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, 2004

                                       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, 2004.
                43,816,207 COMMON SHARES AS OF DECEMBER 31, 2004

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:



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.

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

KM:                          Kilometre

M:                           Meter

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

MANIFESTATIONS:              In Argentina,  manifestations or  "manifestaciones"
                             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
                             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.

PPM:                         parts per million


                                      -2-
<PAGE>


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.

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.

AG:                          Silver

AS:                          Arsenic

AU:                          Gold

BA:                          Barium

CO:                          Cobalt

CU:                          Copper

MO:                          Molybdenum

PB:                          Lead

SB:                          Antimony

ZN:                          Zinc


                                    MINERALS

BIOTITE:                     An iron and magnesium bearing mica mineral.

CARBONATE:                   A mineral containing the radical CO3.

CHALCOPYRITE:                A sulfide mineral containing copper and iron.

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

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

MAGNETITE:                   A magnetic iron oxide 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.



                                      -3-
<PAGE>




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, 2004,  2003 and 2002 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,  2001 and 2000 are
derived from the  Company's  audited  consolidated  financial  statements  after
reflecting  the carve out of Golden Arrow  Resources  Corporation,  not included
herein.

The  information  in the  following  table was extracted  from the  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 11 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  meet  property
commitments on its existing property holdings;  however, at present, the Company
does not have  sufficient  funds to conduct  exploration  programs on all of its
existing  properties  and will  need to  obtain  additional  financing  or joint
venture partners in order to initiate any such programs.  See "Item 5. Operating
and Financial Review and Prospects".

CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

                            ---------------------------------------------------
                                    (CDN$ IN 000, EXCEPT PER SHARE DATA)
                            ---------------------------------------------------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

Revenue                          $0         $0         $0         $0         $0

General Corproate
  Expenditures               (4,084)    (2,276)      (330)      (173)      (387)

General Explroation
  Expenditures                 (229)      (227)      (180)      (110)      (137)

Foreign Exchange
  Gain (Loss)                  (195)       (13)        (2)         3         (3)



                                      -5-
<PAGE>


                            ---------------------------------------------------
                                    (CDN$ IN 000, EXCEPT PER SHARE DATA)
                            ---------------------------------------------------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

Interest and
  Miscellaneous Income          102         67         27         97        157

Provision for
  Marketable Securities        (100)         -          -          -          -

Loss Allocated
  to spin off assets           (131)      (969)      (955)      (699)    (1,654)

Net Income (Loss)            (4,655)    (3,418)    (1,440)      (882)    (2,024)

Earnings (Loss)
  per share from
  continuing operations       (0.11)     (0.08)     (0.02)     (0.01)     (0.03)

Earnings (Loss) per share
  Basic and Diluted           (0.11)     (0.11)     (0.06)     (0.06)     (0.17)


Weighted Average Number
  of Shares Outstanding      40,939     32,252     23,188     15,104    11, 939

Working Capital               5,053      4,747      1,431        733      1,435

Capital Assets                   94         36         46         57         74

Mineral Properties            6,551      1,469        148        132        114

Spin-Off Assets                   -      6,749      6,903      5,369      3,866

Long-Term Debt                    -          -          -          -          -

Total Assets                 12,222     13,419      8,637      6,407      5,678

Net Assets -
  Shareholder's Equity       10,813     11,671      7,324      5,372      4,790


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 11 of the  accompanying  consolidated
audited financial statements):


                                      -6-
<PAGE>




                            ---------------------------------------------------
                                    (CDN$ IN 000, EXCEPT PER SHARE DATA)
                            ---------------------------------------------------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

CONSOLIDATED STATEMENT
  OF OPERATIONS

Earnings (Loss) for the
year under Canadian GAAP    $(4,655)   $(3,418)   $(1,440)     $(882)   $(2,024)

Mineral property and
deferred exploration costs
for the year, net of future
income tax and write down
of marketable securities     (4,448)    (1,813)    (1,267)    (1,321)    (1,989)

Mineral property and
deferred exploration costs
written off during the
year which would have been
expensed in the year
incurred                          -        777          -         21        790

Stock-based compensation          -       (144)      (102)         -          -

Earnings (Loss) for the
year under US GAAP before
comprehensive income
adjustments                 $(9,134)   $(4,598)   $(2,809)   $(2,181)   $(3,224)

Unrealized (loss) gains on
available-for-sale
securities                     (387)       434         55          -          -
                            -------    -------    -------    -------    -------
Comprehensive
Income (Loss)               $(9,521)   $(4,164)   $(2,754)   $(2,181)   $(3,224)
                            =======    =======    =======    =======    =======



                                      -7-
<PAGE>


                            ---------------------------------------------------
                                    (CDN$ IN 000, EXCEPT PER SHARE DATA)
                            ---------------------------------------------------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

Earnings (Loss) per
share under US GAAP          $(0.22)    $(0.14)    $(0.12)    $(0.14)    $(0.26)
                            =======    =======    =======    =======    =======

Diluted Earnings (Loss)
per share under US GAAP      $(0.22)    $(0.14)    $(0.12)    $(0.14)    $(0.26)
                            =======    =======    =======    =======    =======


                            -------    -------    -------    -------    -------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

SHAREHOLDERS' EQUITY

Balance per Canadian GAAP   $10,813    $11,671     $7,324     $5,372     $4,790

Mineral property and
deferred exploration
costs expensed net of
future income tax            (5,666)    (6,884)    (5,848)    (4,581)    (3,282)

Accumulated other
comprehensive income             84        489         54          -          -
                            -------    -------    -------    -------    -------
Balance per US GAAP          $5,231     $5,277     $1,530       $790     $1,508
                            =======    =======    =======    =======    =======


CONSOLIDATED STATEMENTS
OF CASH FLOWS

OPERATING ACTIVITIES

Cash (used) provided
per Canadian GAAP           $(2,962)   $(1,419)   $(1,306)     $(898)     $(987)

Mineral properties and
deferred costs               (4,578)    (1,851)    (1,267)    (1,321)    (1,989)

Cash used per US GAAP       $(7,540)   $(3,270)   $(2,573)   $(2,219)   $(2,976)

INVESTING ACTIVITIES

Cash used per
Canadian GAAP               $(4,510)   $(1,873)   $(1,278)   $(1,312)   $(2,004)

Mineral properties
and deferred costs            4,578      1,851      1,267      1,321      1,989
                            -------    -------    -------    -------    -------
Cash provided (used)
per US GAAP                     $68       $(22)      $(11)        $9       $(15)
                            =======    =======    =======    =======    =======


                                      -8-
<PAGE>

                            ---------------------------------------------------
                                    (CDN$ IN 000, EXCEPT PER SHARE DATA)
                            ---------------------------------------------------
                               2004       2003       2002       2001       2000
                            -------    -------    -------    -------    -------

FINANCING ACTIVITIES

Cash provided per
Canadian and US GAAP         $9,269     $6,278     $3,264     $1,463     $3,380
                            =======    =======    =======    =======    =======

See Note 11 of the Company's consolidated financial statements.

Exchange Rate History

The noon rate of exchange on May 5, 2005,  reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States dollars was CDN$.8033 (US$1.2448 = 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, 2005.

         MONTH                       HIGH              LOW

         November 2004              .8493             .8155
         December 2004              .8435             .8064
         January 2005               .8346             .8050
         February 2005              .8134             .7960
         March 2005                 .8060             .8024
         April 2005                 .8233             .7957

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, 2000 - December 31, 2000         0.6746
         January 1, 2001 - December 31, 2001         0.6456
         January 1, 2002 - December 31, 2002         0.6368
         January 1, 2003 - December 31, 2003         0.7206
         January 1, 2004 - December 31, 2004         0.7682

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  (see "Item 4.  Information  on the  Company - History and
Development of the Company"):

LIQUIDITY AND CASH FLOW: As at the date of this annual  report,  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.  As at May 5, 2005 the
Company had working capital of approximately $5,500,000. Management believes the
Company has  adequate  resources  to maintain  its ongoing  operations  and will
require additional  financing for planned exploration and property  acquisitions
for the remainder of fiscal 2005.  See "Item 5.  Operating and Financial  Review
and Prospects - Liquidity and Capital Resources".


                                      -9-
<PAGE>


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.

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 planned 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.

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
Company's management may elect to acquire new projects, at which time additional
equity  financing may be required 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 projects and  business  plan.  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 does
not have any  definitive  commitment  or agreement  concerning  any  investment,
strategic  alliance  or  related  effort,  on  any  of  the  Company's  material
properties.  The Company may seek joint venture  partners to provide funding for
further work on any or all of those other properties. Joint ventures may involve
significant  risks and the Company may lose any  investment  it makes in a joint
venture. Any investments, strategic alliances or related efforts are accompanied
by risks such as:

     1.   the difficulty of identifying  appropriate  joint venture  partners or
          opportunities;
     2.   the  time the  Company's  senior  management  must  spend  negotiating
          agreements and monitoring joint venture activities;
     3.   the possibility that the Company may not be able to reach agreement on
          definitive agreements, with potential joint venture partners;
     4.   potential  regulatory  issues  applicable  to the mineral  exploration
          business;
     5.   the investment of the Company's  capital or properties and the loss of
          control over the return of the Company's capital or assets;
     6.   the inability of management to capitalize on the growth  opportunities
          presented  by joint  ventures;  and 7.  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   resources  will  be  successful.   Moreover,
substantial  expenditures are required to establish  resources 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 resources,  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
resources.

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.  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



                                      -10-
<PAGE>


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.  Title to properties  may be subject to litigation  claims by
others. On March 5, 2004 Minera Aquiline  Argentina SA, a subsidiary of Aquiline
Resources Inc.  ("Aquiline"),  commenced an action  against the Company  seeking
damages and a constructive trust over certain of the Company's properties in the
Navidad area.  The Company  believes the Aquiline  legal action is without merit
and  continues  to  vigorously  defend  itself.  A Statement of Defence has been
filed.  The  trial  has been set for  October  11,  2005 in  Vancouver,  British
Columbia.  As of the date of this annual report the outcome is not determinable.
See "Item 8. Financial Information - Legal Proceedings."

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  on the TSX
Venture Exchange (the "TSX-V") fluctuated from a high of $4.80 to a low of $1.73
during the 12-month period ending  December 31, 2004.  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  certain
insurance,  however,  such  insurance  is subject  to  numerous  exclusions  and
limitations.  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  $160,000,  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  US$5,000,000  coverage  for bodily  injury or property
damage per occurrence and coverage up to  US$5,000,000  per offence 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.




                                      -11-
<PAGE>



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

    -    $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.

In April 2005,  the Company  purchased an Executive and  Organization  Liability
insurance policy for the benefit of directors and officers.  The aggregate limit
of liability is $5 million. The policy is renewable on a yearly basis.

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 Arthur Lang, 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
are now employed by the Grosso  Group  Management  Ltd.  ("Grosso  Group").  The
Company has entered into  consulting  agreements  with Oxbow and KGE  Management
Ltd. The Company does not maintain "key-man"  insurance in respect of any of its
principals.

Grosso Group Management Ltd.

Effective  January 1, 2005, the Company engaged the Grosso Group Management Ltd.
to provide services and facilities to the Company. As of the date of this Annual
Report,  a formal  agreement among the Company and the Grosso Group has not been
finalized.  Until  such time as the formal  agreement  has been  finalized,  the
Company  and the Grosso  Group  intend to work  under the terms of the  proposed
Administration Services Agreement by and among the Company and the Grosso Group,
which is discussed  below. It is anticipated that the formal agreement will have
an effective date of January 1, 2005.

The Grosso Group is a private company which will be owned by the Company, Golden
Arrow  Resources  Corporation,   Amera  Resources  Corporation  and  Gold  Point
Exploration Ltd., each of which will own one share. Pursuant to the terms of the
proposed  Administration  Services Agreement,  the Grosso Group will provide its
shareholder companies with geological,  corporate  development,  administrative,
and  management  services  on a  non-exclusive  and on an "as  needed"  and  "as
available" basis. The administration services for each shareholder company shall
include  bookkeeping,  accounting  and  services in  connection  with  quarterly
filings, material change reports and other disclosure filings on SEDAR.

The Grosso Group will provide each shareholder company with:

         1.       the use of the Grosso Group's offices;
         2.       receptionist personnel;
         3.       office equipment; and
         4.       services   of    administration,    accounting,    purchasing,
                  secretarial  and like support  staff on an "as needed" and "as
                  available" basis.

Shareholder  companies  may  appoint  the  Grosso  Group to  manage  their  work
programs.  In such event,  the Grosso Group will generally  retain suppliers and
contracts in connection with each shareholder  company's  approved work programs
and will separately  invoice such shareholder  company for the third-party costs
and  such  invoice  will  include  a  handling  charge  as a  percentage  of the
third-party  costs, such charge to be in accordance with industry  standards and
reviewed for reasonableness  from time to time, and which would be negotiated at
the time of such work program.




                                      -12-
<PAGE>

Each shareholder  company will pay the Grosso Group a monthly fee for the Grosso
Group's  services.  The Grosso Group  intends to allocate the costs of the staff
and related general and administrative  expenses to its shareholder companies on
a full recovery basis.  The fee will be based upon a pro-rationing of the Grosso
Group's costs,  including its executive staff and other overhead,  among each of
the shareholder  companies,  with regard to the expected average annual level of
services  provided to each  shareholder  company.  The staff of the Grosso Group
will record their daily activities in connection with each  shareholder  company
and they will  retain a log for  invoicing  purposes.  The fee is to be reviewed
from time to time and the basis may be changed by the Grosso  Group in the event
the  Grosso  Group's  costs  change  or the  shareholder  companies'  use of the
services  is in excess of  historical  experience  or in the event a greater  or
lesser number of shareholder  companies are using the Grosso  Group's  services.
Each shareholder company has prepaid one month's initial estimated allocation of
the Grosso Group's fully  recoverable  costs,  which for the Company amounted to
$60,000  (which as of the date of this report is the estimated  initial  monthly
allocation for the Company).

The Grosso Group has the right to request each of the  shareholder  companies to
allocate  a  reasonable  number  of shares in their  incentive  option  plans to
employees  of the Grosso  Group based upon the general  amount of time and value
added by such employees.

It is anticipated that the  Administration  Services Agreement may be terminated
by a shareholder  company after January 1, 2007, upon 30 days' written notice to
the Grosso Group. Prior to January 1, 2007, if a shareholder  company desires to
terminate the  agreement in the first year, it will pay a termination  fee equal
to one-year's basic  administration  charge and if a shareholder company desires
to terminate the  agreement in the second year,  it will pay a  termination  fee
equal to six-months' basic administration charge.

It  is  anticipated  that  upon  termination  of  the  Administration   Services
Agreement,  each of the  shareholder  companies  will agree to resell its common
share back to the Grosso Group for $1.00 and the shareholder  companies will not
be able to sell,  transfer or otherwise dispose of or encumber such share during
the term of the Administration Services Agreement.

The Grosso Group's areas of experience encompass financing,  marketing, property
acquisition,  community relations,  socioeconomic issues, regulatory compliance,
government relations, property exploration and investor relations.  Additionally
the Grosso Group has a number of other support staff at its corporate office and
arrangements with contract providers of accounting and  administrative  services
at the country operations' offices in Argentina and Peru.

The members of the board of directors  of the Grosso Group are  appointed by the
shareholder  companies,  with each  shareholder  company  appointing  one of its
directors  to serve as a director of the Grosso  Group.  As of May 5, 2005 it is
anticipated  that the  directors  of the Grosso  Group will be  Nikolaos  Cacos,
Joseph Grosso, Arthur Lang and Nick DeMare. Messrs. Lang and Grosso are officers
and  directors  of the  Company.  Mr.  Lang is an  officer  of  Amera  Resources
Corporation and a director of Golden Arrow Resources Corporation.  Mr. Grosso is
a director and officer of Amera Resources Corporation and a director and officer
of Golden Arrow  Resources  Corporation.  Nikolaos Cacos is an officer of IMA, a
director and officer of Golden Arrow  Resources  Corporation  and a director and
officer of Amera Resources  Corporation.  Nick DeMare is an officer and director
of Gold  Point  Exploration  Ltd.  Mr.  DeMare  indirectly  owns  100% of  Chase
Management Ltd., a company which provides consulting services to the Company and
other Grosso Group shareholder companies.

Each of the public  company  shareholders  of the Grosso Group will have its own
separate  board of directors  (whose  members  include  persons  employed by the
Grosso Group);  however, some directors will serve on multiple boards and on the
board of directors of companies which are not shareholders of the Grosso Group.

In connection with the formation and establishment of the Grosso Group, Mr. Nick
DeMare  was  issued  the  initial  share of the  Grosso  Group  and acted as the
President,  Secretary and sole director of the Grosso Group.  Effective February
6, 2004, Mr. DeMare  transferred the sole outstanding  share of the Grosso Group
to Joseph Grosso,  the President and a director of the Company.  Mr. DeMare also
resigned as a director  and the  President  and  Secretary  of the Grosso  Group
effective  February 6, 2004 and Mr.  Grosso was  appointed as a director and the
President and Secretary of the Grosso Group.  It is anticipated  that Mr. Grosso
will return the sole  outstanding  share of the Grosso Group to the Grosso Group
for cancellation and one share will then be issued to the Company.




                                      -13-
<PAGE>

The Board of Directors of the Company  will  approve the formal  agreement  once
completed.

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:  Several 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 - Directors
and Senior Management - Conflicts of Interest".

FOREIGN COUNTRIES AND REGULATORY REQUIREMENTS: The projects in which the Company
has an  interest  are  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.  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.  The
status of Argentina as a developing  country 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.  The Argentine
economy has experienced recessions in recent years and there can be no assurance
that their economy will recover from such recessions.

Argentina has recently  experienced  some  economic and  political  instability.
Management  believes the new democratic elected government is making progress in
the   domestic   economy  and  it  is   improving   the  image  of  the  country
internationally.  Additionally,  management  believes  the  economic  crisis  of
December  2001 has been  overcome,  and  although  the country  defaulted on its
loans,  it has worked out with the  International  Monetary Fund 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.

IMPACT OF  GOVERNMENT  REGULATIONS  ON THE COMPANY'S  BUSINESS:  The projects in
which the Company has an interest are located in Argentina.

ARGENTINA

Mining Industry

Mineral  companies  are  subject to both the  Argentinean  Mineral  Code and the
Environmental  Protection  Mining Code.  The Company  believes it is in material
compliance  with  both  the  Argentinean  Mineral  Code  and  the  Environmental
Protection Mining Code.

Mining Law in Argentina

In IM-11/19 Argentina; Economic Trends-Nov. 1999, the author stated:



                                      -14-
<PAGE>

          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.

Regulatory Environment

Management believes 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.

Political Environment and Economy

In recent years Argentina has experienced a number of changes to its government.
The current president,  Nestor Kirchner,  came to power in May 2003. The country
continues to struggle with its external debt. Negotiations continue with the IMF
and  several of its other  major  creditors.  The  economic  performance  of the
country  has been  troubled  and  uncertain  since the late  1990's.  Management
believes  there  are  currently  some  positive  indications  that the  economic
situation is improving.

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.

The  provincial  government of Chubut  Province,  Argentina has enacted  certain
anti-mining  laws  banning  the use of cyanide and  open-pit  mining in metallic
extraction  in the  Province  of  Chubut.  The  provincial  legislation  is more
restrictive than current federal  Argentinean mining laws. The Company has hired
a mining engineering  consultant to oversee all environmental and socio-economic


                                      -15-
<PAGE>


studies  and  programs to ensure  international  best  practices  for the mining
industry are applied in the  development  of the Company's  properties.  Certain
authorities  believe that the provincial  legislation  may be  unconstitutional.
However,  there can be no  assurance  that the  provincial  legislation  will be
repealed.

CURRENCY FLUCTUATIONS:  The Company's operations in Argentina and Canada make it
subject to foreign  currency  fluctuations  and such  fluctuation  may adversely
affect the Company's  financial  position and results.  Certain of the Company's
expenses are  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. Continued
fluctuation  of the Canadian  dollar  against the U.S.  dollar will  continue to
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  currency.  The
Company  does not  engage in  hedging  activities.  See "Item 5.  Operating  and
Financial Review and Prospects".

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).  Since the Company's shares are traded for less than US$5.00 per
share,  the shares are  subject to the SEC's penny stock  rules.  The  Company's
shares  will be  subject  to the penny  stock  rules  until such time as (1) the
issuer's net tangible assets exceed US$5,000,000 during the issuer's first three
years of continuous  operations or  US$2,000,000  after the issuer's first three
years of continuous operations;  or (2) the issuer has had average revenue of at
least   US$6,000,000   for  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  must  obtain a  written
acknowledgement   from  the  purchaser  that  the  purchaser  has  received  the
disclosure  document.  The  broker-dealer  also must provide the  customer  with
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.  Such rules and regulations may make it difficult for holders
to sell the  common  stock of the  Company,  and they may be  forced  to hold it
indefinitely.

ENFORCEMENT  OF LEGAL  PROCESS:  It may be difficult to bring and enforce  suits
against the Company.  The Company is incorporated in British  Columbia.  None of
the  Company's  directors  are  residents  of the United  States  and all,  or a
substantial  portion,  of their assets are located outside of the United States.
As a result, it may be difficult for U.S. holders of the Company's common shares
to effect  service of process on these  persons  within the United  States or to
enforce judgments  obtained in the U.S. based on the civil liability  provisions
of the U.S.  federal  securities  laws against the Company or their officers and
directors.  In  addition,  a  shareholder  should not assume  that the courts of
Canada (i) would enforce  judgments of U.S.  courts  obtained in actions against
the Company or their officers or directors  predicated  upon the civil liability
provisions  of the U.S.  federal  securities  laws or other  laws of the  United
States,  or (ii) would enforce,  in original  actions,  liabilities  against the
Company  or their  officers  or  directors  predicated  upon  the  U.S.  federal
securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian court provided that
those laws are not contrary to Canadian  public  policy,  are not foreign  penal
laws or laws that deal with  taxation  or the  taking of  property  by a foreign
government  and provided that they are in compliance  with  applicable  Canadian
legislation regarding the limitation of actions.  Also, a judgment obtained in a
U.S.  court would  generally  be  recognized  by a Canadian  court  except,  for
example:



                                      -16-
<PAGE>

1.       where  the  U.S.   court  where  the   judgment  was  rendered  had  no
         jurisdiction according to applicable Canadian law;
2.       the judgment was subject to ordinary  remedy  (appeal,  judicial review
         and any other judicial proceeding which renders the judgment not final,
         conclusive or enforceable  under the laws of the  applicable  state) or
         not final,  conclusive or enforceable  under the laws of the applicable
         state;
3.       the judgment was obtained by fraud or in any manner contrary to natural
         justice or rendered  in  contravention  of  fundamental  principles  of
         procedure;
4.       a dispute  between the same parties,  based on the same subject  matter
         has given rise to a judgment  rendered in a Canadian  court or has been
         decided  in a  third  country  and the  judgment  meets  the  necessary
         conditions for recognition in a Canadian court;
5.       the outcome of the  judgment of the U.S.  court was  inconsistent  with
         Canadian public policy;
6.       the judgment  enforces  obligations  arising from foreign penal laws or
         laws that deal with  taxation  or the taking of  property  by a foreign
         government; or
7.       there has not been compliance with applicable Canadian law dealing with
         the limitation of actions.


ITEM 4.   INFORMATION ON THE COMPANY.
--------------------------------------------------------------------------------

History and Development of the Company

Since 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 in British  Columbia 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  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% owned  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 disposition of certain properties held by IMPSA



                                      -17-
<PAGE>


(BVI). See "Item 4. Information on the Company - Organizational  Structure." The
fee is limited to a maximum of  $1,400,000.  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.



                                      -18-
<PAGE>



In August  1999,  the Company  completed a private  placement  with Barrick Gold
Corporation  ("Barrick").  Barrick  was granted an option to earn an interest in
either the  Potrerillos or Rio de Taguas  property.  The funds were spent on the
drilling program on the Potrerillos property.  Subsequent proceeds were spent on
further  exploration of the Company's  properties in the Valle de Cura region of
San Juan Province, Argentina from October 2000 to March 2001. As a result of the
private  placement  Barrick  became the Company's  largest  shareholder.  During
September 2003 Barrick reduced its shareholding to 1,000,000 shares.

The  Company  agreed  to spend a  minimum  of  $1,125,000  on its  Valle de Cura
properties  out of the  proceeds  from  the  Barrick  private  placement.  As of
December 31, 2003 this  requirement had been met. On December 15, 2003,  Barrick
served  notice  that it would not be  exercising  the option and the Company has
begun pursuing other partners for the continued exploration of these drill ready
projects.

On March 29,  2004,  the new British  Columbia  Business  Corporations  Act (the
"BCBCA")  came into force in British  Columbia and  replaced the former  Company
Act, which is the statute that  previously  governed the Company.  See "Item 10.
Additional Information - Memorandum and Articles of Association."

On  May  3,  2004,  the  Company  announced  its  intention  to  proceed  with a
reorganization  of the  Company  which had the result of  dividing  its  present
mineral   resource   assets  between  two  separate   public   companies.   Upon
implementation  of the corporate  reorganization,  the Company would continue to
hold the Navidad silver-lead-copper project and certain other mineral properties
in central Chubut  Province,  Argentina,  while the newly created public company
will hold the other resource assets of the Company.

Under the  reorganization,  the  Company's  most advanced  project,  the Navidad
silver-lead-copper  project and certain other Navidad area properties in central
Chubut Province,  Argentina (the "Navidad Properties")  continued to be owned by
the Company,  while the  Company's  non-Navidad  mineral  properties  along with
$750,000 of  operating  cash and the joint  venture  agreements  (including  the
marketable securities) relating to the transferred properties  (collectively the
"Transferred  Assets") were be transferred to Golden Arrow Resource  Corporation
("Golden  Arrow"),  a new public  company  formed to effect the  reorganization.
Golden Arrow is committed to grass roots  exploration while the Company retained
the Navidad project and focused on:

    1.   A significantly  expanded drill program on the numerous  targets within
         Navidad;
    2.   More detailed regional exploration for Navidad style targets;
    3.   Pursuing a listing on major U.S. and Canadian stock exchanges;
    4.   Completing  a bankable  feasibility  study on the Navidad  project in a
         timely fashion; and
    5.   Exploring  the Navidad  related  properties  directly or through  joint
         ventures.

However,  there are no assurances  that the Company will be able to successfully
complete any of the foregoing.

The reorganization was implemented by a Plan of Arrangement under the BCBCA. The
Company's shareholders and optionholders approved the Plan of Arrangement at the
Company's  Annual  General  Meeting  that was held on June 22,  2004.  All other
approvals were subsequently received.

The  common  shares of Golden  Arrow were  distributed  to  shareholders  of the
Company in proportion to their  shareholdings in the Company on July 7, 2004 and
on the basis of one Golden Arrow share for every 10 shares of the Company  held.
The  reorganization  was intended to enhance  shareholder value by enabling each
company  to focus on the  development  of its own  properties,  and by  allowing
shareholders to hold an interest in Golden Arrow which reflects the value of the
Company's portfolio of exploration projects.



                                      -19-
<PAGE>



                           CURRENT CORPORATE STRUCTURE


                       ----------------------------------
                              IMA Exploration Inc.
                       ----------------------------------
                                       |
                                       |
                                      100%
                                       |
                                       |
                       ----------------------------------
                               IMA Holdings Corp.
                       ----------------------------------
                                       |
                               CANADA  |
--------------------------------------------------------------------------------
                                       |
                                      100%
                                       |
                       ----------------------------------
                             IMA Latin America Inc.
                       ----------------------------------
                                       |
                                      100%
                                       |
                       ----------------------------------
                       Inversiones Mineras Argentina Inc.
                       ----------------------------------
                                       |
                         BVI/BARBADOS  |
--------------------------------------------------------------------------------
                        ARENTINA/PERU  |
                                       |
                                      100%
                                       |
                       ----------------------------------
                       Inversiones Mineras Arentinas S.A.
                       ----------------------------------
                                       |
                                       |
                             -----------------------
                             Navidad Area Properties
                             -----------------------




                                      -20-
<PAGE>


PRINCIPAL OFFICE

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

ACQUISITION AND DISPOSITION OF MINERAL PROPERTY INTERESTS DURING THE THREE PRIOR
FISCAL YEARS

The Company has made  additions  to mineral  properties  and  deferred  costs of
$4,448.659,  $1,069,228,  and $5,090 and capital assets of $93,650,  $21,875 and
$11,201  for  the  fiscal  years  ended  December  31,  2004,   2003  and  2002,
respectively.

The Company  has not made any write down to the value of its mineral  properties
and deferred costs.

PLANNED EXPLORATION EXPENDITURES AND PROPERTY PAYMENTS

For the period from January 1 to May 5, 2005,  the Company has made additions to
mineral  properties  and deferred  costs of  approximately  $2,050,000.  For the
balance  of 2005,  the  Company  expects  to spend a further  $4,000,000  on the
Navidad project.  See "Item 4.  Information on the Company - Properties,  Plants
and Equipment - Principal Properties - Argentinean Properties and "Item 7. Major
Shareholders and Related Party Transactions - Related Party Transactions."

As of May 5, 2005, 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 Argentina.  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 from mining  operations.  There is no
assurance  that a  commercially  viable  mineral  deposit  exists  on any of the
Company's properties. Further exploration and evaluation will be required before
a final  determination  as to the economic and legal  feasibility  of any of the
properties is determined.

On the  properties  in the Navidad area,  accessibility  and work may be limited
during the winter months.

GENERAL DEVELOPMENT OF THE COMPANY'S BUSINESS

The  Company  has been active in Peru and  continues  to be active in  Argentina
since 1996 acquiring and exploring mineral properties.

In August 1999 the Company completed a private  placement with Barrick.  Barrick
was granted an option to earn an interest  in either the  Potrerillos  or Rio de
Taguas property. The funds were spent on the drilling program on the Potrerillos
property. Subsequent proceeds were spent on further exploration of the Company's
properties  in the Valle de Cura  region of San Juan  Province,  Argentina  from
October 2000 to March 2001. As a result of the private  placement Barrick became
the Company's largest shareholder but has subsequently reduced its holdings.



                                      -21-
<PAGE>


The  Company  agreed  to spend a  minimum  of  $1,125,000  on its  Valle de Cura
properties  out of the  proceeds  from  the  Barrick  private  placement.  As of
December  31, 2003 this  requirement  had been met. On December 15, 2003 Barrick
served notice that it would not be exercising the option.

In March 2001,  the Company  granted Rio Tinto  Mining and  Exploration  Limited
("Rio Tinto") an option to acquire a majority interest in the Mogote property in
the Valle de Cura region of San Juan  Province,  Argentina.  This  agreement was
terminated by Rio Tinto in December  2001.  In March 2003 (as amended  September
30, 2003), the Company granted Amera Resources  Corporation  ("Amera") an option
to  acquire  a 51%  interest,  amended  on April 8, 2004 to 75%,  in the  Mogote
property.  See "Item 4.  Information  on the  Company -  Properties,  Plants and
Equipment - Principal  Properties -  Argentinean  Properties - San Juan Province
Properties  -  Northwest  San  Juan  -  Mogote  Property"  and  "Item  7.  Major
Shareholders and Related Party Transactions - Related Party Transactions."

In 2002, the Company began to acquire properties in Chubut Province,  Argentina.
In 2003,  the Company  significantly  increased  its focus on  activities in the
Chubut region. The Company has entered into a number of joint venture agreements
which resulted in the farm-out of several of its non-core properties.

In early 2003, the Company focused its efforts on its Navidad Area Properties in
Chubut Province located in southern  Argentina.  The preliminary  results of its
initial  exploration  efforts were very encouraging.  A Phase I drilling program
commenced  in  November,  2003 and was  completed in late March 2004. A Phase II
drill program  commenced in late May 2004 and was  completed in September  2004.
Subsequent  to  completion  of the  Phase  II  program,  a  program  of  surface
exploration  including  prospecting,  geological mapping,  ground geophysics and
soil  sampling  was  carried  out. A Phase III  drilling  program  commenced  in
November,  2004 and,  other than a break for  Christmas,  drilling  continued to
March 7, 2005. Subsequently the Company has announced that the Phase III program
budget has been increased to include an additional 10,000 metres of drilling and
drilling resumed in April,  2005. The Phase I drill program at Navidad comprised
8,859.6  metres in 53 holes,  37 of which were drilled on Galena Hill.  Phase II
drilling comprised 9,596.5 metres of diamond core drilling in 67 holes. Drilling
in the Phase II program focused on the Esperanza  Trend, the Barite Hill target,
and on the Navidad Hill and Connector  Zone targets.  Phase III drilling to date
has comprised  9,526.2 metres in 54 holes for a project total of 27,982.3 metres
in 174 holes.

On  May  3,  2004,  the  Company  announced  its  intention  to  proceed  with a
reorganization of the Company.

Under the  reorganization,  the  Company's  most advanced  project,  the Navidad
silver-lead-copper  project and certain other Navidad area properties in central
Chubut Province,  Argentina (the "Navidad Properties")  continued to be owned by
the Company,  while the  Company's  non-Navidad  mineral  properties  along with
$750,000 of  operating  cash and the joint  venture  agreements  (including  the
marketable securities) relating to the transferred properties  (collectively the
"Transferred  Assets") were be transferred to Golden Arrow Resource  Corporation
("Golden  Arrow"),  a new public  company  formed to effect the  reorganization.
Golden Arrow is committed to grass roots  exploration while the Company retained
the Navidad project and focused on:

     1.   A significantly  expanded drill program on the numerous targets within
          Navidad;
     2.   More detailed regional exploration for Navidad style targets;
     3.   Pursuing a listing on major U.S. and Canadian stock exchanges;
     4.   Completing a bankable  feasibility  study on the Navidad  project in a
          timely fashion; and
     5.   Exploring  the Navidad  related  properties  directly or through joint
          ventures.

However,  there are no assurances  that the Company will be able to successfully
complete any of the foregoing.

The reorganization was implemented by a Plan of Arrangement under the BCBCA. The
Company's shareholders and optionholders approved the Plan of Arrangement at the
Company's  Annual  General  Meeting  that was held on June 22,  2004.  All other
approvals were subsequently received.

The  common  shares of Golden  Arrow were  distributed  to  shareholders  of the
Company in proportion to their  shareholdings in the Company on July 7, 2004 and
on the basis of one Golden Arrow share for every 10 shares of the Company  held.
The  reorganization  was intended to enhance  shareholder value by enabling each
company  to focus on the  development  of its own  properties,  and by  allowing
shareholders to hold an interest in Golden Arrow which reflects the value of the
Company's portfolio of exploration projects.



                                      -22-
<PAGE>


GOVERNMENT REGULATIONS

The  Company's   operations  are  subject  to  certain   governmental  laws  and
regulations. See "Item 3. Key Information - Risk Factors - Foreign Countries and
Regulatory  Requirements",  "Item 3. Key  Information - Risk Factors - Impact of
Government Regulations on the Company's Business" and "Item 3. Key Information -
Risk Factors - Environmental Regulations."

Organizational Structure

The Company has one direct wholly-owned subsidiary, IMA Holdings Corp. ("IHC").

IHC has a direct  wholly-owned  subsidiary,  IMA Latin America Inc.  ("IMA Latin
America"), a British Virgin Islands company.

IMA Latin America has one direct  wholly-owned  subsidiary,  Inversiones Mineras
Argentinas  Inc.,  a Barbados  company  ("IMA  Barbados").  IMA Barbados has one
direct  wholly-owned  subsidiary,  Inversiones  Mineras  Argentinas  S.A.  ("IMA
Argentinas"), an Argentine company.

The Company's  current  corporate  structure is depicted  (above).  See "Item 4.
Information on the Company - History and Development of the Company."

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

Properties, Plants and Equipment

The Company's  principal  business is the acquisition and exploration of mineral
properties.  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. See Item 4. Navidad Property - Estimated Resources.

PRINCIPAL PROPERTIES

NAVIDAD PROJECT

On  February  3,  2003  the  Company   announced  the  discovery  of  high-grade
silver-lead  mineralization  on its 100% owned  10,000  hectare  (24,700  acres)
Navidad Project in north central Chubut Province,  Argentina. The mineralization
had been  discovered by prospecting on December 10, 2002 and was a 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  were
abundantly  visible  with 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.

During the fiscal years ending  December 31, 2004, 2003 and 2002 the Company had
capitalized and expensed costs on all of its properties as follows:

                                                General             Aggregate
                                              Exploration             Amount
                          Amount              Expensed in         Written-off In
Fiscal Year Ending     Capitalized            Fiscal Year          Fiscal Year

December 31, 2002         $148,618               $180,321                $ Nil
December 31, 2003       $1,469,026               $226,956                $ Nil
December 31, 2004       $6,551,598               $228,961                $ Nil



                                      -23-
<PAGE>



                            [Argentina Property Map]


                       [GRAPHIC OMITTED][GRAPHIC OMITTED]

            MAP OF ARGENITNA SHOWING THE LOCATION OF THE CITIES OF:

                                  BUENOS AIRES
                                   BARILOCHE
                                 PUERTO MADRYN

   WITH "STAR" SHOWING THE LOCATED OF THE NAVIDAD PROJECT IN CHUBUT PROVINCE



                                      -24-
<PAGE>



ARGENTINEAN PROPERTIES

Navidad Project

On  February  3,  2003,  the  Company  announced  the  discovery  of  high-grade
silver-lead-copper  mineralization  at its 100%  owned  10,000  hectare  (24,700
acres) Navidad Project in north central Chubut,  Argentina.  The  mineralization
had been discovered by prospecting on December 10, 2002, and was a 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 rock sampling activity despite the area being inhabited.  Furthermore a fence
line   passes   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.

PROPERTY DESCRIPTION AND LOCATION

The Navidad  Project  comprises  10,000  hectares  consisting of two  individual
claims  (manifestacions)  in the Gastre  Department  of the  Province of Chubut.
These two claims are underlain by the company's  original  claim (the Gan Cateo)
and cover the same area. The project is centered at approximately 42.415 decimal
degrees  south  latitude and 68.82 decimal  degrees west  longitude in the Campo
Inchauspe  datum.  The above point has been located in the field by professional
surveyors and has the coordinates  2,514,856.53  east and 5,304,454.84  north in
Gauss Kruger Campo Inchauspe zone 2 and was assigned the local grid  coordinates
50,000E,  10,000N  with an  elevation  of  1,218.18  m (Height  Above  Ellipsoid
WGS1984).  The local grid is  rotated  30  degrees  to the east of Gauss  Kruger
north.

Mineral Titles included in the Navidad Project:

--------------------------------------------------------------------------------
File
Number     Year    Date                  Type             Name          Hectares
--------------------------------------------------------------------------------

13984      2002    December 6, 2002      Cateo            Gan             10,000
14340      2004    September 16, 2004    Manifestacion    Navidad Este     5,000
14341      2004    September 16, 2004    Manifestacion    Navidad Oeste    5,000

--------------------------------------------------------------------------------
Note:  the project totals 10,000 hectares, claims 14340 and 14341 together cover
       the same area as the original claim 13984.

ACCESSIBILITY AND INFRASTRUCTURE

The  property  is located in the  north-central  part of the  Province of Chubut
within the prominent Gastre  structural  lineament in a somewhat  uplifted area.
Maximum elevation within the Gan cateo is 1,460 m while the minimum elevation is
1,060 m. Relief is gentle with minor local exceptions.

Vegetation is sparse and comprises grasses and low brush.  Trees are absent. The
climate is characterized as continental  semi-arid with moderate temperatures in
summer often accompanied by high winds. Winters are cold with temperatures often
dipping below zero Celsius,  but are  generally  not  characterized  by extended
sub-zero  periods.  Most of the  precipitation  falls in winter as both rain and
snow and,  as such,  conditions  may not favor  field  work in the  winter,  but
depending on the year, work may be possible even during winter.

Access to the property is possible year around by two-wheel  drive pick-up truck
except in very wet periods. Gastre is the nearest town some 40km to the west and
the town of Gan Gan is about the same distance to the east; both are along Route
4, a gravel  highway.  The nearest  airport with scheduled  service is in Esquel
four hours drive to the  southwest by gravel road.  To the north about two hours
drive, in the province of Rio Negro, is the town of Ingenerio Jacobacci which is
larger  than  Gastre  and has  much  better  services  including  banking.  From
Ingenerio  Jacobacci  it is  another  three  and a half  hours  to the  west  to
Bariloche,  a city with  multiple  daily  flights and a centre for tourism  year
round.  From Gastre to the Atlantic Coast it is approximately  seven hours drive
virtually all on gravel  roads.  Along the coast  infrastructure  is much better
with paved, roads, ports and airports and larger population centers.

During  normal road  conditions  the trip from Gastre to the Navidad  Project is
about 30 minutes.


                                      -25-
<PAGE>


A high voltage power line running from the Futaleufu site to an aluminum smelter
at  Puerto  Madryn  passes  roughly  50km  south  of the  Navidad  Project.  The
government has announced a contract tendered to construct a connection from this
power line to the national  power grid at Choele Choel in Rio Negro to the north
in order to  facilitate  expansion of the aluminum  smelter and other  projects.
Construction of the connection will bring the Argentine national power grid with
easy reach of Navidad.

HISTORY

The Navidad Project has no known exploration  history and there is no indication
that any of the surface  showings  were  previously  discovered  or  sampled.  A
prospecting discovery of this type seems unthinkable in the exploration industry
in this day and age,  especially  within a few  hundred  meters of a  provincial
highway,  except for the lack of mining and prospecting  tradition in Patagonia.
Proof of this lack of mining  tradition is that the posts of the fence line that
passes through the central part of the outcropping high grade mineralization had
been propped up with blocks of rock containing obvious green copper oxides.

The only nearby sign of previous  mining  activity  lies about 3km north west of
Navidad Hill where some barite veins were opened up by trenches  presumably with
the idea of selling barite as an industrial  mineral to the petroleum  industry.
Sampling  during the  surface  work  showed  these veins have very low values of
silver,  copper and lead. Verbal reports suggest the trenching was done about 20
years ago.

