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, 2003
                                       or

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

                         Commission file number: 0-30464

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

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

                                BRITISH COLUMBIA
                 (Jurisdiction of incorporation or organization)

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

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

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

                           COMMON SHARES, NO PAR VALUE
                                (Title of Class)

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

                                 NOT APPLICABLE
                                (Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of December 31, 2003.
                36,381,452 COMMON SHARES AS OF DECEMBER 31, 2003

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

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

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

                                                                               1
<PAGE>


GENERAL INFORMATION:

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

GLOSSARY OF TERMS

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

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

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

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

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

G/T:                         grams per tonne

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

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

KM:                          Kilometre

M:                           Meter

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

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

MINE:                        In Argentina, a mine or  "mina" is a real  property
                             interest. It is a right of exploration granted on a
                             permanent basis after the completion of an official
                             survey  for as  long  as the  right  is  diligently
                             utilized  and  semi-annual   payments  of  US$17.50
                             (Pesos $40) per claim are made.  A mine may consist
                             of one or several claims or "pertinencias".  In the
                             case of vein  deposits,  each claim is a maximum of
                             200 by 300 meters or six hectares; for disseminated
                             deposits,  each claim is up to one square kilometer
                             or 100 hectares.

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

PPM:                         parts per million


                                                                               2
<PAGE>


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

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

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

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

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

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

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

AG:                          Silver

AS:                          Arsenic

AU:                          Gold

BA:                          Barium

CO:                          Cobalt

CU:                          Copper

MO:                          Molybdenum

PB:                          Lead

SB:                          Antimony

ZN:                          Zinc


MINERALS:

BIOTITE:                     An iron and magnesium bearing mica mineral.

CARBONATE:                   A mineral containing the radical CO3.

CHALCOPYRITE:                A sulfide mineral containing copper and iron.

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

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

MAGNETITE:                   A magnetic iron oxide mineral.

PYROXENE:                    An aluminosilicate of magnesium and iron.

PYRRHOTITE:                  A magnetic sulfide of iron.


ROCK TYPES:

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

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

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



                                                                               3
<PAGE>
DIORITE:                     An  intrusive  rock composed  essentially  of sodic
                             plagioclase, hornblende, biotite, or pyroxene.

LIMESTONE:                   A  sedimentary rock  consisting chiefly  of calcium
                             carbonate.

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

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

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

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



















                                                                               4

<PAGE>


                                     PART I

ITEM 1.  DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
--------------------------------------------------------------------------------

Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
--------------------------------------------------------------------------------

Not applicable.

ITEM 3.  KEY INFORMATION.
--------------------------------------------------------------------------------

SELECTED FINANCIAL DATA

The selected  financial  data of IMA  Exploration  Inc. (the  "Company") for the
years ended December 31, 2003,  2002 and 2001 was derived from the  consolidated
financial   statements   of   the   Company   which   have   been   audited   by
PricewaterhouseCoopers  LLP, independent Chartered Accountants,  as indicated in
their report which is included  elsewhere  in this annual  report.  The selected
financial  data set forth for the years  ended  December  31,  2000 and 1999 are
derived  from the  Company's  audited  consolidated  financial  statements,  not
included herein.

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

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

To date, the Company has not generated  sufficient  cashflow from  operations to
fund ongoing  operational  requirements  and cash  commitments.  The Company has
financed its operations  principally  through the sale of its equity securities.
The  Company  considers  that  it  has  adequate   resources  to  meet  property
commitments on its existing property holdings;  however, at present, the Company
does not have  sufficient  funds to conduct  exploration  programs on all of its
existing  properties  and will  need to  obtain  additional  financing  or joint
venture partners in order to initiate any such programs.  See "Item 5. Operating
and Financial Review and Prospects".

CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

                      (CDN$ IN 000, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                   YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------------
                                   2003          2002             2001           2000            1999
<S>                              <C>           <C>              <C>           <C>              <C>
Revenue                              $0            $0               $0             $0              $0

General Corporate
Expenditures                     (2,937)       (1,278)            (836)        (1,066)           (941)

General Exploration
Expenditures                       (227)         (180)            (110)          (137)           (160)


Foreign Exchange                    (26)           (8)              17             (9)            (25)
Gain (Loss)




                                                                               5
<PAGE>


<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                   YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------------
                                   2003          2002             2001           2000            1999
<S>                              <C>           <C>              <C>           <C>              <C>
Interest and
Miscellaneous Income                 67            27               97            157              47

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

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

Write-off of Mineral
Properties                         (777)            -              (21)          (790)            (99)

Net Income (Loss)                (3,418)       (1,440)            (882)        (2,024)         (1,746)

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

Weighted Average
Number of Shares
Outstanding                      32,252        23,188           15,104        11, 939           7,567

Working Capital                   4,747         1,431              733          1,435           1,261

Capital Assets                       40            46               57             74              90

Mineral Properties                6,884         5,848            4,581          3,282           2,083

Long-Term Debt                        -             -                -              -               -

