  of  the  Board  of  Directors  and  senior
management of the Company reside outside the United States.  Furthermore,  since
all of the Company's assets are located outside the United States,  any judgment
obtained in the United  States  against  the Company or such  persons may not be
collectible within the United States.

ITEM 4.   INFORMATION ON THE COMPANY.
--------------------------------------------------------------------------------
HISTORY AND DEVELOPMENT OF THE COMPANY

Since April 3, 1996, the Company has been engaged, through its subsidiaries,  in
the acquisition and exploration of mineral  properties,  with a primary focus in
Argentina and Peru. The Company was incorporated  under the COMPANY ACT (British
Columbia,  Canada)  (the  "Company  Act") on September  17,  1979,  as Gold Star
Resources  Ltd.  On May 1, 1990,  the  Company  filed an Altered  Memorandum  to
reflect its name change to EEC Marketing  Corp. On January 13, 1992, the Company
filed an Altered Memorandum to reflect its name change to Amera Industries Corp.
From its date of  inception  to January 31,  1992,  the  Company  was  inactive.
Between  January 31, 1992 and August 31,  1994,  the Company was involved in the
eyewear and optical products  industry.  Subsequently,  the Company again became
inactive and began seeking a new business opportunity. The Company filed another
Altered   Memorandum  on  February  9,  1995  to  reflect  its  name  change  to
International  Amera Industries Corp. On February 20, 1996, the Company filed an
Altered Memorandum,  changing its name to IMA Resource  Corporation,  and became
engaged in the acquisition and exploration of mineral properties.

In September of 1995 the Company formed IMPSA Resources Corporation ("IMPSA") in
order to pursue  opportunities  in Peru.  At that time,  exploration  efforts by
other companies in Peru were beginning in earnest.  Management believed Peru was
a favorable  country for mineral  exploration  due to the country's  geology and
strong  mining  culture.   In  addition,   management  believed  that  Peru  was
under-explored.

Management  believed  that the  amount of  capital  necessary  to fully  exploit
opportunities in Peru was greater than what the Company sought to invest.  Since
the  Company  had an ongoing  exploration  program  in  Argentina,  the  Company
initially limited the funding of its Peruvian projects to $250,000.  The Company
established  IMPSA  and used the  Company's  $250,000  capital  contribution  to
establish  an  infrastructure   and  initiate  property  reviews.  A  number  of
consultants were retained and detailed property assessments were initiated.  The
Company  determined that in order to further develop IMPSA,  additional  funding
would be required.

The Company  initially  received 500,000 common shares,  or 30.76%,  of the then
issued  and  outstanding  common  shares  of  IMPSA,  for its  $250,000  capital
contribution.  As a result of issuing  375,000 shares to IMPSA's  management and
key  employees,  and the completion of two private  placements  resulting in the
issuance of a total of 1,528,000 common shares of IMPSA,  the Company's  initial
investment  in IMPSA was  diluted  to  20.76%.  However,  in order to assure the
Company an ongoing  interest in the assets of IMPSA,  the Company retained a 20%
participating  interest in IMPSA (BVI) and  retained the right to maintain a 20%
ownership  interest in IMPSA.  During  fiscal 1998,  the Company  increased  its
investment in IMPSA by purchasing 990,963 shares,  which increased the Company's
percentage  ownership  of IMPSA from  20.76% to 43.81%.  In  January  1999,  the
Company acquired an additional 6,500,000 common shares of IMPSA,  increasing its
equity  interest from 43.81% to 80.69%.  During 2001, the Company  completed the
reorganization  of its  corporate  structure  to  continue  the  funding  of the
Company's  Peruvian  exploration  activities.  On August 20,  2001,  the Company
entered into an agreement with IMPSA, its 80.69% subsidiary,  to acquire IMPSA's
80%  interest  in  IMPSA  (BVI)  and  IMPSA's   advances  to  IMPSA  (BVI),   of
approximately  US$1.536  million,  in exchange for $850,000 plus a 2% fee on any
net revenue or proceeds from the


                                                                              15

<PAGE>

disposition of certain  properties held by IMPSA (BVI). See "Item 4. Information
on the Company -  Organizational  Structure." The fee is limited to a maximum of
$1.4 million. This transaction was approved by IMPSA's shareholders on September
4, 2001.  IMPSA used the cash  proceeds to retire its debt to the  Company.  Rio
Tabaconas (formerly known as Tamborapa),  IMPSA's principal property, is for the
most part an early  stage  exploration  property  and  involves a high degree of
risk.

On April 3, 1996,  the Company  acquired IMA Holdings Corp.  ("IHC"),  a British
Columbia  company.  The acquisition of IHC by the Company resulted in the former
shareholders  of IHC  acquiring  control  of the  Company.  At the  time  of the
acquisition,  the Company had two common directors with IHC.  Generally accepted
accounting  principles  required the  transaction  to be treated for  accounting
purposes as a reverse-takeover. In accounting for this transaction:

      (i)    IHC  was  deemed  to  be  the  purchaser  and  parent  company  for
             accounting  purposes.  Accordingly,  its net assets are included in
             the Company's  consolidated  balance sheet at their historical book
             value; and

      (ii)   control of the net assets and  business of the Company was acquired
             effective  April 3, 1996.  The  transaction  was accounted for as a
             purchase  of the assets and  liabilities  of the  Company by IHC at
             their fair values.

IHC's  primary  asset  was a 50%  joint  venture  interest  in Minas  Argentinas
(Barbados)  Inc.  ("Minas  Barbados").  Oro Belle  Resources  Corporation  ("Oro
Belle"),  a third party, held the remaining 50% interest in Minas Barbados.  The
sole asset of Minas  Barbados  is its 100%  interest  in Minas  Argentinas  S.A.
("MASA").  MASA is an Argentine  company whose main activity is  exploration  of
mineral properties in Argentina.  During 1998, the Company held discussions with
Oro Belle and its majority shareholder,  Viceroy, to restructure the arrangement
and facilitate the funding of future financial requirements of MASA.

In May 1998, the Company entered into an arrangement (the "Plan of Arrangement")
with Viceroy  Resource  Corporation  ("Viceroy")  whereby the Company  agreed to
exchange  its 50%  interest in Minas  Barbados for  2,200,000  common  shares of
Viceroy (the "Viceroy Shares"), at a price of $2.25 per Viceroy Share (being the
market  value of the Viceroy  Shares on the date of the  transaction),  a 1% net
smelter  returns  royalty  interest  (the "MASA  NSR") in the  mineral  property
interests held by MASA, and the extinguishment of all debts owing by the Company
to MASA.  No value was  ascribed to the MASA NSR for the purpose of  calculating
the total consideration received at the date of exchange.

The Company also  restructured  its share capital to facilitate the distribution
of  1,540,000  Viceroy  Common  Shares  to  the  Company's   shareholders.   The
transaction was accomplished as follows:

      i)     each  issued  and  outstanding  common  share  of the  Company  was
             exchanged  for one Class A common  share and one Class B  preferred
             share (the "Preferred Shares") of the Company;

      ii)    the holders of the  Preferred  Shares  received  1,540,000  Viceroy
             Common  Shares,  directly from Viceroy,  in exchange for all of the
             Preferred Shares;

      iii)   the Company  relinquished its ownership  interest in Minas Barbados
             to Viceroy in exchange for the Preferred Shares,  the MASA NSR, the
             extinguishment of all debts to MASA and 660,000 Viceroy Shares. The
             Preferred Shares were then canceled by the Company; and

      iv)    all options and warrants to purchase  common  shares of the Company
             became  exercisable  to purchase  Class A common shares on the same
             basis as the common shares.

The  transaction   became  effective  July  7,  1998,  upon  filing  an  Altered
Memorandum, and the Company changed its name to IMA Exploration Inc. As a result
of the transaction,  the Company  consolidated its share capital on the basis of
four old shares for one new share.

On June 30, 1999, the  shareholders  of the Company passed a Special  Resolution
approving a redesignation of the Class A Common Shares to common shares.


                                                                              16

<PAGE>

In August  1999,  the Company  completed a private  placement  with Barrick Gold
Corporation  ("Barrick")  and issued 1.5  million  units at a price of $1.00 per
unit. Each unit consists of one common share in the capital stock of the Company
and one non-transferable  share purchase warrant,  entitling Barrick to purchase
an  additional  common  share  for a period  of one year at a price of $1.50 per
share.  On April 19, 2001,  Barrick  exercised  warrants at $1.50 to purchase an
additional  350,000  shares of the Company for total  proceeds of $525,000.  The
funds were spent on the drilling program on the Potrerillos  property. On August
16, 2001,  Barrick  exercised their remaining  warrants to buy 1,150,000  common
shares of the Company for a total  proceeds of  $1,725,000.  The  proceeds  were
spent on further  exploration of the Company's  properties in the Valle del Cura
region  of  Argentina  from  October  2000 to March  2001.  As a  result  of the
exercise,  Barrick became the Company's largest shareholder.  See "Item 7. Major
Shareholders and Related Party Transactions".

Of the proceeds from the Barrick private placement, the Company agreed to spend,
by August  2000, a minimum of  $1,125,000  on its Valle del Cura  properties  in
Northwestern Argentina. As of December 31, 2002, the Company spent $2,073,114 on
its Valle del Cura  properties,  satisfying the  aforementioned  agreement.  See
"Item 4.  Information  on the  Company -  Properties,  Plants  and  Equipment  -
Principal Properties".

As part of a financing  and option  agreement  dated August 17, 1999 between the
Company and Barrick,  the Company  granted Barrick an option to earn an interest
in EITHER the Rio de las Taguas or Potrerillos  properties in the Valle del Cura
region.  Barrick may earn a 50% interest in the selected  property by paying the
Company  US$250,000  and expending  US$3 million in  exploration on the selected
property  within five years of making the US$250,000  payment.  Once Barrick has
earned its 50%  interest,  the  selected  property  will be  operated as a joint
venture,  with  Barrick as the  operator.  In addition,  Barrick  shall have the
option to earn an additional  25%  interest,  for a total of 75%, by agreeing to
provide  financing  for the  Company's  share of the costs to bring the selected
property  into  production.  See this  "Item 4.  Information  on the  Company  -
Properties, Plants and Equipment - Principal Properties - Argentinean Properties
- Property Agreements and Exploration Activities - Barrick Agreement".

As a result of Barrick  exercising  all the  1,500,000  warrants,  the selection
period was  automatically  extended for an additional  twelve calendar months to
November  30,  2001.  As of March 23,  2001,  the Company  further  extended the
selection  period to November 30, 2002.  Subsequent to the year end, Barrick and
the Company agreed to extend the Selection Notice Period in the Option Agreement
from November 30, 2002 to December 30, 2003 to allow Barrick's technical team to
review additional properties of the Company. In return for the extension Barrick
paid  US$65,000  which  will be used to make  payments  to  maintain  the option
properties in good standing.

Throughout the 2002 fiscal year  exploration on the  Potrerillos  and Rio de las
Taguas properties was on hold pending  resumption of exploration and development
activities at the nearby Pascua-Lama and Veladero deposits by Barrick.

The current office and principal address of the Company is located at #709 - 837
Hastings Street,  Vancouver,  British Columbia, V6C 3N6. The Company's telephone
number is (604) 687-1828.

NATURE OF THE COMPANY'S OPERATIONS AND PRINCIPAL ACTIVITIES

The Company has made  additions  to mineral  properties  and  deferred  costs of
$1,266,555,  $1,320,777 and $1,989,049 and capital assets of $11,201, $8,012 and
$15,321  for  the  fiscal  years  ended  December  31,  2002,  2001,  and  2000,
respectively.  For the three months  ended March 31, 2003,  the Company has made
additions to mineral properties and deferred costs of approximately $610,000 and
no additions to capital assets.

During the fiscal year ended December 31, 2002 the Company did not terminate any
option  agreements on  properties  and mineral  claims.  During the fiscal years
ended December 31, 2001 and 2000, the Company  terminated  option  agreements on
properties and mineral claims  resulting in the write-off of mineral  properties
and deferred costs in the amounts of $21,483 and $789,953, respectively.

During the nine month  period  from March 31,  2003 to December  31,  2003,  the
Company has no planned  exploration  expenditures in Argentina for the Valle del
Cura region, the Gualcamayo region, or the NW San Juan region. The Company plans
to expend  US$500,000  in Argentina on surface work at the Navidad  project,  an
additional  US$1,500,000 on drill programs at the Navidad project and US$593,000
on the Rio  Tabaconas  project  (formerly  known as  Tamborapa  project) in Peru
during the nine month  period  from March 31,  2003 to  December  31,  2003.  In


                                                                              17

<PAGE>

addition, minimum property payments of approximately US $225,000 are required to
maintain all of the existing property holdings.

As a result of the  Provincial  and  Municipal  elections  in Peru to be held in
November  2002  and the  substantial  investment  required  to  advance  the Rio
Tabaconas  project through the next exploration  stage, in June 2002 the Company
announced its intention to take a more measured  approach to  exploration on the
Rio  Tabaconas  project to ensure  that all local  cultural,  developmental  and
environmental  concerns in the region have been  addressed  which may pertain to
mining  activities.  See  "Item  4.  Information  on  the  Company  -  Principal
Properties  - Peruvian  Properties."  The  Company  intends  to conduct  further
exploration  only after an agreement  with the local  community of Tamborapa has
been finalize.  Aided by several Peruvian Social-Economic  consultants,  a draft
Company-Community  plan has been prepared and the Company intends to present the
plan for discussion with the community leaders,  government  officials and other
interested  party leaders in the second  quarter of 2003. See "Item 5. Operating
and Financial Review and Prospects".

For the  Company's  other  Argentinean  properties,  where no  expenditures  are
planned, it is the Company's intention to seek joint venture partners to provide
funding for further  work on any or all of those  properties.  On March 6, 2003,
the Company entered into an agreement  granting Amera Resources  Corporation,  a
private  company  which has a common  director  with the Company  ("Amera"),  an
Option to earn 51% undivided interest on Arturo's Property (Mogotes).  Amera can
earn its  interest in the  property by issuing  1,650,000  common  shares to the
Company and incurring US$1,250,000 of expenditures  (including work programs and
underlying  option  payments),  over a  period  of  five  years.  See  "Item  4.
Information  on the Company - Principal  Properties -  Argentinean  Properties -
Property  Agreements and Exploration  Activities - Arturo's Property  (Mogotes)"
and "Item. 7 Major  Shareholders and Related Party  Transactions - Related Party
Transactions."

As of April 30, 2003, the Company does not have  sufficient  working  capital to
fund all of its planned  exploration work and property  commitments and meet all
of its  ongoing  overhead  obligations.  The  Company  will  continue to rely on
successfully  completing  additional  equity financing  and/or  conducting joint
venture arrangements to conduct further exploration on its properties. There can
be no assurance  that the Company will be  successful  in obtaining the required
financing or negotiating  joint venture  agreements.  The failure to obtain such
financing  or  joint  venture  agreements  could  result  in  the  loss  of,  or
substantial dilution of the Company's interest in its properties.

BUSINESS OVERVIEW

The Company is a natural resource company engaged in the business of acquisition
and exploration of mineral properties in South America, principally in Argentina
and Peru. The Company's  strategy and primary corporate  objective is to acquire
property for the purpose of mineral exploration and exploitation in known mining
areas  adjacent  to, or in close  proximity  to,  known major  discoveries.  The
Company,  therefore,  expects these  properties to command  higher  acquisition,
maintenance,  and vendor  participation fees, where these higher fees are deemed
reasonable  to attempt to reduce  the  overall  risks  associated  with  mineral
exploration.  In the event  the  Company  discovers  mineralization  capable  of
economic production,  the Company intends to seek a joint venture partner and/or
to sell all or a portion of the  Company's  interest in the subject  property to
finance the development of such property.  The secondary  corporate objective is
to identify new  frontiers  through the  evaluation  of  available  historic and
satellite data and acquire large parcels of land in undeveloped regions with the
potential to host mineral  deposits.  There are no assurances that the Company's
strategies  will  achieve  the  desired  results  and the  Company  may  acquire
interests in properties at higher prices, due to the properties'  proximities to
other  discoveries,  and may have to write-off  all or a portion of the value of
such  properties  if they prove  uneconomic.  At  present,  the  Company  has no
producing properties and, consequently,  has no current operating income or cash
flow. As of the date of this annual report,  the Company is an exploration stage
company  and has not  generated  any  revenues.  There  is no  assurance  that a
commercially  viable mineral deposit exists on any of the Company's  properties.
Further  exploration  will  be  required  before  a final  evaluation  as to the
economic and legal feasibility of any of the Company's properties is determined.

Due to the seasonality of field work in the high Andes, the timing for the Valle
del Cura work is generally restricted to the period from October to April, while
the  Patagonia  region  is  accessablefrom  September  to June,  and work on Rio
Tabaconas, the Peruvian property, can be carried out year round but is generally
more effective in the drier season from May to December.

                                                                              18

<PAGE>


During the year ended December 31, 2002, the Company significantly increased its
focus on  activities  in the  Patagonia  region  of  Argentina  carrying  out an
extensive exploration program in the Chubut Province and acquiring five new gold
and silver projects. Additionally the Company has evaluated a number of projects
available  for option  ranging  from grass roots  projects to advanced  projects
including those with resources.  The Peruvian  property payments will be made to
keep the Company's property holding in good standing.

With respect to  properties  located in the Valle del Cura region of  Argentina,
the  Company  does not  intend  to  conduct  any  further  exploration  on these
properties  unless Barrick exercises its option to earn a 50% interest in EITHER
the Rio de las Taguas or Potrerillos properties.  If it decides to exercise this
option,  Barrick must select a property by December  30, 2003.  Once Barrick has
earned its 50%  interest,  the property will be operated as a joint venture with
Barrick  as the  operator  and each  party  paying  its  proportionate  share of
expenses,  subject to normal dilution and non-consent  provisions.  See "Item 4.
Information  on the Company - Principal  Properties -  Argentinean  Properties -
Property Agreements and Exploration  Activities - Barrick Agreement".  All other
Argentine property exploration, if any, will be at a minimum.

GOVERNMENT REGULATIONS ON THE COMPANY'S BUSINESS

THE REPUBLIC OF PERU

GENERAL INFORMATION

Peru covers an area of approximately  1,290,000 square kilometers on the western
coast of South America. The country has a population of approximately 27 million
people.  Lima is the capital and  principal  city of Peru with a  population  of
approximately 8 million  people.  Peru is attempting to recover from an extended
period of political instability and economic hardship.

Any changes in  regulations  or shifts in  political  conditions  are beyond the
control of the Company and may  adversely  affect the  Company's  business.  The
Company's   operations  may  be  affected  in  varying   degrees  by  government
regulations with respect to restrictions on production,  price controls,  export
controls,  income taxes,  expropriations of property,  environmental legislation
and  mine  safety.  Peru's  status  as a  developing  country  may  make it more
difficult for the Company to obtain  financing for any required  exploration  on
the Company's  Peruvian  projects.  The effect of all of these factors cannot be
accurately predicted.

GOVERNMENT ORGANIZATION

Peru is a democratic  republic governed by an elected government which is headed
by a president who serves a five-year term and who, under the new  Constitution,
is eligible to run for one  consecutive  second term. The new  Constitution  was
approved by national  referendum held on October 31, 1993, and also provides for
a one-chamber legislative body or Congress.

On June 3, 2001,  Alejandro Toledo was elected the Peruvian  President and sworn
in on July 28,  2001,  after a  tumultuous  ten year reign by Alberto  Fujimori,
whose  resignation  was  prompted  by  corruption  and  scandal in the  Peruvian
government.  Since he took office as Peru's first democratic president of Indian
blood,  Mr. Toledo's  popularity has plunged.  The leading Lima magazine CARETAS
reported that Mr. Toledo's approval rating in a national  public-opinion  survey
fell by more than  one-half  in the first six months of his  presidency  to 27%,
while  his  disapproval  rating  soared  to 65%.  The  decline  in Mr.  Toledo's
popularity  among the Peruvian people is reported to be caused by his failure to
fulfill campaign  promises and to chart a clear policy course.  After four years
of little or no growth in  employment,  Peruvians are impatient for the jobs Mr.
Toledo  promised  to create.  Nevertheless  Tthe  economy  continues  to develop
favourably.  The  gross  domestic  product  (GDP)  advanced  almost  4% in 2002.
Stronger  mining has  compensated  for lower growth rates in virtually all other
sectors.  The only sector apart from mining that  experienced an improvement was
fishing.  Mr.  Toledo has a better  image  abroad than at home. A team headed by
Javier Perez de Cuellar, a Peruvian former UN secretary-general, has raised US$1
billion in foreign aid to finance Mr.  Toledo's job creation  program.  Peru has
agreed on terms with the International Monetary Fund ("IMF") for a new loan, and
there are signs that the economy is at last reviving.

                                                                              19

<PAGE>


TERRORISM

Peru has been the subject of terrorism by the Sendero  Luminoso,  a Maoist group
intent on creating a  socialist  government,  and the Tupac Amaru  Revolutionary
Movement  (the "MRTA").  In recent years both groups have been active.  In 1997,
the Sendero  Luminoso was implicated in a car-bombing.  In 1996-1997,  more than
400 people were killed when the MRTA attacked the Japanese  embassy in Peru. The
Company  may not be able to continue  its  operations  in Peru if the  terrorism
continues. The Company cannot predict if, or when, the terrorist activities will
cease.  The  Company  may not be able to find  suitable  labor for its  Peruvian
projects,  may have difficulty in obtaining financing for its Peruvian projects,
and may not be able to continue its activities if the terrorism continues.



MINING INDUSTRY

Peru has a lengthy  history of mining which predates the Spanish  conquistadors.
Although political unrest and instability have slowed the development of some of
Peru's  ore  bodies  in  recent  years,  mining  continues  to be  an  important
contributor  to the national  economy and  exploration  by foreign  companies is
accelerating  due to the  abundance  of  mineral  sources.  Peru  is  already  a
substantial  producer  of at  least  six  metals  and may  have  unexplored  and
unexploited reserves in these and other metals. Peru ranks among the top 20 gold
producing  nations,  and the newly expanded  Yanacocha  mine is Latin  America's
largest single gold producer and Antamina is the world's largest zinc and copper
mine.

MINERAL CONCESSIONS IN PERU

Under Peruvian law, the right to explore for and exploit  minerals is granted by
way of concessions.  A Peruvian mining concession is a  property-related  right,
distinct and independent from the ownership of land on which it is located, even
when both belong to the same person.  The rights granted by a mining  concession
are defensible against third parties, transferable,  chargeable and, in general,
may be the  subject of any  transaction  or  contract.  The basic unit for newly
claimed mining concessions is 1,000 hectares and existing concessions of greater
than 1,000 hectares will be reduced to that amount.  Otherwise,  concessions can
only be divided by percentage  parts or shares.  Buildings  and other  permanent
structures  used in a mining  operation are  considered  real property and as an
accessory to the concession on which they are situated.

The concession  holder must pay an annual rental of US$3.00 per hectare  (except
for the year of  acquisition,  as this rental is paid as part of the  concession
application  fee). The concession  holder must sustain a minimum level of annual
commercial  production  of greater than US$100 per hectare in gross sales within
six years of the grant of the  concession or, if the concession has not been put
into production  within that period,  from the seventh year, a penalty is due of
US$6.00 per hectare per year in addition to the annual  rental.  The  concession
will  terminate  if the  annual  rental  is not  paid  for  two  consecutive  or
alternative  years.  The  term of a  concession  is  indefinite  provided  it is
properly maintained by payment of rental duties.

The  Constitution  of Peru  provides  that foreign  people or  countries  cannot
acquire or own a land title or mining  right,  directly or  indirectly,  if such
land title or mining right is located  within 50 kilometers  of Peru's  borders.
The  government  of Peru is permitted to grant an  exemption  by  publishing  an
official statement declaring a public necessity,  called a Decreto Supremo.  The
Decreto  Supremo must be signed by the  President  of Peru and the  Presidential
Cabinet, called the Consejo de Ministros.

The Company's Rio Tabaconas project was declared a public necessity,  in benefit
of Minera IMP Peru S.A.  on June 1,  1998,  by Decreto  Supremo  No.  020-98-EM.
Pursuant to Decreto Supremo No.  020-98-EM,  Minera IMP Peru S.A. was authorized
to own the mining rights inside of the project.  Decreto  Supremo No.  020-98-EM
was  signed  by the  then  President  of  Peru,  Mr.  Alberto  Fujimori  and his
Presidential Cabinet.

REGULATORY ENVIRONMENT

Imports to and exports from Peru are not subject to restrictions and exports are
not taxed.  Import taxes are imposed on an ad valorem basis at rates that, as of
March 31,  2003,  ranged  between 15% to 25%.  Import  duties and other


                                                                              20

<PAGE>


taxes on imports must be paid in Peruvian  currency at the exchange  (sole) rate
ruling on the date of payment.

Goods  with an FOB  value  greater  than  US$2,000,  whether  new or  used,  and
vehicles,  regardless of value,  are subject to a system of import  supervision.
Consequently,  before  shipment,  importers  must obtain in the port of origin a
certificate  of  inspection  issued  by  an  authorized  supervisory  enterprise
specifying the value of the goods in accordance with the custom valuation rules.

In general  terms,  it is  possible  to import  all kinds of new or used  goods,
except fireworks, which are prohibited.

Many commercial  activities  performed by private  companies are subject to some
government  inspection  or  control,  including  mining,  which  requires  prior
government  permission,  licensing or concession,  and  compliance  with special
registration procedures of the Department of Energy and Mines.

ARGENTINA

The Company has interests in various  properties  located in Argentina.  Mineral
exploration  and mining  activities  in  Argentina  may be  affected  in varying
degrees by political  instability  and  government  regulations  relating to the
mining industry.  Mineral companies are subject to both the Argentinean  Mineral
Code and the Environmental Protection Mining Code. As of the date of this annual
report,  management believes the Company is in material compliance with both the
Argentinean Mineral Code and the Environmental Protection Mining Code.

POLITICAL ENVIRONMENT

Carlos  Menem was the  President  of Argentina  from 1989 to December  1999.  In
October 1999, Fernando de la Rua was elected to succeed Mr. Menem. Mr. de la Rua
took  office in  December of 1999,  pledging  to focus on  Argentina's  economic
problems. President de la Rua was unsuccessful and resigned on December 20, 2001
amidst economic and social upheaval.  On January 1, 2002, the Argentine congress
elected Eduardo  Duhalde,  former vice president during the Menem government and
subsequently governor of the Buenos Aires Province (which accounts for more than
one third of Argentina's  economy),  to serve as president for the remaining two
years of Mr. de la Rua's term.  Former  president de la Rua was affiliated  with
the Radical Party and the center left coalition ("FREPASO").

With the  resignation of Mr. de la Rua, the reign of FREPASO came to an end, and
Mr. Duhalde, who is affiliated with the Peronist party, took over the control of
the  country  amid  severe  divisions  among  party  leaders.  The  presidential
elections held on April 27th did not define the next Argentina president, on May
the 18th the population  will go to vote again to chose among the two candidates
who  obtained the highest  number of votes:  former  president  Carlos Menem and
Nestor. Kirchner governor of Santa Cruz Province.

If current  popularity  trends persist,  the  presidential  poll is likely to be
decided in a second round and a future  president will only be able to govern on
the ground of carefully crafted coalitions.  This will render the implementation
of  long-term  economic  reforms  and  a  strengthening  of  weakened  political
institutions - both key ingredients to a sustainable economic recovery in 2003 -
extremely difficult.

ECONOMY

Argentina  is  currently  in a period of  economic  crisis  due  largely to poor
monetary  policies and large amounts of debt. In 1991,  then economic  minister,
Domingo Cavallo,  decided to tie the Argentine Peso to the U.S.  dollar,  with a
one-for-one  exchange  rate  in  order  to  combat  hyperinflation  and  restore
confidence  in the  Argentine  economy.  When  economic  stability  returned  to
Argentina,  the Argentine  government did not respond by devaluing the Argentine
Peso. The failure of the  government to devalue the peso left Argentine  exports
more  expensive than those of other South American  countries,  like Brazil.  By
linking the peso to the dollar, Argentina adopted a currency whose exchange rate
bore  little  relation  to  its  own  economic  conditions,  and  the  Argentine
Government  failed to respond to changing  economic  conditions  by changing its
monetary  policy.  After ten years of sustaining  the exchange rate, the country
has lost competitiveness in the international markets.

Argentina also faces large amounts of internal and external debt.  Deficits have
been financed with external debt,  which is currently  close to US$150  billion,
and internal  public debt,  whereby the rate of interest paid reached almost


                                                                              21

<PAGE>

25% in real terms. Much of the internal debt has been due to overspending by the
two dozen  Argentine  provinces.  In  December  of 2001 the  I.M.F.  refused  to
disburse  US$1.3 billion in aid for the month,  and strikes,  widespread  street
protests and rioting ensued. On December 20, 2001,  President Fernando de la Rua
resigned  and was replaced on January 1, 2002 by Eduardo  Duhalde.  Several days
after Mr. Duhalde  became  president,  the government  devalued the peso and the
Argentine currency was allowed to float freely for the first time in a decade.

The consequence has been social upheaval.  Unemployment rose 20% after Mr. de la
Rua's resignation,  and in April 2002, all banking and foreign exchange activity
was suspended.  Mr. Duhalde announced that the Argentine financial system was at
risk of collapse.  Mr. Duhalde would like to diversify Argentina's foreign ties,
and in particular to revise those with Brazil,  its chief partner with Mercosur.
Brazil has quickly responded. In addition to lobbying for international help for
Argentina, it has promised to take more imports,  especially of cars. Due to its
large  debt  problems,  Argentina  needs help from the IMF.  The  United  States
Government has asked Mr. Duhalde to develop a coherent economic plan. Above all,
that means tackling the ghastly problems of Argentina's banks, which have become
the target of increasing violent protests. Mr. Duhalde inherited restrictions on
bank  transactions and  withdrawals,  which halted a bank run but are strangling
the economy.  His government's  handling of the devaluation of the peso, and its
adoption of a dual exchange rate, have also created problems. On April 26, 2002,
President Duhalde appointed free market economist,  Roberto Lavagna,  as his new
economy minister. Mr. Lavagna's main task will be to convince the IMF to restart
a lending  program to Argentina,  by pushing  ahead with economic  reforms which
must include spending cuts by the country's provinces and legal reforms aimed at
restoring investor confidence.

The Central Bank has managed to maintain the peso  relatively  stable since June
by  intervening  in  the  market.  Following  appreciations  of  1.9%  and  2.9%
respectively in July and August, the currency depreciated 2.9% in September amid
Brazil election  jitters.  In October,  the peso experienced its highest monthly
appreciation this year,  strengthening  6.0% to the US$ in nominal terms. In the
first week of March 2003, the currency appreciated to close at 3.00 pesos to the
US$.

Any changes in  regulations  or shifts in  political  conditions  are beyond the
control of the Company and may  adversely  affect the  Company's  business.  The
Company's   operations  may  be  affected  in  varying   degrees  by  government
regulations with respect to restrictions on production,  price controls,  export
controls,  income taxes,  expropriations of property,  environmental legislation
and mine safety.  Argentina's  status as a  developing  country may make it more
difficult for the Company to obtain  financing for any required  exploration  on
the Company's Argentine  projects.  The effect of all of these factors cannot be
accurately predicted.

MINING LAW IN ARGENTINA

In IM-11/19 ARGENTINA; ECONOMIC TRENDS-NOV. 1999, the author stated:

         Although some ambiguities in its interpretation have emerged,
         the 1993  Argentine  Mining  Code  has  created  a  favorable
         investment  climate  in the  sector.  An  influx  of  foreign
         capital is  bringing  major  copper and gold mines on line in
         Catamarca  and  Santa  Cruz  provinces,  as well  as  smaller
         projects elsewhere.

(Source:  U.S.  Department  of  Commerce  - National  Trade Data Bank,  IM-11/19
ARGENTINA; ECONOMIC TRENDS-NOV. 1999).

The right to explore a property (a "cateo")  and the right to exploit (a "mina")
are granted by administrative or judicial  authorities via concessions.  Foreign
individuals  and  corporations  may apply for and hold cateos and minas,  at the
same level as local  investors  without  differences  of any nature.  Cateos and
minas are freely  transferable  upon  registration  with the  Provincial  Mining
Registry where title to the cateo or mina was first  registered.  Upon the grant
of a legal  concession  of a cateo or a mine,  parties have the right to explore
the land or to own the mine and the resources extracted therefrom.

                                                                              22

<PAGE>



REGULATORY ENVIRONMENT

The present government is deeply committed to opening up the economy,  and there
has been  significant  progress in reducing import duties and export taxes.  For
decades  local  industry  has been  protected,  and the  transition  to  greater
international competitiveness will take some time.

Importers and  exporters  must be  registered  with  Customs.  Except for a very
limited list of items requiring the previous approval of the authorities,  there
are no  import  restrictions.  Import  of  pharmaceuticals,  drugs,  foodstuffs,
defense  material,  and some other items require the approval of the  applicable
government   authority.   Import  duties  are  being  progressively  reduced  in
accordance with the free enterprise and free-trade  policy being  implemented by
the government in order to achieve  greater  international  competitiveness.  To
illustrate,  duties currently range between zero and 20 percent. Restrictions on
exports are not generally imposed.

ORGANIZATIONAL STRUCTURE

The Company has one direct wholly-owned subsidiary,  IMA Holdings Corp. ("IHC"),
a British Columbia company and one 80% owned  subsidiary,  IMPSA Resources (BVI)
Inc.  ("IMPSA  (BVI)"),  a British  Virgin Islands  company.  IHC has one direct
wholly-owned subsidiary, Inversiones Mineras Argentinas Inc., a Barbados company
("IMA  Barbados"),   one  direct  80.69%  owned   subsidiary,   IMPSA  Resources
Corporation  ("IMPSA"),  a private British Columbia company,  and holds a direct
20% interest in IMPSA Resources  (BVI) Inc.  ("IMPSA  (BVI)"),  a British Virgin
Islands  company.   IMA  Barbados  has  one  direct   wholly-owned   subsidiary,
Inversiones Mineras Argentinas S.A. ("IMA Argentinas"), an Argentine company.

IMPSA  (BVI) has one  wholly-owned  subsidiary,  Minera  Imp-Peru  S.A.  ("IMPSA
Peru"), a Peruvian company.

The Company's current corporate structure is depicted as follows:

<TABLE>
<CAPTION>
<S>                                    <C>                                          <C>

                                       ================================
                                       |    IMA EXPLORATION INC.      |
               ------------------------|                              |--------
               |                       |           ("IMA")            |       |
               |                       ================================       |  100%
               |                                                              |
               |                                                ================================
               |           -------------------------------------|     IMA HOLDINGS CORP.       |
               |           |                                    |           ("IHC")            |
               |           |                                    ================================
        80%    |           | 20%                          80.69%  |                     | 100%
               |           |                                      |                     |
        ===============================         ======================                =========================
        |      IMPSA RESOURCES        |         |  IMPSA RESOURCES   |                |  INVERSIONES MINERAS  |
        |         (BVI) INC.          |         |    CORPORATION     |                |    ARGENTINAS INC.    |
        |      ("IMPSA (BVI)")        |         |     ("IMPSA")      |                |     ("IMA Barbados")  |
        ===============================         ======================                =========================
        100%   |                                                                                  | 100%
               |                                                                                  |
               |                                                                                  |
        ===============================                                             ================================
        |   MINERA IMP - PERU S.A.    |                                             |     INVERSIONES MINERAS      |
        |       ("IMPSA Peru")        |                                             |       ARGENTINAS S.A.        |
        |                             |                                             |     ("IMA Argentinas")       |
        ===============================                                             ================================
               |                                                                                  |
               |                                                                                  |
               |                                                                                  |
        ===============================                                             ================================
        |    PERUVIAN PROPERTIES      |                                             |      VARIOUS ARGENTINE       |
        |                             |                                             |         PROPERTIES           |
        ===============================                                             ================================

</TABLE>

Unless otherwise  indicated  herein,  the term "Company" means  collectively the
Company and its subsidiaries.


