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, 2005
                                       or

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

[ ]  Shell Company Report Pursuant to Section 13 OR 15(d) of the Securities
     Exchange Act of 1934



                         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, CANADA 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, 2005.
                48,813,064 COMMON SHARES AS OF DECEMBER 31, 2005

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes               No      X
    ---------         ---------

                                                                               1

<PAGE>

If this report is an annual or transition report,  indicate by check mark if the
registrant  is not required to file  reports  pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
Yes               No      X
    ---------         ---------

Note - Checking the box above will not relieve any  registrant  required to file
reports  pursuant to Section 13 or 15(d) of the Securities  Exchange Act of 1934
from their obligations under those Sections.

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 whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

Large accelerated filer      Accelerated filer  X    Non-accelerated filer
                        ----                   ----                        ----

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

If this is an annual report,  indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act) Yes     No  X
                                                                 ---    ---

                                                                               2
<PAGE>



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
                             $0.30 (  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 exploitation 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$13  (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


                                                                               3
<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.

                                                                               4
<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.




















                                                                               5

<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 and the  information in the following  table of IMA
Exploration Inc. (the "Company") for the years ended December 31, 2005, 2004 and
2003 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 and the information in the
following  table for the years ended December 31, 2002 and 2001 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 should be read in conjunction  with the
information  appearing under the heading "Item 5. Operating and Financial Review
and Prospects".

Reference is made to Note 10 of the 2005  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
may not have  sufficient  funds to conduct  exploration  programs  on all of its
existing properties and may 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".










                                                                               6
<PAGE>
CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CDN$ IN 000, EXCEPT PER SHARE
DATA)


================================================================================
                             2005       2004      2003       2002      2001

Revenue                         -          -         -          -         -

General Corporate
Expenditures               (6,092)    (4,084)   (2,276)      (330)     (173)

General Exploration
Expenditures                  (56)      (229)     (227)      (180)     (110)

Foreign Exchange Gain
(Loss)                        233       (195)      (13)        (2)        3

Interest and
Miscellaneous Income          150        102        67         27        97

Provision for
Marketable Securities           -       (100)        -          -         -

Loss Allocated to
Spin off Assets                 -       (131)     (969)      (955)     (699)


Net Loss for the year      (5,765)    (4,655)   (3,418)    (1,440)     (882)

Loss per Share from
Continuing Operations
                            (0.12)     (0.11)    (0.08)     (0.02)    (0.01)
Loss per Share
  Basic and                 (0.12)     (0.11)    (0.11)     (0.06)    (0.06)
  Diluted

Weighted Average
Number of Shares           46,197     40,939    32,252     23,188    15,104
Outstanding

Working Capital             7,489      5,053     4,747      1,431       733

Capital Assets                  -         94        36         46        57

Mineral Properties         15,032      6,551     1,469        148       132


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


Long-Term Debt                  -          -         -          -         -


Total Assets               23,498     12,222    13,419      8,637     6,407

Net Assets -
Shareholder's Equity       20,761     10,813    11,671      7,324     5,372


                                                                               7

<PAGE>

ADJUSTED TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

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

(CDN$ IN 000, EXCEPT PER SHARE DATA)

================================================================================
                           2005       2004       2003       2002       2001
CONSOLIDATED
STATEMENT OF
OPERATIONS

Loss for the year
under Canadian GAAP
                          (5,765)    (4,655)   $(3,418)   $(1,440)     $(882)

Mineral property and
deferred exploration
costs for the year,
net of reversal of
future income tax and
write down of
marketable securities     (7,605)    (4,479)    (1,813)    (1,267)    (1,321)

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

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

Loss for the year
under US GAAP            $13,370)   $(9,134)   $(4,598)   $(2,809)   $(2,181)


Unrealized (loss)
gains on
available-for-sale
securities                     -       (387)       434         55          -
                        --------------------------------------------------------
Comprehensive Loss
for the year             $(13,370)   $(9,521)   $(4,164)   $(2,754)   $(2,181)
                        ========================================================

Loss per share under
US GAAP                   $(0.29)    $(0.22)    $(0.14)    $(0.12)    $(0.14)
                        ========================================================
Diluted Loss per share
under US GAAP             $(0.29)    $(0.22)    $(0.14)    $(0.12)    $(0.14)
                        ========================================================


                                                                               8
<PAGE>



                            2005       2004       2003       2002       2001
                        --------------------------------------------------------
SHAREHOLDERS' EQUITY

Balance per Canadian
GAAP                      $20,761    $10,813    $11,671     $7,324     $5,372

Mineral property and
deferred exploration
costs expensed net of
reversal of future
income tax                (13,272)    (5,666)    (6,884)    (5,848)    (4,581)

Accumulated other
comprehensive income           84         84        489         54          -
                        --------------------------------------------------------
Balance per US GAAP        $7,573     $5,231     $5,277     $1,530       $790
                        ========================================================

CONSOLIDATED
STATEMENTS OF CASH
FLOWS

OPERATING ACTIVITIES
Cash used per
Canadian GAAP             $(3,850)   $(2,962)   $(1,419)   $(1,306)     $(898)

Mineral properties
and deferred costs         (7,025)    (4,578)    (1,851)    (1,267)    (1,321)
                        --------------------------------------------------------

Cash used per US GAAP     $(10,875)   $(7,540)   $(3,270)   $(2,573)   $(2,219)
                        ========================================================

INVESTING ACTIVITIES
Cash used per
Canadian GAAP             $(6,979)   $(4,510)   $(1,873)   $(1,278)   $(1,312)

Mineral properties
and deferred costs          7,025      4,578      1,851      1,267      1,321
                        --------------------------------------------------------

Cash provided (used)
per US GAAP                   $46        $68       $(22)      $(11)        $9
                        ========================================================


FINANCING ACTIVITIES
Cash provided per
Canadian and US GAAP
                          $13,478     $9,297     $6,278     $3,264     $1,463
                        ========================================================
See Note 10 of the Company's consolidated financial statements.

                                                                               9
<PAGE>



EXCHANGE RATE HISTORY

The noon rate of exchange on May 3, 2006,  reported by the United States Federal
Reserve  Bank of New York for the  conversion  of Canadian  dollars  into United
States dollars was US$0.9032 (US$1.00 = CDN$1.1072).

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, 2006.

             Month                             High                   Low

             November 2005                    .8579                  .8361

             December 2005                    .8690                  .8521

             January 2006                     .8744                  .8528

             February 2006                    .8788                  .8638

             March 2006                       .8834                  .8531

             April 2006                       .8926                  .8534

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, 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
           January 1, 2005 - December 31, 2005                0.8254


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"):

TITLE TO PROPERTIES  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.  In
addition,  Navidad  properties  title  has  being  challenged  in  the  Aquiline
Resources  Inc.  ("Aquiline")  legal action as  disclosed in "Item 8.  Financial
Information - Legal  Proceedings."  In March 2004  Aquiline  commenced an action
against the Company seeking a constructive trust over the Navidad properties and
damages. At this date the outcome is not determinable.  The Company believes the
Aquiline  legal  action is without  merit.  However,  in the event of an adverse
judgment  the  Company  may  suffer  loss and such loss could be  material;  the
Company  might not be able to  proceed  with its plans  for the  development  of
Navidad and could lose the ownership rights it currently has over the project.


                                                                              10
<PAGE>

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 4, 2006 the
Company had working capital of approximately  $13,000,000.  Management  believes
the Company has adequate  resources to maintain its ongoing  operations  and may
require additional  financing for planned exploration and property  acquisitions
for the remainder of fiscal 2006.  See "Item 5.  Operating and Financial  Review
and Prospects - Liquidity and Capital Resources".

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 may not, however,  have sufficient funds to conduct planned  exploration
and  development  programs  on all  these  properties  and may  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.


                                                                              11
<PAGE>
METAL  PRICE  RISK:  The  Company's  portfolio  of  properties  has  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 RISK:  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.

PROJECT DELAY RISK:  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.

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 $4.45 to a low of $2.56
during the 12-month period ending  December 31, 2005.  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 All Risk
Replacement  Cost  Coverage  on office  contents,  up to  $300,000,  with a $500
deductible.  In  addition,  the policy  provides  Commercial  General  Liability
coverage of up to $5,000,000  for Third Party Bodily Injury



                                                                              12
<PAGE>

or Property  Damage,  per occurrence and $2,000,000 for Tenants Legal  Liability
for any one  leased  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.

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

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

The Company has 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.  The loss of Mr.  Grosso could have an
adverse  affect on the  Company.  Joseph  Grosso  provides  his  services to the
Company through Oxbow International  Marketing Corp. ("Oxbow").  The Company has
entered into a consulting agreement with Oxbow.

All of the Company's other officers are now employed by Grosso Group  Management
Ltd. ("Grosso Group"). See "Item 6. Directors, Senior Management and Employees -
Directors and Senior  Management - Conflicts of Interest".  The Company does not
maintain "key-man" insurance in respect of any of its principals.

DEPENDENCE UPON OTHERS: The success of the Company's operations will depend upon
numerous factors, many of which are beyond the Company's control,  including (i)
the  ability  of the  Company  to  enter  into  strategic  alliances  through  a
combination of one or more joint ventures,  mergers or acquisition transactions,
(ii) the ability to discover and produce minerals;  (iii) the ability to attract
and retain additional



                                                                              13
<PAGE>

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.

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 had defaulted on its
loans,  it has repaid its debt to the  International  Monetary  Fund in December
2005.  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 various  federal  and  provincial  laws and
regulations  including  specific  mining and  environmental  rules.  The Company
believes it is in material compliance with all applicable legislation.

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.


                                                                              14
<PAGE>

REGULATORY ENVIRONMENT

Management  believes  the  present  government  is  committed  to opening up the
economy and there has been 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  Argentinean  Customs  office.
Except  for a 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,  although there are export taxes currently in
place including mineral products.

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 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 in metallic  mineral  extraction in
the  Province  of Chubut and  open-pit  mining is subject to, yet to be defined,
zoning  process.  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  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



                                                                              15
<PAGE>

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,  Canada.
Only one of the Company's  directors is a resident 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:

   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;


                                                                              16
<PAGE>

   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
(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


                                                                              17
<PAGE>
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.  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  transferred  to 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 Argentinas Inc.
                                       |
                                       |
        BVI/BARBADOS                   |
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
        ARGENTINA                      |
                                       |
                               100%    |
                                       |
                              Inversiones Mineras
                                Argentinas 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
$8,480,509  and capital assets of $Nil,  $5,082,572 and $93,650,  $1,320,408 and
$21,875  for  the  fiscal  years  ended  December  31,  2005,   2004  and  2003,
respectively.

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

PLANNED EXPLORATION EXPENDITURES AND PROPERTY PAYMENTS

For the period from January 1 to May 4, 2006,  the Company has made additions to
mineral  properties  and deferred  costs of  approximately  $2,500,000.  For the
balance  of 2006,  the  Company  expects  to spend a further  $5,500,000  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."

The Company  considers  that it has  adequate  resources to maintain its ongoing
operations but currently may 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 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,  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 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 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 drill  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 drill  program  commenced in November
2004 and, other than a break for Christmas, drilling continued to March 7, 2005.
Subsequently  the  Company  announced  that the Phase  III  program  budget  was
increased to include an  additional  10,000  metres of  drilling.  Phase III was
completed in September 2005. Phase IV began in January 2006 and is ongoing.  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  comprised  23,731.6  metres in 131
holes for a project  total of 42,188  metres in 251 holes.  Phase IV drilling is
ongoing  and over  10,000  metres has been  drilled in over 50  holes as of this
writing.

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  transferred  to Golden Arrow,  a new public company
formed to effect the reorganization.

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.

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."



                                                                              22
<PAGE>

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

ARGENTINEAN PROPERTIES

During the fiscal years ending  December 31, 2005, 2004 and 2003 the Company had
capitalized and expensed costs on all of its properties as follows:

<TABLE>
<CAPTION>
                                                                GENERAL EXPLORATION             AGGREGATE AMOUNT
     FISCAL YEAR ENDING            AMOUNT CAPITALIZED         EXPENSED IN FISCAL YEAR      WRITTEN-OFF IN FISCAL YEAR
     ------------------            ------------------         -----------------------      --------------------------
<S>                                   <C>                            <C>                              <C>
      December 31, 2003                $1,469,026                    $226,956                         $ Nil

      December 31, 2004                $6,551,598                    $228,961                         $ Nil

      December 31, 2005               $15,032,107                     $55,914                         $ Nil
</TABLE>

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  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  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.



                                                                              23

<PAGE>



                            [Argentina Property Map]
























                                                                              24

<PAGE>


PROPERTY DESCRIPTION AND LOCATION

The Navidad  Project  comprises  10,000  hectares  consisting of four individual
claims of 2,500 hectares each  (manifestaciones) in the Gastre Department of the
Province of Chubut.  These four claims are underlain by the  company's  original
claim (the Gan Cateo now reduced to 4,000 hectares) and cover the original claim
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.

CLAIMS INCLUDED IN THE NAVIDAD PROJECT:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FILE NUMBER                YEAR      DATE                   TYPE                   NAME             HECTARES
------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>                    <C>               <C>                    <C>
13984                      2002      December 6, 2002       Cateo                   Gan              4,000
------------------------------------------------------------------------------------------------------------
14340                      2004      September 16, 2004     Manifestacion      Navidad Este          2,500
------------------------------------------------------------------------------------------------------------
14341                      2004      September 16, 2004     Manifestacion      Navidad Oeste         2,500
------------------------------------------------------------------------------------------------------------
14902                      2006      March 20, 2006         Manifestacion     Navidad Este 1         2,500
------------------------------------------------------------------------------------------------------------
14903                      2006      March 20, 2006         Manifestacion     Navidad Oeste 1        2,500
------------------------------------------------------------------------------------------------------------
</TABLE>
Note: the project totals 10,000 hectares,  claims 14340,  14341, 14902 and 14903
together cover the same area as the original claim 13984.

The life span of the  original  cateo  will  expire  on March  30,  2007 and the
manifestacions  which  have  replaced  the  cateo  have no  expiration  to their
registration.  The  minimum  legislated  investment  in the  cateo  (Argentinean
$380,000) and the manifestacions (Argentinean $24,000,000) has been met.

The Company has  negotiated  access  rights in order to perform its  exploration
activities with two of the four surface owners and representing about 70% of the
10,000  hectares and the areas of  exploration  interest.  These  access  rights
require annual  payments of  approximately  US$31,000.  Argentinean  legislation
provides for the granting of mining easements by the State as the Mineral Rights
are owned by the State and not individual  property owners.  The Company has not
negotiated the purchase of the surface land with the owners at this time.

There are no known environmental liabilities on the Navidad Project. The Company
has  applied  for and  received  all  applicable  permits  for  its  exploration
activities,  including  environmental,  exploration,  drilling,  water  use  and
provincial  flora and fauna. A permit for the  re-location  of an  archeological
burial site was obtained and the site was moved in 2005.

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



                                                                              25
<PAGE>

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 numerous flights and a year round tourist
centre.  From Gastre to the Atlantic Coast it is  approximately  six 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.

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.  In 2003 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.
This  construction is now complete and has brought the Argentine  national power
grid within 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



                                                                              26
<PAGE>

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.

DIAMOND DRILLING PROGRAM

Connors Argentina S. A. ("Connors") of Mendoza, Argentina, commenced drilling on
November 26, 2003. A 43-101  report  entitled  "Diamond  Drilling of the Navidad
Silver-Copper-Lead  Project,  November  2003 To  March  2004,  Chubut  Province,
Argentina,  on  behalf  of IMA  Exploration  Inc."  describes  the Phase I drill
program and was prepared by Qualified Person Paul Lhotka, Ph.D., P.Geo. in 2004.
Phase III drilling  was  completed on  September  14, 2005.  Currently  Phase IV
drilling is ongoing. To the end of the Phase III drill program, 42,188m has been
drilled in 251 holes. As of March 31st,  2006, an additional  9,150m of drilling
in 48 holes had been  completed in Phase IV.  During the life of the project the
average rate of drilling  including  moves and  breakdowns has been 114.8 metres
per day.

All but 355 metres of the drilling has recovered HQ diameter  (61mm) core,  with
the remainder recovering NQ diameter core. The 25HH drill supplied by Connors is
containerized and mounted on a tracked  undercarriage  capable of moving itself.
Water for  drilling is brought to the  drilling  sites by a water truck of about
9,000  liters  that was  subcontracted  by  Connors.  The water is 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.

<TABLE>
SURVEYED COORDINATES AND ORIENTATIONS OF NAVIDAD DRILLHOLES:
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           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
---------------------------------------------------------------------------------------------------------------

                                                                              27
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  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
---------------------------------------------------------------------------------------------------------------
  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
---------------------------------------------------------------------------------------------------------------


                                                                              28
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  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
---------------------------------------------------------------------------------------------------------------
  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
---------------------------------------------------------------------------------------------------------------


                                                                              29
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  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
---------------------------------------------------------------------------------------------------------------
  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
---------------------------------------------------------------------------------------------------------------


                                                                              30
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  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
---------------------------------------------------------------------------------------------------------------
  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
---------------------------------------------------------------------------------------------------------------
  NV05-175    51,081      9,753      2,515,629    5,303,701      1,188        32.0       -50.0      516.12
---------------------------------------------------------------------------------------------------------------
  NV05-176    49,053      9,978      2,513,985    5,304,909      1,238        30.0       -75.0      233.10
---------------------------------------------------------------------------------------------------------------
  NV05-177    49,100      9,996      2,514,034    5,304,901      1,236        30.0       -80.0      239.10
---------------------------------------------------------------------------------------------------------------
  NV05-178    48,498      9,898      2,513,465    5,305,118      1,223        30.0       -55.0      302.00
---------------------------------------------------------------------------------------------------------------
  NV05-179    48,502      9,802      2,513,420    5,305,032      1,208        30.0       -60.0      212.10
---------------------------------------------------------------------------------------------------------------
  NV05-180    48,998      9,908      2,513,903    5,304,876      1,234        30.0       -80.0      131.40
---------------------------------------------------------------------------------------------------------------
  NV05-181    48,996      9,963      2,513,929    5,304,924      1,237        29.0       -80.0      161.20
---------------------------------------------------------------------------------------------------------------
  NV05-182    48,995      10,012     2,513,952    5,304,968      1,240        30.0       -80.0      218.20
---------------------------------------------------------------------------------------------------------------
  NV05-183    49,149      9,970      2,514,064    5,304,854      1,234        30.0       -80.0      257.20
---------------------------------------------------------------------------------------------------------------
  NV05-184    49,248      9,886      2,514,108    5,304,732      1,221        30.0       -88.0      209.20
---------------------------------------------------------------------------------------------------------------
  NV05-185    49,450      9,948      2,514,314    5,304,685      1,210        31.0       -70.0      164.00
---------------------------------------------------------------------------------------------------------------
  NV05-186    49,499      9,969      2,514,368    5,304,678      1,211        30.0       -65.0      119.00
---------------------------------------------------------------------------------------------------------------
  NV05-187    49,250      9,788      2,514,060    5,304,646      1,214        30.0       -76.0      185.00
---------------------------------------------------------------------------------------------------------------
  NV05-188    49,360      10,015     2,514,269    5,304,788      1,214       210.0       -81.0      236.00
---------------------------------------------------------------------------------------------------------------
  NV05-189    48,400      10,055     2,513,458    5,305,302      1,181        31.0       -60.0      211.50
---------------------------------------------------------------------------------------------------------------


                                                                              31
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  NV05-190    48,397      10,138     2,513,497    5,305,375      1,175        31.0       -61.0      158.00
---------------------------------------------------------------------------------------------------------------
  NV05-191    47,798      10,151     2,512,986    5,305,687      1,167        30.0       -70.0      197.00
---------------------------------------------------------------------------------------------------------------
  NV05-192    47,802      10,063     2,512,944    5,305,609      1,168        30.0       -70.0      209.00
---------------------------------------------------------------------------------------------------------------
  NV05-194    48,604      9,055      2,513,135    5,304,334      1,222       210.0       -80.0      212.20
---------------------------------------------------------------------------------------------------------------
  NV05-195    51,227      8,373      2,515,065    5,302,432      1,170        30.0       -80.0      278.20
---------------------------------------------------------------------------------------------------------------
  NV05-196    52,190      7,427      2,515,427    5,301,131      1,240       210.0       -75.0      413.66
---------------------------------------------------------------------------------------------------------------
  NV05-197    51,081      9,892      2,515,698    5,303,821      1,177        28.0       -52.0      441.05
---------------------------------------------------------------------------------------------------------------
  NV05-198    48,863      9,994      2,513,829    5,305,018      1,238        30.0       -90.0      221.30
---------------------------------------------------------------------------------------------------------------
  NV05-199    48,863      10,005     2,513,834    5,305,027      1,238        30.0       -45.0      170.10
---------------------------------------------------------------------------------------------------------------
  NV05-200    48,600      9,890      2,513,549    5,305,059      1,221        30.0       -76.0      275.10
---------------------------------------------------------------------------------------------------------------
  NV05-201    48,600      9,891      2,513,549    5,305,060      1,221        30.0       -45.0      200.00
---------------------------------------------------------------------------------------------------------------
  NV05-202    48,605      9,788      2,513,502    5,304,969      1,215        30.0       -73.0      149.10
---------------------------------------------------------------------------------------------------------------
  NV05-203    48,391      9,873      2,513,360    5,305,149      1,211        30.0       -72.0      324.75
---------------------------------------------------------------------------------------------------------------
  NV05-204    48,391      9,874      2,513,360    5,305,150      1,211        30.0       -45.0      161.00
---------------------------------------------------------------------------------------------------------------
  NV05-205    49,448      9,989      2,514,333    5,304,721      1,211        30.0       -63.0      163.50
---------------------------------------------------------------------------------------------------------------
  NV05-206    49,451      10,022     2,514,352    5,304,748      1,207        30.0       -45.0      190.00
---------------------------------------------------------------------------------------------------------------
  NV05-207    49,498      10,016     2,514,390    5,304,720      1,209        30.0       -45.0      166.00
---------------------------------------------------------------------------------------------------------------
  NV05-208    49,555      9,932      2,514,397    5,304,619      1,205        30.0       -70.0      125.00
---------------------------------------------------------------------------------------------------------------
  NV05-209    49,402      9,981      2,514,289    5,304,738      1,212        30.0       -71.0      227.00
---------------------------------------------------------------------------------------------------------------
  NV05-210    49,551      9,998      2,514,427    5,304,678      1,210        30.0       -90.0      209.00
---------------------------------------------------------------------------------------------------------------
  NV05-211    49,285      9,926      2,514,160    5,304,748      1,219       210.0       -80.0      233.00
---------------------------------------------------------------------------------------------------------------
  NV05-212    49,286      9,885      2,514,141    5,304,712      1,217       210.0       -80.0      212.00
---------------------------------------------------------------------------------------------------------------
  NV05-213    48,954      10,007     2,513,914    5,304,984      1,238        30.0       -80.0      263.00
---------------------------------------------------------------------------------------------------------------
  NV05-214    47,999      10,102     2,513,135    5,305,543      1,173        30.0       -80.0      254.00
---------------------------------------------------------------------------------------------------------------
  NV05-215    48,201      10,051     2,513,284    5,305,399      1,176        30.0       -80.0      254.00
---------------------------------------------------------------------------------------------------------------
  NV05-216    48,199      9,721      2,513,118    5,305,114      1,198        30.0       -80.0      200.00
---------------------------------------------------------------------------------------------------------------
  NV05-217    49,799      9,681      2,514,483    5,304,279      1,172        30.0       -60.0      248.00
---------------------------------------------------------------------------------------------------------------
  NV05-218    49,855      9,723      2,514,552    5,304,287      1,173        30.0       -60.0      194.50
---------------------------------------------------------------------------------------------------------------
  NV05-219    49,922      9,712      2,514,605    5,304,245      1,170        30.0       -60.0      266.00
---------------------------------------------------------------------------------------------------------------
  NV05-220    49,996      9,737      2,514,682    5,304,229      1,170        30.0       -70.0      176.00
---------------------------------------------------------------------------------------------------------------
  NV05-221    49,857      9,667      2,514,526    5,304,238      1,170        30.0       -60.0      194.00
---------------------------------------------------------------------------------------------------------------
  NV05-222    48,301      9,854      2,513,272    5,305,178      1,199        30.0       -85.0      239.00
---------------------------------------------------------------------------------------------------------------
  NV05-223    48,301      9,855      2,513,273    5,305,179      1,199        30.0       -45.0      181.50
---------------------------------------------------------------------------------------------------------------
  NV05-224    48,601      9,735      2,513,472    5,304,925      1,220        30.0       -75.0      152.00
---------------------------------------------------------------------------------------------------------------
  NV05-225    48,500      9,757      2,513,396    5,304,994      1,212        30.0       -65.0      146.00
---------------------------------------------------------------------------------------------------------------
  NV05-226    48,400      9,807      2,513,334    5,305,088      1,202        30.0       -58.0      140.00
---------------------------------------------------------------------------------------------------------------
  NV05-227    48,703      9,776      2,513,581    5,304,910      1,220        30.0       -90.0      251.00
---------------------------------------------------------------------------------------------------------------
  NV05-228    50,299      10,144     2,515,148    5,304,430      1,179        30.0       -50.0      61.50
---------------------------------------------------------------------------------------------------------------
  NV05-229    50,655      10,030     2,515,399    5,304,153      1,159        90.0       -45.0      79.50
---------------------------------------------------------------------------------------------------------------
  NV05-230    50,400      10,159     2,515,243    5,304,392      1,156        30.0       -45.0      82.30
---------------------------------------------------------------------------------------------------------------
  NV05-231    50,576      10,214     2,515,422    5,304,352      1,145        88.5       -80.0      80.00
---------------------------------------------------------------------------------------------------------------
  NV05-232    50,577      10,214     2,515,423    5,304,352      1,145        88.5       -45.0      67.30
---------------------------------------------------------------------------------------------------------------
  NV05-233    50,590      10,163     2,515,408    5,304,301      1,151        90.0       -48.0      100.30
---------------------------------------------------------------------------------------------------------------


                                                                              32
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  NV05-234    50,627      10,126     2,515,423    5,304,251      1,155        90.0       -45.0      70.10
---------------------------------------------------------------------------------------------------------------
  NV05-235    50,560      10,087     2,515,345    5,304,250      1,151        90.0       -65.0      143.00
---------------------------------------------------------------------------------------------------------------
  NV05-236    50,611      10,059     2,515,375    5,304,201      1,157        90.0       -45.0      100.40
---------------------------------------------------------------------------------------------------------------
  NV05-237    50,625      10,186     2,515,451    5,304,303      1,150        90.0       -45.0      82.20
---------------------------------------------------------------------------------------------------------------
  NV05-238    49,760      9,727      2,514,472    5,304,339      1,175        30.0       -60.0      167.00
---------------------------------------------------------------------------------------------------------------
  NV05-239    49,550      10,032     2,514,443    5,304,707      1,209        30.0       -45.0      103.00
---------------------------------------------------------------------------------------------------------------
  NV05-240    49,551      10,014     2,514,435    5,304,692      1,210        30.0       -65.0      90.00
---------------------------------------------------------------------------------------------------------------
  NV05-241    47,814      7,067      2,511,456    5,303,008      1,363       270.0       -45.0      118.50
---------------------------------------------------------------------------------------------------------------
  NV05-242    47,824      7,094      2,511,479    5,303,026      1,358       269.0       -45.0      70.50
---------------------------------------------------------------------------------------------------------------
  NV05-243    47,851      7,089      2,511,500    5,303,008      1,354       270.0       -60.0      95.00
---------------------------------------------------------------------------------------------------------------
  NV05-244    47,856      7,060      2,511,490    5,302,981      1,355       270.0       -60.0      71.00
---------------------------------------------------------------------------------------------------------------
  NV05-245    47,889      7,115      2,511,546    5,303,012      1,342       270.0       -60.0      89.00
---------------------------------------------------------------------------------------------------------------
  NV05-246    49,403      9,975      2,514,287    5,304,732      1,211        30.0       -87.0      209.50
---------------------------------------------------------------------------------------------------------------
  NV05-247    49,402      9,986      2,514,292    5,304,742      1,212        30.0       -54.0      173.40
---------------------------------------------------------------------------------------------------------------
  NV05-248    49,601      9,989      2,514,465    5,304,645      1,209        30.0       -60.0      81.00
---------------------------------------------------------------------------------------------------------------
  NV05-249    50,038      10,021     2,514,860    5,304,454      1,216        30.0       -50.0      63.60
---------------------------------------------------------------------------------------------------------------
  NV05-250    50,044      9,953      2,514,831    5,304,392      1,198        30.0       -50.0      120.00
---------------------------------------------------------------------------------------------------------------
  NV05-251    50,042      9,912      2,514,809    5,304,358      1,191        30.0       -65.0      99.00
---------------------------------------------------------------------------------------------------------------
  NV06-252    47,745      7,806      2,511,767    5,303,682      1,264       210.0       -80.0      407.21
---------------------------------------------------------------------------------------------------------------
  NV06-253    48,995      7,724      2,512,808    5,302,986      1,272       213.0       -70.0      471.07
---------------------------------------------------------------------------------------------------------------
  NV06-254    46,804      8,247      2,511,172    5,304,535      1,210       212.0       -80.0      314.40
---------------------------------------------------------------------------------------------------------------
  NV06-255    48,802      9,709      2,513,634    5,304,802      1,222        30.0       -90.0      131.00
---------------------------------------------------------------------------------------------------------------
  NV06-256    48,897      9,702      2,513,712    5,304,748      1,221        30.0       -90.0      185.00
---------------------------------------------------------------------------------------------------------------
  NV06-257    49,046      9,621      2,513,801    5,304,604      1,207        30.0       -90.0      140.00
---------------------------------------------------------------------------------------------------------------
  NV06-258    48,898      9,652      2,513,688    5,304,704      1,217        30.0       -90.0      100.80
---------------------------------------------------------------------------------------------------------------
  NV06-259    48,895      9,753      2,513,736    5,304,793      1,224        30.0       -90.0      122.00
---------------------------------------------------------------------------------------------------------------
  NV06-260    48,800      9,760      2,513,657    5,304,847      1,226        30.0       -90.0      131.00
---------------------------------------------------------------------------------------------------------------
  NV06-261    48,699      9,722      2,513,551    5,304,865      1,222        30.0       -90.0      131.50
---------------------------------------------------------------------------------------------------------------
  NV06-262    48,548      9,813      2,513,466    5,305,019      1,211        30.0       -90.0      122.00
---------------------------------------------------------------------------------------------------------------
  NV06-263    48,551      9,859      2,513,491    5,305,057      1,219        30.0       -90.0      131.00
---------------------------------------------------------------------------------------------------------------
  NV06-264    48,450      9,885      2,513,417    5,305,130      1,218       211.0       -70.0      134.00
---------------------------------------------------------------------------------------------------------------
  NV06-265    48,351      9,876      2,513,326    5,305,172      1,205        30.0       -80.0      137.10
---------------------------------------------------------------------------------------------------------------
  NV06-266    52,199      8,154      2,515,798    5,301,757      1,157       210.0       -80.0      263.20
---------------------------------------------------------------------------------------------------------------
  NV06-267    48,247      10,021     2,513,309    5,305,349      1,179        30.0       -90.0      149.20
---------------------------------------------------------------------------------------------------------------
  NV06-268    48,248      9,995      2,513,297    5,305,326      1,181       210.0       -60.0      143.40
---------------------------------------------------------------------------------------------------------------
  NV06-269    48,098      10,027     2,513,183    5,305,429      1,178        30.0       -90.0      161.00
---------------------------------------------------------------------------------------------------------------
  NV06-270    49,501      10,101     2,514,435    5,304,792      1,190        30.0       -90.0      68.00
---------------------------------------------------------------------------------------------------------------
  NV06-271    49,470      10,090     2,514,403    5,304,798      1,190        30.0       -90.0      101.20
---------------------------------------------------------------------------------------------------------------
  NV06-272    51,017      9,790      2,515,592    5,303,765      1,180        30.0       -75.0      175.70
---------------------------------------------------------------------------------------------------------------
  NV06-273    51,016      9,769      2,515,581    5,303,747      1,184        30.0       -75.0      185.00
---------------------------------------------------------------------------------------------------------------
  NV06-274    51,016      9,744      2,515,568    5,303,725      1,186        30.0       -75.0      197.00
---------------------------------------------------------------------------------------------------------------
  NV06-275    51,014      9,822      2,515,606    5,303,794      1,181        30.0       -75.0      161.00
---------------------------------------------------------------------------------------------------------------
  NV06-276    51,016      9,847      2,515,620    5,303,814      1,184        30.0       -75.0      197.00
---------------------------------------------------------------------------------------------------------------


                                                                              33
<PAGE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                       Easting    Northing   elevation    Azimuth     dip down
 Diamond     Local E     Local N      GK faja 2   GK faja 2   (metres)    (wrt GK       from         Length
Drill Hole                           Campo Inch  Campo Inch      HAE      CI north)    vertical     (metres)
---------------------------------------------------------------------------------------------------------------
<S>          <C>         <C>        <C>          <C>            <C>         <C>          <C>        <C>
  NV06-277    51,042      9,744      2,515,591    5,303,712      1,187        30.0       -75.0      212.20
---------------------------------------------------------------------------------------------------------------
  NV06-278    51,039      9,770      2,515,601    5,303,736      1,163        30.0       -75.0      212.00
---------------------------------------------------------------------------------------------------------------
  NV06-279    51,041      9,793      2,515,614    5,303,755      1,183        30.0       -75.0      206.00
---------------------------------------------------------------------------------------------------------------
  NV06-280    51,041      9,818      2,515,627    5,303,777      1,183        30.0       -75.0      218.40
---------------------------------------------------------------------------------------------------------------
  NV06-281    51,042      9,843      2,515,640    5,303,798      1,183        30.0       -75.0      212.00
---------------------------------------------------------------------------------------------------------------
  NV06-282    51,065      9,742      2,515,610    5,303,699      1,187        30.0       -75.0      227.30
---------------------------------------------------------------------------------------------------------------
  NV06-283    51,065      9,772      2,515,625    5,303,725      1,186        30.0       -75.0      227.00
---------------------------------------------------------------------------------------------------------------
  NV06-284    51,065      9,796      2,515,637    5,303,745      1,184        30.0       -75.0      229.20
---------------------------------------------------------------------------------------------------------------
  NV06-285    51,066      9,819      2,515,649    5,303,765      1,183        30.0       -75.0      223.00
---------------------------------------------------------------------------------------------------------------
  NV06-286    51,067      9,845      2,515,663    5,303,787      1,182        30.0       -75.0      206.00
---------------------------------------------------------------------------------------------------------------
  NV06-287    50,338      8,701      2,514,460    5,303,161      1,185       210.0       -45.0      221.00
---------------------------------------------------------------------------------------------------------------
  NV06-288    50,000      8,791      2,514,212    5,303,408      1,166       210.0       -45.0      248.00
---------------------------------------------------------------------------------------------------------------
  NV06-289    50,601      8,851      2,514,762    5,303,159      1,153       210.0       -45.0      248.00
---------------------------------------------------------------------------------------------------------------
  NV06-290    51,002      8,926      2,515,147    5,303,024      1,146       210.0       -45.0      245.00
---------------------------------------------------------------------------------------------------------------
  NV06-291    51,400      8,984      2,515,521    5,302,875      1,144       210.0       -45.0      242.00
---------------------------------------------------------------------------------------------------------------
  NV06-292    51,800      9,000      2,515,875    5,302,689      1,131       210.0       -45.0      251.00
---------------------------------------------------------------------------------------------------------------
  NV06-293    52,202      8,927      2,516,187    5,302,424      1,133       210.0       -45.0      105.50
---------------------------------------------------------------------------------------------------------------
  NV06-294    52,597      8,844      2,516,488    5,302,155      1,125       210.0       -45.0      59.00
---------------------------------------------------------------------------------------------------------------
  NV06-295    51,029      9,796      2,515,606    5,303,764      1,182       210.0       -75.0      206.00
---------------------------------------------------------------------------------------------------------------
  NV06-296    51,055      9,869      2,515,665    5,303,814      1,181       210.0       -75.0      215.00
---------------------------------------------------------------------------------------------------------------
  NV06-297    52,202      8,861      2,516,154    5,302,367      1,135       210.0       -45.0      275.00
---------------------------------------------------------------------------------------------------------------
  NV06-298    52,601      8,765      2,516,452    5,302,085      1,126       210.0       -45.0      110.10
---------------------------------------------------------------------------------------------------------------
                                                                             Total Metres Drilled:   50,646
---------------------------------------------------------------------------------------------------------------
</TABLE>
Note coordinates for holes 252 to 298 are provisional pending final surveys by a
professional surveyor.