Total Assets                     12,098         7,432            5,487          4,980           3,602

Net Assets -
Shareholder's
Equity                           11,671         7,324            5,372          4,790           3,434

</TABLE>



                                                                               6
<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):

<TABLE>
                      (CDN$ IN 000, EXCEPT PER SHARE DATA)
<CAPTION>
                               2003           2002            2001           2000           1999
<S>                           <C>            <C>             <C>            <C>            <C>
CONSOLIDATED STATEMENT
OF OPERATIONS

Earnings (Loss) for
the year under
Canadian GAAP                 $(3,418)       $(1,440)          $(882)       $(2,024)       $(1,746)

Mineral property and
deferred exploration
costs for the year             (1,813)        (1,267)         (1,321)        (1,989)          (786)

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

Mineral property and
deferred exploration
costs written off
during the year which
would have been
expensed in the year
incurred                          777              -              21            790             99


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

Earnings (Loss) for
the year under US GAAP
before comprehensive
income adjustments            $(4,598)       $(2,809)        $(2,181)       $(3,224)       $(3,115)

Unrealized gains on
available-for-sale
securities                        434             55               -              -            (82)
                         ----------------------------------------------------------------------------
Comprehensive
Income (Loss)                 $(4,164)       $(2,754)        $(2,181)       $(3,224)       $(3,197)
                         ============================================================================


                                                                               7

<PAGE>

<CAPTION>
<S>                           <C>            <C>             <C>            <C>            <C>
                         ============================================================================

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

                               2003            2002          2001           2000           1999
                          ---------------------------------------------------------------------------
SHAREHOLDERS' EQUITY

Balance per Canadian
GAAP                          $11,671          $7,324          $5,372         $4,790         $3,435

Mineral property and
deferred exploration
costs expensed                 (6,884)         (5,848)         (4,581)        (3,282)        (2,083)

Accumulated other
comprehensive income              489              54               -              -              -
                          --------------------------------------------------------------------------
                               $5,277          $1,530            $790         $1,508         $1,352
Balance per US GAAP
                          ==========================================================================


MINERAL PROPERTIES AND
RELATED DEFERRED COSTS

Balance per Canadian
GAAP                           $6,884          $5,848          $4,581         $3,282         $2,083

Mineral Property
exploration costs and
expenses per US GAAP          $(6,884)        $(5,848)        $(4,581)       $(3,282)       $(2,083)
                         ----------------------------------------------------------------------------
BALANCE PER US GAAP                $-              $-              $-             $-             $-
                         ============================================================================


                                                                               8
<PAGE>

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

CONSOLIDATED
STATEMENTS OF CASH
FLOWS

OPERATING ACTIVITIES

Cash (used) provided
per Canadian GAAP             $(1,388)        $(1,306)          $(898)         $(987)       $(1,567)

Mineral properties and
deferred costs                 (1,851)         (1,267)         (1,321)        (1,989)          (786)

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

Cash used per US GAAP         $(3,238)        $(2,573)        $(2,219)       $(2,976)       $(3,003)

INVESTING ACTIVITIES

Cash used per Canadian
GAAP                          $(1,873)        $(1,278)        $(1,312)       $(2,004)         $(373)

Mineral properties and
deferred costs                  1,851           1,267           1,321          1,989            786

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

Cash provided (used)
per US GAAP                      $(22)           $(11)             $9           $(15)        $1,063
                         ============================================================================

FINANCING ACTIVITIES

Cash provided per
Canadian and US GAAP           $6,278          $3,264          $1,463         $3,380         $2,553
                         ============================================================================
</TABLE>


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

EXCHANGE RATE HISTORY

The noon rate of  exchange  on June 22,  2004,  reported  by the  United  States
Federal  Reserve Bank of New York for the  conversion  of Canadian  dollars into
United States dollars was CDN$1.3592 (US$0.7357 = CDN$1.00).


                                                                               9
<PAGE>


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 May
31, 2004.

         MONTH                              HIGH                    LOW

         December 2003                     0.7738                 0.7460

         January 2004                      0.7880                 0.7496

         February 2004                     0.7626                 0.7439

         March 2004                        0.7645                 0.7418

         April 2004                        0.7637                 0.7293

         May 2004                          0.7364                 0.7158

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, 1999 - December 31, 1999                       0.6731
        January 1, 2000 - December 31, 2000                       0.6746
        January 1, 2001 - December 31, 2001                       0.6456
        January 1, 2002 - December 31, 2002                       0.6368
        January 1, 2003 - December 31, 2003                       0.7206


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, and will apply to the operations of Golden Arrow Resources
Corporation  ("Golden  Arrow") in the event the  arrangement  is approved by the
Company's  shareholders  (see "Item 4.  Information on the Company - History and
Development of the Company"):

LIQUIDITY AND CASH FLOW: As at the date of this annual  report,  the Company has
not  generated  any  revenues  from  operations  to  fund  ongoing   operational
requirements  and cash  commitments.  The Company has  financed  its  operations
principally  through the sale of its equity  securities.  As at May 31, 2004 the
Company had working capital of approximately $7,600,000. Management believes the
Company has  adequate  resources  to maintain  its ongoing  operations  and will
require additional  financing for planned exploration and property  acquisitions
for the remainder of fiscal 2004.  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 does not, however, have sufficient funds to conduct exploration programs
on all these  properties  and will need to obtain  additional  financing or find
joint venture partners in order to initiate any such programs.