                                                                              23

<PAGE>



PROPERTIES, PLANTS AND EQUIPMENT

PRINCIPAL PROPERTIES

The  Company has for the past year  increased  its focus on  Argentina  property
interest,  as a result of this  focus on the  Chubut  region of  Argentina,  the
Company   has   discovered   what   management   believes  to  be  a  major  new
silver-copper-lead  mineralized  system  at  it's  Navidad  project.  All of the
Company's  current  Peruvian  properties will be maintained in good standing for
the coming year,  however,  no work or investement will be undertaken until such
time as the social risk is deemed to be  reasonable.  The Company  will not make
any decisions on the Rio de las Taguas and Protrerillos  properties in the Valle
de Cura region,  Argentina  until  December 30, 2003, at which time Barrick must
decide if it will  exercise  its option to acquire a 50%  interest in one of the
two properties.  See "Principal  Properties - Argentinean  Properties - Property
Agreements and Exploration  Activities - Barrick  Agreement"  below. The Company
signed a letter of Intent on March 6, 2003 with  Amera,  pursuant to which Amera
may earn an  undivided  51%  interest  (subject to  regulatory  approval) in the
Arturo Property (Mogotes). See "Item 4. Information on the Company - History and
Development  of the Company - Nature of the Company's  Operations  and Principal
Activities,"  "Item 4.  Information  on the  Company -  Principal  Properties  -
Argentinean  Properties  - Property  Agreements  and  Exploration  Activities  -
Arturo's Property  (Mogotes)" and "Item. 7 Major  Shareholders and Related Party
Transactions - Related Party  Transactions." The remaining  properties are grass
roots properties on which  additional  exploration may or may not be carried out
in 2003.

ARGENTINEAN PROPERTIES

The Company controls 100% of Inversiones Mineras Argentinas S.A. which presently
has a portfolio of five groups of properties  covering 217,444 hectares (537,297
acres) in the San Juan and Chubut Province.

During the fiscal years ending  December 31, 2002, 2001 and 2000 the Company had
capitalized and expensed costs on its Argentine properties as follows:


       FISCAL YEAR ENDING        AMOUNT CAPITALIZED    AGGREGATE AMOUNT EXPENSED
                                                           IN FISCAL YEAR

       December 31, 2000             $2,240,829               $775,470

       December 31, 2001             $2,777,458               $ 21,483

       December 31, 2002             $3,181,277                  $ -


These expenditures were for the initial  acquisition of properties,  exploration
costs,  associated  costs,  and  for  the  preliminary  evaluation  of  selected
properties.

The properties  owned or optioned by IMA Argentinas cover a variety of districts
and geography in San Juan and Chubut Provinces, Argentina.

PROPERTY AGREEMENTS AND EXPLORATION ACTIVITIES

NAVIDAD PROPERTY

On  February 3, 2003 IMA  Exploration  announced  the  discovery  of  high-grade
silver-lead-copper  mineralization  at its 100%  owned  10,000  hectare  (24,700
acres) Navidad Property in north central Chubut,  Argentina.  The mineralization
had been  discovered  by  prospecting  on December  10, 2002 and was a brand new
discovery as there were no recorded occurrences of silver  mineralization in the
area.    This   was    surprising    due   to   the   fact   that    high-grade,
structurally-controlled mineralization, and the moderate-grade replacement style
mineralization with abundant visible lead and copper mineralization outcrops and
subcrops over a strike  length of thousands of meters.  There was no evidence of
prior   prospecting  or  sampling  activity  anywhere  despite  the  area  being
inhabited. Furthermore a fence line passes

                                                                              24
<PAGE>


                            [Argentina Property Map]







                                                                              25
<PAGE>


through the central part of the outcropping high-grade mineralization and blocks
of rock  containing  obvious  green copper oxides had been used to prop up fence
posts.

By the time of the original  announcement  IMA had collected 92 rocks samples at
Navidad  of which  the  results  for 49 were  tabulated  in a press  release  on
February 3rd, 2003. As of March 31, 2003,  257 rocks  samples,  378 soil samples
and 55 stream silts samples had been  collected from the 10 by 10 km area during
35 man days of  geological  work. In addition to the sampling  mentioned  above,
detailed and property scale geological mapping,  preliminary  petrographic,  and
environmental base line studies have been undertaken.  The following description
is based on results of that work.  Understandably,  no  drilling  or  mechanized
trenching have yet been carried out due to the very short exploration history.

Navidad is located  roughly midway between the small towns of Gastre and Gan Gan
in the treeless  semi-arid central part of the province at an elevation of about
1,200 meters. The climate is cool temperate, quite dry and is characteristically
windy. The administrative unit is the Department of Gastre,  which is one of the
largest and least populated departments in the province. Basic services and fuel
are  available  in  the  above  mentioned  towns.  Locally,  the  main  economic
activities are sheep ranching and government.  From Navidad it is 400 kilometers
to the east, the majority on gravel roads to Rawson the provincial  capital near
the  Atlantic  coast,  or 335 km to  Puerto  Madryn a port  city  with  shipping
facilities.  The  nearest  railhead  is to the  northwest  200  km at  Ingenerio
Jacobacci in the province of Rio Negro.  A major high voltage  power line passes
approximately  45km to the south of Navidad  connecting a  hydroelectric  dam at
Futaleufu with an aluminum smelter at Puerto Madryn.

The only significant history of metallic mineral production in the Department of
Gastre, and in fact in the north-central part of the province came from the Mina
Angela located some 30km northeast of Gastre.  It produced over one million tons
of polymetallic  (gold-silver-copper-lead  zinc) ore from a series of epithermal
veins during intermittent periods between 1920 and 1992. This mine was the first
and only mine to be properly  closed in Argentina  all others having been simply
abandoned.  Former employees of this operation still live in the towns of Gastre
and Gan Gan.

Geologically,  Navidad  lies in a  series  of  mixed  calcareous  sediments  and
intermediate  volcanic  rocks  mapped by  government  geologists  as the Canadon
Asfalto Formation of Upper Jurassic age.  Mineralization found to date is hosted
by what is interpreted as a sedimentary breccia containing clasts of sedimentary
and  volcanic  origin.  That  breccia is  intercalated  with finer  grained more
tuffaceous  equivalents and also limestones of apparently  marine origin.  These
rocks have been intruded by intermediate  (latite to dacite) igneous rocks which
are fine  grained and have  features  suggesting  they were both  intrusive  and
extrusive.  In other  words,  they are  interpreted  to have reached the earth's
surface in a marine  environment  and  contributed to the clasts in the breccia.
Intercalated  with the breccia unit are thin but extensive beds of siliceous and
calcareous  rocks  that are  often  laminated.  These  beds are  interpreted  as
exhalite  units and are  anomalous in silver,  copper,  lead,  zinc and arsenic.
Their presence suggests that the hydrothermal system responsible for the Navidad
vented to the surface into a marine basin.

Economically  important  mineralization  occurs in at least two forms. The first
being  structural  zones  ranging  in width  from 0.2 to about  5.0  meters  and
probably averaging  approximately 1 metre in width. These structures are steeply
dipping and form a sub-parallel  series of strongly  mineralized  zones that are
hosted within a felsic unit which is interpreted  as a flow dome.  Within a zone
of  110 by 160  meters  a  cumulative  strike  length  of  402m  of  outcropping
structures of this type have been mapped from which 43  continuous  chip samples
have been collected that have a length weighted average grade of 6,537 grams per
tonne (g/t) silver (191 ounces per ton),  4.51%  copper,  and 14.07%  lead.  The
geological  potential  for the  extension  of this  type  of  mineralization  is
excellent   because  work  to  date  has  been  hindered  by  thin  soil  cover.
Petrographic  studies  have shown that the major ore  minerals  in this style of
mineralization are argentite-acanthite  (Ag2S), galena (PbS), chalcocite (Cu2S),
and lesser  copper-silver-lead  chlorides and oxides. The high silver content of
the primary minerals,  the absence of pyrite or iron oxides, and the presence of
oxide  copper  minerals at surface  suggest that strong  leaching and  supergene
enrichment have not occurred.

A second type of  mineralization  exists within the breccia unit described above
and comprises  disseminated  galena and barite in the matrix that is interpreted
to have replaced the matrix of the breccia when it was  unconsolidated,  shortly
after the time of  deposition.  Rarely,  fragments  of massive  galena are found
suggesting  that massive  sulphides may have been broken up and  resedimented as
clasts  within the breccia.  Mapping of  mineralized  portions of the breccia to
date has  indicated a cumulative  3.2  kilometre  strike  length this style from
which 41 samples have been collected that average 158 g/t silver (4.61 oz/t) and
8.98%   lead.   Petrographic   work   indicates   that   the   replacement-


                                                                              26

<PAGE>


style  mineralization  is comprised  almost  entirely of  silver-bearing  galena
(PbS); no discrete silver minerals were identified.

Recently a  potential  third type of  mineralization  has been  recognized  that
shares  characteristics of the above two styles. It is a breccia similar to that
noted above but with copper oxides. Its presence appears to be restricted to the
near the margins of felsic volcanic units. In terms of grade, it contains silver
values  intermediate to those noted above  typically  hundreds to a few thousand
grams per tonne of silver as well as significant amounts of both lead and copper
- the later is absent in the typical replacement style mineralization.

It is worth noting that ALS-Chemex has been the primary assay laboratory for all
of the above work, but that a extensive  check assay program  initiated early in
the  project  history  in which to date 31  samples  have  been  assayed  by the
secondary assay laboratory,  Alex Stewart  (assayers)  Argentina S.A. of Mendoza
which is part of an international  organization  serving the mineral industry in
environmental,  exploration,  and production  analytical  work and has extensive
experience in umpire assays and mineral concentrate  analysis.  Results of these
check assays indicate very good concurrence of the two laboratories.

Preliminary soil sampling has been conducted over a strike length of 5.0km along
north-south  oriented lines spaced at 200m  intervals with samples  collected at
50m intervals.  Outside of the previously  reported  Navidad Hill  bonanza-grade
zone,  soil sampling has  identified a highly  anomalous area of 1,200 metres by
approximately  500 metres with values  consistently  greater  than 2 g/t silver.
These high silver  values in soil  samples  correlate  very well with  anomalous
copper  (>50 ppm Cu) values and  reflect  the high  silver-copper  values in the
bonanza-grade  silver-copper-lead  mineralization at Navidad Hill. These results
indicate an excellent  potential for the discovery of new zones of bonanza-grade
silver mineralization similar to those previously reported.

Extending  to  the  northeast   and  southwest   from  the  1,200  x  500  metre
silver-copper anomaly,  highly anomalous lead values,  consistently greater than
500 ppm, occur naturally in soils and define a trend that  correlates  with, and
potentially  expands,  the known replacement  style silver-lead  mineralization.
Within this area of high lead values there are numerous  additional soil samples
with high silver and copper values, including values up to 531 g/t silver (15.61
oz/t) and 574 ppm copper.  One area,  1,200m to the  northwest  of Navidad  Hill
stands out due to its high silver and lead values in soil.  This area has yet to
be  prospected,  but has  values of up to 18.3 ppm  silver and 5,800 ppm lead in
soils over an area of 300 by 600m.

Ongoing work at Navidad  includes  detailed  mapping and  sampling,  infill soil
sampling,  geophysical  surveys including induced  polarization and gravimetrics
with the goal of defining drill targets.  It is anticipated  that this work will
be completed during the Patagonian Fall  (approximately  June) and that drilling
will commence in the Patagonian Spring (approximately September) of 2003.

IMA  ARGENTINAS  GROUP  3  PROPERTIES  (LAGUNA  DEL  TOROS,  EVELINA-LAS  BAYAS,
VICTORIA, COSTA, LAGO PICO, CORCOVADO, LOMA ALTA, RUTA 17, PENASCUDO)

In early  2001,  IMA  acquired,  by  staking,  a 100%  interest  in four  cateos
totalling 4,200 hectares (10,377 acres) in western Chubut  Province,  Patagonia,
named the Los Toros  property.  In October,  2001,  IMA then  acquired,  also by
staking,  a 100%  interest in the 3,450.3  hectare  (8,522  acres)  Evelina (Las
Bayas) Property,  which consists of one cateo.  Both cateos have been granted to
the Company as of December 31, 2002.  During 2002 the Company  expanded its land
portfolio  in Chubut by staking the  following  mining  rights:  Toros II, 3,000
hectares  (7,410 acres);  Victoria 5,400 hectares  (13,338  acres);  Victoria I,
1,800 hectares  (4,446  acres);  Victoria II , 6,509  hectares  (16,077  acres);
Victoria III, 750 hectares (1,852 acres);  Victoria 4, 739.35  hectares  (11,706
acres);  Victoria 5, 932.44  hectares  (14,653  acres);  Costa 4,660.5  hectares
(11,511 acres);  Costa I, 3,285 hectares (8,114 acres); Costa II, 6,467 hectares
(15,973 acres);  Lago Pico,  10,000 hectares (24,700 acres);  Corcovado,  10,000
hectares (24,700 acres);  Loma Alta 10,000 hectares (24,700 acres); and Ruta 17,
4180  hectares  (10,325  acres).  The Company  also applied for and was granted,
seven vacant minas:  Alberto,  1,100  hectares  (2,717  acres);  Rolando,  1,300
hectares  (3,211 acres);  Cecilia,  1,400 hectares (3,458 acres);  Pedro,  1,300
hectares  (3,211 acres);  Fernando,  1,300 hectares (3,211 acres);  Ivan,  1,300
hectares (3,211 acres);  and Daniel,  1,300 hectares (3,211 acres). All of these
Chubut properties are in the exploration stage.


                                                                              27

<PAGE>


The  Patagonia  region  of  Argentina  has  long  been  recognized  as a  highly
prospective  setting for low sulphidation  epithermal gold  mineralization.  The
discovery and  delineation  of Brancote's  Esquel deposit and Anglo Gold's Cerro
Vanguardia deposit have demonstrated the potential for significant gold deposits
in this region.  Worldwide, this deposit type has produced numerous low cost and
highly  profitable mines,  including El Penon in Chile,  Hishikari in Japan, and
Creede and Round  Mountain in the United  States,  making it a much sought after
style of mineralization.  Preliminary reconnaissance geological mapping and rock
sampling  in  mid-2002  indicates  that  Laguna  del  Toros,  covers a number of
mineralized  epithermal quartz veins. The largest  occurrence,  the Morgul vein,
outcrops discontinuously for over one kilometre,  with widths of up to 20 meters
of quartz vein  material.  The presence of anomalous  gold values  together with
strongly anomalous silver,  arsenic and mercury values suggests that the exposed
vein could  represent  the upper  portion of a more  strongly  mineralized  gold
system at depth.

LAS BAYAS/VICTORIA PROPERTY

LOCATION AND ACCESS

The Las Bayas property is located in west central Chubut Province, Argentina, 40
kilometres north of the town of Alto Rio Senguer and 200 kilometres northwest of
the port of  Comodoro  Rivadavia  .  Elevations  on the  property  are modest at
between 675 and 800m. A local road provides easy access to the central  portions
of the property  from highway 40 which passes  through the eastern  extremity of
the property.

EXPLORATION HISTORY

Preliminary   reconnaissance  geological  mapping  and  rock  sampling  in  2001
indicated  that  host  strata  at Las  Bayas is cut by a series  of  subparallel
epithermal quartz veins exposed over a minimum one kilometre strike length.

Subsequent  surface work in 2002  included  over 700 rock chip samples and 1,200
soil samples which defined a 4 kilometre by 1.5  kilometre  area of  outcropping
low-sulphidation  epithermal quartz veins.  Geochemistry  indicated  potentially
economic gold and silver values and anomalous arsenic, antimony, and mercury.

Results of the 2002 surface work led to a 1,953 metre diamond drill  campaign in
February, 2003. This program tested approximately 900 linear metres of the total
15,000 linear metres of quartz veins mapped on the property.

GEOLOGY AND MINERALIZATION

An impressive amount of outcropping quartz veins and subcropping quartz float is
present at Mincor,  Eagle, and Owl hills in the west-central  portion of the Las
Bayas  property.  These three hills define a  north-northeast  trending  zone of
intense  quartz veining over 4 kilometres  long and up to 1.5  kilometres  wide.
Vein  orientations  are dominantly  parallel with this trend, and most veins dip
moderately to steeply to the east. Samples of vein material have returned values
of <0.05 to 25.8 g/t gold and <0.05 to 32.7 g/t silver  although grades are more
commonly in the 0.5 to 3.0 g/t Au range.

Individual  veins are  generally 1 to 22 metres wide and are comprised of white,
fine-grained  quartz  with  white  chalcedony,   minor  limonite,  and  variable
percentages  of carbonate.  Wall rock  fragments are common within veins and are
generally silicified and argillically altered.  Petrographic work shows textures
and alteration  indicative of a  low-sulphidation  epithermal  environment  that
spans the crustiform-colloform and crystalline superzones.  Quartz +/- carbonate
breccias  are common as is bladed  quartz  possibly  indicating  replacement  of
carbonate.

In addition to the larger veins, minor quartz stockworking is present peripheral
to veins, as is argillic alteration.  One zone of strong argillic alteration and
silicification  has been noted distal to known veins, and returned grades of 0.8
g/t gold. This may show potential for significant gold present in the absence of
larger veins and therefore suggests possible bulk tonnage potential.

VICTORIA EXTENSION

The Victoria  claims  represent a large  addition to the Las Bayas  property and
were staked  based on  interpretation  of Landsat  images which show a potential
extension of the Las Bayas  epithermal  system exposed in two "windows"  through
the Cretaceous cover rocks. Initial prospecting of the southernmost "window" has
uncovered  significant


                                                                              28

<PAGE>


quartz  veining and has returned  sample  values from <0.05 to 1.2 g/t gold.  If
this interpreted alteration is shown to be contiguous with the Las Bayas system,
the overall  system  will have a strike  length in excess of 10  kilometres.  In
addition to these zones, two reconnaissance prospecting samples were taken which
returned values of 0.8 and 1.4 g/t gold from quartz/chalcedony material within a
zone of argillic  alteration  adjacent to highway 40 and over 17 km along strike
from  the Las  Bayas  veining.  Although  this  ground  is  presently  at a very
`grassroots'  stage  of  development,  management  believes  that  it is  highly
prospective for additional gold discoveries.

2003 DRILL PROGRAM

The Company  completed a 19 hole,  1,953 metre  diamond drill program on the Las
Bayas  project  on March 3,  2003.  Eighteen  of the 19  drill  holes  completed
intersected  the targeted  low-sulphidation  quartz veins;  these  intersections
ranged in width from 0.4 to 22.1 metres of vein material.  This drilling  tested
approximately  900  metres of the mapped  15,000  metre  strike  length of veins
exposed at Las Bayas Hill. Highlight of the drill results are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
DDH                   Length (m)          Gold (g/t)          Silver (g/t)      Gold Equivalent (g/t)
                                                                                    (Au+Ag/70)
-----------------------------------------------------------------------------------------------------
<S>                     <C>                   <C>                 <C>                  <C>
LB03-01                 5.1                   0.96                36.9                 1.48
-----------------------------------------------------------------------------------------------------
including               1.3                   2.62                33.0                 3.09
-----------------------------------------------------------------------------------------------------
LB03-05                 5.0                   0.73                51.5                 1.47
-----------------------------------------------------------------------------------------------------
including               2.0                   1.48                101.9                2.93
-----------------------------------------------------------------------------------------------------
LB03-07                 0.7                   1.02                n/a                  n/a
-----------------------------------------------------------------------------------------------------
</TABLE>

At present,  no further  work is planned for the Las Bayas  project.  Due to the
large  size of the  mineralized  system  exposed  at Las  Bayas,  the  Company's
geologists feel that significant exploration potential remains at the project.

LAGUNA DE LOS TOROS PROPERTY

The  Laguna  de  los  Toros  property  includes   significant  low  sulphidation
epithermal quartz veins in several separate, yet related, showings.  Mineralized
structures include the Morgul vein, a north-south striking,  east dipping quartz
vein  which,  although  offset by a fault,  is exposed  intermittently  over 1.9
kilometers.

LOCATION AND ACCESS

The  Laguna  de  los  Toros   property  is  located  in   west-central   Chubut,
approximately 55 kilometres south of G. Costa.  Elevation and topographic relief
are moderate, and work is possible year round. Access to the property is easy as
highway 40 passes through it's southern  portions and local roads can be used to
access much of the rest of the property.

GEOLOGY AND MINERALIZATION

The main mineralized structure on the Laguna de los Toros property is the Morgul
vein.  This vein is divided into the Morgul North (700m known strike) and Morgul
South  (1,200m  known  strike) by a fault which  offsets the vein  approximately
600m.  The Morgul  structure is comprised of several  individual 1-3 metre veins
within a 15-20 metre wide zone of  silicification.  Gold and silver  grades from
the Morgul vein are  generally low (from <0.05 to 0.95 g/t Au and<0.05 to 83 g/t
Ag), however highly anomalous arsenic and mercury values (As to 5,330 ppm, Hg to
>20,000 ppb) indicate  possible  precious metals  elsewhere in the system.  Grab
samples of smaller  structures  peripheral  to the Morgul vein and in the Morgul
south central and east areas have returned  more  encouraging  values of 7.6 g/t
gold and 452 g/t silver supporting the idea that bonanza-grade ore shoots may be
present within the Morgul structure.

Petrographic work on samples of the Morgul vein show textures typical of the low
temperature epithermal environment,  likely intermediate between the chalcedonic
and  cristiform-colloform   superzones.  Fluid  inclusion  size  and  shape,  in
conjunction with  microcrystalline  quartz textures indicate probable deposition
at  temperature  less than 180(0) C. This  evidence  supports the  likelihood of
increasing  gold and silver  grades 50 to 150 metres below the present  level of
exposure.


                                                                              29
<PAGE>


FUTURE WORK

All reasonable surface work has been completed at the Los Toros project. A 1,200
to 2,000 metre  drill  program has been  proposed as the next  logical  phase of
exploration.  At this time it is uncertain  whether the Company  will  undertake
this program or seek a partner on the project.

ARTURO'S PROPERTY (Mogotes)

The Arturo  (Mogote)  property  consists of one cateo and three  discoveries  of
8,009 hectares (19,790 acres) located in the Departament  Iglesia,  Macho Muerto
zone,  in the San Juan  Province  close  to the  northern  border  with La Rioja
Province,  approximately  300 kilometers  northwest of the city of San Juan, and
bordering  Chile. The property is underlain by basement rocks of the Permian age
Choiyoi Group,  which are faulted  against and overlain by Tertiary age volcanic
rocks.  Under an option agreement dated June 7, 2000, as amended August 3, 2000,
and  September 1, 2000,  the Company may acquire a 100% interest in the property
by making cash payments totaling $280,000.  As of December 31, 2002, the Company
has paid $24,100.  Subsequent  payments are $15,000 on June 6, 2003,  $20,000 on
December 6, 2003;  $20,000 on June 6, 2004, $80,000 on December 6, 2004(when the
option is  exercised);  and  $110,000  on June 6, 2005.  The balance to $280,000
($10,900) have been written off by the effect of the "pesifications" of debts in
Argentina (debt  obligation are paid in pesos instead of the original dollars at
a rate of exchange  which is no longer peso 1/ $ but a much higher average value
of peso 3.5/ $).  The  vendors  will have the right to receive a royalty of 0.5%
NSR, up to a maximum of $500,000.

A brief geological  reconnaissance  took place in March-April 2000, during which
21 rock and talus  samples were  collected.  Gold values ranged from nil to 0.13
g/t,  with most of the  anomalous  samples  coming  from zones  argillic  and/or
ferruginous alteration.

In November-December 2000, a reconnaissance  geological and geochemical sampling
program was carried out over the property.  This work outlined an area measuring
approximately  3  kilometers  E-W  near the  northern  property  boundary  which
returned a high proportion of anomalous copper and gold results in both rock and
stream sediment samples.

On March 5, 2001,  the Company  entered into a letter  agreement and granted Rio
Tinto  Mining and  Exploration  Limited,  Sucursal  Argentina  ("Rio  Tinto") an
exclusive  option  exercisable at the sole  discretion of Rio Tinto to acquire a
70% interest in the  property.  In order for Rio Tinto to earn a 51% interest in
the property, Rio Tinto must complete work expenditures totaling US$1.85 million
no later than the third  anniversary of the date of the letter  agreement (March
5, 2004) and to elect to earn a further 19% interest  (for a total of 70%),  Rio
Tinto must fund a further US$7.0 million in work  expenditures by March 5, 2009.
The initial option was granted based on Rio Tinto providing a firm commitment to
spend  US$100,000  on  exploration  expenditures  by June 30,  2002 and making a
payment of US$25,000  (paid) on or before June 30, 2001.  In December,  2001 Rio
Tinto elected not to proceed with the IMA-Rio Tinto joint venture as a result of
budgetary  constraints.  Subsequent  to  termination  of the IMA-Rio Tinto joint
venture,  a number of mining  companies have expressed an interest in the Mogote
Property.  Management  continues to view the Mogote Property as having potential
for the discovery of a gold-copper porphyry deposit.

During  January  2003 the  Company  carried  out a four  week  detailed  surface
exploration program to establish drill targets for a Phase I drill program.  The
results  significantly  expanded the  gold-copper  exploration  potential of the
project.  The  Company  signed a letter of Intent on March 6, 2003 with Amera to
earn a undivided  51 % interest  (subject  to  regulatory  approval)  to further
explore the Arturo  Property  (Mogotes).  See "Item.  7 Major  Shareholders  and
Related  Party  Transactions  -  Related  Party  Transactions."  To  earn a 51 %
interest  in the  property,  Amera must  issue  1,650,000  common  shares to the
Company and incur US $1.25 million of expenditures,  including work programs and
underlying option payments, all over five years.

LIRIO GROUP 1 PROPERTIES  (Despoblados,  Quebrada del Durazno, Sierra Pescado I,
Sierra Pescado II, Sierra Yanso)

The Lirio Group 1 Properties  consist of five cateos,  totaling  22,557 hectares
(55,738  acres),  four  of  which  are  located  in  the  Gualcamayo  region  of
northeastern San Juan Province,  while the fifth (Despoblados) is located in the
Valle del Cura region of northwestern San Juan Province.  An option to acquire a
100%  interest in the Group 1 Properties  was granted by Lirfer S.A and has been
executed by  Inversiones  Mineras  Argentinas  S.A.,  for the  aggregate  sum of


                                                                              30

<PAGE>


US$75,000.  For each of the five  cateos  advanced up to  exploitation,  Mineras
Argentinas S.A., will pay US$800,000 after completion of a positive  feasibility
study.

Four of the Lirio Group 1 properties are located in the Gualcamayo  region,  one
of the main regions of gold production in the Pre-Cordillera of Argentina, while
the fifth  property  (Despoblados)  is  located  in the  Valle del Cura  region.
Initial  examination  of  the  Sierra  Pescado  I and II  properties,  including
prospecting and  geochemical  sampling was carried out in late 1999. The results
from the initial  examination  indicate the presence of  skarn-style  alteration
associated with anomalous gold values (range from nil to 0.19 g/t). Based on the
results  of the  initial  examination,  management  believes  the Lirio  Group 1
properties  located  in the  Gualcamayo  region  cover  geological  environments
favorable  for the  occurrence  of  gold  and  copper-gold  skarn  or  carbonate
replacement  mineralization.  Year-round exploration work on these properties is
possible as they are located in low-level elevation areas.

LIRIO GROUP 2 PROPERTIES (Potrerillos, Ortiguita, Gollete)

The Lirio Group 2 Properties  consist of three cateos,  totaling 17,600 hectares
(43,489 acres),  in the Valle del Cura region of northwestern San Juan Province.
An option to acquire a 100%  interest in the Group 2  Properties  was granted by
Lirfer S.A.,  pursuant to an agreement  dated  November 19, 1998,  as amended on
April 23, 2001 and December 26, 2001,  July and December  2002 for the aggregate
sum of US$580,000, of which US$275,000 has been paid, with four more payments to
be made, on July 30, 2003 US$15,000;  on December 3, 2003 US$50,000; on December
30, 2004 US$70,000;  and on December 30, 2005 US$170,000.  For each of the three
cateos advanced up to exploitation,  IMA Argentinas will pay US$1,000,000  after
completion of a positive  feasibility  study.  The option  expires  December 30,
2005.  The  Potrerillos  property  is the subject of the  agreement  between the
Company and Barrick, as more fully described below.

On the  Potrerillos  property of 4,000 hectares  (9,837  acres),  Coast Mountain
Geological  Ltd.  ("CMG")  conducted  a  reconnaissance  geological  mapping and
sampling program in early 1999. The geological  mapping  indicates that Tertiary
age volcanic  rocks occur over much of the property.  A total of 83 rock samples
were collected for geochemical analysis, and 26 of these were also submitted for
Portable  Infrared Mineral Analyzer ("PIMA") analysis to identify the alteration
mineralogy.  Anomalous  gold  values  (nil to 0.23  g/t)  along  with  scattered
anomalous  basemetal,  silver and arsenic values were returned,  mainly from the
central  northwest  portion of the  property.  The PIMA study  showed  that four
samples from the same area contain  alunite,  a key  indicator  mineral for high
level epithermal gold mineralization. The Company commenced a Phase I program of
detailed geochemical sampling and geological mapping in late 1999.

The Phase I program  identified  three targets for detailed  follow-up work. The
Panorama  Zone in the central part of the  property  has  returned  grab samples
assaying  from  nil  to  0.63  g/t  Au and  from  1 g/t  to  276  g/t Ag  from a
north-trending  zone of quartz veining and silicification  which has been traced
for approximately 1 kilometer along strike. The Fabriana Extension zone, located
on the western  portion of the property,  consists of a large area (800 meters x
300  meters) of altered  volcanic  rocks with grab  samples  returning  strongly
anomalous  values in arsenic and scattered  anomalous  gold values.  The Narelle
Zone, on the northeastern  part of the property,  is a large (1.5 x 1 kilometer)
zone of strongly silicified felsic volcanics with variably anomalous mercury and
gold values.

In February 2000, a Phase II program consisting of ground  geophysics,  detailed
geochemical  sampling  and  geological  mapping was  commenced  on the  Fabriana
Extension  zone.  The  geophysical   surveys  outlined  an  east-west   trending
resistivity  anomaly  at least  500  meters  in length  which  underlies  felsic
volcanic breccias with strong alunite  alteration,  strongly  anomalous arsenic,
and erratic  anomalous  gold values.  In April-May  2000, a  reverse-circulation
drilling program was completed over the Fabriana  Extension  target.  Nine holes
totaling  1,785  meters were  completed.  Samples  were  collected  at 1.5 meter
intervals,  and sent to ALS-Chemex Laboratories in Mendoza for analysis for gold
by fire assay;  silver,  copper,  lead,  zinc,  arsenic  and  antimony by atomic
absorption; and mercury by cold vapor analysis. Blank samples were inserted into
the  assay  stream  for  control  purposes.  Sample  rejects  are  stored in the
ALS-Chemex  facility in Mendoza,  while  reference  rock chips of each 1.5 meter
interval are stored in the Company's facility in San Juan.

Six of the holes  were  sited to test a  resistivity  feature  defined by ground
geophysical  surveys.  The anomaly  trends  east-west,  and was  interpreted  to
underlie  surface  outcrops  of  felsic  breccias  containing  abundant  alunite
alteration  and  anomalous  arsenic and lead values.  The  drilling  intersected
shallow  dipping  Tertiary  volcanics  consisting of a


                                                                              31

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felsic  sequence  up to 40  meters  thick  of  breccias  and  interbedded  flows
overlying several hundred meters of porphyritic andesites. Within the andesites,
a number of narrow  intervals  with  anomalous  gold  values  were  intersected,
associated  with (i)  quartz  veining  or (ii)  clay-altered  fault  zones.  The
mineralized  quartz-veined  intervals  are  generally  associated  with strongly
anomalous  mercury values.  Three  additional holes were drilled to the south of
the  resistivity  anomaly on targets defined by surface  geological  mapping and
induced polarization surveying.  All holes drilled into the andesite succession,
and  encountered  several clay altered  fault zones and alunite  veining.  These
zones returned variably  anomalous arsenic values, but only background gold. The
results confirm the existence of a high  sulphidation-style  alteration  system.
Management  believes  further  work is  necessary  to  better  characterize  the
alteration  encountered  in the  drilling  as  well  as  additional  geophysical
modeling of the induced polarization and CSAMT results.

Between  November  2000 and  February  2001,  the  Company  carried  out further
exploration  on the  Potrerillos  property  consisting  of bulldozer  trenching,
geological  mapping,  and rock chip and talus fines goechemical  sampling.  This
work concentrated on the Narelle zone, with some additional work on the Panorama
zone. Both of these targets were first identified during the 1999-2000 season.

At Narelle,  seven bulldozer trenches totaling  approximately  1,750 meters were
excavated.  Talus fines geochemical  sampling (113 samples) and rock geochemical
sampling (50 samples) was  conducted to better define the extent and strength of
the gold-mercury  anomaly  detected in the previous  season.  Gold values in the
talus fines ranged from <0.01 g/t to 0.37 g/t,  with mercury  ranging from <0.02
ppm to 68.4 ppm. Gold values in the rock sampling  ranged from <0.01 g/t to 0.02
g/t,  with  mercury  ranging from <0.02 ppm to 10.8 ppm. The high values in both
sample media concentrate in an area  approximately 200 meters in diameter in the
same  location  as the  anomalous  results  from  the 1999 - 2000  program.  The
mineralization,  hosted by  rhyolitic  pyroclasitic  rocks,  may be  related  to
intersecting NE and NNW-trending structures.

At Panorama,  15 rock samples were collected from the northern  continuation  of
the zone from the area sampled in the 1999 - 2000 season through to the northern
property  boundary.  Five of the fifteen samples are strongly  anomalous to very
high gold and/or silver values, with the overall range in gold values being from
<0.01 g/t to 15.4 g/t and in silver from 0.1 g/t to 2,900 g/t.  Elevated mercury
values ranging from <0.02 ppm to 4.93 ppm are also present. The sample returning
the  highest  gold and silver  values is a chip sample from a 0.6 meter wide E-W
trending quartz vein.

The Gollete property of 10,000 hectares (24,596 acres) is located  approximately
30  kilometers  southeast  of Veladero,  and covers a number of color  anomalies
interpreted from satellite imagery. Also defined on the satellite images, and on
a recent  Argentinean  government  geological  map covering  the area,  is a 100
kilometer long northwest-trending structure which passes through both the Pascua
and  Veladero   properties   and  Gollete.   In  early   1999,CMG   carried  out
reconnaissance sampling of the western part of the property. Due to the presence
of  widespread  alluvial  cover,  most  of the 42  rock  samples  collected  for
geochemical  analysis were of float  material,  with 24 also being submitted for
PIMA  analysis.  Gold  values  range from nil to 0.17 g/t.  In early  2000,  the
Company  carried  out  further  reconnaissance  work at  Gollete  consisting  of
geological  mapping  and the  collection  of 43 rock  geochemical  and 22 stream
sediment  geochemical  samples.  Most of these samples were  collected  from the
northwestern sector of the property where the anomalous results generated by CMG
were  located.  This area is referred to as the Condor  zone,  and is visible on
satellite  images  as a  color  anomaly  approximately  1.5  kilometers  long at
elevations  between  4,500 and 5,000 meters.  Both the rock and stream  sediment
sampling  in the Condor  area  generated  strongly  anomalous  arsenic  results,
without  accompanying  anomalous  gold or  silver  values.  No  further  work is
currently planned.

The Ortiguita property of 3,600 hectares (8,896 acres) is located  approximately
35 kilometers east-north-east of Veladero. In early 2001, a short reconnaissance
program was carried out,  mainly  directed at checking  several color  anomalies
visible on satellite  imagery.  Eight rock and four stream sediment samples were
collected;  none  returned  anomalous  values in gold or silver.  The  satellite
features  appear to be related to outcrop  patterns  in  unmineralized  volcanic
rocks. No further work is planned for the property.