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




                                                                              34
<PAGE>

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 of 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.  As of
this writing  over 687  analyses  had been made and  reviewed of each  standard,
blanks and  duplicate  sample  inserted  by the  Company  in the sample  stream.
Including  check  samples,  over 26,800 samples had been analyzed by the primary
laboratory (up to the end of hole 286).

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 1,216 duplicates.

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

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 contractors 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.



                                                                              35
<PAGE>

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 from surface  mapping  supported by
limited  drilling.  The geology of the Navidad  Project is  described  in a 2003
43-101 report entitled "Exploration of the Navidad Silver-Copper-Lead  Property,
December  2002  To May  2003,  Chubut  Province,  Argentina,  on  behalf  of IMA
Exploration Inc." by Qualified Person Paul Lhotka, Ph.D., P.Geo..

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  (or latitic)  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.

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   it  was  decided  to  use  a  minimum  of
approximately 50 g/t silver  equivalent  including the values of silver and lead
in the calculation. The silver equivalent calculation is based on a silver price
of US$6.00 per troy ounce and US$0.35 per pound for lead  according  the formula
AgEq = Ag g/t + (Pb% * 10000/250).  No  adjustments  have been made for relative
recoveries  of the two  metals  as at this  time  there  is  still  insufficient
information  to do so.  At this  time a  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 and the
intercepts listed 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,  56 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 of the mineralized body suggests that
it could be bulk mineable.  Grade


                                                                              36
<PAGE>
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,  however three holes designed to test this hypothesis
failed to find  indications of a feeder zone.  Moving to the southwest away from
this interpreted feeder zone, lead:silver ratios increase and are interpreted as
more distal portions of the deposit.

<TABLE>
MINERALIZED INTERCEPTS FROM DRILLHOLES AT THE GALENA HILL DEPOSIT

<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>       <C>       <C>       <C>       <C>
  NV03-03               -45        178.5        3.00    178.50      175.50     80          26       0.00      1.35     0.04
  --------------------------------------------------------------------------------------------------------------------------
         including                              3.00    128.30      125.30     100         33       0.00      1.68     0.05
  --------------------------------------------------------------------------------------------------------------------------
         including                             72.50    107.50       35.00     189         50       0.01      3.47     0.06
  --------------------------------------------------------------------------------------------------------------------------
         including                             86.20     95.45        9.25     294         77       0.01      5.43     0.06
  ==========================================================================================================================
  NV03-04               -45        285.0        2.80    266.70      263.90     156         74       0.00      2.04     0.08
  --------------------------------------------------------------------------------------------------------------------------
         including                              2.80    203.00      200.20     192         92       0.00      2.49     0.11
  --------------------------------------------------------------------------------------------------------------------------
         including                             39.60    176.45      136.85     237        117       0.00      2.99     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             39.60    121.25       81.65     268        142       0.00      3.15     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             39.60     94.70       55.10     283        164       0.00      2.97     0.10
  --------------------------------------------------------------------------------------------------------------------------
         including                             65.00     94.70       29.70     312        190       0.00      3.06     0.10
  --------------------------------------------------------------------------------------------------------------------------
         including                             65.00     83.50       18.50     377        241       0.00      3.40     0.10
  ==========================================================================================================================
  NV03-05               -60        217.7       43.30    126.25       82.95     399        229       0.01      4.24     0.20
  --------------------------------------------------------------------------------------------------------------------------
         including                             46.70    113.25       66.55     465        272       0.01      4.82     0.20
  --------------------------------------------------------------------------------------------------------------------------
         including                             46.70     55.90        9.20     852        579       0.04      6.82     0.36
  ----------------------------------------------------------------------------- --------------------------------------------
         including                             89.00    107.25       18.25     951        503       0.00     11.19     0.36
  ==========================================================================================================================
  NV04-12               -65        220.0       18.80     27.80        9.00     362         42       0.00      8.01     2.56
  --------------------------------------------------------------------------------------------------------------------------
               and                             27.80     35.45        7.65     455         71       0.00      9.60     0.54
  --------------------------------------------------------------------------------------------------------------------------
          combined                             18.80     35.45       16.65     392         54       0.00      8.45     1.55
  --------------------------------------------------------------------------------------------------------------------------
            within                             18.80     60.60       41.80     214         35       0.00      4.46     0.68
  ==========================================================================================================================
  NV04-13               -45        142.7       20.00     64.70       44.70     246        223       0.16      0.56     0.09
  ==========================================================================================================================
  NV04-14               -70        158.0       27.70    142.75      115.05     664        454       0.08      5.26     0.50
  --------------------------------------------------------------------------------------------------------------------------
         including                             27.70     75.10       47.40    1032        776       0.17      6.42     0.92
  --------------------------------------------------------------------------------------------------------------------------
         including                             32.70     50.70       18.00    1631      1,421       0.42      5.24     1.69
  ==========================================================================================================================
  NV04-15               -60        139.6       46.55    115.65       69.10     172        114       0.02      1.46     0.13
  --------------------------------------------------------------------------------------------------------------------------
         including                             47.05     55.55        8.50     723        462       0.08      6.54     0.49
  ==========================================================================================================================
  NV04-16               -55        250.5       63.45     72.45        9.00     133         34       0.00      2.47     0.07
  ==========================================================================================================================
  NV04-17               -85        164.2       21.20     40.20       19.00     408         97       0.01      7.79     0.70
  --------------------------------------------------------------------------------------------------------------------------
         including                             30.20     40.20       10.00     681        162       0.02     12.98     0.42
  ==========================================================================================================================
  NV04-18               -55        274.7      232.00    244.00       12.00     86          70       0.06      0.40     0.01
  ==========================================================================================================================
  NV04-19               -80        188.1       24.00     90.50       66.50     210        100       0.00      2.74     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             25.10     37.10       12.00     293        165       0.02      3.20     0.34
  --------------------------------------------------------------------------------------------------------------------------
         including                             49.35     57.75        8.40     346        177       0.02      4.22     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             74.00     81.55        7.55     362        174       0.00      4.69     0.11
  ==========================================================================================================================
  NV04-20               -70         70.9       35.50     40.60        5.10     128         55       0.02      1.82     0.03
  ==========================================================================================================================


                                                                              37
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>       <C>       <C>       <C>       <C>
  NV04-21               -45        198.1       42.45    126.00       83.55     340        322       0.23      0.47     0.21
  --------------------------------------------------------------------------------------------------------------------------
         including                             49.95     70.50       20.55     725        703       0.47      0.54     0.40
  ==========================================================================================================================
  NV04-22               -75        193.8       38.65    101.65       63.00     491        418       0.15      1.82     0.32
  --------------------------------------------------------------------------------------------------------------------------
                                               42.50     55.60       13.10     991        923       0.26      1.70     0.56
  ==========================================================================================================================
  NV04-23               -85        191.1       48.40     71.20       22.80     45          26       0.00      0.47     0.02
  ==========================================================================================================================
  NV04-24               -50        145.6        3.00      5.65        2.65     963        918       0.28      1.13     0.18
  ==========================================================================================================================
  NV04-26               -75        134.0       none                             0
  ==========================================================================================================================
  NV04-28               -60        158.0       45.70    134.75       89.05     191        120       0.01      1.77     0.32
  --------------------------------------------------------------------------------------------------------------------------
         including                             45.70     67.75       22.05     49          23      -0.01      0.65     0.90
  --------------------------------------------------------------------------------------------------------------------------
         including                             67.75    134.75       67.00     238        152       0.01      2.14     0.12
  --------------------------------------------------------------------------------------------------------------------------
         including                             68.10     71.55        3.45    1199        761       0.05     10.96     0.60
  --------------------------------------------------------------------------------------------------------------------------
  NV04-29               -80        158.0       28.50     38.65       10.15     145         72       0.00      1.84     0.05
  ==========================================================================================================================
  NV04-30               -80        209.0       44.80     52.70        7.90     92          48      -0.01      1.11     0.04
  ==========================================================================================================================
  NV04-31               -80        296.0        3.05     23.85       20.80     102         52       0.00      1.25     0.05
  --------------------------------------------------------------------------------------------------------------------------
               and                             47.35     78.45       31.10     176         71       0.00      2.62     0.31
  --------------------------------------------------------------------------------------------------------------------------
         including                             73.85     75.95        2.10    1371        619      -0.01     18.82     3.58
  ==========================================================================================================================
  NV04-36               -80         77.0        8.00     57.90       49.90     228        179       0.08      1.21     0.17
  --------------------------------------------------------------------------------------------------------------------------
         including                             35.30     49.30       14.00     248        209       0.10      0.97     0.15
  ==========================================================================================================================
  NV04-37               -80        102.5       12.80     89.10       76.30     191        139       0.04      1.28     0.12
  --------------------------------------------------------------------------------------------------------------------------
         including                             13.80     17.70        3.90     887        597       0.02      7.23     0.58
  ==========================================================================================================================
  NV04-38               -80        107.0       20.70     61.20       40.50     120        105       0.04      0.40     0.10
  --------------------------------------------------------------------------------------------------------------------------
         including                             34.10     52.55       18.45     173        167       0.07      0.15     0.13
  ==========================================================================================================================
  NV04-41               -45        145.2       58.10    129.00       70.90     92          78       0.08      0.33     0.20
  ==========================================================================================================================
  NV04-42               -80        187.9       48.35    161.55      113.20     230        151       0.03      1.98     0.11
  --------------------------------------------------------------------------------------------------------------------------
         including                             67.90    121.90       54.00     360        239       0.04      3.04     0.16
  --------------------------------------------------------------------------------------------------------------------------
         including                            148.90    161.55       12.65     191        122       0.04      1.74     0.11
  ==========================================================================================================================
  NV04-43               -75        230.6       44.20    127.25       83.05     372        153       0.01      5.48     0.90
  --------------------------------------------------------------------------------------------------------------------------
         including                             44.20     89.00       44.80     489        217       0.01      6.81     1.06
  ==========================================================================================================================
  NV04-44               -75        232.9       13.35    103.90       90.55     391        178       0.01      5.33     0.22
  --------------------------------------------------------------------------------------------------------------------------
         including                             13.35     28.90       15.55     796        445       0.02      8.77     0.14
  ==========================================================================================================================
  NV04-45               -80        167.0       43.00     69.85       26.85     569        355       0.00      5.34     0.33
  --------------------------------------------------------------------------------------------------------------------------
         including                             43.00     51.05        8.05    1571        958       0.01     15.31     0.87
  ==========================================================================================================================
  NV04-46               -80        239.0       30.40    167.00      136.60     73          31       0.00      1.06     0.05
  --------------------------------------------------------------------------------------------------------------------------
         including                             30.40     65.00       34.60     122         62       0.00      1.51     0.06
  ==========================================================================================================================
  NV04-47               -75        242.0       12.90    131.00      118.10     119         37       0.00      2.06     0.13
  --------------------------------------------------------------------------------------------------------------------------
         including                             84.50    116.00       31.50     232         60       0.00      4.31     0.25
  ==========================================================================================================================
  NV04-48               -45         67.5       16.50     32.85       16.35     52          31       0.00      0.53     0.18
  --------------------------------------------------------------------------------------------------------------------------
         including                             26.70     31.80        5.10     71          50       0.01      0.54     0.25
  ==========================================================================================================================
  NV04-49               -80         82.8       63.45     82.80       19.35     47          32       0.00      0.38     0.05
  ==========================================================================================================================


                                                                              38
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>        <C>       <C>       <C>      <C>
  NV04-50               -80        113.0       20.80    101.00       80.20     292        255       0.14      0.93     0.19
  --------------------------------------------------------------------------------------------------------------------------
         including                             20.80     65.00       44.20     409        391       0.23      0.44     0.26
  ==========================================================================================================================
  NV04-51               -45        100.5       64.50     81.85       17.35     281        186       0.05      2.37     0.46
  ==========================================================================================================================
  NV04-52               -45        100.5       16.50     62.55       46.05     296        271       0.10      0.62     0.21
  ==========================================================================================================================
  NV04-53               -50         97.5       15.70     30.80       15.10     81          52       0.04      0.72     0.85
  ==========================================================================================================================
  NV04-56               -45        142.5       19.30    127.75      108.45     106        102       0.08      0.09     0.08
  --------------------------------------------------------------------------------------------------------------------------
         including                             22.50     64.50       42.00     169        164       0.09      0.12     0.08
  ==========================================================================================================================
  NV04-57               -80        245.1       35.90    170.50      134.60     323        158       0.00      4.15     0.34
  --------------------------------------------------------------------------------------------------------------------------
         including                             39.40     61.25       21.85    1075        677       0.03      9.96     0.54
  ==========================================================================================================================
  NV05-175              -50        516.1       47.18    241.63      194.45     366        164       0.01      5.04     0.34
  --------------------------------------------------------------------------------------------------------------------------
         including                             47.18    174.87      127.69     515        225       0.01      7.24     0.50
  --------------------------------------------------------------------------------------------------------------------------
         including                             47.18     97.00       49.82     973        446       0.02     13.17     0.67
  ==========================================================================================================================
  NV05-197             -52         441.1       94.94    168.98      74.04      317        239       0.08      1.97     0.16
  --------------------------------------------------------------------------------------------------------------------------
         including                             94.94    117.36       22.42     486        294       0.03      4.80     0.20
  --------------------------------------------------------------------------------------------------------------------------
               and                            143.23    168.98       25.75     361        348       0.15      0.31     0.20
  ==========================================================================================================================
  NV06-272             -75         175.7       27.06    154.17      127.11     265        129       0.01      3.40     0.25
  --------------------------------------------------------------------------------------------------------------------------
         including                             27.06     93.01       65.95     402        208       0.02      4.85     0.27
  ==========================================================================================================================
  NV06-273             -75         185.0       26.21    122.70       96.49     296        157       0.01      3.49     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             26.21     73.89       47.68     392        238       0.02      3.84     0.15
  ==========================================================================================================================
  NV06-274             -75         197.0        6.88    107.71      100.83     177      119.5       0.02      1.44     0.14
  --------------------------------------------------------------------------------------------------------------------------
         including                             29.46     68.72       39.26     281        221       0.03      1.48     0.25
  ==========================================================================================================================
  NV06-275             -75         161.0       28.50    148.55      120.05     410        218       0.02      4.81     0.73
  --------------------------------------------------------------------------------------------------------------------------
         including                             33.01     60.78       27.77     909        539       0.05      9.26     1.68
  ==========================================================================================================================
  NV06-276             -75         197.0       38.00    137.66       99.66     371        210       0.01      4.02     0.28
  --------------------------------------------------------------------------------------------------------------------------
         including                             38.00     91.60       53.60     428        247       0.01      4.52     0.42
  ==========================================================================================================================
  NV06-277             -75         212.2        3.05    117.62      114.57     215        125       0.00      2.26     0.08
  --------------------------------------------------------------------------------------------------------------------------
         including                              3.05     47.20       44.15     426        266       0.01      4.02     0.11
  --------------------------------------------------------------------------------------------------------------------------
         including                             81.64    117.62       35.98     123         48       0.00      1.87     0.07
  --------------------------------------------------------------------------------------------------------------------------
               and                            167.79    184.41       16.62     294        122       0.02      4.30     1.34
  ==========================================================================================================================
  NV06-278             -75         212.0       31.18    135.80      104.62     321        154       0.01      4.17     0.28
  --------------------------------------------------------------------------------------------------------------------------
         including                             31.18     75.27       44.09     513        290       0.02      5.58     0.18
  ==========================================================================================================================
  NV06-279             -75         206.0       33.00    189.78      156.78     312        121       0.01      4.79     0.73
  --------------------------------------------------------------------------------------------------------------------------
         including                             33.00     74.98       41.98     639        231       0.02     10.20     1.50
  ==========================================================================================================================
  NV06-280             -75         218.4       44.40    162.72      118.32     366        149       0.01      5.41     0.94
  --------------------------------------------------------------------------------------------------------------------------
         including                             50.40     90.38       39.98     463        190       0.00      6.82     1.50
  ==========================================================================================================================
  NV06-281             -75         212.0       57.72    140.00       82.28     308        133       0.01      4.36     0.47
  --------------------------------------------------------------------------------------------------------------------------
         including                             57.72    100.14       42.42     441        185       0.00      6.42     0.85
  ==========================================================================================================================
  NV06-282             -75         227.3       11.30    189.67      178.37     247        124       0.01      3.07     0.48
  --------------------------------------------------------------------------------------------------------------------------
         including                             11.30     89.30       78.00     423        225       0.01      4.96     0.31
  --------------------------------------------------------------------------------------------------------------------------


                                                                              39
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>        <C>       <C>       <C>      <C>
         including                            177.90    189.67       11.77     338        200       0.02      3.44     0.50
  ==========================================================================================================================
  NV06-283             -75         227.0       27.87    123.01       95.14     317        161       0.01      3.91     0.55
  --------------------------------------------------------------------------------------------------------------------------
         including                             36.76     84.58       47.82     429        250       0.02      4.49     0.25
  --------------------------------------------------------------------------------------------------------------------------
               and                            170.91    188.77       17.86     190        110       0.01      2.00     0.76
  ==========================================================================================================================
  NV06-284             -75         229.2       48.79    177.02      128.23     335        151       0.01      4.61     0.67
  --------------------------------------------------------------------------------------------------------------------------
         including                             57.57     90.44       32.87     891        427       0.01     11.61     1.10
  ==========================================================================================================================
  NV06-285             -75         223.0       41.00    164.34      123.34     345        121       0.01      5.60     1.38
  --------------------------------------------------------------------------------------------------------------------------
         including                             47.00     77.70       30.70     542        192       0.01      8.75     2.80
  ==========================================================================================================================
  NV06-286             -75         206.0       44.90    133.47       88.57     157         71       0.01      2.14     0.40
  --------------------------------------------------------------------------------------------------------------------------
         including                             71.85     95.97       24.12     288        134       0.01      3.84     0.36
  --------------------------------------------------------------------------------------------------------------------------
</TABLE>
1.All length weighted average (LWA) results are "uncut"
2.Silver Equivalent is calculated by the formula AgEq=Ag g/t + (Pb% * 10000/250)

NAVIDAD HILL DRILLING RESULTS

Sixty-two  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 but two somewhat  unexpected  geological 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. Much of
Navidad  Hill has little  lead but the silver  equivalent  calculation  has been
shown for all  intercepts  for  comparison  and  because  the  stratigraphically
controlled mineralization often has significant lead values.

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.
Assuming a generally flat lying



                                                                              40
<PAGE>
orientation, true thicknesses of the intercepts in this zone are from 70 to 100%
of the composites tabulated below.

<TABLE>
MINERALIZED INTERCEPTS FROM THE NAVIDAD HILL DRILLING

<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>         <C>       <C>      <C>        <C>       <C>       <C>
NV03-01                -45         109.5        3.05     61.45       58.40     113       111       0.22      0.06      0.07
----------------------------------------------------------------------------------------------------------------------------
         including                             10.10     31.35       21.25     237       233       0.35      0.09      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                             10.10     17.50        7.40     538       536       0.81      0.07      0.14
----------------------------------------------------------------------------------------------------------------------------
         including                             15.70     16.50        0.80    2690      2678       3.07      0.30      0.24
============================================================================================================================
NV03-02                -45         154.5        2.50     50.50       48.00     100        98       0.15      0.06      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                              5.50      6.45        0.95     868       858       8.07      0.26      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             17.60     25.00        7.40     234       227       0.25      0.16      0.09
----------------------------------------------------------------------------------------------------------------------------
         including                             40.40     41.45        1.05    1332      1320       0.82      0.28      0.14
============================================================================================================================
NV03-06                -45         136.2        3.00     63.20       60.20     165       162       0.26      0.10      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                             23.30     28.80        5.50     433       425       0.74      0.20      0.10
============================================================================================================================
NV03-07                -45         108.9        3.00     86.65       83.65     258       247       0.32      0.27      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                              3.00     40.75       37.75     489       475       0.54      0.35      0.07
----------------------------------------------------------------------------------------------------------------------------
         including                              3.00      6.90        3.90    2011      1998       0.92      0.32      0.07
----------------------------------------------------------------------------------------------------------------------------
         including                             30.85     33.25        2.40    2154      2130       3.34      0.60      0.09
============================================================================================================================
NV03-08                -45         146.0        2.50    146.00      143.50     154       146       0.21      0.20      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                              2.50     71.10       68.60     291       275       0.35      0.40      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                             26.10     40.15       14.05    1152      1084       1.25      1.69      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                             26.10     28.40        2.30    2766      2661       1.64      2.63      0.16
----------------------------------------------------------------------------------------------------------------------------
         including                             35.45     37.20        1.75    3077      3043       4.31      0.86      0.11
============================================================================================================================
NV03-09                -45         106.1        2.50     84.30       81.80     129       125       0.12      0.10      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             21.00     21.70        0.70    5124      5068       0.36      1.41      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             65.25     66.20        0.95    1475      1441       1.62      0.86      0.07
============================================================================================================================
NV03-10                -45         150.7        3.50     78.50       75.00     113       111       0.23      0.05      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                              3.50      9.40        5.90     673       670       1.25      0.09      0.06
============================================================================================================================
NV03-11                -45         133.2        1.52     12.10       10.58      99        98       0.53      0.02      0.12
============================================================================================================================
NV04-54                -50         190.5        3.05    107.40      104.35     128       125       0.20      0.07      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                              3.05     38.50       35.45     303       295       0.51      0.19      0.08
============================================================================================================================
NV04-55                -45         168.8        3.00     63.60       60.60      28        27       0.07      0.04      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                             38.05     43.40        5.35      74        73       0.35      0.03      0.07
----------------------------------------------------------------------------------------------------------------------------
NV04-65                -45         229.5        4.50     23.87       19.37      91        81       0.07      0.25      0.11
----------------------------------------------------------------------------------------------------------------------------
               and                             23.87    130.50      106.63      19        18       0.05      0.02      0.03
----------------------------------------------------------------------------------------------------------------------------
NV04-69                -45         181.3        3.00    103.95      100.95      56        53       0.07      0.07      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             29.43     34.69        5.26      81        78       0.22      0.08      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             63.83     66.05        2.22     233       232       0.02      0.02      0.01
============================================================================================================================
NV04-70                -45         190.3        3.00     87.75       84.75      85        83       0.09      0.04      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             58.30     62.85        4.55     424       421       0.23      0.06      0.04
----------------------------------------------------------------------------------------------------------------------------


                                                                              41
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>         <C>       <C>      <C>        <C>       <C>       <C>
         including                             81.10     87.75        6.65     176       175       0.12      0.03      0.03
============================================================================================================================
NV04-71                -45         172.5        3.00     88.50       85.50      57        56       0.12      0.03      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             69.50     88.50       19.00     150       149       0.15      0.02      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             78.15     85.50        7.35     267       265       0.21      0.05      0.03
============================================================================================================================
NV04-72                -45         223.2        3.00     53.85       50.85      29        26       0.07      0.06      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                             45.01     53.85        8.84      48        46       0.04      0.04      0.02
============================================================================================================================
NV04-73                -45         193.5        3.00     36.40       33.40     126        94       0.04      0.80      0.48
----------------------------------------------------------------------------------------------------------------------------
         including                             28.50     36.40        7.90     340       292       0.17      1.19      0.13
----------------------------------------------------------------------------------------------------------------------------
               and                             58.00     59.40        1.40    3982      3975       0.88      0.16      0.07
============================================================================================================================
NV04-83                -45         169.5        4.50     88.00       83.50      98        97       0.15      0.04      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                             53.00     61.91        8.91     213       211       0.25      0.04      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                             79.50     88.00        8.50     238       237       0.12      0.03      0.00
============================================================================================================================
NV04-84                -45         213.0       13.90     55.50       41.60      57        56       0.17      0.02      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                             22.20     23.53        1.33      99        98       0.26      0.02      0.07
----------------------------------------------------------------------------------------------------------------------------
               and                             77.00     81.97        4.97      57        57       0.17      0.00     -0.01
============================================================================================================================
NV04-85                -45          88.5        4.50     28.80       24.30     144       142       0.21      0.06      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                              4.50      8.20        3.70     694       689       0.68      0.14      0.11
============================================================================================================================
NV04-89                -60          97.5       17.70     28.60       10.90     144       109       0.13      0.89      0.15
============================================================================================================================
NV04-90                -45         106.5       16.50     52.33       35.83    2995      2850       0.90      3.62      0.20
----------------------------------------------------------------------------------------------------------------------------
         including                             33.00     46.45       13.45    7584      7321       2.12      6.56      0.19
----------------------------------------------------------------------------------------------------------------------------
         including                             33.00     40.26        7.26   12413     11995       2.32     10.45      0.19
============================================================================================================================
NV04-97                -60         100.5        7.50     39.24       31.74     202       105       0.01      2.43      0.24
----------------------------------------------------------------------------------------------------------------------------
         including                             25.50     39.24       13.74     359       148       0.03      5.28      0.23
============================================================================================================================
NV04-98                -60          76.7       40.93     67.70       26.77     277       185       0.20      2.30      0.09
============================================================================================================================
NV04-99                -60          88.7       44.60     74.58       29.98     260       188       0.14      1.80      0.08
----------------------------------------------------------------------------------------------------------------------------
         including                             44.60     61.70       17.10     402       280       0.16      3.05      0.09
============================================================================================================================
NV04-100               -60         130.7       23.45     65.19       41.74     494       390       0.22      2.61      0.09
----------------------------------------------------------------------------------------------------------------------------
         including                             40.60     49.70        9.10     957       718       0.32      5.97      0.12
============================================================================================================================
NV04-101               -60         109.7       none
============================================================================================================================
NV04-102               -60         122.0       47.78     63.59       15.81     187       116       0.09      1.78      0.27
----------------------------------------------------------------------------------------------------------------------------
         including                             56.00     63.59        7.59     226       191       0.17      0.87      0.11
============================================================================================================================
NV04-103               -60          79.8       11.02     16.80        5.78      71        63       0.05      0.21      0.33
============================================================================================================================
NV04-104               -60         100.3       38.45     51.60       13.15    1521      1489       0.09      0.80      0.09
============================================================================================================================
NV04-109               -60         133.5        3.00    105.06      102.06      79        73       0.13      0.15      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                              3.00     50.07       47.07      93        88       0.13      0.12      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                             20.66     50.07       29.41     115       111       0.14      0.11      0.04
============================================================================================================================
NV04-110               -45         100.5        3.00     64.50       61.50     139       128       0.17      0.27      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                              3.00     21.46       18.46     343       312       0.43      0.77      0.07
----------------------------------------------------------------------------------------------------------------------------
         including                             16.12     21.46        5.34    1110      1006       1.39      2.59      0.18
============================================================================================================================


                                                                              42
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>         <C>       <C>      <C>        <C>       <C>       <C>
NV04-111               -65          35.0        3.00     35.00       32.00      31        28       0.05      0.06      0.07
============================================================================================================================
NV04-112               -45          85.5        6.00     64.68       58.68     222       208       0.22      0.35      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                              6.00     16.26       10.26     401       375       0.71      0.67      0.17
----------------------------------------------------------------------------------------------------------------------------
         including                             28.87     43.65       14.78     357       324       0.26      0.83      0.03
============================================================================================================================
NV04-113               -45          76.5        4.50     28.75       24.25      61        60       0.46      0.03      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                              4.50     10.50        6.00     110       109       0.87      0.03      0.04
============================================================================================================================
NV04-114               -60          62.1        5.56     39.28       33.72      73        57       0.09      0.39      0.12
----------------------------------------------------------------------------------------------------------------------------
         including                              6.50     12.75        6.25     104        83       0.16      0.51      0.17
============================================================================================================================
NV04-115               -60          62.0        8.00     18.05       10.05     165       151       0.04      0.35      0.13
============================================================================================================================
NV04-116               -60          70.7       15.00     45.40       30.40     325       243       0.32      2.04      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                             15.00     36.42       21.42     436       322       0.39      2.85      0.13
============================================================================================================================
NV04-117               -45         109.5       25.50     53.65       28.15    1154      1115       0.45      0.98      0.13
----------------------------------------------------------------------------------------------------------------------------
         including                             42.04     48.01        5.97    4677      4579       1.82      2.47      0.14
============================================================================================================================
NV04-118               -60          80.0       44.00     51.62        7.62     186       155       0.09      0.79      0.11
============================================================================================================================
NV04-119               -60          77.1       44.10     55.30       11.20     132        92       0.03      1.00      0.35
============================================================================================================================
NV04-120               -60          95.0        7.12     65.65       58.53      55        47       0.07      0.22      0.25
----------------------------------------------------------------------------------------------------------------------------
         including                             26.00     31.24        5.24     102        84       0.04      0.43      0.18
----------------------------------------------------------------------------------------------------------------------------
               and                             62.80     65.65        2.85     254       242       0.23      0.30      0.05
============================================================================================================================
NV04-132               -60         127.8       49.55     56.75        7.20      66        31       0.05      0.86      0.31
----------------------------------------------------------------------------------------------------------------------------
               and                             96.71    101.00        4.29      82        62       0.10      0.50      0.04
============================================================================================================================
NV04-133               -60         184.8       94.80    105.32       10.52      95        80       0.14      0.38      0.03
----------------------------------------------------------------------------------------------------------------------------
               and                            153.97    172.80       18.83     117       113       0.13      0.11      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                            163.80    167.70        3.90     465       450       0.30      0.36      0.11
============================================================================================================================
NV05-139               -70          80.0       26.00     43.84       17.84    1070      1037       2.00      0.82      0.12
----------------------------------------------------------------------------------------------------------------------------
         including                             36.20     42.90        6.70    2391      2373       4.98      0.43      0.08
============================================================================================================================
NV05-140               -60          80.0       29.00     61.71       32.71     109        85       0.09      0.62      0.09
----------------------------------------------------------------------------------------------------------------------------
         including                             29.00     41.56       12.56     232       171       0.14      1.52      0.12
============================================================================================================================
NV05-141               -60          80.0        8.00     34.45       26.45     177       149       0.07      0.72      0.25
----------------------------------------------------------------------------------------------------------------------------
         including                             19.15     24.13        4.98     463       411       0.13      1.31      0.16
============================================================================================================================
NV05-142               -60          77.0       11.00     45.45       34.45    1285      1220       1.04      1.64      0.18
----------------------------------------------------------------------------------------------------------------------------
         including                             23.00     43.22       20.22    2034      1979       1.67      1.39      0.15
============================================================================================================================
NV05-157               -60         131.1       14.10     63.88       49.78     101        53       0.06      1.20      0.19
----------------------------------------------------------------------------------------------------------------------------
         including                             14.10     37.56       23.46     169        70       0.03      2.48      0.40
============================================================================================================================
NV05-158               -60         104.1       35.10     68.10       33.00     111        90       0.09      0.51      0.30
----------------------------------------------------------------------------------------------------------------------------
         including                             47.10     65.10       18.00     177       147       0.15      0.75      0.07
============================================================================================================================
NV05-159               -60         137.5       14.10     92.94       78.84      65        52       0.06      0.34      0.15
----------------------------------------------------------------------------------------------------------------------------
         including                             14.10     50.92       36.82      86        65       0.05      0.51      0.30
============================================================================================================================
NV05-160               -60         128.2       29.15     33.26        4.11     668       623       0.33      1.12      0.14
============================================================================================================================


                                                                              43
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>         <C>       <C>      <C>        <C>       <C>       <C>
NV05-161               -60          83.1        3.05     21.16       18.11      61        44       0.05      0.44      0.14
============================================================================================================================
NV05-217               -60         248.0      137.00    141.15        4.15      55        46       0.27      0.21      0.07
============================================================================================================================
NV05-218               -60         194.5       63.79     74.84       11.05     214        47       0.04      4.16      0.04
============================================================================================================================
NV05-219               -60         266.0       58.89     60.87        1.98     678       436       0.15      6.05      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                             81.17    102.87       21.70      78        67       0.06      0.28      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             81.17     89.15        7.98     112        92       0.08      0.48      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             94.17    102.87        8.70      77        72       0.08      0.12      0.02
============================================================================================================================
NV05-220               -70         176.0       66.65     93.92       27.27     136        80       0.04      1.40      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             66.65     68.75        2.10     325        79       0.02      6.14      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                             90.68     93.92        3.24     390       389       0.23      0.02      0.02
============================================================================================================================
NV05-221               -60         194.0       none
============================================================================================================================
NV05-238               -60         167.0       57.61     61.46        3.85      46        14      -0.01      0.78      0.99
----------------------------------------------------------------------------------------------------------------------------
               and                            119.00    134.86       15.86      51        49       0.04      0.06      0.02
============================================================================================================================
NV05-248               -60          81.0       24.00     41.14       17.14     171       136       0.18      0.86      0.27
----------------------------------------------------------------------------------------------------------------------------
         including                             28.24     34.99        6.75     279       243       0.29      0.89      0.25
============================================================================================================================
NV05-249               -50          63.6        3.00      8.73        5.73      62        62       0.09      0.00      0.05
============================================================================================================================
NV05-250               -50         120.0        3.00      9.29        6.29     118       113       0.13      0.11      0.07
----------------------------------------------------------------------------------------------------------------------------
               and                             28.26     35.87        7.61      61        59       0.19      0.05      0.04
============================================================================================================================
NV05-251               -65          99.0       34.17     41.19        7.02      54        54       0.11      0.01      0.03
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. All length weighted average (LWA) results are "uncut"
2. Silver Equivalent is calculated by the formula AgEq=Ag g/t + (Pb% *
   10000/250)

CALCITE HILL DRILLING RESULTS

Sixty  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.