Effectively  the  exploration  history of Navidad  Project began on December 10,
2002 with the discovery of  outcropping  mineralization  by one of the Company's
geologists. Subsequent surface work comprised extensive geological mapping, rock
sampling, soil sampling and geophysics including magnetic,  induced polarization
and gravity surveys.

REGIONAL AND LOCAL GEOLOGY

According  to the  preliminary  map 4369-II at 1:250,000  scale of SEGEMAR,  the
national geological service of Argentina,  the Navidad Project mineralization is
mapped as part of the Upper Jurassic Canadon Asfalto Formation.

Province wide geological maps of Chubut by the same  organization  indicate that
the  Canadon  Asfalto is  restricted  to the  central  part of Chubut.  The type
section of the  formation  is  located  along the Rio  Chubut  southwest  of the
project area between Paso Sapo and Paso de Indios.

Much of the  remainder of the Navidad  Project is underlain by the Lonco Trapial
Formation of Lower Jurassic age and finally older,  poorly age-defined  basement
granitic rocks of Paleozoic age.

The  Canadon  Asfalto  Formation  comprises  fine  sandstones,   limestones  and
volcanics of continental and  lacusterine  environment.  It appears  significant
regional  variations in composition  and  depositional  environment  are present
within the formation as currently  defined.  Both fossils and a K/Ar radiometric
age of 173 +/-4 Ma indicate a middle to upper Jurassic age.

The  Lonco  Trapial  Formation,   including   Tacquetren   Formation  and  other
equivalents,  is more widely distributed in Chubut excluding the Andean portion.
The  formation is volcanic  dominant and appears to be the first phase of infill
of local grabens in the developing San Jorge Basin. Again,  significant regional
variability  in  composition  and   depositional   facies  is  indicated,   with
compositions ranging from felsic to mafic.

Apparently  one of the  controlling  features  of the  San  Jorge  Basin  is the
long-lived,  major  structure  known as the Gastre Fault.  This fault is a wide,
northwest-trending zone of fracturing that appears to have controlled deposition
of rock units and then dismembered them from the Jurassic through the present.

Faulting related to the Gastre Fault is present in the Navidad Project area, but
the most  striking  structural  elements  in the area are a series of  northwest
trending folds.


                                      -26-
<PAGE>

DIAMOND DRILLING PROGRAM

Connors Argentina S. A. ("Connors") of Mendoza Argentina  commenced  drilling on
November 26, 2003.  Phase IIIa  drilling was  completed on March 7, 2005,  Phase
IIIb drilling is currently ongoing.  To the end of the Phase IIIa drill program,
27,982m  have been  drilled in 174 holes.  During  the life of the  project  the
average rate of drilling  including  moves and  breakdowns has been 121.7 metres
per day.

All but 149 metres of the drilling has recovered HQ diameter  (61mm) core,  with
the  remainder  recovering  NQ  diameter  core.  The drill  supplied  by Connors
Argentina is  containerized  and mounted on a tracked  undercarriage  capable of
moving  itself.  Water for drilling was brought to the drilling sites by a water
truck of 9,000 liters that was  subcontracted by Connors.  The water was trucked
from several local sources under agreement with local surface land owners.

Down hole  surveys of the holes  were done  using a Tropari  and/or a Sperry Sun
instrument.  In general the orientation of holes has little deviation because of
the  relatively  large  diameter of the drill  string and the  relatively  short
lengths of the holes.

Surveyed coordinates and orientations of Navidad drillholes:

<TABLE>
<CAPTION>


Diamond                               Easting       Northing     Elevation    Azimuth    dip down
Drill                                 GK faja 2     GK faja 2     (metres)   (wrt GK)      from       Length
Hole           Local E     Local N   Campo Inch    Campo Inch        HAE     CI north)   Vertical    (metres)
<S>          <C>         <C>       <C>           <C>             <C>          <C>        <C>         <C>

NV03-01       50,000.6    10,005.0  2,514,819.5   5,304,458.8     1,219.5       210.0      -45.0       109.5
NV03-02       50,000.0     9,971.1  2,514,802.0   5,304,429.8     1,211.2        30.0      -45.0       154.5
NV03-03       51,160.5     9,660.1  2,515,651.6   5,303,580.3     1,178.4       210.0      -45.0       178.5
NV03-04       51,160.1     9,669.6  2,515,655.9   5,303,588.6     1,178.6        30.0      -45.0       285.0
NV03-05       51,160.1     9,802.1  2,515,722.2   5,303,703.3     1,176.6        30.0      -60.0       217.7
NV03-06       49,961.7     9,972.3  2,514,769.5   5,304,449.9     1,218.4        30.0      -45.0       136.2
NV03-07       49,919.7     9,965.9  2,514,729.9   5,304,465.4     1,222.2        30.0      -45.0       108.9
NV03-08       49,959.8    10,016.3  2,514,789.8   5,304,489.0     1,226.4       210.0      -45.0       146.0
NV03-09       49,919.9    10,027.4  2,514,760.8   5,304,518.6     1,231.4       210.0      -45.0       106.1
NV03-10       49,961.9     9,953.4  2,514,760.2   5,304,433.5     1,215.1        30.0      -45.0       150.7
NV03-11       49,625.2    10,040.0  2,514,511.9   5,304,676.8     1,209.2       120.0      -45.0       133.2
NV04-12       51,160.6     9,577.9  2,515,610.5   5,303,509.0     1,155.4        30.0      -65.0       220.0
NV04-13       50,876.5    10,015.0  2,515,583.1   5,304,029.5     1,179.4        30.0      -45.0       142.7
NV04-14       50,997.6     9,911.7  2,515,636.3   5,303,879.6     1,178.1       210.0      -70.0       158.0
NV04-15       51,159.8     9,910.5  2,515,776.1   5,303,797.4     1,167.0        30.0      -60.0       139.6
NV04-16       51,161.0     9,451.4  2,515,547.6   5,303,399.2     1,138.3        30.0      -55.0       250.5
NV04-17       50,998.8     9,614.4  2,515,488.6   5,303,621.4     1,156.7        30.0      -85.0       164.2
NV04-18       51,001.3     9,364.5  2,515,365.9   5,303,403.8     1,137.1        30.0      -55.0       274.7
NV04-19       51,001.9     9,826.2  2,515,597.2   5,303,803.4     1,181.7       210.0      -80.0       188.1
NV04-20       50,801.6     9,897.6  2,515,459.5   5,303,965.3     1,163.0       210.0      -70.0        70.9
NV04-21       50,997.6     9,948.5  2,515,654.7   5,303,911.4     1,174.2        30.0      -45.0       198.1
NV04-22       50,998.5     9,977.9  2,515,670.2   5,303,936.4     1,171.9       210.0      -75.0       193.8
NV04-23       51,000.7     9,713.6  2,515,540.0   5,303,706.4     1,177.3       210.0      -85.0       191.1
NV04-24       50,804.7    10,023.1  2,515,524.9   5,304,072.4     1,173.8        30.0      -50.0       145.6
NV04-25       51,204.1     9,014.3  2,515,366.4   5,302,999.1     1,140.0       210.0      -45.0       199.8
NV04-26       50,802.1     9,728.9  2,515,375.6   5,303,818.9     1,153.5        32.0      -75.0       134.0
NV04-27       50,100.7     9,719.0  2,514,763.2   5,304,161.1     1,164.0        30.0      -45.0       181.5

</TABLE>



                                      -27-
<PAGE>



<TABLE>
<CAPTION>


Diamond                               Easting       Northing     Elevation    Azimuth    dip down
Drill                                 GK faja 2     GK faja 2     (metres)   (wrt GK)      from       Length
Hole           Local E     Local N   Campo Inch    Campo Inch        HAE     CI north)   Vertical    (metres)
<S>          <C>         <C>       <C>           <C>             <C>          <C>        <C>         <C>

NV04-28       51,164.5     9,865.2  2,515,757.6   5,303,755.8     1,170.6        30.0      -60.0       158.0
NV04-29       51,299.1     9,847.6  2,515,865.4   5,303,673.3     1,157.6       210.0      -80.0       158.0
NV04-30       51,300.4     9,765.7  2,515,825.5   5,303,601.7     1,159.8       210.0      -80.0       209.0
NV04-31       51,160.7     9,666.8  2,515,655.1   5,303,585.9     1,178.5        30.0      -80.0       296.0
NV04-32       50,598.0    10,088.9  2,515,378.9   5,304,232.8     1,154.7        30.0      -45.0       154.5
NV04-33       50,598.4    10,016.4  2,515,343.0   5,304,169.8     1,154.8       210.0      -80.0       149.0
NV04-34       50,180.9     9,955.5  2,514,950.9   5,304,325.8     1,180.0        30.0      -45.0       228.2
NV04-35       51,199.5     9,251.1  2,515,480.9   5,303,206.5     1,134.2        30.0      -80.0       293.0
NV04-36       50,898.2     9,988.0  2,515,588.3   5,303,995.3     1,176.5       210.0      -80.0        77.0
NV04-37       50,899.9     9,914.7  2,515,553.2   5,303,931.0     1,173.8       210.0      -80.0       102.5
NV04-38       50,897.2     9,819.7  2,515,503.3   5,303,850.0     1,164.4        30.0      -80.0       107.0
NV04-39       50,400.2     9,982.9  2,515,154.5   5,304,239.9     1,157.1       210.0      -80.0       215.0
NV04-40       50,399.8    10,098.9  2,515,212.2   5,304,340.5     1,155.9        30.0      -45.0       127.2
NV04-41       51,080.8     9,943.4  2,515,724.2   5,303,865.4     1,174.9        30.0      -45.0       145.2
NV04-42       51,080.4     9,938.8  2,515,721.5   5,303,861.6     1,174.5       210.0      -80.0       187.9
NV04-43       51,080.4     9,853.2  2,515,678.7   5,303,787.4     1,180.3       210.0      -75.0       230.6
NV04-44       51,079.3     9,750.3  2,515,626.3   5,303,698.9     1,188.1       210.0      -75.0       232.9
NV04-45       51,230.9     9,861.1  2,515,813.0   5,303,719.1     1,164.0       210.0      -80.0       167.0
NV04-46       51,232.3     9,760.2  2,515,763.8   5,303,630.9     1,168.6       210.0      -80.0       239.0
NV04-47       51,236.7     9,681.0  2,515,728.1   5,303,560.2     1,176.6        30.0      -75.0       242.0
NV04-48       51,302.3     9,980.9  2,515,934.8   5,303,787.1     1,147.2        30.0      -45.0        67.5
NV04-49       51,301.0     9,915.2  2,515,900.8   5,303,730.8     1,150.5        30.0      -80.0        82.8
NV04-50       51,159.9     9,954.9  2,515,798.5   5,303,835.8     1,165.7        30.0      -80.0       113.0
NV04-51       51,159.1     9,971.9  2,515,806.2   5,303,850.9     1,165.5        30.0      -45.0       100.5
NV04-52       50,896.0     9,948.4  2,515,566.7   5,303,962.1     1,173.4        30.0      -45.0       100.5
NV04-53       50,796.8     9,954.7  2,515,483.9   5,304,017.1     1,169.2        30.0      -50.0        97.5
NV04-54         49,920       9,935    2,514,715     5,304,438       1,215        30.0      -50.0       190.5
NV04-55         50,000       9,906    2,514,770     5,304,374       1,197        30.0      -45.0       168.8
NV04-56         50,943      10,001    2,515,634     5,303,984       1,178        30.0      -45.0       142.5
NV04-57         51,118       9,812    2,515,691     5,303,733       1,181       210.0      -80.0       245.1
NV04-58         51,898       9,703    2,516,311     5,303,249       1,157        30.0      -80.0       173.1
NV04-59         51,900       9,612    2,516,268     5,303,169       1,142        33.0      -80.0       191.1
NV04-60         51,800       9,668    2,516,209     5,303,267       1,145        30.0      -80.0       131.1
NV04-61         51,203       8,927    2,515,322     5,302,924       1,149       210.0      -45.0       241.5
NV04-62         51,095       8,867    2,515,198     5,302,926       1,154       210.0      -45.0       223.5
NV04-63         50,392       8,749    2,514,530     5,303,175       1,175       150.0      -45.0       178.4
NV04-64         50,374       8,692    2,514,487     5,303,135       1,188        31.0      -45.0       235.3
NV04-65         49,919       9,851    2,514,672     5,304,366       1,192        30.0      -45.0       229.5
NV04-66         50,100       9,917    2,514,861     5,304,333       1,184        29.0      -45.0       181.5
NV04-67         50,247       9,936    2,514,998     5,304,276       1,171        30.0      -45.0       226.5
NV04-68         50,351      10,084    2,515,162     5,304,353       1,164        30.0      -45.0       178.5
NV04-69         49,862       9,967    2,514,681     5,304,495       1,227        30.0      -45.0       181.3
NV04-70         49,809      10,009    2,514,656     5,304,558       1,229        29.0      -45.0       190.3
NV04-71         49,860       9,904    2,514,647     5,304,442       1,208        30.0      -45.0       172.5
NV04-72         49,802       9,928    2,514,609     5,304,492       1,210        30.0      -45.0       223.2
NV04-73         49,802       9,814    2,514,552     5,304,393       1,184        29.0      -45.0       193.5

</TABLE>


                                      -28-
<PAGE>




<TABLE>
<CAPTION>


Diamond                               Easting       Northing     Elevation    Azimuth    dip down
Drill                                 GK faja 2     GK faja 2     (metres)   (wrt GK)      from       Length
Hole           Local E     Local N   Campo Inch    Campo Inch        HAE     CI north)   Vertical    (metres)
<S>          <C>         <C>       <C>           <C>             <C>          <C>        <C>         <C>

NV04-74         51,997       9,691    2,516,391     5,303,189       1,165        29.0      -80.0       158.0
NV04-75         52,198       9,674    2,516,557     5,303,073       1,163        29.0      -80.0       158.0
NV04-76         52,401       9,679    2,516,735     5,302,976       1,171        29.0      -80.0       152.0
NV04-77         50,400       9,053    2,514,689     5,303,435       1,151       211.0      -45.0       250.5
NV04-78         51,308       8,954    2,515,426     5,302,895       1,147       210.0      -45.0       100.5
NV04-79         51,100       8,929    2,515,233     5,302,977       1,146       210.0      -45.0       121.5
NV04-80         51,003       8,864    2,515,117     5,302,970       1,151       210.0      -45.0       100.5
NV04-81         50,405       8,802    2,514,568     5,303,215       1,166       150.0      -45.0       150.8
NV04-82         50,340       8,700    2,514,461     5,303,159       1,186       150.0      -45.0       151.0
NV04-83         49,760      10,004    2,514,611     5,304,578       1,221        29.0      -45.0       169.5
NV04-84         49,721       9,991    2,514,570     5,304,587       1,219        31.0      -45.0       213.0
NV04-85         49,660      10,001    2,514,522     5,304,626       1,213        30.0      -45.0        88.5
NV04-86         50,545      10,120    2,515,348     5,304,286       1,148        30.0      -45.0       169.5
NV04-87         50,651      10,052    2,515,407     5,304,175       1,160        30.0      -45.0       159.5
NV04-88         49,197       9,855    2,514,048     5,304,731       1,224        30.0      -80.0       192.3
NV04-89         49,760       9,813    2,514,515     5,304,413       1,184        30.0      -60.0        97.5
NV04-90         49,719       9,855    2,514,501     5,304,470       1,189        30.0      -45.0       106.5
NV04-91         52,345       9,652    2,516,673     5,302,980       1,165        80.0      -45.0       187.5
NV04-92         52,634       9,468    2,516,832     5,302,677       1,142        80.0      -65.0       163.9
NV04-93         51,604       9,576    2,515,994     5,303,285       1,134        30.0      -80.0       201.0
NV04-94         50,400      10,030    2,515,178     5,304,281       1,157        30.0      -45.0       175.5
NV04-95         50,250       9,894    2,514,980     5,304,238       1,167        30.0      -60.0       100.5
NV04-96         50,099       9,832    2,514,819     5,304,260       1,174        30.0      -45.0       100.5
NV04-97         49,920       9,801    2,514,647     5,304,322       1,181        30.0      -60.0       100.5
NV04-98         49,811       9,762    2,514,534     5,304,343       1,178        30.0      -60.0        76.7
NV04-99         49,661       9,838    2,514,442     5,304,484       1,188        30.0      -60.0        88.7
NV04-100        49,722       9,813    2,514,482     5,304,432       1,183        30.0      -60.0       130.7
NV04-101        49,660       9,756    2,514,400     5,304,413       1,182        30.0      -60.0       109.7
NV04-102        49,601       9,830    2,514,386     5,304,507       1,194        30.0      -60.0         122
NV04-103        49,658       9,940    2,514,490     5,304,574       1,204        30.0      -60.0        79.8
NV04-104        49,659       9,880    2,514,461     5,304,521       1,192        31.0      -60.0       100.3
NV04-105        50,300      10,112    2,515,132     5,304,402       1,176        30.0      -60.0        82.7
NV04-106        50,301      10,033    2,515,094     5,304,333       1,171        30.0      -60.0        88.7
NV04-107        50,475      10,123    2,515,289     5,304,323       1,148        30.0      -45.0       118.1
NV04-108        50,599      10,087    2,515,379     5,304,230       1,155        90.0      -45.0       145.5
NV04-109        49,921      10,044    2,514,770     5,304,532       1,231       210.0      -60.0       133.5
NV04-110        49,811      10,075    2,514,690     5,304,614       1,222       210.0      -45.0       100.5
NV04-111        49,809      10,009    2,514,655     5,304,558       1,229       210.0      -65.0        35.0
NV04-112        49,760      10,048    2,514,632     5,304,616       1,218        30.0      -45.0        85.5
NV04-113        49,721      10,038    2,514,593     5,304,627       1,213        30.0      -45.0        76.5
NV04-114        49,759       9,925    2,514,570     5,304,510       1,204        30.0      -60.0        62.1
NV04-115        49,719       9,924    2,514,536     5,304,530       1,204        29.0      -60.0        62.0
NV04-116        49,761       9,853    2,514,535     5,304,447       1,189        30.0      -60.0        70.7
NV04-117        49,700       9,885    2,514,500     5,304,505       1,196       120.0      -45.0       109.5
NV04-118        49,600       9,879    2,514,410     5,304,550       1,198        30.0      -60.0        80.0
NV04-119        49,600       9,934    2,514,437     5,304,598       1,201        30.0      -60.0        77.1

</TABLE>


                                      -29-
<PAGE>



<TABLE>
<CAPTION>


Diamond                               Easting       Northing     Elevation    Azimuth    dip down
Drill                                 GK faja 2     GK faja 2     (metres)   (wrt GK)      from       Length
Hole           Local E     Local N   Campo Inch    Campo Inch        HAE     CI north)   Vertical    (metres)
<S>          <C>         <C>       <C>           <C>             <C>          <C>        <C>         <C>

NV04-120        49,859       9,814    2,514,602     5,304,364       1,184        30.0      -60.0        95.0
NV04-121        49,401       9,786    2,514,191     5,304,569       1,203       210.0      -70.0       149.1
NV04-122        49,324       9,834    2,514,148     5,304,649       1,211        30.0      -70.0       253.5
NV04-123        49,324       9,827    2,514,145     5,304,643       1,210       210.0      -70.0       199.9
NV04-124        49,199       9,905    2,514,075     5,304,773       1,227        30.0      -80.0       209.3
NV04-125        49,197       9,803    2,514,023     5,304,686       1,220        30.0      -80.0       167.1
NV04-126        49,248       9,789    2,514,060     5,304,648       1,215        28.0      -50.0       283.5
NV04-127        50,471      10,083    2,515,266     5,304,291       1,150        30.0      -60.0       137.1
NV04-128        50,448      10,122    2,515,266     5,304,336       1,150        30.0      -60.0       109.6
NV04-129        50,500      10,119    2,515,309     5,304,307       1,146        30.0      -60.0        28.8
NV04-130        50,500      10,116    2,515,308     5,304,305       1,146        30.0      -62.0       106.8
NV04-131        50,578      10,109    2,515,372     5,304,260       1,152        90.0      -60.0       130.8
NV04-132        49,720       9,756    2,514,452     5,304,384       1,179        31.0      -60.0       127.8
NV04-133        49,797       9,732    2,514,506     5,304,325       1,175        30.0      -60.0       184.8
NV05-134        49,253       9,921    2,514,130     5,304,760       1,222        30.0      -70.0       281.0
NV05-135        49,250       9,986    2,514,160     5,304,818       1,224        30.0      -70.0       266.0
NV05-136        49,246      10,093    2,514,210     5,304,913       1,228        30.0      -70.0       251.0
NV05-137        49,200       9,957    2,514,102     5,304,817       1,229        30.0      -80.0       262.0
NV05-138        49,250       9,982    2,514,158     5,304,814       1,224       210.0      -56.0       250.0
NV05-139        49,699       9,876    2,514,493     5,304,498       1,194        31.0      -70.0        80.0
NV05-140        49,699       9,842    2,514,476     5,304,469       1,189        30.0      -60.0        80.0
NV05-141        49,738       9,877    2,514,529     5,304,479       1,193        31.0      -60.0        80.0
NV05-142        49,738       9,851    2,514,516     5,304,457       1,189        30.0      -60.0        77.0
NV05-143        49,320      10,018    2,514,237     5,304,810       1,217       210.0      -55.0       268.8
NV05-144        49,402       9,952    2,514,275     5,304,712       1,210       210.0      -65.0       260.1
NV05-145        49,402       9,902    2,514,249     5,304,669       1,208       211.0      -65.0       250.7
NV05-146        49,499       9,837    2,514,301     5,304,564       1,199        30.0      -60.0       199.8
NV05-147        49,497       9,808    2,514,285     5,304,540       1,194        30.0      -70.0       191.1
NV05-148        49,150       9,871    2,514,016     5,304,768       1,229        30.0      -80.0       170.1
NV05-149        49,148       9,920    2,514,038     5,304,812       1,234        30.0      -80.0       221.1
NV05-150        49,101       9,843    2,513,960     5,304,768       1,230        30.0      -80.0       188.1
NV05-151        49,101       9,893    2,513,984     5,304,812       1,234        30.0      -80.0       176.1
NV05-152        49,100       9,944    2,514,010     5,304,856       1,239        30.0      -80.0       221.1
NV05-153        50,596      10,229    2,515,447     5,304,355       1,143       271.0      -45.0       163.8
NV05-154        50,602      10,231    2,515,453     5,304,354       1,143        30.0      -45.0       190.8
NV05-155        50,660      10,172    2,515,474     5,304,273       1,149        90.0      -45.0        88.8
NV05-156        50,562      10,152    2,515,379     5,304,305       1,149        90.0      -60.0       110.1
NV05-157        49,856       9,772    2,514,578     5,304,330       1,178        30.0      -60.0       131.1
NV05-158        49,758       9,775    2,514,494     5,304,381       1,180        30.0      -60.0       104.1
NV05-159        49,922       9,762    2,514,631     5,304,288       1,175        29.0      -60.0       137.5
NV05-160        50,000       9,836    2,514,735     5,304,313       1,182        30.0      -60.0       128.2
NV05-161        49,762       9,887    2,514,554     5,304,476       1,195        30.0      -60.0        83.1
NV05-162        49,360      10,015    2,514,269     5,304,788       1,214       210.0      -55.0       274.8
NV05-163        49,453       9,832    2,514,259     5,304,583       1,197        30.0      -70.0       215.1
NV05-164        49,548       9,819    2,514,335     5,304,524       1,194        30.0      -70.0       195.6
NV05-165        49,548       9,873    2,514,361     5,304,571       1,202        30.0      -70.0       170.1

</TABLE>


                                      -30-
<PAGE>



<TABLE>
<CAPTION>


Diamond                               Easting       Northing     Elevation    Azimuth    dip down
Drill                                 GK faja 2     GK faja 2     (metres)   (wrt GK)      from       Length
Hole           Local E     Local N   Campo Inch    Campo Inch        HAE     CI north)   Vertical    (metres)
<S>          <C>         <C>       <C>           <C>             <C>          <C>        <C>         <C>

NV05-166        49,503       9,917    2,514,345     5,304,632       1,206        30.0      -65.0       146.1
NV05-167        49,100       9,945    2,514,010     5,304,857       1,239       210.0      -60.0       158.1
NV05-168        49,100      10,007    2,514,041     5,304,911       1,236       210.0      -60.0       167.1
NV05-169        49,048       9,887    2,513,936     5,304,833       1,234        30.0      -80.0       129.0
NV05-170        49,051       9,938    2,513,964     5,304,876       1,237        30.0      -80.0       143.4
NV05-171        49,053       9,978    2,513,985     5,304,909       1,238       210.0      -70.0       134.1
NV05-172        49,321       9,861    2,514,159     5,304,674       1,212        30.0      -60.0       281.1
NV05-173        49,285       9,972    2,514,184     5,304,788       1,221       210.0      -80.0       248.4
NV05-174        49,361       9,963    2,514,245     5,304,742       1,214       210.0      -55.0       263.1

                                                                             Total Metres Drilled:   27,981.5
                                                                                                     ========
</TABLE>

Core  designated for sampling is cut with an  electric-powered  table saw with a
diamond tipped blade. The core was sawn in half and one half was sampled and the
remainder  was  stored  in the core box.  In a few areas the core was  broken or
rubbley and could not be sawn. In such cases the recovered  material was sampled
by spoon and if necessary was split with a knife or chisel.  Rarely, due to hard
core or problems with the saw, core was split with a mechanical splitter.

Alex Stewart  (Assayers)  Argentina S.A. ("Alex Stewart") of Mendoza,  Argentina
was the  primary  lab for all drill core  samples.  All  samples  are weighed on
receipt in the sample bag prior to drying and this weight is  reported  with the
analytical data. Sample  preparation  comprised drying at 90(degree) C for up to
40 hours, followed by crushing of the entire sample to #10 mesh. Next the sample
was split down to 1.5 kg with a riffle splitter for pulverization to 85% passing
#200 mesh.  Between each sample the crusher and the pulverizor were cleaned with
barren quartz.

All drill core samples were  submitted  for 30 gram  fire-assay  for silver with
gravimetric  finish and also a fire assay for Au (with AAS  finish).  The lab is
required to report all sample weights used in fire assays.

In addition, all samples were analyzed by Alex Stewart's ICP-ORE technique which
uses a strong  multi-acid  attack on a sample size of 0.2 grams.  The method has
been  optimized  to  handle a wide  range or  concentrations  of base and  other
metals,  but with some sacrifice in the higher than normal  detection limits for
typical ICP analyses.  Elements  included in the package are Ag, As, Bi, Ca, Cd,
Co, Cu, Fe, Hg, Mg, Mn, Mo, Ni, P, Pb, S, Sb, Tl and Zn.  Extensive  testing was
undertaken  by  the  Company  on  the  ICP-ORE   technique  that  confirmed  its
suitability for the Navidad  mineralization.  That testing  included a precision
test on 30 samples  as well as a blind  duplicate  pulp test on 32 samples  both
with satisfactory results. Furthermore,  ICP-ORE was used in characterization of
the in-house  standards  developed  (see below) and was found to correlate  well
with methods used by other labs.  In fact all of the ICP-ORE  results for Cu and
Pb lay  within  the two  standard  deviation  limit and  hence  were used in the
definition of the accepted values for the standards.

QUALITY CONTROL

A comprehensive  quality control and quality  assurance  program for analyses of
drill core was put in place well prior to the start of  drilling.  This  program
comprises controls including blind certified standards,  blanks, core duplicates
and a secondary laboratory.  The primary laboratory for all drilling samples was
Alex Stewart and the secondary lab was ALS-Chemex La Serena and/or Vancouver. In
each set of 42 samples  sent to the primary lab a blind  high-grade,  low-grade,
blank and duplicate core sample were included in randomized positions.

In addition  to the above,  a  systematic  program of  reanalysis  of pulps by a
second   independent  lab  has  been  used  throughout  the  program.   Randomly
pre-selected  samples  are sent from the  primary  laboratory  and they  include
blanks and standards.  Two samples from each set of 42 samples,  or 4.8% percent
of the pulps are therefore  being checked.  At the time of this writing  results
were available for 726 duplicates.

The purpose of this work is to confirm  the  reproducibility  of the  analytical
method at a second lab.




                                      -31-
<PAGE>



Results of the control by the secondary lab and through the inclusion of blanks,
standards,  and duplicates confirm the high quality of the data generated in the
drilling program.

CHAIN OF CUSTODY

Core is delivered to the core shack by the drill  contractor or picked-up by the
Company's  employees  and stored in the core shack in Gastre.  The core shack is
kept under lock and key when the Company's employees are not present.

Core cutting is supervised  by the  geologist  logging core who ensures that the
sequence of blanks,  duplicates  and  standards is followed.  Cut core is placed
into clean new transparent plastic sample bags into which two pre-printed custom
sample  tickets are  placed.  The lab uses one of these for the pulp bag and one
for the reject bag. A third  sample  ticket is stapled  into the core tray along
with the meterage  represented by the sample. The fourth and final sample ticket
remains in the sample tag book with the hole  numbers and  meterages  filled in.
Once  samples  have been cut and  bagged  the bags are  double  sealed  with two
zip-strips.  The first  ordinary zip strip will close the bag around the neck of
the bag under as much  tension  as it will  support.  A second,  custom  printed
zip-strip  seal with the  Company's  name and the matching  sample number to the
sample  ticket  inside  will be  affixed  to the bag above the  zip-strip  under
tension.  The numbered  seal will pierce the bag above the neck of the bag where
it is sealed by the  first  zip  strip so as to make it  impossible  to slip the
ordinary  zip-strip over the neck of the back. The lab is required to notify the
Company if the samples do not arrive with the Company  seals  intact.  All seals
are being stored by the assay lab to present as proof of use.

Sealed sample bags are placed in rice sacks in sequence for shipment to the lab.
A record of all  samples  shipped is kept by the  geologist  sending  the sample
shipment.  Samples are transported by a company  contracted to transport samples
directly from the core shack in Gastre to the assay  laboratory in Mendoza (some
1,500km). They are not allowed to carry other cargo or make other stops.

GENERAL GEOLOGICAL UNDERSTANDING

Drilling of the Navidad Hill,  Galena Hill,  Calcite Hill and intervening  areas
has greatly increased the geological  understanding of the main geological units
and their  relationships.  Most of this information was gained by drilling along
the Navidad  Trend  (Barite Hill to Calcite  Hill),  but advances have also been
made at Esperanza and at the Argenta Trend.

Stratigraphy at the Navidad  property is comprised of three primary  sedimentary
and volcanic units which vary in thickness and  composition but can generally be
traced  across the  property.  The  lowermost  unit is comprised of  epiclastic,
volcaniclastic  and volcanic rocks that are virtually always  unmineralized  and
unaltered  where they have been  tested to date.  This is overlain by a volcanic
cycle  comprising  trachyandesitic  volcanic rocks,  generally with quartz eyes,
that is altered  and  mineralized  with  silver,  lead,  and to a lesser  degree
copper. The trachyandesite sequence comprises massive flows, amygdaloidal flows,
flow breccias and  volcaniclastic  breccias.  This unit varies in  stratigraphic
thickness from a few metres to well over 200 metres.  The  trachyandesite  is in
turn overlain by pelitic mudstones and limestones of which the lowermost portion
may be highly mineralized with silver, lead, and often zinc. On the southwestern
portions of the property (Loma de la Plata and the Argenta trend) the upper unit
is dominated by coarse grained,  poorly sorted sandstones and conglomerates that
are composed  predominantly  of granitic rock interpreted to be derived from the
Paleozoic granites which form the regional basement rocks in the area.

The contact  between the lower  volcanic  cycle and the latite cycle is of great
interest due to the dramatic change between  unaltered and  unmineralized  rocks
below and high  mineralized  rocks  above,  particularly  in the Galena Hill and
Barite Hill areas. The upper part of the lower cycle is generally  reddish as if
affected by a  lateritic  weathering.  On some  sections  such as  51,160E,  the
contact is quite planar whereas on others it is quite irregular, possible due to
faulting or  paleotopography.  In some cases a dark grey,  soft material with an
unusual texture and structure of partings and slip surfaces is present below the
latites on the contact. This is interpreted as a paleosol.



                                      -32-

<PAGE>

GALENA HILL DRILLING RESULTS

Results of the drilling at Galena Hill have been very  positive.  The amount and
continuity and grade of the  mineralization in the subsurface  exceeded even the
expectations that existed based on the surface work.

The   geometry   of   the   mineralization,   a   gently-dipping,   exposed   to
shallowly-buried  zone of  significant  thickness  suggests  potential  for bulk
mining.  Hence in  determining  how to select  the  mineralized  intercepts  for
tabulation  and  data   manipulation   is  was  decided  to  use  a  minimum  of
approximately  50 g/t silver  irrespective of the copper,  lead and zinc grades.
The minimum grade was not strictly applied to the selection of the intercepts as
samples with  sub-fifty  gram per tonne silver values were permitted for several
samples in some  instances.  In some cases where there were long  intercepts  of
mineralization  somewhat below 50 g/t silver,  but where there were  significant
lead values these  intercepts  were also listed below.  At this time  definitive
"cut-off"  grade can not be  established  since  metallurgical  and  engineering
parameters have not been determined.  For the purpose of the resource  estimates
discussed  below,  a 50 g/t  silver  equivalent  cut-off  grade  was  used.  The
following  intercepts  reflect  the  potential  of Galena  Hill in a bulk mining
scenario.  Some higher grade intercept are also shown.  These higher grades tend
to occur at or near the upper contact of the latite  sequence with the overlying
mudstones, or even in the lower part of the mudstones.

In total,  39 drill holes have been drilled into the Galena Hill deposit.  These
holes outline a silver-lead  deposit ranging in vertical thickness from about 10
to 115 metres with horizontal  dimensions of approximately  400 by 500 metres at
generally greater than 50 g/t silver. The top of the mineralized body is exposed
at surface  in some areas and in other  areas is covered by as much as 40 metres
of barren  sedimentary  cap rock. The shape and aspect of the  mineralized  body
suggests  that it could be bulk  mineable.  Grade  distributions  show a zone of
high-grade silver values with lesser copper and relatively low lead values along
the  northeastern  boundary of the deposit;  this area is  interpreted to be the
source or feeder zone for mineralizing fluids which created the deposit.  Moving
to the  southwest  from this feeder zone,  lead:silver  ratios  increase and are
interpreted as more distal portions of the deposit.


                                      -33-
<PAGE>


<PAGE>


MINERALIZED INTERCEPTS FROM DRILLHOLES AT THE GALENA HILL DEPOSIT

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                             Composite     Vertical     g/t        %         %       %
             Inclin-       From      To       Length      Thickness    Silver    Copper     Lead    Zinc
DDH           ation       metres   metres     metres        metres      LWA       LWA       LWA     LWA
--------------------------------------------------------------------------------------------------------
<S>          <C>          <C>     <C>        <C>           <C>         <C>       <C>       <C>     <C>

NV03-03        -45          3.00   178.50     175.50        124.61       26.2     0.00       1.35   0.04
including                   3.00   128.30     125.30         88.96       33.0     0.00       1.68   0.05
including                  72.50   107.50      35.00         24.85       49.9     0.01       3.47   0.06
including                  86.20    95.45       9.25          6.57       76.8     0.01       5.43   0.06

NV03-04        -45          2.80   266.70     263.90        187.37       74.1     0.00       2.04   0.08
including                   2.80   203.00     200.20        142.14       92.3     0.00       2.49   0.11
including                  39.60   176.45     136.85         97.16      117.3     0.00       2.99   0.14
including                  39.60   121.25      81.65         57.97      141.5     0.00       3.15   0.14
including                  39.60    94.70      55.10         39.12      164.3     0.00       2.97   0.10
including                  65.00    94.70      29.70         21.09      189.5     0.00       3.06   0.10
including                  65.00    83.50      18.50         13.14      241.2     0.00       3.40   0.10

NV03-05        -60         43.30   126.25      82.95         72.17      229.2     0.01       4.24   0.20
including                  46.70   113.25      66.55         57.90      271.8     0.01       4.82   0.20
including                  46.70    55.90       9.20          8.00      578.9     0.04       6.82   0.36
including                  89.00   107.25      18.25         15.88      503.0     0.01      11.19   0.36

NV04-12        -65         18.80    27.80       9.00          8.19       41.6     0.00       8.01   2.56
including                  27.80    35.45       7.65          6.96       70.8     0.00       9.60   0.54
combined                   18.80    35.45      16.65         15.15       55.0     0.00       8.74   1.64
within                     18.80    60.60      41.80         38.04       35.5     0.00       4.46   0.68

NV04-13        -45         20.00    64.70      44.70         31.74      223.4     0.16       0.56   0.09

NV04-14        -70         27.70   142.80     115.10        109.35      453.6     0.08       5.26   0.50
including                  27.70    75.10      47.40         45.03      775.6     0.17       6.42   0.92
including                  32.70    50.70      18.00         17.10     1421.2     0.42       5.24   1.69

NV04-15        -60         46.55   115.65      69.10         60.12      113.5     0.02       1.46   0.13
including                  47.05    55.55       8.50          7.40      461.7     0.08       6.54   0.49

NV04-16        -55         63.45    72.45       9.00          7.56       34.2     0.00       2.47   0.07

NV04-17        -85         21.20    40.20      19.00         18.81       96.7     0.01       7.79   0.70
including                  30.20    40.20      10.00          9.90      161.6     0.02      12.98   0.42

NV04-18        -55         232.0   244.00      12.00          9.96       70.1     0.06       0.40   0.01

NV04-19        -80         24.00    90.50      66.50         65.17      100.3     0.00       2.74   0.14
including                  25.10    37.10      12.00         11.76      165.2     0.02       3.20   0.34
including                  49.35    57.75       8.40          8.23      177.4     0.02       4.22   0.14
including                  74.00    81.55       7.55          7.40      174.0     0.00       4.69   0.11

</TABLE>


                                      -34-
<PAGE>



<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                             Composite     Vertical     g/t        %         %       %
             Inclin-       From      To       Length      Thickness    Silver    Copper     Lead    Zinc
DDH           ation       metres   metres     metres        metres      LWA       LWA       LWA     LWA
--------------------------------------------------------------------------------------------------------
<S>          <C>          <C>     <C>        <C>           <C>         <C>       <C>       <C>     <C>


NV04-20        -70         35.50    40.60       5.10          4.79       54.8     0.02       1.82   0.03

NV04-21        -45         42.45   126.00      83.55         56.81      321.7     0.23       0.47   0.21
including                  49.95    70.50      20.55         13.97      703.0     0.47       0.54   0.40

NV04-22        -75         38.65   101.65      63.00         61.11      418.4     0.15       1.82   0.32
including                  42.50    55.60      13.10         12.71      923.3     0.26       1.70   0.56

NV04-23        -85         48.40    71.20      22.80         22.57       26.3     0.00       0.47   0.02

NV04-24        -50          3.00     5.65       2.65          1.88      917.9     0.28       1.13   0.18

NV04-26        -75         none                               0.00

NV04-28        -60         45.70   134.75      89.05         77.47      120.4     0.01       1.77   0.32
including                  45.70    67.75      22.05         19.18       23.0    -0.01       0.65   0.90
including                  67.75   134.75      67.00         58.29      152.5     0.01       2.14   0.12
including                  68.10    71.55       3.45          3.00      760.9     0.05      10.96   0.60

NV04-29        -80         28.50    38.65      10.15          9.95       71.8     0.00       1.84   0.05

NV04-30        -80         44.80    52.70       7.90          7.74       47.8     0.00       1.11   0.04

NV04-31        -80          3.05    23.85      20.80         20.38       51.7     0.00       1.25   0.05
and                        47.35    78.45      31.10         30.48       71.0     0.00       2.62   0.31
including                  73.85    75.95       2.10          2.06      618.6    -0.01      18.82   3.58

NV04-36        -80          8.00    57.90      49.90         48.90      179.1     0.08       1.21   0.17
including                  35.30    49.30      14.00         13.72      209.5     0.10       0.97   0.15

NV04-37        -80         12.80    89.10      76.30         74.77      139.4     0.04       1.28   0.12
including                  13.80    17.70       3.90          3.82      597.4     0.02       7.23   0.58

NV04-38        -80         20.70    61.20      40.50         39.69      104.5     0.04       0.40   0.10
including                  34.10    52.55      18.45         18.08      166.8     0.07       0.15   0.13

NV04-41        -45         58.10   129.00      70.90         50.34       78.5     0.08       0.33   0.20

NV04-42        -80         48.35   161.55     113.20        110.94      150.8     0.03       1.98   0.11
including                  67.90   121.90      54.00         52.92      239.1     0.04       3.04   0.16
including                 148.90   161.55      12.65         12.40      121.6     0.04       1.74   0.11

NV04-43        -75         44.20   127.25      83.05         81.39      153.2     0.01       5.48   0.90
including                  44.20    89.00      44.80         43.90      216.9     0.01       6.81   1.06

NV04-44        -75         13.35   103.90      90.55         88.74      177.8     0.01       5.33   0.22
including                  13.35    28.90      15.55         15.24      445.3     0.02       8.77   0.14

NV04-45        -80         43.00    69.85      26.85         26.31      355.4     0.00       5.34   0.33
including                  43.00    51.05       8.05          7.89      958.4     0.01      15.31   0.87

NV04-46        -80         30.40   167.00     136.60        133.87       30.9     0.00       1.06   0.05
including                  30.40    65.00      34.60         33.91       61.8     0.00       1.51   0.06

</TABLE>


                                      -35-
<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                             Composite     Vertical     g/t        %         %       %
             Inclin-       From      To       Length      Thickness    Silver    Copper     Lead    Zinc
DDH           ation       metres   metres     metres        metres      LWA       LWA       LWA     LWA
--------------------------------------------------------------------------------------------------------
<S>          <C>          <C>     <C>        <C>           <C>         <C>       <C>       <C>     <C>

NV04-47        -75         12.90   131.00     118.10        113.38       36.6     0.00       2.06   0.13
including                  84.50   116.00      31.50         30.24       59.5     0.00       4.31   0.25

NV04-48        -45         16.50    32.85      16.35         11.61       30.6     0.00       0.53   0.18
including                  26.70    31.80       5.10          3.62       49.7     0.01       0.54   0.25

NV04-49        -80         63.45    82.80      19.35         18.96       31.6     0.00       0.38   0.05

NV04-50        -80         20.80   101.00      80.20         78.60      254.7     0.14       0.93   0.19
including                  20.80    65.00      44.20         43.32      391.0     0.23       0.44   0.26

NV04-51        -45         64.50    81.85      17.35         12.32      185.9     0.05       2.37   0.46

NV04-52        -45         16.50    62.55      46.05         32.70      270.6     0.10       0.62   0.21

NV04-53        -50         15.70    30.80      15.10         10.72       52.0     0.04       0.72   0.85

NV04-56        -45         19.30   127.75     108.45         76.69      102.0     0.08       0.09   0.08
including                  22.50    64.50      42.00         26.70      164.0     0.09       0.12   0.08

NV04-57        -80         35.90   170.50     134.60        132.56      181.0     0.01       4.71   0.39
including                  39.40    61.25      21.85         21.52      718.0     0.03      10.62   0.57

</TABLE>

Notes:
1.   All length weighted average (LWA) results are "uncut"
2.   Vertical thicknesses are calculated  considering the dip of the drill holes
     and assuming flat lying body.