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

                                                                              10
<PAGE>

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.  It is the Company's intention to seek
joint  venture  partners to provide  funding  for further  work on any or all of
those other  properties.  Joint ventures may involve  significant  risks and the
Company may lose any  investment it makes in a joint venture.  Any  investments,
strategic alliances or related efforts are accompanied by risks such as:

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

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

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

PROJECT  DELAY:  The  Company's  minerals  business  is  subject  to the risk of
unanticipated  delays in permitting  its projects.  Such delays may be caused by
fluctuations in commodity prices,  mining risks,  difficulty in arranging needed
financing,  unanticipated  permitting  requirements or legal  obstruction in the
permitting  process  by  project  opponents.  In  addition  to adding to project
capital costs (and possibly operating costs), such delays, if protracted,  could
result in a write-off of all or a portion of the  carrying  value of the delayed
project.

TITLE  TO  PROPERTIES:  The  validity  of  mining  claims,  which  constitute  a
significant  portion of the Company's  undeveloped  property holdings,  is often
uncertain  and may be  contested.  Although the Company has attempted to acquire
satisfactory  title to its undeveloped  properties,  the Company,  in accordance
with mining industry practice,  does not intend to obtain title opinions until a
decision  is made to  develop  a  property,  with the  attendant  risk that some
titles, particularly titles to undeveloped properties, may be subject to contest
by other  parties.  Title to properties  may be subject to litigation  claims by
others. On March 5, 2004 Minera Aquiline  Argentina SA, a subsidiary of Aquiline
Resources Inc.  ("Aquiline"),  commenced an action  against the Company  seeking
damages and a constructive trust over certain of the Company's properties in the
Navidad area.  The Company  believes the Aquiline  legal action is without merit
and will vigorously  defend itself.  A Statement of Defence has been filed.  The
trial has been set for October 11, 2005 in Vancouver,  British  Columbia.  As of
the date of this annual report the outcome is not determinable.  There can be no
assurance  that Golden Arrow will not be joined as a defendant in this action at
some  point  in  the  future.  See  "Item  8.  Financial   Information  -  Legal
Proceedings."

PRICE  FLUCTUATIONS AND SHARE PRICE  VOLATILITY:  In recent years the securities
markets in Canada have  experienced a high level of price and volume  volatility
and the  market  price of  securities  of many  companies,  particularly  junior
mineral  exploration   companies,   like  the  Company,  have  experienced  wide
fluctuations   which  have  not  necessarily   been  related  to  the  operating
performance,  underlying  asset  values  or  prospects  of  such  companies.  In
particular,  the per  share  price of the  Company's  common  shares  on the TSX
Venture Exchange (the "TSX-V") fluctuated from a

                                                                              11
<PAGE>

high of $2.54 to a low of $0.49 during the 12-month  period ending  December 31,
2003.  There can be no assurance that continual  fluctuations  in price will not
occur.

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

INSURABLE  RISKS AND  LIMITATIONS OF INSURANCE:  The Company  maintains  certain
insurance,  however,  such  insurance  is subject  to  numerous  exclusions  and
limitations.  The Company maintains a Total Office Policy in Canadian dollars on
its  principal  offices.  Generally,  the Total  Office  Policy  provides  a 90%
coverage  on  office  contents,  up to  $160,000,  with  a $500  deductible.  In
addition, the policy provides general liability coverage of up to $5,000,000 for
personal  injury,  per occurrence and $2,000,000 for legal liability for any one
premises, with a $500 deductible.  The Company also has insurance coverage of up
to $5,000,000 for non-owned automobile liability.

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

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.

MANAGEMENT:  The Company is  dependent  on the  services of Joseph  Grosso,  the
President and a director of the Company,  Gerald G. Carlson, the Chairman of the
Company's  Board of Directors,  and Arthur Lang, the Company's  Chief  Financial
Officer.  The loss of any of these  people  could have an adverse  affect on the
Company.  Joseph  Grosso  provides  his  services to the Company  through  Oxbow
International Marketing Corp. ("Oxbow"). Gerald G.

                                                                              12
<PAGE>

Carlson  provides his services to the Company through KGE Management Ltd. All of
the Company's other officers and directors are employed directly by the Company.
The Company has entered into consulting agreements with Oxbow and KGE Management
Ltd. The Company has entered into an employment  agreement with Arthur Lang. The
Company  does  not  maintain  "key-man"  insurance  in  respect  of  any  of its
principals.