                                                                              44
<PAGE>

<TABLE>
MINERALIZED INTERCEPTS FROM CALCITE HILL DRILLING

<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>        <C>       <C>         <C>      <C>        <C>        <C>       <C>       <C>
----------------------------------------------------------------------------------------------------------------------------
NV04-88                -80         192.3       70.30    142.63       72.33     340        202       0.05      3.45      0.12
----------------------------------------------------------------------------------------------------------------------------
         including                             81.61    142.63       61.02     341        226       0.05      2.87      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                             70.30    110.92       40.62     327         89       0.02      5.95      0.21
----------------------------------------------------------------------------------------------------------------------------
         including                            110.92    123.36       12.44     693        672       0.14      0.50      0.01
============================================================================================================================
NV04-121               -70         149.1       none
============================================================================================================================
NV04-122               -70         253.5      152.27    199.83       40.78      79         70       0.08      0.23      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                            179.61    199.83       20.22     114        102       0.13      0.29      0.02
============================================================================================================================
NV04-123               -70         199.9       none
============================================================================================================================
NV04-124               -80         209.3       72.45    195.05      122.60     224        195       0.09      0.74      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                             72.45    104.00       31.55     574        476       0.13      2.46      0.03
----------------------------------------------------------------------------------------------------------------------------
               and                             86.22     87.67        1.45   5,922      5,761       0.75      4.05      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                            116.50    127.76       11.26     313        308       0.17      0.13      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                            145.70    149.82        4.12     134        129       0.06      0.12      0.00
----------------------------------------------------------------------------------------------------------------------------
         including                            176.47    180.71        4.24     526        500       0.27      0.63      0.05
============================================================================================================================
NV04-125               -80         167.1       none
============================================================================================================================
NV04-126               -50         283.5       87.40    283.50      196.10     131        113       0.05      0.44      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                             87.40    187.66      100.26     189        156       0.05      0.83      0.21
----------------------------------------------------------------------------------------------------------------------------
         including                            120.72    187.66       66.94     252        228       0.07      0.61      0.00
----------------------------------------------------------------------------------------------------------------------------
   ends in mineral                            270.17    283.50       13.33     232        232       0.06     -0.01      0.00
============================================================================================================================
NV05-134               -70         281.0       71.10    106.01       34.91      82         60       0.05      0.55      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             90.11    106.01       15.90     103        102       0.09      0.04      0.00
============================================================================================================================
NV05-135               -70         266.0       54.43     84.87       30.44      79         43       0.06      0.89      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             54.43     65.27       10.84     180         82       0.12      2.44      0.07
----------------------------------------------------------------------------------------------------------------------------
               and                            110.57    110.81        0.24    2954      2,954       0.28     -0.01      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            222.39    224.88        2.49     372        367       0.11      0.14      0.00
============================================================================================================================
NV05-136               -70         251.0       none
============================================================================================================================
NV05-137               -80         262.0       60.59     73.05       12.46      71         13       0.00      1.45      0.02
============================================================================================================================
NV05-138               -56         250.0       87.74    211.00      123.26     182        139       0.09      1.07      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                            155.50    160.00        4.50     671        654       0.31      0.42      0.00
----------------------------------------------------------------------------------------------------------------------------
               and                            192.50    211.00       18.50     393        387       0.13      0.15      0.01
============================================================================================================================
NV05-143               -55         268.8       82.30    211.39      129.09     131        125       0.05      0.16      0.00
----------------------------------------------------------------------------------------------------------------------------
         including                             82.30     88.04        5.74     222        117       0.07      2.64      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            116.30    126.56       10.26    1264       1257       0.35      0.18      0.02
----------------------------------------------------------------------------------------------------------------------------
          combined                             82.30    128.86       46.56     316        300       0.10      0.39      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            190.31    200.45       10.14     159        157       0.14      0.06      0.00
============================================================================================================================
NV05-144               -65         260.1       69.27     82.62       13.35      51         19       0.00      0.80      0.37
============================================================================================================================


                                                                              45
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>        <C>       <C>         <C>      <C>        <C>        <C>       <C>       <C>
NV05-145               -65         250.7       68.54     76.60        8.06      61         16       0.00      1.12      0.52
============================================================================================================================
NV05-146               -60         199.8       55.50     83.39       27.89      47         34       0.06      0.32      0.17
----------------------------------------------------------------------------------------------------------------------------
         including                             71.35     83.39       12.04      58         59       0.14     -0.01      0.04
----------------------------------------------------------------------------------------------------------------------------
               and                            150.68    153.70        3.02     313        297       0.10      0.41      0.03
============================================================================================================================
NV05-147               -70         191.1       74.10     87.72       13.62      39         37       0.07      0.06      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            163.37    170.10        6.73      46         43       0.10      0.07      0.03
============================================================================================================================
NV05-148               -80         170.1       77.87    160.85       82.98     258        209       0.08      1.23      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                            115.81    120.40        4.59    1244       1197       0.23      1.16      0.01
============================================================================================================================
NV05-149               -80         221.1       70.97    195.17      124.20     146        135       0.09      0.29      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             90.66    131.30       40.64     238        229       0.09      0.21      0.01
============================================================================================================================
NV05-150               -80         188.1       70.17     75.53        5.36      65         35      -0.01      0.75      0.08
----------------------------------------------------------------------------------------------------------------------------
               and                             83.69     92.18        8.49     110         38       0.02      1.81      0.00
----------------------------------------------------------------------------------------------------------------------------
          combined                             70.17     92.18       22.01      70         25       0.00      1.13      0.25
============================================================================================================================
NV05-151               -80         176.1       60.24    140.46       80.22     277        246       0.09      0.78      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                             77.10    140.46       63.36     331        309       0.12      0.56      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                            107.10    132.43       25.33     483        476       0.21      0.17      0.03
============================================================================================================================
NV05-152               -80         221.1       68.10    119.40       51.30     101         89       0.13      0.31      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             76.04     81.96        5.92     282        249       0.57      0.82      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            117.22    119.40        2.18    1219       1218       0.54      0.02      0.07
============================================================================================================================
NV05-162               -55         274.8       86.53    118.80       32.27     181        176       0.15      0.13      0.00
----------------------------------------------------------------------------------------------------------------------------
         including                            112.67    118.80        6.13     726        721       0.35      0.12      0.00
============================================================================================================================
NV05-163               -70         215.1       64.80     80.33       15.53     196        149       0.08      1.17      0.10
============================================================================================================================
NV05-164               -70         195.6       75.10     95.76       20.66      25         24       0.14      0.03      0.01
----------------------------------------------------------------------------------------------------------------------------
               and                            139.97    143.75        3.78      81         76       0.25      0.13      0.04
============================================================================================================================
NV05-165               -70         170.1       45.49     96.05       50.56     139        102       0.21      0.92      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             58.77     72.32       13.55     269        240       0.21      0.71      0.04
============================================================================================================================
NV05-166               -65         146.1       46.60    108.22       61.62      51         44       0.11      0.18      0.04
----------------------------------------------------------------------------------------------------------------------------
         including                             46.60     59.10       12.50     117         92       0.14      0.61      0.10
----------------------------------------------------------------------------------------------------------------------------
               and                             89.10    108.22       19.12      60         55       0.13      0.14      0.02
============================================================================================================================
NV05-167               -60         158.1       83.94    113.55       29.61     451        236       0.06      5.38      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                             83.94     88.80        4.86    1618       1251       0.36      9.19      0.09
----------------------------------------------------------------------------------------------------------------------------
               and                             99.66    113.55       13.89     375         60       0.01      7.87      0.06
============================================================================================================================
NV05-168               -60         167.1       86.10     87.70        1.60     197         53       0.11      3.60      0.02
----------------------------------------------------------------------------------------------------------------------------
               and                            113.10    164.10       51.00     169        168       0.26      0.04      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                            128.95    142.32       13.37     333        333       0.58      0.01      0.08
============================================================================================================================
NV05-169               -80         129.0       80.45    107.40       26.95      84         48       0.01      0.89      0.06
============================================================================================================================
NV05-170               -80         143.4       83.52    134.40       50.88     201        124       0.18      1.93      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                             83.52    110.21       26.69     329        183       0.19      3.66      0.05
----------------------------------------------------------------------------------------------------------------------------
               and                            117.76    134.40       16.64      84         83       0.24      0.02      0.02
============================================================================================================================
NV05-171               -70         134.1       89.65    133.52       43.87     284        171       0.16      2.82      0.04
----------------------------------------------------------------------------------------------------------------------------


                                                                              46
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>        <C>       <C>         <C>      <C>        <C>        <C>       <C>       <C>
         including                             95.50    113.85       18.35     424        220       0.21      5.11      0.05
============================================================================================================================
NV05-172               -60         281.1       89.10    101.29       12.19     110         67       0.05      1.07      0.07
============================================================================================================================
NV05-173               -80         248.4       69.31     80.80       11.49     166        127       0.05      0.96      0.03
----------------------------------------------------------------------------------------------------------------------------
               and                            204.50    220.33       15.83      50         50       0.06     -0.01     -0.01
============================================================================================================================
NV05-174               -55         263.1       84.53    129.50       44.97      91         35       0.03      1.41      0.28
----------------------------------------------------------------------------------------------------------------------------
         including                            111.50    129.50       18.00      85         57       0.07      0.70      0.00
============================================================================================================================
NV05-176               -75         233.1       95.65    206.10      110.45      39         28       0.07      0.28      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             95.65    116.64       20.99     122         63       0.02      1.46      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                            107.50    116.64        9.14     178         89       0.02      2.22      0.04
============================================================================================================================
NV05-177               -80         239.1       86.04     89.57        3.53     126         25       0.00      2.51      0.03
----------------------------------------------------------------------------------------------------------------------------
               and                            213.18    218.10        4.92     102         94       0.17      0.19      0.09
============================================================================================================================
NV05-180               -80         131.4      104.40    113.40        9.00     127        119       0.07      0.20      0.03
============================================================================================================================
NV05-181               -80         161.2        3.00     19.02       16.02      50         36      -0.01      0.34      0.19
----------------------------------------------------------------------------------------------------------------------------
               and                             93.83    122.20       28.37      38         25       0.02      0.32      0.08
============================================================================================================================
NV05-182               -80         218.2      123.07    156.81       33.74      40         39       0.13      0.02      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                            123.07    128.20        5.13      57         57       0.26      0.01      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                            145.96    156.81       10.85      72         71       0.11      0.03      0.02
============================================================================================================================
NV05-183               -80         257.2      154.69    159.71        5.02      47         47       0.09      0.01     -0.01
----------------------------------------------------------------------------------------------------------------------------
               and                            196.75    201.00        4.25      68         67       0.10      0.02      0.02
============================================================================================================================
NV05-184               -88         209.2       82.66    176.20       93.54     128         97       0.04      0.77      0.02
----------------------------------------------------------------------------------------------------------------------------
         including                             94.90     99.82        4.92     858        712       0.32      3.65      0.05
----------------------------------------------------------------------------------------------------------------------------
         including                            120.14    124.07        3.93     344        333       0.13      0.29      0.00
============================================================================================================================
NV05-185               -70         164.0      106.97    143.00       36.03      80         71       0.29      0.23      0.06
----------------------------------------------------------------------------------------------------------------------------
         including                            106.97    111.22        4.25     280        256       0.66      0.61      0.16
----------------------------------------------------------------------------------------------------------------------------
               and                             58.25     59.81        1.56    5231       5106       1.38      3.12      0.27
============================================================================================================================
NV05-186               -65         119.0       43.50    100.20       56.70     121         82       0.12      0.99      0.19
----------------------------------------------------------------------------------------------------------------------------
         including                             44.70     53.10        8.40     505        259       0.08      6.15      0.68
============================================================================================================================
NV05-187               -76         185.0        none                            0
============================================================================================================================
NV05-188               -81         236.0      184.16    200.00       15.84     169        168       0.21      0.01      0.04
============================================================================================================================
NV05-205               -63         163.5       63.48     80.98       17.50      69         64       0.12      0.12      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                             63.48     76.26       12.78      83         76       0.16      0.16      0.04
----------------------------------------------------------------------------------------------------------------------------
               and                            108.40    129.52       21.12      36         35       0.18      0.04      0.05
============================================================================================================================
NV05-206               -45         190.0       72.81     78.94        6.13      58         38       0.01      0.51      0.44
============================================================================================================================
NV05-207               -45         166.0       48.13     75.19       27.06     496        407       0.34      2.21      0.28
----------------------------------------------------------------------------------------------------------------------------
         including                             64.40     70.48        6.08     909        903       0.87      0.15      0.20
============================================================================================================================
NV05-208               -70         125.0       63.54     93.50       29.96      78         76       0.30      0.05      0.03
----------------------------------------------------------------------------------------------------------------------------
         including                             78.65     93.50       15.14     135        133       0.45      0.05      0.02
============================================================================================================================
NV05-209               -71         227.0      148.10    167.97       21.27     554        545       0.22      0.21      0.08
============================================================================================================================
NV05-210               -90         209.0       41.23     48.50        7.27     209         68       0.03      3.53      1.90
============================================================================================================================

                                                                              47
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>        <C>       <C>         <C>      <C>        <C>        <C>       <C>       <C>
NV05-211               -80         233.0      128.35    190.85       62.50      87         84       0.04      0.09      0.01
----------------------------------------------------------------------------------------------------------------------------
         including                            128.35    131.81        3.46     764        762       0.15      0.06      0.01
----------------------------------------------------------------------------------------------------------------------------
               and                            164.15    184.50       20.35      83         80       0.05      0.08      0.01
============================================================================================================================
NV05-212               -80         212.0      142.35    176.25       33.90      93         86       0.07      0.16      0.00
----------------------------------------------------------------------------------------------------------------------------
         including                            169.03    176.25        7.22     241        216       0.21      0.62      0.03
============================================================================================================================
NV05-239               -45         103.0       36.43     67.00       30.57     165        161       0.11      0.08      0.09
----------------------------------------------------------------------------------------------------------------------------
         including                             36.43     38.63        2.20     165        120       0.41      1.13      0.61
----------------------------------------------------------------------------------------------------------------------------
               and                             60.27     67.00        6.73     662        661       0.16      0.00      0.02
============================================================================================================================
NV05-240               -65          90.0       34.67     55.40       20.73     112        108       0.22      0.10      0.11
----------------------------------------------------------------------------------------------------------------------------
         including                             34.67     38.69        4.02     465        453       0.31      0.28      0.32
----------------------------------------------------------------------------------------------------------------------------
               and                             51.92     55.40        3.48      69         68       0.58      0.02      0.05
============================================================================================================================
NV05-246               -87         209.5      184.81    193.74        8.93      53         52       0.10      0.01      0.02
============================================================================================================================
NV05-247               -54         173.4      101.14    105.32        4.18      67         65       0.14      0.06      0.02
============================================================================================================================
NV06-270               -90          68.0       21.52     31.38        9.86     431        401       0.08      0.75      0.29
============================================================================================================================
NV06-271               -90         101.2       34.72     48.35       13.63      90         48       0.01      1.04      0.45
============================================================================================================================
</TABLE>

1. All length weighted average (LWA) results are "uncut"
2.  Silver  Equivalent  is  calculated  by  the  formula  AgEq = Ag g/t + (Pb% *
10000/250)


CALCITE HILL NW DRILLING RESULTS

Thirty-seven drill holes have been completed to date on Calcite Hill NW and have
demonstrated  the presence of a  significant  mineralized  body.  Mineralization
encountered at Calcite Hill NW is somewhat different that other zones in Navidad
Trend in that  the  mineralization  is  concentrated  in and near a  distinctive
sedimentary  tuff-breccia  unit  stratigraphically  some 40m above  the  typical
position at the trachyandesite-sedimentary contact. Directly underlying the main
mineralization  is a sequence of fine grained pelitic sediments with significant
amounts of interbedded  coal. The  distinctive  tuff bed outcrops to the west of
the drilled area and is  associated  with a strong silver and lead soil anomaly.
In the  sub-surface it has been traced over a plan area of  approximately  1400m
long oriented northwest by about 550m. The mineralized bed lies in the core of a
general  syncline with the coal underlying it. The mineralized bed, and also the
coal  bed,  thicken  towards  the  axis  of  the  syncline  suggesting  it was a
depositional feature and not just created by the gentle fold observed.

Mineralization  comprises minor amounts of galena and minor amounts of pyrite as
beds and  disseminations  in  sandstones to mudstones as well as within the tuff
breccia. At the base of the tuff-breccia is a very distinctive black massive mud
bed  with  volcanic  fragments  which  generally  contains  abundant  galena  of
distinctive elongated crystals not seen elsewhere.  This bed has been called the
"Galena  Marker".   Occasionally   minor  amounts  of  green  copper  oxides  or
chalcopyrite are noted in the tuff-breccia or sedimentary rocks above the Galena
Marker.  Analytical  results show that higher silver values are often associated
with slightly elevated copper values in preference to a direct  correlation with
lead.  Towards the southeast the  stratigraphy and Galena Marker remain open but
the silver to lead ratio drops  notably.  The thickest and highest  silver grade
areas  appears  to be  coincident  with  the  approximate  centre  of the  known
distribution of the host  tuff-breccia.  Argillic  alteration is associated with
the mineralized beds.


                                                                              48
<PAGE>
<TABLE>
MINERALIZED INTERCEPTS FROM CALCITE HILL NW DRILLING

<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>        <C>       <C>       <C>      <C>
  NV05-178             -55         302.0       68.00    112.80       44.80     126         96       0.03      0.76      0.07
  ---------------------------------------------------------------------------------------------------------------------------
         including                             71.00    101.00       30.00     143        122       0.04      0.52     -0.01
  ===========================================================================================================================
  NV05-179             -60         212.1       43.10     68.10       25.00     263        251       0.08      0.32      0.01
  ---------------------------------------------------------------------------------------------------------------------------
         including                             56.10     58.78        2.68    1961       1909       0.58      1.31      0.09
  ===========================================================================================================================
  NV05-189             -60         211.5       55.50     68.82       13.32     72          30       0.03      1.07      0.10
  ===========================================================================================================================
  NV05-190             -61         158.0       48.67     53.10        4.43     229        107       0.00      3.06      0.08
  ===========================================================================================================================
  NV05-191             -70         197.0        8.00     30.86       22.86     52          36       0.01      0.40      0.17
  ---------------------------------------------------------------------------------------------------------------------------
         including                             26.00     30.86        4.86     113         81       0.03      0.80      0.04
  ---------------------------------------------------------------------------------------------------------------------------
               and                             43.51     44.47        0.96     199         46       0.07      3.83      0.10
  ---------------------------------------------------------------------------------------------------------------------------
               and                             76.81     84.66        7.85     87          49       0.00      0.96      0.04
  ===========================================================================================================================
  NV05-192             -70         209.0       17.82     22.07        4.25     70          19      -0.01      1.29      0.03
  ---------------------------------------------------------------------------------------------------------------------------
               and                             36.50     39.08        2.58     84          26       0.00      1.44      0.57
  ---------------------------------------------------------------------------------------------------------------------------
               and                             97.78    101.74        3.96     108         26       0.00      2.06      0.58
  ===========================================================================================================================
  NV05-198             -90         221.3        0.00      7.40        7.40    1057       1019       0.01      0.97      1.20
  ---------------------------------------------------------------------------------------------------------------------------
               and                              7.40     32.30       24.90     48          13      -0.01      0.86      0.09
  ---------------------------------------------------------------------------------------------------------------------------
               and                            106.75    108.83        2.08     133         52      -0.01      2.04      0.18
  ===========================================================================================================================
  NV05-199             -45         170.1        0.00     53.10       53.10     95          52      -0.01      1.09      0.12
  ---------------------------------------------------------------------------------------------------------------------------
         including                              0.00     31.11       31.11     124         66      -0.01      1.44      0.19
  ---------------------------------------------------------------------------------------------------------------------------
         including                             21.41     31.11        9.70     266        141      -0.01      3.11      0.03
  ===========================================================================================================================
  NV05-200             -76         275.1       86.35     91.20        4.85     107         41      -0.01      1.64      0.31
  ===========================================================================================================================
  NV05-201             -45         200.0       58.28     72.78       14.50     47           7       0.00      0.99      0.03
  ---------------------------------------------------------------------------------------------------------------------------
               and                            118.26    140.76       22.50     213        102       0.03      2.79      0.09
  ---------------------------------------------------------------------------------------------------------------------------
         including                            129.02    140.76       11.74     321        166       0.05      3.86      0.04
  ===========================================================================================================================
  NV05-202             -73         149.1       61.15     71.10        9.95     458        449       0.08      0.24      0.01
  ===========================================================================================================================
  NV05-203             -72         324.8       47.00     75.96       28.96     166        154       0.06      0.32      0.01
  ---------------------------------------------------------------------------------------------------------------------------
         including                             59.00     71.00       12.00     336        335       0.14      0.01      0.01
  ===========================================================================================================================
  NV05-204             -45         161.0       71.00    119.12       48.12     65          60       0.02      0.14      0.00
  ---------------------------------------------------------------------------------------------------------------------------
         including                             71.00     77.00        6.00     120        113       0.03      0.18      0.00
  ---------------------------------------------------------------------------------------------------------------------------
               and                            113.00    119.12        6.12     329        307       0.04      0.57      0.04
  ===========================================================================================================================
  NV05-213             -80         263.0        1.50     26.00       24.50     59          42      -0.01      0.42      0.08
  ---------------------------------------------------------------------------------------------------------------------------
               and                             98.50    104.90        6.40     103         97       0.00      0.16      0.08
  ===========================================================================================================================
  NV05-214             -80         254.0       20.00     51.18       31.18     30          19       0.02      0.27      0.05
  ---------------------------------------------------------------------------------------------------------------------------
               and                            117.18    119.96        2.78     383        238       0.04      3.61      0.03
  ===========================================================================================================================
  NV05-215             -80         254.0       43.13     62.32       19.19     139        111       0.09      0.70      0.14
  ===========================================================================================================================
  NV05-216             -80         200.0        none
  ===========================================================================================================================
  NV05-222             -85         239.0       18.54     43.62       23.62     86          59       0.09      0.68      0.05
  ---------------------------------------------------------------------------------------------------------------------------
         including                             18.54     24.55        6.01     80          69       0.03      0.29      0.03
  ---------------------------------------------------------------------------------------------------------------------------
               and                             31.25     32.68        1.43     652        563       0.21      2.23      0.06
  ---------------------------------------------------------------------------------------------------------------------------
               and                             38.55     43.62        5.07     92          35       0.02      1.42      0.20
  ===========================================================================================================================

                                                                              49
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>      <C>        <C>         <C>        <C>       <C>       <C>      <C>
  NV05-223             -45         181.5       15.35     78.00       62.65     103         88       0.02      0.39      0.05
  ---------------------------------------------------------------------------------------------------------------------------
         including                             57.17     59.80        2.63     375        299       0.21      1.89      0.09
  ---------------------------------------------------------------------------------------------------------------------------
               and                             73.85     78.00        4.15    1001        972       0.12      0.71      0.05
  ===========================================================================================================================
  NV05-224             -75         152.0       43.57     66.72       23.15     127         92       0.03      0.87      0.03
  ---------------------------------------------------------------------------------------------------------------------------
         including                             55.73     66.72       10.99     216        181       0.06      0.89      0.04
  ---------------------------------------------------------------------------------------------------------------------------
         including                             55.73     62.34        6.61     301        281       0.10      0.48      0.01
  ===========================================================================================================================
  NV05-225             -65         146.0       46.92     63.16       16.24     122        101       0.04      0.52      0.06
  ---------------------------------------------------------------------------------------------------------------------------
         including                             46.92     58.60       11.68     142        133       0.04      0.22      0.01
  ===========================================================================================================================
  NV05-226             -58         140.0       41.00     59.13       18.13     90          74       0.05      0.41      0.03
  ---------------------------------------------------------------------------------------------------------------------------
         including                             41.00     47.70        6.70     119        112       0.03      0.17      0.02
  ---------------------------------------------------------------------------------------------------------------------------
         including                             52.32     54.84        2.52     181        181       0.12     -0.01      0.02
  ===========================================================================================================================
  NV05-227             -90         251.0       51.53     74.10       22.57     141        115       0.00      0.65      0.00
  ---------------------------------------------------------------------------------------------------------------------------
         including                             63.45     74.10       10.65     256        229       0.01      0.67     -0.01
  ===========================================================================================================================
  NV06-255             -90         131.0       59.30     69.25        9.95     68          19       0.00      1.23      0.05
  ---------------------------------------------------------------------------------------------------------------------------
         including                             59.30     62.00        2.70     95          36       0.00      1.48      0.05
  ---------------------------------------------------------------------------------------------------------------------------
               and                             67.70     69.25        1.55     216         38      -0.01      4.45      0.11
  ===========================================================================================================================
  NV06-256             -90         185.0       60.57     68.36        7.79     94          23      -0.01      1.76      0.06
  ---------------------------------------------------------------------------------------------------------------------------
         including                             60.57     63.47        2.90     110         28      -0.01      2.06      0.04
  ---------------------------------------------------------------------------------------------------------------------------
               and                             66.06     68.36        2.30     161         38      -0.01      3.07      0.09
  ===========================================================================================================================
  NV06-257             -90         140.0       33.32     34.85        1.53     132         37      -0.01      2.38      0.08
  ===========================================================================================================================

  NV06-258             -90         100.8       51.54     53.64        2.10     155         35      -0.01      2.99      0.11
  ===========================================================================================================================
  NV06-259             -90         122.0       71.00     76.54        5.54     128         53      -0.01      1.89      0.02
  ===========================================================================================================================
  NV06-260             -90         131.0       75.04     86.60       11.57     178         44       0.00      3.35      0.01
  ---------------------------------------------------------------------------------------------------------------------------
         including                             84.00     86.60        2.60     676        143      -0.01     13.32      0.00
  ===========================================================================================================================
  NV06-261             -90         131.5       53.50     64.54       11.04     175        147       0.02      0.70      0.04
  ===========================================================================================================================
  NV06-262             -90         122.0       41.45     66.65       25.20     162        146       0.04      0.40      0.02
  ---------------------------------------------------------------------------------------------------------------------------
         including                             55.34     63.88        8.54     392        385       0.12      0.17      0.02
  ===========================================================================================================================
  NV06-263             -90         131.0       68.00     80.77       12.77     281        264       0.03      0.42      0.00
  ---------------------------------------------------------------------------------------------------------------------------
         including                             71.00     77.47        6.47     508        496       0.06      0.29     -0.01
  ---------------------------------------------------------------------------------------------------------------------------
         including                             71.00     74.95        3.95     785        784       0.09      0.00      0.00
  ===========================================================================================================================
  NV06-264             -70         134.0       51.36     79.77       28.41     141        127       0.05      0.35      0.02
  ---------------------------------------------------------------------------------------------------------------------------
         including                             69.04     75.89        6.85     456        455       0.17      0.01      0.01
  ---------------------------------------------------------------------------------------------------------------------------
         including                             69.04     70.25        1.21    2213       2208       0.81      0.13      0.10
  ===========================================================================================================================
  NV06-265             -80         137.1       50.85     63.10       12.25     107         80       0.06      0.69      0.09
  ===========================================================================================================================
  NV06-267             -90         149.2       54.14     59.20        5.06     145         97       0.07      1.20      0.14
  ===========================================================================================================================
  NV06-268             -60         143.4       42.77     56.79       14.02     178        160       0.11      0.45      0.06
  ===========================================================================================================================
  NV06-269             -90         161.0       28.05     45.80       17.75     115         93       0.07      0.55      0.09
  ===========================================================================================================================
</TABLE>
    1  All length weighted average (LWA) results are "uncut"
    2  Silver Equivalent is calculated by the formula AgEq = Ag g/t + (Pb% *
       10000/250)


                                                                              50
<PAGE>

CONNECTOR ZONE DRILLING RESULTS

Thirty-seven  drill  holes  have  been  completed  to  date on  Connector  Zone.
Geologically  the  zone  is  complex  and  characterized  by  rapid  changes  in
lithological units and their thicknesses.  Two main styles of mineralization are
known. The first is located closer to Galena Hill and is hosted by bedded wackes
(immature  sandstones)  interpreted to be sourced from the trachyandesite  unit.
These wackes are feldspathic and are often  argillically  altered and are cut by
minor  veinlets of white and pink clay minerals with lesser amounts of carbonate
and silica. These veinlets contain very minor amounts of galena and chalcopyrite
and sometimes native silver and pyrargyrite.

The second style of mineralization is quite different and is present on the east
flank of Navidad where it comprises mainly volcaniclastic  breccias derived with
little reworking from the trachyandesite  unit. The mineralized  portions appear
to be those  that have fine  grained  pyrite in the matrix of the  breccia  with
little or no sign of veining or later hydrothermal brecciation.

<TABLE>
MINERALIZED INTERCEPTS FROM CONNECTOR ZONE  DRILLING

<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>       <C>        <C>        <C>        <C>      <C>       <C>       <C>
  NV04-32              -45         154.5        46.50     96.05     49.55       83          78     0.04      0.14      0.03
  ==========================================================================================================================
  NV04-33              -80         149.0        none
  ==========================================================================================================================
  NV04-34              -45         228.2        10.50     29.20     18.70      103          75     0.01      0.70      0.05
  ==========================================================================================================================
  NV04-39              -80         215.0        none
  ==========================================================================================================================
  NV04-40              -45         127.2        43.20     91.20     48.00      117         108     0.04      0.22      0.16
  --------------------------------------------------------------------------------------------------------------------------
         including                              67.20     88.20     21.00      168         160     0.08      0.19      0.09
  ==========================================================================================================================
  NV04-66              -45         181.5        none
  ==========================================================================================================================
  NV04-67              -45         226.5        50.84     63.70     12.86      186         145     0.04      1.03      0.03
  ==========================================================================================================================
  NV04-68              -45         178.5        52.20     81.75     29.55      114          98     0.03      0.40      0.11
  ==========================================================================================================================
  NV04-86              -45         169.5        34.63    101.18     66.55       52          46     0.03      0.15      0.10
  --------------------------------------------------------------------------------------------------------------------------
         including                              47.80     49.02      1.22      126         104     0.05      0.53      0.08
  ==========================================================================================================================
  NV04-87              -45         159.5        22.40     24.06      1.66      161         129     0.10      0.80      0.08
  --------------------------------------------------------------------------------------------------------------------------
               and                              52.02     52.80      0.78      659         654     1.45      0.13      0.26
  --------------------------------------------------------------------------------------------------------------------------
               and                              66.25     76.50     10.25       26          25     0.04      0.02      0.04
  ==========================================================================================================================
  NV04-94              -45         175.5       103.32    116.39     13.07       46          43     0.00      0.08      0.10
  ==========================================================================================================================
  NV04-95              -60         100.5        49.08     64.80     15.72       76          55     0.00      0.53      0.03
  ==========================================================================================================================
  NV04-96              -45         100.5        none
  ==========================================================================================================================
  NV04-105             -60          82.7        33.43     46.70     13.27      616         545     0.14      1.78      0.11
  ==========================================================================================================================
  NV04-106             -60          88.7        45.80     70.70     24.90      175         147     0.04      0.69      0.11
  --------------------------------------------------------------------------------------------------------------------------
         including                              65.56     67.70      2.14     1262       1,196     0.33      1.63      0.41
  ==========================================================================================================================
  NV04-107             -45         118.1        52.90     99.56     46.66      394         357     0.31      0.94      0.33
  --------------------------------------------------------------------------------------------------------------------------
         including                              71.60     97.10     25.50      626         589     0.55      0.91      0.33
  ==========================================================================================================================
  NV04-108             -45         145.5        31.50     70.50     39.00      495         485     0.10      0.26      0.05
  --------------------------------------------------------------------------------------------------------------------------
         including                              54.07     70.50     16.43     1050       1028      0.19      0.54      0.08
  ==========================================================================================================================


                                                                              51
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  --------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>       <C>        <C>        <C>        <C>      <C>       <C>       <C>
  NV04-127             -60         137.1        97.08    111.39     14.31       73         56      0.01      0.44      0.05
  ==========================================================================================================================
  NV04-128             -60         109.6        54.60     80.09     25.49       79         58      0.04      0.54      0.26
  ==========================================================================================================================
  NV04-129             -60          28.8        none - did not reach target
  ==========================================================================================================================
  NV04-130             -62         106.8        38.56     41.04      2.48      207        111      0.02      2.39      0.79
  --------------------------------------------------------------------------------------------------------------------------
               and                              66.33     78.46     12.13      120         33      0.00      2.18      0.09
  ==========================================================================================================================
  NV04-131             -60         130.8        10.33     91.45     81.12       71         61      0.05      0.25      0.10
  --------------------------------------------------------------------------------------------------------------------------
         including                              60.57     67.80      7.23      163        152      0.07      0.29      0.04
  --------------------------------------------------------------------------------------------------------------------------
         including                              79.22     91.45     12.23      138        126      0.07      0.30      0.05
  ==========================================================================================================================
  NV05-153             -45         163.8         0.00     88.80     88.80      111        107      0.10      0.11      0.04
  --------------------------------------------------------------------------------------------------------------------------
         including                               0.00      7.36      7.36      233        226      0.22      0.18      0.12
  --------------------------------------------------------------------------------------------------------------------------
               and                              37.48     88.80     51.32      128        124      0.10      0.12      0.04
  ==========================================================================================================================
  NV04-154             -45         190.8         3.05     31.80     28.75      155        148      0.13      0.15      0.05
  ==========================================================================================================================
  NV05-155             -45          88.8         0.00      9.10      9.10      106        105      0.09      0.03      0.06
  ==========================================================================================================================
  NV05-156             -60         110.1         8.73     75.99     67.26       69         63      0.03      0.14      0.08
  --------------------------------------------------------------------------------------------------------------------------
         including                               8.73     13.80      5.07       88         53      0.02      0.88      0.68
  --------------------------------------------------------------------------------------------------------------------------
               and                              29.10     75.99     46.89       88         83      0.04      0.11      0.03
  ==========================================================================================================================
  NV05-228             -50          61.5         4.50     43.35     38.85       65         57      0.05      0.19      0.13
  --------------------------------------------------------------------------------------------------------------------------
         including                              20.11     34.90     14.79      108         96      0.06      0.30      0.12
  ==========================================================================================================================
  NV05-229             -45          79.5        20.02     21.36      1.34      117         27      0.00      2.25      0.20
  ==========================================================================================================================
  NV05-230             -45          82.3        25.30     51.78     26.48      135        104      0.03      0.77      0.21
  ==========================================================================================================================
  NV05-231             -80          80.0         3.00     40.31     37.31      114        107      0.08      0.18      0.05
  --------------------------------------------------------------------------------------------------------------------------
         including                               7.30     31.26     23.96      142        132      0.09      0.25      0.05
  ==========================================================================================================================
  NV05-232             -45          67.3         3.00     45.60     42.60       74         71      0.08      0.09      0.05
  ==========================================================================================================================
  NV05-233             -48         100.3        19.30     79.94     60.64       67         64      0.05      0.07      0.04
  --------------------------------------------------------------------------------------------------------------------------
         including                              19.30     29.30     10.00      110        106      0.07      0.10      0.04
  --------------------------------------------------------------------------------------------------------------------------
               and                              68.40     79.94     11.54      114        109      0.09      0.13      0.05
  ==========================================================================================================================
  NV05-234             -45          70.1        35.22     55.87     21.40      239        237      0.15      0.05      0.07
  --------------------------------------------------------------------------------------------------------------------------
         including                              35.22     37.26      2.04     2188       2171      1.33      0.42      0.33
  ==========================================================================================================================
  NV05-235             -65         143.0        20.48     51.18     30.70       63         38      0.03      0.63      0.23
  --------------------------------------------------------------------------------------------------------------------------
         including                              46.60     51.18      4.58      100         90      0.09      0.25      0.05
  --------------------------------------------------------------------------------------------------------------------------
               and                              90.56     96.07      5.51      108         98      0.05      0.25      0.03
  ==========================================================================================================================
  NV05-236             -45         100.4        16.40     29.60     13.20       48         22      0.00      0.63      0.54
  ==========================================================================================================================
  NV05-237             -45          82.2         3.00     34.63     31.63      115        110      0.08      0.12      0.04
  ==========================================================================================================================
</TABLE>
   1  All length weighted average (LWA) results are "uncut"
   2  Silver Equivalent is calculated by the formula AgEq = Ag g/t + (Pb% *
      10000/250)



                                                                              52
<PAGE>
OTHER AREAS DRILLING RESULTS

A number of drill holes have been  completed  in areas such as Loma de la Plata,
Barite Hill,  Esperanza  Zone and  stratigraphic  holes  outside of named zones.
Significant  results have been received from some of these holes as shown in the
table below. Mineral resources have not been calculated on any of these zones.