GARCIA PROPERTIES (Cerro la Sal,  Portezuelo de Agua Negra, Filo de las Sopenas,
Rio de las  Taguas,  Arroyo  Cajon  de la  Brea,  El  Toro,  Paso  de  Soberado,
Chinguillos,  Veladero, Portezuelo Tortolas, Cerro del Salado, Las Flechas South
1-3).

                                                                              32

<PAGE>

The Company owns a 100% interest in the Garcia  Properties which are composed of
fourteen cateos,  totaling 47,160 hectares (116,485 acres), in various locations
in San Juan  Province.  The  properties  were acquired  pursuant to an agreement
dated June 11, 1996, signed by IMA Argentinas, Oscar Garcia, Hugo C. Soria, Yali
Calendaria  Sagua,  Ramon  Olmedo,  Gustavo A. Castillo and Ingrid Soria for the
aggregate sum of US$100,000.  The agreement was amended on December 15, 1998, to
reduce the total payment to US$87,000, which has been paid in full.

The 14 Garcia  properties,  totaling 47,160 hectares  (116,557  acres),  cover a
number of geological  environments  in northwestern  San Juan province.  A brief
reconnaissance  evaluation of the Cerro la Sal and  Chinguillos  properties  was
conducted in 1997. In early 2002,  CMG carried out a  reconnaissance  geological
mapping and geochemical sampling program on the Rio de las Taguas property. With
more detailed  follow up work in both the 2001-2002 and 2000-2001 field seasons.
In early 2001,  a brief  field  program  was  conducted  on the Paso de Soberado
property.  As of the date of this annual  report,  the Company has not conducted
any ground work on the remaining 10 properties.

The Cerro la Sal  property  consists  of 4,864  hectares  (12,021  acres) and is
located 25 kilometers west of the city of San Juan. The main geological  feature
is a  Miocene  age  dacitic  intrusive  which  cuts  Miocene  and  Devonian  age
sedimentary  rocks. The five rock samples collected did not return any anomalous
values.  A study  of the  satellite  imagery  covering  the  property  has  been
recommended to provide a guide for any further field work.

The  Chinguillos  property  consists  of 3,610  hectares  (10,911  acres) and is
located in the Gualcamayo region, approximately 215 kilometers north of the city
of  San  Juan.  In  the  southwestern  part  of the  property,  strong  argillic
alteration is developed in parts of a dacite  intrusive.  Thin  carbonate  veins
occur within the alteration  zone, and samples of the vein material are strongly
anomalous in copper,  arsenic,  nickel and cobalt. Gold values range from nil to
0.04 g/t. Management  believes these results,  combined with the presence of the
strong argillic alteration, were very encouraging.  Additional follow-up mapping
and sampling are  recommended;  however,  no funds have been  allocated for this
work in the next 12 months.

The  Paso  del  Soberado   property  of  873  hectares   (2,157  acres)  located
approximately  20 kilometers  north-northeast  of Veladero was examined in early
2001 and 25 rock and stream sediment geochemical samples collected. Three of the
rock samples  returned  anomalous gold values ranging from 0.26 to 0.51 g/t. All
of the anomalous  samples are of float material,  with two of the three shedding
from a NE-trending  breccia zone containing quartz and alunite.  Additional work
to determine the extent of the mineralized breccia zonewill be undertaken in the
future.

The Rio de las Taguas  property  consists of 1,820 hectares (4,497 acres) and is
located in the Valle del Cura region.  A preliminary  study of satellite  images
covering  the region  shows the  presence of a number of color  anomalies on the
property, along with the presence of a strong southeasterly-trending  structure.
The initial  reconnaissance work, carried out by CMG, targeted on these features
and returned a number of anomalous  gold values  (ranging  from nil to 0.33 g/t)
from 79 rock samples,  generally  associated with elevated  arsenic values.  The
highest rock values for both gold and arsenic cluster in the  southwestern  part
of the property along a northeast facing ridge.

The Company commenced a program of geochemical  sampling and geological  mapping
in late 1999. Three target zones were identified by this program. The Ridge Zone
is a 350 meter long  northeast-trending  zone of strongly clay-altered volcanics
with grab samples  returning  anomalous values in gold and arsenic.  The Central
Breccia Zone covers an area of  silicification,  quartz veining and  brecciation
measuring  approximately  400 meters by 300 meters,  while the Valley Shear is a
linear,  southeast-trending  overburden covered valley which parallels the trend
of the mineralized Pascua Fault.

A  Phase  II  program  consisting  of  gridding,  ground  geophysics,   detailed
geological mapping, PIMA sampling and geochemical sampling over the three target
areas was carried out in early 2001.  This work identified the Ridge Zone as the
highest  priority  target.   Further  geophysical  work  consisting  of  induced
polarization  surveying  was completed in April 2000 and outlined a large (600 x
300 meters) chargeability zone under scree cover adjacent to the Ridge Zone.

In November  2000, a program of road  construction  and bulldozer  trenching was
carried out on the Ridge Zone to provide  better  access and rock  exposure  for
detailed  geological mapping and rock sampling.  Approximately 3.5 kilometers of
road were constructed, of which approximately 500 meters was in bedrock.

                                                                              33

<PAGE>

Mapping and sampling of the new exposures and surrounding area were completed in
late 2000. The geologic  mapping showed the area to consist of a lower andesitic
volcanic unit overlain by dacitic to rhyolitic pyroclastics.  Alteration exposed
in the road cuts is  mainly  sericite-clay  ranging  from  weak to  moderate  in
intensity.  The strongest  alteration effects appear to be associated with local
structures of limited extent.

The  geochemical  sampling  consisted  of 140 rock samples and eight talus fines
samples. The results confirmed low order anomalies in a number of elements, most
notably gold and arsenic.  Gold values in rock range from <0.01 g/t to 0.09 g/t,
and in talus  fines from 0.01 g/t to 0.4 g/t.  Silver  values in rock range from
<0.1 g/t to 3.8 g/t, and in talus fines from 0.2 g/t to 0.4 g/t.  Arsenic values
in rock range from <5 ppm to 622 ppm, and in talus fines from 52 ppm to 120 ppm.

BARRICK AGREEMENT (Rio de las Taguas, Potrerillos)

Under a financing and option agreement dated August 17, 1999, Barrick subscribed
to a private  placement of 1.5 million units at a price of $1.00 per unit.  Each
unit  consists of one common  share of the capital  stock of the Company and one
non-transferable  share  purchase  warrant,  entitling  Barrick to  purchase  an
additional  common share for a period of one year at a price of $1.50 per share.
The shares issued were subject to a 12-month hold which expired August 17, 2000.
Of the  proceeds  from this  private  placement,  the Company  agreed to spend a
minimum of $1,125,000 on its Valle del Cura properties in northwestern Argentina
before August 17, 2000.  The Company has made the required  expenditures  on the
Valle del Cura properties in accordance with the Barrick Agreement.

As part the August 17, 1999 agreement,  the Company granted Barrick an option to
earn an interest in EITHER the Rio de las Taguas or  Potrerillos  properties  in
the Valle del Cura region.  This option gives Barrick the  opportunity to earn a
50%  interest in the  selected  property by paying the  Company  US$250,000  and
expending US$3 million in exploration on the selected property within five years
of making the  US$250,000  payment.  The agreement  prescribes a fourteen  month
period  during  which  Barrick  may  exercise  its option and make the  property
selection.  If Barrick exercises all of the share purchase warrants, this period
is automatically extended for an additional twelve months.

On April 19, 2000, Barrick exercised warrants at $1.50 to purchase an additional
350,000  shares of the Company for total  proceeds of  $525,000.  The funds were
spent on the drill  program on the  Potrerillos  property.  On August 16,  2000,
Barrick  exercised its remaining  warrants to buy 1,150,000 common shares of the
Company for total proceeds of $1,725,000. Part of the proceeds were used to fund
the Company's exploration program in the Valle del Cura region of Argentina from
October 2000 to March 2001.

As a result of Barrick exercising all 1,500,000  warrants,  the selection period
was automatically  extended for an additional twelve calendar months to November
30, 2001.  During March 2002, the Company further  extended the selection period
to  November  30,  2002 which was  extended  further by mutual  consent to allow
Barrick's  technical  team  to  review  additional  properties  of the  Company.
Subsequent  to the year end,  Barrick  and the  Company  agreed  to  extend  the
Selection  Notice  Period in the Option  Agreement  from  November  30,  2002 to
December 30, 2003.  In return for the  extension  Barrick paid US $65,000  which
will  be used to  make  payments  to  maintain  the  option  properties  in good
standing.

Further  exploration on the Potrerillos  and Rio de las Taguas  properties is on
hold pending resumption of exploration and development  activities at the nearby
Pascua-Lama and Veladero deposits by Barrick.

If Barrick  elects to  exercise  its option and once  Barrick has earned its 50%
interest,  the property  will be operated as a joint venture with Barrick as the
operator and each party paying its proportionate  share of expenses,  subject to
normal dilution and non-consent provisions. If either party is diluted down to a
20%  interest,  that  interest  will be converted  to a 5% net smelter  royalty.
Barrick will have the right to earn an additional  25% interest,  for a total of
75%,  by  agreeing  within  two years of  vesting  its 50%  interest  to provide
financing necessary to bring the property into commercial production.

In addition,  Barrick  shall have the option to purchase a 100%  interest in the
selected  property from the Company for US$2 million and a 5% net smelter return
production  royalty.  Unless the  parties  agree  otherwise,  this option may be
exercised  by  Barrick  only  after  Barrick  has  completed   US$3  million  in
exploration  expenditures on the selected property without making a discovery of
ore in commercial quantities.


                                                                              34

<PAGE>

ARASENA PROPERTIES (Guardia Vieja, Arroyo de los Difuntos)

The Arasena  Properties  are  composed of two cateos,  totaling  6,532  hectares
(16,141 acres) located in central western San Juan Province.  The Company owns a
100% interest in the  properties  which were  acquired  pursuant to an agreement
dated  September 3, 1996 for the  aggregate  sum of  US$6,500.  The contract was
signed by IMA Argentinas and Modesto Arasena.

The Guardia Vieja property,  located 150 kilometers  northwest of San Juan city,
has not been  visited to date,  but  initial  evaluation  of  satellite  imagery
indicates the presence of a color  anomaly  associated  with a linear  structure
that cuts across the property in a northeast-southwest direction.

The Arroyo de los Difuntos  property,  located 140  kilometers  southwest of the
city of San Juan, in the Cordillera  Principal,  was visited by Apex  Geoscience
Ltd.  ("Apex") in March 1997.  Apex  reported  localized  zones of  hydrothermal
alteration, and anomalous lead, nickel, cadmium,  manganese, barium and vanadium
in rock grab samples. No further work is planned on this property.

RONCHIETTO PROPERTY (Banitos)

The Ronchietto  property consists of one cateo,  totaling 5,230 hectares (12,923
acres),  in the  Valle  del Cura  region  of  northwestern  San  Juan  Province,
immediately  northeast of the Jaguelito  property.  The Company  acquired a 100%
interest in the Ronchietto  property from V.  Ronchietto  pursuant to a purchase
agreement  dated March 26, 1999, as amended on March 30, 2000, for the aggregate
sum of US$60,000,  payable over 30 months, in twenty-one installments consisting
of an initial payment of US$5,000 (paid); two intermediate installments totaling
US$15,000 (paid), and 18 consecutive  monthly payments of US$2,222 beginning May
5, 2000. As of December 31, 2001,  these monthly  payments were paid in full. In
the event of exploitation of the property,  the purchase is subject to a royalty
of US$960,000 paid in eight installments.

The property  covers a portion of a large,  color  anomaly  visible on satellite
images. In early 2002, CMG carried out a reconnaissance  geological  mapping and
sampling program.  This work indicated that much of the property is underlain by
Tertiary age volcanic and sedimentary rocks which overlie gently dipping Permian
age  sedimentary  rocks  of the  Choiyoi  Group.  Most  of the 29  rock  samples
collected  were of float  material,  and returned  weakly  anomalous gold values
ranging from nil to a maximum of 0.04 g/t.  During late 1999 and early 2000, the
Company  carried  out  a  reconnaissance   program  of  geological  mapping  and
geochemical  sampling over the Banitos property.  The mapping indicated that the
property is underlain by Tertiary age volcanics and sediments, including a thick
gypsum unit which gives rise to a strong satellite color anomaly.  The gypsum is
of  sedimentary  origin and not associated  with  hydrothermal  alteration.  The
geochemical  sampling  returned some moderately  anomalous values in arsenic and
silver from samples taken near the  southeastern  boundary of the  property.  No
immediate follow-up work is planned.

IMA ARGENTINAS GROUP 2 PROPERTIES (Pelambres 2)

This cateo,  totaling 345 hectares (852 acres) was staked to cover extensions of
prospective  rocks  onto open  ground.  No work is  currently  planned  on these
properties.

PERUVIAN PROPERTIES

RIO TABACONAS PROPERTY

The  following  discussion  on the Rio  Tabaconas  property  is  based  upon the
"Geological Report on the Phase 2A Pre-Drilling Surface Exploration Program, Rio
Tabaconas Gold Project" prepared by Mr. George Sivertz,  Professional Geologist,
OreQuest Consultants Ltd., dated May 31, 2002.


                                                                              35
<PAGE>


                              [Peru Property Map 1]






                                                                              36
<PAGE>


                              [Peru Property Map 2]



                                                                              37
<PAGE>



PROPERTY DESCRIPTION, LOCATION, AND ACCESS

The  9,000  hectare  (22,230  acres)  Rio  Tabaconas   property  is  located  in
northwestern Peru,  approximately 35 kilometers south of the southernmost tip of
Ecuador in the District of  Tabaconas,  Province of San Ignacio,  Department  of
Cajamarca.  The Company has an option to purchase three claims  covering a 2,890
hectare  (7,138  acres) area within the central  part of the  property and holds
100% ownership, with no outstanding royalties, on the remainder of the property.

The Rio Tabaconas property is located 760 kilometers NNW of Lima in the District
of Tabaconas,  Province of San Ignacio in the northern part of the Department of
Cajamarca,  Peru. The Peru Ecuador border is located approximately 35 kilometers
to the north of the  property.  The town of  Tamborapa  is  situated in the west
central part of the property.

Access to the property is by road from the city of Chiclayo, an approximately 12
hour trip.  The central part of the property is reached by means of a rough road
leading  northeast  up the Quebrada  Las Minas from the town of  Tamborapa.  The
upper  section of the Quebrada Las Minas and the lower,  cultivated  sections of
the adjacent ridges can be reached using the local farmers' footpaths.

OWNERSHIP

Pursuant  to  an  agreement   between   IMPSA  Peru  and   Sociedad   Minera  de
Responsabilidad  Limitada  Don  Alberto,  JJ De Piura  and  Sociedad  Minera  de
Responsabilidad  Limitada Nova JJ de Piura dated January 24, 1997, as amended on
January 31, 2000,  August 22, 2000 April 24, 2001, and December 23, 2002,  IMPSA
Peru  acquired  an option  from J and J Madueno  Bustamante  to  purchase a 100%
interest in three  concessions  totalling  2,890  hectares  (7,138 acres) in the
Cajamarca  Department  of San Ignacio  Province in northern  Peru.  In addition,
IMPSA Peru owns nine claims  totalling  5,400  hectares  (13,338  acres),  which
surround and overlie the optioned  concessions.  An  additional  2,700  hectares
(6,669 acres) are expected to be added during 2003 Collectively  these are known
as the Rio  Tabaconas  project.  The terms of the  option  agreement  require an
aggregate  sum of  US$1,500,000  payable  over  seven  years and an  exploration
program  totalling  US$525,000  over three years.  On June 28, 2002, the Company
suspended  further  exploration  activities at the Rio Tabaconas  project.  This
decision  was made in response to the local  community  expressing  its concerns
with  mineral  exploration  activites.  The  Company  has  deferred  any further
exploration until an agreement with the local community has been finalized. As a
result  the  Company  declared  force  majeure,  as  allowed  under  the  option
agreement.  Accordingly, the Company and the optionor have revised the timing of
the remaining US $1,340,000 option payments.

Of the total option  payments  US$160,000 has been paid. The remaining  payments
and due dates are: US$25,000 on July 30, 2003,  US$100,000 on December 20, 2003,
US$200,000 on December 20, 2004 and  US$1,015,000 on August 20, 2005 (this final
payment  is to be  made  if the  commercial  exploitation  of the  property  has
commenced).   Alternatively,   in  the  event  commercial  exploitation  of  the
production does not occur,  the payments are to be made in four  installments of
US$200,000 commencing August 20, 2005 and subsequent installments on December 30
of each following year, with a final  installment of US$215,000 due December 31,
2009. In the event that commercial  production commences during this period, the
full remaining balance is due within 20 days of production start-up.

The exploration  program requires work  expenditures  totaling  US$525,000 to be
completed as follows:  US$75,000 by October 24, 2001,  US$150,000 by October 24,
2002, and US$300,000 by October 24, 2002. As at December 31, 2002, approximately
$1,966,404 has been spent on work  expenditures.  The Company is making progress
towards the  finalization  of an agreement with the local  community and expects
exploration  activities  to resume in fiscal  2003 with  Phase 2B of the  drill.
Subject  to  securing  sufficient  financing,   the  Company  intends  to  spend
approximately  $1,144,500 for this property during 2003, of which  approximately
$890,000 is for a Phase 2B 3,000 meter drill  program and $187,500 is for making
option payments due in July and December 2003. A balance of $67,500 will be used
to pay  government  charges  (known as "canons") for the right to do exploration
work.  These  charges are the Company's  responsibility  and are not credited to
option payments or exploration program requirements.

                                                                              38
<PAGE>


CLIMATE, INFRASTRUCTURE AND PHYSIOGRAPHY

The Rio Tabaconas property lies on the east side of the Sierra Occidental of the
Andes at  elevations  of between  1,000 and 2,400  meters,  in an area of rugged
terrain  characterized  by deeply  incised  valleys  separated by narrow ridges.
Exploration in this part of Peru can be conducted year-round.

The Province of San Ignacio and the Peruvian government are currently engaged in
the  construction  of a road to link  the  town of San  Ignacio  with  Tamborapa
village.  The road is being  extended  from a point on the present  road network
west of San Ignacio;  the planned route crosses the divide at the  headwaters of
Quebrada Las Minas at an  elevation of 2,300 meters and descends  along a series
of switchback curves into the lower Las Minas valley.

The village of Tamborapa offers basic services  including  lodging and meals and
is the logical base for exploration efforts on the property.

HISTORY

Evidence of historic  mining at Tabaconas  includes  previously  known and newly
discovered  workings  throughout the Cerro Tablon and Cerro Las Minas areas,  as
well as place names with reference to mining in the current  nomenclature,  such
as Cerro Las Minas and Quebrada Las Minas.

Mine  workings at Tabaconas  are believed to be on the order of 100 to 150 years
old and include adits, cuts and ventilation shafts on several locations on Cerro
Tablon and Cerro Las Minas.  In the valleys,  large  cylindrical  stones used to
crush raw ore in an arrastra or `patio' mill are known.  There is no evidence of
recent hard rock mining on the  property,  but small  placer  operations  can be
found  along  the  Tabaconas  River  and in the  lower  sections  of its  larger
tributaries.

The first modern examination of what is now the Tabaconas property was conducted
in the late 1980s when a government-funded  Peruvian-German consortium re-opened
the old mine workings on Cerro Tablon and carried out  experimental  geochemical
and geological  studies in the mine area.  The Company  acquired the property in
January  1997.  Since that time,  the  property  has been  briefly  examined and
sampled by a number of companies at the Company's invitation.

GEOLOGICAL SETTING

The Rio Tabaconas  property is underlain by Paleozoic to Cretaceous  sedimentary
and  volcanic  rocks,  which are  capped  in the area  north of  Tabaconas  by a
sequence of Middle Tertiary volcanic and  volcaniclastic  rocks belonging to the
Namballe Formation.

Rocks exposed at the Tabaconas property are dominated by volcanic flows,  tuffs,
and coarse pyroclastic rocks assigned to the Oyotun Formation,  of Jurassic age.
This formation also includes tuffaceous sedimentary rocks and volcanic sediments
with  intercalated  limestone  in the  higher  parts of the  volcanic  sequence.
Erosional windows of Ordovician  metasedimentary  rocks of the Salas Group occur
in the Oyotun  cover at  Tamborapa  and to the north and south.  In a large area
10-15  kilometers  north  of  Tamborapa,   the  Oyotun  rocks  are  overlain  by
pyroclastic volcanics,  tuffaceous sandstones, and volcanic conglomerates of the
Mid-Tertiary  Namballe Formation,  which may be stratigraphically  equivalent to
the Porculla Volcanics in the western part of the map-area.

Plutonic rocks of Cretaceous-Tertiary  age intrude all the supracrustal rocks in
the region except for the youngest  Tertiary  volcanic  sequences.  The dominant
intrusive type in the area of the Tamborapa  property is porphyritic  granite of
the Paltashaco pluton.

The Rio Tabaconas  property lies within the Cajamarca  copper-gold  metallogenic
belt, which extends from  Michiquillay,  near the city of Cajamarca,  northwards
into Ecuador. This belt is defined by a number of important gold and copper-gold
deposits   hosted  by  Tertiary   volcanic  and  intrusive  rocks  and  Mesozoic
sedimentary  rocks.  Two of the  most  significant  deposits  in  the  belt  are
Yanacocha  and La Granja.  Other  important  deposits  in the belt  include  the
Michiquillay,  Tantahuatay, Cerro Corona, Canariaco, Pena Verde, and Lanchipampa
porphyry  systems and the La Zanja,  Jehuamarca and Las  Huaquillas  volcanic or
sedimentary-hosted  gold and polymetallic deposits. The deposits


                                                                              39

<PAGE>

in the belt are typically of Tertiary age and genetically linked to heat engines
or  convective  hydrothermal  systems  associated  with  Tertiary  intrusive and
volcanic centers.

EXPLORATION

Work  conducted on the Rio  Tabaconas  property by the Company  began with brief
examinations in 1997 and 1999. In mid-2000,  the Company carried out a four week
exploration  program  at Rio  Tabaconas  at a  cost  of  approximately  $40,000.
Highlights included:

o        Discovery of a field of massive sulphide boulder field in the valley of
         Quebrada Las Minas downslope from Cerro Tablon.  Grab sampling of 22 of
         the boulders  (size  ranges up to 500 tonnes)  returned an average gold
         grade of 9.3 g/t.

o        Identification of in-situ  mineralization  upslope from the boulders at
         Cerro  Tablon.  Chip  samples of massive,  semi-massive  and  stockwork
         sulfide  mineralization  were  collected  from subcrops and outcrops at
         Tablon and Tablon West and  returned  an average  grade of 5.6 g/t gold
         from 122 samples.  Soil sampling of adjoining  areas upslope and to the
         north of the sulfide outcrops returned strongly  anomalous gold in soil
         results.

o        At Cerro Las Minas,  altered volcanic and sedimentary  rocks, dykes and
         breccias were found in a roughly circular zone approximately 800 meters
         in diameter, possibly representing a partially-eroded volcanic complex.
         Rock and soil sampling defined a coherent Au-Ag-Pb-Zn-As anomalous zone
         approximately  600 meters long and 100 - 200 meters wide in the core of
         the target.  On the north and south flanks of the large alteration zone
         are  narrow,  high-grade  vein  structures  which were mined on a small
         scale.

o        Regional  geological mapping and stream sediment  geochemical  sampling
         over much of the 90 square kilometer (22,230 acres) property identified
         three areas of iron (magnetite)  skarn, and several  anomalous gold and
         indicator element anomalies in stream sediments.

In November 2000, a helicopter-borne  electromagnetic ("EM") and magnetic survey
was flown at a cost of  approximately  $93,000.  The magnetic  results provide a
structural framework for the whole property, and showed the presence of a number
of well-defined  ENE-trending magnetic features.  The ENE structural trend is an
important  element at some large mineral  deposits in northern  Peru,  including
Yanacocha, Antamina and Magistral.

The EM results,  while  restricted by steep  topography in some areas,  detected
anomalies  immediately  south of known  mineralization  at Tablon, in an area of
overburden,  as well as in a major  north-south  trending  drainage  located 2.5
kilometers west of Tablon.  The latter EM anomaly (known as "Anomaly A") appears
to have a north-south orientation and lies on the west flank of a magnetic high.

In July, 2001 a pre-drilling  surface  exploration  program was conducted on the
Tablon and Tablon West zones at a cost of approximately $25,000.  Sixty-two soil
samples were taken from the La Union zone,  directly  east of the Tablon zone in
the "B" soil horizon (residual soils),  with several values in the range of 2 to
18 g/t gold. These exploration  results extended the strike length of the Tablon
gold target to 600 meters.

In September,  2001, a 33 hole, 1,600-meter diamond drill programwas undertaken.
The drill program tested three areas (Tablon, Tablon West and La Union Ridge) on
Cerro Tablon.  Other exploration  conducted before,  during, and after the drill
program  included  grid-based  soil  sampling  and  geological  mapping  on  the
southwest  side of Cerro  Tablon,  sampling of Adit 1 in the main  Tablon  area,
trenching and geological  mapping at Tablon West,  geological  mapping and panel
sampling  in the  West  Breccia  Zone on Cerro  Las  Minas,  and soil  sampling,
trenching and geological mapping at the Peak Zone on Cerro Las Minas.

The most recently completed work program was conducted from February to March of
2002. The program incorporated IP-resistivity and magnetometer surveys, detailed
geological  and  structural  mapping,   and  rock,  soil,  and  stream  sediment
geochemical sampling. The results of this program allowed for the delineation of
the present 3000 metre drill plan.


                                                                              40

<PAGE>


MINERALIZATION AND PROPERTY GEOLOGY

Several distinct styles of intrusive-related  gold mineralization are present in
fifteen named zones at the Rio Tabaconas property. Known mineralization at Cerro
Tablon      consists     of     gold-rich      massive      sulphide      bodies
(pyrrhotite-pyrite-sphalerite-galena-chalcopyrite)  which replace  limestone and
occur as stratabound,  fault-related,  and intrusive  contact-related bodies. In
addition  to  these  carbonate-replacement   bodies,  Cerro  Tablon  also  hosts
potential for  structurally-controlled  mineralization at the North and La Union
Zones. On Cerro Las Minas,  bulk-tonnage,  disseminated  gold  mineralization is
associated  with strong to intense  phyllic  alteration  at the West Breccia and
Peak Zones,  while high-grade (up to 62.9 g/t Au) lode-gold occurs within quartz
vein/shear  zones at  Minas  Sur and La  Catedral.  Elsewhere  on the  property,
anomalous  rock,  soil,  and silt samples  demonstrate  potential for additional
discoveries.

Stratified  rocks  exposed at Cerro  Tablon  include,  from oldest to  youngest,
footwall  andesite,   massive  limestone,   bedded  limestone,   and  tuffaceous
siltstone;  all of which are assigned to the Jurassic  Oyotun  Formation.  These
units are cut by two related intrusive phases:  feldspar-hornblende porphyry and
intrusive breccia.

On Cerro Las Minas,  three  stratified  rock units and five intrusive rock units
have been  identified.  Stratified  rocks  include,  from  oldest  to  youngest,
quartzite breccia, lithic tuff, and pebble to cobble conglomerate. The Cerro Las
Minas intrusive  complex hosts  disseminated  mineralization  and includes three
related phases: fine-grained felsic intrusion, flow-banded felsic intrusion, and
intrusive  breccia.  Other  intrusive  rocks  exposed on Cerro Las Minas include
quartz-feldspar porphyry dykes and larger bodies of diorite to quartz diorite.

CERRO TABLON MINERALIZATION

There are seven named targets at Cerro Tablon, six of which have been classified
as drill-ready. These are, in order of importance: the Tablon Main, Tablon West,
Tablon South, Tablon Southwest Extension,  La Union, North, and Sphalerite Creek
Zones.  Gold-rich  massive  sulphide  boulders (22 samples average 9.3 g/t Gold)
derived  from the Tablon Main and West zones now lie at the base of Cerro Tablon
in  Quebrada  de las Minas.  It was these  boulders  which  originally  drew the
attention  of  IMA   geologists   and  led  to  the  discovery  of   outcropping
mineralization on Cerro Tablon.

TABLON MAIN ZONE

The Tablon Main Zone is  comprised  of  numerous  outcropping  massive  sulphide
bodies and was the primary focus of the 2001 drill program. The Tablon Main Zone
is  important  to  the   Tabaconas   property  not  only  for  its   significant
intersections and high gold grades, but also as a model for mineralization  that
may be present at the Tablon South,  Tablon West, and Tablon Southwest Extension
Zones.

Mineralization  at the Tablon  Main Zone  consists  of massive to  semi-massive,
fine-  to   medium-grained   pyrrhotite,   pyrite,   sphalerite,   galena,   and
chalcopyrite.  Gold  grades  commonly  range  from  several  grams  per tonne to
approximately  30 g/t with rare intervals  returning up to 118 g/t Au.  Sulphide
bodies are generally  massive to semi-massive and often include sulphide veinlet
or "stringer" zones below the massive sulphide body. Visible gold has been noted
within   veinlet-style   mineralization.   Massive  sulphides  (mantos)  at  the
limestone/footwall  andesite  contact are commonly  several  metres thick (up to
7m).  Fault  related  and  intrusive  contact  related  mineralization  is quite
variable  in size  and  morphology;  drillhole  intersections  range  up to 16.4
metres. Significant intersections from the 2001 drill program include:

--------------------------------------------------------------------------------
       DDH          FROM (m)        TO (m)         LENGTH (m)       GOLD (g/t)
--------------------------------------------------------------------------------
     RT01-06          9.07           30.48           21.41             3.10
--------------------------------------------------------------------------------
     RT01-07         10.08           30.00           19.92             2.41
--------------------------------------------------------------------------------
     RT01-11         15.54           18.20            2.66            14.20
--------------------------------------------------------------------------------
     RT01-13         13.41           38.83           25.42             8.78
--------------------------------------------------------------------------------
     RT01-15         17.68           19.36            1.68             5.47
--------------------------------------------------------------------------------
     RT01-16         16.17           20.07             3.9            13.18
--------------------------------------------------------------------------------
     RT01-21          1.52           10.97            9.45             5.08
--------------------------------------------------------------------------------


                                                                              41
<PAGE>



--------------------------------------------------------------------------------
     RT01-22         47.44           50.3             2.86            15.22
--------------------------------------------------------------------------------
     RT01-29         34.85           51.25            16.4            17.99
--------------------------------------------------------------------------------
     RT01-29          42             44.15            2.15           118.10
--------------------------------------------------------------------------------

TABLON WEST ZONE

Approximately  300 metres southwest of the Tablon Main Zone,  massive  sulphides
with  significant  gold grades  outcrop at the Tablon  West Zone.  This zone was
drill-tested  by holes RT01-23 to 27 during the 2001 drill program.  The drilled
massive  sulphides at Tablon West are hosted by the tuffaceous  siltstone  which
occurs stratigraphically above the more prospective  limestone/footwall andesite
contact.  This contact remains largely untested below the known  mineralization.
Significant drill intersections at the Tablon West Zone include:

--------------------------------------------------------------------------------
       DDH          FROM (m)        TO (m)         LENGTH (m)       GOLD (g/t)
--------------------------------------------------------------------------------
     RT01-25         33.00          36.10            3.10             12.97
--------------------------------------------------------------------------------
     RT01-26          0.00           6.00            6.00              6.95
--------------------------------------------------------------------------------
     RT01-26          1.00           2.00            1.00             17.37
--------------------------------------------------------------------------------
     RT01-27          9.76          12.00            2.24              1.49
--------------------------------------------------------------------------------

In addition to the drilled zone at Tablon West, a newly discovered sulphide body
is  located  approximately  150 metres to the  southeast  and is named the Cliff
Zone. This zone is situated approximately 60 metres  stratigraphically below the
sulphides at Tablon West.  Massive and semi-massive  sulphides at the Cliff Zone
occur along an intrusive  contact and grade up to 8.79 g/t over 2.0 metres.  The
Cliff  Zone is  significant  in that  it  shows  the  potential  for  additional
Tablon-style  massive  sulphide  mineralization  stratigraphically  below Tablon
West.

TABLON SOUTH ZONE

The Tablon South Zone is located  approximately  250 metres downslope (south) of
the Tablon  Main Zone.  This  completely  covered  target is defined by a strong
chargeability anomaly and is interpreted to underlain by geology similar to that
which hosts the Tablon Main Zone.

TABLON SOUTHWEST EXTENSION

The  Tablon  Southwest  Extension  is a large  area  (~500m x  200-300m)  to the
southwest  of the  Tablon  West Zone and  south of the  Tablon  Fault,  which is
prospective for Tablon-style  massive sulphide bodies.  The area is capped by 20
to 40 metres of  tuffaceous  siltstone,  which is underlain  by the  prospective
limestone and  porphyritic  intrusion.  A large,  strong  chargeability  anomaly
defines the extent of this area.

LA UNION

This target area is defined by a large,  high-grade soil anomaly on the crest of
the La Union  ridge (34  samples >1 g/t Au over a 875 x 150 metre  area).  It is
underlain by  shallowly-dipping  tuffaceous siltstone which has undergone strong
chloritization and  epidotization.  Along its margins the siltstone is underlain
by feldspar-hornblende  porphyry,  which is interpreted to have intruded through
the massive and bedded  limestone.  The La Union area is considered  prospective
for   tablon-style    mineralization    along   the    intrusion/siltstone    or
intrusion/limestone contact and/or structurally-controlled  mineralization along
an interpreted structure which extends from the North Zone, through La Union, to
the Catedral Zone on Cerro Las Minas.

NORTH ZONE

The North Zone is located  approximately  300 metres  northwest of the Main Zone
and is hosted within the footwall  andesite unit.  Consistently high silt sample
values  (up to 5.58  g/t Au) in the  drainage  below  the  North  Zone  led to a
concerted mapping and sampling effort in this area.  Geologic mapping located an
east-striking structure defined by a restricted zone of intense foliation, which
extends  from the La Union  area to the North  Zone.  Along this  structure  are
patchy zones of intense pyrophyllite+/-alunite+/-diaspore  alteration and common
disseminated  pyrite+/-specular  hematite.  At the North  Zone,  an  exposure of
strong phyllic alteration with several percent  disseminated  pyrite was sampled
and


                                                                              42

<PAGE>


returned 6.12 g/t gold over 1.0 metres. A strong  chargeability  and resistivity
anomaly is coincident with this phyllic alteration at the North Zone.

SPHALERITE CREEK ZONE

The Sphalerite  Creek Zone is hosted entirely  within  footwall  andesite and is
defined by a chargeability  anomaly coincident with a mapped fault structure and
a  broad  area  of  moderate  alunite-pyrophyllite  alteration.  It  is  located
approximately 400 metres west of Tablon West, to the north of the Tablon Fault.

CERRO LAS MINAS TARGETS

The Cerro Las Minas area contains four known  mineralized zones with significant
concentrations  of gold.  Three of the four zones (Peak Zone, West Breccia Zone,
and Minas Sur) have been mapped, sampled, and tested by geophysical surveys with
positive results.  Styles of gold mineralization vary significantly  between the
different zones on Cerro Las Minas (disseminated gold within phyllic alteration,
shear-zone  hosted lode gold),  but it is interpreted  that all are related to a
single intrusion-related mineralizing event.

Geophysical  results on Cerro Las Minas correlate  extremely well with the known
mineralized  zones  and  suggest  that   mineralization   extends  further  than
previously  known.  The  West  Breccia  and  Peak  zones  are  defined  by  high
chargeability  responses and are connected by a zone of moderate  chargeability.
The Minas Sur Zone occurs at the southeast end of a strong, linear chargeability
anomaly  which  extends at least 500 metres to the northwest and is open in that
direction.