NAVIDAD HILL DRILLING RESULTS

Fifty-three  drill holes have been  completed  to date at Navidad  Hill and have
been very  successful  in  delineating  silver-copper-lead  mineralization.  Two
distinct styles of  mineralization  have been  intersected,  the first comprises
structurally-controlled,  sub-vertical,  tabular breccia bodies often containing
very high grade silver (up to ~10,000 g/t over short  intervals)  and the second
is a  stratigraphically  controlled  body that occurs on the northwest  flank of
Navidad hill at or near the contact  between  trachyandesite  volcanic rocks and
the overlying mudstones and intercalated volcanic tuffs.

Drilling on the structurally controlled mineralization confirmed that the dip of
the  structures  is near  vertical  and two  somewhat  unexpected  aspects  were
encountered:  firstly,  significant  amounts of clay  alteration  (argillic) are
present;  secondly,  in between the known  structures  there are many areas with
minor veins and stockwork veinlets.  High silver grades were intersected in some
of the structures in the drill holes (see table below);  however, in general the
grades in the drill holes are significantly  less than the average grades of the
structures on surface which were often in the range of 5,000 to 20,000 grams per
tonne silver. This combination of the features suggests that Navidad Hill should
be considered a bulk target rather than as individual  high-grade  vein targets.
Like Galena Hill,  intercepts  have been  calculated at a 50 g/t silver  minimum
grade again somewhat loosely applied at this early stage. Assuming vertical dips
the true  width of the  mineralized  intercept  ranges  from about 34 to 101m in
width.  Despite the high base metal grades of the  individual  structures in the
detailed  surface sampling and in the core samples the grades of copper and lead
over the  width of the bulk zone are  generally  less than  0.3%.  This  marks a
significant difference from the central part of the Galena Hill deposit.



                                      -36-

<PAGE>


The  stratigraphically-controlled  mineralization  at Navidad Hill occurs on the
northwest  flank of the hill and is  covered  by 15 to 30  metres  of  overlying
unmineralized  rock. Drill hole NV04-90 intersected this style of mineralization
with what is to date the best mineralized  intercept recovered from the property
(35.8m of 2,850 g/t silver and 3.62% lead). Mineralization occurs in the form of
a blanket or gently dipping  tabular body that is located at or near the contact
between the trachyandesite and overlying rocks.  Metal-bearing  minerals include
galena,   stromeyerite,    chalcopyrite,   tetrahedrite,   pyrite,   sphalerite,
chalcocite,  Fe-Cu oxides and other oxide species. In several locations, clastic
sulphides are noted in the core that are interpreted to indicate  transportation
of the sulphide-bearing  material after it's deposition.  This strongly supports
the syn-volcanic, syn-sedimentary timing for mineralization that is interpreted.

Mineralized Intercepts from the Navidad Hill Drilling

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %           %
                             From         To         Length      Silver       Copper        Lead        Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)       (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV03-01        -45            3.05       61.45        58.40         111        0.22         0.06        0.07
   including                 10.10       31.35        21.25         233        0.35         0.09        0.11
   including                 10.10       17.50         7.40         536        0.81         0.07        0.14
   including                 15.70       16.50         0.80       2,678        3.07         0.30        0.24

NV03-02        -45            2.50       50.50        48.00          98        0.15         0.06        0.05
                              5.50        6.45         0.95         858        8.07         0.26        0.02
   including                 17.60       25.00         7.40         227        0.25         0.16        0.09
   including                 40.40       41.45         1.05       1,320        0.82         0.28        0.14

NV03-07        -45            3.00       86.65        83.65         247        0.32         0.27        0.05
   including                  3.00       40.75        37.75         475        0.54         0.35        0.07
   including                  3.00        6.90         3.90       1,998        0.92         0.32        0.07
   including                 30.85       33.25         2.40       2,130        3.34         0.60        0.09

NV03-08        -45            2.50      146.00       143.50         146        0.21         0.20        0.04
   including                  2.50       71.10        68.60         275        0.35         0.40        0.06
   including                 26.10       40.15        14.05       1,084        1.25         1.69        0.11
   including                 26.10       28.40         2.30       2,661        1.64         2.63        0.16
   including                 35.45       37.20         1.75       3,043        4.31         0.86        0.11

NV03-09        -45            2.50       84.30        81.80         125        0.12         0.10        0.04
   including                 21.00       21.70         0.70       5,068        0.36         1.41        0.04
   including                 65.25       66.20         0.95       1,441        1.62         0.86        0.07

NV03-10        -45            3.50       78.50        75.00         111        0.23         0.05        0.04
   including                  3.50        9.40         5.90         670        1.25         0.09        0.06

NV03-11        -45            1.52       12.10        10.58          98        0.53         0.02        0.12

NV04-54        -50            3.05      107.40       104.35         125        0.20         0.07        0.04
   including                  3.05       38.50        35.45         295        0.51         0.19        0.08

NV04-55        -45            3.00       63.60        60.60          27        0.07         0.04        0.05
   including                 38.05       43.40         5.35          73        0.35         0.03        0.07

NV04-65        -45            4.50       23.87        19.37          81        0.07         0.25        0.11
   and                       23.87      130.50       106.63          18        0.05         0.02        0.03

NV04-69        -45            3.00      103.95       100.95          53        0.07         0.07        0.04
   including                 29.43       34.69         5.26          78        0.22         0.08        0.04
   including                 63.83       66.05         2.22         232        0.02         0.02        0.01

</TABLE>



                                      -37-

<PAGE>


<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %           %
                             From         To         Length      Silver       Copper        Lead        Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)       (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV04-70        -45            3.00       87.75        84.75          83        0.09         0.04        0.04
   including                 58.30       62.85         4.55         421        0.23         0.06        0.04
   including                 81.10       87.75         6.65         175        0.12         0.03        0.03

NV04-71        -45            3.00       88.50        85.50          57        0.12         0.03        0.04
   including                 69.50       88.50        19.00         149        0.15         0.02        0.02
   including                 78.15       85.50         7.35         265        0.21         0.05        0.03

</TABLE>


                                      -38-
<PAGE>


<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %           %
                             From         To         Length      Silver       Copper        Lead        Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)       (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV04-72        -45            3.00       53.85        50.85          26        0.07         0.06        0.06
                             45.01       53.85         8.84          46        0.04         0.04        0.02
NV04-73        -45            3.00       36.40        33.40          94        0.04         0.80        0.48
   including                 28.50       36.40         7.90         292        0.17         1.19        0.13
   and                       58.00       59.40         1.40       3,975        0.88         0.16        0.07

NV04-83        -45            4.50       88.00        83.50          97        0.15         0.04        0.06
   including                 53.00       61.91         8.91         211        0.25         0.04        0.05
   including                 79.50       88.00         8.50         237        0.12         0.03        0.00

NV04-84        -45           13.90       55.50        41.60          56        0.17         0.02        0.05
   including                 22.20       23.53         1.33          98        0.26         0.02        0.07
   and                       77.00       81.97         4.97          57        0.17         0.00       -0.01

NV04-85        -45            4.50       28.80        24.30         142        0.21         0.06        0.11
   including                  4.50        8.20         3.70         689        0.68         0.14        0.11

NV04-89        -60           17.70       28.60        10.90         109        0.13         0.89        0.15

NV04-90        -45           16.50       52.33        35.83       2,850        0.90         3.62        0.20
   including                 33.00       46.45        13.45       7,321        2.12         6.56        0.19
   including                 33.00       40.26         7.26      11,995        2.32        10.45        0.19

NV04-97        -60            7.50       39.24        31.74         105        0.01         2.43        0.24
   including                 25.50       39.24        13.74         148        0.03         5.28        0.23

NV04-98        -60           40.93       67.70        26.77         185        0.20         2.30        0.09

NV04-99        -60           44.60       74.58        29.98         188        0.14         1.80        0.08
   including                 44.60       61.70        17.10         280        0.16         3.05        0.09

NV04-100       -60           23.45       65.19        41.74         390        0.22         2.61        0.09
   including                 40.60       49.70         9.10         718        0.32         5.97        0.12

NV04-101       -60            none

NV04-102       -60           47.78       63.59        15.81         116        0.09         1.78        0.27
   including                 56.00       63.59         7.59         191        0.17         0.87        0.11

NV04-103       -60           11.02       16.80         5.78          63        0.05         0.21        0.33

NV04-104       -60           38.45       51.60        13.15       1,489        0.09         0.80        0.09

NV04-109       -60            3.00      105.06       102.06          73        0.13         0.15        0.04
   including                  3.00       50.07        47.07          88        0.13         0.12        0.05
   including                 20.66       50.07        29.41         111        0.14         0.11        0.04

NV04-110       -45            3.00       64.50        61.50         128        0.17         0.27        0.05
   including                  3.00       21.46        18.46         312        0.43         0.77        0.07
   including                 16.12       21.46         5.34       1,006        1.39         2.59        0.18

NV04-111       -65            3.00       35.00        32.00          28        0.05         0.06        0.07

</TABLE>



                                      -39-
<PAGE>




<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %           %
                             From         To         Length      Silver       Copper        Lead        Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)       (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV04-112       -45            6.00       64.68        58.68         208        0.22         0.35        0.06
   including                  6.00       16.26        10.26         375        0.71         0.67        0.17
   including                 28.87       43.65        14.78         324        0.26         0.83        0.03

NV04-113       -45            4.50       28.75        24.25          60        0.46         0.03        0.04
   including                  4.50       10.50         6.00         109        0.87         0.03        0.04

NV04-114       -60            5.56       39.28        33.72          57        0.09         0.39        0.12
                              6.50       12.75         6.25          83        0.16         0.51        0.17

NV04-115       -60            8.00       18.05        10.05         151        0.04         0.35        0.13

NV04-116       -60           15.00       45.40        30.40         243        0.32         2.04        0.11
   including                 15.00       36.42        21.42         322        0.39         2.85        0.13

NV04-117       -45           25.50       53.65        28.15        1115        0.45         0.98        0.13
   including                 42.04       48.01         5.97        4579        1.82         2.47        0.14

NV04-118       -60           44.00       51.62         7.62         155        0.09         0.79        0.11

NV04-119       -60           44.10       55.30        11.20          92        0.03         1.00        0.35

NV04-120       -60            7.12       65.65        58.53          47        0.07         0.22        0.25
   including                 26.00       31.24         5.24          84        0.04         0.43        0.18
   and                       62.80       65.65         2.85         242        0.23         0.30        0.05

NV04-132       -60           49.55       56.75         7.20          31        0.05         0.86        0.31
   and                       96.71      101.00         4.29          62        0.10         0.50        0.04

NV04-133       -60           94.80      105.32        10.52          80        0.14         0.38        0.03
   and                      153.97      172.80        18.83         113        0.13         0.11        0.04
   including                163.80      167.70         3.90         450        0.30         0.36        0.11

NV05-139       -70           26.00       43.84        17.84     1036.80        2.00         0.82        0.12
   including                 36.20       42.90         6.70     2373.20        4.98         0.43        0.08

NV05-140       -60           29.00       61.71        32.71          85        0.09         0.62        0.09
   including                 29.00       41.56        12.56         171        0.14         1.52        0.12

NV05-141       -60            8.00       34.45        26.45      148.52        0.07         0.72        0.25
   including                 19.15       24.13         4.98      410.85        0.13         1.31        0.16

NV05-142       -60           11.00       45.45        34.45        1220        1.04         1.64        0.18
   including                 23.00       43.22        20.22        1979        1.67         1.39        0.15

NV05-157       -60           14.10       63.88        49.78          53        0.06         1.20        0.19
   including                 14.10       37.56        23.46          70        0.03         2.48        0.40

NV05-158       -60           35.10       68.10        33.00          90        0.09         0.51        0.30
   including                 47.10       65.10        18.00         147        0.15         0.75        0.07

NV05-159       -60           14.10       92.94        78.84          52        0.06         0.34        0.15
   including                 14.10       50.92        36.82          65        0.05         0.51        0.30

NV05-160       -60           29.15       33.26         4.11         623        0.33         1.12        0.14

NV05-161       -60            3.05       21.16        18.11          44        0.05         0.44        0.14

</TABLE>

Notes
1. All length weighted average (LWA) results are "uncut"



                                      -40-
<PAGE>

CALCITE HILL DRILLING RESULTS

Thirty-six  drill  holes have been  completed  to date on Calcite  Hill and have
demonstrated  the presence of a  significant  mineralized  body.  Mineralization
encountered  at  Calcite  Hill is  predominantly  hosted  within  trachyandesite
volcanic rock and to a lesser degree within mudstone which overlies the volcanic
rock. The  volumetrically  most important  style of  mineralization  consists of
calcite-barite veinlets and breccias with argentite-acanthite, native silver and
lesser  galena  and  chalcopyrite.  In  general,  this  style of  mineralization
contains high silver grades with minor amounts of lead and copper.  In the upper
portions  of  the  host  volcanic   unit,   and  in  the   overlying   mudstone,
mineralization   tends  to  be   lead-rich   and   consists   predominantly   of
medium-grained  galena with moderate  silver values.  Mineralization  at Calcite
Hill has now been defined over a strike  length of 500m and varies in horizontal
width from  approximately 50 to 150 metres and vertical thickness from 10 to 110
metres.  At the time of writing  Phase III drilling is  continuing to expand the
size of known mineralization at Calcite Hill, the ultimate size and grade of the
mineralized body is as yet unknown.

Mineralized Intercepts from Calcite Hill Drilling

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %          %
                             From         To         Length      Silver       Copper        Lead       Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)      (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV04-88        -80           70.30      142.63        72.33         202        0.05         3.45       0.12
   including                 81.61      142.63        61.02         226        0.05         2.87       0.01
   including                 70.30      110.92        40.62          89        0.02         5.95       0.21
   including                110.92      123.36        12.44         672        0.14         0.50       0.01

NV04-121       -70            None

NV04-122       -70          152.27      199.83        40.78          70        0.08         0.23       0.01
   including                179.61      199.83        20.22         102        0.13         0.29       0.02

NV04-123       -70            None

NV04-124       -80           72.45      195.05       122.60         195        0.09         0.74       0.01
   including                 72.45      104.00        31.55         476        0.13         2.46       0.03
   and                       86.22       87.67         1.45       5,761        0.75         4.05       0.03
   including                116.50      127.76        11.26         308        0.17         0.13       0.01
   including                145.70      149.82         4.12         129        0.06         0.12       0.00
   including                176.47      180.71         4.24         500        0.27         0.63       0.05

NV04-125       -80            None

NV04-126       -50           87.40      283.50       196.10         113        0.05         0.44       0.11
   including                 87.40      187.66       100.26         156        0.05         0.83       0.21
   including                120.72      187.66        66.94         228        0.07         0.61       0.00
ends in mineral             270.17      283.50        13.33         232        0.06        -0.01       0.00

NV05-134       -70           71.10      106.01        34.91          60        0.05         0.55       0.04
   including                 90.11      106.01        15.90         102        0.09         0.04       0.00

NV05-135       -70           54.43       84.87        30.44          43        0.06         0.89       0.02
   including                 54.43       65.27        10.84          82        0.12         2.44       0.07
   and                      110.57      110.81         0.24       2,954        0.28        -0.01       0.02
   and                      222.39      224.88         2.49         367        0.11         0.14       0.00

NV05-136       -70            None

NV05-137       -80           60.59       73.05        12.46          13        0.00       1.45       0.02

</TABLE>



                                      -41-
<PAGE>



<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %          %
                             From         To         Length      Silver       Copper        Lead       Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)      (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>

NV05-138       -56           87.74      211.00       123.26         139        0.09         1.07       0.01
   including                155.50      160.00         4.50         654        0.31         0.42       0.00
   and                      192.50      211.00        18.50         387        0.13         0.15       0.01

NV05-143       -55           82.30      211.39       129.09         125        0.05         0.16       0.00
   including                 82.30       88.04         5.74         117        0.07         2.64       0.02
   and                      116.30      126.56        10.26        1257        0.35         0.18       0.02
   combined                  82.30      128.86        46.56         300        0.10         0.39       0.02
   and                      190.31      200.45        10.14         157        0.14         0.06       0.00

NV05-144       -65           69.27       82.62        13.35          19        0.00         0.80       0.37

NV05-145       -65           68.54       76.60         8.06          16        0.00         1.12       0.52

NV05-146       -60           55.50       83.39        27.89          34        0.06         0.32       0.17
   including                 71.35       83.39        12.04          59        0.14        -0.01       0.04
   and                      150.68      153.70         3.02         297        0.10         0.41       0.03

NV05-147       -70           74.10       87.72        13.62          37        0.07         0.06       0.02
   and                      163.37      170.10         6.73          43        0.10         0.07       0.03

NV05-148       -80           77.87      160.85        82.98         209        0.08         1.23       0.01
   including                115.81      120.40         4.59        1197        0.23         1.16       0.01

NV05-149       -80           70.97      195.17       124.20         135        0.09         0.29       0.02
   including                 90.66      131.30        40.64         229        0.09         0.21       0.01

NV05-150       -80           70.17       75.53         5.36          35       -0.01         0.75       0.08
   and                       83.69       92.18         8.49          38        0.02         1.81       0.00

NV05-151       -80           60.24      140.46        80.22         246        0.09         0.78       0.03
   including                 77.10      140.46        63.36         309        0.12         0.56       0.03
   including                107.10      132.43        25.33         476        0.21         0.17       0.03

NV05-152       -80           68.10      119.40        51.30          89        0.13         0.31       0.02
   including                 76.04       81.96         5.92         249        0.57         0.82       0.02
   and                      117.22      119.40         2.18        1218        0.54         0.02       0.07

NV05-162       -55           86.53      118.80        32.27         176        0.15         0.13       0.00
   including                112.67      118.80         6.13         721        0.35         0.12       0.00

NV05-163       -70           64.80       80.33        15.53         149        0.08         1.17       0.10

NV05-164       -70           75.10       95.76        20.66          24        0.14         0.03       0.01
   and                      139.97      143.75         3.78          76        0.25         0.13       0.04

NV05-165       -70           45.49       96.05        50.56         102        0.21         0.92       0.04
   including                 58.77       72.32        13.55         240        0.21         0.71       0.04

NV05-166       -65           46.60      108.22        61.62          44        0.11         0.18       0.04
   including                 46.60       59.10        12.50          92        0.14         0.61       0.10
   and                       89.10      108.22        19.12          55        0.13         0.14       0.02

NV05-167       -60           83.94      113.55        29.61         236        0.06         5.38       0.05
   including                 83.94       88.80         4.86        1251        0.36         9.19       0.09
   and                       99.66      113.55        13.89          60        0.01         7.87       0.06

NV05-168       -60           86.10       87.70         1.60          53        0.11         3.60       0.02
   and                      113.10      164.10        51.00         168        0.26         0.04       0.03
   including                128.95      142.32        13.37         333        0.58         0.01       0.08

</TABLE>


                                      -42-
<PAGE>


<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                   Composite       g/t          %             %          %
                             From         To         Length      Silver       Copper        Lead       Zinc
DDH            DIP         (metres)    (metres)     (metres)      (LWA)        (LWA)        (LWA)      (LWA)
-------------------------------------------------------------------------------------------------------------
<S>          <C>           <C>        <C>          <C>          <C>          <C>         <C>          <C>


NV05-169       -80           80.45      107.40        26.95          48        0.01         0.89       0.06

NV05-170       -80           83.52      134.40        50.88         124        0.18         1.93       0.03
   including                 83.52      110.21        26.69         183        0.19         3.66       0.05
   and                      117.76      134.40        16.64          83        0.24         0.02       0.02

NV05-171       -70           89.65      133.52        43.87         171        0.16         2.82       0.04
   including                 95.50      113.85        18.35         220        0.21         5.11       0.05

NV05-172       -60           89.10      101.29        12.19          67        0.05         1.07       0.07

NV05-173       -80           69.31       80.80        11.49         127        0.05         0.96       0.03
   and                      204.50      220.33        15.83          50        0.06        -0.01      -0.01

NV05-174       -55           84.53      129.50        44.97          35        0.03         1.41       0.28
  including                 111.50      129.50        18.00          57        0.07         0.70       0.00

</TABLE>

Notes
1. All length weighted average (LWA) results are "uncut"

OTHER AREAS DRILLING RESULTS

A number of drill holes have been completed in areas such as the Connector Zone,
Barite Hill,  Esperanza  Zone and  stratigraphic  holes  outside of named zones.
Significant  results from these holes and their locations are shown in the table
below.

Mineralized Intercepts from Drilling Other Targets

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                                      COMPOSITE       G/T          %         %           %
                                                  FROM        TO        LENGTH      SILVER      COPPER      LEAD       ZINC
        DDH       LOCATION          DIP         (METRES)   (METRES)    (METRES)      (LWA)       (LWA)      (LWA)      (LWA)
----------------------------------------------------------------------------------------------------------------------------
   <S>          <C>              <C>           <C>       <C>           <C>         <C>       <C>         <C>       <C>


      NV04-27       recce           -45            7.00       7.73        0.73         61        0.01       0.56       2.25
          and                                     66.90      68.10        1.20        377        0.01       0.10       0.05

      NV04-32     Connector         -45           46.50      96.05       49.55         78        0.04       0.14       0.03

      NV04-33     Connector         -80            None

      NV04-34     Connector         -45           10.50      29.20       18.70         75        0.01       0.70       0.05

      NV04-35       recce           -80            None

      NV04-39     Connector         -80            None

      NV04-40     Connector         -45           43.20      91.20       48.00        108        0.04       0.22       0.16
    including                                     67.20      88.20       21.00        160        0.08       0.19       0.09

      NV04-58    Barite Hill        -80           12.80      41.00       28.20         37        0.00       0.80       0.10

      NV04-59    Barite Hill        -80          148.70     152.40        3.70         23       -0.01       0.51       0.60

      NV04-60    Barite Hill        -80            None

      NV04-61     Esperanza         -45           52.50      55.50        3.00        353        0.03       0.17       0.00

      NV04-62     Esperanza         -45            7.20       9.90        2.70        831        0.09       0.56       0.00

</TABLE>


                                      -43-
<PAGE>


<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                                      COMPOSITE       G/T          %         %           %
                                                  FROM        TO        LENGTH      SILVER      COPPER      LEAD       ZINC
        DDH       LOCATION          DIP         (METRES)   (METRES)    (METRES)      (LWA)       (LWA)      (LWA)      (LWA)
----------------------------------------------------------------------------------------------------------------------------
   <S>          <C>              <C>           <C>       <C>           <C>         <C>       <C>         <C>       <C>

      NV04-63     Esperanza         -45           31.60      77.40       45.80         94        0.01       0.25       0.03
    including                                     31.60      38.95        7.35        162        0.01       0.23       0.04
    including                                     33.55      37.50        3.95        246        0.01       0.28       0.04
          and                                     42.80      77.40       34.60         89        0.01       0.27       0.03
    including                                     66.50      70.50        4.00        185        0.01       0.39       0.08

      NV04-64     Esperanza         -45            6.00      28.30       22.30         25        0.00       0.21       0.02
          and                                     69.20     102.10       32.90         47        0.03       0.16       0.02
    including                                     69.20      70.60        1.40        101        0.00       0.37       0.02
    including                                     96.65     102.10        5.45        153        0.17       0.02       0.03
          and                                    140.10     144.00        3.90         47        0.03       0.85       0.04

      NV04-66     Connector         -45            None

      NV04-67     Connector         -45           50.84      63.70       12.86        145        0.04       1.03       0.03

      NV04-68     Connector         -45           52.20      81.75       29.55         98        0.03       0.40       0.11

      NV04-74    Barite Hill        -80           29.00      37.16        8.16         29        0.01       0.41       0.08

      NV04-75    Barite Hill        -80           53.93      55.52        1.59         63        0.01       0.69       0.18

      NV04-76    Barite Hill        -80           10.10      32.20       22.10         34        0.02       0.63       0.21
          and                                    100.50     122.20       21.70         88        0.03       0.26       0.09
    including                                    106.10     114.47        8.37        191        0.08       0.33       0.13

      NV04-77       recce           -45            None

      NV04-79     Esperanza         -45           34.72      47.28       12.56        513        0.09       0.06       0.01

      NV04-80     Esperanza         -45            4.50       8.05        3.55        258        0.10       0.51       0.03

      NV04-81     Esperanza         -45           58.20      62.48        4.28         41        0.01       0.04       0.03
          and                                     86.87      99.76       12.89         23        0.02       0.04       0.03

      NV04-82     Esperanza         -45            6.00      58.55       52.55         57        0.00       0.35       0.01
    including                                     34.50      58.55       24.05         95        0.00       0.28       0.00
          and                                    102.15     109.30        7.15        149        0.02       1.61       0.35

      NV04-86     Connector         -45           34.63     101.18       66.55         46        0.03       0.15       0.10
    including                                     47.80      49.02        1.22        104        0.05       0.53       0.08

      NV04-87     Connector         -45           22.40      24.06        1.66        129        0.10       0.80       0.08
          and                                     52.02      52.80        0.78        654        1.45       0.13       0.26
          and                                     66.25      76.50       10.25         25        0.04       0.02       0.04

      NV04-91    Barite Hill        -45            3.00      16.50       13.50         12        0.00       0.48       0.17
          and                                    123.50     153.95       30.45         13        0.00       0.28       0.14

      NV04-92    Barite Hill        -65            None

      NV04-93       recce           -80           93.68      94.81        1.13         42        0.00       6.73       0.61
          and                                    137.93     147.00        9.07         11        0.05       1.44       0.04

      NV04-94     Connector         -45          103.32     116.39       13.07         43        0.00       0.08       0.10

      NV04-95     Connector         -60           49.08      64.80       15.72         55        0.00       0.53       0.03

      NV04-96     Connector         -45            None

     NV04-105     Connector         -60           33.43      46.70       13.27        545        0.14       1.78       0.11

     NV04-106   Connector Zone      -60           45.80      70.70       24.90        147        0.04       0.69       0.11
    including                                     65.56      67.70        2.14       1196        0.33       1.63       0.41

</TABLE>


                                      -44-
<PAGE>


<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                                      COMPOSITE       G/T          %         %           %
                                                  FROM        TO        LENGTH      SILVER      COPPER      LEAD       ZINC
        DDH       LOCATION          DIP         (METRES)   (METRES)    (METRES)      (LWA)       (LWA)      (LWA)      (LWA)
----------------------------------------------------------------------------------------------------------------------------
   <S>          <C>              <C>           <C>       <C>           <C>         <C>       <C>         <C>       <C>

     NV04-107     Connector         -45           52.90      99.56       46.66        334        0.31       0.94       0.33
    including                                     71.60      97.10       25.50        548        0.55       0.91       0.33

     NV04-108     Connector         -45           31.50      70.50       39.00        485        0.10       0.26       0.05
    including                                     54.07      70.50       16.43       1028        0.19       0.54       0.08

     NV04-127   Connector Zone      -60           97.08     111.39       14.31         56        0.01       0.44       0.05

     NV04-128     Connector         -60           54.60      80.09       25.49         58        0.04       0.54       0.26

     NV04-129     Connector         -60            none  - did not reach target

     NV04-130   Connector Zone      -62           38.56      41.04        2.48        111        0.02       2.39       0.79
          and                                     66.33      78.46       12.13         33        0.00       2.18       0.09

     NV04-131     Connector         -60           10.33      91.45       81.12         61        0.05       0.25       0.10
    including                                     60.57      67.80        7.23        152        0.07       0.29       0.04
    including                                     79.22      91.45       12.23        126        0.07       0.30       0.05

     NV05-153   Connector Zone      -45               0      88.80       88.80        107        0.10       0.11       0.04
    including                                         0       7.36        7.36        226        0.22       0.18       0.12
          and                                     37.48      88.80       51.32        124        0.10       0.12       0.04

     NV04-154   Connector Zone      -45            3.05      31.80       28.75        148        0.13       0.15       0.05

     NV05-155   Connector Zone      -45               0       9.10        9.10        105        0.09       0.03       0.06

     NV05-156   Connector Zone      -60            8.73      75.99       67.26         63        0.03       0.14       0.08
    including                                      8.73      13.80        5.07         53        0.02       0.88       0.68
          and                                      29.1      75.99       46.89         83        0.04       0.11       0.03
</TABLE>

Notes
1. All length weighted average (LWA) results are "uncut".

ESTIMATED RESOURCES

Two resource estimations have been completed on deposits at the Navidad Project.
The first was released on May 25, 2004 and  estimated  an Indicated  Resource of
63.6 million tonnes at 101 g/t silver and 1.76% lead at the Galena Hill deposit.
The second estimate was publicly  released on December 1, 2004 and increased the
project total  Indicated  Resources to 80.8 million tonnes at 103 g/t silver and
1.45% lead by including  the Navidad Hill and  Connector  zones.  Both  resource
estimations  were  completed  by Snowden  Mining  Industry  Consultants,  43-101
compliant  reports   documenting  these  estimates  have  been  filed  with  the
appropriate regulatory bodies and are publicly available on the SEDAR website.

Navidad Project Indicated Resources using a 50g/t silver equivalent cut-off:

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------
INDICATED RESOURCES                                                            CONTAINED      CONTAINED
(50g/t silver               TONNES     SILVER     LEAD     COPPER    ZINC       SILVER          LEAD
equivalent cut-off)       (MILLIONS)    (G/T)      (%)       (%)      (%)       (M OZS)     (1,000 TONNES)
----------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>      <C>       <C>     <C>          <C>              <C>

NAVIDAD HILL
              Indicated      15.17       115      0.35      0.12     0.09         56.1              53
               Inferred       3.37        97      0.74      0.09     0.16         10.5              25

</TABLE>


                                      -45-
<PAGE>



<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------
INDICATED RESOURCES                                                            CONTAINED      CONTAINED
(50g/t silver               TONNES     SILVER     LEAD     COPPER    ZINC       SILVER          LEAD
equivalent cut-off)       (MILLIONS)    (G/T)      (%)       (%)      (%)       (M OZS)     (1,000 TONNES)
----------------------------------------------------------------------------------------------------------
<S>                       <C>          <C>      <C>       <C>     <C>          <C>              <C>

CONNECTOR ZONE
              Indicated       2.05        74      0.27      0.03     0.09          4.9               6
               Inferred       6.50       100       0.2      0.04      0.1         20.9              13

GALENA HILL
              Indicated      63.58       101      1.76      0.03     0.24        207.4           1,118
               Inferred       5.79        43      0.56      0.01     0.08          8.0              32

NAVIDAD PROJECT TOTAL
              Indicated      80.80       103      1.45      0.05     0.21        267.5           1,177
               Inferred      15.66        78      0.45      0.04     0.11         39.3              70
</TABLE>

Note:Silver  equivalent was calculated using US$5.50/oz  silver,  $0.30/lb lead,
     $1.10/lb  copper,  and $0.40/lb  zinc.  (AgEq = Ag +  (%Pb*10,000/242.5)  +
     (%Cu*10,000/66.1) + (%Zn*10,000/181.9).

PLANNED FUTURE WORK

Phase III drilling is currently planned to encompass an additional 10,000m which
will be completed in June or July, 2005. The primary focus of this drilling will
be continuing  to delineate  mineralization  at Calcite Hill,  however there are
also drill holes  planned at Galena Hill and  `stratigraphic'  or `recce'  holes
planned elsewhere on the property.

A resource  estimate on the  portions of Calcite  Hill that have been drilled to
date is planned for May and June, 2005. Any resources determined at Calcite Hill
will be additional to those described above from the Galena Hill,  Navidad Hill,
and Connector zones.

Additional surface prospecting,  mapping,  geochemical sampling,  and geophysics
may be carried out as deemed appropriate by the Company's Exploration Team.

Navidad Area Properties (Other than the Navidad Project)

The following properties are 100% owned by the Company unless stated otherwise.

TAQUETREN PROPERTY

The Taquetren claim (File Number: 14015/03; 10,000 hectares) is located directly
east of the Rio Chubut, approximately 70 kilometres to the southwest of Navidad.
The area is mapped as being  underlain  by Jurassic  Canadon  Asphalto and Lonco
Trapial Formation  volcanic and sedimentary rocks similar to those that host the
Navidad discovery. Very preliminary prospecting and stream sediment sampling has
shown  anomalous  values of  antimony;  no source has yet been  located for this
anomaly.  Regional  mapping and terrain  analysis  shows an important  northwest
trending structure to bisect the Taquetren property; this orientation is similar
to structures that control mineralization at the Navidad Project.

REGALO PROPERTY

The Regalo property is located 25 kilometres north-northwest of Cerro Condor and
90 kilometres  south-southwest  of the Navidad  project.  The Regalo claim (File
Number: 14016/03;  10,000 hectares) covers ground mapped as prospective Jurassic
Canadon  Asphalto  and  Lonco  Trapial  Formation  rocks  and  includes  several
regionally-important northwest trending structures.  Preliminary stream-sediment
sampling has returned highly anomalous gold values. Gold values from nine stream
sediment   samples,   along  6  kilometres  of  one  drainage   (and   adjoining
tributaries),  range in value from 0.134 to 0.831 ppm.  The  Company has entered
into an option  agreement  dated August 12, 2003 with  Consolidated  Pacific Bay
Minerals Ltd.  ("Consolidated Pacific Bay") whereby Consolidated Pacific Bay can
acquire up to a 70% interest in the Regalo mineral claim through the issuance of
900,000 shares of Consolidated Pacific Bay to the Company, and work expenditures
totalling  US$625,000 over three years.  Consolidated Pacific Bay must issue all
900,000  shares  (which have been issued,  with a deemed value of $180,000)  and


                                      -46-
<PAGE>



expend  US$50,000  on the  property by August 12,  2004,  in order to earn a 51%
interest  in the claims.  A further 19%  interest in the claims can be earned by
Pacific Bay if it  completes a  feasibility  study and  finances the property to
production.  A second  cateo  (Regalo  II) has been  staked  to the north of the
primary Regalo claim,  adding another 10,000 hectares to the property subject to
the  Company's  agreement  with  Consolidated  Pacific  Bay.  On May  16,  2005,
Consolidated Pacific Bay will liberate 4,000 hectares. These 4,000 hectares have
already been covered by the Company through a recent manifestation.

NOEL PROPERTY

The Noel claim (File Number: 14036/03; 9,406 hectares) is adjacent to the Regalo
and Trucha claims and also contains a significant, multi-sample,  gold-in-stream
sediment  anomaly.  Government maps show the claim to be underlain  primarily by
Canadon  Asphalto  Formation  sedimentary  and volcanic  rocks,  with  overlying
Cretaceous  sandstone along the eastern side of the claim.  Five stream sediment
samples taken from two drainages over  approximately 5 kilometres range in value
from  0.114 to 1.570 ppm gold.  The  apparent  source  area for these  extremely
anomalous  values  is has not  been  prospected  to  date  and is  considered  a
high-priority target for follow-up work.

TRUCHA PROPERTY

The Trucha claim (File Number:  14014/03; 9,915 hectares) is contiguous with the
Regalo  and Noel  claims  and also  includes  a stream  sediment  sample  highly
anomalous in gold (single  sample,  0.556 ppm Au).  Regional  mapping  shows the
claim to be underlain by prospective Jurassic Canadon Asphalto and Lonco Trapial
Formation rocks, cut by several regional-scale  structures.  In conjunction with
evaluation of the Noel claims, the Trucha claim requires detailed prospecting to
identify the source of gold producing the high stream-sediment values.

MARA PROPERTY

The Mara claim (File Number:  14018/03; 9,945 hectares) is located approximately
95  kilometres to the  south-southwest  of Navidad.  Regional  mapping shows the
property  to be  underlain  by  Jurassic  Canadon  Asphalto  and  Lonco  Trapial
Formation rocks,  which  unconformably  overly granitic basement rocks.  Several
mapped and interpreted northwest-trending structures are present on the property
and are considered to be prospective for both  Navidad-style  mineralization and
traditional  low-sulphidation  gold veins.  No fieldwork has been carried out to
date on the property.

CONDOR AND ALAMO PROPERTIES

The Condor claim (File Number:  14017/03;  6,000 hectares) and Alamo claim (file
number:   14032/03;   10,000   hectares)  are  located  directly  south  of  the
Regalo/Noel/Trucha  claims and were staked  based on  prospective  stratigraphy,
structure  and the  presence  of known  barite  occurrences.  The  known  barite
together with Navidad-age  stratigraphy and similar structure makes these claims
highly  prospective  for  Navidad-style  mineralization.  No fieldwork  has been
completed on these claims to date;  management believes a first-pass  evaluation
is warranted. 4,000 hectares were liberated last year.

NINA AND CARLOTA PROPERTIES

The Nina claim (file number: 14018/03;  10,000 hectares) and Carlota claim (file
number:  14034/03;  10,000 hectares) are located 40 kilometres southeast of Paso
De Indios and were staked based on the presence of prospective  Canadon Asphalto
stratigraphy and regional northwest trending  structures.  No fieldwork has been
completed to date on these claims;  management believes a first-pass  evaluation
is warranted. Both cateos will be liberating 4,000 hectares each on May 16, 2005
as required by Argentian Mining laws.




                                      -47-
<PAGE>


PAMPA 3 PROPERTY

The Pampa 3 claim (File Number: 14004/03; 2,500 hectares) is located adjacent to
the Navidad  Project,  along trend and  immediately to the  southeast.  Although
predominantly covered with recent alluvium, it is interpreted to be underlain by
the Canadon Asphalto  Formation  limestone and  volcaniclastic  rocks which host
mineralization  at  Navidad.  Work  to date  has  been  minimal  with  only  two
stream-sediment  samples collected,  both of which drain areas peripheral to the
claim.  In January,  2005, the Company  liberated 250 hectares under this cateo.
These 250 hectares were subsequently  recovered by a manifestation  covering the
whole cateo; file #14446/04.

COLONIA PROPERTY

The Colonia claim (File Number: 14005/03; 6,000 hectares) covers a large area of
highly prospective ground directly along strike from the Navidad discovery. Most
of the  10,000  hectare  claim is  underlain  by  prospective  Canadon  Asphalto
Formation  rocks.  Preliminary   stream-sediment  sampling  has  defined  highly
anomalous values of antimony,  an important  "pathfinder" element at the Navidad
discovery.  Minor prospecting (four rock samples collected) has not yet unveiled
the source of these  stream-sediment  values,  management  believes  significant
additional work is warranted. The Company liberated 4,000 hectares in this cateo
last year.

JULIE PROPERTY

The Julie claim (File Number:  14035/03;  5,675  hectares) is  approximately  30
kilometres  southease of the Navidad  project and lies at the  regional  contact
between granitic rocks that underlie the prospective Jurassic stratigraphy,  and
Jurassic volcanic rocks.  Several important  LandSat-interpreted  structures are
present on this  claim;  regional  structure  has been  shown to be of  critical
importance at the Navidad discovery.  Preliminary stream-sediment sampling shows
anomalous  values of copper and  antimony,  although  management  believes it is
strongly warranted, no significant follow-up work has been done.

SIERRA 1 PROPERTY

The Sierra 1 claim (File Number:  14006/03;  9,996 hectares) covers a large area
of prospective  Canadon  Asphalto  Formation  rocks and the underlying  volcanic
rocks and a portion of the granitic basement.  It is located  immediately to the
east of the Julie Property.  Significant areas of LandSat-interpreted alteration
are present in the northeastern portion of the claim, the imagery shows patterns
very  similar to those seen in the area of the  Navidad  discovery.  Preliminary
stream-sediment  sampling has shown anomalous copper values,  these results have
yet to be followed up on.

SIERRA 2 PROPERTY

The Sierra 2 claim (File Number:  14007/03;  10,000  hectares) covers an area of
complex geology in the hinge zone of a  regional-scale  anticline and is located
immediately  south of the Sierra 1 property  in the  Navidad  area.  Mapped rock
units include the Canadon Asphalto Formation and overlying Cretaceous sandstone.
Essentially  no work has been done in the central  portions of this claim as the
local land owners could not be contacted to gain permission for entry onto their
land.

Mina Yanquetreu is a small abandoned  barite mine in the central portions of the
claim. This occurrence is highly encouraging as both strataform (exhalative) and
vein-controlled  barite  is  intimately  associated  with  the  Navidad  system.
Management  believes this area is considered  highly  prospective and warrants a
significant early-stage exploration program.