<TABLE>
  MINERALIZED INTERCEPTS FROM DRILLING OTHER TARGETS

<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>       <C>        <C>        <C>        <C>      <C>       <C>       <C>
  ===========================================================================================================================
                                                      BARITE HILL
  ===========================================================================================================================
      NV04-58          -80         173.1        12.80     41.00     28.20       69         37       0.00      0.80      0.10
  ===========================================================================================================================
      NV04-59          -80         191.1       148.70    152.40      3.70       44         23      -0.01      0.51      0.60
  ===========================================================================================================================
      NV04-60          -80         131.1       none
  ===========================================================================================================================
      NV04-74          -80         158.0        29.00     37.16      8.16       46         29       0.01      0.41      0.08
  ===========================================================================================================================
      NV04-75          -80         158.0        53.93     55.52      1.59       91         63       0.01      0.69      0.18
  ===========================================================================================================================
      NV04-76          -80         152.0        10.10     32.20     22.10       59         34       0.02       0.63     0.21
  ---------------------------------------------------------------------------------------------------------------------------
               and                             100.50    122.20     21.70       98         88       0.03       0.26     0.09
  ---------------------------------------------------------------------------------------------------------------------------
         including                             106.10    114.47      8.37      204        191       0.08       0.33     0.13
  ===========================================================================================================================
      NV04-91          -45         187.5         3.00     16.50     13.50       31         12       0.00       0.48     0.17
  ---------------------------------------------------------------------------------------------------------------------------
               and                             123.50    153.95     30.45       25         13       0.00       0.28     0.14
  ===========================================================================================================================
      NV04-92          -65         163.9       none
  ===========================================================================================================================
                                                    ESPERANZA TREND
  ===========================================================================================================================
      NV04-25          -45         199.8       162.70    170.65      7.95      316        303       0.03       0.31     0.05
  ===========================================================================================================================
      NV04-61          -45         241.5        52.50     55.50      3.00      359        353       0.03       0.17     0.00
  ===========================================================================================================================
      NV04-62          -45         223.5         7.20      9.90      2.70      853        831       0.09       0.56     0.00
  ===========================================================================================================================
      NV04-63          -45         178.4        31.60     77.40     45.80      104         94       0.01       0.25     0.03
  ===========================================================================================================================
         including                              31.60     38.95      7.35      171        162       0.01       0.23     0.04
  ===========================================================================================================================
         including                              33.55     37.50      3.95      257        246       0.01       0.28     0.04
  ===========================================================================================================================
               and                              42.80     77.40     34.60      100         89       0.01       0.27     0.03
  ===========================================================================================================================
         including                              66.50     70.50      4.00      201        185       0.01       0.39     0.08
  ===========================================================================================================================
      NV04-64          -45         235.3         6.00     28.30     22.30       34         25       0.00       0.21     0.02
  ===========================================================================================================================
               and                              69.20    102.10     32.90       54         47       0.03       0.16     0.02
  ===========================================================================================================================
         including                              69.20     70.60      1.40      115        101       0.00       0.37     0.02
  ===========================================================================================================================
         including                              96.65    102.10      5.45      154        153       0.17       0.02     0.03
  ===========================================================================================================================
               and                             140.10    144.00      3.90       81         47       0.03       0.85     0.04
  ===========================================================================================================================
      NV04-78          -45         100.5        37.80     43.18      5.38      119         50       0.03       1.73     0.03
  ===========================================================================================================================
      NV04-79          -45         121.5        34.72     47.28     12.56      515        513       0.09       0.06     0.01
  ===========================================================================================================================
      NV04-80          -45         100.5         4.50      8.05      3.55      278        258       0.10       0.51     0.03
  ===========================================================================================================================


                                                                              53
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>       <C>        <C>        <C>        <C>      <C>       <C>       <C>
      NV04-81          -45         150.8        58.20     62.48      4.28       43         41       0.01       0.04     0.03
  ===========================================================================================================================
               and                              86.87     99.76     12.89       24         23       0.02       0.04     0.03
  ===========================================================================================================================
      NV04-82          -45         151.0         6.00     58.55     52.55       71         57       0.00       0.35     0.01
  ===========================================================================================================================
         including                              34.50     58.55     24.05      106         95       0.00       0.28     0.00
  ===========================================================================================================================
               and                             102.15    109.30      7.15      214        149       0.02       1.61     0.35
  ===========================================================================================================================
      NV06-287         -45         221.0         6.00     35.00     29.00       28         21       0.00       0.18     0.02
  ===========================================================================================================================
               and                              56.00     61.37      5.37       78         74       0.01       0.10     0.02
  ===========================================================================================================================
      NV06-288         -45         248.0       none
  ===========================================================================================================================
      NV06-289         -45         248.0        46.20     59.00     12.80       23         22       0.01       0.03     0.03
  ===========================================================================================================================
      NV06-290         -45         245.0        83.00    104.00     21.00      277        274       0.09       0.08     0.01
  ===========================================================================================================================
         including                              83.00     87.43      4.43      295        290       0.11       0.14     0.02
  ===========================================================================================================================
               and                              93.59    104.00     10.41      420        416       0.11       0.09     0.01
  ===========================================================================================================================

                                                    LOMA DE LA PLATA
  ===========================================================================================================================
     NV05-241+         -45         118.5         0.00     31.50     31.50      577        562       0.05       0.38     0.02
  ===========================================================================================================================
      NV05-242         -45          70.5         0.00     28.40     28.40      240        236       0.02       0.10     0.02
  ===========================================================================================================================
         including                               0.00     19.50     19.50      327        322       0.03       0.11     0.02
  ===========================================================================================================================
      NV05-243         -60          95.0         3.00     32.51     29.51       61         59       0.01       0.05     0.02
  ===========================================================================================================================
         including                               3.00     11.27      8.27      140        140       0.02       0.00     0.02
  ===========================================================================================================================
      NV05-244         -60          71.0         3.00     10.56      7.56      100         90       0.03       0.24     0.00
  ===========================================================================================================================
         including                               3.00      7.07      4.07      147        140       0.04       0.16     0.01
  ===========================================================================================================================
      NV05-245         -60          89.0         3.00      8.00      5.00      171        172       0.01      -0.01     0.04
  ===========================================================================================================================
                                                     RECONNAISSANCE
  ===========================================================================================================================
      NV04-27         -45          181.5         7.00      7.73      0.73       84         61       0.01       0.56     2.25
  ===========================================================================================================================
               and                              66.90     68.10      1.20      381        377       0.01       0.10     0.05
  ===========================================================================================================================
      NV04-35         -80          293.0       none
  ===========================================================================================================================
      NV04-77         -45          250.5       none
  ===========================================================================================================================
      NV04-93         -80          201.0        93.68     94.81      1.13      311         42       0.00       6.73     0.61
  ===========================================================================================================================
               and                             137.93    147.00      9.07       69         11       0.05       1.44     0.04
  ===========================================================================================================================
      NV05-193        -70          299.0       none
  ===========================================================================================================================
      NV05-194        -80          212.2       none
  ===========================================================================================================================
      NV05-195        -80          278.2       none
  ===========================================================================================================================
      NV05-196        -75          413.7       221.00    245.00     24.00       22          7      -0.01       0.39     0.09
  ===========================================================================================================================
         including                             223.40    227.00      3.60       65         15      -0.01       1.23     0.05
  ===========================================================================================================================
      NV06-252        -80          407.2       161.00    163.39      2.39       27         27       0.11       0.00     0.05
  ===========================================================================================================================

                                                                              54
<PAGE>
<CAPTION>
  --------------------------------------------------------------------------------------------------------------------------
                                   TOTAL        FROM      TO      COMPOSITE    G/T        G/T        %        %         %
        DDH         INCLINATION   LENGTH       METRES   METRES     LENGTH      AgEq     SILVER    COPPER     LEAD      ZINC
                                 (METRES)                          METRES      LWA        LWA       LWA      LWA       LWA
  ---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>       <C>        <C>        <C>        <C>      <C>       <C>       <C>
               and                             252.53    256.89      4.36       63         39       0.00       0.60     1.03
  ===========================================================================================================================
      NV06-253        -70          471.1       418.79    423.91      5.12       34         21       0.00       0.34     0.72
  ===========================================================================================================================
      NV06-254        -80          314.4       none
  ===========================================================================================================================
      NV06-266        -80          263.2       none
  ===========================================================================================================================
</TABLE>
   1  All length weighted average (LWA) results are "uncut"
   2  Silver Equivalent is calculated by the formula AgEq = Ag g/t + (Pb% *
      10,000/250)
   +  Note  that  results  herein for hole  NV05-241  from Loma de la Plata have
      been corrected  subsequent to those released in a press release on October
      11, 2005.


MINERAL RESOURCE ESTIMATES

The Company is required in certain  circumstances  under  Canadian law (National
Instrument 43-101 Standards Of Disclosure For Mineral Projects) ("NI 43-101") to
calculate and categorize "mineral reserve", "proven mineral reserve",  "probable
mineral reserve",  "mineral resource",  "measured mineral resource",  "indicated
mineral resource" and "inferred  mineral resource" under the Canadian  Institute
of Mining  Metallurgy and Petroleum  ("CIM")  Standards on Mineral Resources and
Reserves - Definitions  and Guidelines  dated December 11 2005.  These standards
establish   definitions   and   guidelines  for  the  reporting  of  exploration
information, mineral resources and mineral reserves in Canada. These definitions
have not been adopted for use in the United States of America by the  Securities
and Exchange Commission (the "SEC"). Under these guidelines, the CIM definitions
of proven and probable  mineral reserves equate to the definitions of proven and
probable  reserves as set out in Guide 7 of the Securities  Act Industry  Guides
adopted by the SEC ("Guide 7"). In addition, Canadian law requires disclosure of
mineral resources that equate to measured,  indicated and inferred  resources in
certain circumstances.

Four mineral  resource  estimates have been completed on deposits at the Navidad
Project.  The first was  reported on May 25,  2004 and  contained  an  Indicated
Mineral  Resource  Estimate of 63.6  million  tonnes at 101 g/t silver and 1.76%
lead at the Galena Hill deposit. The second estimate was reported on December 1,
2004 and increased the project total  Indicated  Mineral  Resource  Estimates to
80.8 million  tonnes at 103 g/t silver and 1.45% lead by  including  the Navidad
Hill and  Connector  zones.  The third  estimate  was  reported on June 16, 2005
bringing  project total  Indicated  Mineral  Resource  Estimates to 92.8 million
tonnes at 101 g/t silver and 1.36% lead. The fourth and most recent estimate was
reported on February 16, 2006 and is tabulated  below.  It contains an Indicated
Mineral Resource of 93.4 million tones at 102 g/t silver and 1.41% lead. For the
fourth  estimate  all  prior  estimates  for  each  deposit  were  reviewed  and
recalculated;  all data up until holes 251 were  considered  and included  where
appropriate;  a revised  silver  equivalent  formula  using new  silver and lead
prices  was  used  that  excluded  any  value  for  copper  and  zinc  based  on
metallurgical  test work which suggested that copper and zinc are unlikely to be
recovered in economic quantities.  Finally an estimate was made for Calcite Hill
NW for the first time.  The first three  resource  estimates  were  completed by
Qualified  Person  Neil  Burns,  M.Sc.,   P.Geo.,  of  Snowden  Mining  Industry
Consultants  Inc. and the most recent one was  completed  by  Qualified  Persons
Christine Standing,  B.Sc. (Hons),  MAusIMM, MAIG and Neil Burms, M.Sc., P.Geo.,
of  Snowden  Mining  Industry   Consultants  Inc.,  National  Instrument  43-101
Technical  Reports   documenting  these  estimates  have  been  filed  with  the
appropriate  regulatory bodies in Canada and are publicly available on the SEDAR
website.



                                                                              55
<PAGE>

<TABLE>
NAVIDAD PROJECT INDICATED MINERAL RESOURCES USING A 50G/T SILVER EQUIVALENT CUT-OFF:

<CAPTION>
-------------------------------------------------------------------------------------------------------------------
   INDICATED RESOURCES                  SILVER                                          CONTAINED  CONTAINED
      (50G/T SILVER          TONNES     EQUIV.   SILVER    COPPER     LEAD     ZINC      SILVER      LEAD
        EQUIVALENT         (MILLIONS)   (G/T)    (G/T)      (%)       (%)      (%)      (M OZS)     (1,000
        CUT-OFF)                                                                                    TONNES)
<S>                          <C>         <C>      <C>       <C>       <C>      <C>       <C>          <C>
===================================================================================================================
CALCITE HILL NW
===================================================================================================================
              Indicated       6.2         92       72       0.03      0.52     0.11       14.3           32
-------------------------------------------------------------------------------------------------------------------
               Inferred       5.3         96       70       0.03      0.64     0.13       12.1           34
===================================================================================================================
CALCITE HILL
===================================================================================================================
              Indicated      13.1        126       99       0.08      0.68     0.09       41.6           88
-------------------------------------------------------------------------------------------------------------------
               Inferred       0.4        107       93       0.04      0.35     0.06        1.2            1
===================================================================================================================
NAVIDAD HILL
-------------------------------------------------------------------------------------------------------------------
              Indicated      12.8        137      119       0.13      0.45     0.12       49.1           58
-------------------------------------------------------------------------------------------------------------------
               Inferred       1.3        110       87       0.08      0.59     0.12        3.6            8
===================================================================================================================
CONNECTOR ZONE
-------------------------------------------------------------------------------------------------------------------
              Indicated       5.6        105       89       0.04      0.40     0.12       16.0           22
-------------------------------------------------------------------------------------------------------------------
               Inferred       1.2         95       84       0.04      0.28     0.09        3.1            3
===================================================================================================================
GALENA HILL
-------------------------------------------------------------------------------------------------------------------
              Indicated      55.7        183      103       0.03      2.00     0.20      184.7        1,115
-------------------------------------------------------------------------------------------------------------------
               Inferred       2.9         99       33       0.01      1.65     0.12        3.0           47
===================================================================================================================
NAVIDAD PROJECT TOTAL
-------------------------------------------------------------------------------------------------------------------
              Indicated      93.4        158      102       0.05      1.41     0.16      305.7        1,315
-------------------------------------------------------------------------------------------------------------------
               Inferred      11.1         99       65       0.03      0.85     0.12       23.0           94
-------------------------------------------------------------------------------------------------------------------
</TABLE>
  1  Silver Equivalent is calculated by the formula AgEq = Ag g/t + (Pb% *
     10,000/250)

METALLURGICAL TEST WORK

IMA Exploration first released  preliminary  metallurgical  results from Navidad
silver  project on December 1, 2005.  Metallurgical  work  completed  to date on
samples from the Navidad deposits has demonstrated  that Navidad  mineralization
is amenable to  concentration  by simple,  cost  effective  and  environmentally
benign differential flotation processes.  In addition to flotation testwork, the
company is also currently  investigating  the production of silver metal through
hydrometallurgical  means from  low-grade,  high-recovery  silver  concentrates.
Preliminary  results from alkaline pressure  oxidation  followed by thiosulphate
leaching of pyrite concentrate are highly encouraging.

Flotation  testwork has been  conducted to date on nine  composite  samples from
Galena Hill,  three samples from Navidad Hill, and two samples from Calcite Hill
by G&T  Metallurgical  Services  Ltd. of Kamloops B.C.  (G&T),  an ISO 9001:2000
accredited firm. Head grades from these composite samples as reported by G&T are
shown in Table 1 below.  The  composite  samples  tested were  constructed  from
intervals of quartered  core at G&T where they were crushed and  homogenized  in
preparation  for  metallurgical  testing.  All  work  was  performed  under  the
supervision  of Tom  Shouldice,  P. Eng.,  General  Manager - Operations at G&T.
Peter Taggart, P.Eng., of P. Taggart & Associates Ltd., provided overall program
direction, acting as IMA's representative.  Both Tom Shouldice and Peter Taggart
are Qualified Persons under Canadian National Instrument 43-101  regulations.  A
detailed description of the metallurgical  testwork program to


                                                                              56
<PAGE>
date by Qualified Person Peter Taggart, P.Eng., is included in the February 2006
43-101 report filed on SEDAR website.

CALCITE HILL

Limited flotation testwork on mineralization from Calcite Hill yielded excellent
results.  Two distinct styles of mineralization are present at Calcite Hill; the
first contains abundant medium-grained galena and high lead values with moderate
silver  values.   The  second   mineralization   type  contains  native  silver,
argentite-acanthite,   stromeyerite,  and  possesses  high  silver  values  with
generally low lead and other base metal grades. Grind sensitivity tests on these
samples  indicated that optimal  performance could be achieved with a relatively
coarse grind of approximately 150 microns (K80). Comparative work index analyses
suggest the Calcite Hill  mineralization  will be harder than that examined from
the other Navidad  deposits,  yet still of moderate  grindability with Bond Work
Indices of 14 to 19 kWh/t.

Two  composite  samples  (Calcite  Hill 10a and 11a),  corresponding  to the two
mineralization  types, were submitted to G&T for testwork.  Head grades of these
composite samples, and the drillholes from which they were collected, are listed
in Table 1.

Table 2 shows metallurgical  results achieved from stable locked cycle flotation
tests  performed on these  samples.  The  lead-rich  sample  (Calcite  Hill 10a)
yielded a very high quality lead  concentrate  containing 80.4% lead and 709 g/t
silver at a lead  recovery of 92% and silver  recovery of 86%.  The  silver-rich
sample  (Calcite  Hill 11a)  produced a silver  concentrate  grading  10,500 g/t
silver at a silver recovery of 88%.

GALENA HILL

Mineralization at Galena Hill consists  predominantly of fine-grained galena and
pyrite with lesser amounts of sphalerite and chalcopyrite.  Electron  microprobe
studies have shown silver to be contained  within the lattice of both galena and
pyrite,  with the bulk of the silver present within pyrite.  Flotation  tests to
date have focused on producing  separate lead and silver  (pyrite)  concentrates
through differential  flotation.  Primary grind sensitivity test results suggest
that a nominal flotation feed approximating 80 microns K80 will provide adequate
mineral liberation.  The Bond work index of Galena Hill mineralization (NVGH-13)
is 13.5 KWh/tonne, indicating that grinding power consumption will be modest.

Fourteen  rougher and 37 open circuit cleaner tests were performed on the Galena
Hill  composite  samples.  The results of three locked cycle tests  confirm data
produced  in the  open  circuit  tests.  Table 3  shows  results  achieved  when
subjecting three of the Galena Hill composite  samples to locked cycle flotation
test protocols.  Figure 1 show the range of silver and lead results  obtained by
the many open circuit cleaner tests.

Lead  metallurgical  performance  was generally  good with 74 to 84% of the lead
reporting to the lead  concentrates  which grade between 62.0 and 75.3% lead and
include  386 to 968  g/t  silver.  Subsequent  to  galena  flotation,  a  pyrite
concentrate  was  produced  that  recovered  37 to 57% of the total  silver  and
contains  1,083 to 3,546 g/t silver.  Total locked cycle test silver  recoveries
(lead concentrate plus silver concentrate) range from 54 to 82%.

Ongoing work targeting improved silver recoveries includes additional  flotation
tests using alternate reagents,  and mineralogical  studies to identify distinct
pyrite types present in concentrates and tails.

NAVIDAD HILL

Two distinct  styles of  mineralization  from Navidad  Hill were  studied;  head
grades and the drillholes  from which they were collected are listed in Table 1.
Both types contain mixed sulfide and oxide mineralization, the first (NVNH-8a+b)
was  collected   from   drillholes   intersecting   stratigraphically-controlled
mineralization  on the northwest flank of Navidad Hill and the second  (NVNH-9a)
from structurally-controlled mineralization on top of Navidad Hill. Both samples
contain high silver values (436 and 287 g/t Ag) but




                                                                              57
<PAGE>

only the  stratigraphically-controlled  mineralization contains significant lead
(3.11% Pb).  Flotation  testwork on both samples produced a single bulk sulphide
concentrate.

Table 4 shows  the  metallurgical  results  achieved  from  locked  cycle  tests
performed on Composite  samples 8a and 9a from Navidad  Hill.  Results show that
silver  recoveries  of  approximately  64 to 85% were  achieved in  concentrates
grading from 10,449 to 12,246 g/t silver.  Considering  the  oxidized  nature of
this mineralization,  these results far exceed expectations.  Work is ongoing to
improve upon these results.


<TABLE>
TABLE 1: HEAD GRADES OF COMPOSITE SAMPLES USED FOR METALLURGICAL TESTWORK.
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                                  SILVER             LEAD
  SAMPLE             DEPOSIT            DRILLHOLE(S)              (g/t)                %
===============================================================================================
<S>                                     <C>                        <C>                <C>
NVGH-5b/6b                              NV04-56, 57                 76                3.1

NVGH-6a                                 NV04-57                    143                4.86

NVGH-6b                                 NV04-57                    107                3.60

NVGH-7a                                 NV04-42                    466                3.9

NVGH-7b            Galena Hill          NV04-42                    297                3.7

NVGH-12                                 NV05-175                   264                8.0

NVGH-13                                 NV05-197                   300                4.9

NVGH-14                                 NV05-197                    82                1.3

NVGH-15                                 NV05-197                   340                0.4
===============================================================================================
NVNH-8a                                 NV04-100, 116              435                3.5

NVNH-8b               Navidad           NV04-100, 116              389                3.2
                       Hill

NVNH-9a                                 NV04-54, 109               265                0.3
===============================================================================================
NVCH-10a              Calcite           NV04-88                     72                8.5
                       Hill
NVCH-11a                                NV04-88                    320                0.3
===============================================================================================
</TABLE>
Notes: 1.  Samples with "a" and "b" suffix were composited from alternating
           intervals from the same drill holes.
       2.  Grades listed here are as measured by G&T after sample preparation
           and homogenization.


<TABLE>
TABLE 2: CALCITE HILL LOCKED CYCLE TEST RESULTS.
<CAPTION>
---------------------------------------------------------------------------------------------
          PRODUCT            MASS                 ASSAY                  DISTRIBUTION (%)
                            PERCENT        Pb (%)       Ag (g/t)        Pb             Ag
---------------------------------------------------------------------------------------------
<S>                           <C>           <C>          <C>            <C>            <C>
COMPOSITE 10a
---------------------------------------------------------------------------------------------
Flotation Feed                100           9.34           88           100            100
---------------------------------------------------------------------------------------------
CONCENTRATE                   10.7          80.4          709            92             86
---------------------------------------------------------------------------------------------
Cleaner Tail                   2.0          2.88          102             1              2
---------------------------------------------------------------------------------------------
Rougher Tail                  87.2          0.77           12             7             12
---------------------------------------------------------------------------------------------
COMPOSITE 11a
---------------------------------------------------------------------------------------------
Flotation Feed                100           0.38          310           100            100
---------------------------------------------------------------------------------------------
CONCENTRATE                    2.6          6.75         10,500          46             88
---------------------------------------------------------------------------------------------
Cleaner Tail                   2.8          0.46          248             3              2
---------------------------------------------------------------------------------------------
Rougher Tail                  94.6          0.21           31            51             10
---------------------------------------------------------------------------------------------
</TABLE>
Note: Feed grades are calculated from assays of test exit products and may
differ slightly from head grades as shown in Table 1.


                                                                              58

<PAGE>

<TABLE>
TABLE 3: GALENA HILL LOCKED CYCLE TEST RESULTS.
<CAPTION>
---------------------------------------------------------------------------------------------
          PRODUCT            MASS                 ASSAY                  DISTRIBUTION (%)
                            PERCENT        Pb (%)       Ag (g/t)        Pb             Ag
---------------------------------------------------------------------------------------------
<S>                           <C>           <C>          <C>            <C>            <C>
COMPOSITE 5b/6b
---------------------------------------------------------------------------------------------
Flotation Feed                100            3.30           83          100            100
---------------------------------------------------------------------------------------------
LEAD CONCENTRATE              3.6           75.3           386           81             17
---------------------------------------------------------------------------------------------
PYRITE CONCENTRATE            2.8            6.51        1,083            6             37
---------------------------------------------------------------------------------------------
Pyrite Cleaner Tail          14.2            1.70           98            7             17
---------------------------------------------------------------------------------------------
Pyrite Rougher Tail          79.4            0.23           31            6             30
---------------------------------------------------------------------------------------------
COMPOSITE 7b
---------------------------------------------------------------------------------------------
Flotation Feed                100            3.56          278          100            100
---------------------------------------------------------------------------------------------
LEAD CONCENTRATE              4.2           62.0           968           74             15
---------------------------------------------------------------------------------------------
PYRITE CONCENTRATE            3.6            9.59        3,546           10             46
---------------------------------------------------------------------------------------------
Pyrite Cleaner Tail          10.2            3.01          439            9             16
---------------------------------------------------------------------------------------------
Pyrite Rougher Tail          81.9            0.35           79            8             23
---------------------------------------------------------------------------------------------
COMPOSITE 12
---------------------------------------------------------------------------------------------
Flotation Feed                100            8.02          263          100            100
---------------------------------------------------------------------------------------------
LEAD CONCENTRATE             10.2           66.2           634           84             25
---------------------------------------------------------------------------------------------
PYRITE CONCENTRATE           10.0            7.45        1,494            9             57
---------------------------------------------------------------------------------------------
Pyrite Cleaner Tail           4.1            4.00          214            2              3
---------------------------------------------------------------------------------------------
Pyrite Rougher Tail          75.7            0.48           53            4             15
---------------------------------------------------------------------------------------------
</TABLE>
Note: Feed grades are calculated from assays of test exit products and may
differ slightly from head grades as shown in Table 1.




FIGURE 1: SILVER RECOVERY IN LEAD AND PYRITE CONCENTRATES PRODUCED IN OPEN
CIRCUIT TESTS


                     [GRAPHIC OMITTED]





                                                                              59

<PAGE>

<TABLE>
TABLE 4: NAVIDAD HILL LOCKED CYCLE TEST RESULTS.
<CAPTION>
---------------------------------------------------------------------------------------------
          PRODUCT            MASS                 ASSAY                  DISTRIBUTION (%)
                            PERCENT        Pb (%)       Ag (g/t)        Pb             Ag
---------------------------------------------------------------------------------------------
<S>                           <C>           <C>          <C>            <C>            <C>
COMPOSITE 8b
---------------------------------------------------------------------------------------------
Flotation Feed                100            2.89           395         100            100
---------------------------------------------------------------------------------------------
CONCENTRATE                   2.4           44.7         10,449          37             64
---------------------------------------------------------------------------------------------
Cleaner Tail                  5.0            5.70           526          10              7
---------------------------------------------------------------------------------------------
Rougher Tail                 92.5            1.65           124          53             29
---------------------------------------------------------------------------------------------
COMPOSITE 91
---------------------------------------------------------------------------------------------
Flotation Feed                100            0.24           282         100            100
---------------------------------------------------------------------------------------------
CONCENTRATE                   2.0            2.12        12,346          17             85
---------------------------------------------------------------------------------------------
Cleaner Tail                  8.0            0.37            77          12              2
---------------------------------------------------------------------------------------------
Rougher Tail                 90.1            0.19            41          71             13
---------------------------------------------------------------------------------------------
</TABLE>
Note: Feed grades are calculated from assays of test exit products and may
differ slightly from head grades as shown in Table 1.


Metallurgical  testwork to date on material from the Navidad Project has focused
on using flotation technology to produce a high-grade, saleable lead concentrate
and variable-grade silver concentrates.  In the case of Galena Hill, the pyritic
silver  concentrates  will require further  on-site  treatment to produce silver
dore.  Recently,  testwork performed at SGS Lakefield under the direction of Dr.
David  Dreisinger,  P.Eng.  of Dreisinger  Consulting  Inc. has shown that these
silver concentrates are amenable to pressure oxidation under neutral to alkaline
conditions  followed by  atmospheric  leaching using calcium  thiosulphate  as a
lixiviant.  Preliminary  bench-scale  testwork has produced silver recoveries of
87%  after  24 hours  and 89%  after 72 hours  of  leaching.  These  tests  were
conducted on a very low-grade silver  concentrate (235 g/t silver),  it is hoped
that  additional  improvements  in silver  recovery  may be  realized  in future
testwork on higher-grade concentrates. The Company is highly encouraged by these
results as they  indicate that the Navidad  Project  could  produce  silver dore
on-site using an environmentally  benign lixiviant rather than the more commonly
used sodium cyanide. Calcium thiosulphate is routinely used as fertilizer in the
agricultural industry.

PLANNED FUTURE WORK

The Phase IV drilling  currently  underway is planned to  encompass a minimum of
10,000m.  The  primary  objectives  of this  drilling  include 1)  expansion  of
resources along the Navidad trend, 2) delineation of the high-grade  mineralized
zone at Loma de la Plata  which has only been tested by 5 drill holes to date 3)
initial  testing  of other  targets  located  along the 8km  Argenta  Trend,  4)
additional   drilling   along  the  Esperanza   trend,   and  5)  completion  of
stratigraphic  holes to test buried  geological and geophysical  targets between
the Navidad and Argenta trends.

Additional surface prospecting,  mapping,  geochemical sampling,  and geophysics
may be carried out as recommended 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



                                                                              60
<PAGE>
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
numbers: 14016/03; 14617/05, 14616/05, 14,644/05,  14643/05, 14642/05, 14399/04,
14616/05,  14641/05, 14640/05, 14639/05 for the total of 54,671 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.  ("Pacific Bay") whereby Pacific Bay can
acquire up to a 70% interest in the Regalo mineral claim through the issuance of
900,000  shares of Pacific Bay to the Company,  and work  expenditures  totaling
US$625,000  over three years. On December 16, 2005, an extension of one year was
granted to Pacific Bay to meet this  expenditure  limit.  Pacific Bay must issue
all 900,000 shares (which have been issued, with a deemed value of $180,000) and
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.

In a January 12, 2005 News Release,  Pacific Bay reported that the Yastekt South
zone has strong  associated  gold  anomalies  consistent  over almost one square
kilometre.  The Yastekt South anomaly comprises 98 soil analyses that average of
299 ppm gold. Normal,  "background" gold values in the area are less than 5 ppm.
Two of the 98 soil analyses returned values in excess of 3 grams per tonne gold.
In a June 21, 2005 press release, Pacific Bay reported that an outcrop sample on
Pacific Bay's Regalo project has returned an assay value of 205 ppm uranium.  In
August 22,  2005 press  release  Pacific Bay  reported  that a total of 163 rock
samples were collected from 26 backhoe trenches  excavated within the large soil
and stream  sediment  anomalies  described  above. Of these, 13 rock samples had
detectable  gold  in  the 6 to 41  ppm  range.  The  trench  samples  identified
anomalous arsenic, molybdenum,  vanadium and zinc pathfinder elements in porous,
permeable sandstones and conglomerates with strong quartz-hematite alteration.

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 has not been prospected to date and is considered a 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



                                                                              61
<PAGE>
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 numbers:  14017/03;  14738/05,  14739/05 for the total of
10,000  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.

NINA AND CARLOTA PROPERTIES

The Nina claim (file  numbers:  14018/03;  14740/05,  14741/05  for the total of
10,000 hectares) and Carlota claim (file numbers: 14034/03;  14742/05,  14743/05
for the total of 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.

PAMPA III PROPERTY

The Pampa III claim (file number:  14446/04; 2,500 hectares) is located adjacent
to the  Navidad  Project,  along  trend and  immediately  to the  southeast.  It
replaced the lapsed File Number 14004/03.  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.

COLONIA PROPERTY

The  Colonia  claim  (file  numbers:  14005/03;  14367/04,  14368/04,  14832/06,
14833/06  for the  total  of  10,000  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.

JULIE PROPERTY

The Julie claim (file number:  14035/03;  5,675  hectares) is  approximately  30
kilometres  southeast 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  numbers:  14006/03;  14370/04,  14834/06 for the total
10,000 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



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<PAGE>
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 numbers: 14007/03; 14732/05, 14731/05, 14830/06 for the
total of 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 numbers: 14008/03;  14369/04, 14831/06 for the total of
10,000  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.

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")  which is  sub-leased to
Grosso Group. 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. On January 1, 2005 the Company engaged the Grosso
Group to  provide  facilities  and  management  services.  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, 2005
and 2004 the Company held 300,000 shares of Tinka Resources  Limited and 900,000
shares of Pacific Bay with a quoted market value of $270,000 (2004 - $270,000).


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,  2005,  2004  and  2003  should  be  read in
conjunction  with the  consolidated  financial  statements  of the  Company  and
related notes included therein.



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<PAGE>

CRITICAL ACCOUNTING POLICIES

Reference should be made to significant  accounting policies contained in Note 3
of the  December  31,  2005  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.

LEGAL PROCEEDINGS

In March 2004 Aquiline Resources Inc.  ("Aquiline")  commenced an action against
the  Company  seeking a  constructive  trust  over the  Navidad  properties  and
damages.  On September  29, 2005 the Company made an offer to Aquiline to settle
the  litigation.  The Board of  Directors  decided  to make the offer due to the
inherent risks of litigation,  to minimize the significant  legal costs and most
importantly  to allow the Company to continue  with its business plan to develop
Navidad.  The offer was rejected and the action continued on to trial. The trial
commenced on October 11, 2005 and ended on December 12, 2005. At the  conclusion
of the trial, the Court reserved its decision;  the Court's decision is expected
in the first half of 2006.  At this date the  outcome is not  determinable.  The
Company  believes the Aquiline  legal action is without merit.  However,  in the
event of an adverse  judgment the Company may suffer loss and such loss could be
material;  the  Company  might  not be able to  proceed  with its  plans for the
development of Navidad and could lose the ownership rights it currently has over
the project.  The Company  continues  to expense the legal and related  costs of
defending  the action as they are incurred and has not made a provision  for the
future  costs  that  will be  incurred  or  their  potential  recovery  from the
plaintiff.

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.

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



                                                                              64

<PAGE>
referred to in Note 10 of the consolidated  financial  statements of the Company
included  herein.  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 then the costs are
written-off,  or if its  carrying  value has been  impaired,  then the costs are
written down to fair value.  At December 31, 2005,  the Company had  capitalized
$15,032,107 (2004-$6,551,598, 2003 -$1,469,026) on its Argentine properties.

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.

During the year ended  December  31,  2005,  the  Company  completed  a brokered
private  placement  of  3,333,340  units at $3.00  per  unit,  for  proceeds  of
$9,263,283  net of $600,001  agent's  commission  and $136,736 of related  issue
costs.  Each  unit  consisted  of one  common  share and one half  common  share
purchase warrant.  Each full warrant entitles the holder thereof to purchase one
additional  common  share in the  capital of the Company at a price of $3.45 per
share  until  September  14,  2009.  In  addition  to the  cash  commission  the
underwriters were paid a commission of 7% (233,334) underwriter's warrants. Each
underwriter's  warrant is exercisable  for one share at a price of $3.25,  for a
period of twenty four months,  expiring on September  12,  2007.  The  financing
closed  on  September  12,  2005.  From  January  1,  2006 to  April 21 2006 the
aggregate  amount the Company received from the exercise of warrants and options
was $172,900.


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<PAGE>
On March 21, 2006 the Company completed a syndicated  brokered private placement
financing of 2,865,000  special  warrants at $3.50 per special warrant for gross
proceeds of  $10,027,500  was completed.  Each special  warrant will entitle the
holder to acquire one unit  consisting  of one common  share and one half common
share purchase  warrant  without payment of any additional  consideration.  Each
full warrant entitles the holder thereof to purchase one additional common share
in the  capital  of the  Company at a price of $3.80 per share  until  March 21,
2010.  In addition to a cash  commission  of 6% the  underwriters  were  granted
171,900  agents'  warrants,  representing  6% of the number of special  warrants
issued.  Each agents'  warrant is exercisable for one share at a price of $3.80,
for a period of twenty four months, expiring on March 21, 2008.

During the year ended  December 31, 2005, the Company  issued  1,663,517  common
shares on the exercise of options,  warrants and agents warrants for $4,361,011.
As of December 31, 2005,  the Company had reserved  1,900,004  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  4,  2006,  there  were  1,900,004  warrants
outstanding.

Cash on hand at May 4, 2006 was approximately $14,500,000. During the nine month
period from March 31, 2006 to December  31,  2006,  the Company  plans to expend
$6,000,000 on the continuation of the development and exploration 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,  2005,  2004  and  2003  should  be  read in
conjunction with the consolidated  financial  statements of the Company attached
hereto and related notes included therein.


YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

For the year ended December 31, 2005, the Company  reported a consolidated  loss
of  $5,764,874  ($0.12 per share),  an increase of  $1,109,811  from the loss of
$4,655,063  ($0.11 per share) for the year ended December 31, 2004. The increase
in the loss in 2005,  compared to 2004 amount, was due to a number of factors of
which  $1,835,618  can be  attributed  to increases  in  operating  expenses and
$725,807 decrease in other items.

The  Company's  prior period  financial  statements  have been  reclassified  in
accordance  with Canadian GAAP. The net assets  transferred to Golden Arrow were
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.  A loss of $131,231 was
allocated to spin-off assets in the 2004 period.

The  Company's  operating  expenses  for the year ended  December  31, 2005 were
$6,148,234 an increase of $1,835,618  from  $4,312,616 in 2004.  $339,516 of the
2004 operating  expenses had been  reclassified  as "Loss  Allocated to Spin-Off
Assets" which relate to the assets  transferred to Golden Arrow.  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 a cost specific basis.

Professional fees increased  $1,432,498 to $2,327,278 in 2005,  primarily due to
legal costs  incurred in  connection  with the Aquiline  legal action as well as
increased costs of compliance. In 2005 the Company recorded non-cash stock based
compensation  of $2,380,000  compared to  $1,972,860 in 2004,  for stock options
granted to its  employees,  consultants  and directors,  of which  $1,800,000 is
included in expenses in 2005 compared to $1,972,860 in 2004 and $580,000 in 2005
compared  to  $Nil  in  2004  is  included  in  capitalized   mineral   property
expenditures.  Other notable changes in the operating expenses are: (i) Salaries
increased $272,151 due to staff increases (salaries in 2005 are a portion of the
monthly fee charged for


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<PAGE>
services by the Grosso  Group while in 2004 the Company  directly  employed  its
staff);  (ii) Administrative and management services decreased by $89,744 due to
some of the services  provided by consultants in 2004 were provided by employees
of the Grosso Group during 2005 and are included in salaries  (iii) there are no
cost recoveries (for shared  administrative costs and rent) from Amera or Golden
Arrow in 2005;  (iv)  Corporate  development  and investor  relations  increased
$207,951,  as the Company has made its shareholders and others more aware of its
Navidad  project  and its  potential,  (v) Office and Sundry  increased  $40,337
mainly due to the  increase in  insurance  premiums and an increase in activity,
(vi) Transfer agent and regulatory  fees  increased  $141,972  mainly due to the
costs of the Company's  listing on the American  Stock  Exchange,  (vii) General
exploration  decreased by $173,047 as the Company's focus is on Navidad property
for which  costs are  included in  capitalized  mineral  property  expenditures,
(viii)  Travel  increased  $52,444  due to travel  related  to  conferences  and
investor presentations as well as to South America.

In 2005 the Company recorded interest income of $150,406 compared to $101,589 in
2004,  primarily as a result of increase of funds on deposit. In 2005 there were
no reorganization costs recorded by the Company, in 2004 reorganization costs of
$346,103  were  recorded.  There was no gain on the  optioning of  properties to
other mining exploration  companies,  in 2004 a gain of $328,346 was recognized.
No  write  down for the  carrying  value of  marketable  securities  in 2005 was
recognized  while a $99,762  write  down for the  carrying  value of  marketable
securities  was recorded in 2004.  A gain of $232,954  for foreign  exchange was
recorded in 2005  compared to loss of  $195,285  in 2004.  The foreign  exchange
adjustment  in 2005 is a result of a  continued  strengthening  of the  Canadian
dollar compared to US dollar and due to the exchange  movements between expenses
being incurred in US$ and amounts exchanged to settle such payables.  No gain or
loss was  allocated to spin-off  assets in 2005,  in 2004 a loss of $131,232 was
recorded.

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.

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


                                                                              67

<PAGE>
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  $25,916  in 2003.  The  foreign  exchange  adjustment  is as a result of the
continued strengthening of the Canadian dollar compared to the US dollar and due
to the exchange  movements  between the date of recognition of expenses incurred
in US$ and the date of  settlement.  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."