MINAS SUR

Minas Sur  consists of numerous  old adits,  open cuts,  and trenches in an area
that is otherwise devoid of rock exposure.  High grade gold (1.0 to 62.9 g/t Au)
is  contained  in a  series  of  narrow  veins  and  shears  exposed  in a  zone
approximately 30 metres wide. One continuous, composite channel sample collected
across the zone, including both vein and wallrock material,  returned an average
of 3.3 g/t Au over 25.5 metres.  Mineralized  structures  are hosted by fine- to
medium-grained  diorite,  which  in the  vicinity  of the  structures  generally
returns moderate gold grades (0.5 to 1 g/t Au).  Mineralized  structures consist
of 1 to 20 cm sheeted  quartz  veins within an overall  zone of  fracturing  and
intense  argillic  alteration.  Quartz  vein  material  often  exhibits  coxcomb
textures and commonly  contains open vugs.  Sulphide  minerals  present  include
arsenopyrite,  pyrite, galena, chalcopyrite,  and sphalerite;  rarely comprising
more than a few percent of any vein.

Geophysical and  gold-in-soil  geochemical  results have defined an anomaly more
than 500 metres long, trending  west-northwest from the Minas Sur showing.  This
large anomaly is a priority drill target.

PEAK ZONE

The Peak  Zone is a large  (350 x 350m)  area of  highly  elevated  gold-in-soil
values  (28  samples   over  1  g/t  Au)  with   coincident   anomalously   high
chargeability.  The area is primarily underlain by quartzite breccia and massive
to  flow-banded  intrusive.  The area is interpreted to be cut by several north-
and  northwest-trending  faults.  Several small zones of intense clay alteration
are  exposed  by old adits and open  cuts,  and  anomalous  (up to 600 ppb) gold
grades have been  obtained  from samples of this  clay-altered  material.  It is
interpreted that the coincident  geochemical and geophysical anomaly is due to a
recessively weathering mineralized zone which does not outcrop.

WEST BRECCIA ZONE

The West Breccia Zone is a large (~200 x 400m) area of strong to intense phyllic
alteration with correlative zones of disseminated gold  mineralization  (1-4 g/t
Au in 2.0 and 3.0  metre  chip  and  panel  samples)  and  strong  chargeability
responses.  Phyllic  alteration  and  mineralization  is most intense within the
intrusive breccia and flow-banded  felsic intrusive rocks concentrated along the
margins and roof of the Cerro Las Minas intrusion.  Selective sampling has shown
that gold is evenly disseminated within this mineralized zone.


                                                                              43

<PAGE>


LA CATEDRAL

A series of small  adits  driven on narrow  veins/shear  zones is present to the
northwest of Cerro Las Minas.  These veins are similar in character and grade to
those at Minas Sur,  early stage  sampling has returned  grades from 1.0 to 29.3
g/t gold.

OTHER TARGETS

In addition to the relatively advanced Cerro Tablon and Cerro Las Minas targets,
there  are a  number  of  developing  targets  elsewhere  on the  Rio  Tabaconas
property.  These  include the Vega and  Anomaly A areas which have seen  limited
rock,  soil, and stream  sediment  sampling as well as two short  IP/resistivity
geophysical lines over Anomaly A.

In the Vega area,  NW of Cerro  Tablon,  rock and soil  sampling has  identified
three gold  anomalies,  two of which are centered on small mine  workings.  Rock
samples have  returned  values of nil to 6.0 g/t gold over 2.1 metres and nil to
6.5 g/t Au from grab samples.

At Anomaly  A, the  geophysical  survey  defined a  100-150m  wide,  north-south
trending zone of very low resistivity and correlative high  chargeability.  This
geophysical response is interpreted to be caused by a unit of strongly foliated,
pyritic, metasedimentary rocks exposed in the bottom of the valley.

Elsewhere on the property, large areas remain completely untested. Approximately
25 square  kilometres on the east and northern  margins of the property have yet
to  receive  reconnaissance-level   prospecting  or  stream  sediment  sampling.
Although  these areas are some of the most remote on the  property,  they remain
prospective for mineralization similar to that exposed on Cerro Tablon and Cerro
Las Minas.

SAMPLING, SECURITY AND ANALYSIS

Geochemical  samples  collected at the Tabaconas  project  consist of core, rock
(chips  and  channels,  modified  panel,  grab or  float)  and  soil.  Following
geotechnical and geological logging, all core recovered during the course of the
Phase One drill program was split,  with one-half sent for geochemical  analysis
and the other half  stored in wooden core boxes  stored in a secure  location in
Tamborapa village. Core samples were collected based on geologically significant
intervals, marked by changes in lithology, alteration, and mineralization.

All samples  collected for geochemical  analyses at Rio Tabaconas were labelled,
bagged and sealed on the  property,  driven to Jaen and shipped by bus to Bondar
Clegg Canada  Limited's  ("Bonder  Clegg") office in Lima, Peru for preparation.
Sample  pulps were  transported  by Bondar Clegg to  Vancouver  for  geochemical
analysis.  A 30-gram  split of all samples was  analysed  for gold by fire assay
with an atomic  absorption  finish  ("FA/AA").  An  additional  36 elements were
analysed  by  inductively  coupled  plasma  ("ICP").  Samples  with gold  assays
exceeding AA  detection  limits were  analysed by fire assay with a  gravimetric
finish ("FA/Grav").

A program of check  assays was  conducted  on a subset of core  samples from the
Phase One drill program. The original assays were all done by FA/AA on a 30 gram
split,  the overlimits were done by FA/Grav finish.  The check assays  comprised
three groups:

         1.       Eight of the highest Au value samples were  re-analysed  using
                  metallics screen analyses.

         2.       The  remaining  21  samples  with Au  values  over 10 g/t were
                  re-analysed  by  the  same  method  as the  original  analysis
                  (FA/Grav), and

         3.       A randomly selected subset (10%) of samples in the 3 to 10 g/t
                  Au range was  re-analysed  by the same method as the  original
                  analysis (FA/AA).

All check  assays were done on a new split of the coarse  rejects.  The rejects,
which are stored in Bondar Clegg's preparation  facility in Lima were shipped by
Bondar  Clegg to their main lab in North  Vancouver,  British  Columbia and then
forwarded to the ALS Chemex laboratory in North Vancouver, British Columbia.


                                                                              44

<PAGE>

The  results  of the check  assays  show some  significant  variations  from the
original assays,  with both  appreciably  higher and lower gold values obtained.
Most notably:

         1.       The sample with visible  gold (sample  500974) in hole RT01-29
                  originally  reported  an  assay of 118 g/t Au.  The  metallics
                  screen re-assay  returned 185 g/t,  confirming the presence of
                  coarse gold.

         2.       The high grade sample at the base of the sulfide  intersection
                  in hole RT01-25  (sample 500868)  originally  assayed 33.3 g/t
                  Au. The metallics screen re-assay was 13.14 g/t.

         3.       Sample 500468 in hole RT01-16 originally  returned an assay of
                  13.8 g/t gold;  the re-assay by the same method  yielded 85.45
                  g/t.

The following conclusions can be drawn:

         1.       Of the eight samples  submitted for metallic screen  analyses,
                  three contained gold grades  significantly  different from the
                  original  FA/Grav  analyses,  the  remaining  5 analyses  were
                  within 10% of the original FA/Grav analyses.

         2.       Of the 21 high-grade samples  re-analysed by FA/Grav, 10 of 21
                  samples  were  within  10% of the  original  assay and one was
                  within 5%.

         3.       Of  the 7  randomly  selected  samples  in  the 3 to 10 g/t Au
                  range, 7 of the 8 samples showed >10% variation.

The variations in gold grades between the original and check assays are in large
part within  acceptable  limits;  the wider  variations  are  probably  due to a
"nugget effect",  since large gold particles have been observed in drill core at
Tablon.  No formal  studies have been  conducted to determine  the size range of
native gold particles in the mineralized zones of the property.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Company has not  established  any mineral  resource or reserve  estimates at
this stage of exploration of the Rio Tobaconas property.

MINING OPERATIONS

The Company has no development or producing properties.

EXPLORATION AND DEVELOPMENT

Exploration  by the Company on the Rio Tabaconas  property has revealed a number
of targets on both  Cerro  Tablon and Cerro Las Minas,  only a few of which have
been drill tested.

PLANNED WORK

Upon finalizing a community acceptance of the Community  Agreement,  the Company
plans to proceed during 2003 with Phase 2B diamond drill  program.  This program
will include  drilling of targets on Cerro Tablon,  Cerro Las Minas and possibly
other areas of the property. A detailed, 3,000 metre drill plan has been drafted
based upon evaluation of geological,  geochemical  and geophysical  information.
The program is expected to be completed  approximately two to three months after
finalizing a Community Agreement,  at an estimated cost of $890,000.  Subsequent
to this drill program, and based upon the results of this program, the Company's
management will decide whether to:

         (a)      Raise funds to  continue  exploring  and retain 100%  property
                  ownership diluting the share capital base,

                                                                              45

<PAGE>


         (b)      Negotiate  with a another  mining company to take the property
                  to production with the Company  retaining a carried  interest,
                  or

         (c)      Terminate the program.

Subject to a successful drill program,  a follow-up  program would be considered
at which is expected to consist of the following:

         o        Cerro Tablon - to continue the diamond  drilling to fully test
                  the  target  zone,  plus  extensions   indicated  by  geology,
                  geochemistry  and geophysics,  for both bulk mineable open pit
                  and higher grade lode targets.

         o        Cerro Las Minas - drill  testing  target  areas as  defined by
                  geology, geochemistry and/or geophysics for bulk mineable open
                  pit gold targets with  structurally  controlled,  higher grade
                  zones.

         o        "Anomaly  A" - indicated  depth of the  airborne EM feature is
                  60-70  meters,  located at the  western  contact of the Tablon
                  intrusive with sedimentary rocks. Anomaly definition by ground
                  geophysics (IP/Resistivity and Magnetometer) and drilling.

ALTO CHICAMA PROPERTIES

During 2002, the Company  acquired,  through  staking,  8,000  hectares  (19,760
acres) of mining  property in the Alto  Chicama  area,  La Libertad  Department.
After a brief  geological  evaluation  the Company has decided not to commit any
further work on the properties.

PRINCIPAL OFFICE

The  Company's  principal  office  is  located  at #709 - 837  Hastings  Street,
Vancouver,  British Columbia,  V6C 3N6. The Company leases its office space from
Beauregard  Holdings Corp.  ("Beauregard").  See "Item. 7 Major Shareholders and
Related Party Transactions - Related Party Transactions".  The Company commenced
occupation  of the office  premises in January  1999.  The term of the lease was
originally  for three years and has been extended for an  additional  two years,
with minimum  lease  payments of $25,000 per annum,  plus  operating  costs.  In
addition, the Company is responsible for all leasehold improvements.  During the
fiscal year ended  December  31,  2002,  the Company  paid rent in the amount of
$60,924 ( 2001 - $60,924; 2000 - $53,745 ). For the three month period ending on
March 31,  2003,  the  Company  has paid rent in the amount of  $15,230  (2001 -
$15,230; 2000 - $15,230).

The Company shares office  facilities,  capital assets and personnel with IMPSA.
During the fiscal year ended December 31, 2002,  the Company  charged IMPSA - $0
(2001 - $0; 2000 - $0; 1999 - $0; 1998 - $90,000)  for its share of expenses and
has included the amount in interest and miscellaneous income. See "Item. 7 Major
Shareholders and Related Party Transactions - Related Party Transactions".

The Company on September 1, 2002 started to shares  office  facilities,  capital
assets and personnel with Amera. During the fiscal year ended December 31, 2002,
the Company  received  $6,000 from Amera.  See "Item. 7 Major  Shareholders  and
Related Party  Transactions - Related Party  Transactions."  For the three month
period ending on March 31, 2003, the Company has received $6,000 from Amera.

OTHER ASSETS

INVESTMENT IN IMPSA

The Company  directly  owns 80% of the issued  share  capital of IMPSA (BVI) and
owns the remaining 20% through its wholly-owned subsidiary,  IHC. IMPSA(BVI) has
one  wholly-owned  subsidiary,  IMPSA  Peru,  which  owns or has a right to own,
through an option agreement and staked claims, a total of 9,000 hectares (22,230
acres)  of  mining  exploration  properties.  See  "Item 4.  Information  on the
Company".


                                                                              46
<PAGE>

IMPSA  has  retained  a number  of  professional  advisers  for the  purpose  of
identifying mineral properties of interest and conducting due diligence.

To date  IMPSA has  established  a  Peruvian  subsidiary,  IMPSA  Peru,  and has
conducted  due  diligence on a number of mineral  properties.  Current  holdings
consist of one  property in the  department  of  Cajamarca.  IMPSA Peru has been
focused in  researching,  evaluating  and  carrying out  exploration  on various
potential gold targets within the known mining districts. IMPSA Peru has entered
into option agreements to explore one mining property,  and has staked a further
9 mining  claims.  As a result,  IMPSA  Peru  holds an option to  acquire or has
staked claims  totaling  9,000 hectares  which  constitutes  the Rio Tabaconas /
Gypsy property. See "Item 4. Information on the Company - Properties, Plants and
Equipment - Principal Properties - Peruvian Property".

VICEROY COMMON SHARES

In connection with the exchange of the Company's interest in Minas Barbados, the
Company received,  net of the distribution to its shareholders,  660,000 Viceroy
Common Shares.  As at December 31, 2002, the Company held 195,500 Viceroy Common
Shares with a quoted market value of $78,200.

The Company's  principal  business is the acquisition and exploration of mineral
properties  in known mining areas  adjacent to, or in close  proximity to, known
major  discoveries,  with a focus in Argentina  and Peru. As of the date of this
annual  report,  all of the Company's  properties are without known reserves and
the Company's operations are exploratory in nature.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS.
--------------------------------------------------------------------------------

The  following  discussion  of the results of  operations of the Company for the
fiscal  years  ended  December  31,  2002,  2001  and  2000  should  be  read in
conjunction  with the  consolidated  financial  statements  of the  Company  and
related notes included therein.

CRITICAL ACCOUNTING POLICIES

Reference  should be made to the Company's  change in accounting and significant
accounting  policies  contained  in note 2 and 3 of the  consolidated  financial
statements.  These  accounting  policies  can have a  significant  impact of the
financial performance and financial position of the Company.

USE OF ESTIMATES

The  preparation  of financial  statements  in  conformity  with  Canadian  GAAP
requires  management to make estimates and assumptions  that affect the reported
amount of assets  and  liabilities  and  disclosure  of  contingent  assets  and
liabilities at the date of the financial  statements and the reported  amount of
revenues and expenses during the period.  Significant areas requiring the use of
management  estimates relate to the  determination of environmental  obligations
and  impairment of mineral  properties  and deferred  costs.  Actual results may
differ from these estimates.

MINERAL PROPERTIES AND DEFERRED COSTS

Consistent  with the  Company's  accounting  policy  disclosed  in Note 3 of the
consolidated  financial statements,  direct costs related to the acquisition and
exploration  of mineral  properties  held or controlled by the Company have been
capitalized  on an individual  property  basis.  It is the  Company's  policy to
expense any  exploration  associated  costs not related to specific  projects or
properties. Management of the Company periodically reviews the recoverability of
the capitalized mineral properties.  Management takes into consideration various
information  including,  but not limited to, results of  exploration  activities
conducted to date,  estimated  future metal prices,  and reports and opinions of
outside geologists, mine engineers and consultants. When it is determined that a
project or property will be abandoned or its carrying value has been impaired, a
provision is made for any expected loss on the project or property.

                                                                              47
<PAGE>



RISK FACTORS

The Company's  operations and results are subject to a number of different risks
at any given time.  These  factors,  include  but are not limited to  disclosure
regarding   exploration,   additional   financing,   project  delay,  titles  to
properties,  price  fluctuations and share price volatility,  operating hazards,
insurable  risks and limitations of insurance,  management,  foreign country and
regulatory  requirements,  currency  fluctuations and environmental  regulations
risks. See "Item 3. Key Information - Risk Factors."

The Company's  consolidated  financial statements are in Canadian dollars (CDN$)
and are prepared in accordance  with Canadian GAAP, the application of which, in
the case of the  Company,  conforms  in all  material  respects  for the periods
presented with U.S. GAAP except for the measurement  differences  referred to in
Note 10 of the consolidated financial statements of the Company included herein.
The noon rate of exchange on May 12, 2003, reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States dollars was CDN$1.3885  (US$0.7202=  CDN$1.00).  The effects of inflation
and price changes have not had a material impact on the Company's  income or net
sales revenues during the past three years.

The Company's consolidated financial statements were prepared on a going concern
basis  which  assumes  that  the  Company  will be able to  realize  assets  and
discharge liabilities in the normal course of business.

The Company and its  subsidiaries'  functional  currency is the Canadian dollar.
The majority of the Company's cash deposits and accounts are in Canadian  funds.
The Canadian  dollar  varies  under  market  conditions.  In recent  years,  the
Canadian dollar has  experienced a devaluation  against the U.S.  dollar,  which
requires the Company to spend more Canadian  dollars on its projects.  Continued
devaluation of the Canadian dollar against the U.S. dollar, could materially and
adversely affect the Company's  operations and financial position.  See "Item 3.
Key Information - Risk Factors - Currency Fluctuation".

OVERVIEW

The Company is a natural resource company engaged in the business of acquisition
and exploration of mineral properties in South America, principally in Argentina
and  Peru.  At  this  stage  the  Company  has  no  producing   properties  and,
consequently, has no current operating income or cash flow.

The  Company's  accounting  policy is to defer all direct  costs  related to the
acquisition  and  exploration  of mineral  properties  held or controlled by the
Company on an  individual  property  basis  until  viability  of a  property  is
determined.  General exploration costs are expensed as incurred. When a property
is placed in commercial  production,  such deferred costs are depleted using the
units-of-production  method.  Management of the Company periodically reviews the
recoverability  of the capitalized  mineral  properties.  Management  takes into
consideration  various  information  including,  but not limited to,  results of
exploration  activities  conducted to date,  estimated future metal prices,  and
reports and opinions of outside geologists, mine engineers and consultants. When
it is  determined  that a project or property  will be abandoned or its carrying
value has been  impaired,  a write  down is taken for any  expected  loss on the
project  or  property.  At  December  31,  2002,  the  Company  had  capitalized
$3,181,277  (2001 - $2,777,458;  2000 - $2,240,829) on its Argentine  properties
and  $2,666,450  (2001  -  $1,803,714;   2000  -  $1,041,049)  on  the  Peruvian
properties.

To date the Company has financed its  activities by the issue of common  shares.
The Company  completed three private  placements  during the year ended December
31, 1999. The first was a private  placement of a total of 533,333 common shares
of the Company,  at a price of $0.27 per share,  for cash  proceeds of $144,000.
The second was the private  placement of 1,500,000  common  shares at a price of
$1.00 per share and warrants to acquire an additional 1,500,000 common shares at
an  exercise  price of $1.50 per share with  Barrick,  for net cash  proceeds of
$1,490,339. See "Item 4. Information on the Company - History and Development of
the Company".  The third private placement was of 1,563,000 units, at a price of
$0.60 per unit,  for net cash  proceeds of  $907,760.  Each unit  comprises  one
common share of the Company and one  non-transferable  share  purchase  warrant.
Each  warrant was  exercisable  to purchase an  additional  common  share of the
Company,  at a price of $0.75 per share, on or before September 15, 2002. During
the year ended December 31, 2001,  5,000 warrants were exercised for proceeds of
$3,750.


                                                                              48

<PAGE>

During the year ended  December  31,  2000,  the Company  completed  two private
placements.  The first for 637,000 units,  at a price of $0.60 per unit, for net
cash  proceeds of $343,980,  and the second for 1,397,167  units,  at a price of
$0.60 per unit,  for net cash  proceeds of  $773,327.  Each unit  comprises  one
common share of the Company and one  non-transferable  share  purchase  warrant.
Each warrant related to the first private  placement was exercisable to purchase
an additional common share of the Company,  at a price of $0.75 per share, on or
before April 19,  2002.  During the year ended  December  31, 2001,  the Company
received regulatory approval to extend the warrants from April 19, 2002 to April
19, 2005.  As of December 31, 2002,  all of the warrants from this first private
placement  for the year ended  December  31,  2001  remained  outstanding.  Each
warrant  related to the second private  placement was exercisable to purchase an
additional  common  share of the Company,  at a price of $0.90 per share,  on or
before March 16,  2002.  During the year ended  December  31, 2001,  the Company
received regulatory approval to extend the warrants from March 16, 2002 to March
16, 2005. As of December 31, 2002,  all of the warrants from this second private
placement for the year ended December 31, 2000 remained outstanding.

During the year ended  December  31,  2001,  the Company  completed  two private
placements  of  3,000,0000  units,  at a price of $0.26 per  unit,  for net cash
proceeds of $746,250, and 2,063,000 units, at a price of $0.38 per unit, for net
cash proceeds of $717,006. Each unit consists of one common share of the Company
and one half  non-transferable  share purchase warrant.  Each whole warrant from
the  placement  of  3,000,000  units  entitled the holder to purchase one common
share of the  Company,  at a price of  $0.40,  on or  before  July 3,  2002.  In
addition to the 3,000,000  units,  Agent's  warrants to purchase  259,000 common
shares,  for the  exercise  price of $0.35 per share,  on or before July 3, 2002
were also issued.  None of the $0.40 and $0.35  warrants were  outstanding as of
December 31, 2002.  Each whole  warrant  from the  placement of 2,063,000  units
entitles the holder to purchase  one common share of the Company,  at a price of
$0.45, on or before March 31, 2003, and the Company also issued Agent's warrants
to purchase 206,300 common shares, for the exercise price of $0.45, on or before
March 31, 2003.  As of Decemeber  31, 2002,  1,237,800  whole  warrants  with an
exercise price of $0.45 remained outstanding.

During the year ended  December 31, 2002,  the Company  completed  the following
four private placements:

         i)       637,000  units  at a price  of  $0.38  for  cash  proceeds  of
                  $222,695,  net of share  issue  costs of  $19,365.  Each  unit
                  consisted  of one common share of the Company and one warrant.
                  Two  warrants  entitled  the holder to purchase an  additional
                  common  share  for the  exercise  price of $0.45 on or  before
                  March 31, 2003.  In addition,  agents  warrants were issued to
                  purchase 63,700 common shares at a price of $0.45 on or before
                  March 31, 2003.  Subsequent to December 31, 2002,  the Company
                  issued  382,200  common shares on the exercise of warrants and
                  agents warrants for $171,990;

         ii)      1,777,778 units at a price of $0.45 per unit for cash proceeds
                  of $686,132,  net of share issue costs of $118,868.  Each unit
                  consisted  of one common share of the Company and one warrant.
                  Two  warrants  entitled  the holder to purchase an  additional
                  common  share at a price of $0.54 per share on or before April
                  9, 2003. In addition,  the Company issued 11,111 shares to the
                  agents,  at a price  of  $0.45  per  share.  The  agents  also
                  received agents warrants to purchase  355,556 common shares at
                  a price of $0.54 per share on or before April 9, 2003.

                  During the year ended December 31,  2002,  the Company  issued
                  326,361 common shares on the exercise of 652,722  warrants for
                  $146,862.  Subsequent to December 31, 2002 the Company  issued
                  915,083  common  shares on the exercise of warrants and agents
                  warrants  for  $494,145.   The  remaining   warrants  reserved
                  for3,001 common shares expired without exercise;

         iii)     1,722,222  units  at a price  of  $0.45  per  unit,  for  cash
                  proceeds  of  $751,000,  net of share  issue costs of $24,000.
                  Each unit consisted of one common share of the Company and one
                  warrant.  Each  warrant  entitles  the holder to  purchase  an
                  additional common share of the Company at a price of $0.53 per
                  share on or  before  May 23,  2003 and  $0.60  per share on or
                  before May 23, 2004. The agents also received  agents warrants
                  to purchase 66,666 common shares at a price of $0.53 per share
                  on or before May 23, 2003.  Certain  directors  have purchased
                  191,111  units.  Subsequent  to December  31, 2002 the Company
                  issued  111,111  common  shares  on the  exercise  of  100,000
                  warrants and 11,111 agents warrants for $58,889; and

                                                                              49

<PAGE>


         iv)      1,554,915  units  at a price of $0.47  for  cash  proceeds  of
                  $698,987,  net of share  issue  costs of  $31,823.  Each  unit
                  consisted  of one common share of the Company and one warrant.
                  Each  warrant  entitles  the holder to purchase an  additional
                  common  share of the  Company at a price of $0.55 per share on
                  or before  September 27, 2003 and $0.60 on or before September
                  27, 2004. The agents also received agents warrants to purchase
                  37,496  common  shares  at a price  of $0.50  per  share on or
                  before  September 27, 2003.  Certain  directors have purchased
                  325,000 units total benefit was $9,700. Subsequent to December
                  31,  2002 the  Company  issued  61,330  common  shares  on the
                  exercise of 60,000  warrants  and 1,330  agents  warrants  for
                  $33,665.

Cash on hand at April 30,  2003 was  approximately  $4,000,000.  During the nine
month  period  from March 31,  2003 to  December  31,  2003,  the Company has no
planned exploration expenditures in Argentina for the Valle del Cura region, the
Gualcamayo  region,  or the NW San Juan  region.  The  Company  plans to  expend
US$500,000  in Argentina on surface work at the Navidad  project,  an additional
US$1,500,000  on drill programs at the Navidad project and US$593,000 on the Rio
Tabaconas project (formerly known as Tamborapa  project) in Peru during the nine
month  period from March 31, 2003 to December 31,  2003.  In  addition,  minimum
property  payments of  approximately US $225,000 are required to maintain all of
the  existing  property  holdings.  See "Item 4.  Information  on the  Company -
Business   Overview  -  Nature  of  the  Company's   Operations   and  Principal
Activities".

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31,2001

The Company  reported a  consolidated  loss of  $1,440,106  ($0.06 per share) in
2002,  an increase of  $558,231  from the loss of $881,875  ($0.06 per share) in
2001. The increase in the loss  experienced by the Company in 2002,  compared to
2001,  was due to a number of factors of which  $512,591  can be  attributed  to
operating expenditures and $45,640 to non-operating items.

As a result of adopting the new section of the  Canadian  Institute of Chartered
Accountants'  Handbook  Section 3870  effective  January 1, 2002 the Company has
recognized  compensation  expense  of  $128,260  for stock  options  granted  to
consultants which is included in the increased operating expenditures.

As a result of extremely  encouraging  results from Phase I drilling in the fall
of 2001, the Company  continued to focus its main exploration  activities on the
Rio  Tabaconas  project  in Peru  for the  first  half of 2002 by  carrying  out
extensive  pre-drill work to further define drill targets on the property's most
advanced  gold zones,  Tablon and Cerro Las Minas.  As a result of the pre-drill
program the potential size of the mineralized zone was significantly expanded. A
substantial  follow  up  Phase  II  drill  program  was  developed  to test  the
identified drill targets.  In order to obtain financing for the work the Company
proceeded  with an extensive  market  awareness  program and investor  relations
campaign  throughout  North  America and Europe with the  assistance  of several
consultants.  During the first six months of 2002 the Company  raised net equity
proceeds of $1,659,827 for further exploration and property payments in Peru and
Argentina and general working capital.

By the middle of the year the Company  acquired an additional 8,000 ha (10,851.3
acres) in Northern Peru and increased its properties in the Patagonia  region in
southern  Argentina  during  the  remainder  of the year to a total of 91,423 ha
(124,007 acres) as compared to 7,650.3 ha (10,377 acres in 2001).

As a result of the Provincial  and Municipal  elections in Peru held in November
2002 and the  substantial  investment  required  to  advance  the Rio  Tabaconas
project through the next exploration  stage, in June 2002 the Company  announced
its  intention  to  take a more  measured  approach  to  exploration  on the Rio
Tabaconas  project  to  ensure  that  all  local  cultural,   developmental  and
environmental  concerns in the region have been addressed . The Company  intends
to conduct further  exploration only after an agreement with the local community
of  Tamborapa  has been  finalize.  Aided by  several  Peruvian  Social-Economic
consultants,  a draft  Company-Community  plan has been prepared and the Company
intends  to  present  the  plan  for  discussion  with  the  community  leaders,
government officials and other interested party leaders in the second quarter of
2003. See "Item 4.  Information on the Company - Business  Overview - Government
Regulations on the Company's Business."

                                                                              50

<PAGE>


In the meantime, the Company devoted its attention to aggressively assessing its
grass roots properties, acquiring and advancing some of the exciting projects in
Argentina such as Las Bayas and lately the Navidad Silver project.

Through  out the  year  exploration  on the  Potrerillos  and Rio de las  Taguas
properties  was on hold  pending a resumption  of  exploration  and  development
activities  at the nearby  Pascua-Lama  and  Veladero  deposits by Barrick  Gold
Corporation.  The property option  agreement due to expire on November 30, 2002,
was  extended  by mutual  consent to allow  Barrick's  technical  team to review
additional  properties of the Company.  Subsequent to the year end,  Barrick and
the Company agreed to extend the Selection Notice Period in the option agreement
from November 30, 2002 to December 30, 2003. In return for the extension Barrick
paid  US$65,000  which  will be used to make  payments  to  maintain  the option
properties in good standing.

As a result of the above  corporate  activities  there were  increases in to the
following  expenses:  (i) Administration and management  services - $4,218; (ii)
Bank charges and interest - $3,028;  (iii)  Corporate  development  and investor
relations - $161,175 of which  $51,417  reflects the cost of full time  investor
relations staff, $51,906 for investor relations consultant,  $30,223 for various
media  advertising and $25,323 for international  and other  conferences;  ( iv)
General  exploration  - $70,446  as a result  of an  aggressive  examination  of
grassroots  properties  mainly in the Patagonia region; ( v ) Printing - $10,171
mainly for investor  presentation  material;  ( vi) Professional  fees - $67,776
which  relates to the  ongoing  North  America  and  European  market  awareness
program;  ( vii )  Salaries  and  employee  benefits  - $998  reflects  a slight
increase  in  administration   wages  and  benefits  cost;  (viii)  Stock  based
compensation - $128,260 for stock options granted to consultants, as required by
the CICA Handbook  Section 3870 effective  January 1, 2002; ( ix ) Telephone and
utilities - $ 9,230 due to the increase in  correspondence  with  Europe,  North
America and South America; ( x ) Transfer agent and regulatory fees - $20,235 as
a result of the increase in equity  financings;  (xi) Travel and accommodation -
$42,745  mainly due to the European  market  awareness  and  investor  relations
program and trips to Peru and Argentina for property negotiations.

The following  expenses decreased for the year (i) Amortization and depreciation
- $1,885;  and (ii) Office and sundry - $3,052 as a result of cost recovery from
a private company sharing office space;  (iii) Rent,  parking and storage - $754
as a result of cost recovery from a private company sharing office space;

During 2002 the Company did not write-off of mineral claims and deferred  costs,
compared  to a write off of $21,483 in 2001.  The  mineral  claims  written  off
during 2001 were 100 % owned by the Company.

Interest and  miscellaneous  income  reported for 2002 was $26,585 a decrease of
$70,695 from $97,280  reported in 2001 as a result of lower  interest rates paid
on funds on deposit and no overhead charge for the  exploration  expenditures on
the Valle del Cura property allowed under the Barrick agreement.

During  2002,  the Company did not dispose of any  Viceroy  common  shares.  The
Company  sold  100,000  Viceroy  shares  in 2001 for cash  proceeds  of  $16,966
resulting  in a loss  or  $6,534.  No  provision  was  required  for  Marketable
Securities for the year ended 2002 as compared to $22,483 in 2001.

The Company's  total assets  increased  from  $5,487,374 at December 31, 2001 to
$7,432,489  at December  31,  2002.  The  increase is  attributed  to the equity
financing  conducted by the Company through four private placements and exercise
of warrants and stock options  issuing  7,958,387  common shares for proceeds of
$3,458,382 before deducting share issue costs of $194,056.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31,2000

The Company reported a consolidated  loss of $881,875 ($0.06 per share) in 2001,
an  decrease of  $1,142,565  from the loss of  $2,024,440  ($0.17 per share ) in
2000. The decrease in the loss  experienced by the Company in 2001,  compared to
2000,  was  due  to an  decrease  in  operating  expenditures  of  $257,840  and
non-operating cost of $884,725.

During the year 2001, the Company focused its main exploration activities on the
Rio Tabaconas properties  (formerly known as Tamborapa  properties) in Peru. The
exploration activities consisted of a pre-drill program during July, followed by
a Phase One,  1,600 meter (30 hole)  diamond  drill  program in  September.  The
Company also carried out a small exploration  program in the Patagonia region by
staking a total of 7,650.3 ha (10,377  acres).  The emphasis


                                                                              51

<PAGE>

from Argentina to Peru resulted in the Company reducing the amount of activities
in corporate development and investor relations and financing for the year.

As a result the following  expenses  decreased in 2001 as compared to 2000:  (i)
Amortization  and depreciation - $7,229 as a result of less additions to capital
assets;  (ii) Corporate  development and investor relations -$90,884 as a result
of a one time media promotion,  $42,340 paid in the previous year and $7,300 due
to attending fewer conferences, $4,000 for reduced new release dissemination and
$37,244 to reflect a reduction in investor  relations staff cost;  (iii) General
exploration - $27,273 as a result of less general  exploration work; (iv) Office
and sundry - $ 3,095; (v) Printing - $9,812;  (vi)  Professional fees -$ 135,808
of which $36,964 related to services provided in Argentina and $80,000 for a one
time cost paid in the previous year and $13,971 due to reduced legal fees; (vii)
Telephone and utilities - $9,667 as a result of less  investor  relations  work;
(viii) Travel and accommodation - $6,798.

The following  expenses  increased during the year 2001 as compared to 2000: (i)
Administration and management services - $1,440 ; (ii) Bank charges and interest
- $ 386; (iii) Rent, parking and storage - $ 4,301 which reflects a full year as
compared to a partial year for the  additional  office space;  (iv) Salaries and
employee   benefits  -  $  25,801  which  reflects  the  cost  of  a  full  time
administrative  assistant and a full year for actual remuneration and applicable
taxes  which  had  been cut back in the  prior  year;  (v)  Transfer  agent  and
regulatory fees - $ 798.

During 2001 the Company wrote off $21,483 of mineral claims and deferred cost as
compared  to  $789,953  in  2000.  The  mineral  claims  were 100 % owned by the
Company.

Interest and  miscellaneous  income  reported for 2001 was $97,280 a decrease of
$59,585 from $156,865  reported in 2000 as a result of lower interest rates paid
on less  funds  on  deposit  and  lower  overhead  charge  for  the  exploration
expenditures on the Valle del Cura property allowed under the Barrick agreement.

During 2001,  the Company  disposed of 100,000  Viceroy  common  shares for cash
proceeds  of  $16,966,  reporting  a loss of $6,534 as compared to a loss of Nil
reported in 2000. A provision for marketable  securities for 2001 of $22,483 was
made as compared to $178,777  reported in 2000 due to fewer  shares held at year
end.

The Company's  total assets  increased  from  $4,979,696 at December 31, 2000 to
$5,487,374  at December  31,  2001.  The  increase is  attributed  to the equity
financing  conducted  by the  Company  through two  private  placements  issuing
5,063,000  common  shares for proceeds of  $1,563,940  with a net  commission of
$100,684.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31,1999

The Company  reported a  consolidated  loss of $2,024,440  ($0.17 per share ) in
2000, an increase of $278,683  from the loss of $1,745,757  ($0.23 per share) in
1999. The increase in the loss  experienced by the Company in 2000,  compared to
1999,  was  due  to an  increase  in  operating  expenditures  of  $102,205  and
non-operating cost of $165,588.