SIERRA 3 PROPERTY

The  Sierra  3  claim  (File  Number:   14008/03;  9,999  hectares)  covers  the
southwestern  portions of mapped Canadon Asphalto Formation rocks in the Navidad
area.  Also  present on the claim are  Jurassic  volcanic  rocks and  underlying
granitic  basement.  Major  LandSat-interpreted  structures  are  present as are
possible zones of alteration.  Preliminary stream-sediment sampling has returned
strongly anomalous copper values. No follow-up  prospecting or rock sampling has
been  undertaken to date.  Management  believes the Sierra 3 claim is considered
highly  prospective and warrants  considerable  follow-up work. In October 2004,
4,000 hectares were liberated.  These 4,000 hectares were subsequently recovered
through a manifestation; file #14369/04 "Sierra".



                                      -48-
<PAGE>




PRINCIPAL OFFICE

The Company's  principal  office is located at #709 - 837 West Hastings  Street,
Vancouver, British Columbia, V6C 3N6. The Company leases a portion of its office
space  from  Beauregard  Holdings  Corp.  ("Beauregard").  See  "Item  7.  Major
Shareholders and Related Party Transactions - Related Party Transactions".

On September 1, 2002 the Company  started to share  office  facilities,  capital
assets and personnel with Amera. During the fiscal year ended December 31, 2003,
the Company  received $35,110 (2002 - $6,000) from Amera. On July 7, 2004 Golden
Arrow began sharing the office facilities,  capital assets and personnel. During
the fiscal year ended December 31, 2004, the Company received $66,390 from Amera
and $57,000 from Golden Arrow. See "Item 7.
Major Shareholders and Related Party Transactions - Related Party Transactions."

Other Assets

MARKETABLE SECURITIES

The  Company  has  entered  into  option and sale  agreements  on certain of its
non-core mineral  property  holdings in which the Company received common shares
of publicly-traded  companies as partial consideration.  As at December 31, 2004
the  Company  held  300,000  shares of Tinka  Resources  and  900,000  shares of
Consolidated Pacific Bay with a quoted market value of $270,000.  As at December
31, 2003 the Company held 600,000 shares of Amera Resources  Corporation  with a
quoted market value of $546,000 and 500,000  shares of Ballad Gold & Silver Ltd.
with a quoted market value of $325,000 which were transferred to Golden Arrow.


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,  2004,  2003  and  2002  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 significant  accounting policies contained in Note 3
of the  December  31,  2004  consolidated  financial  statements  of the Company
attached hereto.  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 attached hereto,  direct costs related to the
acquisition and exploration of mineral  properties held or controlled by it 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   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 then the costs are written-off,  or if its
carrying value has been impaired, then the costs are written down to fair value.


                                      -49-
<PAGE>



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 were prepared on a going concern
basis  which  assumes  that it will be able  to  realize  assets  and  discharge
liabilities in the normal course of business.

The Company's  consolidated  financial statements are in Canadian dollars (CDN$)
and are prepared in accordance  with Canadian GAAP, the application of which, in
the case of the  Company,  conforms  in all  material  respects  for the periods
presented with U.S. GAAP except for the measurement  differences  referred to in
Note 11 of the consolidated financial statements of the Company included herein.
The noon rate of exchange on May 5, 2005,  reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States  dollars was CDN$.8033  (US$1.2448 = 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 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, the continued fluctuation of
the  Canadian  dollar  against  the U.S.  dollar  will  continue  to affect  the
Company's operations and financial position. See "Item 3. Key Information - Risk
Factors - Currency Fluctuations".

Overview

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

The Company's accounting policy under Canadian GAAP is to defer all direct costs
related to the  acquisition,  exploration and development of mineral  properties
held  or  controlled  by the  Company  on an  individual  property  basis  until
viability  of a  property  is  determined.  Under US GAAP,  the  costs  would be
expensed. 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 to fair value is taken for any  expected
loss on the  project  or  property.  At  December  31,  2004,  the  Company  had
capitalized  $6,551,598  (2003  -$1,469,026,  2002  -$148,618)  on its Argentine
properties.

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.

         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.



                                      -50-
<PAGE>



         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  entitled  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.

         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.

During the year ended  December  31,  2003,  the  Company  completed  a brokered
private  placement  for 2,900,000  units at a price of $0.90 per unit,  for cash
proceeds of  $2,421,150,  net of share issue costs of $188,850  which  closed in
April   2003.   Each  unit   consisted   of  one  common   share  and   one-half
non-transferable  common share purchase warrant.  One whole warrant entitles the
holder to purchase one common share for the exercise price of $1.10 per share on
or before April 28, 2004. In addition, options and warrants were exercised which
resulted in cash proceeds of $3,931,624 to the Company during the year.

During the year ended  December  31,  2004,  the  Company  completed  a brokered
private  placement  of  1,500,000  units at $3.10  per  unit,  for  proceeds  of
$4,307,500 net of costs of $411,237. Each unit consisted of one common share and
one half common share purchase warrant. Each full warrant entitled the holder to
purchase  one  additional  common  share  for  one  year  at  $3.70  per  share.
Underwriters were paid a commission of 6% cash and 200,000 compensation options.
The  compensation  options were exercisable at a price of $3.25 per compensation
option, for a period of twelve months,  into one share and one half warrant with
the  warrants  having  the same  terms as  described  above.  The  underwriters'
compensation  options  were  exercisable  for a period  of twelve  months.  This
financing  closed  February  23,  2004.  From January 1, 2005 to May 5, 2005 the
aggregate  amount the Company received from the exercise of warrants and options
was $4,215,145.

 During the year ended December 31, 2002, the Company  issued  2,085,361  common
shares on the exercise of warrants and agents warrants for $837,512.  During the
year ended December 31, 2003, the Company issued  5,074,996 common shares on the
exercise of warrants  and agents  warrants  for  $3,035,765.  As of December 31,
2003,  the Company had reserved  6,042,448  common  shares for issuance upon the
exercise of  outstanding  warrants.  As of December  31,  2004,  the Company had
reserved  1,422,017  common shares for issuance upon the exercise of outstanding
warrants. As at May 5, 2005, there are no warrants outstanding.

Cash on hand at May 5, 2005 was approximately $5,500,000.  During the nine month
period from March 31, 2005 to December  31,  2005,  the Company  plans to expend
$2,000,000 on the  continuation of the Phase III drilling program at the Navidad
project.

Results of Operations

The  following  discussion  of the results of  operations of the Company for the
fiscal  years  ended  December  31,  2004,  2003  and  2002  should  be  read in
conjunction with the consolidated  financial  statements of the Company attached
hereto and related notes included therein.

YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

The Company  reported a  consolidated  loss of  $4,655,063  ($0.11 per share) in
2004, an increase of $1,236,645 from the loss of $3,418,418 ($0.11 per share) in
2003. The increase in the loss in 2004, compared to 2003, was due to a number of
factors of which $1,148,400 can be attributed to operating  expenses and $88,245
to other expense items.



                                      -51-
<PAGE>


The  Company's  prior period  financial  statements  have been  reclassified  to
reflect the  reorganization  in accordance  with Canadian  GAAP.  The net assets
transferred to Golden Arrow are described as "Spin-Off  Assets  Transferred" and
the allocated  expenses are described as "Loss Allocated to Spin-Off  Assets" in
the consolidated  financial  statements.  This  reclassification  did not change
previously  reported  total  losses.  The  allocation  of certain  expenses  was
calculated  on the  basis of the ratio of the  specific  assets  transferred  to
assets retained.  The following  discussion of the 2004 expenses compared to the
2003 expenses is based on expenses as originally reported.

The Company's 2004 operating  expenses were $4,312,616 an increase of $1,148,400
from the $3,164,216 originally reported for 2003. $661,175 of the 2003 operating
expense has been  reclassified  as "Loss  Allocated  to Spin-Off  Assets"  which
relate to the assets transferred to Golden Arrow. In 2004 $131,232 was allocated
to the Loss from Spin-Off  Assets  compared to $969,175 in 2003.  The allocation
was calculated on the basis of the ratio of the specific  assets  transferred to
assets retained. Certain "Other Income and Expense" items have been allocated to
spin-off  assets on the basis of the  nature of the income or  expense.  In 2004
expenses  increased as a result of increased activity at the Navidad project and
the support required at the corporate office.

Professional fees increased $597,017 to $894,780 in 2004, primarily due to legal
costs incurred in connection with the Aquiline legal action as well as increased
costs of  compliance.  During  2004 the Company  recorded a non-cash  expense of
$1,972,860  for stock  based  compensation  for  stock  options  granted  to its
employees  and  directors,  an  increase of $485,625  from 2003.  Other  notable
changes in the operating  expenses are: (i) Salaries  increased  $113,998 due to
staff  increases  (in 2004 the  Company  had an average  of seven  people on its
payroll compared to three in 2003);  (ii) Travel increased  $97,641due to travel
to conferences as well as to South America;  (iii) Cost  recoveries  (for shared
administrative  costs and  rent)  from  Amera  and  Golden  Arrow  increased  by
$114,161;  (iv) Corporate  development and investor relations decreased $62,026,
as  2003  was a more  active  year  in  which  the  Company  developed  investor
awareness.

In 2004 the  Company  recorded a gain of $328,346  on the  optioning  of certain
properties  to  other  mining  exploration  companies  (plus  $433,960  of gains
relating to the Spin-Off  Assets) compared to $481,779 in total in 2003. In 2004
a  write-down  of $99,762  (2003 - $nil) for the  carrying  value of  marketable
securities  was  recognized.  Reorganization  costs of $346,103 were recorded in
2004. An expense of $195,285 for foreign  exchange was recorded in 2004 compared
to  $25,916  in 2003.  The  foreign  exchange  adjustment  is as a result of the
continued strength of the Canadian dollar compared to the US dollar in which the
majority  of  the   inter-company   transactions  are   denominated;   when  the
inter-company  accounts  are  eliminated  the  difference  is charged to foreign
exchange. Interest and other income was $101,589 in 2004, an increase of $35,028
from 2003, primarily as a result of an increase of funds on deposit.

On March  5,  2004  Minera  Aquiline  Argentina  SA, a  subsidiary  of  Aquiline
Resources  Inc.  commenced an action against the Company  seeking  damages and a
constructive  trust over the Navidad  Area  Properties.  See "Item 8.  Financial
Information - Legal Proceedings." The Company believes the Aquiline legal action
is without  merit and  continues to  vigorously  defend  itself.  A Statement of
Defence  has  been  filed.  The  trial  has  been set for  October  11,  2005 in
Vancouver, British Columbia. As of the date of this annual report the outcome is
not determinable.

YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

The Company  reported a  consolidated  loss of  $3,418,418  ($0.11 per share) in
2003, an increase of $1,978,312 from the loss of $1,440,106 ($0.06 per share) in
2002. The loss from  continuing  operations,  $2,503,041,  increased  $1,963,906
primarily as a result of the cost for Stock Based  Compensation  which increased
$1,457,729  in 2003  compared to 2002.  Loss  allocated  to Spin-off  assets was
little changed in 2003 ($969,175) compared to 2002 ($954,775).

In early 2003 the Company  focused its efforts on its Navidad  Project in Chubut
Province located in southern  Argentina.  The preliminary results of its initial
exploration  efforts  were  very  encouraging.  Phase  I of a  drilling  program
commenced  in November  2003 and  continued  into March 2004.  A second phase is
scheduled to commence in May 2004.  Management believes that the Navidad Project
is worthy of its primary  interest and  accordingly  has focused the majority of
its available resources on this project and expects to continue to do so.




                                      -52-
<PAGE>


The Company's 2003 operating expenses were $2,503,041, an increase of $1,993,061
from 2002. A  significant  portion of the increase for 2003 is attributed to the
Company's  application  of the fair value method of accounting for stock options
granted to its employees and  directors.  As permitted,  the Company has elected
prospective  application,  effective January 1, 2003. Previously options granted
to the  Company's  directors and  employees  were only  disclosed on a pro forma
basis in the notes to the Company's  consolidated  financial statements.  During
2003 the Company recorded a non-cash compensation expense of $1,487,235 relating
to stock options granted to the Company's employees,  directors and consultants.
In 2002, the Company recorded an expense of $29,506 for stock options granted to
its consultants.  Much of the balance of the increase in the operating  expenses
can be  attributed  to the  Navidad  Project  program:  (1)  Administrative  and
Management  Services  increased  $68,365 (2) Corporate  development and investor
relations increased $116,325;  (3) General  exploration  increased $46,638;  (4)
Travel  increased  $33,659.  The  increase of $159,117 in  professional  fees is
primarily  due to legal costs  incurred in  connection  with the Aquiline  legal
action.

Interest  and other  income was $66,561 in 2003,  an  increase of $39,976  from
2002, primarily as a result of an increase of funds on deposit.

In 2003 the Company received cash proceeds of $6,467,245 from the sale of common
shares  less costs of  $188,850.  The  Company's  total  assets  increased  from
$7,432,489  at  December  31, 2002 to  $13,419,876  at December  31,  2003.  The
Company's  cash  position at December  31,  2003 was  $4,422,334  an increase of
$2,986,210 from December 31, 2002.

On May 3, 2004 the Company announced a proposed  corporate  reorganization.  The
effect of the  reorganization  will be to  transfer  the  Transferred  Assets to
Golden  Arrow.  The  Company  will  retain the  Navidad  Properties  and will be
responsible for the Company's accounts payable. The Company's  shareholders will
receive Golden Arrow common shares which will result in an identical  percentage
ownership by the Company's shareholders before and after the reorganization. See
"Item 4. Information on the Company - History and Development of the Company."

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 loss from continuing operations, $485,331, increased $302,600 compared
to 2001 ($182,731).  Loss allocated to Spin-off assets increased $255,631in 2003
($954,775) compared to 2002 ($699,144).

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  $29,506  for  stock  options  granted  to
consultants which is included in the increased operating expenditures.

There were increases in to the following expenses of continuing operations:  (1)
General  exploration  - $70,446  as a result  of an  aggressive  examination  of
grassroots  properties mainly in the Patagonia region; (2) Corporate development
- $41,066  which  relates to the  ongoing  North  America  and  European  market
awareness  program;  (3) Stock based  compensation  - $29,506 for stock  options
granted to consultants,  as required by the CICA Handbook Section 3870 effective
January 1, 2002.

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.

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.

Liquidity and Capital Resources

The Company's cash position at December 31, 2004 was $5,227,354,  an increase of
$805,020 from December 31, 2003.  Total assets  decreased  from  $13,419,876  at
December 31, 2003 to  $12,221,856 at December 31, 2004.  This decrease  resulted
from  the  transfer  of  net  assets  of  $7,364,878  to  Golden  Arrow  on  the



                                      -53-
<PAGE>


reorganization  of the  Company  offset by the  increases  in cash  balance  and
Navidad  carrying  value.  During the year ended  December  31, 2004 the Company
completed a brokered private placement of 1,500,000 units at $3.10 per unit, for
proceeds  of  $4,238,763,  net of  $339,000  agent's  commission  and $72,237 of
related issue costs. See "Item 5. Operating and Financial Review and Prospects -
Overview."

The Company has  capitalized  expenditures of  approximately  $2,050,000 for the
period ending May 5, 2005 on the Navidad Project.

As at May 5, 2005 the Company had working capital of approximately $5,500,000.

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. An extension of the Phase
III  budget  for  the  Navidad  Project  has  been  approved  in the  amount  of
$2,000,000.  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 its interest
in its properties.

The  Company's  management  may elect to  acquire  new  projects,  at which time
additional  equity  financing  may be required 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 projects and business plan.

During  the period  from  January  1, 2005  through  December  31,  2005,  it is
anticipated that the Company will have obligations totaling $720,000 for monthly
payments to the Grosso Group.

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

Off-Balance Sheet Arrangements

The Company does not have any material off balance sheet  arrangements that have
or are  reasonably  likely to have a current or future  effect on the  Company's
financial  condition,  changes in  financial  condition,  revenues or  expenses,
results of operations, liquidity, capital expenditures or capital resources.

Tabular Disclosure of Contractual Obligations
<TABLE>
<CAPTION>

                                            -----------------------------------------------------------------------
                                                                     Payments Due by Period
                                            -----------------------------------------------------------------------
                                                           Less than 1                                  More than 5
                                               Total           Year        1-3 Years      3-5 Years        Years
                                            -----------------------------------------------------------------------
<S>                                        <C>            <C>            <C>            <C>            <C>

Contractual Obligations                            $Nil           $Nil           $Nil           $Nil           $Nil
Long-term Debt Obligations                         $Nil           $Nil           $Nil           $Nil           $Nil
Capital (Finance) Lease Obligations                $Nil           $Nil           $Nil           $Nil           $Nil
Operating Lease Obligations                        $Nil           $Nil           $Nil           $Nil           $Nil
Purchase Obligations                               $Nil           $Nil           $Nil           $Nil           $Nil
Other Long-Term Liabilities Reflected in
   the Company's Balance Sheet under the
   GAAP of the Primary Financial Statements        $Nil           $Nil           $Nil           $Nil           $Nil
                                            -----------    -----------    -----------    -----------    -----------
Total                                              $Nil           $Nil           $Nil           $Nil           $Nil
                                            ===========    ===========    ===========    ===========    ===========
</TABLE>



                                      -54-
<PAGE>


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>

--------------------------------------------------------------------------------------------------------------------
NAME, AGE AND POSITION(1)                 PRINCIPAL OCCUPATION DURING PAST             PERIOD OF SERVICE AS A
                                                       FIVE YEARS                          DIRECTOR/OFFICER
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                    <C>

GERALD G. CARLSON                         President and Director of Copper       Chairman since February 15, 1999.
Chairman and Director                     Ridge Exploration Inc., a public       Director since February 15, 1999.
Age 59                                    British Columbia mineral exploration
                                          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 and    since February 1990.  President of     Chief Executive Officer since
Director                                  Oxbow International Marketing Corp.,   February 1990.
Age 67                                    a private British Columbia company.    Director since February 1990.

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

ARTHUR LANG                               Chief Financial Officer of the         Chief Financial Officer since April
Chief Financial Officer,                  Company since April 2, 2004.           2, 2004.
and Director                              Consultant providing financial         Vice-President since April 2, 2004.
Age 61                                    management services to various         Director since April 2, 2004.
                                          clients from 1999 to April 2004
                                          through Arthur G Lang Inc., a
                                          private British Columbia company.

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

NIKOLAOS CACOS                            Corporate Secretary since 1998.        Secretary since June 25, 1998.
Corporate Secretary                       President, CEO  and director of
Age 38                                    Amera Resources Corporation, a
                                          private British Columbia company,
                                          since April 2000. Director and
                                          Corporate Secretary of Golden Arrow
                                          Resources Corporation.

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

SEAN HURD                                 Investor relations manager for the     Vice President, Investor Relations
Vice President, Investor Relations        Company from June 2002 to present.     since March 2005.
Age 38                                    Investor relations for Senate Capital
                                          from February 1996 to May 2002.
--------------------------------------------------------------------------------------------------------------------

ROBERT STUART (TOOKIE) ANGUS              Director of the Company from May       Director since May 2003
Director                                  2003 to present.  Managing Director,
Age 56                                    Mergers and Acquisitions, Endeavour
                                          Financial Ltd., November 2003 to
                                          present. Partner in law firm, Fasken
                                          Martineau DuMoulin LLP from February
                                          2001 to October 2003. Partner in
                                          law firm, Stikeman Elliott from 1998
                                          to 2001.
--------------------------------------------------------------------------------------------------------------------

</TABLE>



                                      -55-
<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
NAME, AGE AND POSITION(1)                 PRINCIPAL OCCUPATION DURING PAST             PERIOD OF SERVICE AS A
                                                       FIVE YEARS                          DIRECTOR/OFFICER
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                    <C>

CHET IDZISZEK                             Director of the Company from May       Director since May 2003
Director                                  2003 to present.  President, CEO and
Age 57                                    director of Madison Enterprises
                                          Corp. from 1993 to present.
                                          President, CEO and director of
                                          Adrian Resources Ltd. from June 1990
                                          to present.

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

DAVID TERRY                               Director of the Company from May       Director since May 2004
Director                                  2004 to present. Vice President for
Age 40                                    the Company since June 2004 to
                                          present.  Vice President, Exploration
                                          for Amera Resources Corporation from
                                          March 2004 to present. Regional
                                          geologist with the British Columbia
                                          Ministry of Energy and Mines in
                                          Cranbrook, British Columbia from May
                                          2001 to March 2004. Project Geologist
                                          with Boldien Limited prior to May
                                          2001.
--------------------------------------------------------------------------------------------------------------------

DAVID HORTON                              Senior Vice-President of Canaccord     Director since June 2004
Director                                  Capital Corporation from 1996 to
Age 69                                    present.
--------------------------------------------------------------------------------------------------------------------

JUAN CARLOS BERRETTA                      Vice President, South American         Officer since April 2005
Vice President, South American            Corporate Development.
Corporate Development                     Property Manager for the Company
Age 64                                    since 1994.

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

AUGUSTO BAERTL                            President of Cia. Minera Antamina      Director since March 2005
Director (Of subsidiary)                  from 1997 to 2001 and Executive
Age 62                                    Chairman from 2001 to 2002.  Chief
                                          Executive Officer of Gestora de
                                          Negocios e Inversiones S.A. from
                                          August 2003 to present.

--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Officers and  Directors of the Company may also serve as directors of other
     companies. See "Conflicts of Interest" below.

There are no family relationships between any directors or executive officers of
the Company.  With the exception of the agreement with Endeavour  Financial Ltd.
relating to Mr. Angus' appointment to the board of directors, to the best of the
Company's knowledge,  there are no known arrangements or understandings with any
major shareholders, customers, suppliers or others, pursuant to which any of the
Company's  officers or  directors  was selected as an officer or director of the
Company.  See "Item 7. Major  Shareholders  and  Related  Party  Transactions  -
Related Party Transactions."

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.

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 BCBCA, and they will govern themselves in respect thereof to
the best of their ability in accordance with the  obligations  imposed upon them
by law.


                                      -56-
<PAGE>



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 or the United  States,  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
--------------------------------------------------------------------------------------------------------------------

Nikolaos Cacos                      Amera Resources Corporation               President & Director  Apr/00 to present
                                    Golden Arrow Resources Corporation        Director & Secretary  Jul/04 to present
--------------------------------------------------------------------------------------------------------------------

Arthur Lang                         Golden Arrow Resources Corporation        Director & CFO        Jul/04 to present
                                    Amera Resources Corporation               CFO                   Mar/05 to present
--------------------------------------------------------------------------------------------------------------------

Joseph Grosso                       Amera Resources Corporation               Chairman & Director   Feb/04 to present
                                    Golden Arrow Resources Corporation        Chairman, President,
                                                                              CEO & Director        Jul/04 to present
--------------------------------------------------------------------------------------------------------------------

Sean Hurd                           Golden Arrow Resources Corporation        Director              July/04 to present
                                                                              Vice-Pres, Investor
                                                                              Relations             Mar/05 to present
--------------------------------------------------------------------------------------------------------------------

Robert Stuart (Tookie) Angus        CMQ Resources Inc.                        Director              Dec/03 to present
                                    MCK Mining Corp.                          Director              Dec/03 to present
                                    Nevsun Resources Ltd.                     Director              Jan/03 to present
                                    Canico Resource Corp.                     Director              Sept/02 to present
                                    Plutonic Capital Inc.                     Director              June/99 to present
                                    First Quantum Minerals Ltd.               Director              Dec/97 to present
                                    Blackstone Ventures Inc.                  Director              Sept/97 to present
                                    Adrian Resources Ltd.                     Director              July/03 to present
                                    Dynasty Gold Corp.                        Secretary & Director  Oct/99 to present
                                    Bema Gold Corporation                     Director              June/92 to present
--------------------------------------------------------------------------------------------------------------------

Chet Idziszek                       Adrian Resources Ltd.                     Chairman, CEO,
                                                                              President & Director  June/90 to present
                                    Madison Enterprises Corp.                 Chairman, CEO,
                                                                              President & Director  Nov/93 to present
                                    Lund Gold Ltd.                            CEO, President &
                                                                              Director              May/97 to present
                                    Oromin Explorations Ltd.                  President & Director  Feb/94 to present
                                    The Havana Group Inc.                     Director              Aug/02 to present

</TABLE>




                                      -57-
<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
NAME OF DIRECTOR                    NAME OF COMPANY                           POSITION              TERM OF SERVICE
--------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                       <C>                   <C>

David Terry                         Amera Resources Corporation               Vice-Pres Exploration Mar/04 to present
                                    Golden Arrow Resources Corporation        Director, Vice-Pres,
                                                                              Exploration           Jul/04 to present
--------------------------------------------------------------------------------------------------------------------
David Horton                        Golden Arrow Resources Corporation        Director              July/04 to present
--------------------------------------------------------------------------------------------------------------------

</TABLE>

Compensation

During the fiscal year ended  December 31, 2004,  the  directors and officers of
the Company, as a group, had received or charged the Company a total of $476,226
(2003 - $330,600;  2002 - $136,276)  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.

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 and whose  total  salary and bonus  amounted to $100,000 or
more. 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.

During the year ended  December  31, 2004,  the Company had one Named  Executive
Officer:  Joseph  Grosso,  President  and Chief  Executive  Officer  (the "Named
Executive  Officer").  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, 2003 and 2004.

                           Summary Compensation Table

<TABLE>
<CAPTION>

                                                                    ---------------------------------------
                                                                             LONG TERM COMPENSATION
                                  ------------------------------    ---------------------------------------
                                      ANNUAL COMPENSATION                     AWARDS                PAYOUTS
                                  ------------------------------    ----------------------------    -------    ---------
                                                         OTHER                       RESTRICTED
------------------                                       ANNUAL      SECURITIES      SHARES OR                 ALL OTHER
    NAME AND            ----                             COMPEN-    UNDER OPTIONS/   RESTRICTED      LTIP        COMPEN-
PRINCIPAL POSITION     YEAR(1)    SALARY      BONUS      SATION     SARS GRANTED     SHARE UNITS    PAYOUTS      SATION
                                    ($)        ($)         ($)          (#)(2)            (#)         ($)          ($)
------------------      ----      ------------------------------    ----------------------------    -------    ---------
<S>                   <C>        <C>          <C>        <C>       <C>                  <C>         <C>          <C>

Joseph Grosso           2004       102,000      Nil        Nil        150,000            Nil           Nil         Nil
President and CEO       2003       102,000      Nil        Nil        200,000            Nil           Nil         Nil
                        2002       102,000      Nil        Nil        500,000            Nil           Nil         Nil
------------------      ----      ------------------------------    ----------------------------    -------    ---------
</TABLE>

(1)  Fiscal years ended  December 31, 2004,  2003 and 2002.
(2)  See "Options and Stock Appreciation Rights".




                                      -58-
<PAGE>


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  Officer  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 stock options  granted by the Company during the
financial  year ended December 31, 2004 to the Named  Executive  Officers of the
Company:
<TABLE>
<CAPTION>
                                                                                 Market Value
                                        % of Total Options                      of Securities
                     Securities Under       Granted in        Exercise or     Underlying Options
Name                 Options Granted     Financial Year(1)   Base Price(2)    on Date of Grant      Expiration Date
                           (#)                                ($/Security)       ($/Security)
<S>                    <C>                 <C>                <C>               <C>                <C>

Joseph Grosso            150,000              10.47%             $3.10              $2.85           March 24, 2009

</TABLE>

(1)  Percentage of all options granted during the financial year.
(2)  The exercise  price of stock  options was set according to the rules of the
     TSX-V.  The  exercise  price of stock  options  may only be adjusted in the
     event that specified events cause dilution of the Company's share capital.

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
                         Securities                               Unexercised Options         In-the-Money Options
Name                     Acquired on        Aggregate Value         at Fiscal Year-End          Fiscal Year-End(2)
                         Exercise(1)           Realized         Exercisable/Unexercisable    Exercisable/Unexercisable
                             (#)                  ($)                      (#)                         ($)
<S>                       <C>                  <C>                  <C>                         <C>

Joseph Grosso                Nil                  Nil                  150,000/Nil                $138,000 / N/A

</TABLE>

(1)  All options are exercisable to acquire the Company's Common Shares.
(2)  Value of  unexercised  in-the-money  options  calculated  using the closing
     price of the  Company's  Common  Shares on the TSX-V on December  31, 2004,
     $4.02, less the exercise price per share of in-the-money stock options.

PENSION PLAN

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

TERMINATION OF EMPLOYMENT, CHANGES IN RESPONSIBILITY AND EMPLOYMENT CONTRACTS

The Company has no plans or arrangements in respect of remuneration  received or
that may be  received by the Named  Executive  Officers  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, except as disclosed in "Item 6. Directors, Senior
Management and Employees - Compensation - Management Contracts."



                                      -59-
<PAGE>

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, 2004 for
their services in their capacity as directors.

During the last completed  financial year ending  December 31, 2004, the Company
paid a total of $374,226 to its directors who are not Named Executive  Officers,
as a group, for salaries and professional  services rendered.  See also "Item 6.
Directors,   Senior   Management  and  Employees  -  Compensation  -  Management
Contracts."

Option Grants

The following table sets forth  information  concerning stock options granted to
directors,  as a group,  who are not Named  Executive  Officers  during the most
recently completed fiscal year:
<TABLE>
<CAPTION>

                                              % of Total                        Market Value
                           Securities      Options Granted                      of Securities
                         Under Options            in           Exercise or    Underlying Options
Name                       Granted(1)     Financial Year(2)   Base Price(3)   on Date of Grant      Expiration Date
                              (#)                              ($/Security)       ($/Security)
<S>                        <C>               <C>               <C>                <C>              <C>

Directors as a group
who are not Named
Executive Officers          550,000              37%              $3.10             $2.85           March 24, 2009

</TABLE>

(1)  All options are for the Company's Common Shares.
(2)  Percentage of all options granted in the period.
(3)  The  exercise  price of the option is set at not less than the market value
     of the  Company's  Common  Shares  on the date of  grant,  less a  discount
     allowed by the TSX-V.  The  exercise  price may be adjusted  under  certain
     circumstances, subject to regulatory acceptance.

Aggregated Option Exercises and Option Values

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  directors,  as a  group,  who are  not  Named  Executive
Officers:

<TABLE>
<CAPTION>
                                                                                               Value of Unexercised
                         Securities                               Unexercised Options         In-the-Money Options
Name                     Acquired on        Aggregate Value         at Fiscal Year-End          Fiscal Year-End(2)
                         Exercise(1)           Realized         Exercisable/Unexercisable    Exercisable/Unexercisable
                             (#)                  ($)                      (#)                         ($)
<S>                       <C>                  <C>                  <C>                         <C>

Directors, as a
group, who are not
Named Executive
Officers                     Nil                  Nil                  550,000/N/A                 $506,000/N/A

</TABLE>

(1)  All options are exercisable to acquire the Company Common Shares.
(2)  Value of  unexercised  in-the-money  options  calculated  using the closing
     price of the  Company's  Common  Shares on the TSX-V on December  31, 2004,
     $4.02, less the exercise price per share of in-the-money stock options.

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.


                                      -60-
<PAGE>


MANAGEMENT CONTRACTS

GROSSO GROUP MANAGEMENT LTD.

Effective  January 1, 2005, the Company engaged the Grosso Group Management Ltd.
to provide services and facilities to the Company. As of the date of this Annual
Report,  a formal  agreement among the Company and the Grosso Group has not been
finalized.  Until  such time as the formal  agreement  has been  finalized,  the
Company  and the Grosso  Group  intend to work  under the terms of the  proposed
Administration Services Agreement by and among the Company and the Grosso Group,
which is discussed  below. It is anticipated that the formal agreement will have
an effective date of January 1, 2005.

The Grosso Group is a private company which will be owned by the Company, Golden
Arrow,  Amera and Gold Point Exploration Ltd., each of which will own one share.
Pursuant to the terms of the proposed  Administration  Services  Agreement,  the
Grosso Group will provide its shareholder  companies with geological,  corporate
development,  administrative,  and management services on a non-exclusive and on
an "as needed" and "as available"  basis. The  administration  services for each
shareholder  company  shall  include  bookkeeping,  accounting  and  services in
connection with quarterly filings,  material change reports and other disclosure
filings on SEDAR.

The Grosso Group will provide each shareholder company with:

          1.   the use of the Grosso Group's offices;
          2.   receptionist personnel;
          3.   office equipment; and
          4.   services of administration,  accounting,  purchasing, secretarial
               and like  support  staff  on an "as  needed"  and "as  available"
               basis.

Shareholder  companies  may  appoint  the  Grosso  Group to  manage  their  work
programs.  In such event,  the Grosso Group will generally  retain suppliers and
contracts in connection with each shareholder  company's  approved work programs
and will separately  invoice such shareholder  company for the third-party costs
and  such  invoice  will  include  a  handling  charge  as a  percentage  of the
third-party  costs, such charge to be in accordance with industry  standards and
reviewed for reasonableness  from time to time, and which would be negotiated at
the time of such work program.

Each shareholder  company will pay the Grosso Group a monthly fee for the Grosso
Group's  services.  The Grosso Group  intends to allocate the costs of the staff
and related general and administrative  expenses to its shareholder companies on
a full recovery basis.  The fee will be based upon a pro-rationing of the Grosso
Group's costs,  including its executive staff and other overhead,  among each of
the shareholder  companies,  with regard to the expected average annual level of
services  provided to each  shareholder  company.  The staff of the Grosso Group
will record their daily activities in connection with each  shareholder  company
and they will  retain a log for  invoicing  purposes.  The fee is to be reviewed
from time to time and the basis may be changed by the Grosso  Group in the event
the  Grosso  Group's  costs  change  or the  shareholder  companies'  use of the
services  is in excess of  historical  experience  or in the event a greater  or
lesser number of shareholder  companies are using the Grosso  Group's  services.
Each shareholder company has prepaid one month's initial estimated allocation of
the Grosso Group's fully  recoverable  costs,  which for the Company amounted to
$60,000  (which as of the date of this Annual  Report is the  estimated  initial
monthly allocation for the Company).

The Grosso Group has the right to request each of the  shareholder  companies to
allocate  a  reasonable  number  of shares in their  incentive  option  plans to
employees  of the Grosso  Group based upon the general  amount of time and value
added by such employees.

It is anticipated that the  Administration  Services Agreement may be terminated
by a shareholder  company after January 1, 2007, upon 30 days' written notice to
the Grosso Group. Prior to January 1, 2007, if a shareholder  company desires to
terminate the  agreement in the first year, it will pay a termination  fee equal
to one-year's basic  administration  charge and if a shareholder company desires
to terminate the  agreement in the second year,  it will pay a  termination  fee
equal to six-months' basic administration charge.

It  is  anticipated  that  upon  termination  of  the  Administration   Services
Agreement,  each of the  shareholder  companies  will agree to resell its common
share back to the Grosso Group for $1.00 and the shareholder  companies will not
be able to sell,  transfer or otherwise dispose of or encumber such share during
the term of the Administration Services Agreement.



                                      -61-
<PAGE>


The Grosso Group's areas of experience encompass financing,  marketing, property
acquisition,  community relations,  socioeconomic issues, regulatory compliance,
government relations, property exploration and investor relations.  Additionally
the Grosso Group has a number of other support staff at its corporate office and
arrangements with contract providers of accounting and  administrative  services
at the country operations' offices in Argentina and Peru.

The members of the board of directors  of the Grosso Group are  appointed by the
shareholder  companies,  with each  shareholder  company  appointing  one of its
directors  to serve as a director of the Grosso  Group.  As of May 5, 2005 it is
anticipated  that the  directors  of the Grosso  Group will be  Nikolaos  Cacos,
Joseph Grosso, Arthur Lang and Nick DeMare. Messrs. Lang and Grosso are officers
and  directors  of the  Company.  Mr. Lang is an officer and  director of Golden
Arrow and an officer of Amera.  Mr.  Grosso is an officer and director of Golden
Arrow and of Amera.  Nikolaos Cacos is an officer of IMA, a director and officer
of Golden Arrow and a director  and officer of Amera.  Nick DeMare is an officer
and director of Gold Point  Exploration Ltd. Mr. DeMare  indirectly owns 100% of
Chase  Management  Ltd., a company  which  provides  consulting  services to the
Company and other Grosso Group shareholder companies.

Each of the public  company  shareholders  of the Grosso Group will have its own
separate  board of directors  (whose  members  include  persons  employed by the
Grosso Group);  however, some directors will serve on multiple boards and on the
board of directors of companies which are not shareholders of the Grosso Group.

In connection with the formation and establishment of the Grosso Group, Mr. Nick
DeMare  was  issued  the  initial  share of the  Grosso  Group  and acted as the
President,  Secretary and sole director of the Grosso Group.  Effective February
6, 2004, Mr. DeMare  transferred the sole outstanding  share of the Grosso Group
to Joseph Grosso,  the Chairman and a director and principal  shareholder of the
Company.  Mr. DeMare also resigned as a director and the President and Secretary
of the Grosso Group effective February 6, 2004 and Mr. Grosso was appointed as a
director and the President and Secretary of the Grosso Group.  It is anticipated
that Mr.  Grosso will return the sole  outstanding  share of the Grosso Group to
the  Grosso  Group for  cancellation  and one  share  will then be issued to the
Company.

The Board of Directors of the Company  will  approve the formal  agreement  once
completed.

JOSEPH GROSSO

By agreement,  made effective as of July 1, 1999, Oxbow International  Marketing
Corp.,  a private  company owned by Joseph  Grosso,  is paid a consulting fee of
$8,500 per month for making available the services of Joseph Grosso as President
and Chief  Executive  Officer  of the  Company.  During  the  fiscal  year ended
December 31, 2004, Oxbow was paid $102,000.

Pursuant to the terms of the agreement, in the event the agreement is terminated
by the Company as a result of Mr.  Grosso's death or permanent  disability or by
Mr. Grosso as a result of a material breach or default by the Company,  Oxbow is
entitled to: (i) any monthly  compensation due to the date of termination,  (ii)
options as determined by the board of directors,  (iii) an additional $6,500 per
month  of  compensation,   payable  from  July  1,  1999  through  the  date  of
termination,  (iv) twelve months of Mr. Grosso's monthly compensation (which may
be adjusted annually), and (v) a bonus payment of $78,000.

In the event the agreement is  terminated  by the Company  without cause or as a
result of a change of control, Oxbow is entitled to (i) any monthly compensation
due to the date of  termination,  (ii)  options  as  determined  by the board of
directors,  (iii) an additional  $6,500 per month of compensation,  payable from
July 1, 1999 through the date of  termination,  (iv) three years of Mr. Grosso's
monthly  compensation (which may be adjusted annually),  and (v) a bonus payment
of $234,000.

NIKOLAOS CACOS

By agreement dated January 1, 1996, as amended  December 10, 1996 and August 22,
2001,  Nikolaos Cacos,  an officer and director of the Company,  was paid $5,500
per month for professional  services rendered.  Mr. Cacos received a retainer of
$4,500 per month until December 1, 2001.  Thereafter,  the rate was increased by
$1,000.  On January 5, 2004 this  contract was amended to reduce the fee paid to
$1,375 per month.  During the fiscal year ended December 31, 2004, Mr. Cacos was
paid $17,600 (2003 - $66,000; 2002 - $66,000).  Mr. Cacos resigned as a director
of the Company in October 2004. On January 1, 2005 Mr. Cacos's contract with the
Company was cancelled and replaced with a contract with the Grosso Group.



                                      -62-
<PAGE>


SEAN HURD

By agreement  dated June 11, 2001, as extended,  Sean Hurd, a former director of
the  Company,  was paid  $4,000 per month for  professional  services  rendered.
During the fiscal year ended  December 31, 2004, Mr. Hurd was paid $73,800 (2003
- $48,000; 2002 - $52,050).  Mr. Hurd resigned as a director in October 2004. In
January 2005, Mr. Hurd became an employee of the Grosso Group.

GERALD CARLSON

By agreement  dated  February 15, 2001,  between the Company and KGE  Management
Ltd., a private  company owned by Gerald Carlson,  Chairman of the Company,  Mr.
Carlson  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. The agreement expired January 14, 2001 and was 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  were  rendered for more than four days per month.
During the fiscal year ended  December 31, 2004, the Company paid $34,749 to KGE
Management  Ltd.  (2003 -  $41,400;  2002 -  $33,000).  On April  1,  2004 a new
agreement was executed providing for a monthly retainer of $2,000 per month plus
a fee of $600 per day for  additional  days in excess of 3 days per  month.  Mr.
Carlson is  required  to  provide a minimum of eight days of service  per month.
This  agreement  expired March 31, 2005 and has been renewed for six months with
the same terms.

In the event of a change of  management of the Company as a result of a takeover
of the  Company,  Mr.  Carlson  is  entitled  to be paid two times  the  monthly
retainer for the remaining months outstanding under the agreement.

ARTHUR LANG

By agreement dated April 23, 2004,  Arthur Lang, the Chief Financial Officer and
a director of the Company, is paid a salary of $80,000 per year for professional
services  rendered.  Mr. Lang is also  reimbursed for certain monthly club dues.
During the fiscal year ended December 31, 2004,  Mr. Lang was paid $58,671.  Mr.
Lang became an employee of the Grosso Group in January 2005.

DAVID TERRY

Mr. Terry, an officer and a director of the Company,  had a consulting agreement
with Amera dated  February  16,  2004,  amended  June 1, 2004,  which called for
monthly  payments of $10,000.  The Company had agreed to reimburse Amera for 50%
of these fees.  In the fiscal  year ended  December  31,  2004 the Company  paid
$43,000  as a result  of this  arrangement.  On  January  1,  2005  Mr.  Terry's
agreement with Amera was replaced by a similar agreement with the Grosso Group.

CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES

Other than as disclosed  herein, no director or officer of the Company is or has
been,  within the preceding 10 years,  a director or officer of any other issuer
that, while that person was acting in that capacity:

     (a)  was the subject of a cease  trade  order or similar  order or an order
          that denied the other issuer access to any  exemptions for a period of
          more than 30 consecutive days, or

     (b)  became  bankrupt,  made a proposal under any  legislation  relating to
          bankruptcy  or  insolvency  or  was  subject  to  or  instituted   any
          proceedings,  arrangement,  or  compromise  with  creditors  or  had a
          receiver, receiver manager or trustee appointed to hold its assets.