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

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

As a result of the Provincial  and Municipal  elections in Peru held in November
2002 and the  substantial  investment  required  to  advance  the Rio  Tabaconas
project through the next exploration  stage, in June 2002 the Company  announced
its  intention  to  take a more  measured  approach  to  exploration  on the Rio
Tabaconas  project  to  ensure  that  all  local  cultural,   developmental  and
environmental  concerns in the region have been  addressed  which may pertain to
mining activities. The Company intends to conduct further exploration only after
an agreement  with the local  community of Tamborapa  has been  finalized  and a
Social License to continue has been obtained.  Aided by several local,  national
and international Peruvian Social-Economic consultants, a Company-Community plan
has been  prepared  and the Company has made its  social-economic  policies  and
procedures available to the public.

Argentina has recently  experienced  some  economic and  political  instability.
Management  believes the new democratic elected government is making progress in
the   domestic   economy  and  it  is   improving   the  image  of  the  country
internationally.  Additionally,  management  believes  the  economic  crisis  of
December  2001 has been  overcome,  and  although  the country  defaulted on its
loans,  it has worked out with the  International  Monetary Fund a bail-out loan
agreement.  The Company  maintains  the majority of its funds in Canada and only
forwards sufficient funds to meet current obligations and overhead in Argentina.
The Company does not believe that any current currency restrictions which may be
imposed in Argentina will have any immediate impact on the Company's exploration
activities.

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


                                                                              13
<PAGE>



ARGENTINA

MINING INDUSTRY

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

MINING LAW IN ARGENTINA

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

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

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

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

REGULATORY ENVIRONMENT

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

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

POLITICAL ENVIRONMENT AND ECONOMY

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

PERU

MINING INDUSTRY

Peru has a lengthy  history  of mining  activities  that  predates  the  Spanish
conquistadors.  Although  political  unrest  and  instability  have  slowed  the
development of some of Peru's ore bodies in recent years, mining continues to be
an important  contributor  to the national  economy and  exploration  by foreign
companies  is  accelerating  due to the


                                                                              14
<PAGE>



abundance of mineral sources. Peru is already a substantial producer of at least
six metals and may have unexplored and  unexploited  reserves in these and other
metals.  Peru  ranks  among  the top 20 gold  producing  nations,  and the newly
expanded  Yanacocha  mine is Latin  America's  largest  single gold producer and
Antamina is the world's largest zinc and copper mine.

MINERAL CONCESSIONS IN PERU

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

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

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

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

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

TERRORISM

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

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

                                                                              15
<PAGE>



compliance with such legislation  and/or regulation to have a material impact on
the Company's operations.  In addition,  certain types of operations require the
submission  and  approval of  environmental  impact  assessments.  Environmental
legislation  is  evolving  in a  manner  which  means  stricter  standards,  and
enforcement,   fines  and  penalties  for  non-compliance  are  more  stringent.
Environmental  assessments  of proposed  projects  carry a heightened  degree of
responsibility for companies and directors,  officers and employees. The cost of
compliance  with changes in  governmental  regulations has a potential to reduce
the profitability of operations.  The Company intends to ensure that it complies
fully with all environmental regulations relating to its operations in Argentina
and Peru.

The  provincial  government of Chubut  Province,  Argentina has enacted  certain
anti-mining  laws  banning  the use of cyanide and  open-pit  mining in metallic
extraction  in the  Province  of  Chubut.  The  provincial  legislation  is more
restrictive than current federal  Argentinean mining laws. The Company has hired
a mining engineering  consultant to oversee all environmental and socio-economic
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,  Peru and Canada
make it  subject to  foreign  currency  fluctuations  and such  fluctuation  may
adversely  affect the Company's  financial  position and results.  The Company's
property,  option and mining expenses are generally denominated in U.S. dollars.
As such, the Company's  principal  foreign  exchange  exposure is related to the
conversion of the Canadian dollar into U.S. dollars.  The Canadian dollar varies
under market  conditions.  Until the beginning of 2004, the Canadian  dollar has
experienced an appreciation  against the U.S. dollar, which requires the Company
to spend less Canadian  dollars on its projects.  Continued  fluctuation  of the
Canadian  dollar  against the U.S.  dollar will continue to affect the Company's
operations and financial position. The Company's foreign subsidiaries comprise a
direct and integral  extension of the Company's  operations.  These subsidiaries
are also  entirely  reliant  upon the Company to provide  financing in order for
them to continue their  activities.  Consequently,  the  functional  currency of
these  subsidiaries  is considered  by management to be the Canadian  dollar and
accordingly  exchange  gains and losses are  included in net income.  Management
does not believe the Company is subject to material  exchange rate exposure from
any  fluctuation of the Argentine or Peruvian  currencies.  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.

In addition,  it is  anticipated  that Golden Arrow's  shares,  if traded in the
United States,  will trade at less than US$5.00 per share and will be subject to
the penny stock rules.  The Company's  shares and Golden  Arrow'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/or  Golden  Arrow,  and they may be forced to hold it
indefinitely.