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.

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
for  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.



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<PAGE>

On May 3, 2004 the Company announced a proposed  corporate  reorganization.  The
effect of the reorganization was be to transfer the Transferred Assets to Golden
Arrow.  The Company  retained the Navidad  Properties and is responsible for the
Company's  accounts payable.  The Company's  shareholders  received Golden Arrow
common  shares  which  resulted  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."

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position at December 31, 2005 was $7,731,395,  an increase of
$2,504,041  from December 31, 2004.  Total assets  increased to  $23,497,994  at
December 31, 2005 from $12,221,856 at December 31, 2004. This increase is mainly
due to the increase in Navidad carrying value and in cash balance. During fiscal
2005, the Company  completed a brokered private placement for 3,333,340 units at
$3.00 per unit,  for proceeds of $9,263,283 net of $600,001  agent's  commission
and $136,736 of related issue costs. Each unit consisted of one common share and
one half common share purchase  warrant.  Each full warrant  entitles the holder
thereof to purchase  one  additional  common share at a price of $3.45 per share
until  September 14, 2009. In addition to the cash  commission the  underwriters
were granted as commission 233,334  underwriter's  warrants,  representing 7% of
the number of units issued.  Each  underwriter's  warrant is exercisable for one
share at a price of $3.25,  for a period  of twenty  four  months,  expiring  on
September  12,  2007.   The   underwriter's   warrants  were  valued  using  the
Black-Scholes Pricing Model. The warrants were valued at $0.76 per warrant for a
total  value of  $177,333  and have been  recorded  as share  issue costs with a
corresponding  increase to contributed surplus. At May 4, 2006, no underwriter's
warrants had been exercised.

On March 21, 2006 the Company completed a syndicated  brokered private placement
financing of 2,865,000  special warrants at $3.50 per warrant for gross proceeds
of $10,027,500. Each special warrant will entitle the holder to acquire one unit
consisting of one common share and one half common share purchase warrant.  Each
full warrant entitles the holder thereof to purchase one additional common share
in the  capital  of the  Company at a price of $3.80 per share  until  March 21,
2010.  In addition to a cash  commission  of 6% the  underwriters  were  granted
171,900  agents'  warrants,  representing  6% of the number of special  warrants
issued.  Each agents'  warrant is exercisable for one share at a price of $3.80,
for a period of twenty four months, expiring on March 21, 2008.

Options  and  warrants  were  exercised  which  resulted  in  cash  proceeds  of
$4,215,145  during  2005.  The Company  paid  $145,866 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.  As all  warrants  that  were
outstanding as of the effective date of the  reorganization  have been exercised
the Company  has no further  obligation  to pay amounts to Golden  Arrow for the
issue of its shares on the exercise of the Company's warrants.

The Company has received $172,900 from the exercise of options from January 1 to
May 4, 2006. As at May 4, 2006 the Company had working capital of  approximately
$13,500,000.

The Company  considers  that it has  adequate  resources to maintain its ongoing
operations but currently may 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 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.

Except  as  disclosed  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.

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


                                                                              69
<PAGE>

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, 2006  through  December  31,  2006,  it is
anticipated that the Company will have obligations totaling $760,000 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                             760,000         760,000           -             -               -
Long-term Debt Obligations                             -               -              -             -               -
Capital (Finance) Lease Obligations                    -               -              -             -               -
Operating Lease Obligations                            -               -              -             -               -
Purchase Obligations                                   -               -              -             -               -
Other Long-Term Liabilities Reflected in
the Company's Balance Sheet under the
GAAP of the Primary Financial Statements               -               -              -             -               -
---------------------------------------------------------------------------------------------- ----------------------------
Total                                               760,000         760,000           -             -               -
===========================================================================================================================
</TABLE>


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

DIRECTORS AND SENIOR MANAGEMENT

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

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST            PERIOD OF SERVICE AS A
     NAME, AGE AND POSITION(1)<F1>                     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
Age 60                                    British Columbia mineral exploration   Director since February 15, 1999.
                                          company from March 1999 to present.
                                          President of Nevada Star Resources
                                          Corp, from March 5, 2002 to present.

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


                                                                              70
<PAGE>

<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST            PERIOD OF SERVICE AS A
     NAME, AGE AND POSITION(1)<F1>                     FIVE YEARS                          DIRECTOR/OFFICER
------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                    <C>
JOSEPH GROSSO -                           Director and President of the          Director  and President since
President,  Chief Executive Officer       Company since February 1990.           February 1990.
and Director
Age 68                                                                           Chief Executive Officer since
                                                                                 February 1990.

------------------------------------------------------------------------------------------------------------------------
ARTHUR LANG  -                            Chief Financial Officer of the         Director  Vice-President and Chief
Chief Financial Officer, Secretary        Company since April 2, 2004.           Financial Officer since April 2,
and Director                              Consultant providing financial         2004.
Age 62                                    management services to various         Secretary since August 31, 2005.
                                          clients from 1999 to April 2004
                                          through Arthur G Lang Inc., a
                                          private British Columbia company.

------------------------------------------------------------------------------------------------------------------------
NIKOLAOS CACOS -                          President, CEO  and director of        Corporate Secretary from June 25,
Vice President                            Amera Resources Corporation, a         1998 to January 2005.
Age 39                                    public British Columbia company,
                                          since April 2000. Corporate            Vice President  since June 23, 2005
                                          Secretary and Vice President, North
                                          America Corporate Development of the
                                          Company Director and Corporate
                                          Secretary of Golden Arrow Resources
                                          Corporation.
------------------------------------------------------------------------------------------------------------------------
SEAN HURD  -                              Investor Relations Manager for the     Vice President, Investor Relations
Vice President, Investor Relations        Grosso Group since 2005 and for the    since March 2005.
Age 39                                    Company from June 2002 to
                                          present. Investor relations for Senate
                                          Capital  from  February  1996  to  May
                                          2002.
------------------------------------------------------------------------------------------------------------------------
ROBERT STUART (TOOKIE) ANGUS              Independent Business Adviser to the    Director since May 2003
Director                                  mining  industry since January
                                          2006.  Managing Director, Mergers and
------------------------------------------------------------------------------------------------------------------------
Age 57                                    Acquisitions, Endeavour
                                          Financial Ltd., November 2003 to
                                          December 31, 2005. Partner in law
                                          firm, Fasken Martineau DuMoulin LLP
                                          from February 2001 to October 2003.
------------------------------------------------------------------------------------------------------------------------
CHET IDZISZEK                             President, CEO and director of         Director since May 2003
Director                                  Madison Enterprises Corp. from 1993
Age 58                                    to present. President, CEO and
                                          director of Adrian Resources Ltd.
                                          from June 1990 to present.
------------------------------------------------------------------------------------------------------------------------
DAVID TERRY                               Vice President for the Company since   Director since May 2004
Director                                  June 2004 to present.  Vice
Age 41                                    President, Exploration for the         Vice President for the Company since
                                          Grosso Group from January 2005 to      June 2004
                                          present. Regional geologist

                                                                              71
<PAGE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST            PERIOD OF SERVICE AS A
     NAME, AGE AND POSITION(1)<F1>                     FIVE YEARS                          DIRECTOR/OFFICER
------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                    <C>
                                          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 and Director     Director since June 2004
Director                                  of Canaccord Capital Corporation
Age 69                                    from 1996 to present.
------------------------------------------------------------------------------------------------------------------------
AUGUSTO BAERTL                            President of Cia. Minera Antamina      Director  and President of
Director (Of subsidiary)                  from 1997 to 2001 and Executive        subsidiary since March 2005
Age 62                                    Chairman from 2001 to 2002.  Chief
                                          Executive Officer of Gestora de
                                          Negocios e Inversiones S.A. from
                                          August 2003 to present.
------------------------------------------------------------------------------------------------------------------------
LEONARD HARRIS                            Retired Mining Consultant since 1995   Director since August 24, 2005
Director
Age 78
------------------------------------------------------------------------------------------------------------------------
CARLOS D'AMICO                            President since February 2005 and      President since February, 2005
President (of subsidiary)                 General Manager since 2003 to          General Manager 2003-2005
Age 48                                    present  of Inversiones Mineras
                                          Argentinas S.A., a subsidiary of the
                                          Company, 2000-2003 President of
                                          Independent Construction Company
------------------------------------------------------------------------------------------------------------------------
GUILLERMO RAMON SALVATIERRA               COO, Inversiones Mineras Argentinas    COO since October 1, 2005
COO (of subsidiary)                       S.A., a subsidiary of the Company,
Age 48                                    2001-2004 Operations Manager, Risk
                                          Manager Coordinator and Senior
                                          Auditor at Transportadora Gas del
                                          Norte S.A., 2000-2001 COO Svedala
                                          Industries AB Argentina
------------------------------------------------------------------------------------------------------------------------
<FN>
(1)<F1>  Officers and Directors of the  Company  may also  serve as directors of
         other companies.  See "Conflicts of Interest" below.
</FN>
</TABLE>

There are no family relationships between any directors or executive officers of
the Company.  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.


                                                                              72
<PAGE>
The  directors  and  officers of the Company are aware of the  existence of laws
governing accountability of directors and officers for corporate opportunity and
requiring disclosures by directors of conflicts of interest and the Company will
rely upon such laws in respect of any  directors'  and  officers'  conflicts  of
interest  or in  respect  of any  breaches  of duty by any of its  directors  or
officers.  All such conflicts will be disclosed by such directors or officers in
accordance with the 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.

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     Mar/99 to present
                                    Nevada Star Resources Corp.             President/Director     Mar/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

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


Joseph Grosso                       Amera Resources Corporation             Chairman/Director      Feb/04 to present
                                    Golden Arrow Resources Corporation      Chairman/President/    Jul/04 to present
                                                                            CEO/Director
                                                                            Chairman/Director      April/06 to present

Robert Stuart (Tookie) Angus        CMQ Resources Inc.                      Director               Dec/03 to present

                                    Nevsun Resources Ltd.                   Director               Jan/03 to present

                                    Plutonic Power Corporation              Director               June/99 to present

                                    Blackstone Ventures Inc.                Director               Sept/97 to present
                                                                            Chairman/Secretary
                                    Dynasty Gold Corp.                      Director               Oct/99 to present
                                    Bema Gold Corporation                   Director               June/92 to present
                                    Crescent Gold Limited                   Director               Nov/05 to present
                                    Polaris Minerals Corporation            Director               Seot/03 to present
                                    Tsodilo Resources Limited               Director               July/04 to present
                                    United Bolero Development Corp.                                March/06 to present

Chet Idziszek                       Adrian Resources Ltd.                   Chairman/CEO/          June/90 to present
                                                                            President/Director
                                    Madison Enterprises Corp.               Chairman/CEO/          Nov/93 to present
                                                                            President/Director
                                    Lund Gold Ltd.                          CEO/President/         May/97 to present
                                                                            Director


                                                                              73
<PAGE>

<CAPTION>
NAME OF DIRECTOR                    NAME OF COMPANY                         POSITION               TERM OF SERVICE
----------------                    ---------------                         --------               ---------------
<S>                                 <C>                                     <C>                    <C>
                                    Oromin Explorations Ltd.                President/Director     Feb/94 to present
                                    The Havana Group Inc.                   Director               Aug/02 to present


David Terry                         Amera Resources Corporation             Vice President         Mar/04 to present
                                                                            Exploration
                                    Golden Arrow Resources Corporation      Director/V-P           Jul/04 to present
                                                                            Exploration
                                    Astral Mining Corporation               Director               March 9/05 to present

David Horton                        Golden Arrow Resources Corporation      Director               July/04 to present


Leonard Harris                      Glamis Gold Ltd.                        Director               May/99 to May/03
                                    Corriente Resources                     Director               Jul/95 to present
                                    Solitario Resources                     Director               Jun/98 to present
                                    Cardero Resource Corp.                  Director               Feb/00 to present
                                    Alamos Minerals Ltd.                    Director               Jun/98 to May/03
                                    Canarc Resource Corp.                   Director               Jun/01 to present
                                    Solliden Exploration Inc.               Director               Sep/03 to present
                                    Endeavour Gold Corp.                    Director               Jul/03 to present
                                    Alamos Gold Inc.                        Director               Nov/03 to present
                                    Morgain Minerals Inc.                   Director               Jun/04 to present
</TABLE>


COMPENSATION

During the fiscal year ended  December 31, 2005,  the  directors and officers of
the Company, as a group, had received or charged the Company a total of $241,088
(2004-$476,226;  2003 - $330,600)  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 and Chief Financial
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 and Chief Financial  Officer,
who were serving as executive officers at the end of the most recent fiscal year
and whose total  salary and bonus  amounted to  $150,000 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  $150,000,  whether or not they
were an executive officer at the end of the most recent fiscal year.

During the year ended  December  31, 2005,  the Company had two Named  Executive
Officers:  Joseph Grosso, President and Chief Executive Officer and Arthur Lang,
Chief Financial  Officer (the "Named Executive  Officers").  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, 2003, 2004 and 2005.


                                                                              74
<PAGE>
<TABLE>
                           SUMMARY COMPENSATION TABLE
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                 ANNUAL COMPENSATION                LONG TERM COMPENSATION
                                 ---------------------------------- -------------------------------------------------
                                                                    AWARDS                   PAYOUTS
                                                                    ------------------------ ------------------------
NAME AND                                                 OTHER      SECURITIES   RESTRICTED    LTIP
PRINCIPAL                         SALARY        BONUS    ANNUAL     UNDER        SHARES OR     PAYOUTS     ALL
POSITION               YEAR       ($)           ($)      COMPENSA   OPTIONS/     RESTRICTED    ($)         OTHER
(a)                  (b)(1)<F1>   (c)           (d)      TION       SARS         SHARE         (h)         COMPEN-
                                                         ($)        GRANTED      UNITS                     SATION
                                                         (e)        (#)(2)<F2>   ($)                       ($)
                                                                    (f)          (g)                       (i)
---------------------------------------------------------------------------------------------------------------------
<S>                    <C>        <C>            <C>       <C>      <C>             <C>         <C>         <C>
Joseph Grosso(3)<F3>   2005        $102,000       -         -       150,000          -           -           -
President and Chief    2004        $102,000       -         -       150,000          -           -           -
Executive Officer      2003        $102,000       -         -       200,000          -           -           -

Arthur Lang, Chief     2005       $68,927(4)<F4>  -         -       100,000          -           -           -
Financial Officer      2004        $58,671        -         -       50,000           -           -           -
                       2003          $Nil         -         -       -                -           -           -
---------------------------------------------------------------------------------------------------------------------
<FN>
(1)<F1>  Fiscal years ended  December 31, 2005,  2004 and 2003.
(2)<F2>  See "Options and Stock Appreciation Rights".
(3)<F3>  See description of termination payment for Mr. Grosso in Item 6,
         agreement dated July 1, 1999 with  Oxbow International Marketing Corp.
(4)<F4>  During the year ended December 31, 2005,  Mr. Lang's total compensation
         from the Grosso Group was $94,667,  of which $68,927 was allocated to
         the Company as part of the Grosso Group fees for the year.
</FN>
</TABLE>

LONG TERM INCENTIVE PLAN AWARDS

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

OPTIONS AND STOCK APPRECIATION RIGHTS

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

OPTION GRANTS

The following  table sets forth stock options  granted by the Company during the
financial  year ended December 31, 2005 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)<F1>  BASE PRICE(2)<F2>    ON DATE OF GRANT      EXPIRATION DATE
----             ---------------     --------------          ----------         -----------------      ---------------
                       (#)                                  ($/Security)          ($/Security)
<S>                  <C>                  <C>                  <C>                   <C>               <C>
Joseph Grosso        150,000              11.02%               $4.16                 $4.16             March 16, 2010

Arthur Lang           75,000               7.35%               $4.16                 $4.16             March 16, 2010
                      25,000                                   $2.92                 $2.92             November 16, 2010
<FN>
(1)<F1>  Percentage of all options granted during the financial year.
(2)<F2>  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.
</FN>
</TABLE>


                                                                              75

<PAGE>

AGGREGATED OPTION EXERCISES AND OPTION VALUES

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

<TABLE>
<CAPTION>
                                                                                               VALUE OF UNEXERCISED
                                                                   UNEXERCISED OPTIONS         IN-THE-MONEY OPTIONS
                     SECURITIES ACQUIRED    AGGREGATE VALUE         AT FISCAL YEAR-END          FISCAL YEAR-END(2)<F2>
NAME                  ON EXERCISE(1)<F1>       REALIZED         EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
----                  ------------------       --------         -------------------------    -------------------------
                             (#)                  ($)                      (#)                         ($)
<S>                          <C>                  <C>                  <C>                        <C>
Joseph Grosso                Nil                  Nil                  547,500/Nil                $520,550 / N/A

Arthur Lang                  Nil                  Nil                  150,000/Nil                $33,000 / N/A
<FN>
(1)<F1>  All options are exercisable to acquire the Company's Common Shares.
(2)<F2>  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, 2005,
         $3.48, less the exercise price per share of in-the-money stock options.
</FN>
</TABLE>

PENSION PLAN

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

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."

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, 2005 for
their services in their capacity as directors.

During the last completed  financial year ending  December 31, 2005, the Company
paid directly  $139,088 and indirectly $63,000 (as  part of the allocated Grosso
Group monthly fees) 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>
                                                                                      MARKET VALUE
                       SECURITIES UNDER   % OF TOTAL OPTIONS                         OF SECURITIES
                            OPTIONS          GRANTED IN          EXERCISE OR       UNDERLYING OPTIONS
NAME                     GRANTED(1)<F1>  FINANCIAL YEAR(2)<F2>  BASE PRICE(3)<F3>   ON DATE OF GRANT      EXPIRATION DATE
----                       -------       -------------------    -------------       -----------------     ---------------
                              (#)                                ($/Security)          ($/Security)
<S>                         <C>                  <C>               <C>               <C>                   <C>
Directors as a group        300,000              22%               $4.16 and         $4.16 and $2.92       March 16, 2010
who are not Named                                                    $2.92                                 November 16, 2010
Executive Officers

                                                                              76
<PAGE>
<FN>
(1)<F1>  All options are for the Company's Common Shares.
(2)<F2>  Percentage of all options granted in the year.
(3)<F3>  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.
</FN>
</TABLE>

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
                                                                      UNEXERCISED OPTIONS         IN-THE-MONEY OPTIONS
                      SECURITIES ACQUIRED     AGGREGATE VALUE         AT FISCAL YEAR-END           FISCAL YEAR-END(2)<F2>
NAME                  ON EXERCISE(1)<F1>         REALIZED          EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
----                  -------------------        --------          -------------------------    -------------------------
                               (#)                  ($)                       (#)                         ($)
<S>                            <C>                  <C>                  <C>                         <C>
Directors, as a                Nil                  Nil                  1,200,000/N/A               $1,670,700/N/A
group, who are not
Named Executive
Officers
<FN>
(1)<F1>  All options are exercisable to acquire the Company Common Shares.
(2)<F2>  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, 2005
         $3.48, less the exercise price per share of in-the-money stock options.
</FN>
</TABLE>

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 other than as
disclosed herein.

MANAGEMENT CONTRACTS

GROSSO GROUP MANAGEMENT LTD.

Effective  January 1, 2005, the Company engaged Grosso Group to provide services
and  facilities  to the  Company.  On May 6, 2005,  an  Administration  Services
Agreement was  finalized  and executed by the Company and the Grosso Group.  The
Grosso Group is a private  company which is owned by the Company,  Golden Arrow,
Amera,  Astral Mining Corporation and Gold Point Energy Corp., each of which own
one share. The Grosso Group provides its shareholder  companies with geological,
corporate development,  administrative and management services. The Grosso Group
staff is available to the shareholder companies on a cost recovery basis without
the expense of full time personnel.  The shareholder  companies pay monthly fees
to the Grosso Group. The fee is based upon a reasonable pro-rating of the Grosso
Group's  costs  including  its staff and overhead  costs among each  shareholder
company  with regard to the  mutually  agreed  average  annual level of services
provided to each shareholder  company.  During fiscal 2005, the Company incurred
fees of $730,802 to the Grosso  Group.  In  addition,  included in the  accounts
receivable, prepaids and deposits is a $205,000 deposit to the Grosso Group. The
deposits from the member  companies  were used for the purchase of equipment and
leasehold improvements and for operating working capital.

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



                                                                              77
<PAGE>

desires  to  terminate  the  agreement  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 4, 2006,  the
directors of the Grosso Group are Nikolaos  Cacos,  Joseph Grosso,  Arthur Lang,
Manfred  Kurschner  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 and director of Gold Point.  Nikolaos Cacos is an officer of IMA, a
director  and  officer  of Golden  Arrow and a  director  and  officer of Amera.
Manfred  Kurschner is an officer and director of Astral Mining  Corporation  and
director  of Golden  Arrow and Nick  DeMare is an officer  and  director of Gold
Point. 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.  Mr.  Grosso
returned the sole outstanding  share of the Grosso Group to the Grosso Group for
cancellation and one share was issued to the Company.

The Board of Directors of the Company has approved the  Administration  Services
Agreement.

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, 2005, Oxbow was paid $102,000. On April 12, 2006 the Board accepted
the  recommendation  from the  Compensation  Committee  to increase  the monthly
consulting fee effective May 1, 2006 to $20,833  ($250,000 per annum) and to pay
a bonus of $150,000.

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  while
providing  services to the Company,  or by Mr.  Grosso as a result of a material
breach or default by the  Company,  Oxbow is entitled to a bonus  payment in the
amount of $461,500.


                                                                              78
<PAGE>


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) three years of Mr. Grosso's monthly compensation (which may be
adjusted annually), and (iv) a bonus payment of $461,500.

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.  Mr.  Cacos  resigned  as a director of the Company in October
2004.  During fiscal 2005, Mr. Cacos was paid directly by the Company $Nil (2004
- $17,600,  2003 - $66,000).  On January 1, 2005 Mr.  Cacos's  contract with the
Company was cancelled and replaced with a contract with the Grosso Group. During
the year ended December 31, 2005, Mr. Cacos's total compensation from the Grosso
Group was $22,500,  of which $14,862 was allocated to the Company as part of the
Grosso Group fees for the year.

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, 2005,  Mr. Hurd was paid  directly by
the  Company  $Nil (2004 - $73,800,  2003 -  $48,000).  Mr.  Hurd  resigned as a
director in October 2004.  In January  2005,  Mr. Hurd became an employee of the
Grosso  Group.  During  the year ended  December  31,  2005,  Mr.  Hurd's  total
compensation  from the Grosso Group was $96,000,  of which $72,216 was allocated
to the Company as part of the Grosso Group fees for the year.

GERALD CARLSON

By agreement  dated  February 15, 2001,  between the Company and KGE  Management
Ltd. ("KGE"),  a private company owned by Gerald Carlson,  Chairman of the board
of directors 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. 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.  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  was  required  to  provide a
minimum of eight days of service per month.  This  agreement  expired  March 31,
2005 and was renewed for six months with the same terms.  During the fiscal year
ended December 31, 2005, the Company paid $24,000 to KGE (2004 - $34,749, 2003 -
$41,400).  Effective January 1, 2006 the Company agreed to pay KGE a fee of $600
per day if services were required and the former agreement was not renewed.

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.  Effective  May 1,
2005 Mr. Lang's  annual salary was increased to $102,000.  During the year ended
December  31, 2005,  Mr.  Lang's  total  compensation  from the Grosso Group was
$94,667,  of which  $68,927 was  allocated  to the Company as part of the Grosso
Group fees for the year. On April 12, 2006 the Board accepted the recommendation
from the Compensation Committee to increase Mr. Lang's annual salary to $150,000
effective May 1, 2006 and to pay a bonus of $50,000.



                                                                              79

<PAGE>

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.
During the year ended December 31, 2005, Mr. Terry's total compensation from the
Grosso Group was $120,000, of which $63,600 was allocated to the Company as part
of the Grosso Group fees during the year.  On April 12, 2006 the Board  accepted
the  recommendation  from the  Compensation  Committee to increase  Mr.  Terry's
monthly fee to $12,500  ($150,000  annually)  effective May 1, 2006 and to pay a
bonus of $50,000.

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.

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

COMPENSATION 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  Company's  Compensation  Committee  must  be  comprised  of  at  least  two
independent directors, who 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  and Angus  are  members  of the  Compensation



                                                                              80
<PAGE>
Committee.   The  board  of  directors   of  the  Company,   after  each  annual
shareholder's meeting must appoint or re-appoint a compensation committee.

                               TERMS OF REFERENCE
                                     FOR THE
                             COMPENSATION COMMITTEE

GENERAL

The  Compensation  Committee  is a committee of the Board to which the Board has
delegated its  responsibility  for oversight of the Corporation's  overall human
resources policies and procedures. This includes reviewing the adequacy and form
of the compensation  paid to the  Corporation's  executives and key employees to
ensure that such compensation  realistically  reflects the  responsibilities and
risks of such positions.

The Compensation  Committee's  objectives are to assist the Board in meeting its
responsibilities  in respect of overall human resources  policies and procedures
including recruitment,  performance management,  compensation, benefit programs,
resignation/terminations,  training  and  development,  succession  planning and
organizational  planning  and  design,  to  ensure  a broad  plan  of  executive
compensation  is  established  that is  competitive  and  motivating in order to
attract,  retain and inspire executive management and other key employees and to
review all compensation and benefit proposals for the  Corporation's  executives
and make recommendations to the Board.

COMPOSITION AND PROCESS

1.       The  Compensation  Committee  will be  comprised  of a  minimum  of two
         directors, all of whom will be independent.

2.       Compensation  Committee  members  will be  appointed by the Board on an
         annual  basis  for  a  one-year  term  and  may  serve  any  number  of
         consecutive  terms,  which  are  encouraged  to  ensure  continuity  of
         experience.

3.       The  Chair  of the  Compensation  Committee  will be  appointed  by its
         members on an annual basis for a one-year term and may serve any number
         of consecutive terms. The Compensation Committee Chair will arrange for
         an alternate  chair for a specific  meeting if he or she is planning to
         be absent.

4.       The  Compensation   Committee  Chair  will  establish  the  agenda  for
         Compensation  Committee  meetings  and ensure  that  properly  prepared
         agenda materials are circulated to the members with sufficient time for
         review prior to the meeting.

5.       The  Compensation  Committee  will meet at least twice per year and may
         call  special  meetings  as  required.  A  quorum  at  meetings  of the
         Compensation  Committee  will be one of its members.  The  Compensation
         Committee  may hold  its  meetings,  and  members  of the  Compensation
         Committee may attend meetings, by telephone conference call.

6.       At all meetings of the  Compensation  Committee  every question will be
         decided by a majority  of the votes  cast.  In case of an  equality  of
         votes, the Compensation  Committee Chair will forward the matter to the
         Board of Directors for resolution.

7.       The minutes of Compensation  Committee  meetings will document the date
         and time of the meetings.

8.       The  Compensation  Committee  will have the  authority  to  retain  (or
         terminate) any outside  counsel,  advisors or consultants it determines
         necessary to assist it in discharging its functions,  independently  of
         the Board,  Chair or CEO. The  Compensation  Committee will be provided
         with the  necessary  funding to  compensate  any  counsel,  advisors or
         consultants it retains.

9.       The CEO may attend and  participate  in  meetings  of the  Compensation
         Committee, except when his compensation is the subject matter.



                                                                              81
<PAGE>
RESPONSIBILITIES

   1.    The Compensation Committee will review management prepared policies and
         make recommendations to the Board regarding the following matters:

   2.    Compensation,  philosophy, policies and guidelines for senior officers,
         as well as supervisory and management  personnel of the Corporation and
         any subsidiary companies.

   3.    Corporate  benefits for senior  management  (i.e. car  insurance,  life
         insurance, retirement plan, expense accounts, etc.).

   4.    Incentive plans, along with global payment information as it applies to
         senior management bonus and discretionary bonus plans.

   5.    Review and approval of Corporate  goals and objectives  relevant to CEO
         and other senior management compensation.

   6.    Evaluation of the performance of the CEO and other senior management in
         light of corporate goals and objectives and making recommendations with
         respect to compensation levels based on such evaluations.

   7.    Policies  regarding the  Corporation's  Incentive Stock Option Plan and
         the granting of stock options to Directors, management and employees of
         the Corporation.

   8.    Policies  regarding the  development  and  implementation  of incentive
         compensation plans and equity based compensation plans.

   9.    Compensation levels for directors and committee members,  including the
         compensation  of the Chair and the  Chair of any Board  committees,  to
         ensure compensation  realistically  reflects the  responsibilities  and
         risk involved in being an effective  director.  Compensation  should be
         commensurate  with  the  time  spent  by  directors  in  meeting  their
         obligations  and should be  transparent  and easy for  shareholders  to
         understand.

   10.   Succession  plan for the CEO and other  executives and key employees of
         the Corporation, in conjunction with the CEO.

   11.   Any material changes in human resources policy, procedure, remuneration
         and benefits.

   12.   Review of executive  compensation  disclosure in all public  disclosure
         documents.

   13.   The  Compensation  Committee will review and assess its  effectiveness,
         contribution  and these Terms of Reference  annually and  recommend any
         proposed changes thereto to the Board.

   14.   Perform any other activities  consistent with these Terms of Reference,
         as  the  Compensation   Committee  or  the  Board  deems  necessary  or
         appropriate.

   15.   The  Compensation  Committee  will have the  authority  to delegate any
         specific tasks to individual Compensation Committee members.

AUDIT COMMITTEE

The Company's Audit Committee must be comprised of at least three directors, who
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  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:


                                                                              82
<PAGE>

         -        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.

EMPLOYEES

As of December  31, 2005,  the Company  uses the  services of the Grosso  Group,
which  had  twenty   full-time   employees  in  the  area  of   management   and
administration  compared  with nine  full-time  employees  and  three  part-time
employees  that the Company  employed  directly in the areas of  management  and
administration  at December 31, 2004 compared to eight  full-time  employees and
two part-time employees in the area of management and administration at December
31, 2003.  Exploration  activities  are conducted by  consultants,  laborers and
technicians hired for the duration of the exploration program.

SHARE OWNERSHIP

As of May 4, 2006, the Company had 48,948,064 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 4, 2006.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                      SHARES AND RIGHTS
                                                                    BENEFICIALLY OWNED OR
TITLE OF CLASS           NAME                                           CONTROLLED (1)<F1>     PERCENT OF CLASS(1)<F1>
--------------------------------------------------------------------------------------------------------------------
<S>                      <C>                                            <C>                           <C>
Common Stock             Joseph Grosso                                  1,522,167(2)<F2>              3.1%
Common Stock             Nikolaos Cacos                                   188,151(3)<F3>              0.4%
Common Stock             Sean Hurd                                        310,000(4)<F4>              0.6%
Common Stock             Gerald Carlson                                   402,500(5)<F5>              0.8%
Common Stock             David Terry                                      202,000(6)<F6>              0.4%
Common Stock             Chet Idziszek                                    330,000(7)<F7>              0.7%
Common Stock             Robert Stuart (Tookie) Angus                     220,000(8)<F8>              0.5%
Common Stock             Arthur Lang                                      150,000(9)<F9>              0.3%
Common Stock             David Horton                                     130,000(10)<F10>            0.3%
Common Stock             Leonard Harris                                    52,000(11)<F11>            0.1%
Common Stock             Officers and Directors (as a group, 10         3,506,818(12)<F12>            7.2%
                         persons)


                                                                              83
<PAGE>
<FN>
(1)<F1>   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  48,933,064  shares of
          common stock outstanding as of May 4, 2006.

(2)<F2>   Includes  the  following  shares,  options  and  warrants  held by Mr.
          Grosso,  Evelyn Grosso (Mr.  Grosso's  wife) and Mr.  Grosso's private
          companies:

          (a)  581,543 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)<F3>         Includes  13,151  shares held by Mr.  Cacos and 175,000  options
                held by Mr. Cacos to acquire an additional  175,000 shares.  See
                "Item 6.  Directors, Senior Management and  Employees - Options,
                Warrants  and  Other  Rights  to  Acquire  Securities  -   Stock
                Options."
(4)<F4>         Includes  310,000  options  held  by  Mr.  Hurd  to  acquire  an
                additional  310,000  shares.  See  "Item  6.  Directors,  Senior
                Management and Employees - Options, Warrants and Other Rights to
                Acquire Securities - Stock Options."
(5)<F5>         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)<F6>         Includes  2,000 shares held by Mr. Terry and options held by Mr.
                Terry to  acquire an  additional  200,000  shares.  See "Item 6.
                Directors,  Senior Management and Employees - Options,  Warrants
                and Other Rights to Acquire Securities - Stock Options."

(7)<F7>         Includes 85,000 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)<F8>         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)<F9>         Includes options  held  by  Mr. Lang  to acquire 150,000 shares.
                See  "Item 6.  Directors,  Senior  Management  and  Employees  -
                Options, Warrants and Other Rights to Acquire Securities - Stock
                Options."
(10)<F10>       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."
(11)<F11>       Includes  2,000 shares and options held by Mr. Harris to acquire
                50,000 shares.  See "Item 6.  Directors,  Senior  Management and
                Employees  -  Options,  Warrants  and Other  Rights  to  Acquire
                Securities - Stock Options."
(12)<F12>       Includes  the  shares,  options,  and  warrants  set  forth   in
                footnotes  2 through 11 above.  See "Item 6.  Directors,  Senior
                Management and Employees - Options, Warrants and Other Rights to
                Acquire Securities - Stock Options."
</FN>
</TABLE>

OPTIONS, WARRANTS AND OTHER RIGHTS TO ACQUIRE SECURITIES

As of May 4, 2006, 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  11,115,404  common  shares of the Company may be issued.  The following is a
brief  summary of these stock  options and warrants  currently  outstanding  and
agreements.


                                                                              84
<PAGE>
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 meetings of shareholders of the Company
held on June 24, 2004, and June 23, 2005  shareholders  approved and ratified by
ordinary  resolution  the 2003 Stock Option Plan to make a total of up to 10% of
the issued and outstanding shares of IMA available for issuance.  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  the  Compensation  Committee  (the
"Committee")  of the  Company's  Board  consisting  of not less  than two of its
members. The Stock Option Plan is currently administered by the Committee.

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.

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  shares 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.