                                      -63-
<PAGE>


PENALTIES OR SANCTIONS

No director or officer of the Company is or has, within the past 10 years:

     (a)  been subject to any penalties or sanctions imposed by a court relating
          to Canadian securities  legislation or Canadian securities  regulatory
          authority or has entered into a settlement  agreement  with a Canadian
          securities regulatory authority, or

     (b)  been subject to any other penalties or sanctions imposed by a court or
          regulatory  body that would be likely to be considered  important to a
          reasonable investor making an investment decision.

INDIVIDUAL BANKRUPTCIES

No director or officer of the Company is or has,  within the preceding 10 years,
become bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency or been subject to or instituted  any  proceedings,  arrangement,  or
compromise  with  creditors  or had a  receiver,  receiver  manager  or  trustee
appointed to hold the assets of that individual.

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.

The board of directors appoints a Remuneration Committee as is needed.

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.  Horton,  Angus,  Idziszek  and Lang are  members  of the Audit
Committee.   The  board  of  directors   of  the  Company,   after  each  annual
shareholder's 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 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.

The Audit Committee's Charter is attached as an Exhibit.




                                      -64-
<PAGE>

Employees

As of December  31, 2004,  the Company had nine  full-time  employees  and three
part-time  employees in the area of management and administration  compared with
nine full-time  employees and two part-time employees in the areas of management
and  administration  at December 31, 2003 compared to eight full-time  employees
and two part-time  employees in the area of  management  and  administration  at
December 31, 2002. Exploration activities are conducted by consultants, laborers
and technicians hired for the duration of the exploration program.

Share Ownership

As of May 5, 2005, the Company had 45,479,724 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:

The following table sets forth certain  information  regarding  ownership of the
Company's shares by the Company's officers and directors as of May 5, 2005.
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                                      SHARES AND RIGHTS
                                                                    BENEFICIALLY OWNED OR
TITLE OF CLASS           NAME                                           CONTROLLED (1)         PERCENT OF CLASS(1)
--------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                         <C>                           <C>

Common Stock             Joseph Grosso                                  1,765,175(2)                  3.88%
Common Stock             Nikolaos Cacos                                   243,151(3)                  0.53%
Common Stock             Sean Hurd                                        285,000(4)                  0.63%
Common Stock             Gerald Carlson                                   402,500(5)                  0.88%
Common Stock             David Terry                                      132,000(6)                  0.29%
Common Stock             Chet Idziszek                                    420,900(7)                  0.39%
Common Stock             Robert Stuart (Tookie) Angus                     220,000(8)                  0.92%
Common Stock             Arthur Lang                                      125,000(9)                  0.27%
Common Stock             Augusto Baertl                                  150,000(10)                  0.33%
Common Stock             Juan Carlos Berretta                            100,000(11)                  0.22%
Common Stock             David Horton                                    130,000(12)                  0.28%
Common Stock             Officers and Directors (as a group,           3,973,726(13)                  8.74%
                         11persons)
</TABLE>

(1)  Where  persons  listed on this  table  have the right to obtain  additional
     shares of common stock through the exercise of outstanding  options , these
     additional shares are deemed to be outstanding for the purpose of computing
     the percentage of common stock 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 45,479,724 shares of common stock outstanding as of
     May 5, 2005.
(2)  Includes the following  shares,  options and warrants  held by Mr.  Grosso,
     Evelyn Grosso (Mr. Grosso's wife) and Mr. Grosso's private companies:

     (a)  1,021,11346,013 shares held by Mr. Grosso;
     (b)  7,500 shares held by Beauregard (50%);
     (c)  27,564 shares held by Mr. Grosso's wife (50%);
     (d)  348,448 shares held by Oxbow (50%);
     (e)  9,612 shares held by Threadco (50%); and
     (f)  547,500 Options held by Mr. Grosso to acquire 547,500 shares.

     See "Item 6. Directors, Senior Management and Employees - Options, Warrants
     and Other Rights to Acquire Securities - Stock Options."

(3)  Includes  13,151  shares held by Mr. Cacos and 230,000  options held by Mr.
     Cacos to acquire an  additional  230,000  shares.  See "Item 6.  Directors,
     Senior  Management  and  Employees - Options,  Warrants and Other Rights to
     Acquire Securities - Stock Options."


                                      -65-
<PAGE>



(4)  Includes 285,000 options held by Mr. Hurd to acquire an additional  285,000
     shares. See "Item 6. Directors,  Senior Management and Employees - Options,
     Warrants and Other Rights to Acquire Securities - Stock Options."
(5)  Includes 47,500 shares held by KGE Management Ltd., a private company owned
     by Mr.  Carlson and options  held by Mr.  Carlson to acquire an  additional
     355,000 shares.  See "Item 6. Directors,  Senior Management and Employees -
     Options, Warrants and Other Rights to Acquire Securities - Stock Options."
(6)  Includes  2,000  shares held by Mr.  Terry and options held by Mr. Terry to
     acquire  an  additional  130,000  shares.  See "Item 6.  Directors,  Senior
     Management  and  Employees - Options,  Warrants and Other Rights to Acquire
     Securities - Stock Options."
(7)  Includes  175,900  shares  held by Mr.  Idziszek  and  options  held by Mr.
     Idziszek to acquire an additional  245,000 shares.  See "Item 6. Directors,
     Senior  Management  and  Employees - Options,  Warrants and Other Rights to
     Acquire Securities - Stock Options."
(8)  Includes options held by Mr. Angus to acquire 220,000 shares.  See "Item 6.
     Directors,  Senior  Management and Employees - Options,  Warrants and Other
     Rights to Acquire Securities - Stock Options."
(9)  Includes  options held by Mr. Lang to acquire 125,000 shares.  See "Item 6.
     Directors,  Senior  Management and Employees - Options,  Warrants and Other
     Rights to Acquire Securities - Stock Options."
(10) Includes options held by Mr. Baertl to acquire 150,000 shares. See "Item 6.
     Directors,  Senior  Management and Employees - Options,  Warrants and Other
     Rights to Acquire Securities - Stock Options."
(11) Includes options held by Mr. Berretta to acquire 100,000 shares.  See "Item
     6. Directors, Senior Management and Employees - Options, Warrants and Other
     Rights to Acquire Securities - Stock Options."
(12) Includes options held by Mr. Horton to acquire 130,000 shares. See "Item 6.
     Directors,  Senior  Management and Employees - Options,  Warrants and Other
     Rights to Acquire Securities - Stock Options."
(13) Includes the shares, options, and warrants set forth in footnotes 2 through
     14  above.  See "Item 6.  Directors,  Senior  Management  and  Employees  -
     Options, Warrants and Other Rights to Acquire Securities - Stock Options."

Options, Warrants and Other Rights to Acquire Securities

As of May 5, 2005, 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  4,456,000  common  shares of the Company may be issued.  The  following is a
brief  summary of these stock  options and warrants  currently  outstanding  and
agreements.

STOCK OPTIONS

The TSX-V requires all TSX-V listed  companies to adopt stock options plans, and
such plans must  contain  certain  provisions.  At the annual and  extraordinary
general  meeting of  shareholders  of the  Company  held on June 26,  2003,  the
shareholders approved the Company's stock option plan (the "Stock Option Plan").
At the annual and  extraordinary  general meeting of shareholders of the Company
held on June 24, 2004,  shareholders  approved by ordinary  resolution to make a
total of 10% of the issued and outstanding  shares of IMA available for issuance
thereunder.  The purpose of the Stock Option Plan is to provide incentive to the
Company's employees,  officers,  directors,  and consultants responsible for the
continued success of the Company. The following is a summary of the Stock Option
Plan.

ADMINISTRATION OF THE STOCK OPTION PLAN

The Stock Option Plan  provides  that it will be  administered  by the Company's
board  of  directors  (the  "Board"),  or  by  a  stock  option  committee  (the
"Committee")  of  the  Company's  Board  consisting  of not  less  than 2 of its
members. The Stock Option Plan is currently administered by the Board.

DESCRIPTION OF STOCK OPTION PLAN

The effective  date (the  "Effective  Date") of the Stock Option Plan is June 2,
2003,  the date the Board of Directors  approved  the Stock Option Plan,  and it
will terminate ten years from the Effective Date.

The Stock  Option Plan  provides  that  options may be granted to any  employee,
officer, director or consultant of the Company or a subsidiary of the Company.



                                      -66-
<PAGE>


The options  issued  pursuant to the Stock Option Plan will be  exercisable at a
price not less than the market value of the Company's  common shares at the time
the option is granted. "Market Value" means:

(a)      for each  organized  trading  facility  on which the  common  share are
         listed,  Market Value will be the closing  trading  price of the common
         shares  on the day  immediately  preceding  the  grant  date  less  any
         discounts permitted by the applicable regulatory authorities;
(b)      if the  Company's  common  shares are listed on more than one organized
         trading  facility,  the  Market  Value  shall  be the  Market  Value as
         determined in accordance  with  subparagraph  (a) above for the primary
         organized  trading  facility on which the common shares are listed,  as
         determined  by the  Board  (or a  committee  thereof),  subject  to any
         adjustments  as may be  required  to secure  all  necessary  regulatory
         approvals;
(c)      if the  Company's  common  shares are  listed on one or more  organized
         trading  facilities  but have not traded  during the ten  trading  days
         immediately  preceding  the grant date,  then the Market  Value will be
         determined  by the  Board  (or a  committee  thereof),  subject  to any
         adjustments  as may be  required  to secure  all  necessary  regulatory
         approvals; and
(d)      if the  Company's  common  shares are not listed for trading on a stock
         exchange or over the counter  market,  the value which is determined by
         the  Board  (or a  committee  thereof)  to be  the  fair  value  of the
         Company's common shares, taking into consideration all factors that the
         Board (or a committee  thereof) deems appropriate,  including,  without
         limitation,  recent  sale and  offer  prices of the  Company  shares in
         private transactions negotiated at arms' length.

Options  under the Stock Option Plan will be granted for a term not to exceed 10
years from the date of their grant, provided that if the Company is then a "Tier
2"  company  listed on the TSX-V,  the term of the option  will be not more than
five years.

Options under the Stock Option Plan will be subject to such vesting  schedule as
the  Committee  may  determine.  In the event that an option is to be terminated
prior to expiry of its term due to certain  corporate  events,  all options then
outstanding  shall  become  immediately  exercisable  for 10 days  after  notice
thereof, notwithstanding the original vesting schedule.

Options will also be  non-assignable  and  non-transferable,  provided that they
will be exercisable by an optionee's legal heirs,  personal  representatives  or
guardians for up to 12 months  following the death or termination of an optionee
due to disability,  or up to 12 months following the death of an employee if the
employee  dies  within 12  months of  termination  due to  disability.  All such
options  will  continue  to vest  in  accordance  with  their  original  vesting
schedule.

The maximum  number of common shares to be reserved for issuance under the Stock
Option Plan, including options currently outstanding, will not exceed 10% of the
number of common shares of the Company issued and  outstanding on the applicable
date of grant.

If a material  alteration  in the capital  structure of the Company  occurs as a
result of a recapitalization,  stock split, reverse stock split, stock dividend,
or otherwise,  the Committee shall make adjustments to the Stock Option Plan and
to the options  then  outstanding  under it as the  Committee  determines  to be
appropriate  and  equitable  under  the  circumstances,   unless  the  Committee
determines  that it is not  practical  or  feasible to do so, in which event the
options granted under the Stock Option Plan will terminate as set forth above.

The TSX-V  requires all TSX-V  listed  companies  who have adopted  stock option
plans  which  reserve a  maximum  of 10% of the  number of common  shares of the
Company  issued  and  outstanding  on the  applicable  date of grant,  to obtain
shareholder approval to the Stock Option Plan on an annual basis.

As of May 5, 2005, the Company has 4,456,000  non-transferable  incentive  stock
options to purchase common shares outstanding to the following persons:


                                      -67-
<PAGE>

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

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

Nikolas Cacos             Officer                        70,000        $1.87      Aug. 27/08          $1.87
                                                        110,000        $3.10      Mar. 24/09          $3.10
                                                         50,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Joseph Grosso             Director                       47,500        $0.50      Sept. 23/07         $0.50
                                                        200,000        $1.87      Aug. 27/08          $1.87
                                                        150,000        $3.10      Mar. 24/09          $3.10
                                                        150,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Sean Hurd                 Officer                       100,000        $1.87      Aug. 27/08          $1.87
                                                        130,000        $3.10      Mar. 24/09          $3.10
                                                         60,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Gerald Carlson            Director                      200,000        $0.40      Jul. 19/06          $0.40
                                                         50,000        $1.87      Aug. 27/08          $1.87
                                                         85,000        $3.10      Mar. 24/09          $3.10
                                                         20,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Nick DeMare               Consultant                     25,000        $0.84      Mar. 07/08          $0.84
                                                         50,000        $1.87      Aug. 27/08          $1.87
                                                         50,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Evelyn  Grosso(2)         Consultant                     67,500        $0.50      Sept. 23/07         $0.50
                                                         75,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
A. Sanchez                Consultant                      5,000        $0.40      Jul. 19/06          $0.40
                                                         15,000        $0.84      Mar. 07/08          $0.84
----------------------------------------------------------------------------------------------------------------
Keith Patterson           Consultant                     50,000        $0.84      Mar. 07/08          $0.84
                                                         25,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
David Terry               Director                       50,000        $3.10      Mar. 24/09          $3.10
                                                         80,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Chet Idziszek             Director                      150,000        $0.90      May 30/08           $0.90
                                                         75,000        $3.10      Mar. 24/09          $3.10
                                                         20,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
J. C. Berretta            Officer                        25,000        $3.10      Mar. 24/09          $3.10
                                                         75,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
William Lee(3)            Consultant                     75,000        $1.87      Aug. 27/08          $1.87
                                                         30,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
Robert Stuart (Tookie)    Director                      150,000        $0.90      May 30/08           $0.90
Angus                                                    40,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Diane Reeves              Consultant                     60,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16
</TABLE>



                                      -68-
<PAGE>




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

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

Jeanne Denee              Consultant                     10,000        $3.10      Mar. 24/09          $3.10
                                                          5,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Claudia Sandoval          Consultant                     10,000        $3.10      Mar. 24/09          $3.10
                                                         15,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Carlos D'Amico            Officer (of                   220,000        $1.87      Aug. 27/08          $1.87
                          subsidiary-exempted            75,000        $3.10      Mar. 24/09          $3.10
                          from reporting)
----------------------------------------------------------------------------------------------------------------
Carlos Timossi            Consultant                     75,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
Steve Phillips            Consultant                    300,000        $1.87      Aug. 27/08          $1.87
                                                         50,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
Joanne Faccin             Consultant                     10,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
Marianna De Simone        Director (of                   59,500        $0.50      May 02/07           $0.50
                          subsidiary-exempted            80,000        $3.10      Mar. 24/09          $3.10
                          from reporting)
----------------------------------------------------------------------------------------------------------------
I. Chiarantano            Director(of                    59,500        $0.50      May 02/07           $0.50
                          subsidiary-exempted
                          from reporting)
----------------------------------------------------------------------------------------------------------------
David J. Horton           Director                      100,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Arthur Lang               Director                       50,000        $3.10      Mar. 24/09          $3.10
                                                         75,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Gordon James              Consultant                      7,000        $3.10      Mar. 24/09          $3.10
----------------------------------------------------------------------------------------------------------------
R. Aragon                 Director(of                    50,000        $1.87      Aug. 27/08          $1.87
                          subsidiary-exempted
                          from reporting)
----------------------------------------------------------------------------------------------------------------
A. Colucci                Consultant                    120,000        $1.87      Aug. 27/08          $1.87
----------------------------------------------------------------------------------------------------------------
L. Salley                 Consultant                     15,000        $1.87      Aug. 27/08          $1.87
----------------------------------------------------------------------------------------------------------------
P. Hedblom                Consultant                     30,000        $1.87      Aug. 27/08          $1.87
----------------------------------------------------------------------------------------------------------------
J. Wong                   Consultant                     25,000        $1.87      Aug. 27/08          $1.87
----------------------------------------------------------------------------------------------------------------
Larry Roth                Consultant                     50,000        $4.20      Dec. 1/09           $4.02
----------------------------------------------------------------------------------------------------------------
Darren Tindale            Consultant                      5,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Florian Riedl             Consultant                     30,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Augusto Beartl            Director                      150,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Ian Thomson               Consultant                     10,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------
Mar Bergstrom             Consultant                     25,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------

</TABLE>


                                      -69-
<PAGE>



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

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

Robert Robertson          Consultant                     10,000        $4.16      Mar. 16/10          $4.16
----------------------------------------------------------------------------------------------------------------

                          TOTAL                       4,456,000
                                                      =========
----------------------------------------------------------------------------------------------------------------
Officers and directors,
as a group (11
persons)(4)                                           2,522,500
                                                      =========
----------------------------------------------------------------------------------------------------------------

</TABLE>

(1)      Pursuant  to the rules of the  TSX-V,  the  Company  has  issued  stock
         options to employees, directors, officers and consultants.
(2)      Evelyn Grosso is the wife of Joseph Grosso.
(3)      The Company granted Mr. Lee options to acquire common shares during his
         tenure as  director.  Mr. Lee resigned as an office and director of the
         Company  effective April 2, 2004 and currently  remains as a consultant
         to the Company.
(4)      Includes options held by Joseph Grosso's wife, Evelyn Grosso.

Warrants and Other Commitments

As of May 5, 2005, there were no non-transferable common share purchase warrants
exercisable.

As of May 5, 2005, the Company's officers and directors,  as a group,  including
entities controlled or under significant  influence of officers and directors of
the Company, did not hold any warrants to purchase the Company's common shares.

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

To the best of the  Company's  knowledge  there are no persons who  beneficially
own, directly or indirectly, or exercise control or direction, over more than 5%
of the issued and outstanding common shares of the Company other than that which
is described below.

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 its 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%).  To the best of the Company's
knowledge,  subsequent  to April 30,  2003,  Barrick  sold common  shares of the
Company and is no longer a major shareholder.

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%). To the best of the Company's knowledge, as of December 31,
2004, Prudent Bear Funds Inc. had control and direction of 492,960 common shares
of the Company (1.12%).



                                      -70-
<PAGE>


On April 30,  2005,  Sprott  Asset  Management  Inc.  advised the Company it had
acquired  control and direction  over  3,743,732 of the Company's  common shares
(8.23% based on 45,479,724 outstanding shares at April 30, 2005).

SHARES HELD IN THE UNITED STATES

As of May 5,  2005,  there  were  approximately  70  registered  holders  of the
Company's  shares in the United  States,  with  combined  holdings of  5,865,259
shares (12.90% of the 45,479,724 outstanding shares at May 5, 2005).

CHANGE OF CONTROL

As of May 5, 2005, 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, severally or jointly.

Related Party Transactions

Other than as disclosed  below,  from  January 1, 2003 through May 5, 2005,  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 shared office facilities, capital assets and personnel with
         Amera.  Joseph  Grosso,  Nikolaos  Cacos,  Arthur Lang and David Terry,
         officers  and/or  directors of the  Company,  are  officers,  directors
         and/or  employees of Amera.  During the fiscal year ended  December 31,
         2004 the Company received $66,390 (2003 - $35,110; 2002 - $6,000).

2.       The Company  leases a portion of its office  space from  Beauregard,  a
         private company 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 had been  extended  for
         another  two  years.  On  January 1, 2004 the  Company  and  Beauregard
         executed a lease for a term of three  years with an option to renew for
         a further two years with minimum annual lease payments of $52,200, plus
         operating  costs.  In  addition,  the  Company is  responsible  for all
         leasehold improvements. During the fiscal year ended December 31, 2004,
         the Company  incurred $33,822 for leasehold  improvements  conducted on
         the  office  premises.   The  Company  made  no  leasehold  improvement
         expenditures  in 2003.  During the fiscal year ended December 31, 2004,
         the Company paid rent in the amount of  $74,870(2003 - $60,924;  2002 -
         $60,924).  On March 1, 2005 the Company and Beauregard executed a lease
         for  additional  premises for a term of one year and ten months with an
         option to renew  for a further  two years  with  minimum  annual  lease
         payments of $38,100,  plus operating costs. The Company expects that it
         will  sublease  the  premises  to the  Grosso  Group.  - See  "Item  4.
         Information  on the  Company  -  Properties,  Plants  and  Equipment  -
         Principal Office".

3.       The Company has executed an agreement with Oxbow, pursuant to which Mr.
         Grosso,  an officer and director of the Company,  provides  services to
         the Company. See "Item 6. Directors,  Senior Management and Employees -
         Compensation  -  Management  Contracts".  During the fiscal  year ended
         December 31, 2004,  Oxbow was paid  $102,000  (2003 - $102,000;  2002 -
         $102,000).



                                      -71-
<PAGE>



4.       The Company has entered  into an  agreement  with  Nikolaos  Cacos,  an
         officer and former director of the Company, pursuant to which Mr. Cacos
         provides  services  to the  Company.  See  "Item 6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts." During
         the fiscal year ended  December  31,  2004,  Mr. Cacos was paid $17,600
         (2003 - $66,000; 2002 - $66,000).  Effective January 1, 2005 Mr. Cacos'
         contract with the Company was replaced by a new  agreement  between the
         Grosso Group and Mr. Cacos.

5.       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".

6.       The Company has entered into an  agreement  with KGE  Management  Ltd.,
         pursuant to which  Gerald G.  Carlson,  an officer and  director of the
         Company,  provides  services to the  Company.  See "Item 6.  Directors,
         Senior Management and Employees - Compensation - Management Contracts."
         During the fiscal year ended  December 31, 2004, Mr.  Carlson,  through
         KGE, was paid $34,749 (2003 - $41,400; 2002 - $33,000).

7.       The Company  has  entered  into an  agreement  with Mr.  Sean Hurd,  an
         officer and former director of the Company,  pursuant to which Mr. Hurd
         provides  services  to the  Company.  See  "Item 6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts." During
         the year ended  December  31, 2004,  Mr. Hurd was paid $73,800  (2003 -
         48,000;  2002 -  $52,050).  Effective  January  2005 Mr. Hurd became an
         employee of the Grosso Group.

8.       On December 16, 2003 and November 16, 2004, the Company entered into an
         agreement with Endeavour Financial Ltd. a company of which Mr. Angus, a
         director of the Company,  is a  shareholder.  A monthly fee of US$5,000
         for services is payable under this  agreement  for a minimum  period of
         one year.  The  agreement  includes  a  provision  for a  nominee  from
         Endeavour  to be  nominated  to the  board  and for  fees to be paid to
         Endeavour,  in  addition  to the  monthly  fee, in the event of certain
         specified transactions.  See "Item 6. Directors,  Senior Management and
         Employees - Directors and Senior Management."

9.       The Company has agreed to issue options to David Terry,  an officer and
         director of the Company,  and to  reimburse  Amera for a portion of Mr.
         Terry's  salary for services  provided to the Company.  Mr. Terry has a
         consulting  agreement with Amera dated February 16, 2004,  amended June
         1, 2004, which called for monthly payments of $10,000.  The Company had
         agreed to  reimburse  Amera for 50% of these  fees.  In the fiscal year
         ended  December  31, 2004 the Company  paid $43,000 as a result of this
         arrangement.  On January 1, 2005 Mr.  Terry's  agreement with Amera was
         replaced by a similar  agreement  with the Grosso  Group.  See "Item 6.
         Directors,  Senior Management and Employees - Compensation - Management
         Contracts."

10.      The Company has entered  into an agreement  dated April 23, 2004,  with
         Mr.  Lang,  Chief  Financial  Officer  and a director  of the  Company,
         pursuant to which Mr. Lang provides services to the Company. During the
         year ended December 31, 2004,  Mr. Lang was paid $58,671.  See "Item 6.
         Directors,  Senior Management and Employees - Compensation - Management
         Contracts  Effective January 1, 2005 Mr. Lang became an employee of the
         Grosso Group.

11.      The Company has entered into an Arrangement Agreement with Golden Arrow
         pursuant  to which the  Company  transferred  certain  assets to Golden
         Arrow  as  part  of a  reorganization  of the  Company.  See  "Item  4.
         Information  on the Company - History and  Development of the Company."
         The Company intends to enter into an indemnity agreement, for any costs
         or losses  incurred  by Golden  Arrow in  respect  of the legal  action
         commenced by a Minera Aquiline Argentina S.A. against the Company.  See
         "Item 8. Financial Information - Legal Proceedings."



                                      -72-

<PAGE>


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

Consolidated Statements and Other Financial Information

FINANCIAL STATEMENTS

DESCRIPTION                                                                PAGE

Consolidated Financial Statements for the Years Ended
December 31, 2004, 2003 and 2002.                                           F-1

Significant Changes

There are no  significant  changes to report  between the year end  December 31,
2004 and the date of this annual report.

Legal Proceedings

In March 2004,  Minera  Aquiline  Argentina  S.A., a wholly-owned  subsidiary of
Aquiline  Resources  Inc.,  commenced  a legal  proceeding  against  the Company
asserting that the Company  unlawfully  used  confidential  information,  and is
seeking damages and a constructive  trust over the Navidad Area Properties.  The
Company  believes the Aquiline  legal action is without  merit and  continues to
vigorously  defend itself.  A trial date has been scheduled for October 2005. At
this  date  the  outcome  is not  determinable.  The  Company  has not  made any
provision  for  costs  for  which  it might  become  liable  in what  management
considers the unlikely event of an adverse judgment.

The Company has provided  Golden Arrow with an indemnity for any costs or losses
incurred by Golden  Arrow in respect of the legal  action  commenced by Aquiline
against the Company.

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-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  Canadian  Venture
Exchange or CDNX. On August 1, 2001,  the CDNX was acquired by the Toronto Stock
Exchange and became known as the TSX-V.  The Company is  classified  as a Tier I
company on the TSX-V and trades 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
the TSX-V (or  predecessor),  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 December 2004 through April 2005.



                                      -73-
<PAGE>



          TSX VENTURE EXCHANGE (OR PREDECESSOR) STOCK TRADING ACTIVITY

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

December 31, 2004            37,174,800                $4.80           $1.73
December 31, 2003            49,855,800                $2.54           $0.49
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


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

March 31, 2005                6,402,850                $4.45           $3.40
December 31, 2004             9,181,100                $4.80           $3.22
September 30, 2004            4,560,500                $3.39           $2.00
June 30, 2004                 7,886,600                $3.57           $1.93
March 31, 2004               15,546,600                $3.81           $1.73
December 31, 2003            14,206,200                $2.37           $1.42
September 30, 2003           12,946,600                $2.54           $1.32
June 30, 2003                 9,170,600                $1.65           $0.78
March 31, 2003               13,712,400                $1.06           $0.49


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

April 30, 2005                1,432,928                $4.00           $3.11
March 31, 2005                1,721,150                $4.45           $3.50
February 28, 2005             2,577,000                $4.08           $3.40
January 31, 2005              2,104,700                $4.24           $3.66
December 31, 2004             1,654,300                $4.68           $3.50

             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.  The Company  currently trades on the OTC Bulletin
Board under the symbol "IMXPF".  The following tables set forth the market price
ranges and the  aggregate  volume of trading of the common shares of the Company
on the OTC Bulletin Board system for the periods indicated:


                                                           BID PRICE (US$)
                                                   ----------------------------
YEAR ENDED                       VOLUME                HIGH             LOW

December 31, 2004            20,132,331                $4.05           $1.31
December 31, 2003             6,964,497                $1.89           $0.36
December 31, 2002                97,497                $0.36           $0.22




                                      -74-
<PAGE>



                                                           BID PRICE (US$)
                                                   ----------------------------
QUARTER ENDED                    VOLUME                HIGH             LOW

March 31, 2005                4,066,314                $3,86           $2.72
December 31, 2004             5,394,824                $4.05           $2.53
September 30, 2004            3,302,327                $2.68           $1.48
June 30, 2004                 2,636,425                $2.70           $1.40
March 31, 2004                8,798,755                $2.93           $1.31
December 31, 2003             3,376,297                $1.78           $1.01
September 30, 2003            1,743,800                $1.89           $0.97
June 30, 2003                   983,900                $1.25           $0.52
March 31, 2003                  860,500                $0.75           $0.36
December 31, 2002                72,497                $0.33           $0.22
September 30, 2002               25,000                $0.36           $0.29


                                                           BID PRICE (US$)
                                                   ----------------------------
MONTH ENDED                      VOLUME                HIGH             LOW

April 30, 2005                  997,058                $3.23           $2.45
March 31, 2005                1,712,600                $3.68           $2.85
February 28, 20054            1,565,799                $3.34           $2.72
January 31, 2005                787,915                $3.54           $2.95
December 31, 2004             1,414,948                $3.80           $2.84



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

Memorandum and Articles of Association

The  Company  was  incorporated  under the Company  Act  (British  Columbia)  on
September 17, 1979,  as Gold Star  Resources  Ltd. The  Company's  Incorporation
Number is 197061.  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.
On February 9, 1995, the Company filed an Altered Memorandum to reflect its name
change to International Amera Industries Corp. On February 20, 1996, the Company
filed  an  Altered  Memorandum  to  reflect  its  name  change  to IMA  Resource
Corporation.  Effective July 7, 1998, the Company  underwent a statutory plan of
arrangement (the "Arrangement") with Viceroy Resource  Corporation  ("Viceroy"),
changed its name to IMA Exploration Inc.,  consolidated its share capital on the
basis of four old shares for one new share and filed an  Altered  Memorandum  to
give effect to the foregoing. See "Item 4. Information on the Company".

The  Company's  objects and purposes are not set forth in or  prescribed  by its
Articles  or  Memorandum.  The Company is in the  business  of the  acquisition,
exploration and development of mineral properties, mainly in Argentina.

AMENDMENT OF NOTICE OF ARTICLES

On March 29, 2004, the new British Columbia Business  Corporations Act came into
force in British  Columbia  and replaced  the former  Company Act,  which is the
statute that previously  governed the Company.  Under the BCBCA, the Company has
two  years  within  which to  transition  ("Transition")  itself  under  the new
statute.  In  accordance  with  the  BCBCA,  the  Company  cannot  complete  the



                                      -75-
<PAGE>

Arrangement  or amend its Articles or Notice of Articles until the Transition to
the BCBCA is  completed.  The Board of  Directors  (the  "Board") of the Company
approved the  Transition of the Company  under the BCBCA on April 29, 2004.  The
Company filed a transition  application with the Registrar of Companies  British
Columbia and completed the Transition on May 4, 2004.

Concurrent with the completion of the Transition,  the Company was required,  in
accordance  with the  BCBCA,  to  incorporate  certain  provisions  known as the
"Pre-Existing  Company Provisions" (the "Pre-Existing  Company Provisions") into
its Notice of Articles,  which replaced the existing  Memorandum of the Company.
The  Pre-Existing  Company  Provisions  provide the Company with certain default
provisions in case certain  provisions  which are required to be included in the
Articles under the BCBCA are not included in the Company's Articles.

In order to bring the  Company's  Articles  in line with the BCBCA,  the Company
intends to delete and replace its Articles in their entirety.  The new Articles,
will among  other  things,  incorporate  and amend  certain  of the  information
required by the Pre-Existing  Company Provisions.  In accordance with the BCBCA,
the Company cannot alter its Articles in relation to any matter that is included
in the  Pre-Existing  Company  Provisions  until the  Company  has  removed  the
application of the Pre-Existing  Company Provisions by special resolution of the
shareholders of the Company.

Accordingly,   the  shareholders   passed  a  special  resolution  removing  the
application of the Pre-Existing Company Provisions at a meeting held on June 24,
2004.

ADOPTION OF NEW ARTICLES

The Board has  determined  that it is in the best  interests  of the  Company to
adopt new articles (the "New  Articles")  to replace its existing  Articles (the
"Existing  Articles").  Management  believes the  language  used in the Existing
Articles  of the  Company  is no  longer  appropriate  and there are a number of
references to  provisions in the former  Company Act (the "Former Act") which no
longer  exists.  The New Articles also  incorporate  many key  provisions of the
BCBCA that should  reinforce  the  importance  of certain  sections of the BCBCA
including  disclosing conflicts of interest,  indemnification,  fiduciary duties
and other obligations that are imposed on the Board.

Set forth below is a discussion of the changes  proposed under the New Articles.
These proposed  changes to the New Articles  include a discussion of substantive
changes  included in the New Articles and changes  included that are as a result
of  changes  under  the  BCBCA.  The  New  Articles   incorporate  a  number  of
non-substantive changes,  including the use of the new terminology adopted under
the BCBCA.  For  example,  "members"  are now  "shareholders"  and  "register of
members" is now "central  securities  register"  under the BCBCA.  Many of these
terminology  and  wording  changes are not  discussed  in detail  here,  as they
reflect statutory requirements that the Company cannot alter or amend.

The following is a discussion  of the  substantive  changes  proposed in the New
Articles.

BORROWING POWERS

Under the  Existing  Articles,  the  Company  may borrow  money,  issue debt and
mortgage,  pledge,  or give security on the undertaking,  or on the whole or any
part of the  property  and assets,  of the Company  (both  present and  future).
However, under the BCBCA, companies are now also permitted, without restriction,
to guarantee  repayment of money by any other person or the  performance  of any
obligation  of any other  person.  This change  reflects  the  modernization  of
corporate  legislation to effectively respond to increasingly  complex financial
transactions that companies may enter into in the course of their business. As a
result,  the New Articles propose that the Company also be able to guarantee the
repayment of money by any other person or the  performance  of any obligation of
any other person.  Management  believes that it is in the best  interests of the
Company  to allow  for such a  guarantee  to  permit  the  Company  the  maximum
flexibility in possible future  financial  transactions,  recognizing the duties
directors  have to ensure that the guarantee must always be in the best interest
of the Company and its shareholders.



                                      -76-
<PAGE>


DIRECTORS AUTHORITY TO SET AUDITOR'S REMUNERATION

Under the BCBCA, the Company is, subject to shareholder  approval,  permitted to
include  in the  New  Articles  authorization  for  the  directors  to  set  the
remuneration  paid to the auditors of the  Company.  The Former Act required the
shareholders  to set the  remuneration or the  shareholders to authorize,  on an
annual basis, the directors to set the remuneration.  Historically, shareholders
of the Company have always  authorized the directors to appoint the auditors and
to set the auditor's  remuneration.  As a result, the inclusion of the authority
for  directors to set the  auditor's  remuneration  in the New  Articles  merely
codifies existing practice. More importantly, however, this change also codifies
new corporate  governance rules and regulations relating to audit committees and
the appointment and remuneration of auditors.

SPECIAL MAJORITY FOR RESOLUTIONS

Under  the  Former  Act,  the  majority  of  votes  required  to pass a  special
resolution  at a general  meeting  was  three-quarters  of the  votes  cast on a
resolution.  Under the BCBCA,  the Company is authorized to determine  whether a
special resolution  requires two-thirds or three-quarters of the votes cast on a
resolution.  The  Existing  Articles  did not state what the  majority was for a
special resolution,  as this matter was dealt with under the Former Act. The New
Articles propose that a special  resolution  require a majority of two-thirds of
the votes cast on a resolution.  This threshold is consistent with the threshold
in most other  Canadian  corporate  law  statutes  such as the  Canada  Business
Corporations Act.

SHARE ISSUANCES

Under the Former Act, the maximum discount or commission payable on the issuance
of a share of the  Company was 25%.  Under the BCBCA the Company is,  subject to
shareholder  approval,  now permitted to avoid setting a numerical maximum for a
discount or  commission  payable on the issuance of a share but rather limit any
discount or commission  by a test of  reasonableness.  The New Articles  provide
that the  Company be  permitted  to pay or offer the  commission  or discount as
permitted in the BCBCA.  Management of the Company believes that the 25% maximum
limit  should  not be set out in the New  Articles  as  such a  limit  does  not
consider factual  circumstances nor apply a test of reasonableness.  By limiting
the  discount  or  commission  amounts  payable  by the test of  reasonableness,
exercised by directors  with a duty to act in the best  interest of the Company,
the Company is provided greater flexibility in possible future transactions.  In
addition,  since  the  Company  is a  public  company,  it  is  subject  to  the
requirements  of the TSX-V on share  issuances and  discounts  and  commissions,
which  requirements  are  generally  far  more  stringent  than the  Former  Act
provisions.

The following are changes to the provisions contained in the BCBCA which have an
effect on provisions contained in the Existing Articles:

OFFICERS

Under  the  Existing  Articles,  the  Company  was  required  to  have a least a
President  and Secretary as officers,  and there had to be separate  individuals
holding those positions.  In addition, the President was required to be director
of the Company. These were requirements under the Former Act. However, under the
BCBCA,  those requirements no longer exist, and as a result, it is proposed that
the  New  Articles  remove  these  requirements.  Management  and the  board  of
directors believe that by removing these restrictions the Company is better able
to meet its corporate  governance  obligations  as to membership of the board of
directors.

PUBLICATION OF ADVANCE NOTICE OF MEETING

Under the  Existing  Articles,  the Company  was  required to publish an advance
notice of a general meeting of shareholders at which directors are to be elected
in the manner required under the Former Act. Under the BCBCA,  the Company is no
longer  required to publish  notice of general  meetings,  and recent changes to
securities  legislation in Canada requires that all public companies,  including
the  Company,  post  advance  notice of a general  meeting on  www.sedar.com  in
advance of the record date for the meeting. As a result, it is proposed that the
New Articles remove the requirement to publish advance notice of the meeting.



                                      -77-
<PAGE>


SHARE CERTIFICATES

Under the Existing  Articles,  a shareholder is entitled to a share  certificate
representing  the number of shares of the  Company  he or she  holds.  Under the
BCBCA, a shareholder  is now entitled to a share  certificate  representing  the
number of shares of the Company he or she holds or a written  acknowledgement of
the shareholder's right to obtain such a share certificate. As a result, the New
Articles have been amended to provide for this additional right. The addition of
the  ability  to issue a  written  acknowledgement  is very  useful  for  public
companies  such as the Company,  since it permits  flexibility  in corporate and
securities transmissions.

DISCLOSURE OF INTEREST OF DIRECTORS

Under the BCBCA,  the  provisions  relating to the  disclosure  of  interests by
directors  have been revised and updated.  As directors of the Company are bound
by  these  provisions,  the  New  Articles  have  deleted  reference  to the old
disclosure of interest  provisions and refer to the provisions  contained in the
BCBCA.

INDEMNITY PROVISION

Under the Former  Act,  the  Company  could only  indemnify  directors  where it
obtained prior court  approval,  except in certain  limited  circumstances.  The
Existing  Articles provided for the Company to indemnify  directors,  subject to
the  requirements  of the  Former  Act.  Under the  BCBCA,  the  Company  is now
permitted  to  indemnify  a past or present  director  or officer of the Company
without  obtaining prior court approval in respect of an "eligible  proceeding".
An  "eligible   proceeding"  includes  any  legal  proceeding  relating  to  the
activities of the  individual as a director or officer of the Company.  However,
under the BCBCA, the Company will be prohibited from paying an indemnity if:

         (a)      the party did not act  honestly  and in good faith with a view
                  to the best interests of the Company;
         (b)      the  proceeding  was not a civil  proceeding and the party did
                  not have  reasonable  grounds  for  believing  that his or her
                  conduct was lawful; and
         (c)      the proceeding is brought  against the party by the Company or
                  an associated corporation.

As a  result,  the New  Articles  propose  to allow  the  Company  to  indemnify
directors,  officers,  employees and agents, subject to the limits imposed under
the BCBCA.  Management  believes that it is in the best interests of the Company
to allow the  indemnification  of  directors,  officers,  employees  and agents,
subject to the limits and conditions of the BCBCA.

The  directors,  officers,  employees  and agents have  entered  into  Indemnity
Agreements, as allowed under the new Articles of the Company.

AUTHORIZED SHARE CAPITAL

Under the Former Act, the Company was  required to set a maximum  number for its
authorized  share  capital and such number was  required to be  contained in the
Company's  memorandum.  Under the BCBCA there are no maximum number restrictions
and, due to the elimination of the memorandum  under the BCBCA,  such authorized
share capital must be contained in a company's  Notice of Articles.  In order to
provide the Company with greater  flexibility to proceed with equity financings,
management  altered its authorized share capital from 200,000,000 shares divided
into 100,000,000 common shares and 100,000,000  preferred shares to an unlimited
number of common shares and 100,000,000 preferred shares.



                                      -78-
<PAGE>

HOLDING OF ANNUAL MEETINGS

Under the Former Act,  annual meetings were required to be held within 13 months
of the last annual meeting. The BCBCA allows for annual meetings to be held once
in each calendar year and not more than 15 months after the last annual  meeting
and accordingly, the Company's New Articles reflect this provision.

QUORUM FOR SHAREHOLDER MEETING

The  current  Articles  allow  for  quorum  to be two  persons  who are,  or who
represent by proxy,  shareholders who, in the aggregate, hold at least 5% of the
issued shares entitled to be voted at the meeting.

ALTERATIONS TO CONSTATING DOCUMENT

In accordance  with the BCBCA,  the New Articles  update the type of alterations
that can be made to the Company's constating documents, and disclose the type of
resolution that is required to make such amendments.

Accordingly,  the shareholders of the Company passed all of the above changes to
the Company's Articles at its shareholder's meeting held on June 24, 2004.

SUMMARY OF MATERIAL PROVISIONS

The  following  is a summary of certain  material  provisions  of the  Company's
Articles of  Association  and Memorandum (as currently in effect and as proposed
to be amended) and certain provisions of the BCBCA, applicable to the Company:

A.       DIRECTOR'S  POWER TO VOTE ON A  PROPOSAL,  ARRANGEMENT  OR  CONTRACT IN
         WHICH THE DIRECTOR IS MATERIALLY INTERESTED.