As the Company began a drilling program in the middle of April 2000 on the Valle
del Cura  region of  Argentina,  financed  by  Barrick,  it also  increased  its
activities in seeking additional properties,  corporate development and investor
relations,  and financing. As the exploration season in Argentina came to an end
due to the onset of the winter  season,  the  Company  focused on its  Tamborapa
property in northern Peru carrying out Phase I of the exploration program during
June and July 2000 and a  helicopter-borne  electromagnetic  survey in  November
2000. These activities  resulted in an increase in the following  expenses:  (i)
Corporate development and investor relations - $84,214, $42,340 of which was for
media promotion, $4,000 for news release dissemination, $7,000 to reflect a full
year of investor  relations  staff cost and $30,000 for  corporate  development;
(ii)  Professional  fees - $ 82,414,  $33,450 of which  relates  directly to the
filing cost of a registration statement and $36,964 related to services provided
in Argentina;  (iii) Rent,  parking and storage - $7,944 as a result of increase
in parking  cost of $2,083 and  additional  office space  expenses  beginning in
August of $5,563; and (iv) Salaries and employee benefits - $33,410 , $11,000 of
which reflects the cost of a full time  receptionist  and $22,410 to reflect the
actual  remuneration  and  applicable  taxes which had been cutback in the prior
year.

The following expenses decreased in 2000 as compared to 1999: (i) Administration
and  management  services - $48,940 as a result of a one time  director's fee of
$42,984  paid in the  previous  year  and a  reduction  of  $11,909  paid


                                                                              52

<PAGE>


to KGE  Management  Ltd,  Gerald G.  Carlson and an increase of $20,250  paid to
Nikolaos Cacos the Corporate  Secretary;  (ii) Bank Charges - $5,920 as a result
of fewer wire transfers ; (iii) General exploration - $ 23,188 due to more costs
being  capitalized;  (iv)  Office  and  sundry - $432;  (v)  Printing  - $4,260;
Telephone and utilities - $6,022 due to lower long distance rates and better use
of electronic  mail; (iv) Transfer agent and regulatory  fees - $3,897;  and (v)
Travel and  accommodations  - $13,252 as a result of attending fewer trade shows
and trips to South America.

During 2000 the Company  terminated  option agreements on certain mineral claims
and  accordingly  wrote off  $789,953  of mineral  claims and  deferred  cost as
compared  to $98,628 in 1999.  The option  agreements  terminated  include:  the
Bosque  Property  (Pelambres);  the Munoz  Properties  (Surena,  Teatinos);  the
Rodrigues/Garcia Properties (Calin 1-12); and the Ramos Property (Jaguelito).

Interest and miscellaneous  income reported for 2000 was $156,865 an increase of
$109,634  from $47,231  reported in 1999 largely due to the overhead  charge for
the exploration  expenditures  on the Valle del Cura property  allowed under the
Barrick agreement.

During 2000, the Company did not dispose of any Viceroy common shares, reporting
no loss as  compared to a loss of $161,859  reported  in 1999.  A provision  for
marketable securities for 2000 of $178,777 was made, a decrease of $237,878 from
that reported in 1999 due to a more stable market condition.

LIQUIDITY AND CAPITAL RESOURCES

The Company's  total assets  increased  from  $5,487,374 at December 31, 2001 to
$7,432,489  at  December  31,  2002  primarily  from the sale of equity  for net
proceeds of  $3,264,326  with a net  commission  of $194,056  from four  private
placements  which were  announced on November 26, 2001,  March 20, 2002,  May 2,
2002 and September 23, 2002.

As at March 31, 2003,  the Company had working  capital of  $1,592,081.  For the
remaining  nine months of fiscal 2003, the Company has budgeted no funds for its
remaining exploration commitment for the Valle del Cura region in Argentina, the
Gualcamayo  region,  and the NW San Juan  region.  The  Company  plans to expend
US$500,000  in Argentina on surface work at the Navidad  project,  an additional
US$1,500,000  on drill programs at the Navidad project and US$593,000 on the Rio
Tabaconas project (formerly known as Tamborapa  project) in Peru during the nine
month  period from March 31, 2003 to December 31,  2003.  In  addition,  minimum
property  payments of  approximately US $225,000 are required to maintain all of
the existing property holdings.

The Company  considers  that it has  adequate  resources to maintain its ongoing
operations but currently does not have sufficient working capital to fund all of
its planned exploration work and property commitments. The Company will continue
to rely on successfully completing additional equity financing and/or conducting
joint venture  arrangements to further exploration on its properties.  There can
be no assurance  that the Company will be  successful  in obtaining the required
financing or negotiating  joint venture  agreements.  The failure to obtain such
financing or joint venture agreements could result in the loss of or substantial
dilution of the Company's interest in its properties.

The Company's  management  may elect to acquire new projects,  at which time the
Company may require  additional  equity  financing to fund overhead and maintain
its interests in current  projects,  or may decide to relinquish  certain of its
properties.  These decisions will be based on the results of ongoing exploration
programs  and the  response  of equity  markets to the  Company's  projects  and
business plan.

The  Company had a loss of  $(1,440,106)  for the year ended  December  31, 2002
(2001 -  ($881,875);  2000 -  ($2,024,440)).  The Company has made  additions to
mineral  properties and deferred costs of $1,266,555,  $1,320,777 and $1,989,049
and  capital  assets of $11,201,  $8,012 and $15,321 for the fiscal  years ended
December 31, 2002,  2001,  and 2000.  For the three months ended March 31, 2003,
the Company has made  additions  to mineral  properties  and  deferred  costs of
approximately  $613,656 and no additions to capital  assets.  The Company raised
$3,264,326  for the year ended  December  31,  2002 (2001 -  $1,463,256;  2000 -
$3,380,056 ) from equity financing with a net of $194,056 in share issuance cost
for the year ended December 31, 2002 (2001 - $100,684; 2000 - $103,194 ).

During the fiscal year ended  December  31, 2002 the Company had not  terminated
any option agreements on properties and mineral claims.  During the fiscal years
ended December 31, 2001 and 2000, the Company  terminated  option  agreements on
properties and mineral claims  resulting in the write-off of mineral  properties
and  deferred  costs

                                                                              53

<PAGE>


in the amounts of $21,483 for the year ended  December 31, 2001 and $789,953 for
the year ended December 31, 2000.

The Company  completed a private  placement of 2,900,000 units at $0.90 per unit
for a total amount of $2.61 million.  Each unit consists of one common share and
one half of one common share  purchase  warrant.  Each full warrant will entitle
the holder thereof to purchase one additional common share in the capital of the
Company  for  one  year  at  $1.10  per  share.  The  funds  will be used on its
properties in South American and general working capital.

The  Company  does  not  know of any  trends,  demand,  commitments,  events  or
uncertainties  that will result in, or that are reasonably  likely to result in,
the Company's liquidity either materially increasing or decreasing at present or
in the  foreseeable  future.  Material  increases or decreases in the  Company's
liquidity  are  substantially  determined  by  the  success  or  failure  of the
Company's exploration programs or the acquisition of projects.

The Company  does not now and does not expect to engage in  currency  hedging to
offset any risk of currency fluctuations.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.
--------------------------------------------------------------------------------

DIRECTORS AND SENIOR MANAGEMENT

The name,  positions  held with the Company  and  principal  occupation  of each
director,  officer and  executive  officer of the Company  within the five years
preceding the date of this annual report are as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST            PERIOD OF SERVICE AS A
         NAME, AGE AND POSITION                       FIVE YEARS(1)<F1>                   DIRECTOR/OFFICER(2)<F2>
---------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                    <C>
GERALD G. CARLSON(4)<F4>-                 President and Director of Copper       Chairman since February 15, 1999.
Chairman and Director                     Ridge Exploration Inc., a public
Age 57                                    British Columbia mineral exploration   Director since February 15, 1999.
                                          company from March 2002 to present.
                                          President of Nevada Star Resources
                                          Corp, from March 5,2002 to present.
                                           President and CEO of LaTeko
                                          Resources Ltd. from December 1996 to
                                          February 2002.
---------------------------------------------------------------------------------------------------------------------
JOSEPH GROSSO -                           Director and officer of the Company    President since February 1990.
President, Chief Executive Officer        since February 1990.  President of
and Director                              Oxbow International Marketing Corp.,   Chief Executive Officer since
Age 65                                    a private British Columbia company.    February 1990.

                                                                                 Director since February 1990.
---------------------------------------------------------------------------------------------------------------------
WILLIAM LEE(3)<F3> -                      Chartered Accountant.  CFO of the      Vice-President since June 1996.
Vice-President,                           Company since June 1996.  From
Chief Financial Officer and Director      December 1994 to May 1996,             Chief Financial Officer since June
Age 50                                    Independent Consultant.  From July     1996.
                                          1992 to November 1994, Chief
                                          Financial Officer of Sanctuary Woods   Director since June 1996.
                                          Multimedia Corp., a public British
                                          Columbia company.

---------------------------------------------------------------------------------------------------------------------

                                                                              54
<PAGE>

<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST            PERIOD OF SERVICE AS A
         NAME, AGE AND POSITION                       FIVE YEARS(1)<F1>                   DIRECTOR/OFFICER(2)<F2>
---------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                    <C>
ROBERT BROWN(3) (4)<F3><F4> -             Professional Engineer.  Presently      Director since September 1996.
Director                                  President and director of Findlay
Age 50                                    Minerals Ltd. a mineral exploration
                                          company from July 1999 to present.
                                          VP Exploration and director of Soho
                                          Resources Corp., from May 1997 to
                                          April 2002. Exploration Manager of
                                          the Company from March 1996 to April
                                          1997.

---------------------------------------------------------------------------------------------------------------------
NIKOLAOS CACOS -                          Corporate Secretary and
Corporate Secretary and Director          Vice-President Investor Relations of   Secretary since June 25, 1998.
Age 36                                    the Company since 1993. Director of    Director since June 20, 2002
                                          Info Touch Technologies, a
                                          technology company, since August
                                          1998.  President and CEO of Gatco
                                          Technology Corp. a capital pool
                                          corporation, from May 2000 to Oct.
                                          2001.  President and director of
                                          Amera Resources Corporation, a
                                          private British Columbia company,
                                          since April 2000.
---------------------------------------------------------------------------------------------------------------------
SEAN HURD(3)<F3>  -
Director                                  Investor relations manager for the     Director since September 2001.
Age 36                                    Company from June  2002 to present
                                          and director since September 2001.
                                          Investor relations manager for
                                          Mercury Scheduling Systems Inc. from
                                          August 2001 to March 31, 2002.
                                          Investor relations manager for the
                                          Company from June 2000 to August
                                          2001.  Investor relations for Senate
                                          Capital from February 1996 to May
                                          2002.
---------------------------------------------------------------------------------------------------------------------

<FN>
(1)<F1> Officers and Directors  of the Company  may also serve as  directors  of
        other companies.  See "Conflicts  of Interests" below.
(2)<F2> All  directorships  were  re-elected  for  a period  of one  year at the
        Company's last annual general meeting held on June 20, 2002.
(3)<F3> Denotes members of the Audit Committee.
(4)<F4> Denotes members of the Remuneration Committee.
</FN>
</TABLE>

There are no known  arrangements  or  understandings  between any  directors  or
executive  officers  and any  other  persons  pursuant  to which  the  executive
officers or directors were selected.

CONFLICTS OF INTEREST

There are no existing or potential conflicts of interest among the Company,  its
directors, officers or promoters as a result of their outside business interests
with the  exception  that  certain  of the  Company's  directors,  officers  and
promoters serve as directors,  officers and promoters of other  companies,  and,
therefore,  it is possible  that a conflict may arise  between their duties as a
director,  officer or promoter of the Company and their  duties as a director or
officer of such other companies.

                                                                              55

<PAGE>

The  directors  and  officers of the Company are aware of the  existence of laws
governing accountability of directors and officers for corporate opportunity and
requiring disclosures by directors of conflicts of interest and the Company will
rely upon such laws in respect of any  directors'  and  officers'  conflicts  of
interest  or in  respect  of any  breaches  of duty by any of its  directors  or
officers.  All such conflicts will be disclosed by such directors or officers in
accordance  with the  Company  Act and they will  govern  themselves  in respect
thereof to the best of their ability in accordance with the obligations  imposed
upon them by law.

All of the Company's  directors are also directors,  officers or shareholders of
other  companies  that are engaged in the business of acquiring,  developing and
exploiting natural resource properties  including  properties in countries where
the Company is conducting its  operations.  Such  associations  may give rise to
conflicts of interest from time to time. Such a conflict poses the risk that the
Company may enter into a transaction on terms which place the Company in a worse
position than if no conflict existed.  The directors of the Company are required
by law to act honestly and in good faith with a view to the best interest of the
Company  and to  disclose  any  interest  which they may have in any  project or
opportunity of the Company.  However,  each director has a similar obligation to
other  companies for which such director  serves as an officer or director.  The
Company has no specific internal policy governing conflicts of interest.

The following table  identifies the name of each director of the Company and any
company,  which is a  reporting  issuer in Canada,  and for which such  director
currently serves as an officer or director:

<TABLE>
<CAPTION>
NAME OF DIRECTOR                    NAME OF COMPANY                           POSITION              TERM OF SERVICE
----------------                    ---------------                           --------              ---------------
<S>                                 <C>                                       <C>                   <C>
Gerald G. Carlson                   Copper Ridge Explorations                 President/Director    Feb/99 to present
                                    Nevada Star Resources Corp.               President/Director    Feb/02 to present
                                    Dentonia Resources Ltd.                   Director              Feb/94 to present
                                    Fairfield Minerals Ltd.                   Director              Jul/98 to present
                                    Orphan Bay Resources Inc.                 Director              Nov/00 to present

                                    Finlay Minerals Ltd.                      President/Director    July/99 to present
Robert Brown                        Soho Resources Corp                       Director              Jan/82 to April/02

William Lee                         Hilton Petroleum Ltd.                     Director              Sep/95 to present
                                    QDM Ventures Ltd.                         Director              May/00 to Sept/01
                                    Silver Arrow Explorations Inc.            Director              Jan/01 to July /01
                                    Aladdin Resource Corp.                    Director              July/01 to Mar /03
                                    Desert Holdings Inc.                      Director              Oct/ 02 to Jan/03
                                    Tinka Resources Limited                   Director              Jan/03 to present

Joseph Grosso                       Mr. Grosso is not an officer or
                                    director of any other public company.


Sean Hurd                           Mr. Hurd is not an officer or director
                                    of any other public company.

</TABLE>

COMPENSATION

During the fiscal year ended  December 31, 2002,  the  directors and officers of
the Company, as a group, had received or charged the Company a total of $326,326
(2001  $326,707;  2000 - $367,142)  for services  rendered by the  directors and
officers or companies owned by the individuals.

The Company is required,  under applicable securities  legislation in Canada, to
disclose to its shareholders  details of compensation  paid to its directors and
officers.  The  following  fairly  reflects all material  information  regarding
compensation  paid  by  the  Company  to  its  directors  and  officers,   which
information has been disclosed to the Company's  shareholders in accordance with
applicable Canadian law.

                                                                              56
<PAGE>


EXECUTIVE COMPENSATION

"Named  Executive  Officers" means the Chief  Executive  Officer of the Company,
regardless of the amount of  compensation  of that  individual,  and each of the
Company's four most highly compensated executive officers,  other than the Chief
Executive Officer, who were serving as executive officers at the end of the most
recent fiscal year. In addition,  disclosure is also required for any individual
whose total  salary and bonus  during the most  recent  fiscal year was at least
$100,000,  whether or not they were an executive  officer at the end of the most
recent fiscal year.

The Company has two Named Executive Officers, Joseph Grosso and William Lee. The
following table sets forth all annual and long-term  compensation  awarded, paid
to or earned by the  Company's  Named  Executive  Officers  during the financial
years ended December 31, 2002, 2001 and 2000.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                    Annual Compensation                 Long-Term Compensation
                                                                 -------------------------------------
                                                                       Awards            Payouts
------------------------------------------------------------------------------------------------------------------
Name and            Year      Salary      Bonus       Other      Securities    Restricted     LTIP       All other
Principal                       ($)        ($)        Annual        Under      Shares or     Payouts     Compensa-
Position                                             Compensa-     Options     Restricted      ($)          tion
                                                       tion      Granted (#)   Share Units
                                                       ($)                        ($)
-------------------------------------------------------------------------------------------------------------------
<S>                 <C>       <C>           <C>         <C>        <C>             <C>          <C>          <C>
Joseph Grosso,      2002      102,000       -           -          500,000         -            -            -
President and       2001      102,000                              300,000
Chief Executive     2000      102,000                              148,029
Officer (1)<F1>
-------------------------------------------------------------------------------------------------------------------
William Lee,        2002       72,000       -           -          150,000         -            -            -
Chief Financial     2001       72,000                              100,000
Officer             2000       68,206                               50,000
-------------------------------------------------------------------------------------------------------------------

<FN>
 (1)<F1> Pursuant  to  a  contract for  corporate  and administrative  services,
         entered into July 1, 1996, between the Company and Oxbow  International
         Marketing Corp.  ("Oxbow"),  a private  company owned by Joseph Grosso,
         the Company has agreed to retain  Oxbow at a monthly  fee of $8,500 per
         month.  The  contract expired  June  30,1999 and has been renewed on an
         annual  basis and subsequent to  December 31,  2002 a new  contract was
         finalized.  The monthly compensation remained unchanged.
</FN>
</TABLE>

LONG TERM INCENTIVE PLAN AWARDS

Long Term Incentive Plan Awards  ("LTIP") means any plan providing  compensation
intended to serve as an incentive for  performance to occur over a period longer
than one fiscal year whether  performance  is measured by reference to financial
performance  of the  Company or an  affiliate  of the  Company,  or the price of
shares of the Company but does not include option or stock  appreciation  rights
plans or plans for compensation  through restricted shares or units. The Company
has not  granted  any  LTIP's to the Named  Executive  Officers  during the most
recently completed fiscal year.

OPTIONS AND STOCK APPRECIATION RIGHTS

Stock Appreciation  Rights ("SAR's") means a right,  granted by an issuer or any
of its subsidiaries as compensation for services  rendered or in connection with
office or  employment,  to receive a payment of cash or an issue or  transfer of
securities based wholly or in part on changes in the trading price of the shares
of the Company.  No SAR's were  granted to or  exercised by the Named  Executive
Officers or directors during the most recently completed fiscal year.

OPTION GRANTS

The following table sets forth  information  concerning stock options granted to
the Named Executive Officers during the most recently completed fiscal year:


                                                                              57

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                    MARKET VALUE OF
                          SECURITIES        % OF TOTAL                                 SECURITIES
                            UNDER             OPTIONS                                  UNDERLYING
                           OPTIONS          GRANTED TO           EXERCISE OR        OPTIONS ON DATE
                           GRANTED         EMPLOYEES IN          BASE PRICE             OF GRANT
        NAME                 (#)          FISCAL YEAR(1)<F1>   ($/SECURITY)(2)<F2>    ($/SECURITY)      EXPIRATION DATE
         (a)                 (b)                (c)                  (d)                  (e)                 (f)
------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                <C>                   <C>                   <C>         <C>
Joseph Grosso              200,000            19.70%                0.50                  0.50        Sept. 23,2007
President

William Lee                 50,000             4.76%                0.50                  0.50        May 2, 2007
Chief Financial
Officer
-----------------------------------------------------------------------------------------------------------------------
<FN>
(1)<F1>  Percentage of all options granted in the period.
(2)<F2>  The  exercise  price  of  the option is the market  value of the common
         shares of the Company on the date of grant.  The  exercise price may be
         adjusted under certain circumstances, subject to regulatory acceptance.
</FN>
</TABLE>

AGGREGATED OPTION EXERCISES AND OPTION VALUES

The following  table sets forth details of all exercises of stock options by the
Named Executive  Officers during the most recently completed fiscal year and the
fiscal year-end value of unexercised options on an aggregated basis:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                          VALUE OF UNEXERCISED
                                                                UNEXERCISED                   IN-THE-MONEY
                      SECURITIES                             OPTIONS AT FISCAL                   OPTIONS
                      ACQUIRED ON       AGGREGATE                YEAR-END                 AT FISCAL YEAR-END(1)<F1>
                       EXERCISE       VALUE REALIZED     EXERCISABLE/UNEXERCISABLE      EXERCISABLE/UNEXERCISABLE
       NAME               (#)              ($)                      (#)                            ($)
------------------------------------------------------------------------------------------------------------------
<S>                       <C>              <C>                  <C>                              <C>
Joseph Grosso             Nil              Nil                  500,000/Nil                      $55,000
------------------------------------------------------------------------------------------------------------------

William Lee               Nil              Nil                  150,000/Nil                      $17,500
------------------------------------------------------------------------------------------------------------------

<FN>
(1)<F1>  Value of unexercised in-the-money  options calculated using the closing
         price of the shares of the Company on the  TSX-V on  December 31, 2002,
         $0.55, less the exercise price per share of in-the-money stock options.
</FN>
</TABLE>

PENSION PLAN

The Company  does not provide  retirement  benefits  for  directors or executive
officers.

AGREEMENTS RELATING TO TERMINATION OF EMPLOYMENT OR CHANGES IN RESPONSIBILITY

Except  as  described  below,  the  Company  does  not have  any  employment  or
consulting  agreements  that  provide  for  any  benefits  upon  termination  of
employment.  The Company has no plans or arrangements in respect of remuneration
received or that may be received by the Named Executive Officer in the Company's
most  recently  completed  fiscal  year or  current  fiscal  year in  respect of
compensating  such  officers in the event of  termination  of  employment  (as a
result  of  resignation,  retirement,  change of  control,  etc.) or a change in
responsibilities  following  a  change  of  control,  where  the  value  of such
compensation exceeds $100,000 per Named Executive Officer.

Mr.  Grosso's  services are provided  through a consulting  agreement with Oxbow
International  Marketing  Corp.  ("Oxbow") made as of July 1, 1999. The contract
calls for the monthly payment of $8,500 and a further contingent monthly payment
of $6,500,  which  amount is only  payable  on change of control or  termination
without  cause.  Under  the terms of the  contract  in the  event  that  Oxbow's
services  are  terminated  without  cause or upon a change  of  control,


                                                                              58

<PAGE>

then a  termination  payment is due. The  termination  payment would include all
contingent  amounts  plus 3 years  at  $15,000  per  month.  The new  consulting
agreement was approved by the Board of Directors  excluding Mr. Joseph Grosso on
April 17, 2003.

COMPENSATION OF DIRECTORS

There are no arrangements  under which directors were compensated by the Company
during the most recently  completed  financial year ended December 31, 2002, for
their services in their capacity as directors.  The Company does have employment
agreements with certain directors. See "Compensation - Employment Contracts" and
"Item 7. Interest of Management in Certain Transactions".

The service of Robert Brown, in his capacity as consultant, is made available to
the Company by R.F.B. Geological Inc. ("RFB"), a private company owned by Robert
Brown,  for cash on a per diem  basis.  For the last  completed  financial  year
ending December 31, 2002 $1,276 (2001 - $1,850;  2000 - $1,140) was paid to RFB.
See "Item 7. Interest of Management in Certain Transactions".

The following table sets forth  information  concerning stock options granted to
directors  who are  not  Named  Executive  Officers  during  the  most  recently
completed fiscal year:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                    MARKET VALUE OF
                                           % OF TOTAL                                 SECURITIES
                         SECURITIES         OPTIONS                                   UNDERLYING
                            UNDER          GRANTED TO          EXERCISE OR          OPTIONS ON DATE
                           OPTIONS        EMPLOYEES IN         BASE PRICE              OF GRANT
        NAME             GRANTED (#)     FISCAL YEAR(1)<F1>  ($/SECURITY)(2)<F2>     ($/SECURITY)        EXPIRATION DATE
         (a)                 (b)              (c)                  (d)                    (e)                  (f)
------------------------------------------------------------------------------------------------------------------------
<S>                        <C>               <C>               <C>                       <C>              <C>
Sean Hurd                  60,000            5.71%             0.50                      0.50              May 2 , 2007

Nikolaos Cacos             20,000            1.90 %            0.50                      0.50               May 2,2007
                           100,000           9.52 %            0.50                      0.50             Sept. 23,2007

Robert Brown               50,000            4.76 %            0.50                      0.50             Sept. 23,2007
------------------------------------------------------------------------------------------------------------------------

<FN>
(1)<F1>  Percentage of all options granted in the period.
(2)<F2>  The  exercise  price  of  the option is the market  value of the common
         shares of the Company on the date of grant. The  exercise  price may be
         adjusted under certain circumstances, subject to regulatory acceptance.
</FN>
</TABLE>

The following table sets forth details of all securities acquired, the aggregate
value  realized  and the  fiscal  year  end  number  and  value  of  unexercised
options/SARs held by current directors of the Company:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                          VALUE OF UNEXERCISED
                         SECURITIES       AGGREGATE       UNEXERCISED OPTIONS AT          IN-THE-MONEY OPTIONS
                         ACQUIRED ON        VALUE             FISCAL YEAR-END              FISCAL YEAR-END(1)
                          EXERCISE        REALIZED       EXERCISABLE/UNEXERCISABLE      EXERCISABLE/UNEXERCISABLE
        NAME                 (#)             ($)                    (#)                            ($)
------------------------------------------------------------------------------------------------------------------
<S>                        <C>             <C>                 <C>                              <C>

Robert Brown               50,000          $21,500              50,000/Nil                       $2,500

Gerald G. Carlson            Nil             N/A               200,000/Nil                      $30,000

Nikolaos Cacos             100,000         $43,000             120,000/ Nil                      $6,000

Sean Hurd                    Nil             N/A                60,000/ Nil                      $3,000

------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)      Value of unexercised in-the-money  options calculated using the closing
         price of the shares of the Company on the  TSX-V on  December 31, 2002,
         $0.55, less the exercise price per share of in-the-money stock options.


                                                                              59
<PAGE>

PROPOSED COMPENSATION

The Company has no bonus,  profit  sharing or similar plans in place pursuant to
which cash or non-cash compensation is proposed to be paid or distributed to the
Named Executive Officers in the current or subsequent fiscal years.

EMPLOYMENT CONTRACTS

By  agreement  dated  January 1, 1996,  and as amended July 22, 1996 and July 1,
1999, Joseph Grosso, an officer and director of the Company, is paid a salary of
$8,500 per month through Oxbow.  Subsequent to the year end a new contract dated
as of July 1,1999 was approved by the Board. Under the terms of the contract,  a
termination  payment is due in the event that Oxbow's  services  are  terminated
without cause or upon a change of control. The termination payment would include
all  contingent  amounts plus 3 years at $15,000 per month.  This  amendment was
approved  on April  17,  2003 by the Board of  Directors  excluding  Mr.  Joseph
Grosso.  During the fiscal year ended December 31, 2002, Oxbow was paid $102,000
( 2001 -  $100,200;  2000 -  $102,000  ). See "Item 7.  Major  Shareholders  and
Related Party Transactions".

By agreement dated June 21, 1996, as amended December 10, 1996,  William Lee, an
officer  and  director  of the  Company,  is paid a salary of $6,000  per month.
During the fiscal year ended  December 31, 2002, Mr. Lee was paid $72,000 ( 2001
- $72,000;  2000 -$68,206;).  See "Item 7. Major  Shareholders and Related Party
Transactions".

By agreement dated January 1, 1996, as amended  December 10, 1996 and August 22,
2001, Nikolaos Cacos, an officer and director of the Company, is paid a retainer
of $5,500 per month.  During the fiscal year ended  December 31, 2002, Mr. Cacos
was  paid  $66,000  ( 2001 -  $66,000;  2000 -  $52,250).  See  "Item  7.  Major
Shareholders and Related Party Transactions".

By agreement  dated  February 15, 2001,  between the Company and KGE  Management
Ltd.  ("KGE  Management"),  Gerald G.  Carlson,  an officer and  director of the
Company,  was paid a  consulting  fee of $36,000 per year,  plus $550 per day if
services are rendered for more than five days per month,  through KGE Management
Ltd.  During the fiscal year ended  December 31, 2002,  the Company paid $33,000
(2001-$33,000;  2000 - $34,749) to Mr. Carlson pursuant to the agreement between
the Company and KGE Management.  The agreement  expired January 14, 2001 and has
been renewed until June 18, 2003. By mutual agreement on October 3, 2002 the fee
was changed to $2,000 per month plus $550 per day if services  are  rendered for
more than four days per month. See "Item 7. Major Shareholders and Related Party
Transactions".

BOARD PRACTICES

REMUNERATION COMMITTEE

The board of directors of the Company has adopted  procedures to ensure that all
employment,  consulting or other compensation agreements between the Company and
any  director  or senior  officer of the  Company or between  any  associate  or
affiliate of the Company and any director or senior  officer are  considered and
approved by the  disinterested  members of the board of directors or a committee
of independent directors.

Messrs. Carlson and Brown, members of the Board of Directors, and Mr. DeMare, an
independent  advisor  and a former  director  of the  Company are members of the
Remunration Committee.

AUDIT COMMITTEE

The Company's Audit Committee must be comprised of at least three directors, the
majority of whom are not employees, control persons or members of the management
of the Company or any of its  associates or  affiliates.  As of the date of this
report,  Messrs.  Lee, Brown and Heard are members of the Audit  Committee.  The
board of directors of the Company,  after each annual shareholder'  meeting must
appoint or re-appoint an audit committee.

The Audit Committee must review the annual  financial  statements of the Company
before they are approved by the board of directors of the Company.  The board of
directors of the Company must review, and if considered

                                                                              60

<PAGE>


appropriate,  approve the annual  financial  statements  of the  Company  before
presentation  to the  shareholders  of  the  Company.  In  addition,  the  Audit
Committee is responsible for:

         -        Retaining the external auditors and communicating to them that
                  they are ultimately accountable to the Committee and the Board
                  as the representatives of the shareholders;

         -        Reviewing  the  external  audit  plan and the  results  of the
                  audit,  approves  all  audit  engagement  fees and  terms  and
                  pre-approves  all  non-audit  services to be  performed by the
                  external auditor;

         -        Reviewing  the  Company's  financial  statements  and  related
                  management's   discussion   and  analysis  of  financial   and
                  operating results; and

         -        Having  direct  communication   channels  with  the  Company's
                  auditors.

The Audit  Committee's  mandate  requires that all of the members be financially
literate and at least one member have accounting or related financial management
expertise.  The mandate of the Committee empowers it to retain legal, accounting
and other advisors.

EMPLOYEES

As of December  31,  2002,  the Company had eight  full-time  employees  and two
part-time  employees in the area of management and administration  compared with
seven full-time  employees and one part-time  employee in the area of management
and  administration  at December 31, 2001 and 2000.  Exploration  activities are
conducted by consultants, laborers and technicians hired for the duration of the
exploration program.

SHARE OWNERSHIP

As of April 30,  2002,  the  Company  had  32,542,130  shares  outstanding.  The
following  table sets forth details of all employee share ownership and includes
information  regarding the date of expiration or any options or warrants held by
each employee;  the exercise price of the particular option or warrant held; the
total number of options and warrants held by each employee;  the total number of
shares held by each employee; and each employee's percentage of ownership:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
NAME               DATE OF            OPTION/          TOTAL            TOTAL WARRANTS   TOTAL SHARES    PERCENTAGE
                   EXPIRATION OF      WARRANT          OPTIONS          HELD(2)<F2>      HELD            OWNERSHIP(1)<F1>
                   OPTIONS/           EXERCISE         HELD(2)<F2>
                   WARRANTS           PRICE
----------------------------------------------------------------------------------------------------------------------
<S>                <C>                <C>              <C>              <C>              <C>             <C>
Joseph Grosso      7/19/06            $0.40            300,000          -0-              470,724         4.85 %
                   9/23/07            $0.50            200,000
                   5/23/03            $0.53 ($0.60)                     161,111
                   (5/23/04) (3)<F3>
                   9/15/04            $0.75                             172,400
                   9/27/03            $0.55 ($0.60)                     150,000
                   (9/27/04) (4)<F4>
                   4/28/04            $1.10                             125,000
----------------------------------------------------------------------------------------------------------------------
Gerald Carlson     7/19/06            $0.40            200,000                           45,000          0.82 %
                   4/28/04            $1.10                             22,500
----------------------------------------------------------------------------------------------------------------------
William Lee        7/19/06            $0.40            100,000          -0-              41,438          0.85%
                   5/02/07            $0.50            50,000
                   3/08/07            $0.84            50,000
                   5/23/03            $0.53 ($0.60)                     25,000
                   (5/23/04) (3)<F3>
                   4/28/04            $1.10                             10,000
----------------------------------------------------------------------------------------------------------------------
Robert Brown       9/23/07            $0.50            50,000           -0-              -0-             0.15 %
----------------------------------------------------------------------------------------------------------------------

                                                                              61

<PAGE>


<CAPTION>
----------------------------------------------------------------------------------------------------------------------
NAME               DATE OF            OPTION/          TOTAL            TOTAL WARRANTS   TOTAL SHARES    PERCENTAGE
                   EXPIRATION OF      WARRANT          OPTIONS          HELD(2)<F2>      HELD            OWNERSHIP(1)<F1>
                   OPTIONS/           EXERCISE         HELD(2)<F2>
                   WARRANTS           PRICE
----------------------------------------------------------------------------------------------------------------------
<S>                <C>                <C>              <C>              <C>              <C>             <C>

Nikolaos Cacos     7/19/06            $0.40            37,500           -0-              32,151          0.32 %
                   5/2/07             $0.50            20,000
                   9/23/07            $0.50
                   4/28/04            $1.10                             15,000
----------------------------------------------------------------------------------------------------------------------
Sean Hurd          7/19/06            $0.40                                              100,000         0.46 %
                   5/2/07             $0.50
                   4/28/04            $1.10                             50,000
------------------====================================================================================================
Total Holdings                                         1,007,500        731,011          689,313         8.7%
by Directors and
Management
----------------------------------------------------------------------------------------------------------------------
<FN>
(1)<F1>  Where persons listed on this table have the right to obtain  additional
         shares of Common  Stock  through  the  exercise  of options or warrants
         within 60 days from April 30, 2003, these additional  shares are deemed
         to be outstanding for the purpose of computing the percentage of common
         shares owned by such persons,  but are not deemed to be outstanding for
         the purpose of  computing  the  percentage  owned by any other  person.
         Based on 32,542,130 common shares outstanding as of April 30, 2003.

(2)<F2>  All options  and  warrants  listed are  exercisable  to acquire  common
         shares of the Company.

(3)<F3>  Warrants may be  exercised  at an exercise  price of $0.53 on or before
         May 23, 2003 and thereafter at $0.60 on or before May 23, 2004.

(4)<F4>  Warrants may be  exercised  at an exercise  price of $0.55 on or before
         September 27, 2003 and  thereafter at $0.60 on or before  September 27,
         2004.
</FN>
</TABLE>

STOCK OPTION PLAN

As of April 30, 2003, the Company had granted a number of stock options,  issued
a number of warrants and entered into a number of  agreements  pursuant to which
up to 10,849,650 common shares of the Company may be issued.  The following is a
brief summary of these stock options, warrants and agreements.

STOCK OPTIONS

Stock Options to purchase  securities  from the Company are granted to directors
and  employees  of  the  Company  on  terms  and  conditions  acceptable  to the
regulatory  authorities  in Canada,  notably the TSX-V.  Stock  options  must be
approved by the Company's shareholders at an Annual General Meeting. The Company
has no formal written stock option plan.

Under the stock  option  program,  stock  options for up to 10% of the number of
issued and outstanding  shares of common stock may be granted from time to time,
provided that stock options in favor of any one  individual may not exceed 5% of
the issued and outstanding shares of common stock. No stock option granted under
the stock option program is  transferable  by the optionee other than by will or
the laws of  descent  and  distribution,  and each stock  option is  exercisable
during the lifetime of the optionee only by such optionee.

The exercise  price of all stock options  granted under the stock option program
must be at least equal to the fair market  value of such shares of common  stock
on the date of grant,  and the maximum  term of each stock option may not exceed
five years.

                                                                              62

<PAGE>


The exercise  prices for stock options were  determined in accordance with TSX-V
guidelines and reflect the average  closing price of the Company's  common stock
for the ten trading days on the TSX-V  immediately  preceding  the date on which
the directors granted and publicly announced the stock options.