                                                                              85
<PAGE>
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 4, 2006, the Company has 4,746,000  non-transferable  incentive  stock
options to purchase common shares outstanding to the following persons:

<TABLE>
<CAPTION>
                                                                                                 MARKET VALUE ON
                            NATURE                     NUMBER       EXERCISE     EXPIRATION       DATE OF GRANT
OPTIONEE                  OF OPTION(1)<F1>            OF SHARES       PRICE         DATE          OR REPRICING
--------------------------------------------------------------------------------------------------------------------
<S>                       <C>                        <C>               <C>       <C>                  <C>
N. Cacos                  Officer                       110,000        $3.10      Mar. 24/09          $3.10
                                                         50,000        $4.16      Mar. 16/10          $4.16
                                                         15,000        $2.92      Nov. 16/10          $2.92

J. 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

S. 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
                                                         20,000        $2.92      Nov. 16/10          $2.92

G. 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

N. 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

E. Grosso(2)<F2>          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

                                                                              86
<PAGE>
<CAPTION>
                                                                                                 MARKET VALUE ON
                            NATURE                     NUMBER       EXERCISE     EXPIRATION       DATE OF GRANT
OPTIONEE                  OF OPTION(1)<F1>            OF SHARES       PRICE         DATE          OR REPRICING
--------------------------------------------------------------------------------------------------------------------
<S>                       <C>                        <C>               <C>       <C>                  <C>

K. Patterson              Consultant                     25,000        $3.10      Mar. 24/09          $3.10
                                                         25,000        $2.92      Nov. 16/10          $2.92

D. Terry                  Director                       50,000        $3.10      Mar. 24/09          $3.10
                                                         80,000        $4.16      Mar. 16/10          $4.16
                                                         70,000        $2.92      Nov. 16/10          $2.92

C. 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            Consultant                     25,000        $3.10      Mar. 24/09          $3.10
                                                         75,000        $4.16      Mar. 16/10          $4.16

W. Lee(3)<F3>             Consultant                     75,000        $1.87      Aug. 27/08          $1.87
                                                         30,000        $3.10      Mar. 24/09          $3.10

R. Angus                  Director                      150,000        $0.90       May 30/08          $0.90
                                                         40,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16

D. Dorval                 Employee                       60,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16

J. Denee                  Employee                       10,000        $3.10      Mar. 24/09          $3.10
                                                          5,000        $4.16      Mar. 16/10          $4.16

C. Sandoval               Employee                       10,000        $3.10      Mar. 24/09          $3.10
                                                         15,000        $4.16      Mar. 16/10          $4.16

C. D'Amico(5)<F5>         Director (of                  220,000        $1.87      Aug. 27/08          $1.87
                          subsidiary-exempted            75,000        $3.10      Mar. 24/09          $3.10
                          from reporting)

C. Timossi                Consultant                     75,000        $3.10      Mar. 24/09          $3.10

S. Phillips               Consultant                    300,000        $1.87      Aug. 27/08          $1.87
                                                         50,000        $3.10      Mar. 24/09          $3.10

J. Faccin                 Consultant                     10,000        $3.10      Mar. 24/09          $3.10

M. 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)

D. Horton                 Director                      100,000        $3.10      Mar. 24/09          $3.10
                                                         30,000        $4.16      Mar. 16/10          $4.16


                                                                              87
<PAGE>

<CAPTION>
                                                                                                 MARKET VALUE ON
                            NATURE                     NUMBER       EXERCISE     EXPIRATION       DATE OF GRANT
OPTIONEE                  OF OPTION(1)<F1>            OF SHARES       PRICE         DATE          OR REPRICING
--------------------------------------------------------------------------------------------------------------------
<S>                       <C>                        <C>               <C>       <C>                  <C>
A. Lang                   Director                       50,000        $3.10      Mar. 24/09          $3.10
                                                         75,000        $4.16      Mar. 16/10          $4.16
                                                         25,000        $2.92      Nov. 16/10          $2.92

G. 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


P. Hedblom                Consultant                     30,000        $1.87      Aug. 27/08          $1.87
                                                         20,000        $2.92      Nov. 16/10          $2.92

J. Wong                   Consultant                     25,000        $1.87      Aug. 27/08          $1.87

L. Roth                   Consultant                     50,000        $4.20       Dec. 1/09          $4.02

D. Tindale                Employee                        5,000        $4.16      Mar. 16/10          $4.16

F. Riedl                  Consultant                     30,000        $4.16      Mar. 16/10          $4.16

A. Beartl                 Director (of                  150,000        $4.16      Mar. 16/10          $4.16
                          subsidiary-exempted           150,000        $2.92      Nov. 16/10          $2.92
                          from reporting)

I. Thomson                Consultant                     10,000        $4.16      Mar. 16/10          $4.16

L. Harris                 Director                       50,000        $2.92      Nov. 16/10          $2.92

C. Yepes                  Employee                       10,000        $2.92       Nov.16/10          $2.92

C. Smyth                  Consultant                      5,000        $2.92      Nov. 16/10          $2.92

E. Epshtein               Employee                       15,000        $2.92      Nov. 16/10          $2.92

K. Vargas                 Employee                       15,000        $2.92      Nov. 16/10          $2.92

L. Rivero                 Employee                       10,000        $2.92      Nov. 16/10          $2.92

L. Shane                  Employee                        5,000        $2.92      Nov. 16/10          $2.92

G. Salvatierra            Employee                       25,000        $2.92      Nov. 16/10          $2.92


                          TOTAL                       4,746,000
                                                      =========

Officers and directors,                               2,525,000
as a group (10                                        =========
persons)(4)

                                                                              88
<PAGE>

<FN>
(1)<F1>  Pursuant  to the rules of the  TSX-V,  the  Company  has  issued  stock
         options to employees,  directors, officers and consultants.  "Employee"
         refers to the  employees of the Grosso Group  providing  administrative
         and management services to the Company.
(2)<F2>  Evelyn Grosso is the wife of Joseph Grosso.
(3)<F3>  The Company granted Mr. Lee options to acquire common shares during his
         tenure as director.  Mr. Lee resigned as an officer and director of the
         Company  effective April 2, 2004 and currently  remains as a consultant
         to the Company.
(4)<F4>  Includes options held by Joseph Grosso's wife, Evelyn Grosso.
(5)<F5>  The Company granted Mr. D'Amico options to acquire common shares during
         his tenure as director of a subsidiary.
</FN>
</TABLE>

WARRANTS AND OTHER COMMITMENTS

As of May 4, 2006, there were 1,900,004  non-transferable  common share purchase
warrants exercisable.

As of May 4, 2006, 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.

On March 21, 2006 a syndicated brokered private placement financing of 2,865,000
special  warrants at $3.50 per special warrant for gross proceeds of $10,027,500
was completed.  Each special warrant will entitle the holder to acquire one unit
consisting  of one  common  share and one half  common  share  purchase  warrant
without payment of any additional consideration.  Each full warrant entitles the
holder  thereof to purchase  one  additional  common share in the capital of the
Company at a price of $3.80 per share  until  March 21,  2010.  In addition to a
cash commission of 6% the  underwriters  were granted 171,900 agents'  warrants,
representing 6% of the number of special warrants  issued.  Each agents' warrant
is  exercisable  for one share at a price of $3.80,  for a period of twenty four
months, expiring on March 21, 2008.


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


                                                                              89
<PAGE>

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,  2005,  Prudent Bear Funds Inc. is no
longer a major shareholder of the Company.

SHARES HELD IN THE UNITED STATES

As of May 4,  2006,  there  were  approximately  69  registered  holders  of the
Company's  shares in the United  States,  with  combined  holdings of  6,693,265
shares (13.67% of the 48,948,065 outstanding shares at May 4, 2006).

CHANGE OF CONTROL

As of May 9, 2006, 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 9, 2006,  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.    Effective January 1, 2005, the Company  engaged Grosso Group to provide
         services  and   facilities   to  the  Company.   On  May  6,  2005,  an
         Administrative  Services  Agreement  was  finalized and executed by the
         Company and the Grosso  Group.  The Grosso  Group is a private  company
         which is owned by the  Company,  Golden  Arrow,  Amera,  Astral  Mining
         Corporation  and Gold Point Energy Corp.,  each of which own one share.
         The Grosso Group provides its  shareholder  companies with  geological,
         corporate  development,  administrative  and management  services.  The
         Grosso Group staff is available to the shareholder  companies on a cost
         recovery  basis  without  the  expense  of  full  time  personnel.  The
         shareholder  companies pay monthly fees to the Grosso Group. The fee is
         based  upon  a  reasonable  pro-rating  of  the  Grosso  Group's  costs
         including its staff and overhead costs among each  shareholder  company
         with regard to the  mutually  agreed  average  annual level of services
         provided to each shareholder  company.  During fiscal 2005, the Company
         incurred fees of $730,802 to the Grosso Group. In addition, included in
         the Accounts receivable, prepaids and deposits is a $205,000 deposit to
         the Grosso Group.  The deposits from the member companies were used for
         the purchase of equipment and leasehold  improvements and for operating
         working capital.

         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 it will pay a termination  fee equal
         to six-months' basic administration charge.

   2.    Prior to the signing of the Administrative  Services Agreement with the
         Grosso  Group in 2005 the Company  shared  office  facilities,  capital
         assets and personnel with Amera. Joseph Grosso,


                                                                              90
<PAGE>

         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,  2005 the Company  received
         $Nil (2004 - $66,390,  2003 - $35,110) from Amera for  reimbursement of
         expenses.

   3.    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, 2005,
         the Company  incurred $Nil (2004 - $33,822,  2003 - $Nil) for leasehold
         improvements  conducted  on the office  premises.  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. During the fiscal year ended December 31, 2005, the Company paid
         rent to  Beauregard in the amount of $128,722  (2004 - $74,870,  2003 -
         $60,924).  The Company  subleases  the premises to the Grosso Group and
         recovered the 2005 rent it had paid. - See "Item 4.  Information on the
         Company - Properties, Plants and Equipment - Principal Office".

   4.    The Company  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, 2005,  Oxbow was paid  $102,000  (2004 - $102,000,  2003 -
         $102,000). On April 12, 2006 the Board accepted the recommendation from
         the  Compensation  Committee  to increase  the monthly  consulting  fee
         effective  May 1, 2006 to  $20,833  ($250,000  per  annum) and to pay a
         bonus of $150,000.

   5.    The Company  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.  During the year ended  December 31, 2005,
         Mr. Cacos's total  compensation  from the Grosso Group was $22,500,  of
         which  $14,862 was allocated to the Company as part of the Grosso Group
         fees for the year.

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

   7.    The  Company  has entered into an agreement  with KGE  Management  Ltd.
         ("KGE"),  a private company owned by Gerald Carlson,  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." By agreement  dated
         February 15, 2001,  between the Company and KGE, 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. 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.  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 was required
         to provide a minimum of eight days of service per month. This agreement
         expired  March 31,  2005 and was  renewed  for six months with the same
         terms. During the fiscal year ended December 31, 2005, the Company paid
         $24,000

                                                                              91
<PAGE>

         to KGE (2004 - $34,749, 2003 - $41,400).  Effective January 1, 2006 the
         Company  agreed  to pay KGE a fee of  $600  per  day if  services  were
         required and the former agreement was not renewed.

   8.    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 fiscal year ended  December 31, 2005, Mr. Hurd was paid directly by
         the Company $Nil (2004 - $73,800, 2003 - $48,000). In January 2005, Mr.
         Hurd  became an  employee  of the Grosso  Group.  During the year ended
         December 31, 2005, Mr. Hurd's total  compensation from the Grosso Group
         was $96,000,  of which  $72,216 was allocated to the Company as part of
         the Grosso Group fees for the year.

   9.    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,  was a shareholder.  A monthly fee of
         US$5,000 for services was payable  under this  agreement  for a minimum
         period of one year.  On July 4,  2005,  the  agreement  was  amended to
         increase the monthly fee to US$10,000 per month effective June 1, 2005.
         During the fiscal year ended  December  31,  2005,  Endeavour  was paid
         $115,088  (2004 - $78,637).  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.  Effective December 31, 2005 Mr. Angus
         retired from  Endeavour and the monthly fee was reduced to US$5,000 per
         month.  See "Item 6.  Directors,  Senior  Management  and  Employees  -
         Directors  and Senior  Management."  The  agreement  was  terminated by
         mutual consent effective February 28, 2006.

   10.   On February  14, 2006 and  effective  January 1, 2006,  the Company has
         entered into an agreement  with RSA  Holdings  Ltd.,  pursuant to which
         R.S.  (Tookie)  Angus,  a director of the  Company,  provides  advisory
         services including  participation on various committees of the Company.
         A monthly fee of US$5,000 for services is payable under this  agreement
         for a minimum  period of six  months.  See "Item 6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts."

   11.   Mr.  Terry 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.  During the year ended  December 31, 2005,  Mr.  Terry's
         total compensation from the Grosso Group was $120,000, of which $63,600
         was  allocated  to the Company as part of the Grosso  Group fees during
         the year. On April 12, 2006 the Board accepted the recommendation  from
         the  Compensation  Committee  to increase  Mr.  Terry's  monthly fee to
         $12,500 ($150,000 annually) effective May 1, 2006 and to pay a bonus of
         $50,000.   See  "Item  6. Directors, Senior  Management and Employees -
         Compensation - Management Contracts."

   12.   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.  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.  Effective May 1, 2005 Mr. Lang's annual
         salary was  increased to $102,000.  During the year ended  December 31,
         2005, Mr. Lang's total  compensation from the Grosso Group was $94,667,
         of which  $68,927  was  allocated  to the Company as part of the Grosso
         Group  fees for the year.  On April 12,  2006 the  Board  accepted  the
         recommendation  from the Compensation  Committee to increase Mr. Lang's
         annual  salary to $150,000  effective May 1, 2006


                                                                              92
<PAGE>

         and  to  pay a  bonus  of  $50,000.  See  "Item  6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts."

   12.   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  entered  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."


ITEM 8.  FINANCIAL INFORMATION.
================================================================================

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

FINANCIAL STATEMENTS

DESCRIPTION                                                                 PAGE

Consolidated Financial Statements for the Years Ended                        F-1
December 31, 2005, 2004 and 2003.

SIGNIFICANT CHANGES

There are no  significant  changes to report  between the year end  December 31,
2005 and the date of this annual report.

LEGAL PROCEEDINGS

In March 2004 Aquiline Resources Inc.  ("Aquiline")  commenced an action against
the  Company  seeking a  constructive  trust  over the  Navidad  properties  and
damages.  On September  29, 2005 the Company made an offer to Aquiline to settle
the  litigation.  The Board of  Directors  decided  to make the offer due to the
inherent risks of litigation,  to minimize the significant  legal costs and most
importantly  to allow the Company to continue  with its business plan to develop
Navidad.  The offer was rejected and the action continued on to trial. The trial
commenced on October 11, 2005 and ended on December 12, 2005. At the  conclusion
of the trial, the Court reserved its decision;  the Court's decision is expected
in the first half of 2006.  At this date the  outcome is not  determinable.  The
Company  believes the Aquiline  legal action is without merit.  However,  in the
event of an adverse  judgment the Company may suffer loss and such loss could be
material;  the  Company  might  not be able to  proceed  with its  plans for the
development of Navidad and could lose the ownership rights it currently has over
the project.  The Company  continues  to expense the legal and related  costs of
defending  the action as they are incurred and has not made a provision  for the
future  costs  that  will be  incurred  or  their  potential  recovery  from the
plaintiff.

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.


                                                                              93
<PAGE>

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 2005 through April 2006.

          TSX VENTURE EXCHANGE (OR PREDECESSOR) STOCK TRADING ACTIVITY

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

December 31, 2005           18,584,000             $4.45           $2.56
December 31, 2004           37,199,200             $4.80           $1.73
December 31, 2003           50,625,400             $2.54           $0.49
December 31, 2002           17,609,200             $0.94           $0.34
December 31, 2001            5,559,800             $0.62           $0.27


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

March 31, 2006              9,126,500               $3.96           $2.84
December 31, 2005           5,453,800               $3.96           $2.56
September 30, 2005          3,780,700               $3.95           $2.65
June 30, 2005               2,949,100               $4.00           $2.61
March 31, 2005              6,400,400               $4.45           $3.40

December 31, 2004           9,179,500               $4.80           $3.22
September 30, 2004          4,560,100               $3.39           $2.00
June 30, 2004               7,885,200               $3.57           $1.93
March 31, 2004             15,574,400               $3.81           $1.73




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

April 30, 2006              2,213,400               $3.70           $3.29
March 31, 2006              4,217,000               $3.90           $3.13
February 28, 2006           2,343,600               $3.96           $3.05
January 31, 2006            2,565,900               $3.82           $2.84
December 31, 2005           1,657,100               $3.55           $2.81
November 30, 2005           1,524,700               $3.21           $2.81


                                                                              94
<PAGE>
    AMERICAN STOCK EXCHANGE AND OVER-THE-COUNTER BULLETIN BOARD STOCK TRADING
                                    ACTIVITY

As of July 6, 2005, the Company's  shares started to trade on the American Stock
Exchange  ("AMEX").  Prior to that the Company's  shares were trading on the OTC
Bulletin Board operated by the National Association of Securities Dealers in the
United  States from October 8, 2002.  The Company  currently  trades on the AMEX
under the symbol "IMR".  The following  tables set forth the market price ranges
and the  aggregate  volume of trading of the common shares of the Company on the
AMEX or the OTC Bulletin Board system for the periods indicated:

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

December 31, 2005          13,245,000               $3.68           $2.00
December 31, 2004          20,134,200               $4.05           $1.31
December 31, 2003           6,974,500               $1.89           $0.36
December 31, 2002              97,497               $0.36           $0.22


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

March 31, 2006              7,278,900               $3.48           $2.43
December 31, 2005           4,024,400               $3.39           $2.16
September 30, 2006          3,003,500               $3.48           $2.00
June 30, 2005               2,150,800               $3.23           $2.05
March 31, 2005              4,066,300               $3.68           $2.72

December 31, 2004           5,395,400               $4.05           $2.53
September 30, 2004          3,302,600               $2.68           $1.48
June 30, 2004               2,636,700               $2.70           $1.40
March 31, 2004              8,799,500               $2.93           $1.31

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

April 30, 2006              2,222,900               $3.25           $2.88
March 31, 2006              2,919,600               $3.48           $2.70
February 28, 2006           1,925,300               $3.44           $2.50
January 31, 2006            2,434,000               $3.38           $2.43
December 31, 2005           1,152,900               $3.06           $2.41
November 30, 2005             944,500               $2.72           $2.39

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


                                                                              95
<PAGE>

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
Arrangement  or amend its Articles or Notice of Articles until the Transition to
the BCBCA is  completed.  The Board of  Directors  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
deleted and replaced  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.

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 proposed 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.

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

                                                                              96
<PAGE>

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 at 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.

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

                                                                              97
<PAGE>

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.


                                                                              98
<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 five
percent (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:


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              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;
              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.


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<PAGE>

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.

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  48,933,064  common shares were issued and  outstanding  as of May 4,
2006. 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.

On March 21, 2006 the Company completed a syndicated  brokered private placement
financing of 2,865,000  special  warrants at $3.50 per special warrant for gross
proceeds of $10,027,500. Each special warrant will entitle the holder to acquire
one unit  consisting  of one common  share and one half  common  share  purchase
warrant  without  payment of any  additional  consideration.  Each full  warrant
entitles  the holder  thereof to purchase  one  additional  common  share in the
capital of the Company at a price of $3.80 per share until  March 21,  2010.  In
addition  to a cash  commission  of 6% the  underwriters  were  granted  171,900
agents' warrants, representing 6% of the number of special warrants issued. Each
agents' warrant is exercisable  for one share at a price of $3.80,  for a period
of twenty four months, expiring on March 21, 2008.

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 4, 2006, there were
18,283,053  Preferred  Shares,  Series I,  outstanding.  All of the  outstanding
preferred shares of the Company are held by Inversiones Mineras Argentinas Inc.,
a wholly owned subsidiary of IMA, and eliminate on  consolidation.  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.



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<PAGE>

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 4,  2006,  there are  18,283,053  Series I Shares
outstanding.  All of the outstanding preferred shares of the Company are held by
Inversiones  Mineras  Argentinas  Inc.,  a wholly owned  subsidiary  of IMA, and
eliminate on consolidation.  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.

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



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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.

MATERIAL CONTRACTS

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

   1.    Effective January 1, 2005, the Company  engaged Grosso Group to provide
         services  and   facilities   to  the  Company.   On  May  6,  2005,  an
         administrative  services  agreement  was  finalized and executed by the
         Company and the Grosso  Group.  The Grosso  Group is a private  company
         which is owned by the  Company,  Golden  Arrow,  Amera,  Astral  Mining
         Corporation  and Gold Point Energy Corp.,  each of which own one share.
         The Grosso Group provides its  shareholder  companies with  geological,
         corporate  development,  administrative  and management  services.  The
         Grosso Group staff is available to the shareholder  companies on a cost
         recovery  basis  without  the  expense  of  full  time  personnel.  The
         shareholder  companies pay monthly fees to the Grosso Group. The fee is
         based  upon  a  reasonable  pro-rating  of  the  Grosso  Group's  costs
         including its staff and overhead costs among each  shareholder  company
         with regard to the  mutually  agreed  average  annual level of services
         provided to each shareholder  company.  During fiscal 2005, the Company
         incurred fees of $730,802 to the Grosso Group. In addition, included in
         the Accounts receivable, prepaids and deposits is a $205,000 deposit to
         the Grosso Group.  The deposits from the member companies were used for
         the purchase of equipment and leasehold  improvements and for operating
         working capital.

         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 it will pay a termination  fee equal
         to six-months' basic administration charge.

   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


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         leasehold improvements. During the fiscal year ended December 31, 2005,
         the Company  incurred $Nil (2004 - $33,822,  2003 - $Nil) for leasehold
         improvements  conducted  on the office  premises.  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. During the fiscal year ended December 31, 2005, the Company paid
         rent to  Beauregard in the amount of $128,722  (2004 - $74,870,  2003 -
         $60,924).  The Company  subleases  the premises to the Grosso Group and
         recovered the 2005 rent it had paid. - 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, 2005,  Oxbow was paid  $102,000  (2004 - $102,000,  2003 -
         $102,000). On April 12, 2006 the Board accepted the recommendation from
         the  Compensation  Committee  to increase  the monthly  consulting  fee
         effective  May 1, 2006 to  $20,833  ($250,000  per  annum) and to pay a
         bonus of $150,000.

   4.    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,  was a shareholder.  A monthly fee of
         US$5,000 for services was payable  under this  agreement  for a minimum
         period of one year.  On July 4,  2005,  the  agreement  was  amended to
         increase the monthly fee to US$10,000 per month effective June 1, 2005.
         During the fiscal year ended  December  31,  2005,  Endeavour  was paid
         $115,088  (2004 - $78,637).  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.  Effective December 31, 2005 Mr. Angus
         retired from  Endeavour and the monthly fee was reduced to US$5,000 per
         month.  See "Item 6.  Directors,  Senior  Management  and  Employees  -
         Directors  and Senior  Management."  The  agreement  was  terminated by
         mutual consent effective February 28, 2006.

   5.    On February  14, 2006 and  effective  January 1, 2006,  the Company has
         entered into an agreement  with RSA  Holdings  Ltd.,  pursuant to which
         R.S.  (Tookie)  Angus,  a director of the  Company,  provides  advisory
         services including  participation on various committees of the Company.
         A monthly fee of US$5,000 for services is payable under this  agreement
         for a minimum  period of six  months.  See "Item 6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts."

   6.    Mr.  Terry 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.  During the year ended  December 31, 2005,  Mr.  Terry's
         total compensation from the Grosso Group was $120,000, of which $63,600
         was  allocated  to the Company as part of the Grosso  Group fees during
         the year. On April 12, 2006 the Board accepted the recommendation  from
         the  Compensation  Committee  to increase  Mr.  Terry's  monthly fee to
         $12,500 ($150,000 annually) effective May 1, 2006 and to pay a bonus of
         $50,000.  See "Item 6.  Directors,  Senior  Management  and Employees -
         Compensation - Management Contracts."

   7.    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  entered  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."



                                                                             104
<PAGE>

   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.    The  Company  has entered  into an  agreement with  KGE Management Ltd.
         ("KGE"),  a private company owned by Gerald Carlson,  pursuant to which
         Gerald G.  Carlson,  an officer and director of the  Company,  provides
         services to the Company.  By agreement dated February 15, 2001, between
         the Company and KGE, 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. 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.  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.  This agreement  expired March 31, 2005 and
         was renewed for six months with the same terms.  During the fiscal year
         ended  December  31,  2005,  the  Company  paid  $24,000 to KGE (2004 -
         $34,749, 2003 - $41,400).  Effective January 1, 2006 the Company agreed
         to pay KGE a fee of $600  per day if  services  were  required  and the
         former  agreement  was not  renewed.  See  "Item 6.  Directors,  Senior
         Management and Employees - Compensation - Management Contracts."

EXCHANGE CONTROLS

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

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

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

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

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

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

                                                                             105
<PAGE>

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 2005 is $250,000,000.  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.

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;

                                                                             106
<PAGE>


         (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").

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


                                                                             107
<PAGE>

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.

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


                                                                             108
<PAGE>

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.


                                                                             109
<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.


                                                                             110
<PAGE>

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

Not applicable.


                                     PART II

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

Not applicable.

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

Not applicable.

ITEM 15.   CONTROLS AND PROCEDURES.
================================================================================

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, 2005 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,  2005,  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 BUSINESS CONDUCT AND ETHICS.
================================================================================

                       CODE OF BUSINESS CONDUCT AND ETHICS

The Board of Directors of IMA  Exploration  Inc. (the  "Company")  has adopted a
Code of Business  Conduct and Ethics that outlines the Company's  values and its
commitment to ethical  business  practices in every business  transaction.  This
code applies to all  directors,  officers,  and employees of the Company and its
subsidiaries  and affiliates.  A copy of the Company's Code of Business  Conduct
and     Ethics    is     available     on    the     Company's     website    at
www.imaexploration.com/s/CorporteGovernance.asp.

         HONEST AND ETHICAL CONDUCT

         The  Company  expects  a high  level  of  personal  integrity  for each
         employee,   officer  and  director  when  interacting  with  investors,
         business  partners,  shareholders,  suppliers,  consultants  and  other
         employees.

                                                                             111
<PAGE>


         CONFLICT OF INTEREST

         When possible,  conflicts of interest between personal and professional
         relationships  should be  avoided,  however,  unavoidable  conflict  of
         interest  will be  handled in  accordance  with the  Company's  ethical
         standards.

         A director,  officer or employee may not  represent  the Company in any
         transaction  with a person or an entity in which the director,  officer
         or  employee  has a direct  or  indirect  interest  or from  which  the
         director, officer or employee may derive personal benefit.
<PAGE>

         ACCURATE AND TIMELY DISCLOSURE

         Full, fair, accurate,  timely and understandable  disclosure in reports
         or documents  submitted to the Securities  and Exchange  Commission and
         other  securities  commissions  across  Canada  as well  as all  public
         communications.  Employees and officers who prepare financial and other
         reports will exercise  diligence in ensuring that there are no false or
         misleading statements.

         COMPLIANCE WITH APPLICABLE GOVERNMENTAL LAWS, RULES AND REGULATIONS

         The  Company  is  committed  to  compliance  with all  laws,  rules and
         regulations, including laws and regulations applicable to the Company's
         securities,  as well as any rules  promulgated by any exchange on which
         the Company's shares are listed.

         PROMPT INTERNAL REPORTING OF VIOLATIONS

         Employees  and  officers  are   responsible  for  the  prompt  internal
         reporting of any  violations  of the Code to the  Company's  Compliance
         Officer.

         PROTECTION AND PROPER USE OF COMPANY ASSETS AND OPPORTUNITIES

         All employees have an obligation to protect the Company's assets and to
         ensure that all  opportunities  available to the Company are brought to
         the attention of the relevant officer or employee.

         CONFIDENTIALITY OF COMPANY INFORMATION

         It is the  Company's  policy that  business  affairs of the Company are
         confidential and should not be discussed outside the Company except for
         information that has already been made available to the public.

         INSIDER TRADING

         Management, employees, members of the Board of Directors and others who
         are in a  "special  relationship"  with the  Company  from time to time
         become  aware of corporate  developments  or plans which may affect the
         value  of  the  Company's  shares  (inside  information)  before  these
         developments or plans are made public. Company directors,  officers and
         employees are prohibited  from using inside  information  themselves or
         disclosing   this  inside   information  to  others  who  may  use  the
         information to trade Company stock.

         FAIR DEALING

         Each  employee  should  endeavour  to  respect  the rights of, and deal
         fairly with, our shareholders, investors, business partners, suppliers,
         competitors and employees.  No employee should take


                                                                             112
<PAGE>

         unfair advantage of anyone through manipulation,  concealment, abuse of
         privileged  information,  misrepresentation  of material  facts, or any
         other unfair business practice.

         REPORTING UNETHICAL AND ILLEGAL CONDUCT/ETHICS QUESTIONS

         The Company is committed to taking prompt action against  violations of
         the Code of Business Conduct and Ethics and it is the responsibility of
         all  directors,  officers and  employees to comply with the Code and to
         report violations or suspected  violations to the Company's  Compliance
         Officer.   Employees  may  also  discuss  their   concerns  with  their
         supervisor who will then report suspected  violations to the Compliance
         Officer.

         The  Compliance  Officer is appointed by the Board of Directors  and is
         responsible for investigating and resolving all reported complaints and
         allegations  and shall advise the President and CEO, the CFO and/or the
         Audit Committee.

         The Compliance  Officer can be reached via telephone at  1-866-921-6714
         or       via       the       internet       site       located       at
         http://www.whistleblowersecurity.com.

         VIOLATIONS AND WAIVERS

         The Compliance  Officer will report  suspected  fraud or securities law
         violations for review by the Audit Committee.  The Audit Committee will
         report  all  violations  reviewed  by the  Committee  to the  Board  of
         Directors.

         The Compliance  Officer will report regularly to the Board of Directors
         on the results and resolution of complaints and allegations  concerning
         violations of the Code.

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

         Only the Audit  Committee  may amend this Code of Business  Conduct and
         Ethics.

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

AUDIT FEES

For the fiscal year ended December 31, 2005,  the Company's  auditor is expected
to bill approximately  $45,000, and for the fiscal year ended December 31, 2004,
the  Company's  auditor  billed  approximately  $39,000  for  the  audit  of the
Company's annual financial  statements or services that are normally provided by
the auditor in connection  with statutory and regulatory  filings or engagements
for those fiscal years.

AUDIT RELATED FEES

For the fiscal years ended December 31, 2005 and 2004, the Company's  auditor is
expected to bill $10,700 and billed  $16,253,  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"


TAX FEES

For the fiscal years ended December 31, 2005 and 2004, the Company's  auditor is
expected to bill $7,500 and billed $7,500, respectively, for tax compliance, tax
advice and tax planning services.


                                                                             113
<PAGE>

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 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  obtained  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  also  allowed 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.

ITEM 19.  EXHIBITS.
================================================================================

EXHIBITS

  EXHIBIT
  NUMBER                                EXHIBIT

   1.1        Notice of Articles(8)

   1.2        Articles (1)

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






                                                                             114
<PAGE>
  EXHIBIT
  NUMBER                                EXHIBIT

   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)

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



                                                                             115
<PAGE>
  EXHIBIT
  NUMBER                                EXHIBIT

  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)

  4.42        Amendment to Consulting Agreement Between KGE Management Ltd. And
              IMA Exploration Inc. (5)

  4.43        Amendment to Agreement between the Company and Sean Hurd (5)

  4.44        Amendment to Exploration and Option Agreement with Barrick
              Exploraciones Argentina S.A. dated March 26, 2003. (6)

  4.45        Letter of Intent dated March 6, 2003 with Amera Resources
              Corporation (6)

  4.46        Letter Agreement with Amera Resources Corporation re:
              reimbursement of office expenses (6)

  4.47        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)

  4.48        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)

  4.49        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)

  4.50        Amendment to Consulting Services Agreement Between Oxbow
              International  Marketing Corp. and IMA Resource  Corporation dated
              July 15, 2002 (6)



                                                                             116

<PAGE>
  EXHIBIT
  NUMBER                                EXHIBIT

  4.51        Amendment to Consulting Agreement Between KGE Management Ltd. And
              IMA Exploration Inc. dated June 14, 2002 (6)

  4.52        Amendment to Consulting Agreement Between KGE Management Ltd. And
              IMA Exploration Inc. dated October 3, 2002 (6)

  4.53        Amendment to Agreement between the Company and Sean Hurd dated
              June 10, 2002 (6)

  4.54        Amendment to Consulting Services Agreement Between Oxbow
              International  Marketing Corp. and IMA Resource  Corporation dated
              April 17, 2003 (6)

  4.55        Arrangement Agreement between IMA Exploration Inc., IMA Holdings
              Corp. and Golden Arrow  Resources  Corporation  dated May 14, 2004
              (7)

  4.56        Amendment to consulting Agreement with Nikolaos Cacos dated
              January 5, 2004(8)

  4.57        Amendment to Agreement with Sean Hurd dated January 5, 2004(8)

  4.58        Financial Advisory Services Agreement with Endeavour Financial
              Ltd. (8)

  4.59        Agreement between the Company and Amera Resources Corporation
              dated March 6, 2003 relating to the Lago Pico, Loma Alta and Nueva
              Ruta properties(8)

  4.60        Amendment to Letter of Intent with Amera Resources Corporation
              dated September 30, 2003(8)

  4.61        Amendment to Letter of Intent with Amera Resources Corporation
              dated April 8, 2004(8)

  4.62        Letter Agreement with Beauregard Holdings Corp. dated February 5,
              2004 regarding office lease(8)

  4.63        Option Agreement dated September 22, 2003, between the Company and
              Cloudbreak Resources Ltd.(8)

  4.64        Option Agreement dated August 12, 2003 between the Company and
              Consolidated Pacific Bay Minerals Ltd.(8)

  4.65        Option agreement dated June 11, 2003, between the Company and
              Ballad Gold & Silver Ltd. (formerly Ballad Ventures Ltd.)(8)

  4.66        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)

  4.67        Letter Agreement with Arthur Lang dated April 23, 2004(8)

  4.68        Arrangement Agreement by and among the Company, Golden Arrow
              Resources Corporation and IMA Holdings Corp. dated May 14, 2004(9)

  4.69        Indemnity Agreement provided to Golden Arrow Resources Corporation
              dated 7th day of July 2004(9)

  4.70        Administration Services Agreement with the Grosso Group Management
              Ltd. dated January 1, 2005 (9)

  4.71        Amendment to Consulting Agreement Between KGE Management Ltd. and
              IMA Exploration Inc. dated April 1, 2005 (9)

  4.72        Amendment to Consulting Agreement Between KGE Management Ltd. and
              IMA Exploration Inc. dated January 26, 2006



                                                                             117
<PAGE>
  EXHIBIT
  NUMBER                                EXHIBIT

  4.73        Advisory Services Agreement Between RSA Holdings Ltd. and IMA
              Exploration Inc. dated February 14, 2006

  4.74        Auditor Consent Letter

   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


(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.
(9)  Previously  filed as an exhibit to the Company's Annual Report on Form 20-F
filed June 7, 2005. File Number 0-30464.


                                                                             118
<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 8, 2006




















                                                                             119
<PAGE>





                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)
















                                      F-1
<PAGE>














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  10 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


March 24, 2006





                                      F-2

<PAGE>


PRICEWATERHOUSECOOPERS
--------------------------------------------------------------------------------
                                                    PricewaterhouseCoopers LLP
                                                    Chartered Accountants
                                                    PricewaterhouseCoopers Place
                                                    250 Howe Street, Suite 700
                                                    Vancouver, British Columbia
                                                    Canada V6C 3S7
                                                    Telephone 1 604 806 7000
                                                    Facsimile 1 604 806 7806



INDEPENDENT AUDITORS' REPORT


TO THE SHAREHOLDERS OF
IMA EXPLORATION INC.

We have audited the consolidated balance sheets of IMA EXPLORATION INC. as at
December 31, 2005 and December 31, 2004 and the consolidated statements of
operations and deficit and cash flows for the years ended December 31, 2005,
2004 and 2003. 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, 2005
and 2004 and the results of its operations and its cash flows for the years
ended December 31, 2005, 2004 and 2003 in accordance with Canadian generally
accepted accounting principles.