         Under the BCBCA,  subject to certain  exceptions,  a director or senior
         officer of the Company  must  disclose any  material  interest  that he
         personally  has, or that he as a director or senior  officer of another
         corporation  has in a contract or  transaction  that is material to the
         Company and which the  Company  has  entered  into or proposes to enter
         into.

         A director or senior officer of the Company does not hold a disclosable
         interest in a contract or transaction if:
                           1.       the   situation    that   would    otherwise
                                    constitute  a  disclosable   interest  arose
                                    before the  coming  into force of the BCBCA,
                                    or the interest was  disclosed  and approved
                                    under,  or was not  required to be disclosed
                                    under   legislation   that  applied  to  the
                                    Company before the coming into effect of the
                                    BCBCA;
                           2.       both the  Company and the other party to the
                                    contract  or  transaction  are wholly  owned
                                    subsidiaries of the same corporation;
                           3.       the Company is a wholly owned  subsidiary of
                                    the   other   party  to  the   contract   or
                                    transaction;
                           4.       the   other   party  to  the   contract   or
                                    transaction is a wholly owned  subsidiary of
                                    the Company ; or
                           5.       the  director or senior  officer is the sole
                                    shareholder   of   the   Company   or  of  a
                                    corporation of which the Company is a wholly
                                    owned subsidiary.

         A director or senior officer of the Company does not hold a disclosable
         interest in a contract or transaction merely because:

                           1.       the   contract   or    transaction   is   an
                                    arrangement by way of a security  granted by
                                    the   Company   for  money   loaned  to,  or
                                    obligations  undertaken  by, the director or
                                    senior  officer,  or a  person  in whom  the
                                    director  or senior  officer  has a material
                                    interest,  for the benefit of the Company or
                                    an affiliate of the Company;



                                      -79-
<PAGE>

                           2.       the  contract or  transaction  relates to an
                                    indemnity or insurance under the BCBCA;
                           3.       the contract or  transaction  relates to the
                                    remuneration   of  the  director  or  senior
                                    officer, or a person in whom the director or
                                    senior  officer,  employee  or  agent of the
                                    Company or of an affiliate of the Company;
                           4.       the  contract  or  transaction  relates to a
                                    loan to the  Company,  and the  director  or
                                    senior  officer,  or a  person  win whom the
                                    director  or senior  officer  has a material
                                    interest, is or is to be a guarantor of some
                                    or all of the loan; or
                           5.       the contract or transaction has been or will
                                    be  made  with  or  for  the  benefit  of  a
                                    corporation  that  is  affiliated  with  the
                                    Company and the  director or senior  officer
                                    is also a director or senior officer of that
                                    corporation   or  an   affiliate   of   that
                                    corporation.

         A director or senior  officer who holds such a material  interest  must
         disclose such interest in writing.  The disclosure must be evidenced in
         writing in a consent resolution,  the minutes of a meeting or any other
         record deposited with the Company's record office. A director who has a
         disclosable  interest in a contract or  transaction  is not entitled to
         vote  of  any  directors'   resolution  to  approve  that  contract  or
         transaction, but may be counted in the quorum at the directors' meeting
         at which such vote is taken.

         The current  Articles of the Company were passed by the shareholders at
         the Company's annual general meeting on June 24, 2004.

B.       DIRECTOR'S  POWER,  IN THE ABSENCE OF AN  INDEPENDENT  QUORUM,  TO VOTE
         COMPENSATION TO THEMSELVES OR ANY MEMBERS OF THEIR BODY.

         The  compensation  of the directors is decided by the directors  unless
         the Board of Directors  requests  approval of the compensation from the
         shareholders.  If the  issuance of  compensation  to the  directors  is
         decided by the directors,  a quorum is the majority of the directors in
         office.

C.       BORROWING  POWERS  EXERCISABLE  BY THE DIRECTORS AND HOW SUCH BORROWING
         POWERS MAY BE VARIED.

                  The Company, if authorized by the directors, may:

                           1.       borrow  money in the manner and  amount,  on
                                    the  security,  from the  sources and on the
                                    terms  and  conditions  that  they  consider
                                    appropriate;
                           2.       issue  bonds,   debentures  and  other  debt
                                    obligations  either  outright or as security
                                    for  any  liability  or  obligation  of  the
                                    Company  or any  other  person  and at  such
                                    discounts  or  premiums  and on  such  other
                                    terms as they consider appropriate;
                           3.       guarantee  the  repayment  of  money  by any
                                    other  person  or  the  performance  of  any
                                    obligation of any other person; and
                           4.       mortgage, charge, whether by way of specific
                                    or   floating   charge,   grant  a  security
                                    interest in, or give other  security on, the
                                    whole or any part of the  present and future
                                    assets and undertaking of the Company.

                  The  borrowing  powers  may  be  varied  by  amendment  to the
                  Articles  of  the  Company  which  requires  approval  of  the
                  shareholders of the Company by special resolution.

D.       RETIREMENT  AND   NON-RETIREMENT   OF  DIRECTORS  UNDER  AN  AGE  LIMIT
         REQUIREMENT.

                  There are no such  provisions  applicable to the Company under
                  the  Notice of  Articles,  Articles  (as  existing  or the new
                  proposed Articles) or the BCBCA.

E.       NUMBER OF SHARES REQUIRED FOR A DIRECTOR'S QUALIFICATION.

                  A director of the  Company is not  required to hold a share in
                  the capital of the Company as qualification for his office.



                                      -80-
<PAGE>


DESCRIPTION OF SHARE CAPITAL

The authorized  capital of the Company consists of an unlimited number of common
shares without par value and 100,000,000  Preferred shares without par value, of
which 18,283,053 have been designated as Preferred Shares,  Series I. A complete
description is contained in the Company's Altered Memorandum and Articles.

COMMON SHARES

A total of  45,479,724  common shares were issued and  outstanding  as of May 5,
2005. All of the common shares are fully paid and not subject to any future call
or assessment. All of the common shares of the Company rank equally as to voting
rights,  participation  in a  distribution  of the  assets of the  Company  on a
liquidation,  dissolution  or winding-up of the Company and the  entitlement  to
dividends.  The holders of the common  shares are entitled to receive  notice of
all  shareholder  meetings and to attend and vote at such meetings.  Each common
share  carries  with it the right to one  vote.  The  common  shares do not have
preemptive  or  conversion  rights.  In  addition,  there are no sinking fund or
redemption  provisions  applicable  to  the  common  shares  or  any  provisions
discriminating against any existing or prospective holders of such securities as
a result of a shareholder owning a substantial number of shares. The Company has
proposed to the  shareholders  to amend the  Company's  Articles to increase the
number of  authorized  common  shares to an  unlimited  number of common  shares
without par value.

PREFERRED SHARES

The Company is authorized to issue up to 100,000,000  preferred shares in one or
more  series.  The  preferred  shares are  entitled to priority  over the common
shares with respect to the payment of dividends and distribution in the event of
the  dissolution,  liquidation  or  winding-up  of the  Company.  The holders of
preferred  shares as a class shall not be entitled as such to receive notice of,
to attend or to vote at any meeting of the  shareholders  of the Company,  other
than at a meeting of holders of Preferred  Shares.  As of May 5 2005, there were
18,283,053 Preferred Shares, Series I, outstanding. There are no sinking fund or
redemption provisions or any provisions  discriminating  against any existing or
prospective  holders of such  securities as a result of a  shareholder  owning a
substantial number of shares applicable to the preferred shares.

PREFERRED SHARES, SERIES I

The  Company  is  authorized  to issue  100,000,000  preferred  shares  of which
18,283,053  have been  designated as Preferred  Shares,  Series I (the "Series I
Shares").  The holders of Series I Shares are not entitled to receive notice of,
attend or vote at any meeting of the shareholders of the Company,  other than at
a meeting of  holders of  Preferred  Shares,  Series I. The  holders of Series I
Shares  are  entitled  to  receive,  if,  as and when  declared  by the board of
directors  of  the  Company,   non-cumulative   dividends.   Upon   dissolution,
liquidation  or  winding-up  of the Company,  the holders of Series I Shares are
entitled  to  receive  an  amount  equal  to the  redemption  amount,  which  is
determined  by  dividing  $3,495,800  by the  number of Series I Shares  issued,
together with all declared and unpaid dividends thereon. The Series I Shares may
be  redeemed  at the option of the Company or the holder of the Series I Shares.
Upon  redemption of the Series I Shares,  the Company shall pay to the holder of
the Series I Shares the Redemption  Amount together with all declared and unpaid
dividends  thereon.  As of May 5,  2005,  there are  18,283,053  Series I Shares
outstanding.  There  are  no  sinking  fund  or  redemption  provisions  or  any
provisions  discriminating  against any existing or prospective  holders of such
securities  as a result of a shareholder  owning a substantial  number of shares
applicable  to the  Series I Shares.  The  Series I Shares  are not  subject  to
further capital calls or assessments.

CHANGES TO RIGHTS AND RESTRICTIONS OF SHARES

If the  Company  wishes to change  the  rights  and  restrictions  of the common
shares,  preferred  shares or the Series I Shares,  the Company  must obtain the
approval of 3/4 of the holders of the common  shares,  preferred  shares and the
Series I Shares.  Under the BCBCA and the proposed  amendments  to the Company's
Articles,  if the Company  wishes to change the rights and  restrictions  of the
common shares,  preferred shares or the Series I Shares, the Company must obtain
the approval of 2/3 of the holders of the common  shares,  preferred  shares and
the Series I Shares.


                                      -81-
<PAGE>


DIVIDEND RECORD

The Company has not paid any  dividends  on its common  shares and has no policy
with respect to the payment of dividends.

OWNERSHIP OF SECURITIES AND CHANGE OF CONTROL

There are no limitations on the rights to own  securities,  including the rights
of non-resident or foreign shareholders to hold or exercise voting rights on the
securities  imposed  by  foreign  law or by  the  constituent  documents  of the
Company.

Any person who beneficially owns or controls,  directly or indirectly, more than
10% of the Company's  voting  shares is considered an insider,  and must file an
insider  report  with the  British  Columbia,  Alberta  and  Ontario  Securities
Commissions  within ten days of  becoming  an insider  disclosing  any direct or
indirect  beneficial  ownership of, or control over direction over securities of
the Company. In addition, if the Company itself holds any of its own securities,
the Company must disclose such ownership.

There are no provisions in the Company's  Memorandum and Articles of Association
or Bylaws  that would have an effect of  delaying,  deferring  or  preventing  a
change in  control  of the  Company  operating  only with  respect  to a merger,
acquisition   or   corporate   restructuring   involving   the  Company  or  its
subsidiaries.

MEETINGS OF THE SHAREHOLDERS

ANNUAL AND GENERAL MEETINGS

Pursuant to the Company's  existing  Articles,  the Company must hold its annual
general  meeting once in every calendar year (being not more than 15 months from
the last annual general  meeting) at such time and place to be determined by the
Directors  of the Company.  The Company  must  publish an advance  notice in the
manner required by the Company Act of any general meeting at which Directors are
to be elected.  The Company must give shareholders not less than 21 days' notice
of any general meeting of the shareholders.

Under BCBCA and the proposed  changes to the Company's  Articles,  the Company's
annual  general  meeting is to be held once in each  calendar  year and not more
than 15 months after the previous meeting. No advance notice will be required to
be published at a meeting where  directors  are to be elected.  The Company must
give  shareholders  not less than 21 days' notice of any general  meeting of the
shareholders.

The  Directors  may fix in advance a date,  which is no fewer than 35 days or no
more than 60 days prior to the date of the  meeting.  All the  holders of common
shares as at that date are entitled to attend and vote at a general meeting.

DIFFERENCES FROM REQUIREMENTS IN THE UNITED STATES

Except for the Company's quorum  requirements,  certain  requirements related to
related  party  transactions  and the  requirement  for  notice  of  shareholder
meetings,  discussed  above,  there are no  significant  differences  in the law
applicable to the Company,  in the areas  outlined  above,  in Canada versus the
United States.  In most states in the United States,  a quorum must consist of a
majority of the shares  entitled to vote.  Some states  allow for a reduction of
the quorum  requirements to less than a majority of the shares entitled to vote.
Having a lower quorum threshold may allow a minority of the shareholders to make
decisions about the Company,  its management and operations.  In addition,  most
states  in the  United  States  require  that a notice of  meeting  be mailed to
shareholders  prior to the meeting date.  Additionally,  in the United States, a
director may not be able to vote on the approval of any transaction in which the
director has a interest.



                                      -82-
<PAGE>


Material Contracts

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

1.       The Company has executed an agreement with Oxbow, pursuant to which Mr.
         Grosso,  an officer and director of the Company,  provides  services to
         the Company. See "Item 6. Directors,  Senior Management and Employees -
         Compensation - Management  Contracts"  and "Item 7. Major  Shareholders
         and Related Party Transactions - Related Party Transactions."


2.       The Company has entered into an  agreement  with KGE  Management  Ltd.,
         pursuant to which  Gerald G.  Carlson,  an officer and  director of the
         Company,  provides  services to the  Company.  See "Item 6.  Directors,
         Senior Management and Employees - Compensation - Management  Contracts"
         and "Item 7.  Major  Shareholders  and  Related  Party  Transactions  -
         Related Party Transactions."

3.       Lease  agreements  between the Company and Beauregard  dated January 1,
         2004 and March 1, 2005,  regarding the Company's office  premises.  See
         "Item 7. Major  Shareholders  and Related Party  Transactions - Related
         Party Transactions."

4.       In November 2004, the Company  entered into an agreement with Endeavour
         Financial  Ltd. a company  with  which Mr.  Angus,  a  director  of the
         Company is  associated.  A monthly  fee of  US$5,000  for  services  is
         payable  under this  agreement  for a minimum  period of one year.  See
         "Item 7. Major  Shareholders  and Related Party  Transactions - Related
         Party Transactions."

5.       The Company has entered into an Arrangement Agreement with Golden Arrow
         pursuant  to which the  Company  transferred  certain  assets to Golden
         Arrow  as  part  of a  reorganization  of the  Company.  See  "Item  4.
         Information on the Company - History and Development of the Company."

6.       The Company has entered into an indemnity  agreement,  for any costs or
         losses  that may be  incurred  by Golden  Arrow in respect of the legal
         action  commenced  by  Aquiline  against  the  Company.  See  "Item  8.
         Financial Information - Legal Proceedings."

7.       Option  Agreement  dated  August 12,  2003  between  with  Consolidated
         Pacific Bay Minerals Ltd.  relating to the Regalo  mineral  claim.  See
         "Item 4. Information on the Company - Properties,  Plants and Equipment
         -  Principal  Properties  -  Argentinean   Properties  -  Navidad  Area
         Properties (Other than the Navidad Project) - Regalo Property."

8.       The Company  entered into a Management  Services  Agreement dated March
         22, 2005 with IMA Latin  America Inc.,  the Company's  wholly owned BVI
         subsidiary  and Gestora de Negocios E Inversiones  S.A.  ("Gestora") to
         retain Gestora to provide certain  management,  consulting and advisory
         services of Mr.  Augusto Baertl  ("Baertl") for the  development of the
         Navidad project.  A Confidentiality  Agreement between the Grosso Group
         Management  Ltd. and Gestora was also entered into. A  Director/Officer
         Agreement  between IMA Latin  America  Inc. and Baertl was also entered
         into as well as an Indemnity Agreement between the Company and Baertl.

9.       Effective  January 1,  2005,  the  Company  engaged  the  Grosso  Group
         Management Ltd. to provide  services and facilities to the Company.  As
         of the date of this Annual Report, a formal agreement among the Company
         and the  Grosso  Group has not been  finalized.  Until such time as the
         formal  agreement has been finalized,  the Company and the Grosso Group
         intend to work under the terms of the proposed  Administration Services
         Agreement  by and  among  the  Company  and  the  Grosso  Group.  It is
         anticipated  that the formal  agreement  will have an effective date of
         January 1, 2005.

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".


                                      -83-
<PAGE>



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.

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:

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

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

An  investment  is  reviewable  under  the Act if there is an  acquisition  by a
non-Canadian of a Canadian business and the asset value of the Canadian business
being acquired equals or exceeds the following thresholds:

(a)      for  non-WTO  Investors,  the  threshold  is  $5,000,000  for a  direct
         acquisition  and over  $50,000,000  for an  indirect  acquisition.  The
         $5,000,000  threshold will apply however for an indirect acquisition of
         the asset value of the Canadian  business being acquired exceeds 50% of
         the asset value of the global transaction;

(b)      except as specified in paragraph  (c) below,  a threshold is calculated
         for  reviewable  direct  acquisitions  by or from  WTO  Investors.  The
         threshold for 2004 is $237,000,000.  Pursuant to Canada's international
         commitments,  indirect  acquisitions  by or from WTO  Investors are not
         reviewable; and

(c)      the  limits  set  out in  paragraph  (a)  apply  to all  investors  for
         acquisitions of a Canadian business that:

         (i)      engages in the production of uranium and owns an interest in a
                  producing uranium property in Canada;

         (ii)     provides any financial services;

         (iii)    provides any transportation service; or

         (iv)     is a cultural business.



                                      -84-
<PAGE>


WTO Investor as defined in the Act means:

(a)      an individual, other than a Canadian, who is a national of a WTO Member
         or who has the right of  permanent  residence  in  relation to that WTO
         Member;

(b)      a government of a WTO Member,  whether  federal,  state or local, or an
         agency thereof;

(c)      an entity that is not a  Canadian-controlled  entity, and that is a WTO
         investor-controlled entity, as determined in accordance with the Act;

(d)      a corporation or limited partnership:

         (i)      that  is  not  a  Canadian-controlled  entity,  as  determined
                  pursuant to the Act;

         (ii)     that is not a WTO investor within the meaning of the Act;

         (iii)    of which less than a  majority  of its  voting  interests  are
                  owned by WTO investors;

         (iv)     that is not  controlled  in fact through the  ownership of its
                  voting interests; and

         (v)      of which two thirds of the members of its board of  directors,
                  or of which two thirds of its  general  partners,  as the case
                  may be, are any combination of Canadians and WTO investors;

(e)      a trust:

         (i)      that  is  not  a  Canadian-controlled  entity,  as  determined
                  pursuant to the Act;

         (ii)     that is not a WTO investor within the meaning of the Act;

         (iii)    that is not  controlled  in fact through the  ownership of its
                  voting interests, and

         (iv)     of which two thirds of its  trustees  are any  combination  of
                  Canadians and WTO investors, or

(f)      any other form of business  organization  specified by the  regulations
         that is controlled by a WTO investor.

WTO Member as defined in the Act means a member of the World Trade Organization.

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.

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
person's business as a trader or dealer in securities.

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").


                                      -85-
<PAGE>



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.  . In the event of the Company
declaring and paying dividends it would withhold any applicable taxes.

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.

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.


                                      -86-
<PAGE>


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 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.



                                      -87-
<PAGE>


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  Internal  Revenue  Code of 1986,  as amended.  The
elections require certain  conditions be met such as filing on or before the due
date, as extended,  for filing the shareholder's income tax return for the first
taxable year to which the election will apply.

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  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 - 837West Hastings Street,
Vancouver, British Columbia, V6C 3N6.


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

As of the date of this report,  the Company  does not have any  material  market
risk sensitive financial instruments.


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

Not applicable.



                                      -88-
<PAGE>


                                     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.
--------------------------------------------------------------------------------

An evaluation was performed under the supervision and with the  participation of
the Company's  management,  including Mr. Grosso,  the Company's chief executive
officer,   and  Mr.  Lang,  the  Company's  chief  financial  officer,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures  pursuant to Rules  13a-15(b)  and  15d-15(b) of the  Securities
Exchange  Act of 1934 (the  "Exchange  Act") as of December  31, 2004 Based upon
that  evaluation,   Messrs.  Grosso  and  Lang,  concluded  that  the  Company's
disclosure  controls and  procedures  are  effective to ensure that  information
required  to be  disclosed  by the  Company in reports  that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified in  Securities  and  Exchange  Commission  rules and
forms.

During the fiscal year ended  December  31,  2004,  there were no changes in the
Company's  internal  control  over  financial  reporting  that  have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.


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

The Board of Directors  has  determined  that the Company has at least one audit
committee  financial expert, Mr. David Horton, who serves on the Company's audit
committee.


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

  CODE OF BUSINESS CONDUCT AND ETHICS AND WHISTLE-BLOWER POLICY AND PROCEDURES

                                  Introduction

Pursuant to  applicable  United  States  securities  laws and the United  States
Securities and Exchange  Commission  ("SEC"),  our Audit Committee has adopted a
Code of  Business  Conduct and Ethics to provide  principles  for the purpose of
promoting:

    -    Honest and ethical conduct, including the ethical handling of actual or
         apparent  conflicts  of  interest  between  personal  and  professional
         relationships;
    -    Full, fair, accurate,  timely, and understandable disclosure in reports
         and  documents  that we file with,  or submit to,  the  Securities  and
         Exchange Commission and in other public communications;
    -    Compliance with applicable governmental laws, rules and regulations;
    -    The prompt  internal  reporting of  violations  of our Code of Business
         Conduct and Ethics; and
    -    Accountability  for  adherence  to our  Code of  Business  Conduct  and
         Ethics.

REPORTING RESPONSIBILITY

It is the responsibility of all directors, officers and employees to comply with
the Code and to report  violations or suspected  violations  in accordance  with
this  Whistleblower  Policy.  In our Code of Business  Conduct and Ethics  these
individuals are referred to as "you".
Violations or suspected  violations may be submitted on a confidential  basis by
the  complainant  or may be  submitted  anonymously.  Reports of  violations  or
suspected   violations  will  be  kept  confidential  to  the  extent  possible,
consistent with the need to conduct an adequate investigation.



                                      -89-
<PAGE>


NO RETALIATION

No director,  officer or employee  who in good faith  reports a violation of the
Code shall suffer harassment,  retaliation or adverse employment consequence. An
employee  who  retaliates  against  someone who has reported a violation in good
faith is subject to discipline up to and including  termination  of  employment.
This  Whistleblower  Policy is intended to encourage  and enable  employees  and
others to raise  serious  concerns  within the  Corporation  rather than seeking
resolution outside the Corporation.

REPORTING VIOLATIONS

The Code  addresses  the  Corporation's  open  door  policy  and  suggests  that
employees  share their  questions,  concerns,  suggestions  or  complaints  with
someone who can address them properly.

In most cases,  an  employee's  supervisor is in the best position to address an
area of  concern.  However,  if you  are  not  comfortable  speaking  with  your
supervisor or you are not satisfied  with your  supervisor's  response,  you are
encouraged  to speak  with  anyone in  management  whom you are  comfortable  in
approaching.

Supervisors and managers are required to report suspected violations of the Code
of Conduct to the Company's  Compliance Officer,  who has specific and exclusive
responsibility  to investigate all reported  violations.  For suspected fraud or
securities law violations,  or when you are not satisfied or uncomfortable  with
following the  Corporation's  open door policy,  individuals  should contact the
Corporation's Compliance Officer directly.

COMPLIANCE OFFICER

The Corporation's Compliance Officer is appointed by the board of directors, and
is  responsible  for  investigating  and resolving all reported  complaints  and
allegations  concerning  violations  of the Code and, at his  discretion,  shall
advise the President and CEO, the CFO and/or the Audit Committee. The Compliance
Officer has direct  access to the Audit  Committee of the board of directors and
is  required to report to the  Committee  at least  annually  on his  compliance
activity.

In order to protect  your  anonymity,  and to ensure  proper  record  keeping as
required by regulations,  our Company uses an external reporting agency which is
the sole link to the Compliance Officer.

THE   COMPANY'S    COMPLIANCE    OFFICER   CAN   BE   REACHED   VIA   EMAIL   AT
GROSSOGROUP@WHISTLEBLOWERSECURITY.COM,  VIA TELEPHONE AT  1-866-921-6714  OR VIA
THE INTERNET LOCATED AT HTTP://WWW.WHISTLEBLOWERSECURITY.COM.

The  Compliance  Officer will notify the sender and  acknowledge  receipt of the
reported violation or suspected violation within five business days. All reports
will be promptly investigated and appropriate corrective action will be taken if
warranted by the investigation.

Your Responsibilities

         1.       You shall act with honesty and integrity in the performance of
                  your duties, shall comply with all laws, rules and regulations
                  of federal,  provincial, state and local governments and other
                  private and public regulatory agencies that affect the conduct
                  of our business and our financial reporting.


                                      -90-
<PAGE>



         2.       You are  responsible  for full,  fair,  accurate,  timely  and
                  understandable disclosure in the reports and documents that we
                  file with,  or submit to, any Canadian  Exchange or Securities
                  Commission and the  Securities and Exchange  Commission and in
                  our other public communications.  Accordingly,  each of you is
                  responsible  for  promptly  bringing to the  attention  of The
                  Compliance  Officer any material  information of which you may
                  become  aware  that  affects  our  disclosure  in  our  public
                  filings.

         3.       You shall  promptly  bring to the attention of The  Compliance
                  Officer any information you may have concerning  evidence of a
                  material  violation of the securities or other laws,  rules or
                  regulations applicable to us and the operation of our business
                  or any violation of this Code of Business  Conduct and Ethics.
                  In either  event,  any reporting is  confidential  and you are
                  protected from retaliation.

         4.       You shall  promptly  bring to the attention of The  Compliance
                  Officer  any   information   you  may  have   concerning   (a)
                  significant   deficiencies  in  the  design  or  operation  of
                  internal  controls which could adversely affect our ability to
                  record,  process,  summarize and report  financial data of (b)
                  any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  our
                  financial reporting, disclosures or internal controls.

         5.       You must avoid any personal activity or association that could
                  appear  to  influence   your   judgment  or  affect  our  best
                  interests.  You shall  promptly bring to the attention of your
                  manager or the Compliance Officer any information you may have
                  concerning  any  actual  or  apparent  conflicts  of  interest
                  between personal and professional relationships, involving any
                  management or other  employees who have a significant  role in
                  our financial reporting, disclosures or internal controls.

VIOLATIONS AND WAIVERS

The Compliance Officer determines if a special meeting of the Audit Committee is
required and shall provide information about the complaint to all members of the
Audit  Committee at its next regularly  scheduled  meeting.  The Chairman of the
Audit Committee shall advise the Board of Directors in writing of all violations
of this Code of Business Conduct and Ethics reported to him.

Anyone filing a complaint  concerning a violation or suspected  violation of the
Code must be acting in good faith and have reasonable  grounds for believing the
information  disclosed  indicates a violation of the Code. Any allegations  that
prove not to be  substantiated  and which prove to have been made maliciously or
knowingly to be false will be viewed as a serious disciplinary offense.

No waivers of any  provision of this Code of Business  Conduct and Ethics may be
made except by the Audit Committee. Only the Audit Committee may amend this Code
of Business  Conduct and Ethics.  Any waiver or  amendment  shall be reported as
required by law or regulation.


ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.
--------------------------------------------------------------------------------

Audit Fees

For the fiscal year ended December 31, 2004, the Company's principal  accountant
is  expected  to bill  approximately  $35,000,  and for the  fiscal  year  ended
December 31, 2003,  the  Company's  principal  accountant  billed  approximately
$30,000 for the audit of the Company's annual  financial  statements or services
that are normally  provided by the  accountant in connection  with statutory and
regulatory filings or engagements for those fiscal years.

Audit Related Fees

For the fiscal years ended December 31, 2004 and 2003,  the Company's  principal
accountant  is expected to bill $13,650 and billed  $16,000,  respectively,  for
assurance and related  services that were reasonably  related to the performance
of the audit or review of the Company's  financial  statements  outside of those
fees disclosed above under "Audit Fees"


                                      -91-
<PAGE>


Tax Fees

For the fiscal years ended December 31, 2004 and 2003,  the Company's  principal
accountant is expected to bill $100,000 and billed  $28,000,  respectively,  for
tax compliance, tax advice and tax planning services.

 Pre-Approval Policies and Procedures

Generally,  in the past,  prior to engaging the Company's  auditors to perform a
particular service,  the Company's audit committee has, when possible,  obtained
an estimate for the services to be performed.  The audit committee in accordance
with procedures for the Company approved all of the services described above.

Additionally,   the  auditors   have  been   engaged  to  perform   services  by
non-independent  directors  of  the  Company  (who  are  members  of  the  audit
committee) pursuant to pre-approval  policies and procedures  established by the
audit committee (which are detailed as to the particular  service) and the audit
committee has been informed of any such engagement and service.

Since January 1, 2005,  the  Company's  auditors have not billed the Company for
audit related services in connection with the reorganization.

Beginning  July 1,  2004,  the  Company's  audit  committee  intends  to  obtain
estimates for services to be performed,  prior to engaging the Company's auditor
to perform any audit or non-audit  related  services,  including those set forth
above.  The audit committee will also allow the engagement of the auditor,  by a
non-independent member of the board of directors, to render services pursuant to
pre-approval  policies and procedures  established by the audit committee (which
are detailed as to the  particular  service),  provided  the audit  committee is
informed of any such engagement and service. The audit committee may delegate to
one of its members,  who is also an  independent  director of the  Company,  the
ability to approve such services on behalf of the audit committee.  Any approval
by such director shall be ratified by the audit  committee at its next scheduled
meeting.


ITEM 16D.   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
--------------------------------------------------------------------------------

Not applicable.


ITEM 16E.   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.
--------------------------------------------------------------------------------

Not applicable.


                                    PART III


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

See pages F-1 though F-38


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

Not applicable.


                                      -92-
<PAGE>


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

Exhibits
<TABLE>
<CAPTION>

   EXHIBIT
    NUMBER       EXHIBIT
   <S>          <C>

      1.1        Notice of Articles(8)
      1.2        Articles (1)
      4.1        Share Purchase Agreement Between Shareholders and 389863 B.C. Ltd. (1)
      4.2        Arrangement Agreement Between Viceroy Resource Corporation and IMA Resource
                 Corporation (1)
      4.3        Consulting Services Agreement Between Oxbow International Marketing Corp. and IMA
                 Resource Corporation (1)
      4.4        Employment Agreement with William Lee (1)
      4.5        Consulting Services Agreement Between Nikolaos Cacos and IMA Resource Corporation(1)
      4.6        Consulting Agreement Between KGE Management Ltd. and IMA Exploration Inc. dated
                 April 1, 2004(8)
      4.7        Consulting Agreement Between Lindsay R. Bottomer and IMA Exploration Inc. (1)
      4.8        Exploration and Option Agreement with Barrick Exploraciones Argentina S.A. (1)
      4.9        Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio Lirio
                 representing Lir-Fer Construcciones S.R.L. (1)
     4.10        Option Agreement with Lirio and Lir-Fer Construcciones S.R.L. (1)
     4.11        Option Agreement with Oscar Garcia and others (1)
     4.12        Purchase Agreement with Modesto Enrique Arasena (1)
     4.13        Option Agreement with Hugo Arturo Bosque (1)
     4.14        Option Agreement with Guillermo Munoz, Lydia Gonzalez, Ricardo Sanchez and
                 Antonio Monteleone (1)
     4.15        Option Agreement with Jorge Ernesto Rodriguez and Gerardo Javier Rodriguez (1)
     4.16        Option Agreement with Jorge Ernesto Rodriguez and Raul Alberto Garcia (1)
     4.17        Purchase Agreement with Victor Ronchietto (1)
     4.18        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 (1)
     4.19        Amendment to Option Agreement with Hugo Arturo Bosque (2)
     4.20        Amendment to Purchase Agreement with Victor Ronchietto (2)
     4.21        Option Agreement with Dionisio Ramos (2)
     4.22        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation (2)
     4.23        Amendment to consulting Agreement between IMA Exploration Inc. and Nikolaos Cacos(3)
     4.24        Agreement between the Company and Sean Hurd dated June 2, 2002 (3)
     4.25        Option Agreement between Nestor Arturo and IMA S.A. (3)
     4.26        Amendment to Option Agreement with Guillermo Munoz, Lydia Gonzalez, Ricardo
                 Sanchez and Antonio Monteleone (3)
     4.27        Amendment to 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 (3)
</TABLE>


                                      -93-
<PAGE>

<TABLE>
<CAPTION>

   EXHIBIT
    NUMBER       EXHIBIT
   <S>          <C>

     4.28        Option Agreement with Rio Tinto Mining and Exploration Limited (4)
     4.29        Amendment to Exploration and Option Agreement with Barrick Exploraciones
                 Argentina S.A. (4)
     4.30        Consulting Agreement between the Company and Lindsay Bottomer dated April 1,2002(4)
     4.31        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. (4)
     4.32        Amendment to Option Agreement with Juan Demetrio Lirio and Lir-Fer Construcciones
                 S.R.L. (4)
     4.33        Amendment to 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 (4)
     4.34        Amendment to Option Agreement between Nestor Arturo and IMA S.A. (4)
     4.35        Consulting Agreement Between KGE Management Ltd. and IMA Exploration Inc. (4)
     4.36        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. (5)
     4.37        Amendment to Option Agreement with Juan Demetrio Lirio and Lir-Fer Construcciones
                 S.R.L. (5)
     4.38        Amendment to Option Agreement between Nestor Arturo and IMA S.A. (5)
     4.39        Amendment to 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 (5)
     4.40        Short Form Offering Document (5)
     4.41        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation (5)
     4.43        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. (5)
     4.44        Amendment to Agreement between the Company and Sean Hurd (5)
     4.45        Amendment to Exploration and Option Agreement with Barrick Exploraciones
                 Argentina S.A. dated March 26, 2003. (6)
     4.46        Letter of Intent dated March 6, 2003 with Amera Resources Corporation (6)
     4.47        Letter Agreement with Amera Resources Corporation re: reimbursement of office
                 expenses (6)
     4.48        Amendment to 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 December 23, 2002 (6)
     4.49        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. dated July 10, 2002 (6)
     4.50        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. dated December 27, 2002 (6)
</TABLE>


                                      -94-
<PAGE>

<TABLE>
<CAPTION>

   EXHIBIT
    NUMBER       EXHIBIT
   <S>          <C>

     4.51        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation dated July 15, 2002 (6)
     4.52        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. dated June 14, 2002 (6)
     4.53        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. dated October 3, 2002 (6)
     4.54        Amendment to Agreement between the Company and Sean Hurd dated June 10, 2002 (6)
     4.55        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation dated April 17, 2003 (6)
     4.56        Arrangement Agreement between IMA Exploration Inc., IMA Holdings Corp. and Golden
                 Arrow Resources Corporation dated May 14, 2004 (7)
     4.57        Amendment to consulting Agreement with Nikolaos Cacos dated January 5, 2004(8)
     4.58        Amendment to Agreement with Sean Hurd dated January 5, 2004(8)
     4.59        Financial Advisory Services Agreement with Endeavour Financial Ltd. (8)
     4.60        Agreement between the Company and Amera Resources Corporation dated March 6, 2003
                 relating to the Lago Pico, Loma Alta and Nueva Ruta properties(8)
     4.61        Amendment to Letter of Intent with Amera Resources Corporation dated September 30, 2003(8)
     4.62        Amendment to Letter of Intent with Amera Resources Corporation dated April 8,2004(8)
     4.63        Letter Agreement with Beauregard Holdings Corp. dated February 5, 2004 regarding
                 office lease(8)
     4.64        Option Agreement dated September 22, 2003, between the Company and Cloudbreak
                 Resources Ltd.(8)
     4.65        Option Agreement dated August 12, 2003 between the Company and Consolidated
                 Pacific Bay Minerals Ltd.(8)
     4.66        Option agreement dated June 11, 2003, between the Company and Ballad Gold &
                 Silver Ltd. (formerly Ballad Ventures Ltd.)(8)
     4.67        Amendment to 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  August  15,  2003.(8)
     4.68        Letter Agreement  with  Arthur Lang dated April 23,  2004(8)
     4.69        Administration Services Agreement dated January 1, 2005
     4.70        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. dated April 1, 2005
     4.71        Indemnity Agreement provided to Golden Arrow Resources Corporation
     4.72        Arrangement Agreement by and among the Company, Golden Arrow Resources
                 Corporation and IMA Holdings Corp. dated May 14, 2004
     4.73        Auditor Consent Letter
     4.74        Audit Committee Charter

</TABLE>


                                      -95-
<PAGE>

<TABLE>
<CAPTION>

   EXHIBIT
    NUMBER       EXHIBIT
   <S>          <C>

      8.1        List of Subsidiaries(8)
     12.1        Certification of Joseph Grosso Pursuant to Rule 13a-14(a)
     12.2        Certification of Arthur Lang Pursuant to Rule 13a-14(a)
     13.1        Certification of Joseph Grosso Pursuant to 18 U.S.C. Section 1350
     13.2        Certification of Arthur Lang Pursuant to 18 U.S.C. Section 1350

</TABLE>

     (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.
     (6)  Previously  filed as an exhibit to the Company's Annual Report on Form
          20-F filed May 16, 2003. File Number 0-30464.
     (7)  Previously  filed as with the Company's  Report on Form 6-K filed June
          18, 2004. File Number 0-30464.
     (8)  Previously  filed as an exhibit to the Company's Annual Report on Form
          20-F filed June 23, 2004. File Number 0-30464.

                                      -96-

<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/ Arthur Lang
                  -------------------------------------------------
                  Arthur Lang, Chief Financial Officer and Director

                  Date:  May 5, 2005
                         -------------------------------------------


                                      -97-
<PAGE>

                                      F-1





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


                              IMA EXPLORATION INC.

                         (AN EXPLORATION STAGE COMPANY)


                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2004, 2003 AND 2002

                         (Expressed in Canadian Dollars)


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










<PAGE>
                                      F-2











MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The  accompanying  consolidated  financial  statements  of the Company have been
prepared by  management  in  accordance  with  accounting  principles  generally
accepted in Canada and reconciled to accounting principles generally accepted in
the  United  States  as set out in Note  11,  and  contain  estimates  based  on
management's  judgement.  Management maintains an appropriate system of internal
controls to provide  reasonable  assurance  that  transactions  are  authorized,
assets safeguarded, and proper records maintained.

The  Audit  Committee  of the  Board of  Directors  has met  with the  Company's
independent auditors to review the scope and results of the annual audit, and to
review the financial statements and related financial reporting matters prior to
submitting the financial statements to the Board for approval.

The Company's independent auditors, PricewaterhouseCoopers LLP, are appointed by
the  shareholders  to conduct an audit in  accordance  with  generally  accepted
auditing standards in Canada and the Public Company  Accounting  Oversight Board
(United States), and their report follows.



/s/ Joseph Grosso                               /s/ Art Lang

Joseph Grosso                                   Art Lang
President                                       Chief Financial Officer


April 21, 2005




<PAGE>
                                      F-3







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, 2004 and  December  31, 2003 and the  consolidated  statements  of
operations  and deficit and cash flows for the years ended  December  31,  2004,
2003  and  2002.  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 Canadian  generally accepted auditing
standards and the standards of the Public  Company  Accounting  Oversight  Board
(United  States).  Those standards  require that we plan and perform an audit to
obtain  reasonable  assurance  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, 2004
and 2003 and the  results  of its  operations  and its cash  flows for the years
ended  December 31, 2004,  2003 and 2002 in accordance  with Canadian  generally
accepted accounting principles.

/s/ PriceWaterhouseCoopers LLP

CHARTERED ACCOUNTANTS
Vancouver, B.C., Canada
April 21, 2005



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

In the United States,  reporting  standards for auditors require the addition of
an  explanatory  paragraph  (following  the  opinion  paragraph)  when there are
changes  in  accounting   principles   that  have  a  material   effect  on  the
comparability  of  the  company's  financial  statements,  such  as  the  change
described in note 3 to the financial statements.  Our report to the shareholders
dated  April  21,  2005 is  expressed  in  accordance  with  Canadian  reporting
standards  which do not  require  a  reference  to such a change  in  accounting
principles in the auditors' report when the change is properly accounted for and
adequately  disclosed  in  the  financial  statements.