As of April 30,  2003,  the  Company  had  granted  an  aggregate  of  2,352,000
non-transferable incentive stock options to the following persons:

<TABLE>
<CAPTION>
                                                                                                 MARKET VALUE ON
                          NATURE                     NUMBER       EXERCISE      EXPIRATION        DATE OF GRANT
OPTIONEE                  OF OPTION(1)<F1>          OF SHARES       PRICE          DATE           OR REPRICING
<S>                       <C>                        <C>            <C>        <C>                    <C>

N. Cacos                  Director                    37,500        $0.40       July 19/06            $0.40
                                                      20,000        $0.50         May 2/07            $0.50


J. Grosso                 Director                   300,000        $0.40       July 19/06            $0.40
                                                     200,000        $0.50      Sept. 23/07            $0.50

N. DeMare(2)<F2>          Employee                    12,500        $0.40       July 19/06            $0.40
                                                      50,000        $0.50      Sept. 23/07            $0.50
                                                      25,000        $0.84         Mar.7/08            $0.84

E. Grosso                 Employee                    75,000        $0.40       July 19/06            $0.40
                                                      67,500        $0.50      Sept. 23/07            $0.50

A. Sanchez                Employee                     5,000        $0.40       July 19/06            $0.40
                                                      15,000        $0.84         Mar.7/08            $0.84

I. Chiarantano            Employee                   180,000        $0.40       July 19/06            $0.40
                                                      80,000        $0.50         May 2/07            $0.50

B. L. Moody               Employee                     6,250        $0.40       July 19/06            $0.40

A. Smith                  Employee                     2,500        $0.40       July 19/06            $0.40
H. Lim                    Employee                     4,400        $0.40       July 19/06            $0.40
W. Lee                    Director                   100,000        $0.40       July 19/06            $0.40
                                                      50,000        $0.50         May 2/07            $0.50
                                                      50,000        $0.84         Mar.7/08            $0.84

M. Briones                Employee                     4,250        $0.40       July 19/06            $0.40
                                                       7,000        $0.84         Mar.7/08            $0.84

R. Brown                  Director                    50,000        $0.50       Sept 23/07            $0.50
J. C. Berretta            Employee                    78,500        $0.40       July 19/06            $0.40
                                                      21,500        $0.84         Mar.7/08            $0.84
Chase Mangement(3)<F3>    Employee                    27,500        $0.40       July 19/06            $0.40

L. Bottomer               Employee                    20,000        $0.40       July 19/06            $0.40

G. Carlson                Director                   200,000        $0.40       July 19/06            $0.40

M. Saldana                Employee                    50,000        $0.40       July 19/06            $0.40
                                                      25,000        $0.84         Mar.7/08            $0.84



                                                                              63

<PAGE>

<CAPTION>
                                                                                                 MARKET VALUE ON
                          NATURE                     NUMBER       EXERCISE      EXPIRATION        DATE OF GRANT
OPTIONEE                  OF OPTION(1)<F1>          OF SHARES       PRICE          DATE           OR REPRICING
<S>                       <C>                        <C>            <C>        <C>                    <C>

P. Storelli               Employee                    10,000        $0.40       July 19/06            $0.40
M. DeSimone               Employee                   125,100        $0.40       July 19/06            $0.40
                                                      80,000        $0.50         May 2/07            $0.50
I. Saldana                Employee                    50,000        $0.50         May 2/07            $0.50
Bruno Faccin              Employee                    10,000        $0.50         May 2/07            $0.50
J. Dennee                 Employee                    10,000        $0.50         May 2/07            $0.50
C. Smyth                  Employee                   150,000        $0.50         May 2/07            $0.50
K. Patterson              Employee                    50,000        $0.50       Sept 23/07            $0.50
                                                      50,000        $0.84         Mar.7/08            $0.84
A.Montgomery              Employee                    20,000        $0.50       Sept 23/07            $0.50
J. Caplan                 Employee                     2,500        $0.50       Sept 23/07            $0.50
D. Charchaflie            Employee                    30,000        $0.84         Mar.7/08            $0.84

                          TOTAL                    2,352,000
                                                   =========
Officers and directors,                            1,007,500
as a group (6 persons)                             ---------


<FN>
(1)<F1>  Pursuant  to the rules of the  TSX-V,  the  Company  has  issued  stock
         options to employees,  directors, and consultants. The Company, for the
         purposes of issuing stock options, designates consultants as employees;
         therefore,  certain  persons  designated  as  employees  are,  in fact,
         consultants.

(2)<F2>  The Company granted Nick DeMare options to acquire common shares during
         his tenure as director.  Mr. DeMare resigned as director of the Company
         effective September 11, 2001.

(3)<F3>  Mr.  DeMare,  a former  director of the Company,  also holds options to
         acquire common shares of the Company through Chase  Management  Ltd., a
         private company indirectly wholly-owned by Mr. DeMare.
</FN>
</TABLE>

WARRANTS AND OTHER COMMITMENTS

As of April 30, 2003, there were non-transferable common share purchase warrants
exercisable for the purchase of 8,497,650 common shares, as follows:


            NUMBER OF SHARES      EXERCISE PRICE      EXPIRATION DATE

               1,397,167              $0.90           March 16, 2005
                 637,000              $0.75           April 19, 2005
               1,551,000              $0.75           September 15, 2004
                  36,166              $0.50           September 27, 2003
               1,454,915              $0.55           September 27, 2003
                                      $0.60           September 27, 2004
               1,622,222              $0.53           May 23, 2003
                                      $0.60           May 23, 2004
                  55,555              $0.53           May 23, 2003
                 195,750              $0.90           April 28, 2004
                  97,875              $1.10           April 28, 2004
               1,450,000              $1.10           April 28, 2004
            ----------------
               8,497,650              TOTAL
            ================


As of  April  30,  2003,  the  Company's  officers  and  directors,  as a group,
including  entities  controlled or under  significant  influence of officers and
directors  of the  Company,  held  warrants  to  purchase  up to  731,011 of the
Company's common shares.

                                                                              64

<PAGE>


There are no  assurances  that the options,  warrants or other rights  described
above will be exercised in whole or in part.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
--------------------------------------------------------------------------------

PRINCIPAL HOLDERS OF VOTING SECURITIES

The following table sets forth certain  information  regarding  ownership by the
Company's  officers  and  directors  as a group,  as well as all persons who own
greater than 5% of the Company's outstanding shares, as of April 30, 2002:

<TABLE>
<CAPTION>
                                                           AMOUNT              PERCENT OF
TITLE OF CLASS     IDENTITY OF PERSON OR GROUP              OWNED               CLASS(1)<F1>
<S>                <C>                                   <C>                     <C>
Common Stock       Barrick Gold Corporation              3,000,000                9.22%
Common Stock       Prudent Bear Funds, Inc.              3,963,774               12.18%
Common Stock       Joseph Grosso                         1,579,235(2)<F2>         4.85%
Common Stock       Officers and Directors, as a group      848,589(3)<F3>         2.61%

<FN>
(1)<F1>  Where persons listed on this table have the right to obtain  additional
         shares of Common  Stock  through  the  exercise  of options or warrants
         within 60 days from April 30, 2003, these additional  shares are deemed
         to be outstanding for the purpose of computing the percentage of common
         shares owned by such persons,  but are not deemed to be outstanding for
         the purpose of  computing  the  percentage  owned by any other  person.
         Based on 32,542,130 common shares outstanding as of April 30, 2003.

(2)<F2>  Includes  options  and  warrants  held by Joseph  Grosso to  acquire an
         additional 1,108,511 common shares.

(3)<F3>  Includes  options and warrants  held by officers  and  directors of the
         Company to acquire an additional 630,000 common shares.
</FN>
</TABLE>

The  Company's  major  shareholders  have the same  voting  rights  as all other
shareholders.

CHANGES IN OWNERSHIP BY MAJOR SHAREHOLDERS

In August 1999, Barrick Gold Corporation ("Barrick") acquired, through a private
placement, 1.5 million units at a price of $1.00 per unit. Each unit consists of
one common  share in the capital  stock of the Company and one  non-transferable
share purchase warrant, entitling Barrick to purchase an additional common share
for a period  of one year at a price of $1.50  per  share.  On April  19,  2000,
Barrick exercised  warrants at $1.50 to purchase an additional 350,000 shares of
the Company.  On August 16, 2000,  Barrick exercised their remaining warrants to
buy 1,150,000  common shares of the Company.  As of April 30, 2003 Barrick owned
3,000,000 common shares of the Company (9.22%).

On April 28,  2003,  Prudent  Bear Funds,  Inc.  advised the Company that it had
acquired  control  and  direction,  through  Prudent  Bear Fund,  a mutual  fund
controlled by it, over 818,500 of the Company's common shares.  This resulted in
Prudent  Bear  Funds,  Inc.  having  ownership  of and  control  over a total of
3,209,637 common shares together with warrants to purchase an additional 754,137
common  shares.  As of April 30, 2003, if such warrants were  exercised  Prudent
Bear Funds,  Inc. would have control and direction of 3,963,774 common shares of
the Company (12.18%).

SHARES HELD IN THE UNITED STATES

As of March 31,  2003 there were  approximately  187  registered  holders of the
Company's  shares in the United  States,  with  combined  holdings of  4,481,488
shares (15.7% of the 28,616,862 outstanding shares at March 31, 2003).


                                                                              65

<PAGE>



CHANGE OF CONTROL

As of April 30, 2003, there were no arrangements  known to the Company which may
at a subsequent date result in a change of control of the Company.

CONTROL BY OTHERS

To the  best  of the  Company's  knowledge,  the  Company  is  not  directly  or
indirectly owned or controlled by another  corporation,  any foreign government,
or any other natural or legal person.

RELATED PARTY TRANSACTIONS

Other than as disclosed below,  from January 1, 2002 through March 31, 2003, the
Company did not enter into any transactions or loans between the Company and any
(a) enterprises that directly or indirectly through one or more  intermediaries,
control or are controlled by, or are under common control with the Company;  (b)
associates;  (c) individuals owning, directly or indirectly,  an interest in the
voting  power of the  Company  that gives them  significant  influence  over the
Company,  and close members of any such individual's  family; (d) key management
personnel and close members of such individuals' families; or (e) enterprises in
which  a  substantial  interest  in the  voting  power  is  owned,  directly  or
indirectly by any person  described in (c) or (d) or over which such a person is
able to exercise significant influence.

      1.  The Company  shares office  facilities,  capital  assets and personnel
          with  IMPSA.  During the fiscal  year ended  December  31,  2002,  the
          Company  charged  IMPSA - $0 ( 2001 - $0;  2000 - $0). As of March 31,
          2003,  there  have  been no other  charges  to  IMPSA.The  Company  on
          September 1, 2002 began sharing office facilities,  capital assets and
          personnel with Amera.  Nikolaos  Cacos, an officer and director of the
          Company,  is an officer and director of Amera.  During the fiscal year
          ended December 31, 2002, the Company  received $6,000 from Amera.  For
          the three month period ending on March 31, 2003, the Company  received
          $6,000 from Amera.

      2.  The Company leases its office space from Beauregard, a private company
          50% owned by Joseph  Grosso,  an officer and  director of the Company,
          and 50% owned by Mr. Grosso's wife, Mrs.  Evelina Grosso.  The Company
          commenced  occupation of the office premises in January 1999. The term
          of the lease was for three years and has been extended for another two
          years,  with  minimum  lease  payments  of  $25,000  per  annum,  plus
          operating  costs.  In  addition,  the Company is  responsible  for all
          leasehold  improvements.  During the fiscal  year ended  December  31,
          1999,  the  Company  incurred   $12,366  for  leasehold   improvements
          conducted  on  the  office  premises.  The  Company  made  no  further
          leasehold  improvement  expenditures  in 2000 or  2001.  See  "Item 4.
          Information  on the  Company -  Properties,  Plants  and  Equipment  -
          Principal Office". During the fiscal year ended December 31, 2002, the
          Company paid rent in the amount of $60,924. For the three month period
          ending on March 31,  2003,  the Company has paid rent in the amount of
          $15,230.

      3.  By agreement  dated July 1, 1996,  as amended  July 22,  1996,  Joseph
          Grosso,  an officer and director of the  Company,  is paid a salary of
          $8,500 per month through Oxbow. The term of the agreement expired July
          1, 2002 was extended until July 1, 2003, by mutual  agreement.  During
          the fiscal year ended December 31, 2002, Oxbow was paid $102,000 (2001
          - $102,000; 2000 - $102,000),  and during the three months ended March
          31,  2003,  Oxbow was paid  $25,500.  See "Item 6.  Directors,  Senior
          Management and Employees - Employment Contracts".

      4.  During the fiscal years ended  December 31, 2002,  2001 and 2000,  the
          Company  paid  $1,276,  $1,850 and  $1,140,  respectively,  to RFB for
          consulting  services  provided  by Robert  Brown,  a  director  of the
          Company. See "Item 6. Directors, Senior Management and Employees".

      5.  By agreement  dated January 1, 1996, as amended  December 10, 1996 and
          August 22,  2001,  Nikolaos  Cacos,  an officer  and  director  of the
          Company,  is paid a retainer of $5,500 per month. Mr. Cacos received a
          retainer of $4,500 per month until  December 1, 2001.  Thereafer,  the
          rate was  increased by $1,000.  During the fiscal year ended  December
          31,  2002,  Mr.  Cacos  was  paid  $66,000  ( 2001 -  $66,000;  2000 -
          $52,250).


                                                                              66

<PAGE>

          During  the  three  months  ended  March 30, 2003,  Mr. Cacos was paid
          $16,500.   See  "Item  6. Directors, Senior Management and Employees".

      6.  The Company's officers and directors have been granted incentive stock
          options  enabling them to purchase  common shares of the Company.  See
          "Item  6.   Directors,   Senior   Management  and  Employees  -  Share
          Ownership".

      7.  By  agreement  dated June 21,  1996,  as amended  December  10,  1996,
          William Lee, an officer and director of the Company,  is paid a salary
          of $6,000 per month.  During the fiscal year ended  December 31, 2002,
          Mr. Lee was paid $72,000 (2001 - $72,000; 2000 - $68,206).  During the
          three months ended March 31, 2003, Mr. Lee was paid $18,000. See "Item
          6. Directors, Senior Management and Employees".

      8.  By agreement dated February  26,1999 and as amended February 15, 2002,
          between the Company and KGE  Management  Ltd.,  Gerald G. Carlson,  an
          officer and  director of the  Company,  was paid a  consulting  fee of
          $36,000 per year, plus $550 per day if services were rendered for more
          than five days per month,  through KGE  Management  Ltd. The agreement
          has been renewewed to June 18, 2003. By mutual agreement on October 3,
          2002 the fee was  changed  to $2,000  per  month  plus $550 per day if
          services are  rendered  for more than four days per month.  During the
          fiscal year ended  December 31, 2002,  Mr.  Carlson,  through KGE, was
          paid $33,000 (2001 - $33,000; 2000 - $34,749). During the three months
          ended March 31, 2003, Mr. Carlson,  through KGE, was paid $13,800. See
          "Item 6. Directors, Senior Management and Employees".

      9.  By agreement  dated June 2, 2002,  the Company  agreed to pay Mr. Sean
          Hurd,   investor   relations  manager  and  director  of  the  Company
          (effective September 2000), a salary of $3,000 per month for the first
          three months and $3,500 per month until August 2000, at which time Mr.
          Hurd left the Company as an employee but remained a director. Mr. Hurd
          later returned as investor relations  manager,  and under an agreement
          dated June 11, 2001,  the Company agreed to pay him a salary of $4,000
          per month.  During the year ended December 31, 2002, Mr. Hurd was paid
          $52,050, (2001 - $30,882; 2000 -$28,235).

      10. During  the  year  ended  December  31,  2002,  the  Company  recorded
          $64,641(2001  -  $45,381;   2000  -  $43,791)  for   reimbursement  of
          expenditures  and  disbursements  incurred on behalf of the Company by
          Mr. Grosso.  As at December 31, 2002,  $1,496 (2001 - $17,683;  2000 -
          $14,461) remained unpaid and has been included in accounts payable and
          accrued liabilities.


ITEM 8.  FINANCIAL INFORMATION.
--------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

FINANCIAL STATEMENTS

DESCRIPTION                                                                 PAGE

Consolidated Financial Statements for the Years Ended                        F-1
December 31, 2002, 2001 and 2000.

SIGNIFICANT CHANGES

Subsequent to December 31, 2002,  the Company  completed a private  placement of
2,900,000 units at $0.90 per unit for a total amount of $2.61 million. Each unit
consists of one common share and one half of one common share purchase  warrant.
Each full  warrant will  entitle the holder  thereof to purchase one  additional
common share in the capital of the Company for one year at $1.10 per share.  The
funds will be used on the Company's properties in South American and for general
working capital.

LEGAL PROCEEDINGS

None.


                                                                              67
<PAGE>


DIVIDEND POLICY

The Company has not paid any  dividends on its common shares and does not intend
to pay dividends on its common shares in the immediate  future.  Any decision to
pay  dividends  on its common  shares in the future will be made by the board of
directors on the Company on the basis of earnings,  financial  requirements  and
other such conditions that may exist at that time.


ITEM 9.  THE OFFER AND LISTING.
--------------------------------------------------------------------------------

PRICE HISTORY

The  Company's  common  shares  are  listed  on the TSX  Venture  Exchange  (the
"TSX-V").  From April 15, 1996 to November  28,1999,  the Company's  shares were
listed on the Vancouver Stock Exchange (the "VSE"). Effective November 29, 1999,
the VSE and the Alberta Stock  Exchange (the "ASE") merged and began  operations
as the TSX-V.  The Company is  classified  as a Tier I company and trades on the
TSX-V under the symbol  "IMR".  Companies  which  satisfy  the  minimum  initial
listing  requirements  of the TSX-V are  designated as Tier II companies and are
subject to listing  requirements  which are  stricter  than those for  companies
which are designated as Tier I companies.

The following table lists the volume of trading and high and low sales prices on
theTSX-V the TSX-V,  for shares of the Company's  common stock for the last five
fiscal years,  each  quarterly  period during the last two fiscal years and each
month from November 2002 through April 2003.

                   TSX VENTURE EXCHANGE STOCK TRADING ACTIVITY

                                                        SALES PRICE
                                                 --------------------------
YEAR ENDED                    VOLUME               HIGH              LOW

December 31, 2002           17,608,424            $0.94             $0.34
December 31, 2001            5,564,250            $0.62             $0.27
December 31, 2000            4,330,674            $1.15             $0.30
December 31, 1999            2,126,666            $0.88             $0.40
December 31, 1998            5,483,428            $0.60             $0.28



                                                        SALES PRICE
                                                 --------------------------
QUARTER ENDED                 VOLUME               HIGH              LOW

March 31, 2003              13,712,400            $1.06             $0.49

December 31, 2002            2,753,752            $0.56             $0.35
September 30, 2002           2,360,296            $0.55             $0.34
June 30, 2002                9,803,396            $0.94             $0.42
March 31, 2002               2,690,980            $0.56             $0.39

December 31, 2001            2,458,798            $0.62             $0.37
September 30, 2001           1,244,860            $0.59             $0.31
June 30, 2001                1,427,984            $0.39             $0.28
March 31, 2001                 427,608            $0.39             $0.27



                                                                              68
<PAGE>





                                                        SALES PRICE
                                                 --------------------------
MONTH ENDED                   VOLUME               HIGH              LOW

April 30, 2003               2,953,800            $1.00             $0.78
March 31, 2003               8,954,800            $1.06             $0.70
February 28, 2003            3,588,400            $0.81             $0.62
January 31, 2003             1,169,200            $0.64             $0.49
December 31, 2002            1,167,854            $0.56             $0.35
November 30, 2002              357,839            $0.46             $0.38

             OVER-THE-COUNTER BULLETIN BOARD STOCK TRADING ACTIVITY

As of October 8, 2002, the Company's  shares  received  clearance for trading on
the OTC  Bulletin  Board  operated by the  National  Association  of  Securities
Dealers in the United States.

                                                         BID PRICE
                                                 --------------------------
YEAR ENDED                    VOLUME               HIGH              LOW

December 31, 2002             97,497              $0.36             $0.22



                                                         BID PRICE
                                                 --------------------------
QUARTER ENDED                 VOLUME               HIGH              LOW

March 31, 2003               842,490              $0.70             $0.22

December 31, 2002             72,497              $0.33             $0.22
September 30, 2002            25,000              $0.36             $0.29



                                                         BID PRICE
                                                 --------------------------
MONTH ENDED                   VOLUME               HIGH              LOW

April 30, 2003               287,599              $0.69             $0.52
March 31, 2003               488,598              $0.70             $0.47
February 28, 2003            303,394              $0.54             $0.41
January 31, 2003              50,498              $0.43             $0.22
December 31, 2002             33,997              $0.33             $0.22
November 30, 2002              4,500              $0.31             $0.29

As of March 31,  2003 there were  approximately  187  registered  holders of the
Company's  shares in the United  States,  with  combined  holdings of  4,481,488
shares (15.7% of the outstanding shares at March 31, 2003).


ITEM 10.  ADDITIONAL INFORMATION.
--------------------------------------------------------------------------------

MEMORANDUM AND ARTICLES OF ASSOCIATION

Information  regarding the Company's  Memorandum and Articles of Association has
been previously reported in the Company's  Registration  Statement on Form 20-F,
filed with the Commission on January 6, 2000 and in the Company's  annual report
on From 20-F, filed with the Commission on May 8, 2001 (File Number 000-03464).

                                                                              69

<PAGE>


MATERIAL CONTRACTS

The following are material contracts to which the Company is a party:

      1.  A Consulting Services Agreement Between Oxbow International  Marketing
          Corp.  ("Oxbow") and IMA Resource  Corporation,  dated January 1, 1999
          and amended on July 1, 1996,  July 1, 1999,  July 1, 2001, and July 1,
          2002, under which the Company has agreed to pay Oxbow $8,500 per month
          for consulting services. See "Item 6. Directors, Senior Management and
          Employees - Compensation - Executive Compensation".

      2.  A  Consulting  Services  Agreement  Between  Nikolaos  Cacos  and  IMA
          Resource  Corporation  dated January 1, 1996, and amended December 10,
          1996 and August 22, 2000,  under which Nikolaos  Cacos, an officer and
          director  of the  Company,  was paid a retainer of $4,500 per month by
          the Company for consulting services.  The retainer,  as of December 1,
          2000,  was  increased  to $5,500  per month.  See "Item 6.  Directors,
          Senior Management and Employees - Employment Contracts".

      3.  A Consulting  Agreement Between KGE Management Ltd. ("KGE Management")
          and IMA Exploration  Inc., dated February 15, 2001, under which Gerald
          G. Carlson,  an officer and director of the Company,  is paid a salary
          of $36,000 per year,  plus $550 per day if services  are  rendered for
          more  than  five days per  month,  through  KGE  Management  Ltd.  The
          agreement  expired  January 14, 2001 and has been extended  until June
          18, 2003.  By mutual  agreement on October 3, 2002 the fee was changed
          to $2,000 per month plus $550 per day if  services  are  rendered  for
          more  than  four  days  per  month.  See  "Item 6.  Directors,  Senior
          Management and Employees - Employment Contracts".

      4.  By agreement dated June 1, 1999,  Lindsay Bottomer,  an officer of the
          Company,  was paid a salary of $6,250 per month. The agreement expired
          May  31,  2000.  The  Company  negotiated  a new  agreement  with  Mr.
          Bottomer, effective March 31, 2001, whereby, he was paid a retainer of
          $2,000 per month, plus $350 per day if services were rendered for more
          than five days per month.  The agreement was  subsequently  amended on
          July 3, 2001  reducing the  retainer to $800 per month,  plus $350 per
          day if services were  rendered for more than two days per month.  This
          agreement was terminated on November 28, 2001.  During the fiscal year
          ended December 31, 2002,  the Company paid Mr.  Bottomer $ Nil (2001 -
          $40,375; 2000 - $75,000).

      5.  An  Exploration  and  Option  Agreement  with  Barrick   Exploraciones
          Argentina  S.A.  ("Barrick"),  dated August 17, 1999 and amended March
          19, 2001 and further  amended on March 25, 2003,  granting  Barrick an
          option  to  earn an  interest  in  EITHER  the  Rio de las  Taguas  or
          Potrerillos  properties  in the  Valle del Cura  region.  See "Item 4.
          Information  on the  Company -  Properties,  Plants  and  Equipment  -
          Principal  Properties - Argentinean  Properties - Property  Agreements
          and Exploration Activities - Barrick Agreement".

      6.  Purchase  Agreement  with Victor  Ronchietto,  dated March 24, 1999 as
          amended April 6, 2000, between IMASA and Mr. Ronchietto.  See "Item 4.
          Information  on the  Company -  Properties,  Plants  and  Equipment  -
          Principal  Properties - Argentinean  Properties - Property  Agreements
          and Exploration Activities - Ronchietto Properties".

      7.  Option Agreement with Sociedad Minera de Responsabilidad Limitado Nova
          JJ de Piura and Sociedad Minera de Responsabilidad Limitada (SMR Ltda)
          Don Alberto JJ de Piura, dated January 24, 1997 as amended January 31,
          2000,  August 22, 2000 and April 22, 2001. See "Item 4. Information on
          the Company - Properties,  Plants and Equipment - Principal Properties
          - Peruvian Property".

      8.  An  Agreement  between the Company and Sean Hurd,  investor  relations
          manager and director,  dated June 2, 1999.  The Company  agreed to pay
          Mr. Sean Hurd, a salary of $3,000 per month for the first three months
          and $3,500 per month until  August  2000,  at which time Mr. Hurd left
          the Company but  remained a  director.  Mr. Hurd  returned as investor
          relations  manager and under an  agreement,  dated June 11, 2001,  the
          Company has agreed to pay him a salary of $4,000 per month.  See "Item
          6. Directors, Senior Management and Employees - Employment Contracts".

      9.  An Option Agreement between Nestor Arturo and IMA S.A., signed June 7,
          2000 as amended  August 3, 2000 and  September  1, 2000,  granting the
          Company an option to acquire mineral rights.  See "Item 4.


                                                                              70

<PAGE>


          Information  on the  Company -  Properties,  Plants  and  Equipment  -
          Principal  Properties - Argentinean  Properties - Property  Agreements
          and Exploration Activities - Arturo Property (Mogotes)".

      10. An Option  Agreement  with Rio Tinto  Mining and  Exploration  Limited
          ("Rio Tinto"),  dated March 5, 2001, granting the Company an option to
          acquire  a  majority  interest  in the  Mogotes  property  in San Juan
          Province,  Argentina  between IMA, IMASA and Rio Tinto. This agreement
          was terminated by Rio Tinto in December 2001. See "Item 4. Information
          on  the  Company  -  Properties,   Plants  and  Equipment-   Principal
          Properties  -  Argentinean   Properties  -  Property   Agreements  and
          Exploration Activities - Arturo Property (Mogotes)".

      11. The Company leases its office space from Beauregard, a private company
          50% owned by Joseph  Grosso,  an officer and  director of the Company,
          and 50% owned by Mr. Grosso's wife, Mrs.  Evelina Grosso.  The Company
          commenced  occupation of the office premises in January 1999. The term
          of the lease was for three years and has been extended for another two
          years,  with  minimum  lease  payments  of  $25,000  per  annum,  plus
          operating  costs.  In  addition,  the Company is  responsible  for all
          leasehold  improvements.  During the fiscal  year ended  December  31,
          1999,  the  Company  incurred   $12,366  for  leasehold   improvements
          conducted  on  the  office  premises.  The  Company  made  no  further
          leasehold  improvement  expenditures  in 2000 or  2001.  See  "Item 4.
          Information  on the  Company -  Properties,  Plants  and  Equipment  -
          Principal Office". During the fiscal year ended December 31, 2002, the
          Company paid rent in the amount of $60,924. For the three month period
          ending on March 31,  2003,  the Company has paid rent in the amount of
          $15,230.

      12. The  Company  signed a letter of  Intent  on March 6, 2003 with  Amera
          Resources Corporation a private company which has a commpn director to
          earn a undivided  51 % interest  (subject to  regulatory  approval) to
          further explore the Arturo Property (Mogotes). To earn a 51 % interest
          in the  property,  Amera must  issue  1,650,000  common  shares to the
          Company and incur US $1.25  million of  expenditures,  including  work
          programs and  underlying  option  payments,  all over five years.  See
          "Item  4.  Information  on  the  Company  -  Principal   Properties  -
          Argentinean   Properties  -  Property   Agreements   and   Exploration
          Activities  -  Arturo's   Property   (Mogotes)"  and  "Item.  7  Major
          Shareholders   and  Related   Party   Transactions   -  Related  Party
          Transactions."

EXCHANGE CONTROLS

There are no governmental  laws,  decrees,  or regulations in Canada relating to
restrictions on the export or import of capital,  or affecting the remittance of
interest,  dividends, or other payments to non-resident holders of the Company's
Common  Stock.  Any  remittances  of dividends to United States  residents  are,
however,  subject  to a  15%  withholding  tax  (10%  if  the  shareholder  is a
corporation  owning at least 10% of the outstanding Common Stock of the Company)
pursuant to Article X of the reciprocal tax treaty between Canada and the United
States. See "Item 10. Additional Information - Taxation".

Except as  provided  in the  Investment  Canada  Act (the  "Act"),  there are no
limitations  specific to the rights of  non-Canadians to hold or vote the Common
Stock of the  Company  under  the laws of  Canada  or the  Province  of  British
Columbia or in the charter documents of the Company.

Management  of the  Company  considers  that the  following  general  summary is
materially  complete and fairly  describes those provisions of the Act pertinent
to an investment by an American investor in the Company.

The Act requires a non-Canadian  making an investment  which would result in the
acquisition of control of a Canadian business,  the gross value of the assets of
which  exceed  certain  threshold  levels or the  business  activity of which is
related to Canada's cultural heritage or national identity, to either notify, or
file an  application  for review with,  Investment  Canada,  the federal  agency
created by the Investment Canada Act.

The notification  procedure  involves a brief statement of information about the
investment  of a prescribed  form which is required to be filed with  Investment
Canada by the investor at any time up to 30 days following implementation of the
investment.  It is intended that investments  requiring only  notification  will
proceed without government  intervention  unless the investment is in a specific
type of business  activity  related to Canada's  cultural  heritage and national
identity.

                                                                              71

<PAGE>


If an investment is reviewable  under the Act, an application  for review in the
form prescribed is normally required to be filed with Investment Canada prior to
the investment  taking place and the investment may not be implemented until the
review has been completed and the Minister  responsible for Investment Canada is
satisfied that the  investment is likely to be of net benefit to Canada.  If the
Minister is not satisfied  that the investment is likely to be of net benefit to
Canada, the non-Canadian must not implement the investment or, if the investment
has been  implemented,  may be  required  to divest  himself  of  control of the
business that is the subject of the investment.

The following investments by non-Canadians are subject to notification under the
Act:

(1)   an investment to establish a new Canadian business; and

(2)   an  investment  to  acquire  control of a  Canadian  business  that is not
      reviewable pursuant to the Act.

The following investments by a non-Canadian are subject to review under the Act:

(1)   direct  acquisitions  of control of Canadian  businesses with assets of $5
      million  or more  unless  the  acquisition  is being  made by an  American
      investor;

(2)   direct  acquisitions of control of Canadian businesses with assets of $152
      million or more by an American investor;

(3)   indirect  acquisitions of control of Canadian businesses with assets of $5
      million or more if such assets  represent more than 50% of the total value
      of the assets of the  entities,  the  control of which is being  acquired,
      unless the acquisition is being made by an American investor;

(4)   indirect  acquisitions  of control of Canadian  businesses  with assets of
      $152 million or more by an American investor if such assets represent more
      than 50% of the total value of the assets of the entities,  the control of
      which is being acquired;

(5)   indirect acquisitions of control of Canadian businesses with assets of $50
      million or more even if such assets  represent  less than 50% of the total
      value  of the  assets  of the  entities,  the  control  of  which is being
      acquired,  unless the acquisition is being made by an American investor in
      which case there is no review; and

(6)   an  investment  subject  to  notification  that  would  not  otherwise  be
      reviewable   if  the  Canadian   business   engages  in  the  activity  of
      publication,  distribution  or  sale  of  books,  magazines,  periodicals,
      newspapers,  audio  or  video  music  recordings,  or  music  in  print or
      machine-readable form.

Generally  speaking,  an acquisition is direct if it involves the acquisition of
control of the Canadian business or of its Canadian parent or grandparent and an
acquisition  is  indirect  if  it  involves  the  acquisition  of  control  of a
non-Canadian  parent  or  grandparent  of an  entity  carrying  on the  Canadian
business.  Control may be acquired  through the acquisition of actual or de jure
voting  control  of  a  Canadian  corporation  or  through  the  acquisition  of
substantially  all of the assets of the Canadian  business.  No change of voting
control  will be deemed to have  occurred if less than  one-third  of the voting
control of a Canadian corporation is acquired by an investor.

An  American,  as defined in the Act includes an  individual  who is an American
national or a lawful  permanent  resident of the United States,  a government or
government  agency of the United  States,  an  American-controlled  corporation,
limited  partnership,  trust  or  joint  venture  and  a  corporation,   limited
partnership,  trust or joint  venture  that is  neither  American-controlled  or
Canadian-controlled  of which  two-thirds  of its  board of  directors,  general
partners or trustees,  as the case may be, are any  combination of Canadians and
Americans.

The  higher  thresholds  for  Americans  do not apply if the  Canadian  business
engages in  activities  in certain  sectors such as oil,  natural gas,  uranium,
financial  services  (except  insurance),   transportation   services  or  media
activities.

The Act specifically  exempts certain  transactions from either  notification or
review. Included among the category of transactions is the acquisition of voting
shares or other voting  interests  by any person in the ordinary  course of that


                                                                              72

<PAGE>


person's  business as a trader or dealer in securities.  Given the nature of the
Company's  business and the size of its operations,  management does believe the
Investment  Canada Act would apply to an investment in the Company's shares by a
U.S. investor.

TAXATION

MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES

Management of the Company considers that the following  discussion describes the
material  Canadian  federal  income tax  consequences  applicable to a holder of
Common  Stock of the Company  who is a resident of the United  States and who is
not a resident of Canada and who does not use or hold,  and is not deemed to use
or hold,  his shares of Common Stock of the Company in connection  with carrying
on a business in Canada (a "non-resident shareholder").

This summary is based upon the current provisions of the Income Tax Act (Canada)
(the  "ITA"),  the  regulations  thereunder  (the  "Regulations"),  the  current
publicly  announced  administrative  and assessing  policies of Revenue  Canada,
Taxation and all specific  proposals (the "Tax  Proposals") to amend the ITA and
Regulations  announced  by the  Minister of Finance  (Canada)  prior to the date
hereof.  This  description  is not exhaustive of all possible  Canadian  federal
income tax  consequences  and, except for the Tax Proposals,  does not take into
account or anticipate any changes in law,  whether by legislative,  governmental
or judicial action.

DIVIDENDS

Dividends  paid on the common  stock of the  Company to a  non-resident  will be
subject  to  withholding  tax.  The  Canada-U.S.  Income Tax  Convention  (1980)
provides that the normal 25% withholding tax rate is reduced to 15% on dividends
paid on shares of a  corporation  resident  in Canada  (such as the  Company) to
residents of the United  States,  and also  provides for a further  reduction of
this rate to 5% where the  beneficial  owner of the  dividends is a  corporation
which is a resident of the United  States  which owns at least 10% of the voting
shares of the corporation paying the dividend.