/s/ PRICEWATERHOUSECOOPERS LLP
------------------------------
CHARTERED ACCOUNTANTS
Vancouver, B.C., Canada
March 24, 2006





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


                                      F-3
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                        AS AT DECEMBER 31, 2005 AND 2004
                         (EXPRESSED IN CANADIAN DOLLARS)



                                                       2005            2004
                                                         $               $

                                     ASSETS

CURRENT ASSETS

Cash and cash equivalents                             7,731,395       5,227,354
Accounts receivable, prepaids and
     deposits (Note 5 and 7)                            548,492         162,802
Marketable securities (Note 4)                          186,000         186,000
                                                   ------------    ------------
                                                      8,465,887       5,576,156

EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Note 5)                 -          94,102

MINERAL PROPERTIES AND
     DEFERRED COSTS (Notes 2 and 8)                  15,032,107       6,551,598
                                                   ------------    ------------
                                                     23,497,994      12,221,856
                                                   ============    ============


                                   LIABILITIES

CURRENT LIABILITIES

Accounts payable and accrued liabilities                976,811         523,378

FUTURE INCOME TAX LIABILITIES (Note 8)                1,760,110         885,093
                                                   ------------    ------------
                                                      2,736,921       1,408,471
                                                   ------------    ------------

                              SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 6)                               50,414,672      36,982,307

CONTRIBUTED SURPLUS (Note 6)                          5,854,445       3,428,382

DEFICIT                                             (35,508,044)    (29,597,304)
                                                   ------------    ------------
                                                     20,761,073      10,813,385
                                                   ------------    ------------
                                                     23,497,994      12,221,856
                                                   ============    ============

NATURE OF OPERATIONS AND CONTINGENCY (Note 1)

COMMITMENTS (Note 7)

SUBSEQUENT EVENTS (Note 12)

APPROVED BY THE BOARD

/s/ DAVID HORTON        , Director
------------------------

/s/ ROBERT STUART ANGUS , Director
------------------------

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

                                      F-4
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>

                                                       2005            2004            2003
                                                         $               $               $

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

EXPENSES

Administrative and management services                  150,340         240,084         119,921
Corporate development and investor relations            525,938         317,987         196,537
General exploration                                      55,914         228,961         226,956
Office and sundry                                       148,015         107,678          52,118
Professional fees                                     2,327,278         894,780         198,876
Rent, parking and storage                                72,791          90,629          35,552
Salaries and employee benefits                          585,560         313,409          98,202
Stock based compensation (Note 6)                     1,800,000       1,972,860       1,487,235
Telephone and utilities                                  26,648          34,165          18,681
Transfer agent and regulatory fees                      199,715          57,743          34,078
Travel and accommodation                                256,035         203,591          52,175
Cost recoveries (Note 7)                                      -        (149,271)        (17,290)
                                                   ------------    ------------    ------------
                                                      6,148,234       4,312,616       2,503,041
                                                   ------------    ------------    ------------
LOSS BEFORE OTHER ITEMS                              (6,148,234)     (4,312,616)     (2,503,041)
                                                   ------------    ------------    ------------
OTHER EXPENSE (INCOME)

Foreign exchange                                       (232,954)        195,285          12,763
Reorganization costs                                          -         346,103               -
Interest and other income                              (150,406)       (101,589)        (66,561)
Gain on options and disposition of
     mineral properties                                       -        (328,346)              -
Write-down of marketable securities                           -          99,762               -
                                                   ------------    ------------    ------------
                                                       (383,360)        211,215         (53,798)
                                                   ------------    ------------    ------------
LOSS FROM CONTINUING OPERATIONS                      (5,764,874)     (4,523,831)     (2,449,243)

Loss allocated to spin-off assets (Note 2)                    -         131,232         969,175
                                                   ------------    ------------    ------------
LOSS FOR THE YEAR                                    (5,764,874)     (4,655,063)     (3,418,418)

DEFICIT - BEGINNING OF YEAR                         (29,597,304)    (17,577,363)    (14,158,945)

DISTRIBUTION OF EQUITY ON SPIN-OFF OF ASSETS
     TO GOLDEN ARROW (Note 2)                          (145,866)     (7,364,878)              -
                                                   ------------    ------------    ------------
DEFICIT - END OF YEAR                               (35,508,044)    (29,597,304)    (17,577,363)
                                                   ============    ============    ============


BASIC AND DILUTED LOSS PER COMMON SHARE
     FROM CONTINUNG OPERATIONS                           $(0.12)         $(0.11)         $(0.08)
                                                   ============    ============    ============

BASIC AND DILUTED LOSS PER COMMON SHARE                  $(0.12)         $(0.11)         $(0.11)
                                                   ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING                       46,197,029      40,939,580      32,251,753
                                                   ============    ============    ============

</TABLE>


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

                                      F-5
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>
                                                       2005            2004            2003
                                                         $               $               $

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

CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Net loss for the year                                (5,764,874)     (4,655,063)     (3,418,418)
Net loss allocated to spin-off assets                         -         131,232         969,175
                                                   ------------    ------------    ------------
Net loss from continuing operations                  (5,764,874)     (4,523,831)     (2,449,243)

Items not affecting cash
     Depreciation                                             -          26,665          13,257
     Stock based compensation                         1,800,000       1,972,860       1,487,235
     Gain on options and disposition of
          mineral properties                                  -        (328,346)              -
     Write-down of marketable securities                      -          99,762               -
                                                   ------------    ------------    ------------
                                                     (3,964,874)     (2,752,890)       (948,751)
Change in non-cash working capital balances             115,256          74,785         182,698
                                                   ------------    ------------    ------------
                                                     (3,849,618)     (2,678,105)       (766,053)
Cash used in spin-off operations                              -        (283,629)       (653,496)
                                                   ------------    ------------    ------------
                                                     (3,849,618)     (2,961,734)     (1,419,549)
                                                   ------------    ------------    ------------
INVESTING ACTIVITIES

Expenditures on mineral properties
     and deferred costs                              (7,025,492)     (4,448,659)     (1,069,228)
Net mineral properties and marketable securities
     cash flow related to spin-off assets                     -          32,592        (781,533)
Proceeds from sale/(purchase) of equipment               46,589         (93,650)        (21,875)
                                                   ------------    ------------    ------------
                                                     (6,978,903)     (4,509,717)     (1,872,636)
                                                   ------------    ------------    ------------
FINANCING ACTIVITIES
Issuance of common shares                            14,215,165       9,707,897       6,467,245
Share issuance costs                                   (736,737)       (411,237)       (188,850)
                                                   ------------    ------------    ------------
                                                     13,478,428       9,296,660       6,278,395
                                                   ------------    ------------    ------------
INCREASE IN CASH AND CASH EQUIVALENTS                 2,649,907       1,825,209       2,986,210

CASH TRANSFERRED TO GOLDEN ARROW (Note 2)              (145,866)     (1,020,189)              -
                                                   ------------    ------------    ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS             2,504,041         805,020       2,986,210

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR         5,227,354       4,422,334       1,436,124
                                                   ------------    ------------    ------------
CASH AND CASH EQUIVALENTS - END OF YEAR               7,731,395       5,227,354       4,422,334
                                                   ============    ============    ============

CASH AND CASH EQUIVALENTS IS COMPRISED OF:
Cash                                                    151,395         927,354       1,622,334
Term Deposits                                         7,580,000       4,300,000       2,800,000
                                                   ------------    ------------    ------------
                                                      7,731,395       5,227,354       4,422,334
                                                   ============    ============    ============
</TABLE>

SUPPLEMENTARY CASH FLOW INFORMATION (Note 11)

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

                                      F-6
<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
               CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS
                      FOR THE YEAR ENDED DECEMBER 31, 2005
                         (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>

                                                                      NAVIDAD
                                                      NAVIDAD          AREAS          IVA TAX          TOTAL
                                                         $               $               $               $

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

Balance, beginning of year                            5,770,968         112,694         667,936       6,551,598
                                                   ------------    ------------    ------------    ------------
Expenditures during the year
     Assays                                             316,220               -               -         316,220
     Communications                                      28,100              51               -          28,151
     Drilling                                         2,188,346               -               -       2,188,346
     Engineering                                         53,340               -               -          53,340
     Environmental                                      391,816               -               -         391,816
     Geophysics                                         176,036               -               -         176,036
     Metallurgy                                         501,070               -               -         501,070
     Office and other                                    95,310             640               -          95,950
     Petrography                                         13,563               -               -          13,563
     Salaries and Contractors (Note 6 (d))            1,539,569               -               -       1,539,569
     Supplies and Equipment                             441,012              41               -         441,053
     Transportation                                     248,554               -               -         248,554
     Project Development                                828,036               -               -         828,036
     IVA Tax                                                  -               -         783,788         783,788
                                                   ------------    ------------    ------------    ------------
                                                      6,820,972             732         783,788       7,605,492
                                                   ------------    ------------    ------------    ------------
Future income tax (Note 8)                              875,017               -               -         875,017
                                                   ------------    ------------    ------------    ------------
Balance, end of year                                 13,466,957         113,426       1,451,724      15,032,107
                                                   ============    ============    ============    ============
</TABLE>







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

                                      F-7
<PAGE>


                              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
     Communications                      13,729               -               -          13,729               -          13,729
     Drilling                         1,663,984               -               -       1,663,984               -       1,663,984
     Environmental                      252,201               -               -         252,201          65,166         317,367
     Office and other                   172,874          22,786               -         195,660          48,798         244,458
     Salaries and Contractors           994,912           2,949               -         997,861           2,339       1,000,200
     Supplies and Equipment             147,422             529               -         147,951               -         147,951
     Transportation                      51,583               -               -          51,583               -          51,583
     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 8)              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.

                                      F-8
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)



1.       NATURE OF OPERATIONS AND CONTINGENCY

         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.

         In March 2004 Aquiline Resources Inc. ("Aquiline")  commenced an action
         against  the  Company  seeking a  constructive  trust over the  Navidad
         properties and damages. On September 29, 2005 the Company made an offer
         to Aquiline to settle the litigation. The Board of Directors decided to
         make the offer due to the inherent risks of litigation, to minimize the
         significant  legal costs and most  importantly  to allow the Company to
         continue  with its  business  plan to  develop  Navidad.  The offer was
         rejected and the action  continued on to trial.  The trial commenced on
         October 11, 2005 and ended on December 12, 2005.  The Court's  decision
         is expected in the first half of 2006.  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.  However,  in the  event of an  adverse
         judgment  the Company may suffer loss and such loss could be  material;
         the  Company  might  not be able to  proceed  with  its  plans  for the
         development of Navidad and could lose the ownership rights it currently
         has over the  project.  The Company  continues to expense the legal and
         related  costs of defending the action as they are incurred and has not
         made a  provision  for the future  costs that will be incurred or their
         potential recovery from the plaintiff.

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  Area
         properties,   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
         project, 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  project 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


                                      F-9
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)




2.       SPIN-OFF OF ASSETS (continued)

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

         Cash and cash equivalents                                    1,020,189
         Marketable securities and other current
              assets and liabilities                                    548,841
         Mineral properties and deferred cost and equipment           6,874,960
         Future income tax liabilities                               (1,079,112)
                                                                   ------------
                                                                      7,364,878
                                                                   =============

         During 2005 the Company paid $145,866 to Golden Arrow from the exercise
         of warrants of the Company  that  resulted in the issue of Golden Arrow
         shares as required by the terms of the Reorganization.  As all warrants
         that were  outstanding as of the effective  date of the  reorganization
         have been  exercised  the  Company  has no  further  obligation  to pay
         amounts to Golden  Arrow for the issue of its shares on the exercise of
         the Company's warrants.

         The Company's  comparative  amounts in the Statement of Operations  and
         Deficit include 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 a cost specific basis.


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 10.

         USE OF ESTIMATES

         The  preparation  of financial  statements in conformity  with Canadian
         GAAP requires  management to make estimates and assumptions that affect
         the  reported  amount of  assets  and  liabilities  and  disclosure  of
         contingent  assets  and  liabilities  at  the  date  of  the  financial
         statements and the reported  amount of revenues and expenses during the
         period.  Significant  areas  requiring the use of management  estimates
         include   the   determination   of   environmental   obligations,   the
         recoverability of mineral  properties,  and the assumptions used in the
         determination  of the fair value of stock  based  compensation.  Actual
         results may differ from these estimates.

         PRINCIPLES OF CONSOLIDATION

         These  consolidated  financial  statements  include the accounts of the
         Company  and 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.

                                      F-10
<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         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 and 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  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 mineral properties
         and deferred 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  received 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  amortization
         calculated using the  straight-line  method over their estimated useful
         lives of five years.

                                      F-11
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         ASSET RETIREMENT OBLIGATIONS

         Asset   retirement   obligations   are  recognized   when  a  legal  or
         constructive  obligation  arises.  This  liability is recognized at the
         fair value of the asset  retirement  obligation.  When the liability is
         initially  recorded the Company  capitalizes the cost by increasing the
         carrying  amount  of the  related  long-lived  assets.  Over  time  the
         liability  is  accreted  to its  present  value  each  period,  and the
         capitalized  cost is  amortized  over the  useful  life of the  related
         asset.  Upon settlement of the liability,  the Company may incur a gain
         or loss.  As at December  31, 2005 the Company  does not have any asset
         retirement obligations.

         IMPAIRMENT OF LONG-LIVED ASSETS

         Long-lived   assets  are  reviewed  for   impairment   when  events  or
         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.

         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, 2005, the
         market value of marketable securities was $270,000 (2004 - $270,000).

         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 to the extent that they are
         not considered likely to be realized.

                                      F-12
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         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 6.

         STOCK BASED COMPENSATION

         The Company has an employee stock option plan.  The Company  recognizes
         an  expense  or  addition  to   exploration   properties  and  deferred
         exploration  expenditures  arising from stock  options  granted to both
         employees and non-employees using the fair value method. The fair value
         of option grants is generally  established at the date of grant using a
         Black  Scholes  option  pricing  model and the  expense or  addition to
         mineral properties is recognized over the vesting period.

         VARIABLE INTEREST ENTITIES

         Effective  January 1, 2005, the Company  adopted  Accounting  Guideline
         AcG-15,  Consolidation of Variable  Interest  Entities,  which requires
         consolidation  of entities  in which the Company  expects to receive or
         absorb the majority of the entity's expected losses,  expected residual
         returns or both.  The  Company has  determined  that it has no variable
         interest entities.

         COMPARATIVE FIGURES

         Certain  of the  prior  year  comparatives  have been  reclassified  to
         conform with the current year's presentation.

4.       MARKETABLE SECURITIES

<TABLE>
<CAPTION>
                                                               2005                            2004
                                                   ----------------------------    ----------------------------
                                                                       QUOTED                          QUOTED
                                                      RECORDED         MARKET         RECORDED         MARKET
                                                       VALUE           VALUE           VALUE           VALUE
                                                         $               $               $               $
<S>                                                <C>             <C>             <C>             <C>

         Tinka Resources Limited
              - 300,000 common shares                    96,000         126,000          96,000         180,000
         Consolidated Pacific Bay Minerals Ltd.
              - 900,000 common shares                    90,000         144,000          90,000          90,000
                                                   ------------    ------------    ------------    ------------
                                                        186,000         270,000         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.

                                      F-13
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


5.       EQUIPMENT AND LEASHOLD IMPROVEMENTS

                                                       2005            2004
                                                   ------------    -------------
                                                         $               $

         Office equipment and computers                       -         231,724
         Leasehold improvements                               -          96,634
                                                   ------------    ------------
                                                              -         328,358
         Less: Accumulated depreciation                       -        (234,256)
                                                   ------------    ------------
                                                              -          94,102
                                                   ============    ============

         On May 6, 2005, on the signing of an Administration Services Agreement,
         the  Company   transferred   its  corporate   equipment  and  leasehold
         improvements  to Grosso Group  Management  Ltd. (the "Grosso Group") at
         their  carrying  values of  $93,177  as of  December  31,  2004.  As of
         December  31,  2005 the Company has  received  $46,589  from the Grosso
         Group for these assets. The remaining balance due from the Grosso Group
         is included in Accounts Receivable.


6.       SHARE CAPITAL

         Authorized   - unlimited common shares without par value
                      - 100,000,000 preferred shares without par value

                                                      NUMBER             $
         Issued - common shares

         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 placement                            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

         Private placement                            3,333,340      10,000,020
         Exercise of options                             10,000          31,000
         Exercise of agents' options                    168,000         546,000
         Contributed surplus reallocated
              on exercise of options                          -         131,270
         Exercise of warrants                         1,485,517       3,784,011
         Proceeds collected and paid on behalf
              of Golden Arrow shares                          -        (145,866)
         Less share issue costs                               -        (914,070)
                                                   ------------    ------------
         Balance, December 31, 2005                  48,813,064      50,414,672
                                                   ============    ============

                                      F-14
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

         (a)      During fiscal 2005, the Company  completed a brokered  private
                  placement for 3,333,340  units at $3.00 per unit, for proceeds
                  of $9,263,283 net of $600,001 agent's  commission and $136,736
                  of related  issue  costs.  Each unit  consisted  of one common
                  share and one half common share  purchase  warrant.  Each full
                  warrant entitles the holder thereof to purchase one additional
                  common share at a price of $3.45 per share until September 14,
                  2009. In addition to the cash commission the underwriters were
                  granted  as   commission   233,334   underwriter's   warrants,
                  representing   7%  of  the  number  of  units   issued.   Each
                  underwriter's  warrant is exercisable for one share at a price
                  of $3.25,  for a period of twenty  four  months,  expiring  on
                  September  12, 2007.  The  underwriter's  warrants were valued
                  using the Black-Sholes Pricing Model. The warrants were valued
                  at $0.76 per warrant  for a total  value of $177,333  and have
                  been  recorded  as  share  issue  costs  with a  corresponding
                  increase to  contributed  surplus.  At December 31,  2005,  no
                  underwriter's warrants had been exercised.

         (b)      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 was exercised during 2005.

         (c)      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.

         (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  granted  during 2005 are subject to a four month hold
                  period and  exercisable  for a period of five years. A summary
                  of the  Company's  outstanding  options at December  31, 2005,
                  2004 and 2003 and the  changes  for the years  ending on those
                  dates is presented below:
<TABLE>
<CAPTION>
                                                   2005                    2004                      2003
                                           ---------------------    ---------------------     ---------------------
                                             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,                   3,568,500    2.10        2,528,150    1.32         2,465,500    0.44
                       Beginning of year
                  Granted                    1,360,000    3.74        1,512,000    3.14         1,918,500    1.60
                  Exercised                    (10,000)   3.10         (441,650)   1.14        (1,855,850)   0.44
                  Cancelled                    (37,500)   3.92          (30,000)   3.10                 -       -
                                           -----------              -----------               -----------
                  Balance, end of year       4,881,000    2.54        3,568,500    2.10         2,528,150    1.32
                                           ===========              ===========               ===========
</TABLE>

                                      F-15
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

                  Stock options outstanding and exercisable at December 31, 2005
                  are as follows:

                            NUMBER       EXERCISE PRICE     EXPIRY DATE
                                               $

                           205,000            0.40          July 19, 2006
                           119,000            0.50          May 2, 2007
                           115,000            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
                         1,347,000            3.10          March 24, 2009
                            25,000            3.10          March 24, 2007
                            50,000            4.20          December 01, 2009
                           865,000            4.16          March 16, 2010
                           460,000            2.92          November 16, 2010
                        ----------
                         4,881,000
                        ==========

                  During  fiscal  2005,  the  Company  granted  1,360,000  stock
                  options (2004 - 1,512,000;  2003 - 1,918,500).  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:
                                                2005        2004        2003

                  Risk-free interest rate  3.32% - 3.70%   2.38%   3.76% - 4.16%
                  Estimated volatility       70% - 77%       77%     74% - 78 %
                  Expected life              2.5 years   2.5 years   2.5 years
                  Expected dividend yield        0%          0%          0%


                  For  2005,  stock  based  compensation  of  $2,380,000  (2004:
                  1,972,869;  2003:  1,487,235) was recorded by the Company,  of
                  which  $1,800,000  (2004:  $1,972,860;  2003:  $1,487,235)  is
                  included in expenses and $580,000  (2004:  Nil; 2003:  Nil) is
                  included in capitalized mineral property expenditures,  with a
                  corresponding increase in contributed surplus.

                  The  weighted  average  fair value per share of stock  options
                  granted  during  the year was $1.76  per share  (2004 - $1.28;
                  2003 -  $0.63).  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.

         (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,  2005,  2004  and  2003 and the
                  changes for the years ending on those dates is as follows:

                                      F-16
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)
                                            2005          2004          2003
                  Balance,
                     beginning of year    1,422,017     6,042,448     9,511,550
                  Issued                  1,984,004       810,909     1,502,965
                  Exercised              (1,485,517)   (5,371,285)   (4,969,066)
                  Cancelled                       -       (38,955)            -
                  Expired                   (20,500)      (21,100)       (3,001)
                                         ----------    ----------    ----------
                  Balance,
                     end of year          1,900,004     1,422,017     6,042,448
                                         ==========    ==========    ==========

                  Common shares reserved pursuant to warrants and agent warrants
                  outstanding at December 31, 2005 are as follows:

                      NUMBER         EXERCISE PRICE          EXPIRY DATE
                                           $

                    1,666,670             3.45               September 14, 2009
                      233,334             3.25               September 13, 2007
                   ----------
                    1,900,004
                   ==========


7.       RELATED PARTY TRANSACTIONS

         (a)      Effective January 1, 2005 the Company engaged the Grosso Group
                  to provide services and facilities to the Company.  The Grosso
                  Group is a private company owned by the Company, Golden Arrow,
                  Amera  Resources  Corporation  ("Amera") and Gold Point Energy
                  Corp., each of which owns one share. The Grosso Group provides
                  its   shareholder   companies   with   geological,   corporate
                  development,   administrative  and  management  services.  The
                  shareholder  companies  pay monthly fees to the Grosso  Group.
                  The fee is based upon a  reasonable  pro-rating  of the Grosso
                  Group's  costs  including  its staff and overhead  costs among
                  each  shareholder  company with regard to the mutually  agreed
                  average annual level of services  provided to each shareholder
                  company.  During  fiscal 2005,  the Company  incurred  fees of
                  $730,802  to the  Grosso  Group:  $764,012  was paid in twelve
                  monthly   payments   and   $33,210  is  included  in  accounts
                  receivable,  prepaids  and deposits as a result of a review of
                  the  allocation  of the  Grosso  Group  costs  to  the  member
                  companies  for the year.  In  addition,  included  in accounts
                  receivable, prepaids and deposits is a $205,000 deposit to the
                  Grosso  Group for the  purchase  of  equipment  and  leasehold
                  improvements and for operating working capital.

         (b)      During  fiscal  2005,   the  Company  paid  $241,088  (2004  -
                  $476,226;  2003 -  $330,600)  to  directors  and  officers  or
                  companies controlled by directors and officers of the Company,
                  for accounting, management and consulting services provided.

         (c)      Prior to the signing of the Administration  Services Agreement
                  with the Grosso Group in 2005,  the Company  shared its office
                  facilities  with Amera and Golden  Arrow.  During fiscal 2005,
                  the  Company  received  $nil (2004 - $66,390;  2003 - $35,110)
                  from Amera and $nil (2004 - $57,000;  2003 - $Nil) from Golden
                  Arrow for shared rent and administration costs.

         (d)      The Company has  agreements  with a company  controlled by the
                  wife of the  President of the Company for the rental of office
                  premises.  Effective January 1, 2005 the Company subleased the
                  office premises to the Grosso Group.


                                      F-17
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)

7.       RELATED PARTY TRANSACTIONS (continued)

         (e)      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, 2005,  the amount  payable  under the  agreement  would be
                  $1,047,000.

         Other  related  party  transactions  are  disclosed  elsewhere in these
         consolidated financial statements.


8.       INCOME TAXES

         The recovery of income taxes shown in the  consolidated  statements  of
         operations  and deficit  differs from the amounts  obtained by applying
         statutory  rates to the loss before  provision  for income taxes due to
         the following:
<TABLE>
<CAPTION>
                                                       2005            2004            2003
                                                         $               $               $
<S>                                                <C>             <C>             <C>

         Statutory tax rate                            34.12%          35.62%          37.62%
                                                   ============    ============    ============

         Loss for the year                           (5,764,874)     (4,655,063)     (3,418,418)
                                                   ============    ============    ============

         Provision for income taxes based on
            statutory Canadian combined federal
               and provincialincome tax rates        (1,966,975)     (1,658,133)     (1,286,009)
         Differences in foreign tax rates                     -        (114,390)       (383,116)
         Losses for which an income tax benefit
            has not been recognized                   1,966,975       1,722,523       1,669,125
                                                   ------------    ------------    ------------
                                                              -               -               -
                                                   ============    ============    ============
</TABLE>

         The  significant  components of the Company's  future tax assets are as
         follows:

                                                       2005            2004
                                                         $               $

         Future income tax assets
              Financing costs                           472,437         192,369
              Operating loss carryforward             4,709,496       3,594,455
                                                   ------------    ------------
                                                      5,181,933       3,786,824
         Valuation allowance for future tax assets   (5,181,933)     (3,786,824)
                                                   ------------    ------------
                                                              -               -
                                                   ============    ============

         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, 2005, the Company  recorded a future income
         tax  liability  of  $875,017  (2004  -  $633,913)  and a  corresponding
         adjustment to mineral properties.

                                      F-18
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


8.       INCOME TAXES (continued)

                                                       2005            2004
                                                         $               $

         Future income tax liabilities                1,760,110         885,093
                                                   ============    ============

         The Company has Canadian  non-capital loss carryforwards of $13,684,112
         that may be available for tax purposes. The losses expire as follows:

                    EXPIRY DATE               $

                        2006              1,255,915
                        2007              1,261,932
                        2008                841,160
                        2009              1,317,729
                        2010              1,545,964
                        2014              2,752,324
                        2015              4,709,088
                                        -----------
                                         13,684,112
                                        ===========


9.       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 2005 and 2004.

         The Company's total assets are segmented geographically as follows:

                                                DECEMBER 31, 2005
                                   --------------------------------------------
                                     CORPORATE       ARGENTINA         TOTAL
                                         $               $               $

         Current assets               8,331,000         134,887       8,465,887
         Mineral properties
              and deferred costs              -      15,032,107      15,032,107
                                   ------------    ------------    ------------
                                      8,331,000      15,166,994      23,497,994
                                   ============    ============    ============

                                                DECEMBER 31, 2004
                                   --------------------------------------------
                                     CORPORATE       ARGENTINA         TOTAL
                                         $               $               $

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



                                      F-19

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
         ACCEPTED ACCOUNTING PRINCIPLES

         The consolidated financial statements of the Company have been prepared
         in accordance  with  Canadian  GAAP,  which differ in certain  material
         respects from US GAAP.

         The 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>

                                                                       2005            2004            2003
                                                                         $               $               $
        <S>                                                        <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF OPERATIONS

         Loss for the year under Canadian GAAP                       (5,764,874)     (4,655,063)     (3,418,418)
         Mineral properties and deferred costs for the year (i)      (8,480,509)     (5,212,625)     (2,134,757)
         Reversal of Future income tax liability (i)                    875,017         633,913         322,217
         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)
                                                                   ------------    ------------    ------------
         Loss for the year under US GAAP                            (13,370,366)     (9,134,013)     (4,598,332)

         Unrealized gains (losses)
              on available-for-sale securities (ii)                           -        (387,160)        434,346
                                                                   ------------    ------------    ------------
         Comprehensive loss (iv)                                    (13,370,366)     (9,521,173)     (4,163,986)
                                                                   ============    ============    ============

         Basic and diluted loss per share under US GAAP                   (0.29)          (0.22)          (0.14)
                                                                   ============    ============    ============

         Weighted average number of common shares outstanding        46,197,029      40,939,580      32,251,753
                                                                   ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>

                                                                       2005            2004
                                                                         $               $
        <S>                                                        <C>             <C>

         SHAREHOLDERS' EQUITY

         Balance per Canadian GAAP                                   20,761,073      10,813,385
         Mineral properties and deferred costs expensed (i)         (15,032,107)     (6,551,598)
         Reversal of Future income tax liability (i)                  1,760,110         885,093
         Accumulated other comprehensive income (ii)                     84,000          84,000
                                                                   ------------    ------------
         Balance per US GAAP                                          7,573,076       5,230,880
                                                                   ============    ============

                                                                       2005            2004
                                                                         $               $
         MINERAL PROPERTIES AND DEFERRED COSTS

         Balance per Canadian GAAP                                   15,032,107       6,551,598
         Mineral properties and deferred costs
              expensed under US GAAP (i)                            (15,032,107)     (6,551,598)
                                                                   ------------    ------------
         Balance per US GAAP                                                  -               -
                                                                   ============    ============
</TABLE>

                                      F-20
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)

10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)


                                                       2005            2004
                                                         $               $
         FUTURE INCOME TAX LIABILITY

         Balance per Canadian GAAP                    1,760,110         885,093
         Reversal of future income tax liability(i)  (1,760,110)       (885,093)
                                                   ------------    ------------
         Balance per US GAAP                                  -               -
                                                   ============    ============
<TABLE>
<CAPTION>

                                                       2005            2004            2003
                                                         $               $               $
        <S>                                        <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF CASH FLOWS

         OPERATING ACTIVITIES

         Cash used per Canadian GAAP                 (3,849,618)     (2,961,734)     (1,419,549)
         Mineral properties and deferred costs(i)    (7,025,492)     (4,578,712)     (1,850,761)
                                                   ------------    ------------    ------------
         Cash used per US GAAP                      (10,875,110)     (7,540,446)     (3,270,310)
                                                   ============    ============    ============

                                                       2005            2004            2003
                                                         $               $               $
         INVESTING ACTIVITIES

         Cash used per Canadian GAAP                 (6,978,903)     (4,509,717)     (1,872,636)
         Mineral properties and deferred costs(i)     7,025,492       4,578,712       1,850,761
                                                   ------------    ------------    ------------
         Cash provided by (used) per US GAAP             46,589          68,995         (21,875)
                                                   ============    ============    ============
</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 exploration costs relating
                  to unproven mineral  properties as incurred,  and reverses any
                  associated  future  income tax  liabilities.  When  proven and
                  probable  reserves are determined  for a property,  subsequent
                  exploration  and   development   costs  of  the  property  are
                  capitalized.  The capitalized  costs of such properties  would
                  then be assessed,  on a periodic basis,  to determine  whether
                  the carrying  value can be recovered on an  undiscounted  cash
                  flow basis.  If the carrying value cannot be recovered on this
                  basis,  the mineral  properties  would be written down to fair
                  value determined using discounted cash flows.

         ii)      Investments

                  The  Company's   marketable   securities   are  classified  as
                  available-for-sale  investments  under US GAAP and  carried at
                  the lower of cost and market value for Canadian GAAP purposes.
                  Such  investments are not held  principally for the purpose of
                  selling in the near term and, for US GAAP purposes,  must have
                  holding gains and losses  reported as a separate  component of
                  shareholders'  equity  until  realized  or until an other than
                  temporary impairment in value occurs.

                                      F-21
<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)

10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

         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.  As a result of a
                  Repricing, the Company recorded compensation cost in 2003.

                  During fiscal 2004, for US GAAP purposes,  the Company adopted
                  the fair value  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.

         vi)      Recent Accounting Pronouncements

                  ACCOUNTING CHANGES AND ERROR CORRECTIONS

                  SFAS  154  ,  effective  for  accounting   changes  and  error
                  corrections  made in fiscal years beginning after December 15,
                  2005, has been introduced and requires,  unless impracticable,
                  retroactive  application as the required  method for reporting
                  changes   in   accounting   principles   in  the   absence  of
                  transitional   provisions   specific  to  the  newly   adopted
                  accounting principle. The Company will apply this standard for
                  US GAAP purposes commencing in fiscal 2006.



                                      F-22

<PAGE>
                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


10.      DIFFERENCES  BETWEEN  CANADIAN  AND UNITED  STATES  GENERALLY  ACCEPTED
         ACCOUNTING PRINCIPLES (continued)

                  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   and  cash
                  equivalents,  accounts  receivable and accounts payable.  This
                  new section requires little difference in accounting for these
                  financial instruments from current standards.

                  HEDGE ACCOUNTING

                  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.

                  NON-MONETARY TRANSACTIONS

                  CICA Handbook Section 3831 "Non-Monetary Transactions" will be
                  applicable to the company  commencing  with the 2006 financial
                  year.  Under this standard,  exchanges of non-monetary  assets
                  after  January 1, 2006 would be recorded at carrying  value if
                  they lack commercial substance.

                  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.

                                      F-23
<PAGE>

                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                         (EXPRESSED IN CANADIAN DOLLARS)


  11.    SUPPLEMENTARY CASH FLOW INFORMATION


         Non-cash  investing  and  financing  activities  were  conducted by the
         Company as follows:

<TABLE>
<CAPTION>

                                                                       2005            2004            2003
                                                                         $               $               $
        <S>                                                        <C>             <C>             <C>

         Investing activities
              Proceeds on disposition of mineral properties                   -        (252,000)       (272,982)
              Acquisition of marketable securities                            -         252,000         272,982
              Expenditures on mineral properties and deferred costs    (580,000)              -               -
              Stock based compensation capitalized                      580,000               -               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============


                                                                       2005            2004            2003
                                                                         $               $               $
         Financing activities
              Shares issue costs                                       (177,333)              -               -
              Shares issued on exercise of options                            -         204,070          74,379
              Contributed surplus                                       177,333        (204,070)        (74,379)
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
</TABLE>

12.      SUBSEQUENT EVENTS

         Subsequent to December 31, 2005, the Company:

         a)       Completed  on March 21,  2006 a  syndicated  brokered  private
                  placement financing of 2,865,000 special warrants at $3.50 per
                  warrant  for  gross  proceeds  of  $10,027,500.  Each  special
                  warrant will entitle the holder to acquire one unit consisting
                  of one  common  share  and  one  half  common  share  purchase
                  warrant.  Each full  warrant  entitles  the holder  thereof to
                  purchase  one  additional  common  share in the capital of the
                  Company at a price of $3.80 per share until March 21, 2010. In
                  addition  to a cash  commission  of 6% the  underwriters  were
                  granted  171,900  agents'  warrants,  representing  6% of  the
                  number of special  warrants  issued.  Each agents'  warrant is
                  exercisable for one share at a price of $3.80, for a period of
                  twenty four months, expiring on March 21, 2008.

         b)       Issued  120,000 common shares for $172,900 on the exercises of
                  stock options.

                                      F-24
<PAGE>
                              IMA EXPLORATION INC.
                       MANAGEMENT DISCUSSION AND ANALYSIS
                      FOR THE YEAR ENDED DECEMBER 31, 2005


INTRODUCTION

The following management discussion and analysis and financial review,  prepared
as of March 29, 2006,  should be read in conjunction with the Company's  audited
annual consolidated  financial  statements and related notes for the years ended
December 31, 2005 and 2004.  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 flows.  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.

In March 2004 Aquiline Resources Inc.  ("Aquiline")  commenced an action against
the  Company  seeking a  constructive  trust  over the  Navidad  properties  and
damages.  On September  29, 2005 the Company made an offer to Aquiline to settle
the  litigation.  The Board of  Directors  decided  to make the offer due to the
inherent risks of litigation,  to minimize the significant  legal costs and most
importantly  to allow the Company to continue  with its business plan to develop
Navidad.  The  offer was  summarily  rejected  within  24 hours  and the  action
continued  on to trial.  The trial  commenced  on October  11, 2005 and ended on
December 12, 2005.  The Court is currently  reviewing  the thousands of pages of
transcripts  from the two month long trial along with  testimony  from  numerous
witnesses  and the lengthy  arguments  submitted  by both  parties.  The Court's
decision is expected in the first half of 2006.  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.  However,  in the event of an adverse judgment the Company may
suffer loss and such loss could be  material;  the Company  might not be able to
proceed  with its plans  for the  development  of  Navidad  and  could  lose the
ownership  rights it currently  has over the project.  The Company  continues to
expense the legal and related costs of defending the action as they are incurred
and has not made a provision for the future costs that will be incurred or their
potential recovery from the plaintiff.

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. The ongoing exploration programs have returned excellent results.

Effective  January 1, 2005, the Company  engaged Grosso Group  Management  Ltd.,
("Grosso  Group") to provide  services and facilities to the Company.  On May 6,
2005,  an  administrative  services  agreement was finalized and executed by the
Company and the Grosso  Group.  The Grosso Group is a private  company  which is
owned by the Company,  Golden Arrow, Amera Resources  Corporation  ("Amera") and
Gold Point Energy Corp. ("Gold Point"),  each of which own one share. The Grosso
Group provides its shareholder companies with geological, corporate development,

                                      F-25

<PAGE>


administrative and management  services.  The Grosso Group staff is available to
the  shareholder  companies on a cost recovery basis without the expense of full
time personnel.  The shareholder companies pay monthly fees to the Grosso Group.
The fee is based  upon a  reasonable  pro-rating  of the  Grosso  Group's  costs
including  its staff and  overhead  costs among each  shareholder  company  with
regard to the mutually agreed average annual level of services  provided to each
shareholder company.

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. A scoping study
is in process 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.

PROPERTIES UPDATE

NAVIDAD

On February 3, 2003 the Company  announced the  discovery of  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 drill 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.  Phase III drill
program  commenced in November  2004 and was  completed in September  2005.  The
Company  commenced a Phase IV drill  program in January  2006 that is ongoing at
the present time.

On May 25,  2004,  just six  months  after the  first  drilling  on the  Navidad
Project,  the Company  released the first resource  estimate for the Galena Hill
deposit.  Since then, a number of resource  estimate updates have been released,
the most recent on February 16, 2006 in which the Company  reported that Navidad
Project Indicated resources are estimated at 93.4 million tonnes grading 102 g/t
silver  and  1.41%  lead for a total of 305.7  million  ounces  silver  and 2.90
billion  pounds of lead (1.32  million  tonnes)  making the Navidad  discovery a
truly world class silver-lead deposit.

In December 2005 the Company released preliminary metallurgical test results and
announced that it has retained the international mining consulting firm Pincock,
Allen and Holt of Denver, Colorado, to prepare a conceptual study of the Navidad
project. This study is expected to provide preliminary technical, legal, social,
environmental  and  economic  parameters  of the  Navidad  project  to guide the
ongoing  development of the project.  It will be based on the resources outlined
in the February 2006 update.

In addition  to its active  exploration  program,  the Company has made a strong
commitment to its ongoing community  relations and  environmental  baseline data
collection  programs  in the  project  area.  The  Company  intends to  continue
expanding  the silver and lead  resources  at  Navidad by  systematically  drill
testing exploration targets as well as expanding and better defining areas where
resources have been defined.