/s/ PriceWaterhouseCoopers LLP

CHARTERED ACCOUNTANTS
Vancouver, B.C., Canada
April 21, 2005




<PAGE>
                                      F-4

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                        AS AT DECEMBER 31, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


                                                       2004            2003
                                                         $               $
                                     ASSETS

CURRENT ASSETS
Cash and cash equivalents                             5,227,354       4,422,334
Amounts receivable and prepaids                         162,802         174,938
Marketable securities (Note 4)                          186,000               -
Spin-off assets transferred (Notes 2 and 4)                   -         568,199
                                                   ------------    ------------
                                                      5,576,156       5,165,471

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Note 5)            94,102          36,186

MINERAL PROPERTIES AND
     DEFERRED COSTS (Notes 2, 3 and 9)                6,551,598       1,469,026

SPIN-OFF ASSETS TRANSFERRED (Note 2)                          -       6,749,193
                                                   ------------    ------------
                                                     12,221,856      13,419,876
                                                   ============    ============

                                   LIABILITIES

CURRENT LIABILITIES
Accounts payable and accrued liabilities                523,378         418,234
                                                   ------------    ------------
FUTURE INCOME TAX LIABILITIES (Note 9)                  885,093         251,180

SPIN-OFF LIABILITIES TRANSFERED (Note 2)                      -       1,079,112
                                                   ------------    ------------
                                                      1,408,471       1,748,526
                                                   ------------    ------------

                              SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 7)                               36,982,307      27,707,597

CONTRIBUTED SURPLUS (Note 7)                          3,428,382       1,541,116

DEFICIT                                             (29,597,304)    (17,577,363)
                                                   ------------    ------------
                                                     10,813,385      11,671,350
                                                   ------------    ------------
                                                     12,221,856      13,419,876
                                                   ============    ============

NATURE OF OPERATIONS (Note 1)
CONTINGENCY (Note 6)
COMMITMENTS (Note 8)
SUBSEQUENT EVENTS (Note 13)

APPROVED BY THE BOARD

/s/ David Horton , Director
-----------------
/s/ R.S. Angus   , Director
-----------------

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


<PAGE>

                                      F-5

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>

                                                                       2004            2003            2002
                                                                         $               $               $
<S>                                                               <C>             <C>             <C>

EXPENSES

Administrative and management services                                  240,084         119,921          51,556
Bank charges and interest                                                10,318          10,319          10,492
Corporate development and investor relations                            290,680         173,693          57,368
Depreciation                                                             26,665          13,257           5,239
General exploration                                                     228,961         226,956         180,321
Office and sundry                                                        70,695          28,542           8,011
Printing                                                                 27,307          22,844           5,131
Professional fees                                                       894,780         198,876          39,759
Rent, parking and storage                                                90,629          35,552          16,625
Salaries and employee benefits                                          313,409          98,202          45,099
Stock based compensation (Note 7)                                     1,972,860       1,487,235          29,506
Telephone and utilities                                                  34,165          18,681           7,906
Transfer agent and regulatory fees                                       57,743          34,078          35,831
Travel and accommodation                                                203,591          52,175          18,516
Cost recoveries (Note 8)                                               (149,271)        (17,290)         (1,380)
                                                                   ------------    ------------    ------------
                                                                      4,312,616       2,503,041         509,980
                                                                   ------------    ------------    ------------
LOSS BEFORE OTHER ITEMS                                              (4,312,616)     (2,503,041)       (509,980)
                                                                   ------------    ------------    ------------
OTHER EXPENSE (INCOME)

Foreign exchange                                                        195,285          12,763           1,936
Reorganization costs (Note 2)                                           346,103               -
Interest and other income                                              (101,589)        (66,561)        (26,585)
Gain on options and disposition of mineral properties                  (328,346)              -               -
Write-down of marketable securities                                      99,762               -               -
                                                                   ------------    ------------    ------------
                                                                        211,215         (53,798)        (24,649)
                                                                   ------------    ------------    ------------
LOSS FROM CONTINUING OPERATIONS                                      (4,523,831)     (2,449,243)       (485,331)

Loss allocated to spin-off assets (Note 2)                              131,232         969,175         954,775
                                                                   ------------    ------------    ------------
LOSS FOR THE YEAR                                                    (4,655,063)     (3,418,418)     (1,440,106)

DEFICIT - BEGINNING OF YEAR                                         (17,577,363)    (14,158,945)    (12,718,839)

DISTRIBUTION OF EQUITY ON SPIN-OFF OF
   ASSETS TO GOLDENARROW (Note 2)                                    (7,364,878)              -               -
                                                                   ------------    ------------    ------------
DEFICIT - END OF YEAR                                               (29,597,304)    (17,577,363)    (14,158,945)
                                                                   ============    ============    ============

BASIC AND DILUTED LOSS PER COMMON SHARE
   FROM CONTINUNG OPERATIONS                                             $(0.11)         $(0.08)         $(0.02)
                                                                   ============    ============    ============

BASIC AND DILUTED LOSS PER COMMON SHARE                                  $(0.11)         $(0.11)         $(0.06)
                                                                   ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDI   G                                       40,939,580      32,251,753      23,188,485
                                                                   ============    ============    ============
</TABLE>

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

<PAGE>

                                      F-6

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>

                                                                       2004            2003            2002
                                                                         $               $               $
<S>                                                               <C>             <C>             <C>

CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Net loss for the year                                                (4,655,063)     (3,418,418)     (1,440,106)
Net loss allocated to spin-off assets                                   131,232         969,175         954,775
                                                                   ------------    ------------    ------------
Net loss from continuing operations                                  (4,523,831)     (2,449,243)       (485,331)
Items not affecting cash
Depreciation                                                             26,665          13,257           5,239
Stock based compensation                                              1,972,860       1,487,235          29,506
Gain on options and disposition of mineral properties                  (328,346)              -               -
Write-down of marketable securities                                      99,762               -               -
                                                                   ------------    ------------    ------------
                                                                     (2,752,890)       (948,751)       (450,586)
Change in non-cash working capital balances                              74,785         182,698         (17,137)
                                                                   ------------    ------------    ------------
                                                                     (2,678,105)       (766,053)       (467,723)
Cash used in spin-off operations                                       (283,629)       (653,496)       (838,488)
                                                                   ------------    ------------    ------------
                                                                     (2,961,734)     (1,419,549)     (1,306,211)
                                                                   ------------    ------------    ------------
INVESTING ACTIVITIES

Expenditures on mineral properties and deferred costs                (4,448,659)     (1,069,228)         (5,090)
Net mineral properties and marketable securities
     cash flow related to spin-off assets                                32,592        (781,533)     (1,261,465)
Purchase of equipment                                                   (93,650)        (21,875)        (11,201)
                                                                   ------------    ------------    ------------
                                                                     (4,509,717)     (1,872,636)     (1,277,756)
                                                                   ------------    ------------    ------------
FINANCING ACTIVITIES

Issuance of common shares                                             9,707,897       6,467,245       3,453,382
Share issuance costs                                                   (411,237)       (188,850)       (189,056)
                                                                   ------------    ------------    ------------
                                                                      9,296,660       6,278,395       3,264,326
                                                                   ------------    ------------    ------------

INCREASE IN CASH AND CASH EQUIVALENTS                                 1,825,209       2,986,210         680,359

CASH TRANSFERRED TO GOLDEN ARROW (Note 2)                            (1,020,189)              -               -
                                                                   ------------    ------------    ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                               805,020       2,986,210         680,359

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                         4,422,334       1,436,124         755,765
                                                                   ------------    ------------    ------------
CASH AND CASH EQUIVALENTS - END OF YEAR                               5,227,354       4,422,334       1,436,124
                                                                   ============    ============    ============

CASH AND CASH EQUIVALENTS IS COMPRISED OF:

CASH                                                                    927,354       1,622,334         631,255
TERM DEPOSITS                                                         4,300,000       2,800,000         804,869
                                                                   ------------    ------------    ------------
                                                                      5,227,354       4,422,334       1,436,124
                                                                   ============    ============    ============
</TABLE>

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


<PAGE>
                                      F-7

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
               CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS
                      FOR THE YEAR ENDED DECEMBER 31, 2004
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>

                                                                                                   GOLDEN ARROW
                                                      NAVIDAD                         SUBTOTAL       RELATED
                                     NAVIDAD           AREAS          IVA TAX         NAVIDAD       PROPERTIES         TOTAL
                                        $                $               $               $               $               $
<S>                              <C>              <C>             <C>             <C>             <C>              <C>

Balance, beginning of year            1,253,391          16,178         199,457       1,469,026       6,744,907       8,213,933
                                  -------------    ------------    ------------    ------------    ------------    ------------
Expenditures during the year

Assays                                  567,364               -               -         567,364           1,702         569,066
Contractors - surveying                 994,912           2,949               -         997,861           2,339       1,000,200
Contractors - environmental             252,201               -               -         252,201          65,166         317,367
Drilling                              1,663,984               -               -       1,663,984               -       1,663,984
Communications                           13,729               -               -          13,729               -          13,729
Supplies                                147,422             529               -         147,951               -         147,951
Statutory fees and taxes                  2,094          19,129               -          21,223               -          21,223
Travel                                   51,583               -               -          51,583               -          51,583
Office                                  170,780           3,657               -         174,437          11,753         186,190
Other                                         -               -               -               -          37,045          37,045
Option payments                          19,595          70,252               -          89,847          12,048         101,895
IVA Tax                                       -               -         468,479         468,479               -         468,479
                                  -------------    ------------    ------------    ------------    ------------    ------------
                                      3,883,664          96,516         468,479       4,448,659         130,053       4,578,712
                                  -------------    ------------    ------------    ------------    ------------    ------------
Balance, before transfer              5,137,055         112,694         667,936       5,917,685       6,874,960      12,792,645

Future income tax (Note 9)              633,913               -               -         633,913               -         633,913

Property transfer to Golden Arrow             -               -               -               -      (6,874,960)     (6,874,960)
                                  -------------    ------------    ------------    ------------    ------------    ------------
Balance, end of year                  5,770,968         112,694         667,936       6,551,598               -       6,551,598
                                  =============    ============    ============    ============    ============    ============

</TABLE>







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


<PAGE>
                                      F-8


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
               CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS
                      FOR THE YEAR ENDED DECEMBER 31, 2003
                         (EXPRESSED IN CANADIAN DOLLARS)



<TABLE>
<CAPTION>

                                                                                                   GOLDEN ARROW
                                                      NAVIDAD                         SUBTOTAL       RELATED
                                     NAVIDAD           AREAS          IVA TAX         NAVIDAD       PROPERTIES         TOTAL
                                        $                $               $               $               $               $
<S>                              <C>              <C>             <C>             <C>             <C>              <C>

Balance, beginning of year                5,090               -         143,528         148,618       6,707,184       6,855,802
                                  -------------    ------------    ------------    ------------    ------------    ------------

Expenditures during the year

Assays                                   62,232               -               -          62,232          36,911          99,143
Contractors - surveying                 113,518               -               -         113,518          19,751         133,269
Contractors - environmental              40,664               -               -          40,664         105,145         145,809
Drilling                                222,259               -               -         222,259         191,923         414,182
Geological                              467,569               -               -         467,569         245,659         713,228
Statutory fees and taxes                  2,900          16,178               -          19,078         132,963         152,041
Travel                                   37,369               -               -          37,369          48,824          86,193
Office                                   10,791               -               -          10,791         147,065         157,856
Other                                    39,819               -               -          39,819          37,651          77,470
Option payments                               -               -               -               -         147,348         147,348
IVA Tax                                       -               -          55,929          55,929               -          55,929
                                  -------------    ------------    ------------    ------------    ------------    ------------
                                        997,121          16,178          55,929       1,069,228       1,113,240       2,182,468
                                  -------------    ------------    ------------    ------------    ------------    ------------
Balance, before adjustments           1,002,211          16,178         199,457       1,217,846       7,820,424       9,038,270

Future income tax (Note 9)              251,180               -               -         251,180          71,037         322,217

Cost recoveries                               -               -               -               -        (346,947)       (346,947)

Write-off mineral properties                  -               -               -               -        (776,626)       (776,626)

Proceeds on sale of mineral
   properties                                 -               -               -               -         (22,981)        (22,981)
                                  -------------    ------------    ------------    ------------    ------------    ------------
Balance, end of year                  1,253,391          16,178         199,457       1,469,026       6,744,907       8,213,933
                                  =============    ============    ============    ============    ============    ============


</TABLE>










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



<PAGE>
                                      F-9

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



1.       NATURE OF OPERATIONS

         The Company is a natural  resource  company  engaged in the business of
         acquisition,  exploration  and  development  of mineral  properties  in
         Argentina. 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 fiscal year but currently  does not have
         sufficient  working capital to fund all of its planned  exploration and
         development  work.  The Company will  continue to rely on  successfully
         completing additional equity financing.


2.       SPIN-OFF OF ASSETS

         On July 7, 2004, the Company completed a corporate  restructuring  plan
         (the "Reorganization")  which resulted in dividing the Company's assets
         and   liabilities   into  two   separate   companies.   Following   the
         Reorganization the Company continued to hold the Navidad project, while
         all other mineral property interests, certain marketable securities and
         cash were  spun-off  to Golden  Arrow  Resources  Corporation  ("Golden
         Arrow"), a newly created company. The Navidad Property,  located in the
         province  of Chubut  Argentina,  was staked by the Company in late 2002
         and  continues  to be  the  focus  of  the  Company's  activities.  The
         Reorganization  of the Company was  accomplished  by way of a statutory
         plan of arrangement. The shareholders of the Company were issued shares
         in Golden  Arrow on the basis of one Golden  Arrow share for ten shares
         of the  Company.  On  completion  of the  Reorganization,  the  Company
         transferred to Golden Arrow:

         i)       all of the  Company's  investment  in its mineral  properties,
                  excluding the Navidad and Navidad Area  properties and related
                  future income tax liabilities;
         ii)      the assets and  liabilities  of IMPSA  Resources  (BVI)  Inc.,
                  Inversiones  Mineras  Argentinas  Holdings  (BVI)  Inc.,  both
                  wholly-owned  subsidiaries of the Company, and IMPSA Resources
                  Corporation, an 80.69% owned subsidiary of the Company;
         iii)     certain  marketable  securities at their recorded values;  iv)
                  cash and cash equivalents

         The aggregate  carrying amount of the net assets  transferred  from the
         Company to Golden Arrow is as follows:
                                                                   DECEMBER 31,
                                                       2004            2003
                                                         $               $

         Cash and cash equivalents                    1,020,189          31,908

         Marketable securities and other current
            assets and liabilities                      548,841         536,291

         Mineral properties and deferred cost
            and equipment                             6,874,960       6,749,193

         Future income tax liabilities               (1,079,112)     (1,079,112)
                                                   ------------    ------------
                                                      7,364,878       6,238,280
                                                   ============    ============

<PAGE>
                                      F-10

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



2.       SPIN-OFF OF ASSETS (continued)

         The Company's  Statement of Loss and Deficit  includes an allocation of
         General  and  Administrative  Expenses  as Loss  allocated  to spin-off
         assets.  The allocation was calculated on the basis of the ratio of the
         specific assets  transferred to assets retained.  Certain "Other Income
         and Expense" items have been allocated to spin-off  assets on the basis
         of the nature of the income or expense.


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 United States
         generally accepted accounting principles ("US GAAP") as they affect the
         Company are disclosed in Note 11.

         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 assessment
         of mineral properties and deferred cost carrying values. Actual results
         may differ from these estimates.

         PRINCIPLES OF CONSOLIDATION

         These  consolidated  financial  statements  include the accounts of the
         Company and all its  subsidiaries,  all of which are wholly owned.  The
         Company's principal  subsidiary is Inversiones Mineras Argentinas S.A..
         All inter-company 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 initial investment.

         MARKETABLE SECURITIES

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

         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


<PAGE>
                                      F-11

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         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  then the costs are  written-off,  or if its
         carrying  value has been  impaired,  then the costs are written down to
         fair value.

         The  Company  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,  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. After costs are recovered the balance of the payments
         are recorded as a gain on option or disposition of mineral property.

         EQUIPMENT

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

         ASSET RETIREMENT OBLIGATIONS

         The fair value of a liability  for an asset  retirement  obligation  is
         recognized  when a reasonable  estimate of fair value can be made.  The
         asset  retirement  obligation is recorded  initially at fair value as a
         liability with a  corresponding  increase to the carrying amount of the
         related  long-lived  asset.  In  subsequent  periods,  the liability is
         adjusted for the accretion of discount and any changes in the amount or
         timing of the underlying cash flows. The related asset is adjusted only
         as a result of changes in the amount or timing of the  underlying  cash
         flows. The capitalized asset retirement cost is depreciated on the same
         basis  as  the  related  asset;   discount  accretion  is  included  in
         determining  the results of  operations.  As at December 31, 2004,  the
         Company does not have any asset retirement obligations.

         LONG-LIVED ASSETS IMPAIRMENT

         Long-lived assets are reviewed for impairment when events or changes in
         circumstances   suggest  their  carrying  value  has  become  impaired.
         Management  considers  assets  to be  impaired  if the  carrying  value
         exceeds  the  estimated  undiscounted  future  projected  cash flows to
         result  from the use of the  asset  and its  eventual  disposition.  If
         impairment is deemed to exist,  the assets will be written down to fair
         value. Fair value is generally  determined using a discounted cash flow
         analysis.



<PAGE>
                                      F-12

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         TRANSLATION OF FOREIGN CURRENCIES

         The Company's  foreign  operations  are  integrated  and are 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 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 the
         short-term  nature of those  instruments.  As of December 31, 2004, the
         market value of marketable securities was $270,000 (2003 - $1,032,546).

         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. Potential
         future income tax assets are not recognized, as they are not considered
         likely to be realized.

         LOSS PER SHARE

         Loss per share is calculated  based on the weighted  average  number of
         common shares  issued and  outstanding  during the year.  The effect of
         potential  issuances  of shares  under  options and  warrants  would be
         anti-dilutive  and therefore basic and diluted losses per share are the
         same.  Information  regarding  securities that could potentially dilute
         basic earnings per share in the future is presented in Note 7.

         STOCK BASED COMPENSATION

         Effective  January 1,  2003,  the  Company  prospectively  adopted  the
         requirements of CICA Handbook Section 3870. Stock-based compensation is
         accounted for at fair value as determined by the  Black-Scholes  option
         pricing  model  using  amounts  that are  believed to  approximate  the
         volatility of the trading price of the  Company's  stock,  the expected
         lives of  awards of  stock-based  compensation,  the fair  value of the
         Company's  stock and the risk-free  interest  rate.  The estimated fair
         value of awards of  stock-based  compensation  is charged to expense as
         awards vest, with offsetting amounts recognized as contributed surplus.


<PAGE>
                                      F-13

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         COMPARATIVE FIGURES

         Certain of the 2003 and 2002 fiscal year figures have been reclassified
         to conform with the presentation used in fiscal 2004.


4.       MARKETABLE SECURITIES
<TABLE>
<CAPTION>

                                                                               2004                            2003
                                                                   ----------------------------    ----------------------------
                                                                                      QUOTED                          QUOTED
                                                                     RECORDED         MARKET         RECORDED         MARKET
                                                                      VALUE           VALUE           VALUE           VALUE
                                                                         $               $               $               $
                                                                   ----------------------------    ----------------------------
        <S>                                                       <C>             <C>             <C>             <C>

         Tinka Resources - 300,000 common shares                         96,000         180,000               -               -
         Cons Pacific Bay Minerals - 900,000 common shares               90,000          90,000               -               -
         Ballad Gold & Silver Ltd. - 500,000 common shares                    -               -         250,000         325,000
         Amera Resources Corp. - 600,000 common shares                        -               -         270,000         546,000
         Other                                                                -               -          23,460         161,546
                                                                   ------------    ------------    ------------    ------------
                                                                        186,000         270,000         543,460       1,032,546
                                                                                                                   ============
         Less amounts allocated to spin-off assets transferred                -               -        (543,460)
                                                                   ------------    ------------    ------------
                                                                        186,000         270,000               -
                                                                   ============    ============    ============
</TABLE>

         The Company has entered into option and sale  agreements  on certain of
         its non-core  mineral  property  holdings in which the Company received
         common shares of  publicly-traded  companies as partial  consideration.
         All  securities  associated  with  option and sale  agreements  for all
         properties,  other  than  Navidad  and  Navidad  area  properties  were
         transferred  to Golden  Arrow  with a  recorded  value of  $543,460  at
         December 31, 2003 (see Note 2).


5.       EQUIPMENT AND LEASHOLD IMPROVEMENTS

                                                       2004            2003
                                                   ------------    ------------
                                                         $               $

         Office equipment and computers                 231,724         179,425
         Leasehold improvements                          96,634          62,812
                                                   ------------    ------------
                                                        328,358         242,237
         Less: Accumulated depreciation                (234,256)       (206,051)
                                                   ------------    ------------
                                                         94,102          36,186
                                                   ============    ============




<PAGE>
                                      F-14

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



6.       CONTINGENCY

         In March 2004, Aquiline Resources Inc. ("Aquiline") commenced an action
         against  the  Company,  seeking a  constructive  trust over the Navidad
         properties and damages.  The Company believes the Aquiline legal action
         is without  merit and continues to vigorously  defend  itself.  A trial
         date has been  scheduled  for October 2005. At this date the outcome is
         not determinable.  The Company has not made any provision for costs for
         which it might become liable in what management  considers the unlikely
         event of an adverse judgment.


7.       SHARE CAPITAL

         Authorized   - unlimited  common shares without par value
                      - 100,000,000 preferred shares without par value

         Issued - common shares
                                                      NUMBER             $
                                                   ------------    ------------

         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

         Private placement                            2,900,000       2,610,000
         Exercise of options                          1,855,850         895,859
         Exercise of warrants                         4,969,066       2,940,428
         Exercise of agent's options                    105,930          95,337
         Less share issue costs                               -       (188,850)
                                                   ------------    ------------
         Balance, December 31, 2003                  36,381,452      27,707,597

         Private placements                           1,500,000       4,650,000
         Exercise of options                            441,650         597,910
         Exercise of agents' options                    121,820         184,838
         Contributed surplus reallocated
            on exercise of options                            -         226,630
         Exercise of warrants                         5,371,285       4,275,149
         Proceeds collected and paid on behalf
            of Golden Arrow shares                            -       (107,544)
         Less share issue costs                               -       (552,273)
                                                   ------------    ------------
         Balance, December 31, 2004                  43,816,207      36,982,307
                                                   ============    ============

         (a)      During fiscal 2004, the Company  completed a brokered  private
                  placement of 1,500,000 units at $3.10 per unit for proceeds of
                  $4,238,763,  net of $339,000 agent's commission and $72,237 of
                  related issue costs.  Each unit  consisted of one common share
                  and one half  non-transferable  share purchase  warrant.  Each
                  whole  warrant  entitles the holder to purchase a common share
                  for  $3.70  per  share on or before  February  23,  2005.  The
                  Company also issued 200,000  compensation options to the agent
                  to  acquire  200,000  shares at $3.25  per  share and  100,000
                  warrants at $3.70 per share on or before  February  23,  2005.
                  The  compensation  options  granted  were valued at $0.705 per
                  option using the  Black-Scholes  Option Pricing  Model,  for a
                  total  value of  $141,036,  which has been  recorded  as share
                  issue  costs  with a  corresponding  increase  to  contributed
                  surplus.  At December 31, 2004, a total of 32,000 compensation
                  options   had  been   exercised.   The   balance   of  168,000
                  compensation   options  were   exercised   subsequent  to  the
                  year-end.


<PAGE>
                                      F-15

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



7.       SHARE CAPITAL (continued)

         (b)      During fiscal 2003, the Company  completed a brokered  private
                  placement  for  2,900,000  units at a price of $0.90 per unit,
                  for cash proceeds of  $2,421,150,  net of share issue costs of
                  $188,850.  Each  unit  consisted  of one  common  share of the
                  Company and one-half  non-transferable  common share  purchase
                  warrant. One whole warrant entitles the holder to purchase one
                  common share for the  exercise  price of $1.10 per share on or
                  before April 28, 2004.  Certain  officers and directors of the
                  Company purchased 445,000 units of the private placement.

         (c)      During  fiscal  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  entitled  the  holder  to
                         purchase an  additional  common  share for the exercise
                         price of $0.45 on or before March 31, 2003. The Company
                         also issued agents  warrants to purchase  63,700 common
                         shares at a price of $0.45 on or before March 31, 2003;

                  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.
                         The Company also issued 11,111 shares to the agents, at
                         a price of $0.45 per share.  The  Company  also  issued
                         agents warrants to purchase  355,556 common shares at a
                         price of $0.54 per share on or before April 9, 2003;

                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  entitled  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.
                         Certain directors  purchased 191,111 units. The Company
                         also issued agents  warrants to purchase  66,666 common
                         shares at a price of $0.53  per share on or before  May
                         23, 2003; and

                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  entitled  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. Certain
                         directors  purchased  325,000  units.  The Company also
                         issued agents warrants to purchase 37,496 common shares
                         at a price of $0.50 per  share on or  before  September
                         27, 2003.

                v)       In connection  with the financing,  the Company granted
                         the agent an option to  purchase  195,750  units on the
                         same  basis and  terms as the  private  placement.  The
                         agent has exercised  options to purchase 195,750 units,
                         for $176,175 cash.

         (d)      Stock options and stock based compensation

                  The  Company  grants  stock  options  in  accordance  with the
                  policies  of the TSX  Venture  Exchange  ("TSXV").  The  stock
                  options  vest over  periods that vary from three months to one
                  year.  A  summary  of the  Company's  outstanding  options  at
                  December 31, 2004, 2003 and 2002 and the changes for the years
                  ending on those dates is presented below:


<PAGE>
                                      F-16

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


7.       SHARE CAPITAL (continued)
<TABLE>
<CAPTION>

                                   ----------------------------    ----------------------------    ----------------------------
                                               2004                            2003                            2002
                                   ----------------------------    ----------------------------    ----------------------------
                                     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   2,528,150        1.32           2,465,500        0.44           1,635,500        0.40

                  Granted             1,512,000        3.14           1,918,500        1.60           1,050,000        0.50
                  Exercised            (441,650)       1.14          (1,855,850)       0.44            (170,000)       0.40
                  Cancelled             (30,000)       3.10                   -           -             (50,000)       0.40
                                   ------------                    ------------                    ------------
                  Balance,
                  End of year         3,568,500        2.10           2,528,150        1.32           2,465,500        0.44
                                   ============                    ============                    ============

</TABLE>

                  Stock options outstanding and exercisable at December 31, 2004
                  are as follows:

                  -------------------------------------------------------------
                     NUMBER            EXERCISE PRICE        EXPIRY DATE
                                              $
                  -------------------------------------------------------------
                      205,000                0.40            July 19, 2006
                      119,000                0.50            May 2, 2007
                      117,500                0.50            September 23, 2007
                       90,000                0.84            March 7, 2008
                      300,000                0.90            May 30, 2008
                    1,305,000                1.87            August 27, 2008
                    1,382,000                3.10            March 24, 2009
                       50,000                4.20            December 01, 2009
                   ----------
                    3,568,500
                   ==========

                  During  fiscal  2004,  the  Company  granted  1,512,000  stock
                  options (2003 - 1,918,500:  2002 - 1,050,000).  The fair value
                  of stock  options  granted is estimated on the dates of grants
                  using  the   Black-Scholes   Option  Pricing  Model  with  the
                  following  assumptions  used for the  grants  made  during the
                  year:
<TABLE>
<CAPTION>

                                               2004            2003             2002
                <S>                        <C>           <C>               <C>

                  Risk-free interest rate      2.38%       3.76% - 4.16%     3.89% - 4.25%
                  Estimated volatility          77%          74% - 78 %        73% - 87%
                  Expected life              2.5 years       2.5 years         2.5 years
                  Expected dividend yield        0%              0%                0%
</TABLE>

                  The weighted  average  fair value per share of stock  options,
                  calculated  using  the  Black-Scholes  Option  Pricing  Model,
                  granted  during  the year was $1.28  per share  (2003 - $0.63,
                  2002 -  $0.26).  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.



<PAGE>
                                      F-17

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



7.       SHARE CAPITAL (continued)

                  During fiscal 2002, the Company  granted 540,000 stock options
                  to its employees and directors and applied the intrinsic value
                  based method of accounting.  Had the Company followed the fair
                  value based method of accounting  in fiscal 2002,  the Company
                  would have  recorded  an  additional  compensation  expense of
                  $140,840  in respect of its  employees  and  directors'  stock
                  options.   Pro-forma  loss  and  loss  per  share  information
                  determined  under the fair value  method in fiscal 2002 are as
                  follows:

                                                                         $

                  Net loss for fiscal 2002
                      - 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)


         (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,  2004,  2003  and  2002 and the
                  changes for the years ending on those dates is as follows:
<TABLE>
<CAPTION>

                                                       2004            2003            2002
                                                   ------------    ------------    ------------
                <S>                               <C>             <C>             <C>

                  Balance, beginning of year          6,042,448       9,511,550       6,588,967

                  Issued                                810,909       1,502,965       5,007,944
                  Exercised                          (5,371,285)     (4,969,066)     (2,085,361)
                  Cancelled                             (38,955)              -               -
                  Expired                               (21,100)         (3,001)              -
                                                   ------------    ------------    ------------
                  Balance, end of year                1,422,017       6,042,448       9,511,550
                                                   ============    ============    ============
</TABLE>

                  Common shares reserved pursuant to warrants and agent warrants
                  outstanding at December 31, 2004 are as follows:

                  -------------------------------------------------------------
                     NUMBER            EXERCISE PRICE        EXPIRY DATE
                                              $
                  -------------------------------------------------------------

                      663,667                0.90            March 16, 2005
                      758,350                3.70            February 23, 2005
                  -----------
                    1,422,017
                  ===========




<PAGE>
                                      F-18

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



8.       RELATED PARTY TRANSACTIONS

         (a)      During  fiscal  2004,   the  Company  paid  $476,226  (2003  -
                  $330,600;  2002 -  $136,276)  to  directors  and  officers  or
                  companies controlled by directors and officers of the Company,
                  for accounting, management and consulting services provided.

         (b)      The Company has  agreements  with a company  controlled by the
                  wife of the  President of the Company for the rental of office
                  premises. During fiscal 2004, the Company paid $74,870 (2003 -
                  $60,924; 2002 - $60,924) for rent.

         (c)      The Company shares its office  facilities with Amera Resources
                  Corporation  "Amera" and Golden Arrow. All three companies are
                  public companies with common  management.  During fiscal 2004,
                  the Company received  $66,390 (2003 - $35,110;  2002 - $6,000)
                  from  Amera and  $57,000  (2003 and 2002 - $Nil)  from  Golden
                  Arrow for shared rent and administration costs.

         (d)      The  President  of the  Company  provides  his  services  on a
                  full-time  basis  under  a  contract  with a  private  company
                  controlled by the  President.  The President is paid an annual
                  amount of $102,000.  The contract also  provides  that, in the
                  event the  services  are  terminated  without  cause or upon a
                  change in control of the Company, a termination  payment would
                  include a bonus of $6,500  per month,  retroactive  to July 1,
                  1999,  plus an  additional  three  years  of  compensation  at
                  $15,000 per month. If the termination had occurred on December
                  31, 2004, the amount under the agreement would be $969,000.

         (e)      Other related party  transactions  are disclosed  elsewhere in
                  these consolidated financial statements.


9.       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>

                                                       2004            2003            2002
                                                         $               $               $
        <S>                                       <C>             <C>             <C>

         Statutory tax rate                              35.62%          37.62%          39.62%
                                                   ============    ============    ============

         Loss for the year                           (4,655,063)     (3,418,418)    (1,440,106)
                                                   ============    ============    ============

         Provision for income taxes based on
            statutory Canadian combined federal
               and provincial income tax rates       (1,658,133)     (1,286,009)       (570,570)

         Differences in foreign tax rates              (114,390)       (383,116)         (4,234)

         Losses for which an income tax benefit
            has not been recognized                   1,722,523       1,669,125         574,804
                                                   ------------    ------------    ------------
                                                              -               -               -
                                                   ============    ============    ============
</TABLE>



<PAGE>
                                      F-19

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


9.       INCOME TAXES (continued)

         The  significant  components of the Company's  future tax assets are as
         follows:

                                                       2004            2003
                                                         $               $

         Future income tax assets
            Financing costs                             192,369         116,985
            Operating loss carryforward               3,594,455       4,051,130
                                                   ------------    ------------
                                                      3,786,824       4,168,115
         Valuation allowance for future tax assets   (3,786,824)     (4,168,115)
                                                   ------------    ------------
                                                              -               -
                                                   ============    ============

         Future Income Tax Liabilities

         For  certain  acquisitions  and other  payments  for  mineral  property
         interests,  the Company  records a future  income tax  liability  and a
         corresponding  adjustment to the related asset carrying amount.  During
         the year ended December 31, 2004, the Company  recorded a future income
         tax  liability  of  $633,913  (2003  -  $251,180)  and a  corresponding
         adjustment to mineral properties.

                                                       2004            2003
                                                         $               $

         Future income tax liabilities                  885,093         251,180
                                                   ============    ============

         The Company has Canadian  non-capital loss  carryforwards of $9,998,489
         that may be available for tax purposes. The losses expire as follows:


                        EXPIRY DATE                      $

                            2005                      1,173,356
                            2006                      1,255,915
                            2007                      1,261,932
                            2008                        841,160
                            2009                      1,317,729
                            2010                      1,545,964
                            2014                      2,602,433
                                                   ------------
                                                      9,998,489
                                                   ============




<PAGE>
                                      F-20

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



10.      SEGMENTED INFORMATION

         The  Company  is  involved  in  mineral   exploration  and  development
         activities,  which are conducted principally in Argentina.  The Company
         is in the exploration stage and, accordingly, has no reportable segment
         revenues or operating results for each of fiscal 2004, 2003 and 2002.

         The Company's total assets are segmented geographically as follows:
<TABLE>
<CAPTION>

                                                   ------------------------------------------------------------
                                                                               2004
                                                   ------------------------------------------------------------
                                                     CORPORATE       ARGENTINA         PERU            TOTAL
                                                         $               $               $               $
                                                   ------------------------------------------------------------
        <S>                                       <C>             <C>             <C>             <C>

         Current assets                               5,438,079         138,077               -      5,576,156
         Equipment                                       93,177             925               -         94,102
         Mineral properties and deferred costs                -       6,551,598               -      6,551,598
                                                   ------------    ------------    ------------    ------------
                                                      5,531,256       6,690,600               -     12,221,856
                                                   ============    ============    ============    ============
</TABLE>
<TABLE>
<CAPTION>

                                                   ------------------------------------------------------------
                                                                               2003
                                                   ------------------------------------------------------------
                                                     CORPORATE       ARGENTINA         PERU            TOTAL
                                                         $               $               $               $
                                                   ------------------------------------------------------------
        <S>                                       <C>             <C>             <C>             <C>

         Current assets                               5,075,092          65,637          24,742       5,165,471
         Equipment                                       28,974           7,032           4,466          40,472
         Mineral properties and deferred costs                -       4,406,421       3,807,512       8,213,933
                                                   ------------    ------------    ------------    ------------
                                                      5,104,066       4,479,090       3,836,720      13,419,876
                                                   ============    ============    ============    ============
</TABLE>




<PAGE>
                                      F-21

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



11.      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 effects of 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>

                                                                   --------------------------------------------
                                                                       2004            2003            2002
                                                                         $               $               $
                                                                   --------------------------------------------
        <S>                                                       <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF OPERATIONS

         Loss for the year under Canadian GAAP                       (4,655,063)     (3,418,418)     (1,440,106)
         Mineral properties and deferred costs for the year (i)      (5,212,625)     (2,134,757)     (1,551,841)
         Future income tax recovery (i)                                 633,913         322,217         285,286
         Write down of marketable securities                             99,762               -               -
         Mineral properties and deferred costs written off                    -
              during the year which would have been
              expensed in the year incurred (i)                                         776,626               -
         Stock-based compensation (iii)                                       -        (144,000)       (102,150)
                                                                   ------------    ------------    ------------
         Loss for the year under US GAAP                             (9,134,013)     (4,598,332)     (2,808,811)
         Unrealized gains (losses) on available-for-
              sale securities (ii)                                     (387,160)        434,346          54,740
                                                                   ------------    ------------    ------------
         Comprehensive loss (iv)                                     (9,521,173)     (4,163,986)     (2,754,071)
                                                                   ============    ============    ============

         Basic and diluted loss per share under US GAAP                   (0.22)          (0.14)          (0.12)
                                                                   ============    ============    ============

         Weighted average number of common shares outstanding        40,939,580      32,251,753      23,188,485
                                                                   ============    ============    ============
</TABLE>
<TABLE>
<CAPTION>

                                                                   ----------------------------
                                                                       2004             2003
                                                                         $                $
                                                                   ----------------------------
        <S>                                                       <C>             <C>

         SHAREHOLDERS' EQUITY

         Balance per Canadian GAAP                                   10,813,385      11,671,350
         Mineral properties and deferred costs expensed (i)          (6,551,598)     (8,213,933)
         Future income tax recovery (i)                                 885,093       1,330,292
         Accumulated other comprehensive income (ii)                     84,000         489,086
                                                                   ------------    ------------
         Balance per US GAAP                                          5,230,880       5,276,795
                                                                   ============    ============
</TABLE>



<PAGE>
                                      F-22

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


11.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)
                                                   ----------------------------
                                                       2004            2003
                                                         $               $
                                                   ----------------------------

         MINERAL PROPERTIES AND DEFERRED COSTS

         Balance per Canadian GAAP                    6,551,598       8,213,933
         Mineral properties and deferred costs
              expensed under US GAAP (i)             (6,551,598)     (8,213,933)
                                                   ------------    ------------
         Balance per US GAAP                                  -               -
                                                   ============    ============

                                                   ----------------------------
                                                       2004            2003
                                                         $               $
                                                   ----------------------------

         FUTURE INCOME TAX LIABILITY

         Balance per Canadian GAAP                      885,093       1,330,292
         Future income tax recovery (i)                (885,093)     (1,330,292)
                                                   ------------    ------------
         Balance per US GAAP                                  -               -
                                                   ============    ============

<TABLE>
<CAPTION>

                                                   --------------------------------------------
                                                       2004            2003            2002
                                                         $               $               $
                                                   --------------------------------------------
        <S>                                       <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF CASH FLOWS

         OPERATING ACTIVITIES

         Cash used per Canadian GAAP                 (2,961,734)     (1,419,549)     (1,306,211)
         Mineral properties and deferred costs (i)   (4,578,712)     (1,850,761)     (1,266,555)
                                                   ------------    ------------    ------------
         Cash used per US GAAP                       (7,540,446)     (3,270,310)     (2,572,766)
                                                   ============    ============    ============

         INVESTING ACTIVITIES

         Cash used per Canadian GAAP                 (4,509,717)     (1,872,636)     (1,277,756)
         Mineral properties and deferred costs (i)    4,578,712       1,850,761       1,266,555
                                                   ------------    ------------    ------------
         Cash used per US GAAP                           68,995         (21,875)        (11,201)
                                                   ============    ============    ============
</TABLE>

         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  and in  addition  has a related  future  income  tax
                  recovery. 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


<PAGE>
                                      F-23

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


11.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  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  accounted 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"
                  until December 31,  2003.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.

                  During  fiscal  2004,  for US GAAP  purposes,  the Company has
                  adopted the fair based method of  accounting  for  stock-based
                  compensation  on a modified  prospective  basis in  accordance
                  with FAS 148. This  application  is consistent  with the early
                  application  of  CICA  3870  under  Canadian  GAAP  (Note  3).
                  Accordingly, effective January 1, 2004, there is no difference
                  on accounting for stock-based  compensation under Canadian and
                  US GAAP.

         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)       Spin-Off of Assets to Golden Arrow

                  Under  Canadian GAAP a spin-off of assets is accounted for and
                  disclosed  in  accordance  with  CICA  Handbook  Section  3475
                  "Disposal of Long-Lived  Assets and Discontinued  Operations".
                  Under US GAAP,  such a  spin-off  would be  accounted  for and
                  disclosed as a dividend in kind and would not require separate
                  carve-out of results in the  statements of operations and cash
                  flows nor separate balance sheet classification.


<PAGE>
                                      F-24

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


11.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

         vi)      Recent Accounting Pronouncements

                  Consolidation of Variable Interest Entities

                  In January 2003, the Financial  Accounting  Standards Board or
                  "FASB" issued Interpretation No. 46, Consolidation of Variable
                  Interest   Entities,   and  an  Interpretation  of  Accounting
                  Research  Bulletin  No.  51  ("FIN  46").  FIN 46  establishes
                  accounting  guidance for  consolidation  of variable  interest
                  entities  by the  primary  beneficiary.  FIN 46 applies to any
                  business enterprise, public or private, that has a controlling
                  interest,   contractual   relationship   or   other   business
                  relationship  with a variable  interest  entity.  In  December
                  2003,  the FASB  issued  Interpretation  No.  46R ("FIN 46 R")
                  which  supersedes  FIN 46 and is  effective  for all  Variable
                  Interest  Entities  ("VIEs") created after February 1, 2003 at
                  the end of the first interim or annual reporting period ending
                  December 15, 2003.  FIN 46 R is applicable to all VIEs created
                  prior to February 1, 2003 by public entities at the end of the
                  first  interim or annual  reporting  period ending after March
                  15, 2004. The Company has determined that it has no VIEs.

                  In June  2003,  the  CICA  issued a new  accounting  guideline
                  ACG-15, "Consolidation of Variable Interest Entities" which is
                  effective for interim and annual periods beginning on or after
                  November 1, 2004. ACG-15  harmonizes the accounting  treatment
                  for  variable  interest  entities  with the US GAAP  treatment
                  under FIN 46R.

                  Exchanges of Non-Monetary Assets

                  In December  2004,  the FASB issued  Statement  No. 153 ("SFAS
                  153")  "Exchanges of Non-monetary  Assets".  SFAS 153 replaces
                  guidance   previously   issued   under  APB  Opinion  No.  29,
                  "Accounting for Non-monetary Transactions", which was based on
                  the principle that exchanges of non-monetary  assets should be
                  measured based on the fair value of the assets exchanged.  The
                  guidance in that Opinion, however, included certain exceptions
                  to that principle. SFAS 153 amends Opinion 29 to eliminate the
                  exception  for  non-monetary  exchanges of similar  productive
                  assets and replaces it with a general  exception for exchanges
                  of non-monetary assets that do not have commercial  substance.
                  A non-monetary exchange has commercial substance if the future
                  cash flows of the entity are expected to change  significantly
                  as a  result  of  the  exchange.  SFAS  153 is  effective  for
                  non-monetary  exchanges  occurring in fiscal periods beginning
                  after  June 15,  2005.  The  Company  will  comply  with  this
                  guidance for any non-monetary transactions after the effective
                  date for U.S. GAAP purposes.

                  Whether Mineral Rights are Tangible or Intangible Assets

                  Effective  for  reporting  periods  beginning  after April 29,
                  2004,  the EITF released Issue 04-2,  "Whether  Mineral Rights
                  are Tangible or  Intangible  Assets".  The  consensus was that
                  mineral rights acquired on a business combination are tangible
                  assets  and should be  recorded  as a  separate  component  of
                  property,  plant  and  equipment  either  on the  face  of the
                  financial statements or in the notes. The Company has not been
                  involved  to date in a business  combination  but will  comply
                  with the Issue in the future as required.



<PAGE>
                                      F-25

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


11.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  Mining Assets:  Impairment and Business Combinations

                  Effective  for  reporting  periods  beginning  after March 31,
                  2004,  the EITF  released  Issue  No.  04-3,  "Mining  Assets:
                  Impairment  and  Business  Combinations".   The  EITF  reached
                  consensus  that an entity  should  include value beyond proven
                  and probable  reserves in the value allocated to mining assets
                  in  a  purchase  price  allocation  to  the  extent  a  market
                  participant  would include such value in determining  the fair
                  market  value of the asset.  The EITF also  reached  consensus
                  that an entity  should  include  the  effects  of  anticipated
                  changes in market prices of minerals when determining the fair
                  market value of mining assets in a purchase  price equation in
                  a manner consistent with expectations of the marketplace.