                                                                              16

<PAGE>


ENFORCEMENT  OF LEGAL  PROCESS:  It may be difficult to bring and enforce  suits
against  the  Company  and  Golden  Arrow.  The  Company  and  Golden  Arrow are
corporations  incorporated in British Columbia. None of the Company's nor Golden
Arrow's  directors  are residents of the United States and all, or a substantial
portion,  of their assets are located outside of the United States. As a result,
it may be difficult for U.S.  holders of the Company's and Golden Arrow's common
shares to effect service of process on these persons within the United States or
to  enforce  judgements  obtained  in the  U.S.  based  on the  civil  liability
provisions of the U.S. federal securities laws against the Company, Golden Arrow
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,  Golden  Arrow 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,  Golden  Arrow 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;
     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.

LACK OF PUBLIC  MARKET IN THE UNITED  STATES:  In the event the  arrangement  is
consummated,  management  does not believe there will be a public market for the
Golden Arrow common shares in the United States. See "Item 4. Information on the
Company - History and Development of the Company."  Management  anticipates that
Golden Arrow will seek to have its common shares quoted on the  Over-The-Counter
Bulletin Board following  completion of the Arrangement;  however,  there are no
assurances  as to if, or when,  the Golden Arrow common shares will be quoted on
the Over-The-Counter Bulletin Board. Consequently, Golden Arrow shareholders may
not be able to use their shares for  collateral  or loans and may not be able to
liquidate at a suitable price in the event of an emergency. In addition,  Golden
Arrow  shareholders  may not be able to resell their shares in the United States
and may have to hold them indefinitely.


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

                                                                              17
<PAGE>

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 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

                                                                              18
<PAGE>


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.

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 will have the result of dividing its present
mineral   resource   assets  between  two  separate   public   companies.   Upon
implementation  of the  corporate  reorganization,  the Company will continue to
hold the Navidad silver-lead-copper project and certain other mineral properties
in central Chubut  Province,  Argentina,  while the newly created public company
will hold the other resource assets of the Company.

Under the  reorganization,  the  Company's  most advanced  project,  the Navidad
silver-lead-copper  project and certain other Navidad area properties in central
Chubut Province,  Argentina (the "Navidad Properties") will continue 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") will be transferred to Golden Arrow, a new public company
formed to effect

                                                                              19
<PAGE>


the  reorganization.  These two separate  public  companies will be owned by the
existing shareholders of the Company and each will have a separate focus. Golden
Arrow will be committed to grass roots exploration while the Company will retain
the Navidad project and focus 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  remaining  projects  outside of Navidad  will be held by Golden Arrow which
will  initially  have the same  board of  directors  as the  Company,  and it is
intended that Golden Arrow will initially be managed by the same management team
as the  Company.  Golden  Arrow  will  then be  able  to  focus  on  grass  root
exploration for economic mineral  discoveries.  Management  believes the markets
will then be able to fairly value these exploration assets.

The common shares of Golden Arrow will be  distributed  to  shareholders  of the
Company in proportion to their present  shareholdings  in the Company and on the
basis of one Golden  Arrow  share for every 10 shares of the Company  held.  The
reorganization is 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.

The reorganization will be implemented by a Plan of Arrangement under the BCBCA.
Once the  Company's  shareholders  and  optionholders  have approved the Plan of
Arrangement,  the  Supreme  Court of the  Province of British  Columbia  will be
requested to grant its final approval.

The following is a summary of the steps necessary to effect the arrangement,  in
the sequence they will occur, and which will occur on the effective date without
any action on the part of the securityholders:

     (a)  the Company's authorized share structure shall be amended by:
          (i)    altering the name of the  100,000,000 common shares without par
                 value to be  100,000,000  Class  A  Common  shares  without par
                 value; and
          (ii)   creating the following two new classes of shares:
                 (A) an unlimited number of common shares without par value; and
                 (B) an  unlimited  number of special shares without par value;

     (b)  Golden Arrow's authorized share structure shall be amended by creating
          a new class of shares  consisting of an unlimited  number of preferred
          shares without par value having the rights and restrictions set out in
          Golden Arrow's Articles;

     (c)  Each  common  share  of the  Company  issued  and  outstanding  on the
          effective  date (other than  shares held by  dissenting  shareholders)
          will  be  exchanged  for one  new  common  share  of the  Company  and
          one-tenth of one special share of the Company;

     (d)  The common  shares of the Company  exchanged for the new common shares
          of the Company and the Company's special shares shall be cancelled;

     (e)  IMA  Holdings  Corp.  will  transfer  to the  Company,  with  good and
          marketable title free and clear of all encumbrances, all of the shares
          of Inversiones  Mineras Argentinas Holdings (BVI) Inc., IMPSA BVI Inc.
          and IMPSA Resources  Corporation held by it. As consideration for such
          shares  transferred  to the Company,  the Company will reduce the debt
          owed to it by IMA Holdings Corp. by an amount equal to the fair market
          value of such shares;