CAPITAL GAINS

In general,  a  non-resident  of Canada is not subject to tax under the ITA with
respect  to a  capital  gain  realized  upon  the  disposition  of a share  of a
corporation  resident in Canada that is listed on a prescribed  stock  exchange.
For purposes of the ITA, the Company is listed on a prescribed  stock  exchange.
Non-residents  of Canada who dispose of shares of the Company will be subject to
income tax in Canada with respect to capital gains if:

         (a)      the non-resident holder;
         (b)      persons  with  whom  the  non-resident  holder did not deal at
                  arm's length; or
         (c)      the non-resident holder and persons with whom the non-resident
                  holder did not deal with at arm's length,

owned  not less  than 25% of the  issued  shares  of any  class or series of the
Company at any time during the five-year period  preceding the  disposition.  In
the case of a  non-resident  holder  to whom  shares  of the  Company  represent
taxable Canadian  property and who is resident in the United States, no Canadian
taxes will be payable on a capital gain realized on such shares by reason of the
Canada-U.S. Income Tax Convention (1980) (the "Treaty") unless the value of such
shares is derived principally from real property situated in Canada. However, in
such a case, certain transitional relief under the Treaty may be available.



                                                                              73

<PAGE>

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following  discussion  summarizes the material  United States federal income
tax  consequences,  under current law,  applicable to a U.S.  Holder (as defined
below)  of  the  Company's  common  stock.  This  discussion  does  not  address
consequences peculiar to persons subject to special provisions of federal income
tax law, such as tax-exempt organizations, qualified retirement plans, financial
institutions,  insurance  companies,  real estate investment  trusts,  regulated
investment companies,  broker-dealers,  nonresident alien individuals or foreign
corporations,  or shareholders  owning common stock representing 10% of the vote
and value of the Company. In addition, this discussion does not cover any state,
local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code
of 1986,  as amended (the  "Code"),  Treasury  Regulations,  published  Internal
Revenue Service ("IRS") rulings,  published  administrative positions of the IRS
and court decisions that are currently applicable,  any or all of which could be
materially and adversely changed,  possibly on a retroactive basis, at any time.
In addition,  this  discussion  does not consider the  potential  effects,  both
adverse and beneficial of recently proposed legislation which, if enacted, could
be  applied,  possibly  on  a  retroactive  basis,  at  any  time.  Holders  and
prospective  holders of the Company's  Common Stock should consult their own tax
advisors  about the  federal,  state,  local and  foreign  tax  consequences  of
purchasing, owning and disposing of shares of Common Stock of the Company.

U.S. HOLDERS

As used herein,  a "U.S.  Holder" is defined as (i) citizens or residents of the
U.S.,  or any state  thereof,  (ii) a  corporation  or other  entity  created or
organized  under the laws of the U.S.,  or any  political  subdivision  thereof,
(iii) an estate  the  income of which is  subject  to U.S.  federal  income  tax
regardless of source or that is otherwise  subject to U.S. federal income tax on
a net  income  basis in  respect  of the  common  stock,  or (iv) a trust  whose
administration  is subject to the primary  supervision of a U.S. court and which
has one or  more  U.S.  fiduciaries  who  have  the  authority  to  control  all
substantial  decisions  of the trust,  whose  ownership  of common  stock is not
effectively  connected  with the  conduct of a trade or  business  in the United
States and  shareholders  who  acquired  their  stock  through  the  exercise of
employee stock options or otherwise as compensation.

DISTRIBUTIONS ON SHARES OF COMMON STOCK

U.S. Holders receiving dividend distributions (including constructive dividends)
with  respect to the  Company's  common  stock are  required to include in gross
income for United  States  federal  income tax purposes the gross amount of such
distributions to the extent that the Company has current or accumulated earnings
and profits,  without  reduction for any Canadian  income tax withheld from such
distributions.  Such  Canadian tax withheld may be credited,  subject to certain
limitations,  against  the  U.S.  Holder's  United  States  federal  income  tax
liability  or,  alternatively,  may be deducted in computing  the U.S.  Holder's
United States federal taxable income by those who itemize deductions.  (See more
detailed  discussion  at  "Foreign  Tax  Credit"  below.)  To  the  extent  that
distributions exceed current or accumulated earnings and profits of the Company,
they  will be  treated  first as a return  of  capital  up to the U.S.  Holder's
adjusted  basis in the  common  stock  and  thereafter  as gain from the sale or
exchange of such shares.  Preferential tax rates for long-term capital gains are
applicable to a U.S. Holder which is an individual,  estate or trust.  There are
currently  no  preferential  tax rates for  long-term  capital  gains for a U.S.
Holder which is a corporation. Dividends paid on the Company's common stock will
not  generally  be eligible for the  dividends  received  deduction  provided to
corporations receiving dividends from certain United States corporations.

FOREIGN TAX CREDIT

A U.S. Holder who pays (or has withheld from distributions)  Canadian income tax
with respect to the ownership of the Company's common stock may be entitled,  at
the option of the U.S.  Holder,  to either a deduction  or a tax credit for such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a
credit  because  a  credit  reduces  United  States  federal  income  taxes on a
dollar-for-dollar  basis, while a deduction merely reduces the taxpayer's income
subject to tax. This election is made on a year-by-year basis and applies to all
foreign  taxes paid by (or  withheld  from) the U.S.  Holder  during  that year.
Subject to certain  limitations,  Canadian  taxes  withheld will be eligible for
credit against the U.S.  Holder's United States federal income taxes.  Under the
Code,  the  limitation  on  foreign  taxes  eligible  for  credit is  calculated
separately  with respect to specific  classes of income.  Dividends  paid by


                                                                              74

<PAGE>

the Company  generally will be either "passive"  income or "financial  services"
income,  depending on the particular U.S.  Holder's  circumstances.  Foreign tax
credits  allowable  with respect to each class of income  cannot exceed the U.S.
federal income tax otherwise  payable with respect to such class of income.  The
consequences of the separate  limitations  will depend on the nature and sources
of each U.S.  Holder's  income and the  deductions  appropriately  allocated  or
apportioned  thereto.  The  availability  of the  foreign  tax  credit  and  the
application  of the  limitations on the credit are fact specific and holders and
prospective  holders  of common  stock  should  consult  their own tax  advisors
regarding their individual circumstances.

DISPOSITION OF SHARES OF COMMON STOCK

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

OTHER CONSIDERATIONS

The Company has not  determined  whether it meets the  definition  of a "passive
foreign  investment  company" (a "PFIC").  It is unlikely that the Company meets
the  definition  of  a  "foreign  personal  holding  company"  (a  "FPHC")  or a
"controlled foreign corporation" (a "CFC") under current U.S. law.

If more  than  50% of the  voting  power  or value  of the  Company  were  owned
(actually  or  constructively)  by U.S.  Holders  who each  owned  (actually  or
constructively)  10% or more of the voting power of the Company's  common shares
("10%  Shareholders"),  then  the  Company  would  become  a CFC  and  each  10%
Shareholder would be required to include in its taxable income as a constructive
dividend  an amount  equal to its share of certain  undistributed  income of the
Company.  If (1) more  than 50% of the  voting  power or value of the  Company's
common  shares  were  owned  (actually  or  constructively)  by  five  or  fewer
individuals  who are citizens or  residents of the United  States and (2) 60% or
more of the Company's  income consisted of certain  interest,  dividend or other
enumerated  types of income,  then the Company  would be a FPHC.  If the Company
were a FPHC,  then each U.S.  Holder  (regardless of the amount of the Company's
Common  Shares  owned by such U.S.  Holder)  would be required to include in its
taxable  income  as  a   constructive   dividend  its  share  of  the  Company's
undistributed income of specific types.

If 75% or more of the  Company's  annual gross income has ever  consisted of, or
ever consists of, "passive" income or if 50% or more of the average value of the
Company's  assets in any year has ever consisted of, or ever consists of, assets
that produce, or are held for the production of, such "passive" income, then the
Company would be or would become a PFIC. The Company has not provided assurances
that it has not been and does not expect to become a PFIC.  Please note that the
application of the PFIC  provisions of the Code to mining  companies is somewhat
unclear.

If the Company were to be a PFIC, then a U.S. Holder would be required to pay an
interest  charge  together  with tax  calculated at maximum tax rates on certain
"excess  distributions"  (defined to include  gain on the sale of stock)  unless
such U.S.  Holder made an  election  either to (1) include in his or her taxable
income  certain  undistributed  amounts of the  Company's  income or (2) mark to
market his or her Company  common  shares at the end of each taxable year as set
forth in Section 1296 of the Code.

INFORMATION REPORTING AND BACKUP WITHHOLDING

U.S. information reporting requirements may apply with respect to the payment of
dividends to U.S. Holders of the Company's  shares.  Under Treasury  regulations
currently in effect,  non-corporate holders may be subject to backup withholding
at a 31% rate with respect to dividends when such holder (1) fails to furnish or
certify a correct taxpayer


                                                                              75

<PAGE>


identification  number to the payor in the required  manner,  (2) is notified by
the IRS that it has failed to report payments of interest or dividends  properly
or (3) fails, under certain circumstances,  to certify that it has been notified
by the IRS that it is  subject  to  backup  withholding  for  failure  to report
interest and dividend payments.

DOCUMENTS ON DISPLAY

Documents concerning the Company and referred to in this report may be inspected
at the  Company's  principal  office,  located  at #709 - 837  Hastings  Street,
Vancouver, British Columbia, V6C 3N6.


ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
--------------------------------------------------------------------------------

Not applicable.


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.
--------------------------------------------------------------------------------

Not applicable.


                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.
--------------------------------------------------------------------------------

Not applicable.


ITEM 14.  MATERIAL  MODIFICATIONS  TO  THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS.
--------------------------------------------------------------------------------

Not applicable.


ITEM 15.   CONTROLS AND PROCEDURES.
--------------------------------------------------------------------------------

Based on their evaluation  conducted  within 90 days of filing this report,  our
chief  financial  officer and chief  executive  officer have  concluded that the
Company's  disclosure  controls and procedures (as defined in Rule 13a-15(c) and
Rule  15d-15(c)  promulgated  under  the  Securities  Exchange  Act of 1934,  as
amended)  are  effective  and  designed  to alert them to  material  information
relating to the Company.

Within the 90 day period  prior to the filing of this report  there have been no
significant  changes in the  Company's  internal  controls or the  occurrence of
events or other factors that could significantly affect these controls.


ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT.
--------------------------------------------------------------------------------

Not applicable.


ITEM 16B.  CODE OF ETHICS.
--------------------------------------------------------------------------------

Not applicable.



                                                                              76
<PAGE>



                                    PART III

ITEM 17.  FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

See pages F-1 though F-26

ITEM 18.  FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

Not applicable.

ITEM 19.  EXHIBITS.
--------------------------------------------------------------------------------

EXHIBITS

  EXHIBIT                                                                  PAGE
  NUMBER                              EXHIBIT                             NUMBER

   1.1        Memorandum as Amended (1)                                     N/A

   1.2        Articles (1)                                                  N/A

   4.1        Share Purchase Agreement Between Shareholders and             N/A
              389863 B.C. Ltd. (1)

   4.2        Arrangement Agreement Between Viceroy Resource                N/A
              Corporation and IMA Resource Corporation (1)

   4.3        Consulting Services Agreement Between Oxbow International     N/A
              Marketing Corp. and IMA Resource Corporation (1)

   4.4        Employment Agreement with William Lee (1)                     N/A

   4.5        Consulting Services Agreement Between Nikolaos Cacos and      N/A
              IMA Resource Corporation (1)

   4.6        Consulting Agreement Between KGE Management Ltd. and IMA      N/A
              Exploration Inc.(2)

   4.7        Consulting Agreement Between Lindsay R. Bottomer and IMA      N/A
              Exploration Inc. (1)

   4.8        Exploration and Option Agreement with Barrick                 N/A
              Exploraciones Argentina S.A. (1)

   4.9        Option Agreement with Juan Demetrio Lirio Jr. and             N/A
              Juan Demetrio Lirio representing Lir-Fer Construcciones
              S.R.L. (1)

   4.10       Option Agreement with Lirio and Lir-Fer Construcciones        N/A
              S.R.L. (1)

   4.11       Option Agreement with Oscar Garcia and others (1)             N/A

   4.12       Purchase Agreement with Modesto Enrique Arasena (1)           N/A

   4.13       Option Agreement with Hugo Arturo Bosque (1)                  N/A

   4.14       Option Agreement with Guillermo Munoz, Lydia Gonzalez,        N/A
              Ricardo Sanchez and Antonio Monteleone (1)

   4.15       Option Agreement with Jorge Ernesto Rodriguez and             N/A
              Gerardo Javier Rodriguez (1)

   4.16       Option Agreement with Jorge Ernesto Rodriguez and Raul        N/A
              Alberto Garcia (1)

   4.17       Purchase Agreement with Victor Ronchietto (1)                 N/A

   4.18       Option Agreement with Sociedad Minera de Responsabilidad      N/A
              Limitado Nova JJ de Piura and Sociedad Minera de
              Responsabilidad Limitada (SMR Ltda) Don Alberto JJ
              de Piura (1)


                                                                              77

<PAGE>

  EXHIBIT                                                                  PAGE
  NUMBER                              EXHIBIT                             NUMBER
   4.19       Amendment to Option Agreement with Hugo Arturo Bosque (2)     N/A

   4.20       Amendment to Purchase Agreement with Victor Ronchietto (2)    N/A

   4.21       Option Agreement with Dionisio Ramos (2)                      N/A

   4.22       Amendment to Consulting Services Agreement Between Oxbow      N/A
              International Marketing Corp. and IMA Resource
              Corporation (2)

   4.23       Amendment to consulting Agreement between IMA Exploration     N/A
              Inc. and Nikolaos Cacos (3)

   4.24       Agreement between the Company and Sean Hurd dated             N/A
              June 2, 2002 (3)

   4.25       Option Agreement between Nestor Arturo and IMA S.A. (3)       N/A

   4.26       Amendment to Option Agreement with Guillermo Munoz, Lydia     N/A
              Gonzalez, Ricardo Sanchez and Antonio Monteleone (3)

   4.27       Amendment to Option Agreement with Sociedad Minera de         N/A
              Responsabilidad Limitado Nova JJ de Piura and Sociedad
              Minera de Responsabilidad Limitada (SMR Ltda) Don Alberto
              JJ de Piura (3)

   4.28       Option Agreement with Rio Tinto Mining and Exploration        N/A
              Limited (4)

   4.29       Amendment to Exploration and Option Agreement with            N/A
              Barrick Exploraciones Argentina S.A. (4)

   4.30       Consulting Agreement between the Company and Lindsay          N/A
              Bottomer dated April 1, 2002(4)

   4.31       Amendment to Option Agreement with Juan Demetrio Lirio        N/A
              Jr. and Juan Demetrio Lirio representing Lir-Fer
              Construcciones S.R.L. (4)

   4.32       Amendment to Option Agreement with Juan Demetrio Lirio        N/A
              and Lir-Fer Construcciones S.R.L. (4)

   4.33       Amendment to Option Agreement with Sociedad Minera de         N/A
              Responsabilidad Limitado Nova JJ de Piura and Sociedad
              Minera de Responsabilidad Limitada (SMR Ltda) Don
              Alberto JJ de Piura (4)

   4.34       Amendment to Option Agreement between Nestor Arturo and       N/A
              IMA S.A. (4)

   4.35       Amendment to Consulting Agreement Between KGE Management      N/A
              Ltd. and IMA Exploration Inc. (4)

   4.36       Amendment to Option Agreement with Juan Demetrio Lirio        N/A
              Jr. and Juan Demetrio Lirio representing Lir-Fer
              Construcciones S.R.L. (5)

   4.37       Amendment to Option Agreement with Juan Demetrio Lirio        N/A
              and Lir-Fer Construcciones S.R.L. (5)

   4.38       Amendment to Option Agreement between Nestor Arturo and       N/A
              IMA S.A. (5)

   4.39       Amendment to Option Agreement with Sociedad Minera de         N/A
              Responsabilidad Limitado Nova JJ de Piura and Sociedad
              Minera de Responsabilidad Limitada (SMR Ltda) Don
              Alberto JJ de Piura (5)

   4.40       Short Form Offering Document (5)                              N/A

   4.41       Amendment to Consulting Services Agreement Between Oxbow      N/A
              International Marketing Corp. and IMA Resource Corpora-
              tion (5)


                                                                              78
<PAGE>

  EXHIBIT                                                                  PAGE
  NUMBER                              EXHIBIT                             NUMBER
   4.42       Lease Agreement between IMA Exploration Inc. and              N/A
              Beauregard Holdings Corp. (5)

   4.43       Amendment to Consulting Agreement Between KGE Management      N/A
              Ltd. And IMA Exploration Inc. (5)

   4.44       Amendment to Agreement between the Company and Sean Hurd      N/A
              (5)

   4.45       Amendment to Exploration and Option Agreement with            109
              Barrick Exploraciones Argentina S.A. dated March 26, 2003.

   4.46       Letter of Intent dated March 6, 2003 with Amera Resources     113
              Corporation

   4.47       Letter Agreement with Amera Resources Corporation re:         125
              reimbursement of office expenses

   4.48       Amendment to Option Agreement with Sociedad Minera de         127
              Responsabilidad Limitado Nova JJ de Piura and Sociedad
              Minera de Responsabilidad Limitada (SMR Ltda) Don
              Alberto JJ de Piura dated Decmeber 23, 2002

   4.49       Amendment to Option Agreement with Juan Demetrio Lirio        133
              Jr. and Juan Demetrio Lirio representing Lir-Fer
              Construcciones S.R.L. dated July 10, 2002

   4.50       Amendment to Option Agreement with Juan Demetrio Lirio        136
              Jr. and Juan Demetrio Lirio representing Lir-Fer
              Construcciones S.R.L. dated December 27, 2002

   4.51       Amendment to Consulting Services Agreement Between Oxbow      139
              International Marketing Corp. and IMA Resource Corporation
              dated July 15, 2002

   4.52       Amendment to Consulting Agreement Between KGE Management      141
              Ltd. And IMA Exploration Inc. dated June 14, 2002

   4.53       Amendment to Consulting Agreement Between KGE Management      143
              Ltd. And IMA Exploration Inc. dated October 3, 2002

   4.54       Amendment to Agreement between the Company and Sean Hurd      145
              dated June 10, 2002

   4.55       Amendment to Consulting Services Agreement Between Oxbow      147
              International Marketing Corp. and IMA Resource
              Corporation dated April 17, 2003

   8.1        List of Subsidiaries                                          155

  12.1        Certification of Joseph Grosso                                157

  12.2        Certification of William Lee                                  159

  12.3        Consent of George Sivertz, Professional Geologist             161

(1) Previously  filed as an exhibit to the Company's  Registration  Statement on
Form 20-F, filed with the Commission on January 6, 2000. File number 0-30464.
(2) Previously  filed as an exhibit to the Company's  Registration  Statement on
Form 20-F/A Amendment No. 1 filed July 14, 2000. File Number 0-30464.
(3) Previously  filed as an exhibit to the Company's  Registration  Statement on
Form 20-F/A Amendment No. 2 filed September 15, 2000. File Number 0-30464.
(4) Previously  filed as an exhibit to the Company's  Annual Report on Form 20-F
filed May 8, 2001. File Number 0-30464.
(5) Previously  filed as an exhibit to the Company's  Annual Report on Form 20-F
filed May 8, 2002. File Number 0-30464.



                                                                              79
<PAGE>


                                   SIGNATURES

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

                  IMA EXPLORATION INC.
                  (Registrant)




                   /s/ WILLIAM LEE
                  ------------------------------------------------------
                  William Lee
                  Vice President, Chief Financial Officer and Director


                  Date: MAY 16, 2003
                       ------------------























                                                                              80
<PAGE>

PRICEWATERHOUSECOOPERS
--------------------------------------------------------------------------------
                                                 PricewaterhouseCoopers LLP
                                                 Chartered Accountants
                                                 PricewaterhouseCoopers Place
                                                 250 Howe Street, Suite 700
                                                 Vancouver, British Columbia
                                                 Canada V6C 3S7
                                                 Telephone +1 (604) 806 7000
                                                 Facsimile +1 (604) 806 7806
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF
IMA EXPLORATION INC.

We have audited the consolidated balance sheets of IMA EXPLORATION INC. as at
December 31, 2002 and 2001 and the consolidated statements of loss and deficit
and cash flows for the years ended December 31, 2002, 2001 and 2000. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 2002
and 2001 and the results of its operations and its cash flows for the years
ended December 31, 2002, 2001 and 2000 in accordance with Canadian generally
accepted accounting principles. As required by the British Columbia Company Act,
we report that, in our opinion, these principles have been applied on a
consistent basis.

/s/ PricewaterhouseCoopers LLP

CHARTERED ACCOUNTANTS

Vancouver, B.C., Canada
March 18, 2003
(except as to note 12 which is as of April 11, 2003)





PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers LLP
and the other member firms of PricewaterhouseCoopers International Limited, each
of which is a separate and independent legal entity.





                                      F-1

                                                                              81
<PAGE>












================================================================================


                              IMA EXPLORATION INC.

                         (AN EXPLORATION STAGE COMPANY)


                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2002, 2001 AND 2000

                         (EXPRESSED IN CANADIAN DOLLARS)

================================================================================
















                                      F-2

                                                                              82
<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                        AS AT DECEMBER 31, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>
                                                                                    2002                 2001
                                                                                     $                    $
<S>                                                                          <C>                  <C>
                                   A S S E T S

CURRENT ASSETS

Cash and cash equivalents                                                        1,436,124              755,765
Amounts receivable and prepaids                                                     79,661               69,889
Marketable securities                                                               23,460               23,460
                                                                             --------------       --------------
                                                                                 1,539,245              849,114
PROPERTY, PLANT AND EQUIPMENT net of
   accumulated depreciation of $201,771 (2001 - $179,000)                           45,517               57,088
MINERAL PROPERTIES AND DEFERRED COSTS (Note 4)                                   5,847,727            4,581,172
                                                                             --------------       --------------
                                                                                 7,432,489            5,487,374
                                                                             ==============       ==============

                             L I A B I L I T I E S

CURRENT LIABILITIES

Accounts payable and accrued liabilities                                           108,351              115,716
                                                                             --------------       --------------

                     S H A R E H O L D E R S ' E Q U I T Y

SHARE CAPITAL (Note 6)                                                          21,354,823           18,090,497

CONTRIBUTED SURPLUS (Note 5)                                                       128,260                  -

DEFICIT                                                                        (14,158,945)         (12,718,839)
                                                                             --------------       --------------
                                                                                 7,324,138            5,371,658
                                                                             --------------       --------------
                                                                                 7,432,489            5,487,374
                                                                             ==============       ==============
</TABLE>

NATURE OF OPERATIONS (Note 1)

SUBSEQUENT EVENTS (Notes 6 and 12)



APPROVED BY THE BOARD

/s/ JOSEPH GROSSO                         , Director
------------------------------------------
/s/ WILLIAM LEE                           , Director
------------------------------------------



        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                              FINANCIAL STATEMENTS.

                                      F-3
                                                                              83

<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



<TABLE>
<CAPTION>
                                                                          2002             2001             2000
                                                                            $                $                $
<S>                                                                <C>               <C>              <C>
EXPENSES

Administrative and management services                                    224,109          219,891         218,451
Bank charges and interest                                                  10,492            7,464           7,078
Corporate development and investor relations                              249,373           88,198         179,082
Depreciation                                                               22,772           24,657          31,886
General exploration                                                       180,321          109,875         137,148
Office and sundry                                                          34,823           37,875          40,970
Printing                                                                   22,304           12,133          21,945
Professional fees                                                         172,828          105,052         240,860
Rent, parking and storage                                                  67,768           68,522          64,221
Salaries and employee benefits                                            194,542          193,544         167,743
Stock based compensation (Note 5)                                         128,260             -               -
Telephone and utilities                                                    34,368           25,138          34,805
Transfer agent and regulatory fees                                         35,831           15,596          14,798
Travel and accommodation                                                   80,485           37,740          44,538
                                                                   ---------------   --------------   -------------
                                                                        1,458,276          945,685       1,203,525
                                                                   ---------------   --------------   -------------
OTHER EXPENSE (INCOME)

Foreign exchange                                                            8,415          (17,030)          9,050
Interest and miscellaneous income                                         (26,585)         (97,280)       (156,865)
Write-off of mineral properties and related deferred costs                   -              21,483         789,953
Write-down of marketable securities                                          -              22,483         178,777
Loss on sale of marketable securities                                        -               6,534            -
                                                                   ---------------   --------------   -------------
                                                                          (18,170)         (63,810)        820,915
                                                                   ---------------   --------------   -------------
LOSS FOR THE YEAR                                                      (1,440,106)        (881,875)     (2,024,440)

DEFICIT - BEGINNING OF YEAR                                           (12,718,839)     (11,836,964)     (9,812,524)
                                                                   ---------------   --------------   -------------
DEFICIT - END OF YEAR                                                 (14,158,945)     (12,718,839)    (11,836,964)
                                                                   ===============   ==============   =============

LOSS PER SHARE - BASIC AND DILUTED                                        $(0.06)          $(0.06)         $(0.17)
                                                                   ===============   ==============   =============
WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING                                         23,188,485       15,104,239      11,938,699
                                                                   ===============   ==============   =============
</TABLE>


        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                              FINANCIAL STATEMENTS.

                                      F-4

                                                                              84
<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



<TABLE>
<CAPTION>
                                                                            2002            2001            2000
                                                                              $               $               $
<S>                                                                  <C>             <C>             <C>
CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Loss for the year                                                       (1,440,106)       (881,875)      (2,024,440)
Items not affecting cash
   Depreciation                                                             22,772          24,657           31,886
   Stock based compensation                                                128,260             -               -
   Write-down of marketable securities                                        -             22,483          178,777
   Loss on sale of marketable securities                                      -              6,534             -
   Write-off of mineral properties and deferred costs                         -             21,483          789,953
Decrease (increase) in amounts receivable and prepaids                      (9,772)        (17,984)          14,729
Increase (decrease) in accounts payable and accrued liabilities             (7,365)        (73,703)          21,838
                                                                     --------------  --------------  ---------------
                                                                        (1,306,211)       (898,405)        (987,257)
                                                                     --------------  --------------  ---------------
INVESTING ACTIVITIES

Additions to mineral properties and deferred costs                      (1,266,555)     (1,320,777)      (1,989,049)
Additions to property, plant and equipment                                 (11,201)         (8,012)         (15,321)
Proceeds on sale of marketable securities                                     -             16,966             -
                                                                     --------------  --------------  ---------------
                                                                        (1,277,756)     (1,311,823)      (2,004,370)
                                                                     --------------  --------------  ---------------
FINANCING ACTIVITIES

Issuance of common shares                                                3,453,382       1,563,940        3,483,250
Share issuance costs                                                      (189,056)       (100,684)        (103,194)
                                                                     --------------  --------------  ---------------
                                                                         3,264,326       1,463,256        3,380,056
                                                                     --------------  --------------  ---------------
INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                                    680,359        (746,972)         388,429

CASH AND CASH EQUIVALENTS
   - BEGINNING OF YEAR                                                     755,765       1,502,737        1,114,308
                                                                     --------------  --------------  ---------------
CASH AND CASH EQUIVALENTS - END OF YEAR                                  1,436,124         755,765        1,502,737
                                                                     ==============  ==============  ===============

CASH AND CASH EQUIVALENTS IS COMPRISED OF:

CASH                                                                       631,255         605,765          177,737

SHORT-TERM DEPOSIT                                                         804,869         150,000        1,325,000
                                                                     --------------  --------------  ---------------
                                                                         1,436,124         755,765        1,502,737
                                                                     ==============  ==============  ===============

SUPPLEMENTARY CASH FLOW INFORMATION (Note 11)
</TABLE>


        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                              FINANCIAL STATEMENTS.

                                      F-5

                                                                              85

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


1.       NATURE OF OPERATIONS

         The Company is in the process of exploring  its mineral  properties  in
         South  America and  evaluating  other mineral  properties.  The Company
         presently  has no  proven  or  probable  reserves  and on the  basis of
         information to date, it has not yet determined whether these properties
         contain economically recoverable ore reserves. Consequently the Company
         considers itself to be an exploration stage company.  The amounts shown
         as mineral  properties and deferred costs  represent  costs incurred to
         date, less amounts amortized and/or written off, and do not necessarily
         represent present or future values. The underlying value of the mineral
         properties and deferred costs is entirely dependent on the existence of
         economically  recoverable reserves,  securing and maintaining title and
         beneficial  interest in the  properties,  the ability of the Company to
         obtain the  necessary  financing  to complete  development,  and future
         profitable production.

         The Company  considers  that it has adequate  resources to maintain its
         core operations for the next year. However, the Company recognizes that
         it  will  require  additional  financing  in the  forthcoming  year  to
         complete  its  proposed  exploration  programs.  The Company is seeking
         additional financing to complete these programs,  and while it has been
         successful at doing so in the past,  there can be no assurance  that it
         will be able to do so in the future. See also Note 12.


2.       CHANGE IN ACCOUNTING POLICY

         On January 1, 2002, the Company  adopted,  on a prospective  basis, the
         provisions  of new Section  3870  "STOCK-BASED  COMPENSATION  AND OTHER
         STOCK  BASED   PAYMENTS"  of  the   Canadian   Institute  of  Chartered
         Accountants' ("CICA") Handbook ("Section 3870").

         The Company  elected not to adopt the fair value method for stock-based
         compensation  granted to employees and directors and to continue  using
         the intrinsic value method.  As a result,  no  compensation  expense is
         recognized  if the exercise  price of the stock  options at the date of
         grant  is  equal  to  market   value.   Grants  of  stock   options  to
         non-employees and direct awards of stock to employees and non-employees
         must be  accounted  for using  the fair  value  method  of  accounting.
         Consideration  paid for shares on exercise of stock options is credited
         to share capital. The additional disclosure required by Section 3870 as
         a result of the Company not  adopting the fair value method is provided
         in Note 5.



                                      F-6

                                                                              86

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         These   consolidated   financial   statements  have  been  prepared  in
         accordance  with  Canadian  generally  accepted  accounting  principles
         ("Canadian  GAAP").  The significant  measurement  differences  between
         those  principles  and those that would be applied  under US  generally
         accepted  accounting  principles ("US GAAP") as they affect the Company
         are disclosed in Note 10.

         USE OF ESTIMATES

         The  preparation  of financial  statements in conformity  with Canadian
         GAAP requires  management to make estimates and assumptions that affect
         the  reported  amount of  assets  and  liabilities  and  disclosure  of
         contingent  assets  and  liabilities  at  the  date  of  the  financial
         statements and the reported  amount of revenues and expenses during the
         period.  Significant  areas  requiring the use of management  estimates
         relate to the determination of environmental obligations and impairment
         of mineral  properties  and deferred  costs.  Actual results may differ
         from these estimates.

         PRINCIPLES OF CONSOLIDATION

         These  consolidated  financial  statements  include the accounts of the
         Company and all its subsidiaries.  The Company's principal subsidiaries
         are IMPSA Resources Corporation (80.69%),  Minera Imp- Peru S.A. (100%)
         and  Inversiones  Mineras  Argentinas  S.A.  (100%).  All  intercompany
         transactions and balances have been eliminated.

         CASH AND CASH EQUIVALENTS

         Cash and cash  equivalents  include  cash  and  short-term  investments
         maturing within 90 days of the original date of acquisition.

         MARKETABLE SECURITIES

         Marketable securities are carried at the lower of cost or market.


                                      F-7

                                                                              87

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         MINERAL PROPERTIES AND DEFERRED COSTS

         Direct costs  related to the  acquisition  and  exploration  of mineral
         properties  held  or  controlled  by the  Company  are  deferred  on an
         individual  property  basis  until  the  viability  of  a  property  is
         determined.  Administration  costs and  general  exploration  costs are
         expensed  as  incurred.   When  a  property  is  placed  in  commercial
         production,    deferred    costs   will   be    depleted    using   the
         units-of-production  method.  Management  of the  Company  periodically
         reviews  the  recoverability  of the  capitalized  mineral  properties.
         Management takes into consideration various information including,  but
         not limited to,  results of exploration  activities  conducted to date,
         estimated  future  metal  prices,  and reports and  opinions of outside
         geologists, mine engineers and consultants.  When it is determined that
         a project or property will be abandoned or its carrying  value has been
         impaired,  a provision is made for any expected  loss on the project or
         property.

         The Company also accounts for foreign value added taxes paid as part of
         mineral properties and deferred costs. The recovery of these taxes will
         commence on the  beginning  of foreign  commercial  operations.  Should
         these  amounts be  recovered  they would be treated as a  reduction  in
         carrying costs of mineral properties and deferred costs.

         Although  the  Company  has  taken  steps to  verify  title to  mineral
         properties in which it has an interest, according to the usual industry
         standards  for the  stage  of  exploration  of such  properties,  these
         procedures do not guarantee the Company's title. Such properties may be
         subject to prior  agreements  or transfers and title may be affected by
         undetected defects.

         From time to time,  the Company  acquires  or  disposes  of  properties
         pursuant to the terms of option  agreements.  Options  are  exercisable
         entirely  at the  discretion  of the  optionee  and,  accordingly,  are
         recorded as mineral  property costs or recoveries when the payments are
         made or received.

         PROPERTY, PLANT AND EQUIPMENT

         Property,  plant and equipment,  which comprise leasehold  improvements
         and  office  furniture  and  equipment,   are  recorded  at  cost  less
         accumulated depreciation calculated using the straight-line method over
         their estimated useful lives of five years.


                                      F-8

                                                                              88

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         TRANSLATION OF FOREIGN CURRENCIES

         The Company's  foreign  operations are integrated and translated  using
         the temporal method. Under this method, the Company translates monetary
         assets and liabilities  denominated in foreign currencies at period-end
         rates. Non-monetary assets and liabilities are translated at historical
         rates.  Revenues and expenses are translated at average rates in effect
         during the period except for depreciation  and  amortization  which are
         translated  at  historical  rates.  The  resulting  gains or losses are
         reflected in the operating results in the period of translation.

         CONCENTRATION OF CREDIT RISK

         Financial  instruments  that  potentially  subject  the  Company  to  a
         significant  concentration of credit risk consist primarily of cash and
         cash  equivalents  and  amounts  receivable.  The  Company  limits  its
         exposure to credit loss by placing its cash and  cash-equivalents  with
         major financial institutions.

         FAIR VALUES OF FINANCIAL INSTRUMENTS

         The fair value of the  Company's  financial  instruments  consisting of
         cash and cash equivalents,  amounts receivable and accounts payable and
         accrued  liabilities  approximate  their carrying values,  due to their
         short-term  nature.  As of  December  31,  2002,  the  market  value of
         marketable securities was $78,200.

         INCOME TAXES

         The Company uses the liability  method of accounting  for future income
         taxes.  Under  this  method  of  tax  allocation,   future  income  tax
         liabilities   and  assets  are   recognized   for  the   estimated  tax
         consequences  attributable to differences  between the amounts reported
         in the  consolidated  financial  statements  and their  respective  tax
         bases, using substantively enacted tax rates and laws that are expected
         to be in effect in the periods in which the future income tax assets or
         liabilities  are  expected to be settled or  realized.  The effect of a
         change in income tax rates on future income tax  liabilities and assets
         is  recognized in income in the period that the change  occurs.  Future
         income tax assets are recognized to the extent that they are considered
         more likely than not to be realized.

         EARNINGS (LOSS) PER SHARE

         Basic  earnings  (loss)  per  share  is  computed  by  dividing  income
         available  to common  shareholders  by the weighted  average  number of
         common shares  outstanding  during the year. The computation of diluted
         earnings  per share  assumes  the  conversion,  exercise or issuance of
         securities only when such conversion, exercise or issuance would have a
         dilutive  effect  on  earnings  per  share.   The  dilutive  effect  of
         outstanding  options and warrants and their equivalents is reflected in
         diluted earnings per share by application of the treasury stock method.