INDICATED AND INFERRED RESOURCES

On February 16, 2006 the Company  announced  the results of an updated  resource
estimation carried out by Snowden Mining Industry  Consultants Inc.  ("Snowden")
which  included  Indicated  and  Inferred  Resources  at Calcite NW. IMA has now
defined continuous silver resources over a 3.6 kilometre strike length along the
Navidad Trend in the Galena Hill, Connector Zone, Navidad Hill, Calcite Hill and
Calcite NW deposits.  Inferred and indicated  resources estimated to date on the
Navidad Project are presented in the table below at a range of cut-off grades:


   NAVIDAD PROJECT INDICATED RESOURCES AT 50 G/T SILVER EQUIVALENT CUT-OFF(1):

--------------------------------------------------------------------------------
                 THOUSAND                                   CONTAINED  CONTAINED
CUT-OFF GRADE     TONNES     SILVER   COPPER   LEAD   ZINC    SILVER      LEAD
(g/t AgEq(1))                (g/t)      (%)     (%)    (%)    (M ozs)    (M lbs)
--------------------------------------------------------------------------------

      50          93,393       102     0.05    1.41   0.16    305.73      2,900
--------------------------------------------------------------------------------
      60          83,134       110     0.05    1.52   0.17    293.86      2,792
--------------------------------------------------------------------------------
      80          74,498       118     0.05    1.64   0.18    281.83      2,690
--------------------------------------------------------------------------------
      100         66,615       126     0.05    1.76   0.19    269.06      2,583
--------------------------------------------------------------------------------
      200         53,715       141     0.06    2.01   0.21    243.99      2,376
--------------------------------------------------------------------------------
      300         22,456       213     0.06    3.03   0.29    153.57      1,498
--------------------------------------------------------------------------------


                                      F-26

<PAGE>


   NAVIDAD PROJECT INFERRED RESOURCES AT 50 G/T SILVER EQUIVALENT CUT-OFF(1):

--------------------------------------------------------------------------------
                 THOUSAND                                   CONTAINED  CONTAINED
CUT-OFF GRADE     TONNES     SILVER   COPPER   LEAD   ZINC    SILVER      LEAD
(g/t AgEq(1))                (g/t)      (%)     (%)    (%)    (M ozs)    (M lbs)
--------------------------------------------------------------------------------

      50          11,063        65     0.03    0.85   0.12     23.03       207
--------------------------------------------------------------------------------
      60           9,056        72     0.03    0.91   0.12     20.93       183
--------------------------------------------------------------------------------
      80           5,576        92     0.04    1.02   0.13     16.44       125
--------------------------------------------------------------------------------
      100          3,920       107     0.04    1.11   0.14     13.43        96
--------------------------------------------------------------------------------
      200            597       145     0.06    2.50   0.26      2.77        33
--------------------------------------------------------------------------------
      300             41       312     0.17    1.02   0.13      0.41         1
--------------------------------------------------------------------------------
Notes:
1.   Silver  equivalent  calculated using  US$6.00/oz  silver and $0.35/lb lead.
     (AgEq = Ag +  (%Pb*10,000/250).  No attempt  has been made to adjust  these
     relative values by accounting for metallurgical  recoveries as insufficient
     information is available to do so.
2.   Strict quality control and quality assurance  procedures have been observed
     at all stages of data collection leading to this resource. Please see IMA's
     website   (www.imaexploration.com)   for  a  detailed   overview  of  these
     procedures.
3.   Resource categories  (Indicated and Inferred) used here and the preparation
     of this resource estimate conform to National  Instrument 43-101 "Standards
     of disclosure for mineral projects" and those of the Canadian  Institute of
     Mining,  Metallurgy,  and Petroleum  (the "CIM")  "Definition  Standards on
     Mineral Resources and Reserves, 2004".
4.   A National  Instrument  43-101  Technical  Report  documenting  the Snowden
     Resource Estimate will be filed at www.sedar.com as is required by Security
     Commission regulations.
5.   An `INFERRED MINERAL RESOURCE' is that part of a Mineral Resource for which
     quantity and grade or quality can be  estimated on the basis of  geological
     evidence and limited  sampling and  reasonably  assumed,  but not verified,
     geological  and  grade  continuity.   The  estimate  is  based  on  limited
     information  and sampling  gathered  through  appropriate  techniques  from
     locations such as outcrops, trenches, pits, workings and drill holes.
6.   An  `INDICATED  MINERAL  RESOURCE'  is that part of a Mineral  Resource for
     which   quantity,   grade  or  quality,   densities,   shape  and  physical
     characteristics,  can be estimated with a level of confidence sufficient to
     allow the appropriate application of technical and economic parameters,  to
     support mine  planning  and  evaluation  of the  economic  viability of the
     deposit.  The estimate is based on detailed and  reliable  exploration  and
     testing information gathered through appropriate  techniques from locations
     such as outcrops,  trenches, pits, workings and drill holes that are spaced
     closely  enough  for  geological  and  grade  continuity  to be  reasonably
     assumed.

Detailed review of the geological  interpretation and block model shows that the
Calcite  Hill  deposit,  the  Connector  Zone and  Calcite  NW  remain  open and
insufficiently drill tested in several areas.

METALLURGICAL TESTWORK

On December 1, 2005 the Company released a summary of preliminary  Metallurgical
testwork  carried out on samples of Galena Hill,  Navidad Hill, and Calcite Hill
mineralization   demonstrating  that  Navidad   mineralization  is  amenable  to
concentration by simple, cost effective, and environmentally benign differential
flotation  processes.  In addition to  flotation  testwork,  the Company is also
currently    investigating    the    production    of   silver   metal   through
hydrometallurgical means from low-grade,  high-recovery silver concentrates.  On
February  16, 2006 IMA  released  highly  encouraging  preliminary  results from
alkaline  pressure  oxidation  followed  by  thiosulphate   leaching  of  silver
concentrates.

Flotation  testwork has been  conducted by G&T  Metallurgical  Services  Ltd. of
Kamloops B.C.  (G&T), an ISO 9001:2000  accredited  firm. All work was performed
under the supervision of Tom Shouldice, P. Eng., General Manager - Operations at
G&T. Peter Taggart,  P.Eng, of P. Taggart & Associates  Ltd.,  provided  overall
program direction, acting as IMA's representative. Both are considered Qualified
Persons as defined by National Instrument 43-101.

Limited flotation testwork on two composite samples (high  lead-moderate  silver
and high silver-low lead) from Calcite Hill yielded  excellent  results.  Locked
cycle  flotation  tests  performed on the lead-rich  sample  yielded a very high
quality  lead  concentrate  containing  80.4%  lead and 709 g/t silver at a lead
recovery of 92% and silver  recovery of 86%. The  silver-rich  sample produced a
silver concentrate grading 10,500 g/t silver at a silver recovery of 88%.

Mineralization at Galena Hill consists  predominantly of fine-grained galena and
pyrite with lesser amounts of sphalerite and chalcopyrite.  Electron  microprobe
studies have shown silver to be contained  within the lattice of both galena and
pyrite,  with the bulk of the silver present within pyrite.  Flotation  tests to

                                      F-27
<PAGE>

date have focused on producing  separate lead and silver  (pyrite)  concentrates
through  differential  flotation.  Fourteen  rougher and 37 open circuit cleaner
tests were performed on the Galena Hill composite samples.  The results of three
locked  cycle tests  confirm  data  produced  in the open  circuit  tests.  Lead
metallurgical  performance  at Galena Hill was generally  good with 74 to 84% of
the lead reporting to the lead  concentrates  which grade between 62.0 and 75.3%
lead and include 386 to 968 g/t silver. Subsequent to galena flotation, a pyrite
concentrate  was  produced  that  recovered  37 to 57% of the total  silver  and
contains  1,083 to 3,546 g/t silver.  Total locked cycle test silver  recoveries
(lead  concentrate  plus  silver  concentrate)  range  from  54 to  82%.  Silver
recoveries  as high as 93.2%  have been  obtained  with  batch  flotation  tests
designed  to maximize  silver  recovery  at the  expense of  concentrate  grade.
Ongoing work  targeting  improved  silver  recoveries  for Galena Hill  includes
additional flotation tests using alternate reagents,  and mineralogical  studies
to identify distinct pyrite types present in concentrates and tails.

Hydrometallurgical  testwork carried out at SGS Lakefield under the direction of
Dr. David Dreisinger, P.Eng. of Dreisinger Consulting Inc. has shown that silver
concentrates  from Galena Hill are amenable to pressure  oxidation under neutral
to  alkaline   conditions   followed  by  atmospheric   leaching  using  calcium
thiosulphate  as a  lixiviant.  Preliminary  bench-scale  testwork  has produced
silver  recoveries  of 87% after 24 hours  and 89%  after 72 hours of  leaching.
These tests were  conducted  on a very  low-grade  silver  concentrate  (235 g/t
silver),  it is hoped that  additional  improvements  in silver  recovery may be
realized in future  testwork on higher-grade  concentrates.  The company is very
encouraged  by these  results as they  indicate  that the Navidad  Project could
produce silver dore on-site using an  environmentally  benign  lixiviant  rather
than the more commonly used sodium  cyanide.  Calcium  thiosulphate is routinely
used as fertilizer in the agricultural industry.

Two distinct  styles of  mineralization  from Navidad  Hill were  studied.  Both
samples  had high  silver  values  (436  and 287 g/t Ag) but only one  contained
significant  lead  (3.11%  Pb)  and  both  comprised  mixed  sulfide  and  oxide
mineralization.  Flotation  testwork  on both  samples  produced  a single  bulk
sulphide concentrate. Silver recoveries of approximately 64 to 85% were achieved
in concentrates grading from 10,449 to 12,246 g/t silver.

While significant  progress has been made in understanding the metallurgy of the
Navidad deposits,  the Company is confident that with additional  testwork,  our
highly  skilled  and  experienced  metallurgical  team will  continue  to unlock
additional value through improvements to metallurgical performance.

EXPLORATION PROGRAM:

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 drill  program  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.  The Phase III drill  program  was  completed  in
September 2005 and comprised 23,732 metres in 131 holes.  Results from the Phase
III drilling have been  described in News Releases dated January 13, March 4 and
March 22, April 19, June 21, August 17,  September 29 and October 13, 2005.  The
Phase III drill program has focussed on drilling in the Calcite Hill and Calcite
Hill Northwest  Extension areas and expansion and infill drilling on the Navidad
Hill and  Connector  Zone areas.  In addition  five holes were  completed at the
southern end of the Loma de la Plata prospect.

The Phase IV drill  program  commenced in January 2006 and is ongoing with 8,252
metres of drilling in 44 holes  completed as at March 19th,  2006,  bringing the
project  total to 50,440  metres in 294 holes.  The Phase IV program to date has
focussed on infill and expansion  drilling on Calcite Hill Northwest  Extension,
exploratory  drilling  along  Esperanza,  infill  drilling  on  Galena  Hill and
stratigraphic  drilling  between the Esperanza and Argenta Trends.  Results from
the Phase IV  program  will be  released  in batches  as they are  received  and
compiled.  No  results  have been  released  to date from the Phase IV  drilling
program and therefore are not discussed in the following sections.

The  exploration  program at the Navidad  Project is being carried out under the
supervision  of Dr.  Paul  Lhotka,  P.Geo.,  a  Qualified  Person as  defined by
National Instrument 43-101.

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

                                      F-28
<PAGE>

syn-depositional  timing for the  mineralization  event. The Galena Hill deposit
measures  approximately  450  by 500  metres  in  plan  view  (at 50 g/t  silver
equivalent  cut-off) and is up to 125 metres thick in its centre.  A total of 39
drillholes 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 hole 14
and 63.0 metres of 418.4 g/t silver,  including 20.6 metres of 703.0 g/t silver,
in hole 22.  During  Phase III,  hole 175 and 197 were drilled at Galena Hill in
order to collect  metallurgical  samples. Hole 175 intercepted 194 metres of 188
g/t silver and 5.8% lead including 49.8 metres of 481 g/t silver and 14.2% lead.
Hole 197 intercepted  74.04 metres of 239 g/t silver and 1.97% lead.  Results of
these two holes  were  incorporated  into the  resource  estimate  published  on
February 16, 2006.

NAVIDAD HILL:

A total of 62 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 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 tonne)  including  5.97 metres of 4,579 grams per
tonne  (133.7  ounces per  tonne) in hole 117 and 58.68  metres of 208 grams per
tonne silver (6.1 ounces per tonne) in hole 112.

Phase III  drilling in the area of hole 90 included  holes 139 to 142 which were
completed to provide more detailed  information on this zone of very  high-grade
silver mineralization. Of these, 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 from the wider spaced  drilling and the prior resource block
model.  Results of these new holes were  incorporated into the resource estimate
published on February 16, 2006.

CONNECTOR ZONE:

At the Connector Zone 37 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 (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 (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  (holes 32, 86, 87, 108,  131,  153,  154,  155.  and 156),  the
controls on mineralization  and the  stratigraphic  correlations are less clear.
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.

Phase III drilling at the Connector Zone (holes 153-156 and 228-237)),  aimed at
providing  additional  drill  density to  upgrade  previously  defined  Inferred
Resources to the Indicated Resources category, intersected moderate-grade silver
mineralization  over long  intervals  with rare  high-grade  structures  (e.g. 2
metres  of 2,171  g/t  silver  in hole 234)  outside  of the  current  Indicated
Resource.  Results  include  88.8  metres of 107 g/t silver in hole 153 and 28.8
metres of 148 g/t  silver in hole 154,  26 metres of 104 g/t silver in hole 230,
37 metres of 107 g/t silver in hole 231, 21 metres of 237 g/t silver in 234, and
32 metres of 110 g/t silver in hole 237. Much of this  mineralization  starts at
or very near surface.

                                      F-29

<PAGE>


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.

Highlights from Phase III drilling at Calcite Hill include:  122.6 metres of 195
g/t silver in hole 124, 196.1 metres of 113 g/t silver in hole 126, 123.6 metres
of 139 g/t  silver in hole 138,  46.6  metres of 300 g/t silver  including  10.3
metres of 1,257 g/t  silver in hole 143,  83.0  metres of 209 g/t silver in hole
148,  80.2 metres of 246 g/t silver  including  25.3 metres of 476 g/t silver in
hole  151,  27  metres  of 407 g/t  silver  in hole 207 and 21 metres of 545 g/t
silver in hole 209.

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. A total of
60 drill holes were used in the  estimate  of  resources  published  in February
2006.

CALCITE HILL NW:

Exploration  drilling  in Phase III along  strike  towards  the  northwest  from
Calcite Hill discovered new  mineralization.  This new  mineralization  is named
Calcite  NW. The  mineralization  at  Calcite  Hill NW is  dominantly  hosted in
sedimentary  rocks that overly the volcanic rocks which host the majority of the
mineralization  at Navidad Project.  Within the overlying  sediments strong clay
alteration is widespread  and affects  pelites,  sandstones  and  conglomerates.
Mineralization  can be lead-rich  with silver (hole 201),  or lead-poor but with
minor  values  in  copper  and  higher   silver  grades  (holes  202  and  203).
Fine-grained  but  visible,  disseminated  native  silver was  located  within a
carbonaceous  bed in hole  203.  This is a new mode of  occurrence  of silver at
Navidad   Project.   At   Calcite   Hill  NW   mineralization   appears   to  be
stratigraphically  controlled  and is  disseminated  in the host rock;  veins or
feeder structures have not been recognized. The zone is nearly flat-lying, shows
good continuity  from hole to hole and typically  starts at shallow depths of 15
to 50 meters below surface.

Drilling at Calcite  Hill NW has defined a central area of  approximately  400 x
150 metres x 5 to 60 meters thick (defined by drill holes 178, 179, 202, 203 and
223-227).  Highlights include:  holes 178 and 179 (30.0 metres of 122 g/t silver
and 25.0  metres of 251 g/t  silver,  respectively),  202 (10  metres of 435 g/t
silver),  and 203 (29 metres of 154 g/t silver).  Results  outside the core area
include  intercepts from holes 199 (31.1 metres of 62 g/t silver and 1.29% lead)
and 201 (22.5  metres of 104 g/t silver and 2.79% lead).  The resource  estimate
released in February 16, 2006 used 23 holes.

ESPERANZA TREND:

A total of 11  drillholes  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 hole 62 and 2.6  metres  of 513  grams  per  tonne  silver in hole 79.
Interestingly, hole 79 shows signs of the mineralization being stratigraphically
rather than  structurally  controlled  as had been  interpreted  to date in this
area.  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,  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 during 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 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

                                      F-30

<PAGE>

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.

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.

Initial  drilling  of five holes at Loma de la Plata has  confirmed  the surface
discovery   but  has  tested  only  a  small   portion  of  the  known   surface
mineralization.  Trenches 7 and 10 are located up to 275 metres from the current
drilling and returned values of 48.5 metres of 315 g/t silver and 56.0 metres of
452 g/t silver,  respectively.  Of the five drill holes  completed at Loma de la
Plata,  two (241 and 242) were drilled at angles of -45 and were  collared  near
trenches  where  high-grade  silver  had  been  defined  on  surface.  Hole  241
intersected  31.5 metres of 562 g/t silver  (grade was  incorrectly  stated in a
October 13, 2005 News Release as 684 g/t) and was drilled under trenches 1 and 3
that  returned  40.1 metres of 740 g/t silver and 42.9 metres of 684 g/t silver,
respectively. Hole 242 intersected 28.4 metres of 236 g/t silver and was drilled
under  trench 2 which  returned  103.3  metres  of 290 g/t  silver.  The  strong
correlation  between surface results from trenching and sub-surface results from
drilling suggests that little or no surface enrichment of silver has occurred at
Loma de la Plata.  The  remaining  three  holes  were  collared  40 to 90 metres
further to the east and drilled at -60 angles.  These holes (243-245)  appear to
have  missed  the  better-mineralized  north-south  trending  zone as defined by
trenches 1-3, 8, and 9 and drill holes 241 and 242.

Drilling  at Loma de la Plata  has  confirmed  the basic  geological  model of a
favourable, mineralized, upper-volcanic sequence comprised of quartz-eye bearing
trachyandesites.  The units  dip  approximately  25 to 30  degrees  towards  the
northeast and the favourable unit is  approximately 30 to 35 metres thick in the
area drilled to date.  The form and shape of  mineralized  zones of veinlets and
brecciation  is not yet well  defined,  but is  hosted  exclusively  within  the
trachyandesite  upper  volcanic  rocks.  Further  drilling  will be  required to
confirm the orientation and ultimate size potential of this zone.

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  (see  attached  figure).
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.  IMA
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.

                                      F-31

<PAGE>


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  Argenta  Trend
includes Sector Zeta and Loma de la Plata and extends approximately 8 kilometres
to the southeast, parallel with the Esperanza and Navidad Trends.

The Argenta Trend is  highlighted by anomalous  silver,  lead and zinc values in
soils with subordinate and sporadic anomalous copper.  Recent surface work along
the Argenta trend has discovered high-grade lead values over significant widths.
New  discoveries  include  the "Bajo del Plomo",  "Filo del Plomo" and  "Ginger"
zones  where lead  values of up to 10.7% lead over 10 metres,  7.3% lead over 17
metres and 4.8% lead over 21 metres  respectively,  have been discovered.  These
new  discoveries  are located  southeast of the Loma de la Plata zone.  With the
addition of the three new zones,  the Argenta  Trend now  consists of five named
mineralized zones along an 8 kilometre strike length. Mineralization styles vary
from  silver-copper  rich at the northwest end at Sector Zeta, to silver-rich at
Loma de la Plata, to lead-dominant at Bajo del Plomo, Filo del Plomo and Ginger.
Mineralization  is  hosted  by the same  trachyandesitic  volcanic  rocks as the
Galena,  Navidad,  and  Calcite  Hill  deposits,  and in some cases in  adjacent
sedimentary  rocks. It appears to occur at approximately the same  stratigraphic
position as the known resources but with significant  differences in sedimentary
facies.

The Company now has over 58 square kilometres of geophysical  surveying covering
and extending beyond the Navidad and Argenta Trends. The Galena Hill deposit has
a strong geophysical signature, while other deposits such as Navidad and Calcite
Hills have much more subtle  signatures.  This additional  geophysical  coverage
provides a wealth of  information  about the geology and structure at Navidad in
addition to highlighting new areas prospective for mineralized zones that may be
completely buried.

NAVIDAD AREA PROPERTIES:

The  Company has 18  exploration  properties  in Chubut  Province in addition to
Navidad.  The Regalo  property  is  currently  the  subject  of a joint  venture
agreement.

REGALO:

Work by  Consolidated  Pacific Bay Minerals Ltd.  ("Pacific  Bay") on the Regalo
Property,  currently under option from IMA, has identified highly anomalous gold
in soils and silt samples over a large area. In a January 12, 2005 News Release,
Pacific Bay  reported  that the Yastekt  South zone has strong  associated  gold
anomalies 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.  In a June 21,  2005 press  release,
Pacific Bay reported that an outcrop  sample on Pacific Bay's Regalo project has
returned an assay  value of 205 ppm  uranium.  On August 22, 2005 press  release
Pacific Bay reported  that a total of 163 rock samples  were  collected  from 26
backhoe trenches  excavated within the large soil and stream sediment  anomalies
described  above.  Of these,  13 rock samples had detectable gold in the 6 to 41
ppb range. The trench samples identified anomalous arsenic, molybdenum, vanadium
and zinc pathfinder elements in porous,  permeable  sandstones and conglomerates
with strong quartz-hematite alteration.


                                      F-32
<PAGE>

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.
<TABLE>
<CAPTION>
                                                   --------------------------------------------
                                                              YEARS ENDED DECEMBER 31
                                                   --------------------------------------------
                                                       2005            2004            2003
                                                         $               $               $
                                                   ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>
Total Assets                                         23,497,994      12,221,856      13,419,876
Long Term Financial Liabilities                               -               -               -
Total Revenues                                                -               -               -
General and Administrative Expenses                   6,148,234       4,312,616       2,503,041
Loss from Continuing Operations                      (5,764,874)     (4,523,831)     (2,449,243)
Loss per Common Share from Continuing Operations          (0.12)          (0.11)          (0.08)
Loss allocated to Spin-Off Assets                             -        (131,232)       (969,175)
Net Loss                                             (5,764,874)     (4,655,063)     (3,418,418)
Net Loss per Common Share Basic and Diluted               (0.12)          (0.11)          (0.11)
                                                   --------------------------------------------
</TABLE>


Total assets increased  $11,276,138 from December 31, 2004 to 2005 primarily due
to the  expenditures on the Navidad project.  Total assets decreased  $1,198,021
from  December  31,  2003 to December  31,  2004 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.  General and  adminstrative
expenses have  increased  mainly due to the increases in legal costs incurred in
connection  with  the  Aquiline  legal  action  and due to the  increase  in the
activity level related to continued  exploration at the Navidad  project and the
necessary support required.

SELECTED QUATERLY FINANCIAL INFORMATION AND FOURTH QUARTER

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>

                            --------------------------------------------------  --------------------------------------------------
                                                   2005                                                2004
                            --------------------------------------------------  --------------------------------------------------
                              DEC. 31      SEP. 30      JUN. 30      MAR. 31      DEC. 31      SEP. 30      JUN. 30      MAR. 31
                                 $            $            $            $            $            $            $            $
                            -----------  -----------  -----------  -----------  -----------  -----------  -----------  -----------
<S>                          <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>

Revenues                              -            -            -            -            -            -            -            -

Loss from Continuing
     Operations              (1,041,118)  (1,233,392)    (972,894)  (2,517,470)  (1,164,504)    (492,562)    (466,021)  (2,400,744)
Loss per Common Share from
     Continuing Operations        (0.02)       (0.03)       (0.02)       (0.06)       (0.03)       (0.01)       (0.01)       (0.06)
Income (Loss) Allocated to
     Spin-off Assets                  -            -            -            -            -            -     (355,252)     224,020
Net Loss                     (1,041,118)   (1,233,392)   (972,894)  (2,517,470)  (1,164,955)    (492,562)    (821,273)  (2,176,273)
Net Loss per Common Share
     Basic and Diluted            (0.02)       (0.03)       (0.02)       (0.06)       (0.02)       (0.01)       (0.02)       (0.06)
                            --------------------------------------------------  --------------------------------------------------
</TABLE>

The Net Loss for the periods includes the following:

    -    Q1 2004 Net Loss includes  $1,871,360 non-cash stock based compensation
         expense for the stock options granted during the period
    -    Q2 2004 includes $313,801 gain on disposition of mineral property
    -    Q1 2005 Net Loss includes  $1,800,000 non-cash stock based compensation
         for the stock options granted during the period
    -    Q3 2005 Net Loss  includes  the  increased  legal  fees  related to the
         Aquiline litigation
    -    In the quarter ended December 31, 2005, the Company's  legal costs were
         substantially higher compared to 2004 period as the Aquiline trial took
         place during the quarter  ended  December 31, 2005.  This  increase was
         offset with a foreign  exchange  gain  recorded in the last  quarter of
         2005 and with a decrease in stock based compensation in the 2005 period
         compared to 2004.

SUMMARY OF FINANCIAL RESULTS

For the year ended December 31, 2005, the Company  reported a consolidated  loss
of  $5,764,874  ($0.12 per share),  an increase of  $1,109,811  from the loss of
$4,655,063  ($0.11 per share) for the year ended December 31, 2004. The increase

                                      F-33
<PAGE>

in the loss in 2005,  compared to 2004 amount, was due to a number of factors of
which  $1,835,618  can be  attributed  to increases  in  operating  expenses and
$725,807 decrease in other items.

The  Company's  prior period  financial  statements  have been  reclassified  in
accordance  with Canadian GAAP. The net assets  transferred to Golden Arrow were
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.  A loss of $131,231 was
allocated to spin-off assets in the 2004 period.

RESULTS OF OPERATIONS

The  Company's  operating  expenses  for the year ended  December  31, 2005 were
$6,148,234 an increase of $1,835,618  from  $4,312,616 in 2004.  $339,516 of the
2004 operating  expenses had been  reclassified  as "Loss  Allocated to Spin-Off
Assets" which relate to the assets  transferred to Golden Arrow.  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 a cost specific basis.

Professional fees increased  $1,432,498 to $2,327,278 in 2005,  primarily due to
legal costs  incurred in  connection  with the Aquiline  legal action as well as
increased costs of compliance. In 2005 the Company recorded non-cash stock based
compensation  of $2,380,000  compared to  $1,972,860 in 2004,  for stock options
granted to its  employees,  consultants  and directors,  of which  $1,800,000 is
included in expenses in 2005 compared to $1,972,860 in 2004 and $580,000 in 2005
compared  to  Nil  in  2004  is  included  in   capitalized   mineral   property
expenditures.  Other notable changes in the operating expenses are: (i) Salaries
increased $272,151 due to staff increases (salaries in 2005 are a portion of the
monthly fee charged for  services by the Grosso  Group while in 2004 the Company
directly  employed  its staff);  (ii)  Administrative  and  management  services
decreased by $89,744 due to some of the services provided by consultants in 2004
were  provided by  employees of the Grosso Group during 2005 and are included in
salaries (iii) there are no cost recoveries (for shared administrative costs and
rent)  from  Amera or  Golden  Arrow in 2005;  (iv)  Corporate  development  and
investor relations increased $207,951,  as the Company has made its shareholders
and others more aware of its Navidad  project and its potential,  (v) Office and
Sundry increased $40,337 mainly due to the increase in insurance premiums and an
increase in activity, (vi) Transfer agent and regulatory fees increased $141,972
mainly due to the costs of the Company's listing on the American Stock Exchange,
(vii) General  exploration  decreased by $173,047 as the  Company's  focus is on
Navidad  property for which costs are included in capitalized  mineral  property
expenditures,   (viii)  Travel  increased  $52,444  due  to  travel  related  to
conferences and investor presentations as well as to South America.

In 2005 the Company recorded interest income of $150,406 compared to $101,589 in
2004,  primarily as a result of increase of funds on deposit. In 2005 there were
no reorganization costs recorded by the Company, in 2004 reorganization costs of
$346,103  were  recorded.  There was no gain on the  optioning of  properties to
other mining exploration  companies,  in 2004 a gain of $328,346 was recognized.
No  write  down for the  carrying  value of  marketable  securities  in 2005 was
recognized  while a $99,762  write  down for the  carrying  value of  marketable
securities  was recorded in 2004.  A gain of $232,954  for foreign  exchange was
recorded  in 2005  compared  to loss of 195,285 in 2004.  The  foreign  exchange
adjustment  in 2005 is a result of a  continued  strengthening  of the  Canadian
dollar compared to US dollar and due to the exchange  movements between expenses
being incurred in US$ and amounts exchanged to settle such payables.  No gain or
loss was  allocated to spin-off  assets in 2005,  in 2004 a loss of $131,232 was
recorded.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position at December 31, 2005 was $7,731,395,  an increase of
$2,504,041  from December 31, 2004.  Total assets  increased to  $23,191,738  at
December 31, 2005 from $12,221,856 at December 31, 2004. This increase is mainly
due to the increase in Navidad carrying value and in cash balance. During fiscal
2005, the Company  completed a brokered private placement for 3,333,340 units at
$3.00 per unit,  for proceeds of $9,263,283 net of $600,001  agent's  commission
and $136,736 of related issue costs. Each unit consisted of one common share and
one half common share purchase  warrant.  Each full warrant  entitles the holder
thereof to purchase  one  additional  common share at a price of $3.45 per share
until  September 14, 2009. In addition to the cash  commission the  underwriters
were granted as commission 233,334  underwriter's  warrants,  representing 7% of
the number of units issued.  Each  underwriter's  warrant is exercisable for one
share at a price of $3.25,  for a period  of twenty  four  months,  expiring  on

                                      F-34
<PAGE>

September  12,  2007.   The   underwriter's   warrants  were  valued  using  the
Black-Sholes  Pricing Model. The warrants were valued at $0.76 per warrant for a
total  value of  $177,333  and have been  recorded  as share  issue costs with a
corresponding   increase  to  contributed   surplus.   At  March  29,  2006,  no
underwriter's warrants had been exercised.

On March 21, 2006 the Company completed a syndicated  brokered private placement
financing of 2,865,000  special warrants at $3.50 per warrant for gross proceeds
of $10,027,500. Each special warrant will entitle the holder to acquire one unit
consisting of one common share and one half common share purchase warrant.  Each
full warrant entitles the holder thereof to purchase one additional common share
in the  capital  of the  Company at a price of $3.80 per share  until  March 21,
2010.  In addition to a cash  commission  of 6% the  underwriters  were  granted
171,900  agents'  warrants,  representing  6% of the number of special  warrants
issued.  Each agents'  warrant is exercisable for one share at a price of $3.80,
for a period of twenty four months, expiring on March 21, 2008.

Options  and  warrants  were  exercised  which  resulted  in  cash  proceeds  of
$4,215,145  during  2005.  The Company  paid  $145,866 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.  As all  warrants  that  were
outstanding as of the effective date of the  reorganization  have been exercised
the Company  has no further  obligation  to pay amounts to Golden  Arrow for the
issue of its shares on the exercise of the Company's warrants.

The Company has received $172,900 from the exercise of options from January 1 to
March 29,  2006.  As at March 29,  2006,  the  Company  had  working  capital of
approximately $14,000,000.

The Company  considers  that it has  adequate  resources to maintain its ongoing
operations but currently may 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 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.

Except  as  disclosed  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.

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 for the year ended December 31, 2005 was
$3,849,618,  compared  to cash  outflow  for 2004 of  $2,961,734  as a result of
increases in activities and changes in non-cash working capital.

FINANCING ACTIVITIES

During the year ended December 31, 2005, the Company  received  $14,215,165 from
the issue of common shares from a brokered private placement and on the exercise
of warrants  and options less costs of $736,737,  compared to  $9,707,897,  less
costs of $411,237, for the year ended December 31, 2004.

INVESTING ACTIVITIES

Investing  activities  required  cash of  $6,978,903  during  2005,  compared to
$4,509,717 for 2004, these investing  activities were primarily for additions to
the Navidad project in Argentina.

RELATED PARTY TRANSACTIONS

Effective  January  1, 2005 the  Company  engaged  the  Grosso  Group to provide
services and  facilities to the Company.  The Grosso Group is a private  company
owned by the Company, Golden Arrow, Amera and Gold Point, each of which owns one
share.  The Grosso Group provides its  shareholder  companies  with  geological,
corporate development, administrative and management services on a cost recovery
basis.  During fiscal 2005, the Company  incurred fees of $730,802 to the Grosso
Group:  $764,012 was paid in twelve monthly  payments and $33,210 is included in
the  Accounts  receivable,  prepaids and deposits as a result of a review of the

                                      F-35
<PAGE>

allocation  of the Grosso Group costs to the member  companies  for the year. In
addition,  included  in the  Accounts  receivable,  prepaids  and  deposits is a
$205,000  deposit to the Grosso Group.  The deposits  from the member  companies
were used for the  purchase of  equipment  and  leasehold  improvements  and for
operating working capital.

CRITICAL ACCOUNTING ESTIMATES

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, 2005. These  accounting  policies can have a significant
impact of the financial  performance and financial  position of the Company.  As
disclosed  previously,  the Company has not made any provision for any potential
loss in the event of an adverse judgement related to the Aquiline legal action.

RECENT ACCOUNTING PRONOUNCEMENTS

Reference should be made to the recent  accounting  pronouncements in Canada and
in US  that  described  in  Note  10 of  the  Company's  consolidated  financial
statements for the year ended December 31, 2005.

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 if the expenditures do not have the  corresponding
tax basis.  It is the  Company's  policy to expense any  exploration  associated
costs not related to specific projects or properties.  Management of the Company
periodically  reviews the recoverability of the capitalized  mineral properties.
Management  takes into  consideration  various  information  including,  but not
limited to,  results of  exploration  activities  conducted  to date,  estimated
future  metal  prices,  and reports and  opinions  of outside  geologists,  mine
engineers and consultants. When it is determined that a project or property will
be abandoned or its carrying  value has been  impaired,  a provision is made for
any expected loss on the project or property.  In 2005 and in 2004 no impairment
of long-lived assets was identified.

FINANCIAL INSTRUMENTS

The Company's  financial  instruments  consisting of cash and cash  equivalents,
accounts  receivable and accounts  payable and accrued  liabilities  approximate
their carrying values due to the short-term nature of those  instruments.  As of
December 31, 2005, the market value of marketable  securities was $270,000 (2004
- $270,000).

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  has  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.

                                      F-36
<PAGE>

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. In addition, Navidad properties
title has being challenged in Aquiline legal action as previously discussed.

DISCLOSURE CONTROL AND PROCEDURES

Disclosure  controls and  procedures are defined under  Multilateral  Instrument
52-109 -  Certification  of Disclosure  Controls in Issuers'  Annual and Interim
Filings ("MI  52-109") as "...  controls and other  procedures of an issuer that
are designed to provide  reasonable  assurance that  information  required to be
disclosed by the issuer in its annual filings,  interim filings or other reports
filed or submitted by it under provincial and territorial securities legislation
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the provincial and territorial  securities legislation and include,
without limitation,  controls and procedures designed to ensure that information
required to be disclosed by an issuer in its annual filings,  interim filings or
other reports filed or submitted  under  provincial and  territorial  securities
legislation  is  accumulated  and  communicated  to  the  issuer's   management,
including its chief executive  officers and chief financial officers (or persons
who perform similar  functions to a chief executive officer or a chief financial
officer),   as  appropriate  to  allow  timely  decisions   regarding   required
disclosure". The Company has conducted a review and evaluation of its disclosure
controls and procedures,  with the conclusion that it has an effective system of
disclosure controls, and procedures as defined under MI 52-109. In reaching this
conclusion, the Company recognizes that two key factors must be and are present:

a)       the  Company  is very  dependant  upon  its  advisors  and  consultants
         (principally its legal counsel) to assist in recognizing, interpreting,
         understanding  and complying  with the various  securities  regulations
         disclosure requirements; and

b)       an active Board and management with open lines of communication.

The Company has a small staff with varying  degrees of knowledge  concerning the
various regulatory disclosure  requirements.  The Company is not of a sufficient
size to justify a separate department or one or more staff member specialists in
this area.  Therefore the Company must rely upon its advisors and consultants to
assist it and as such they form part of the disclosure controls and procedures.

Proper  disclosure  necessitates  that one not  only be  aware of the  pertinent
disclosure requirements, but one is also sufficiently involved in the affairs of
the Company  and/or  receives the  communication  of  information  to assess any
necessary disclosure  requirements.  Accordingly,  it is essential that there be
proper communication among those people who manage and govern the affairs of the
Company,  this being the Board of Directors and senior  management.  The Company
believes this communication exists.

                                      F-37
<PAGE>

While the Company believes it has adequate disclosure controls and procedures in
place,  lapses in the  disclosure  controls  and  procedures  could occur and/or
mistakes could happen.  Should such occur,  the Company will take whatever steps
necessary to minimize the consequences thereof.

SHARE DATA INFORMATION

As of March 29, 2006 there were 48,933,065 common shares, 2,071,904 warrants and
4,761,000  stock  options  outstanding.  As  a  result  of a  private  placement
completed  on March  21,  2006,  the  Company  has  2,865,000  special  warrants
outstanding.  Each special  warrant will entitle the holder to acquire one unit,
without payment of additional consideration,  consisting of one common share and
one half common share purchase  warrant.  Each full warrant  entitles the holder
thereof to purchase one additional common share in the capital of the Company at
a price of $3.80 per share until March 21, 2010.

INVESTOR RELATIONS

The  Company   currently  does  not  engage  any  outside   investor   relations
consultants.  Mr. Sean Hurd is the Company's Vice-President,  Investor Relations
and coordinates investor relations' activities.














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