     (f)  Each holder of the Company's  special shares will transfer,  with good
          and  marketable  title  free and clear of all  encumbrances,  all such
          shares to Golden Arrow.  As  consideration  for the Company's  special
          shares  transferred  to it,  Golden Arrow will issue to such  holders,
          Golden  Arrow  common  shares on the basis of one Golden  Arrow common
          share  for  every one whole  special  share of the  Company  held by a
          respective holder;

     (g)  the Company will sell and transfer  the  Transferred  Assets to Golden
          Arrow in  consideration  for the issuance by Golden Arrow of 1,000,000
          Golden Arrow  preferred  shares having a collective  fair
                                                                              20

<PAGE>


          market value equal to an amount  determined by the Company's  board of
          directors as of the  effective  date as being equal to the fair market
          value of the assets being transferred to Golden Arrow;

     (h)  The Company  will  purchase for  cancellation  the  Company's  special
          shares held by Golden Arrow in  consideration  for the issuance by the
          Company to Golden Arrow of a promissory note from the Company having a
          principal  amount and fair market  value equal to the  aggregate  fair
          market  value  of  the   Company's   special   shares   purchased  for
          cancellation (the "IMA Note");

     (i)  The  authorized  share  structure  of the Company  shall be amended by
          eliminating  the  100,000,000  Class A common shares without par value
          and the unlimited special shares without par value, none of which will
          then be issued;

     (j)  Golden Arrow will purchase for cancellation the Golden Arrow preferred
          shares held by the Company in consideration for the issuance by Golden
          Arrow to the Company of a  promissory  note from Golden Arrow having a
          principal  amount and fair market  value equal to the  aggregate  fair
          market  value of the  Golden  Arrow  preferred  shares  purchased  for
          cancellation (the "Golden Arrow Note");

     (k)  The  authorized  share  structure  of Golden Arrow shall be amended by
          eliminating the unlimited  preferred shares without par value, none of
          which will then be issued; and

     (l)  The  Company  will  pay  the  principal  amount  of the  IMA  Note  by
          transferring  to Golden  Arrow the  Golden  Arrow  Note  which will be
          accepted by Golden Arrow as full payment,  satisfaction  and discharge
          of the Company's  obligations  under the IMA Note and  simultaneously,
          Golden Arrow will pay the principal amount of the Golden Arrow Note by
          transferring  to the  Company,  the IMA Note which will be accepted by
          the Company as full  payment,  satisfaction  and  discharge  of Golden
          Arrow's  obligation  under the Golden Arrow Note. The IMA Note and the
          Golden Arrow Note will both thereupon be cancelled.

The  effect  of the  Arrangement  is  illustrated  by the  following  simplified
diagrams:

                                                                              21
<PAGE>
IMMEDIATELY PRIOR TO THE ARRANGEMENT

                                    TABLE A

                        IMA Exploration Inc.                Golden Arrow
                        /       |
                       /        |
                      /        100%
                     /          |
                    /    IMA Holdings Corp
                   /      /     |      \    \
                  /      /      |       \    80.69%
                 /      /       |        \         IMPSA Resources
                /      /        |         \          Corporation
               /      /         |          \
              /       /         |          100%
             /       /          |           \
           80%      /           |            \
            /    20%            |             \
CANADA     /      /             |              \
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
         /      /               |               \
        /      /               100%              \
       /      /                 |                 \
      /      /          IMA Navidad (BVI) Inc.     \
     /      /                   |                   \ Inversiones Mineras
IMPSA BVI Inc.                 100%                   Argentinas Holdings
     |                          |                           (BVI) Inc.
     |                          |                               |
     |                   Inversiones Mineras                    |
    100%                   Argentinas Inc.                     100%
     |                          |                               |
BVI/BARBADOS                    |                               |
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ARGENTINA/PERU                  |                               |
     |                         100%                             |
     |                          |                               |
Minera IMP - Peru         Inversiones Mineras           Inversiones Mineras
    S.A.C.                   Argentinas S.A.               Australes S.A.
     |                          |                               |
     |                          |                               |
     |                          |                               |
     |                          |                               |
Peru Properties              Navidad Area                 Non-Navidad Area
                              Properties               Properties Argentina



                                                                              22

<PAGE>

IMMEDIATELY AFTER THE ARRANGEMENT

                                    TABLE B

IMA Exploration Inc.                                Golden Arrow
        |                                              /   |      \
        |                                             /    |       80.69%
       100%                                          /     |
        |                                           /      |     IMPSA Resources
IMA Holdings Corp.                                 /       |        Corporation
        |                                         /         \
CANADA  |                                        /           \
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
       100%                               100%                    100%
        |
IMA Navidad (BVI) Inc.              Inversiones Mineras       IMPSA BVI Inc.
        |                           Argentinas Holdings            |
        |                              (BVI) Inc.                  |
        |                                  |                       |
       100%                                |                       |
        |                                  |                       |
Inversiones Mineras                        |                       |
  Argentinas Inc.                         100%                    100%
        |                                  |                       |
BVI/BARBADOS                               |                       |
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ARGENTINA/PERU                             |                       |
        |                                  |                       |
       100%                                |                       |
        |                                  |                       |
Inversiones Mineras                 Inversiones Mineras       Minera IMP - Peru
  Argentinas S.A.                       Australes S.A.             S.A.C.
        |                                  |                       |
        |                                  |                       |
  Navidad Area                           Non-Navidad          Peru Properties
   Properties                          Area Properties
                                           Argentina


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.