                                      F-9
                                                                              89

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



4.       MINERAL PROPERTIES AND DEFERRED COSTS


<TABLE>
<CAPTION>
                                        2002                                        2001
                      ----------------------------------------    ----------------------------------------
                                     DEFERRED                                    DEFERRED
                      ACQUISITION   EXPLORATION                   ACQUISITION   EXPLORATION
                         COSTS         COSTS         TOTAL           COSTS         COSTS         TOTAL
PROPERTY                   $             $             $               $             $             $
<S>                   <C>           <C>           <C>             <C>           <C>          <C>

Argentina:
    Valle de Cura          661,635     1,879,040     2,540,675         622,791    1,866,361      2,489,152
    Gualcamayo              85,621        16,240       101,861          52,880        9,595         62,475
    NW San Juan             51,065       101,831       152,896          37,096       83,471        120,567
    Chubut                    -          354,873       354,873            -          79,869         79,869
    Other                     -           30,972        30,972            -          25,395         25,395
                      ------------  ------------  ------------    ------------  -----------  -------------
                           798,321     2,382,956     3,181,277         712,767    2,064,691      2,777,458
Peru:
    Rio Tabaconas          700,046     1,966,404     2,666,450         535,217    1,268,497      1,803,714
                      ------------  ------------  ------------    ------------  -----------  -------------
                         1,498,367     4,349,360     5,847,727       1,247,984    3,333,188      4,581,172
                      ============  ============  ============    ============  ===========  =============
</TABLE>

         (a)      Argentinean Properties

                  The Company has either staked,  fully paid or holds options to
                  acquire 100% working interests in mineral properties,  located
                  in San Juan Province and Chubut  Province in Argentina.  As of
                  December 31, 2002, the Company must make further payments with
                  respect to option agreements relating to the Valle de Cura and
                  NW San Juan regions, totalling US$550,000, as follows:


<TABLE>
<CAPTION>
                  YEAR                     VALLE DE CURA        NW SAN JUAN           TOTAL
                                                US$                 US$                US$
<S>                                        <C>                 <C>                <C>

                  2003                         65,000              35,000             100,000
                  2004                         70,000             100,000             170,000
                  2005                        170,000             110,000             280,000
                                           -----------         -----------        ------------
                                              305,000             245,000             550,000
                                           ===========         ===========        ============
</TABLE>

                  The Company is required to pay annual  government  payments of
                  approximately  US$30,000 on its  Argentinean  properties.  The
                  Company has also agreed to pay net  smelter  return  royalties
                  ("NSR")  (ranging from 0.5% to 2.0% NSR) of up to US$8,460,000
                  once  commercial  production  is  achieved  on  certain of the
                  Argentinean properties.


                                      F-10

                                                                              90

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


4.       MINERAL PROPERTIES AND DEFERRED COSTS (continued)

                  The Company has granted Barrick Gold  Corporation  ("Barrick")
                  an option,  whereby  Barrick  can elect to earn an interest in
                  either the Rio de las Taguas or Potrerillos  properties in the
                  Valle de Cura region. Barrick may earn an initial 50% interest
                  in the selected property by paying the Company US$250,000, and
                  expending US$3 million in exploration on the selected property
                  within  five  years of  making  the  US$250,000  payment.  The
                  initial  option  period  expired on November  30, 2002 without
                  exercise  of the option.  Subsequent  to  December  31,  2002,
                  Barrick paid the Company US$65,000 to extend the date by which
                  it is required to elect to proceed with its option to December
                  31, 2003.

                  Once  Barrick  has earned  its 50%  interest  in the  selected
                  property,  Barrick  will have the right to earn an  additional
                  25%  interest by  providing  financing  necessary to bring the
                  property into commercial production.

                  In addition,  should Barrick earn its initial 50% interest and
                  not discover ore in commercial  quantities,  it has the option
                  to purchase the  remaining  interest in the selected  property
                  from the Company for US$2 million and a 5% NSR.

                  See also Note 12 (iii).

         (b)      Rio Tabaconas, Peru

                  The  Company  holds an option to  acquire a 100%  interest  in
                  three concessions,  in the Cajamarca Department of San Ignacio
                  Province in northern  Peru. In addition,  the Company owns ten
                  concessions,   which   surround   and  overlie  the   optioned
                  concessions. Collectively these are known as the Rio Tabaconas
                  Project.

                  Under the terms of the option agreement,  the Company has paid
                  US$160,000 and is required to make further payments  totalling
                  US$1,340,000.  On June 28, 2002, the Company suspended further
                  exploration  activities  at the Rio  Tabacanos  project.  This
                  decision   was  made  in  response  to  the  local   community
                  expressing its concerns with mineral  exploration  activities.
                  The Company has  deferred  any  further  exploration  until an
                  agreement with the local  community has been  finalized.  As a
                  result the Company  declared force  majeure,  as allowed under
                  its  option  agreement.   Accordingly,  the  Company  and  the
                  optionor have revised the timing of the  remaining  $1,340,000
                  option payments as follows:


                                      F-11

                                                                              91

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


4.       MINERAL PROPERTIES AND DEFERRED COSTS (continued)

                  i)       US$25,000  on July 30, 2003,  US$100,000  on December
                           20, 2003, and US $200,000 on December 20, 2004; and

                  ii)      US$1,015,000   on  August  20,  2005,  if  commercial
                           production has commenced. Alternatively, in the event
                           commercial production has not commenced,  the Company
                           will  be  required  to  make  four   instalments   of
                           US$200,000,  with the  initial  payment due on August
                           20,  2005  and  the  remaining   instalments  due  on
                           December 30, 2006 and each year thereafter. The final
                           instalment of US$215,000 is due on December 30, 2009.
                           In the event  that  commercial  production  commences
                           subsequent  to August 20,  2005,  the full  remaining
                           outstanding  balance  will be due  within  20 days of
                           commercial production.

                  The Company is making progress  towards the finalization of an
                  agreement  with the local  community  and expects  exploration
                  activities to resume in fiscal 2003.


5.       STOCK BASED COMPENSATION

         During the year ended  December 31,  2002,  the Company  granted  stock
         options to its  employees,  directors and  independent  consultants  to
         purchase  up to  1,050,000  shares  of the  Company.  The  options  are
         exercisable at $0.50 per share and have a 5 year term to expiry.

         The Company has recognized compensation expense of $128,260 for 510,000
         stock  options  granted to  consultants  during  the year which  vested
         immediately.

         As the Company did not adopt the fair value  method of  accounting  for
         stock options granted to employees and directors, Section 3870 requires
         disclosure  of pro forma  amounts  that  reflect  the  impact as if the
         Company  had adopted the fair value  based  method of  accounting.  Had
         compensation costs for the Company's stock options granted to employees
         and  directors  been  accounted  for under the fair value  method,  the
         Company's net loss and loss per share would have increased as follows:


                                      F-12

                                                                              92

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



                                                                 $
Net loss for the year
  - as reported                                             (1,440,106)
  - compensation expense                                      (140,840)
                                                           ------------
  - pro-forma                                               (1,580,946)
                                                           ============
Basic and diluted loss per share
  - as reported                                                 $(0.06)
  - pro-forma                                                   $(0.07)












                                      F-13

                                                                              93

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


5.       STOCK BASED COMPENSATION (continued)

         The fair value of stock  options  granted to  employees,  directors and
         consultants was estimated on the date of grant using the  Black-Scholes
         option pricing model with the following assumptions used for the grants
         made during the year:


             Risk-free interest rate                    3.89% - 4.25%
             Estimated volatility                         78% - 87%
             Expected life                                2.5 years

         The weighted average fair value per share of stock options,  calculated
         using the Black-Scholes option pricing model, granted during the period
         to the Company's  employees,  directors and  consultants  was $0.26 per
         share.

         Option-pricing  models  require the use of  estimates  and  assumptions
         including   the  expected   volatility.   Changes  in  the   underlying
         assumptions  can  materially   affect  the  fair  value  estimates  and
         therefore,  existing models do not necessarily provide reliable measure
         of the fair value of the Company's stock options.


6.       SHARE CAPITAL

         Authorized - 99,708,334 common shares without par value

         Issued                                     NUMBER               $

         Balance, December 31, 1999                9,967,552        13,247,185

            Private placements                     2,034,167         1,220,500
            Exercise of options                       22,500             9,000
            Exercise of warrants                   1,505,000         2,253,750
            Less share issue costs                      -             (103,194)
                                                -------------     -------------
         Balance, December 31, 2000               13,529,219        16,627,241

            Private placements                     5,063,000         1,563,940
            Less share issue costs                      -             (100,684)
                                                -------------      ------------
         Balance, December 31, 2001               18,592,219        18,090,497

            Private placements                     5,703,026         2,552,870
            Exercise of options                      170,000            68,000
            Exercise of warrants                   2,085,361           837,512
            Less share issue costs                      -             (194,056)
                                                -------------      ------------
         Balance, December 31, 2002               26,550,606        21,354,823
                                                =============      ============




                                      F-14
                                                                              94

<PAGE>

6.       SHARE CAPITAL (continued)

         In addition to subsequent events disclosed in Notes 6(a) and (b) below,
         further  equity  issuances  subsequent to the year end are described in
         Note 12.

         (a)      During the year ended December 31, 2002, the Company completed
                  the following private placements:

                  i)     637,000  units at a price of $0.38 for cash proceeds of
                         $222,695,  net of share issue  costs of  $19,365.  Each
                         unit  consisted  of one common share of the Company and
                         one  warrant.   Two  warrants  entitle  the  holder  to
                         purchase an  additional  common  share for the exercise
                         price  of  $0.45  on  or  before  March  31,  2003.  In
                         addition,  agents  warrants  were  issued  to  purchase
                         63,700  common  shares at a price of $0.45 on or before
                         March 31, 2003.  Subsequent  to December 31, 2002,  the
                         Company issued 382,200 common shares on the exercise of
                         warrants and agents warrants for $171,990;

                  ii)    1,777,778  units at a price of $0.45  per unit for cash
                         proceeds  of  $686,132,  net of  share  issue  costs of
                         $118,868.  Each unit  consisted  of one common share of
                         the Company and one warrant.  Two warrants  entitle the
                         holder to  purchase  an  additional  common  share at a
                         price of $0.54 per share on or before April 9, 2003. In
                         addition,  the  Company  issued  11,111  shares  to the
                         agents,  at a price of $0.45 per share. The agents also
                         received  agents  warrants to purchase  355,556  common
                         shares at a price of $0.54 per share on or before April
                         9, 2003.

                         During the year ended  December 31,  2002,  the Company
                         issued 326,361 common shares on the exercise of 652,722
                         warrants for $146,862.  Subsequent to December 31, 2002
                         the  Company   issued  915,083  common  shares  on  the
                         exercise of warrants and agents  warrants for $494,145.
                         The remaining warrants reserved for 3,001 common shares
                         expired without exercise;

                  iii)   1,722,222  units at a price of $0.45 per unit, for cash
                         proceeds  of  $751,000  net of  share  issue  costs  of
                         $24,000. Each unit consisted of one common share of the
                         Company and one  warrant.  Each  warrant  entitles  the
                         holder to purchase an  additional  common  share of the
                         Company  at a price of $0.53 per share on or before May
                         23, 2003 and $0.60 per share on or before May 23, 2004.
                         The agents also  received  agents  warrants to purchase
                         66,666  common  shares at a price of $0.53 per share on
                         or  before  May  23,  2003.   Certain   directors  have
                         purchased  191,111  units.  Subsequent  to December 31,
                         2002 the Company  issued  111,111  common shares on the
                         exercise of 100,000 warrants and 11,111 agents warrants
                         for $58,889; and


                                      F-15

                                                                              95

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

                  iv)    1,554,915  units at a price of $0.47 for cash  proceeds
                         of $698,987,  net of share issue costs of $31,823. Each
                         unit  consisted  of one common share of the Company and
                         one  warrant.  Each  warrant  entitles  the  holder  to
                         purchase an additional common share of the Company at a
                         price of $0.55  per share on or  before  September  27,
                         2003 and $0.60 on or before  September  27,  2004.  The
                         agents also received agents warrants to purchase 37,496
                         common  shares  at a price  of  $0.50  per  share on or
                         before  September  27,  2003.  Certain  directors  have
                         purchased  325,000  units.  Subsequent  to December 31,
                         2002 the Company  issued  61,330  common  shares on the
                         exercise of 60,000  warrants and 1,330 agents  warrants
                         for $33,665.

         (b)      During the year ended December 31, 2001, the Company completed
                  the following private placements:

                  i)     3,000,000  units at a price of $0.26 for cash  proceeds
                         of $746,250,  net of share issue costs of $33,750. Each
                         unit  consisted  of one common share of the Company and
                         one- half  warrant.  Each  full  warrant  entitles  the
                         holder to purchase  one common  share for the  exercise
                         price of $0.40 on or before July 3, 2002.  In addition,
                         agents warrants were issued to purchase  259,000 common
                         shares  for the  exercise  price of $0.35 on or  before
                         July 3, 2002.  The President of the Company  subscribed
                         for 240,000 units of the private placement.

                         During the year  ended  December 31, 2002, the  Company
                         issued 1,759,000 common shares on the exercise  of  the
                         warrants and agents warrants for $690,650; and

                  ii)    2,063,000  units at a price of $0.38 for cash  proceeds
                         of $717,006,  net of share issue costs of $66,934. Each
                         unit  consisted  of one common share of the Company and
                         one- half  warrant.  Each  full  warrant  entitles  the
                         holder to purchase  one common  share for the  exercise
                         price  of  $0.45  on  or  before  March  31,  2003.  In
                         addition,  agents  warrants  were  issued  to  purchase
                         206,300  common shares for the exercise  price of $0.45
                         on or before March 31, 2003. Subsequent to December 31,
                         2002 the Company issued  1,237,800 common shares on the
                         exercise  of  the  warrants  and  agents  warrants  for
                         $557,010.

                                      F-16

                                                                              96

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

         (c)      During the year ended December 31, 2000, the Company completed
                  the following private placements:

                  i)     637,000  units at a price  of  $0.60  per unit for cash
                         proceeds of $343,980,  net of  commissions  of $38,220.
                         Each unit  consisted of one common share of the Company
                         and one warrant.  Each  warrant  entitles the holder to
                         purchase an additional common share of the Company at a
                         price of $0.75 per share on or before  April 19,  2005.
                         The warrants remained outstanding at December 31, 2002;
                         and

                  ii)    1,397,167  units at a price of $0.60 per unit, for cash
                         proceeds of $773,327,  net of  commissions  of $64,973.
                         Each unit  consisted of one common share of the Company
                         and one warrant.  Each  warrant  entitles the holder to
                         purchase an additional common share of the Company at a
                         price of $0.90 per share on or before  March 16,  2005.
                         The warrants remained outstanding at December 31, 2002.

         (d)      Stock Options

                  The  Company  grants  stock  options  in  accordance  with the
                  policies  of the  TSX  Venture  Exchange  ("TSX  Venture").  A
                  summary of the Company's outstanding options at December 2002,
                  2001 and 2000 and the  changes  for the years  ending on those
                  dates is presented below:

<TABLE>
<CAPTION>
                                       2002                      2001                      2000
                              ----------------------    ----------------------    ----------------------
                                OPTIONS    WEIGHTED       OPTIONS    WEIGHTED        OPTIONS    WEIGHTED
                              OUTSTANDING   AVERAGE     OUTSTANDING  AVERAGE      OUTSTANDING   AVERAGE
                                  AND      EXERCISE         AND      EXERCISE         AND       EXERCISE
                              EXERCISABLE    PRICE      EXERCISABLE   PRICE       EXERCISABLE    PRICE
                                               $                        $                          $
<S>                          <C>              <C>       <C>            <C>        <C>             <C>
Balance, beginning of year     1,635,500      0.40        1,224,000    0.54          996,500      0.51
Granted                        1,050,000      0.50        1,635,500    0.40          250,000      0.65
Exercised                       (170,000)     0.40             -        -            (22,500)     0.40
Cancelled                        (50,000)     0.40       (1,224,000)   0.54             -          -
                             ------------               ------------              -----------
Balance, end of year           2,465,500      0.44        1,635,500    0.40        1,224,000      0.54
                             ============               ============              ===========
</TABLE>

                                      F-17


                                                                              97

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

                  Stock options outstanding and exercisable at December 31, 2002
                  are as follows:


                  NUMBER            EXERCISE PRICE           EXPIRY DATE
                                          $
                1,415,500                0.40                July 19, 2006
                  510,000                0.50                May 2, 2007
                  540,000                0.50                Sept. 23, 2007
                ---------
                2,465,500
                =========

         (e)      Warrants

                  A summary of the number of common shares reserved  pursuant to
                  the  Company's   outstanding   warrants  and  agents  warrants
                  outstanding  at  December  31,  2002,  2001  and  2000 and the
                  changes for the years ending on those dates is as follows:

<TABLE>
<CAPTION>
                                                        2002            2001            2000

<S>                                                 <C>             <C>             <C>
                  Balance, beginning of year          6,588,967       3,592,167       3,709,019
                  Issued                              5,007,944       2,996,800       2,034,167
                  Expired                                  -               -           (646,019)
                  Exercised                          (2,085,361)           -         (1,505,000)
                                                    ------------    ------------    ------------
Balance, end of year                                  9,511,550       6,588,967       3,592,167
                                                    ============    ============    ============
</TABLE>

                  Common shares  reserved  pursuant to warrants  outstanding  at
                  December 31, 2002 are as follows:


                    NUMBER          EXERCISE PRICE         EXPIRY DATE
                                          $
                  1,620,000            0.45                Mar. 31, 2003
                    918,084            0.54                Apr.  09, 2003
                  1,722,222            0.53 /  0.60        May 23, 2003 / 2004
                     66,666            0.53                May 23, 2003
                  1,554,915            0.55 /  0.60        Sept. 27, 2003 / 2004
                     37,496            0.50                Sept. 27, 2003
                  1,558,000            0.75                Sept. 15, 2004
                  1,397,167            0.90                Mar. 16, 2005
                    637,000            0.75                Apr. 19, 2005
                 ----------
                  9,511,550
                 ==========

         (f)      See also Note 12.


                                      F-18

                                                                              98

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


7.       RELATED PARTY TRANSACTIONS

         (a)      During the year ended  December  31,  2002,  the Company  paid
                  $136,276  (2001 -  $157,825;  2000 -  $218,451)  to  companies
                  controlled by current and former directors and officers of the
                  Company, for accounting,  management,  and consulting services
                  provided.

         (b)      The Company has  agreements  with a company  controlled by the
                  President  of the Company  for the rental of office  premises.
                  The  Company is  required  to make  monthly  rent  payments of
                  $5,077.  These amounts are comparable to market rates.  During
                  the year ended  December  31,  2002,  the Company paid $60,924
                  (2001 - $60,924; 2000 - $53,745) for rent.

         (c)      The Company shares office  facilities  with a private  company
                  that  has  a  common  director.   The  affiliated  company  is
                  currently  paying  $2,000 per month to the  Company for shared
                  rent and  administration.  During the year ended  December 31,
                  2002, the Company received $6,000 from the affiliated company.

         (d)      During the year ended December 31, 2002, the Company  recorded
                  $64,641(2001 - $45,381;  2000 - $43,791) for  reimbursement of
                  expenditures  and  disbursements  incurred  on  behalf  of the
                  Company by the  President of the  Company.  As at December 31,
                  2002,  $1,496 (2001 - $17,683;  2000 - $14,461) remains unpaid
                  and  has  been  included  in  accounts   payable  and  accrued
                  liabilities.

         (e)      Other related party  transactions  are disclosed  elsewhere in
                  these consolidated financial statements.


8.       INCOME TAXES

         The recovery of income taxes shown in the  consolidated  statements  of
         operations  and deficit  differs from the amounts  obtained by applying
         statutory  rates to the loss before  provision  for income taxes due to
         the following:

<TABLE>
<CAPTION>
                                                                2002             2001              2000
                                                                  $                $                 $

<S>                                                        <C>               <C>               <C>
         Statutory tax rate                                     39.62%           44.62%            45.62%

         Provision for income taxes based on statutory
            Canadian combined federal and provincial
            income tax rates                                  (570,570)        (393,493)         (918,075)

         Differences in foreign tax rates                       (4,234)         179,918           239,306

         Losses for which an income tax benefit
            has not been recognized                            574,804          213,575           678,769
                                                           ------------      -----------       -----------
                                                                  -                -                 -
                                                           ============      ===========       ===========

</TABLE>

                                      F-19

                                                                              99

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



8.       INCOME TAXES (continued)

         The  significant  components of the Company's  future tax assets are as
         follows:


<TABLE>
<CAPTION>
                                                                              2002              2001
                                                                                $                 $
<S>                                                                    <C>                <C>
         Future income tax assets
            Financing costs                                                   98,934            89,063
            Operating loss carryforward                                    4,164,745         2,782,412
            Excess of tax values of mineral properties
              and property, plant and equipment over book value              330,957           428,648
                                                                       --------------     -------------
                                                                           4,594,636         3,300,123
Valuation allowance for future tax assets                                 (4,594,636)       (3,300,123)
                                                                       --------------     -------------
                                                                                -                 -
                                                                       ==============     =============
</TABLE>

         The Company has Canadian  non-capital loss  carryforwards of $8,756,438
         that may be available for tax purposes. The losses expire as follows:


         EXPIRY DATE                                                       $

            2003                                                       1,202,652
            2004                                                       1,554,225
            2005                                                       1,266,386
            2006                                                       1,255,915
            2007                                                       1,277,771
            2008                                                         845,836
            2009                                                       1,353,653
                                                                    ------------
                                                                       8,756,438
                                                                    ============

9.       SEGMENTED INFORMATION

         The  Company's  principal  activities  are the  exploration  of mineral
         properties  in Argentina  and Peru.  Management  reviews the  financial
         results according to expenditures by property.

         Segment assets by geographical location are as follows:

<TABLE>
<CAPTION>
                                                                             2002
                                                  --------------------------------------------------------
                                                     CANADA        ARGENTINA        PERU           TOTAL
                                                        $              $              $              $
<S>                                               <C>           <C>            <C>            <C>
         Property, plant and equipment                34,323          5,817          5,377         45,517
         Mineral properties and deferred costs          -         3,181,277      2,666,450      5,847,727
                                                  ----------    -----------    -----------    -----------
                                                      34,323      3,187,094      2,671,827      5,893,244
                                                  ==========    ===========    ===========    ===========
</TABLE>


                                      F-20

                                                                             100

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)



9.       SEGMENTED INFORMATION (continued)

<TABLE>
<CAPTION>
                                                                             2001
                                                  ----------------------------------------------------------
                                                     CANADA        ARGENTINA        PERU           TOTAL
                                                        $              $              $              $
<S>                                               <C>           <C>             <C>            <C>
         Property, plant and equipment                45,376           5,817          5,895         57,088
         Mineral properties and deferred costs          -          2,777,458      1,803,714      4,581,172
                                                  ----------    ------------    -----------    -----------
                                                      45,376       2,783,275      1,809,609      4,638,260
                                                  ==========    ============    ===========    ===========
</TABLE>


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES

         The consolidated financial statements of the Company have been prepared
         in accordance  with  Canadian  GAAP,  which differ in certain  material
         respects from US GAAP.

         The significant  measurement  differences  between Canadian GAAP and US
         GAAP for certain items on the consolidated  balance sheets,  statements
         of operations and deficit and statements of cash flows are as follows:

<TABLE>
<CAPTION>
                                                                        2002             2001             2000
                                                                          $                $                $

<S>                                                               <C>              <C>              <C>
         CONSOLIDATED STATEMENTS OF OPERATIONS

         Loss for the year under Canadian GAAP                       (1,440,106)        (881,875)      (2,024,440)
         Mineral properties and deferred costs for the year (i)      (1,266,555)      (1,320,777)      (1,989,049)
         Mineral properties and deferred costs written off
            during the year which would have been
            expensed in the year incurred (i)                              -              21,483          789,953
         Stock-based compensation (iii)                                (102,150)            -                -
                                                                  --------------   --------------   --------------
         Loss for the year under US GAAP                             (2,808,811)      (2,181,169)      (3,223,536)
         Unrealized gains on available-for-sale securities (ii)          54,740             -                -
                                                                  --------------   --------------   --------------
         Comprehensive loss (iv)                                     (2,754,071)      (2,181,169)      (3,223,536)
                                                                  ==============   ==============   ==============
         Loss per share under US GAAP                                     (0.12)           (0.14)           (0.26)
                                                                  ==============   ==============   ==============
         Diluted loss per share under US GAAP                             (0.12)           (0.14)           (0.26)
                                                                  ==============   ==============   ==============
</TABLE>



                                      F-21

                                                                             101

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (continued)


<TABLE>
<CAPTION>
                                                                            2002             2001
                                                                              $                $
<S>                                                                    <C>              <C>
         SHAREHOLDERS' EQUITY

         Balance per Canadian GAAP                                        7,324,138        5,371,658
         Mineral properties and deferred costs expensed (i)              (5,847,727)      (4,581,172)
         Accumulated other comprehensive income (ii)                         54,740             -
                                                                       -------------    -------------
         Balance per US GAAP                                               1,531,151         790,486
                                                                       =============    =============
</TABLE>

<TABLE>
<CAPTION>
                                                                            2002             2001
                                                                              $                $
<S>                                                                    <C>              <C>
         MINERAL PROPERTIES AND DEFERRED COSTS

         Balance per Canadian GAAP                                         5,847,727        4,581,172
         Mineral properties and deferred costs
            expensed under US GAAP (i)                                    (5,847,727)      (4,581,172)
                                                                       --------------   --------------
         Balance per US GAAP                                                    -                -
                                                                       ==============   ==============
</TABLE>

<TABLE>
<CAPTION>
                                                              2002             2001             2000
                                                                $                $                $
<S>                                                     <C>               <C>              <C>
         CONSOLIDATED STATEMENTS OF CASH FLOWS

         OPERATING ACTIVITIES

         Cash used per Canadian GAAP                       (1,306,211)        (898,405)        (987,257)
         Mineral properties and deferred costs (i)         (1,266,555)      (1,320,777)      (1,989,049)
                                                        --------------    -------------    -------------
         Cash used per US GAAP                             (2,572,766)      (2,219,182)      (2,976,306)
                                                        ==============    =============    =============
         INVESTING ACTIVITIES

         Cash used per Canadian GAAP                       (1,277,756)      (1,311,823)      (2,004,370)
         Mineral properties and deferred costs (i)          1,266,555        1,320,777        1,989,049
                                                        --------------    -------------    -------------
         Cash provided (used) per US GAAP                     (11,201)           8,954          (15,321)
                                                        ==============    =============    =============
</TABLE>



                                      F-22

                                                                             102

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (continued)

             i)   Mineral properties and deferred costs

                  Mineral  properties  and deferred  costs are  accounted for in
                  accordance  with  Canadian GAAP as disclosed in Note 3. For US
                  GAAP   purposes,   the  Company   expenses   acquisition   and
                  exploration  costs relating to unproven mineral  properties as
                  incurred. When proven and probable reserves are determined for
                  a property,  subsequent  exploration and development  costs of
                  the property are  capitalized.  The capitalized  costs of such
                  properties  would then be assessed,  on a periodic  basis,  to
                  determine  whether the  carrying  value can be recovered on an
                  undiscounted  cash flow basis. If the carrying value cannot be
                  recovered  on this  basis,  the  mineral  properties  would be
                  written down to fair value  determined  using  discounted cash
                  flows.

            ii)   Investments

                  The  Company's   marketable   securities   are  classified  as
                  available-for-sale  investments  under US GAAP and  carried at
                  the lower of cost and market value for Canadian GAAP purposes.
                  Such  investments are not held  principally for the purpose of
                  selling in the near term and, for US GAAP purposes,  must have
                  holding gains and losses  reported as a separate  component of
                  shareholders'  equity  until  realized  or until an other than
                  temporary impairment in value occurs.

           iii)   Accounting for stock-based compensation

                  For US GAAP  purposes,  the Company  accounts for  stock-based
                  employee  compensation  arrangements using the intrinsic value
                  method  prescribed  in  Accounting  Principles  Board  ("APB")
                  Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES".

                  Under  US  GAAP,   when  stock   options  are   cancelled  and
                  immediately  reissued  at a revised  price (the  "Repricing"),
                  these options are accounted for as variable  compensation from
                  the date of the  Repricing.  Under this method,  following the
                  repricing  date,  compensation  expense is recognized when the
                  quoted market value of the Company's common shares exceeds the
                  amended  exercise  price.   Should  the  quoted  market  value
                  subsequently  decrease, a recovery of a portion, or all of the
                  previously   recognized    compensation   expense,   will   be
                  recognized.



                                      F-23

                                                                             103

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (continued)

            iv)   Comprehensive income

                  US GAAP  requires  disclosure of  comprehensive  income (loss)
                  which is  intended  to  reflect  all other  changes  in equity
                  except those resulting from  contributions  by and payments to
                  owners.

             v)   New Accounting Standards

                  In  June  2001,  the  Financial   Accounting  Standards  Board
                  ("FASB")  issued SFAS 143,  "ACCOUNTING  FOR ASSET  RETIREMENT
                  OBLIGATIONS."  SFAS 143  addresses  financial  accounting  and
                  reporting for  obligations  associated  with the retirement of
                  tangible long-lived assets and the associated asset retirement
                  costs.  SFAS 143  generally  requires that the fair value of a
                  liability for an asset retirement  obligation be recognized in
                  the period  which it is incurred if a  reasonable  estimate of
                  fair value can be made.  The associated  retirement  costs are
                  capitalized as part of the cost of the long-lived  asset.  The
                  pronouncement is effective for financial statements issued for
                  fiscal years  beginning  after June 15, 2002.  Management does
                  not believe that the adoption of SFAS 143 will have any impact
                  on  its   consolidated   financial   position  or  results  of
                  operations.

                  The  CICA  issued  Section  3063,  "IMPAIRMENT  OF  LONG-LIVED
                  ASSETS". This statement establishes standards for recognition,
                  measurement  and disclosure of the impairment of non- monetary
                  long-lived assets,  including  property,  plant and equipment,
                  intangible   assets  with  finite   useful   lives,   deferred
                  pre-operating  costs and long-term prepaid assets. The Company
                  does not expect that the  implementation  of this new standard
                  will  have a  material  impact on its  consolidated  financial
                  position or results of its operations.  The effect of adopting
                  this standard on January 1, 2004, has not yet been determined.

                  In June 2002, the FASB issued SFAS 146,  "ACCOUNTING FOR COSTS
                  ASSOCIATED  WITH  EXIT  OR  DISPOSAL   ACTIVITIES."  SFAS  146
                  addresses   financial   accounting  and  reporting  for  costs
                  associated  with exit or  disposal  activities  and  nullifies
                  Emerging   Issues  Task  Force  Issue  No.  94-3,   "LIABILITY
                  RECOGNITION  FOR CERTAIN  EMPLOYEE  TERMINATION  BENEFITS  AND
                  OTHER COSTS TO EXIT AN ACTIVITY." SFAS 146 generally  requires
                  a  liability  for a cost  associated  with an exit or disposal
                  activity to be recognized  and measured  initially at its fair
                  value in the period in which the  liability is  incurred.  The
                  pronouncement  is  effective  for exit or disposal  activities
                  initiated after December 31, 2002.


                                      F-24

                                                                             104

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES (continued)

                  The  CICA  has  issued   Accounting   Guideline  13,  "HEDGING
                  RELATIONSHIPS",  ("AcG13")  which will be effective  for years
                  beginning  on or after  July 1,  2003.  AcG 13  addresses  the
                  identification,  designation,  documentation and effectiveness
                  of hedging  transactions  for the  purposes of applying  hedge
                  accounting.  It also  establishes  conditions  for applying or
                  discounting  hedge  accounting.  In  December  2002,  the CICA
                  approved,  subject to written  ballot,  certain  amendments to
                  AcG13.  These  amendments  are expected to be finalized in the
                  first half of 2003. Under the new guideline,  the Company will
                  be  required  to  document   any  hedging   transactions   and
                  explicitly   demonstrate  that  the  hedges  are  sufficiently
                  effective in order to continue accrual  accounting for hedging
                  and derivatives. Management does not believe that the adoption
                  of AcG13  will have any impact on its  consolidated  financial
                  position or results of operations.

                  In December  2002, the FASB issued SFAS 148,  "ACCOUNTING  FOR
                  STOCK-BASED  COMPENSATION - TRANSITION AND  DISCLOSURE".  This
                  standard  amends  SFAS  123,   "ACCOUNTING  FOR  STOCK-  BASED
                  COMPENSATION",  to provide  alternative  methods of transition
                  for a  voluntary  change  to the fair  value  based  method of
                  accounting for stock-based employee compensation.  The Company
                  does  not  use  the  fair  value  method.  In  addition,  this
                  statement  amends the disclosure  requirements  of SFAS 123 to
                  require  prominent  disclosures  in both  annual  and  interim
                  financial  statements  about  the  method  of  accounting  for
                  stock-based employee compensation and the effect of the method
                  used on reported results.


11.      SUPPLEMENTARY CASH FLOW INFORMATION

         The Company conducted non-cash financing activities as follows:


<TABLE>
<CAPTION>
                                                              2002            2001          2000
                                                                $              $             $
<S>                                                        <C>             <C>           <C>
         Non-cash financing activities
            Finder's fees payable                            (5,000)           -             -
            Shares issued for payment of finder's fees        5,000            -             -
                                                           ---------       ---------     ---------
                                                               -               -             -
                                                           =========       =========     =========
</TABLE>


                                      F-25

                                                                             105

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
                         (EXPRESSED IN CANADIAN DOLLARS)

12.      SUBSEQUENT EVENTS

         Subsequent  to December 31, 2002 and on or before  April 11, 2003,  the
         Company:

           (i)    issued 237,000 shares for $100,800 on the exercise of options.
                  In  addition,   the  Company  issued   2,714,524   shares  for
                  $1,320,949 on the exercise of warrants and agents  warrants as
                  described in Note 6;

          (ii)    received   regulatory  approval  to  grant  stock  options  to
                  purchase  223,500  common shares  exercisable  for a period of
                  five years at a price of $0.84 per share;

         (iii)    agreed,  subject  to  regulatory  approvals,  to farm  out its
                  Mogote  Property  in the NW San Juan  Region of  Argentina  to
                  Amera Resources Corporation ("Amera"), a private company which
                  has a common  director.  Amera  has the  option  to earn a 51%
                  interest  in the 8,009  hectare  Mogote  Property  by  issuing
                  1,650,000  common  shares  of  Amera  to  the  Company  and by
                  incurring  US$1.25  million of  expenditures,  including  work
                  programs and underlying option payments,  all over a five year
                  period; and

          (iv)    arranged, subject to regulatory approval, to conduct a private
                  placement  financing  of up to 2,900,000  units,  at $0.90 per
                  unit,  to raise gross  proceeds of up to $2.61  million.  Each
                  unit is  comprised  of one common  shares and  one-half of one
                  warrant. Each full warrant will entitle the holder to purchase
                  an  additional  share  for a period  of one year at $1.10  per
                  share.  A cash  commission  of 8% will be  paid  and  warrants
                  granted  for the  portion  of the  private  placement  sold by
                  agents.






                                      F-26


                                                                             106

<PAGE>

                                  CERTIFICATION

I, Joseph Grosso, certify that:

1.       I have  reviewed  this annual  report on Form 20-F of IMA  Exploration,
         Inc.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)       designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared;

         b)       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent function):

         a)       all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.


Date:  May 16, 2003
     ---------------------

Signed:  /s/ JOSEPH GROSSO
        --------------------------------------------
         Joseph Grosso, Chief Executive Officer

                                                                             107

<PAGE>


                                  CERTIFICATION

I, William Lee, certify that:

1.       I have  reviewed  this annual  report on Form 20-F of IMA  Exploration,
         Inc.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)       designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this annual report is being prepared;

         b)       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented  in this  annual  report our  conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent function):

         a)       all  significant  deficiencies  in the design or  operation of
                  internal   controls   which   could   adversely   affect   the
                  registrant's ability to record, process,  summarize and report
                  financial  data  and  have  identified  for  the  registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.


Date:  May 16, 2003
     -------------------------

Signed:  /s/ WILLIAM LEE
        -----------------------------------------
         William Lee, Chief Financial Officer


                                                                             108