                  An entity should also include cash flows associated with value
                  beyond  proven and  probable  reserves in  estimates of future
                  cash flows for determining if a mining asset is impaired under
                  SFAS 144. An entity  should also  anticipate  fluctuations  in
                  market prices when determining these cash flows.

                  The  Company  will  comply  with  this  Issue  for any  future
                  business combinations and impairment reviews.

                  Financial Instruments

                  On January  27,  2005,  the CICA  issued  Section  3855 of the
                  Handbook  titled  "Financial  Instruments  -  Recognition  and
                  Measurement".  It expands  Handbook  section 3860,  "Financial
                  Instruments - Disclosure and Presentation" by prescribing when
                  a  financial  instrument  is to be  recognized  on the balance
                  sheet and at what  amount.  It also  specifies  how  financial
                  instrument gains and losses are to be presented. All financial
                  instruments  will be required to be  classified  into  various
                  categories. Held to maturity investments loans and receivables
                  are measured at amortized cost with amortization of premium or
                  discounts and losses and impairment included in current period
                  interest income or expense.  Held for trading financial assets
                  and  liabilities  are  measured at fair market  value with all
                  gains and losses included in net income in the period in which
                  they  arise.  All  available  for sale  financial  assets  are
                  measured  at fair  market  value  with  revaluation  gains and
                  losses included in other comprehensive  income until the asset
                  is  removed  from the  balance  sheet  except  that other than
                  temporary losses due to impairment are included in net income.
                  All other financial liabilities are to be carried at amortized
                  cost. This new Handbook  section will bring Canadian GAAP more
                  in line with U.S.  GAAP.  The mandatory  effective date is for
                  fiscal  years  beginning  on or after  October 1,  2006,  with
                  optional early  recognition  for fiscal years  beginning on or
                  after  December  31,  2004.  At present,  the  Company's  most
                  significant   financial   instruments   are   cash,   accounts
                  receivable  and accounts  payable.  This new section  requires
                  little   difference   in   accounting   for  these   financial
                  instruments from current standards.

                  Hedge Accounting

                  New  Handbook  Section  3865,  "Hedges"  provides  alternative
                  treatments to Handbook  Section 3855 for entities which choose
                  to designate qualifying  transactions as hedges for accounting
                  purposes.  The  effective  date of this  section is for fiscal
                  years  beginning on or after  October 1, 2006,  with  optional
                  early  recognition  for  fiscal  years  beginning  on or after
                  December 31, 2004.

                  The Company does not currently have any hedging relationships.





<PAGE>
                                      F-26

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



11.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  Comprehensive Income

                  New Handbook Section 1530, "Comprehensive Income",  introduces
                  a new  requirement  to temporarily  present  certain gains and
                  losses outside of income.  Section 1530 defines  comprehensive
                  income as a change in value of net  assets  that is not due to
                  owner activities.  Assets that are classified as available for
                  sale will have revaluation  gains and losses included in other
                  comprehensive  income  until  the  asset is  removed  from the
                  balance sheet.

                  At present,  the Company  has  investments  in shares of arm's
                  length  corporations  that may be  classified as available for
                  sale  investments.  The Company would be required to recognize
                  unrealized  gains and losses on these  securities  and include
                  these amounts in comprehensive  income.  The effective date of
                  this section is for fiscal years beginning on or after October
                  1, 2006,  with  optional  early  recognition  for fiscal years
                  beginning on or after  December 31,  2004.  Implementation  of
                  this section will more closely  align  Canadian GAAP with U.S.
                  GAAP.



12.      SUPPLEMENTARY CASH FLOW INFORMATION

         Non-cash  investing  and  financing  activities  were  conducted by the
         Company as follows:
<TABLE>
<CAPTION>

                                                                   --------------------------------------------
                                                                       2004            2003            2002
                                                                         $               $               $
                                                                   --------------------------------------------
        <S>                                                       <C>             <C>             <C>

         Investing activities

         Proceeds on disposition of mineral properties                 (252,000)       (272,982)              -
         Acquisition of marketable securities                           252,000         272,982               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
         Financing activities

         Finder's fees payable                                                -               -          (5,000)
         Shares issued for payment of finder's fees                           -               -           5,000
         Shares issued on exercise of options                           204,070          74,379               -
         Contributed surplus                                           (204,070)        (74,379)              -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
</TABLE>




<PAGE>
                                      F-27

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)



13.      SUBSEQUENT EVENTS

         a)       Subsequent to December 31, 2004, the Company:

                  (i)      granted  900,000 stock options for $4.16 per share to
                           its directors, employees and consultants for a period
                           of five years; and

                  (ii)     issued  1,663,517 common shares for $4,267,345 on the
                           exercises of stock options and warrants.

         b)       Effective  January 1, 2005,  the Company  engaged Grosso Group
                  Management  Ltd.,  ("Grosso  Group") to provide  services  and
                  facilities  to the  Company.  As of April 21,  2005,  a formal
                  agreement  among the Company and the Grosso Group has not been
                  finalized.  Until such time as the formal  agreement  has been
                  finalized,  the  Company and the Grosso  Group  intend to work
                  under  the  terms  of  the  proposed  Administration  Services
                  Agreement by and among the Company and the Grosso Group. It is
                  anticipated  that the formal  agreement will have an effective
                  date of January 1, 2005. The Grosso Group is a private company
                  which will be owned by the Company,  Golden  Arrow,  Amera and
                  Gold Point Exploration Ltd., each of which will own one share.
                  The Grosso Group will provide its  shareholder  companies with
                  geological,   corporate   development,    administrative   and
                  management services.


<PAGE>
                                      F-28

                              IMA EXPLORATION INC.
                       MANAGEMENT DISCUSSION AND ANALYSIS
                      FOR THE YEAR ENDED DECEMBER 31, 2004



INTRODUCTION

The following management discussion and analysis and financial review,  prepared
as of  April  21,  2005,  should  be  read in  conjunction  with  the  Company's
consolidated  financial statements and related notes. The consolidated financial
statements  have been prepared in accordance  with Canadian  generally  accepted
accounting  principles  ("Canadian  GAAP").  Except as otherwise  disclosed  all
dollar  figures  in this  report  are  stated in  Canadian  dollars.  Additional
information  relevant  to the  Company  can be found  on the  SEDAR  website  at
www.sedar.com.

FORWARD LOOKING STATEMENTS

Certain information  included in this discussion may constitute  forward-looking
statements.  Forward-looking  statements are based on current  expectations  and
entail  various risks and  uncertainties.  These risks and  uncertainties  could
cause or contribute to actual results that are  materially  different than those
expressed  or implied.  The Company  disclaims  any  obligation  or intention to
update or  revise  any  forward-looking  statement,  whether  as a result of new
information, future events or otherwise.

OVERVIEW

The  Company  is  a  natural   resource  company  engaged  in  the  business  of
acquisition,  exploration and development of mineral properties in Argentina. At
present, the Company has no producing properties and consequently has no current
operating  income or cash flow.  As of this date the  Company is an  exploration
stage  company  and has not  generated  any  revenues.  The  Company is entirely
dependent  on the equity  market for its source of funds.  There is no assurance
that a  commercially  viable mineral  deposit  exists on any of the  properties.
Further  evaluation  and  exploration  will  be  required  before  the  economic
viability of any of the properties is determined.

During  the  year  ended   December   31,   2004  the  Company   completed   its
reorganization, which had the effect of transferring all the non-Navidad mineral
properties  and related  assets to a new  corporation,  Golden  Arrow  Resources
Corporation  ("Golden Arrow").  The reorganization  allowed the Company to focus
all its efforts and resources on the Navidad project located in Chubut Province,
Argentina.  A Phase I drilling program  commenced in November 2003 and continued
into March 2004.  Phase II commenced in May 2004 and was  completed in September
2004.  Phase III  commenced  in  November  2004 and is ongoing.  These  drilling
programs have returned excellent results.  In March 2005 the Company engaged the
services of Augusto Baertl of Lima Peru to determine the economic feasibility of
the Navidad Project,  through a contract with Mr. Baertl's  company,  Gestora de
Negocios  e  Inversiones  SA.  The  Company  expects  that,  with  Mr.  Baertl's
assistance,  a  pre-feasibility  study will be undertaken as a first step in the
determination  of the economic  viability of Navidad.  Mr. Baertl's mandate is a
continuing  one whose  objective is  ultimately  the  achievement  of commercial
production.

In March 2004 Aquiline Resources Inc.  ("Aquiline")  commenced an action against
the  Company  seeking a  constructive  trust  over the  Navidad  properties  and
damages.  The Company  believes the Aquiline  legal action is without  merit and
continues to  vigorously  defend  itself.  A trial date has been  scheduled  for
October 2005. At this date the outcome is not determinable.  The Company has not
made any provision for costs for which it might become liable in what management
considers the unlikely event of an adverse judgement.

PROPERTIES UPDATE

All mineral  properties  held by the Company,  with the exception of the Navidad
property and the Navidad area properties  discussed  below,  were transferred to
Golden Arrow in July 2004 on completion of the Company's reorganization.

                                      -1-
<PAGE>
                                      F-29


NAVIDAD

On  February  3,  2003  the  Company   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 Province,  Argentina.  A Phase I
drilling  program  commenced in November,  2003 and was  completed in late March
2004. A Phase II drill  program  commenced in late May 2004 and was completed in
September 2004.  Subsequent to completion of the Phase II program,  a program of
surface exploration including prospecting, geological mapping, ground geophysics
and soil  sampling  was  commenced.  A Phase III drilling  program  commenced in
November 2004 and, other than a break for Christmas, drilling continued to March
7, 2005.  Subsequently  the  Company  has  announced  that the Phase III program
budget has been increased to include an additional 10,000 metres of drilling and
drilling  will resume in mid April 2005.  In addition to its active  exploration
program,  the  Company has an ongoing  program of  environmental  baseline  data
collection in the project area.

On May 25, 2004 the Company announced results of a resource  estimation  carried
out for the Galena Hill deposit and portions of the adjacent  connector  zone by
Snowden  Mining  Consultants  Inc. The resource  estimation  for the Galena Hill
deposit,  the  first  systematically  drilled  target on the  Navidad  property,
outlined an Indicated  Resource of 207 million  ounces of silver and 1.1 million
tonnes of lead at a 50 g/t silver equivalent cut-off grade (63.6 M tonnes at 101
g/t  Silver  and  1.76%  lead).  This  resource  includes  a  higher-grade  core
containing117  million  ounces of silver and 495,047 tonnes of lead at a 300 g/t
silver  equivalent  cut-off  grade  (13.2 M tonnes at 277 g/t  silver  and 3.76%
lead).  Inferred  Resources at Galena Hill total 36 million ounces of silver and
56,776 tonnes of lead at a 50 g/t silver equivalent cut-off grade (16.9 M tonnes
at 67 g/t silver and 0.3% lead).

Subsequent  to the Phase II drill  program,  on  December  1, 2004,  the Company
announced the results of an updated resource estimate by Snowden Mining Industry
Consultants  Inc.  including the Navidad Hill and Connector Zone deposits.  This
increased  the  overall  project  Indicated  Resources  by 61 million  ounces of
contained  silver  using a 50 g/t silver  equivalent  cut-off  grade.  Resources
estimated to date on the project are presented in the table below.

--------------------------------------------------------------------------------
                                                           CONTAINED   CONTAINED
                     TONNES    SILVER    SILVER    LEAD     SILVER        LEAD
                       (m)     (g/t)     (oz/t)    (%)     (million     (1,000
                                                            ounces)      tonnes)
--------------------------------------------------------------------------------

GALENA HILL
   Indicated          63.6      101       2.95     1.76       207        1,118
   Inferred            5.8       43       1.26     0.56         8           33
--------------------------------------------------------------------------------
NAVIDAD HILL
   Indicated          15.2      115       3.36     0.35        56           52
   Inferred            3.4       97       2.83     0.74        11           25
--------------------------------------------------------------------------------
CONNECTOR ZONE
   Indicated           2.1       74       2.16     0.27         5            6
   Inferred            6.5      100       2.92     0.20        21           13
--------------------------------------------------------------------------------
PROJECT TOTAL
 RESOURCES
   Indicated          80.8      103       3.01     1.45       268        1,176
   Inferred           15.7       78       2.28     0.45        39           71
--------------------------------------------------------------------------------
*  Estimated using a 50 g/t silver equivalent cut-off grade

Detailed review of the geological  interpretation and block model shows that the
Navidad Hill deposit and the Connector Zone remain open and insufficiently drill
tested in several  areas.  The Phase III drill program  currently  underway will
more fully test the  boundaries  of the  Navidad  Hill zone,  with the intent to
increase the Indicated Resource at Navidad Hill and the Connector Zone.

The Phase I drill program at Navidad comprised 8,859.6 metres in 53 holes, 37 of
which were drilled on Galena Hill. Phase II drilling comprised 9,596.5 metres of
diamond core drilling in 67 holes.  Drilling in the Phase II program  focused on
the  Esperanza  Trend,  the Barite  Hill  target,  and on the  Navidad  Hill and
Connector Zone targets.  Phase III drilling to date has comprised 9,526.2 metres
in 54 holes for a project  total of 27,982.3  metres in 174 holes.  Results from
the Phase III drilling have been  described in news  releases  dated January 13,
March 4 and March 22, 2005. The Phase III drill program has focussed on drilling
in the Calcite Hill area and expansion  and infill  drilling on the Navidad Hill
and Connector Zone areas.



                                      -2-
<PAGE>
                                      F-30


Galena Hill

The  Galena   Hill   Deposit  is  hosted   primarily   within   gently   dipping
trachyandesitic  volcanic breccias with a matrix of galena, pyrite, calcite, and
barite.  These  breccias are  interpreted  to have formed  primarily by multiple
hydrothermal fluid pulses. Calcareous mudstones overlie the mineralized volcanic
breccias;  these  generally  contain  significant  silver,  lead and zinc values
within one to five metres of the volcanic-mudstone  contact.  Sulphides occur in
the mudstone both as  crosscutting  veinlets and as strataform beds suggesting a
syn-depositional  timing for the  mineralization  event. The Galena Hill deposit
measures  approximately  450 by 500 metres in plan view (at 50 g/t AgEq cut-off)
and is up to 125 metres thick in its centre.  A total of 39 drillholes have been
completed to date to delineate the Galena Hill resource. Highlights from Phase I
drilling on Galena  Hill  include 115 metres of 497 g/t silver and 5.71% lead in
Drill Hole 14 and 63.0 metres of 418.4 g/t silver,  including 20.6m of 703.0 g/t
silver, in Drill Hole 22.

Navidad Hill

A total of 53 drill  holes  have been  completed  to date at  Navidad  Hill.  In
addition to the structurally controlled mineralization located on top of Navidad
Hill,  near-surface  stratigraphically  controlled silver mineralization has now
been identified along the southwest and southeast flanks of Navidad Hill.

Intercepts of structurally  controlled,  near vertical mineralized bodies on the
top of Navidad Hill include hole NV04-110 which  intersected  61.5 metres of 128
grams per tonne silver, including 5.34 metres of 1,006 grams per tonne silver.

Highlights of  stratigraphically-controlled  mineralization on the western flank
of the Navidad  volcanic dome include the exceptional  intercept from Drill Hole
NV04-90 that returned 35.8 metres of 2,850 grams per tonne (83.2 ounces per ton)
silver  including  7.3 metres of 11,995 grams per tonne  (350.3  ounces per ton)
silver  starting  from  16.5  metres  depth.  Drill  Hole 90 was  drilled  at an
inclination of -45(degree) towards the northeast on the western flank of Navidad
Hill,  approximately  275 metres northwest of Drill Holes 1 and 2 and in an area
of little or no outcrop.  Bonanza-grade mineralization in Drill Hole 90 contains
semi-massive   silver-copper-lead   sulphides  and/or  sulphosalts.  In  several
locations  native  silver occurs as fine veinlets and grains up to 5 millimetres
in size.  Further intercepts in the area include 28.15 metres of 1,115 grams per
tonne  silver  (32.6  ounces per ton)  including  5.97 metres of 4,579 grams per
tonne (133.7 ounces per ton) in Drill Hole 117 and 58.68 metres of 208 grams per
tonne silver (6.1 ounces per ton) in Drill Hole 112.

Phase III drilling in the area of Drill Hole 90 included  Drill Holes 139 to 142
which were  completed to provide more detailed  information on this zone of very
high-grade  silver  mineralization.  Of these,  Drill Holes 139 (17.8  metres of
1,037  g/t  silver)  and 142  (34.5  metres  of 1,220  g/t  silver)  intersected
significantly  higher grade than that  predicted by the Snowden  resource  block
model.  Drill Holes 157 to 161 were collared along the southern  boundary of the
known resource at Navidad Hill and  demonstrate  that  mineralization  continues
beyond the limits of the Indicated portion of current resource estimation.

Connector Zone

At the Connector Zone 24 drill holes have been  completed to date.  Drilling has
demonstrated that both structurally and stratigraphically  controlled high-grade
silver  mineralization  occurs  in  this  area,  as  at  Navidad  Hill.  In  the
northwestern part of the Connector Zone (Drill Holes 40, 68, 105, 106, and 107),
the   control  on   mineralization   appears  to  be   stratigraphic   with  the
mineralization  occurring  in the same  stratigraphic  position as at the Galena
Hill deposit and on the flank of Navidad Hill (Drill Hole 90).  Highlights  from
this mineralization style include 46.7 metres of 334 grams per tonne silver from
hole 107 and 13.3  metres of 545 grams per tonne  silver  from hole 105.  In the
southeastern  Connector  Zone (Drill Holes 32, 86, 87, 108,  131, 153, 154, 155.
and 156), the controls on mineralization and the stratigraphic  correlations are
less  clear.  Drill Hole 108 was  drilled  towards the east to cross a northerly
trending  structural  zone  partially  exposed on  surface  and  intersected  an
impressive 485 grams per tonne silver over 39.0 metres.


                                      -3-
<PAGE>
                                      F-31


Phase III drilling at the Connector Zone (holes 153-156) has intersected  silver
mineralization  over long intervals outside of the current  Indicated  Resource.
Results include 88.8 metres of 107 g/t silver in Drill Hole 153 and 28.8m of 148
g/t silver in Drill Hole 154; both intercepts  start at surface.  Mineralization
in Drill Holes 153 and 154 is open to expansion to the north and northwest. Both
step-out  and infill  drilling is required in this area and an updated  resource
estimate will be undertaken when this is completed.

Calcite Hill

Near the end of the Phase II program a single hole, NV04-88, was drilled to test
favourable  stratigraphy  on the edge of Calcite Hill in an area where there are
few indications of mineralization or geochemical  anomalies at surface. The hole
intersected 72.3 metres averaging 202 grams per tonne silver and 3.45% lead from
70.3 to 142.6 metres depth and included a higher-grade  interval containing 12.4
metres  averaging  672  grams  per  tonne  silver.  Drill  Holes 88 was  located
approximately  400 metres west of the nearest holes on Navidad  Hill.  The major
Calcite  Hill  silver-lead  soil  anomaly is located a further 340 metres to the
northwest  of Drill Hole 88. The  mineralization  in NV04-88  comprises  galena,
calcite and barite with minor amounts of native silver and  argentinte-acanthite
(native  silver had not been  observed in any of the drill core from the Navidad
Project prior to Drill Hole 88).

Phase III drilling has now defined a mineralized zone  approximately  275 metres
long by 100 metres  wide by 50 to 120 metres  deep at Calcite  Hill.  Highlights
from Phase III drilling at Calcite Hill include:  122.6 metres of 195 g/t silver
in Drill  Hole 124;  196.1  metres of 113 g/t  silver in Drill  Hole 126;  123.6
metres  of 139 g/t  silver  in Drill  Hole 138;  46.6  metres of 300 g/t  silver
including  10.3 metres of 1,257 g/t silver in Drill Hole 143; 83.0 metres of 209
g/t silver in Drill Hole 148; and 80.2 metres of 246 g/t silver  including 25.3m
of 476 g/t silver in Drill Hole 151.

Mineralization  encountered  to date at  Calcite  Hill is  predominantly  hosted
within trachyandesite volcanic rock and to a lesser degree within mudstone which
overlies  the  volcanic  rock.  The  volumetrically   most  important  style  of
mineralization   consists  of   calcite-barite   veinlets  and   breccias   with
argentite-acanthite,  native  silver and  lesser  galena  and  chalcopyrite.  In
general,  this style of  mineralization  contains  high silver grades with minor
amounts of lead and copper. In the upper portions of the host volcanic unit, and
in the  overlying  mudstone,  mineralization  tends to be lead-rich and consists
predominantly of medium-grained  galena with moderate silver values. The Calcite
Hill soil anomaly  extends for 1.4 km to the  northwest of current  drilling.  A
resource estimate has not yet been done for Calcite Hill.

Esperanza Trend

A total of 10 drill holes have been  completed  to date in two areas along the 6
kilometre Esperanza Trend.  Highlights include 2.7 metres of 831 grams per tonne
silver in Drill  Hole 62 and 2.6  metres of 513 grams per tonne  silver in Drill
Hole 79.  Interestingly,  Drill Hole 79 shows signs of the mineralization  being
stratigraphically rather than structurally controlled as had been interpreted to
date in this area.  Drill Hole 63 intersected  45.8 metres of 94 grams per tonne
silver,  including 4.0 metres of 246 grams per tonne  silver,  800 metres to the
northwest.  In the same area,  Drill Hole 82 intersected 54.6 metres of 64 grams
per tonne silver,  including  26.1 metres of 106 grams per tonne silver and also
6.0 metres of 140 grams per tonne silver.  These results confirm the high grades
and potential for a significant structurally and/or stratigraphically controlled
zone at Esperanza.  Significantly more drilling will be required to evaluate the
6-kilometre Esperanza Trend.

Barite Hill

A total of 8 holes were  completed at Barite Hill in Phase II.  Although many of
these holes  contain  significant  near surface  intersections  of galena matrix
breccia  similar  in style to that at Galena  Hill,  they have  generally  lower
silver  and lead  values.  The most  significant  intercept  was from Drill Hole
NV04-76  that cut 22.1 metres of galena  matrix  breccia  averaging 34 grams per
tonne silver and 0.63% lead in the upper part of the hole and then intersected a
different style of mineralization  deeper in the hole that contained 21.7 metres
of 88 grams per tonne silver including 8.4 metres of 191 grams per tonne silver.
This  deeper   mineralization  is  associated  with  calcite  veining  within  a
fine-grained  muddy sedimentary rock and is characterized by high silver to base
metal ratios.



                                      -4-
<PAGE>
                                      F-32


Loma de la Plata

The  surface  exploration  program  launched  September  2004  resulted  in  the
discovery of the Loma de la Plata Zone,  approximately  4 kilometres west of the
Galena Hill deposit, through grid soil sampling. At Loma de la Plata, an area of
approximately 400 x 400 metres has been systematically sampled with twelve lines
of continuous and semi-continuous  channel samples;  these sample lines range in
length from 12.5 to 135.9 metres. Highlights of channel samples include:

                  Line LP-1:          40.1 metres of 740 g/t silver
                  Line LP-3:          42.9 metres of 684 g/t silver
                  Line LP-4:         135.9 metres of 159 g/t silver
                  Line LP-7:          48.5 metres of 315 g/t silver
                  Line LP-2:         103.3 metres of 290 g/t silver
                  Line LP-9:          49.5 metres of 410 g/t silver
                  Line LP-10:         56.0 metres of 452 g/t silver

The Loma de la Plata  zone is hosted  within  quartz-eye  phyric  trachyandesite
volcanic  rocks that dip to the  northeast  at 15 to 45 degrees.  Mineralization
occurs in  micro-veinlets  and breccia  zones and  consists  primarily  of minor
galena and copper  oxides  with common  native  silver.  Preliminary  geological
assessment  indicates that the zone is hosted by a similar  sequence of volcanic
and sedimentary rocks, in a similar  stratigraphic  position, to those that host
the  Galena  Hill  deposit.  The  possibility  of  leaching,   or  alternatively
concentration, of silver values at or near surface cannot be determined from the
data available and drilling will be required to constrain  this. No drilling has
been carried out on the Loma de la Plata zone to date.

Sector Zeta

At Sector  Zeta,  approximately  5 kilometres  west of the Galena Hill  Deposit,
seven sample lines ranging in length from 6.7 to 60.0 metres have been completed
covering an area of  approximately  80 by 100 metres.  Highlights  of the Sector
Zeta results include:

               Line Z-5:       8.0 metres of 105 g/t Silver and 1.14% Copper
               Line Z-6:      12.0 metres of 112 g/t Silver and 1.13% Copper
               Line Z-7:      12.0 metres of 133 g/t Silver and 3.27% Copper

Mineralization  at Sector Zeta  predominantly  consists of green  copper  oxides
within argillicly  altered latite volcanic rocks that are often brecciated.  The
Company's geologists interpret that the volcanic rocks which host mineralization
here are part of the same volcanic unit that hosts  mineralization at Galena and
Navidad Hills and also at Loma de la Plata.  At present,  the orientation of the
mineralized  zone at  Sector  Zeta is  unknown;  drill  data  will be  needed to
unambiguously   define  the  geometry  and  size  of  the  mineralization.   The
possibility of leaching,  or  alternatively,  concentration of silver and copper
values at or near  surface,  particularly  at Sector Zeta in the case of copper,
cannot  be  determined  from the data  available  to date and  drilling  will be
required; no drilling has been carried out in the Sector Zeta area.

Argenta Trend

On January 21, 2005 the Company  released the results from a large  expansion to
the soil sample grid and follow-up  prospecting  which uncovered a series of new
mineralized zones to the southeast of Loma de la Plata. The newly named "Argenta
Trend" includes Sector Zeta and Loma de la Plata and extends  approximately  six
kilometres to the southeast, parallel with the Esperanza and Navidad Trends.

A total of  1,366  new soil  samples  (including  blanks  and  duplicates)  were
collected  at 50 metre  intervals  on lines spaced 200 metres apart and cover an
area of over 1,300 hectares to the south of the previous grid. The Argenta Trend
is highlighted by anomalous  silver,  lead and zinc values with  subordinate and
sporadic anomalous copper.  Prospecting and geological mapping along the Argenta
Trend has found several new zones of silver-lead, lead-silver, and silver-copper
mineralization.  Results  have been  reported  for 32 rock chip and grab samples
which  range from below  detection  to  high-grade  silver,  lead,  and  copper.


                                      -5-
<PAGE>
                                      F-33


Highlights  include eight samples  containing over 100 g/t silver (up to 290 g/t
silver), ten samples with over 10% lead (up to 29.7% lead), and two samples with
over 1% copper (up to 1.42%).

NAVIDAD AREA PROPERTIES

The  Company has 18  exploration  properties  in Chubut  Province in addition to
Navidad, several of which are the subject of joint venture agreements.

Regalo

Work by  Consolidated  Pacific Bay Minerals Ltd.  ("Pacific  Bay") on the Regalo
Property,  currently  under  option  from the  Company,  has  identified  highly
anomalous  gold in soils and silt  samples over a large area.  In Pacific  Bay's
January 12, 2005 news release,  they report that in one zone,  "Yastekt  South",
the strong gold anomalies are consistent over almost one square  kilometre.  The
Yastekt  South  anomaly  comprises 98 soil  analyses  that average 299 ppb gold.
Normal,  "background" gold values in the area are less than 5 ppb. Two of the 98
soil analyses  returned values in excess of 3 grams per tonne gold.  Pacific Bay
is exploring the property for epithermal  gold deposits and is planning to carry
out a trenching program on the property in the near future.

Other  parties to the joint  venture  agreements in the Navidad area have agreed
not to seek TSXV approval for the  agreements  until certain legal and political
uncertainties  can be  resolved.  Accordingly  the Company did not  complete the
terms of the agreements in 2004.

SELECTED ANNUAL FINANCIAL INFORMATION

The following selected  consolidated  financial  information is derived from the
audited consolidated financial statements and notes thereto. The information has
been prepared in accordance with Canadian GAAP.

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

                                              YEARS ENDED DECEMBER 31,
                                        ---------------------------------------
                                           2004          2003           2002
                                             $             $             $
                                        ---------------------------------------

Total Assets                             12,221,856    13,419,876     8,636,895

Long Term Financial Liabilities                 Nil           Nil           Nil

Total Revenues                                  Nil           Nil           Nil

General and Administrative Expenses       4,312,616     2,503,041       509,980

Loss from Continuing Operations          (4,523,831)   (2,449,243)     (485,331)

Loss per Common Share from
     Continuing Operations                    (0.11)        (0.08)        (0.02)

Loss allocated to Spin-Off Assets          (131,232)     (969,175)     (954,775)

Net Loss                                 (4,655,063)   (3,418,418)   (1,440,106)

Net Loss per Common Share Basic
     and Diluted                              (0.11)        (0.11)        (0.06)
                                        ---------------------------------------

Total assets decreased $1,198,021 from December 31, 2004 and 2003 as a result of
the transfer of assets to Golden Arrow offset by corresponding  increases in the
Company's cash balance and in the Navidad property  carrying value. The increase
between 2003 and 2002 was a result of the increase in the Company's cash balance
and property additions. General and adminstrative expenses have increased due to
the  increases in the activity  level  related to continued  exploration  at the
Navidad project and the necessary support required.


                                      -6-
<PAGE>
                                      F-34


SELECTED QUARTERLY FINANCIAL INFORMATION

The following selected  consolidated  financial  information is derived from the
unaudited   consolidated  interim  financial  statements  of  the  Company.  The
information has been prepared in accordance with Canadian GAAP.
<TABLE>
<CAPTION>

                       ----------------------------------------------------    ----------------------------------------------------
                                             2004                                                    2003
                       ----------------------------------------------------    ----------------------------------------------------
                          DEC. 31       SEP. 3        JUN. 30       MAR. 31       DEC. 31       SEP. 30       JUN. 30       MAR. 31
                              $             $            $             $            $             $             $             $
                       ----------------------------------------------------    ----------------------------------------------------
<S>                   <C>            <C>           <C>          <C>           <C>            <C>           <C>          <C>

Revenues                      Nil           Nil           Nil           Nil           Nil           Nil           Nil           Nil

Loss from Continuing
   Operations          (1,164,504)     (492,562)     (466,021)   (2,400,744)   (1,436,078)     (586,158)     (243,728)     (183,279)

Loss per Common Share
   from Continuing
   Operations               (0.03)        (0.01)        (0.01)        (0.06)        (0.04)        (0.02)        (0.01)        (0.01)

Income (Loss)
   Allocated to
   Spin-off Assets            Nil          (Nil)     (355,252)      224,020      (702,420)       22,656      (163,658)     (125,753)

Net Loss               (1,164,955)     (492,562)     (821,273)   (2,176,273)   (2,138,498)     (563,502)     (407,386)     (309,032)

Net Loss per Common
   Share Basic
   and Diluted              (0.02)        (0.01)        (0.02)        (0.06)        (0.07)        (0.02)        (0.01)        (0.01)
                       ----------------------------------------------------    ----------------------------------------------------
</TABLE>

In the  quarter  ended  December  31,  2004  the  Company  recorded  stock-based
compensation  of $101,150  compared to $1,141,415 in the comparable 2003 period.
Legal costs were  substantially  greater in the current  period  compared to the
previous year.

SUMMARY OF FINANCIAL RESULTS

The Company  reported a  consolidated  loss of  $4,655,063  ($0.11 per share) in
2004, an increase of $1,236,645 from the loss of $3,418,418 ($0.11 per share) in
2003. The increase in the loss in 2004, compared to 2003, was due to a number of
factors of which $1,148,400 can be attributed to operating  expenses and $88,245
to other expense items.

The  Company's  prior period  financial  statements  have been  reclassified  in
accordance  with Canadian GAAP.  The net assets  transferred to Golden Arrow are
described  as  "Spin-Off  Assets  Transferred"  and the  allocated  expenses are
described as "Loss Allocated to Spin-Off Assets" in the  consolidated  financial
statements.  This  reclassification  did not change  previously  reported  total
losses.  The  allocation of expenses was calculated on the basis of the ratio of
the specific assets transferred to assets retained.  The following discussion of
the 2004  expenses  compared  to the 2003  expenses  is  based  on  expenses  as
originally reported.

RESULTS OF OPERATIONS

The Company's 2004 operating  expenses were $4,312,616 an increase of $1,148,400
from the $3,164,216 originally reported for 2003. $661,175 of the 2003 operating
expense has been  reclassified  as "Loss  Allocated  to Spin-Off  Assets"  which
relate to the assets transferred to Golden Arrow. In 2004 $131,232 was allocated
to the Loss from Spin-Off  Assets  compared to $969,175 in 2003.  The allocation
was calculated on the basis of the ratio of the specific  assets  transferred to
assets retained. Certain "Other Income and Expense" items have been allocated to
spin-off  assets on the basis of the  nature of the income or  expense.  In 2004
expenses  increased as a result of increased activity at the Navidad project and
the support required at the corporate office.

Professional fees increased $597,017 to $894,780 in 2004, primarily due to legal
costs incurred in connection with the Aquiline legal action as well as increased
costs of  compliance.  During  2004 the Company  recorded a non-cash  expense of
$1,972,860  for stock  based  compensation  for  stock  options  granted  to its
employees  and  directors,  an  increase of $485,625  from 2003.  Other  notable
changes in the operating  expenses are: (i) Salaries  increased  $113,998 due to
staff  increases  (in 2004 the  Company  had an average  of seven  people on its
payroll compared to three in 2003);  (ii) Travel increased  $97,641due to travel
to conferences as well as to South America;  (iii) Cost  recoveries  (for shared
administrative costs and rent) from Amera Resources Corporation and Golden Arrow
increased  by  $114,161;  (iv)  Corporate  development  and  investor  relations
decreased $62,026, as 2003 was a more active year in which the Company developed
investor awareness.


                                      -7-
<PAGE>
                                      F-35


In 2004 the  Company  recorded a gain of $328,346  on the  optioning  of certain
properties  to  other  mining  exploration  companies  (plus  $433,960  of gains
relating to the Spin-Off  Assets) compared to $481,779 in total in 2003. In 2004
a  write-down  of $99,762  (2003 - $nil) for the  carrying  value of  marketable
securities  was  recognized.  Reorganization  costs of $346,103 were recorded in
2004. An expense of $195,285 for foreign  exchange was recorded in 2004 compared
to  $25,916  in 2003.  The  foreign  exchange  adjustment  is as a result of the
continued strength of the Canadian dollar compared to the US dollar in which the
majority  of  the   inter-company   transactions  are   denominated;   when  the
inter-company  accounts  are  eliminated  the  difference  is charged to foreign
exchange.  The  Company  wrote  down the  value of its  mineral  properties  and
deferred  costs by $776,626 in 2003. In 2004 there were no write offs of mineral
properties and deferred  costs.  Interest and other income was $101,589 in 2004,
an increase of $35,028 from 2003,  primarily as a result of an increase of funds
on deposit.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position at December 31, 2004 was $5,227,354,  an increase of
$805,020 from December 31, 2003.  Total assets  decreased  from  $13,419,876  at
December 31, 2003 to $12,221,856  at December 31, 2004.  This decrease in assets
resulted  from the  transfer  of  $7,364,878  net assets to Golden  Arrow on the
reorganization  of the  Company  offset by the  increases  in cash  balance  and
Navidad  carrying  value.  During the year ended  December  31, 2004 the Company
completed a brokered  private  placement for 1,500,000  units at $3.10 per unit,
for proceeds of $4,238,763,  net of $339,000  agent's  commission and $72,237 of
related issue costs.

In addition  during 2004,  options and warrants were exercised which resulted in
cash proceeds of $5,057,897 during the year. The Company paid $107,544 to Golden
Arrow from the exercise of warrants that resulted in the issue of Golden Arrow's
shares as required by the terms of the reorganization.

The Company has  received  $4,267,345  from the exercise of warrants and options
from January 1 to April 21,  2005.  As at April 21, 2005 the Company had working
capital of approximately $6,500,000.

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 and development work. The expanded work for Phase III of
the Navidad  project has been approved in the amount of $2,000,000.  The Company
will continue to rely on successfully  completing additional equity financing to
further  exploration and development of Navidad.  There can be no assurance that
the Company will be successful in obtaining the required financing.  The failure
to obtain such financing could result in the loss of or substantial  dilution of
its interest in its properties.

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,
its liquidity  either  materially  increasing or decreasing at present or in the
foreseeable   future.   Material   increases  or  decreases  in  liquidity   are
substantially determined by the success or failure of the exploration programs.

Effective  January 1, 2005, the Company  engaged Grosso Group  Management  Ltd.,
("Grosso Group") to provide services and facilities to the Company.  As of April
21, 2005, a formal agreement among the Company and the Grosso Group has not been
finalized.  Until  such time as the formal  agreement  has been  finalized,  the
Company  and the Grosso  Group  intend to work  under the terms of the  proposed
Administration Services Agreement by and among the Company and the Grosso Group.
This is not expected to result in a significant change to the Company's costs.

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

OPERATING CASH FLOW

Cash outflow from operating activities in 2004 was $2,961,734,  compared to cash
outflow in 2003 of $1,419,549 as a result of increases in activities.



                                      -8-
<PAGE>
                                      F-36


FINANCING ACTIVITIES

In 2004 the Company  received  $9,707,897  from the sale of common shares,  less
costs of $411,237 and $107,544  paid to Golden  Arrow,  compared to  $6,467,245,
less costs of $188,850, in 2003.

INVESTING ACTIVITIES

Investing  activities  required cash of $4,509,717 in 2004 (2003 -  $1,872,636),
these  investing  activities  were for  additions to the Navidad  properties  in
Argentina and $93,650 (2003 - $21,875) for equipment.

RELATED PARTY TRANSACTIONS

During fiscal 2004, the Company paid $476,226 (2003 - $330,600; 2002 - $136,276)
to directors  and officers or companies  controlled by directors and officers of
the Company,  for accounting,  management and consulting services provided.  The
Company has agreements with a company controlled by the wife of the President of
the Company for the rental of office  premises.  During fiscal 2004, the Company
paid $74,870  (2003 - $60,924;  2002 - $60,924) for rent.  The  President of the
Company  provides  his  services  on a full-time  basis under a contract  with a
private  company  controlled by the  President.  The President is paid an annual
amount of $102,000.  The contract also provides  that, in the event the services
are  terminated  without  cause or upon a change in  control of the  Company,  a
termination  payment would include a bonus of $6,500 per month,  retroactive  to
July 1, 1999,  plus an  additional  three years of  compensation  at $15,000 per
month.  If the  termination  had occurred on December 31, 2004, the amount under
the agreement would be $969,000.

CRITICAL ACCOUNTING POLICIES

Reference  should  be  made to the  Company's  significant  accounting  policies
contained in Note 3 of the Company's  consolidated  financial statements for the
year ended December 31, 2004. 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
annual  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.  For certain
acquisitions and related payments for mineral  property  interests,  the Company
records a future  income tax  liability  and a  corresponding  adjustment to the
related  asset  carrying  amount.  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.  In 2004 no
impairment of long-lived assets was identified. In 2003 a write down of $776,626
was recorded to reflect Barrick's notice that they would not be exercising their
option on either of certain  properties  and allocated to the Loss from Spin-Off
Assets.


                                      -9-
<PAGE>
                                      F-37


FINANCIAL INSTRUMENTS

The Company's  financial  instruments  consisting of cash and cash  equivalents,
amounts  receivable,  marketable  securities  and  accounts  payable and accrued
liabilities  approximate  their carrying values due to the short-term  nature of
those instruments.

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.  Exploration  for mineral  resources  involves a high degree of risk. The
cost of conducting  programs may be substantial and the likelihood of success is
difficult to assess.

Metal Price  Risk:  The  Company's  portfolio  of  properties  have  exposure to
predominantly  silver and lead. The prices of these metals,  especially  silver,
greatly  affect  the  value  of the  Company  and  the  potential  value  of its
properties and investments.

Financial  Markets:  The Company is dependent on the equity  markets as its sole
source of operating  working  capital and the  Company's  capital  resources are
largely  determined  by the strength of the junior  resource  markets and by the
status of the Company's  projects in relation to these markets,  and its ability
to compete for the investor support of its projects.

Political Risk: Exploration is presently carried out in Argentina.  This exposes
the Company to risks that may not  otherwise be  experienced  if all  operations
were  domestic.  Political  risks may adversely  affect the  Company's  existing
assets and operations.  Real and perceived  political risk in some countries may
also affect the Company's  ability to finance  exploration  programs and attract
joint venture partners, and future mine development opportunities.

Currency Risk:  Business is transacted by the Company in a number of currencies.
Fluctuations  in exchange rates may have a significant  effect on the cash flows
of the Company.  Future  changes in exchange rates could  materially  affect the
Company's results in either a positive or negative direction.

Environmental Risk: The Company seeks to operate within environmental protection
standards that meet or exceed  existing  requirements  in the countries in which
the Company  operates.  Present or future  laws and  regulations,  however,  may
affect the Company's operations.  Future environmental costs may increase due to
changing  requirements or costs  associated with exploration and the developing,
operating  and closing of mines.  Programs may also be delayed or  prohibited in
some  areas.  Although  minimal  at this  time,  site  restoration  costs  are a
component of exploration expenses.

Title Risk:  Although  the  Company  has taken steps to verify  title to mineral
properties  in which it has an interest,  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.

SHARE DATA INFORMATION

As of April 21, 2005 there were  45,479,724  common shares and  4,456,000  stock
options outstanding.

INVESTOR RELATIONS

The Company currently does not engage any outside investor relations consultant.
Mr.  Sean  Hurd  is  the  Company's   Vice-President,   Investor  Relations  and
coordinates investor relations' activities.


                                      -10-
<PAGE>