                                                                              23
<PAGE>


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
$1,850,761,  $1,266,555,  and $1,320,777 and capital assets of $21,875, $11,201,
and $8,012  for the fiscal  years  ended  December  31,  2003,  2002,  and 2001,
respectively.  For the three months  ended March 31, 2004,  the Company has made
additions to mineral  properties and deferred costs of approximately  $1,433,000
and additions to capital assets of approximately $75,000.

During the fiscal year ended December 31, 2003, the Company wrote down the value
of its mineral  properties  and deferred costs by $776,626.  This  adjustment of
property  values  reflected the  expiration  of the agreement  with Barrick Gold
Corporation on the Company's  Valle de Cura area  properties.  During the fiscal
year ended December 31, 2002 the Company did not terminate any option agreements
on  properties  and mineral  claims.  During the fiscal year ended  December 31,
2001, the Company  terminated option agreements on properties and mineral claims
resulting in the  write-off  of mineral  properties  and  deferred  costs in the
amounts of $21,483.

PLANNED EXPLORATION EXPENDITURES AND PROPERTY PAYMENTS

During the nine month  period  from March 31,  2003 to December  31,  2003,  the
Company has no planned  exploration  expenditures in Argentina for the Valle del
Cura region, the Gualcamayo region, or the NW San Juan region. The Company plans
to expend  $2,100,000  in Argentina  on Phase II of the drilling  program on the
Navidad project.

For the  Company's  other  Argentinean  properties,  the  majority  of which are
proposed  to be  transferred  to Golden  Arrow,  a budget of  $350,000  has been
approved  for work on the  Laguna de los  Toros  property.  It is the  Company's
intention to seek joint venture  partners to provide funding for further work on
any or all of those other properties. On March 6, 2003, the Company entered into
an agreement granting Amera Resources Corporation  ("Amera"),  an Option to earn
51% undivided interest on Mogote (Arturo's)  Property.  Joseph Grosso,  Nikolaos
Cacos and David Terry,  officers and/or  directors of the Company,  are officer,
directors and/or employees of Amera. Amera can earn its interest in the property
by issuing 1,650,000 common shares to the Company and incurring  US$1,250,000 of
expenditures  (including work programs and underlying option  payments),  over a
period of five years. In addition, Amera has agreed to reimburse the Company for
past  payments made and  expenditures  which had been incurred by the Company on
the Mogote  (Arturo's)  Property.  As at December 31, 2003, Amera had reimbursed
the Company $192,952 and $4,902 remained  outstanding and is included in amounts
receivable.  As at December 31, 2003, the Company had received 100,000 shares of
Amera at a recorded  amount of $45,000.  On April 8, 2004, the Company and Amera
entered  into a  further  agreement  whereby  Amera can earn an  additional  24%
interest,  for a total 75% interest,  after earning the initial 51% interest, by
issuing  300,000 common shares to the Company and conducting an additional US $3
million  of  exploration  expenditures  over a three year  period.  See "Item 4.
Information  on the  Company -  Properties,  Plants and  Equipment  -  Principal
Properties - Argentinean  Properties - San Juan Province  Properties - Northwest
San Juan - Mogote  (Arturo's)  Property"  and "Item 7.  Major  Shareholders  and
Related Party Transactions - Related Party Transactions."

The Company plans to spend  approximately  $200,000 on the Rio Tabaconas project
(formerly known as Tamborapa  project) in Peru during the nine month period from
March 31, 2004 to December 31, 2004. In June 2002 the Company announced it would
take a more measured approach to exploration on the project to ensure that local
cultural,   developmental  and  environmental   concerns  pertaining  to  mining
activities in the region would be  addressed.  See "Item 4.  Information  on the
Company -  Properties,  Plants and  Equipment - Principal  Properties - Peruvian
Properties."  All  exploration  activities have been deferred until an agreement
with the local community of Tamborapa can be finalized. The Company has declared
force  majeure,  as  allowed  under the  property  option  agreement.  A Company
Community  plan  has  been  prepared  with the aid of  several  Peruvian  social
economic  consultants  and has been  presented  for  discussion to the community
leaders, government officials and interested party leaders and as of the date of
this report no agreement has been reached.  Thus the Company (or Golden Arrow if
the  arrangemnt  is  approved)  will  continue to work with the  various  social
economic  consultants  to develop a plan which will be acceptable to all parties
in the community of Tabaconas.  Upon  acceptance by the community of the Company
Community  plan the Company (or Golden  Arrow if the  arrangement  is  approved)
plans to proceed with the next phase of a diamond drill program.

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


                                                                              24
<PAGE>

As of June 22, 2004,  the Company does not have  sufficient  working  capital to
fund all of its planned  exploration work and property  commitments and meet all
of its  ongoing  overhead  obligations.  The  Company  will  continue to rely on
successfully  completing  additional  equity financing  and/or  conducting joint
venture arrangements to conduct further exploration on its properties. There can
be no assurance  that the Company will be  successful  in obtaining the required
financing or negotiating  joint venture  agreements.  The failure to obtain such
financing  or  joint  venture  agreements  could  result  in  the  loss  of,  or
substantial dilution of the Company's interest in its properties.

BUSINESS OVERVIEW

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

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

In March 2001,  the Company  granted Rio Tinto  Mining and  Exploration  Limited
("Rio Tinto") an option to acquire a majority interest in the Mogote property in
the Valle de Cura region of San Juan  Province,  Argentina.  This  agreement was
terminated by Rio Tinto in December  2001.  In March 2003 (as amended  September
30, 2003), the Company granted Amera Resources  Corporation  ("Amera") an option
to  acquire  a 51%  interest,  amended  on April 8, 2004 to 75%,  in the  Mogote
property.  Recent  exploration  results from Amera's work have been encouraging.
See "Item 4.  Information  on the Company -  Properties,  Plants and Equipment -
Principal  Properties - Argentinean  Properties - San


                                                                              25
<PAGE>

Juan Province Properties - Northwest San Juan - Mogote (Arturo's)  Property" and
"Item 7. Major  Shareholders  and Related  Party  Transactions  - Related  Party
Transactions."

In September 2003, the Company granted Cloudbreak Resources Ltd.  ("Cloudbreak")
an option to acquire a 50%  interest  in the  Gollette  property  located in the
Valle de Cura. Cloudbreak can increase its interest to 75% by funding additional
work expenditures and development costs.

The Company acquired the Peruvian property known as Rio Tabaconas in 1997 by way
of an option. In addition the Company owns claims which surround and overlie the
optioned concessions. Mine workings in the Rio Tabaconas area are believed to be
on the order of 100 to 150 years old.  The first modern  examination  of what is
now  the  Rio  Tabaconas  property  was  conducted  in the  late  1980's  when a
government-funded  Peruvian-German consortium re-opened the old mine workings on
Cerro Tablon and carried out experimental  geochemical and geological studies in
the mine area.  Since that time,  the  property  has been  briefly  examined and
sampled by a number of companies at the  Company's  invitation.  The Company had
spent $3,164,554 on Rio Tabaconas to the end of December 2003.

On June 28, 2002, the Company  suspended further  exploration  activities at the
Rio Tabaconas project. The Company has deferred any further exploration until an
agreement with the local community has been finalized.  The Company has declared
force  majeure,  as allowed  under the option  agreement.  The  Company  and the
optionor have revised the timing of the remaining US $1,315,000 option payments.
On August 1,  2003,  the  Company  commenced  paying US $1,500  per month to the
optionor as compensation  during this waiting period.  The Company is working to
ensure that all local cultural,  developmental and environmental concerns in the
region  have  been  addressed  which may  pertain  to  mining  activities.  Upon
acceptance by the community of a Community Agreement between the Company and the
local community, the Company plans to proceed with the next phase of the diamond
drill  program.  A detailed  3,000 metre drill plan has been drafted  based upon
evaluation of geological,  geochemical  and  geophysical  information.  The next
phase of the exploration  program is expected to be completed  after  finalizing
the Community Agreement.

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

In early 2003, the Company focused its efforts on its Navidad Area Properties in
Chubut Province located in southern  Argentina.  The preliminary  results of its
initial  exploration  efforts were very encouraging.  A Phase I drilling program
commenced  in November  2003 and  continued  into March 2004.  A second phase is
scheduled to commence in May 2004.At the date of this report the Company has not
received any results from this  program.  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.

In early 2003 the Company  negotiated the sale of three  non-core  properties in
Chubut  Province to Amera,  Amera has issued  500,000 shares to the Company at a
deemed price of $225,000 for these properties.  In addition, in the event that a
decision is made to place any of the  properties  into  commercial  production a
bonus of  US$250,000  is payable  and the  Company  has  retained a net  smelter
returns royalty ("NSR") of 3%. See "Item 7. Major Shareholders and Related Party
Transactions - Related Party Transactions."

GOVERNMENT REGULATIONS

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

ORGANIZATIONAL STRUCTURE

The Company has one direct wholly-owned subsidiary,  IMA Holdings Corp. ("IHC"),
a British Columbia company and one 80% owned subsidiary,  IMPSA BVI Inc. ("IMPSA
(BVI)"), a British Virgin Islands company.


                                                                              26
<PAGE>

IHC has two direct  wholly-owned  subsidiaries,  IMA  Navidad  (BVI) Inc.  ("IMA
Navidad"),  a British Virgin Islands company, and Inversiones Mineras Argentinas
Holdings (BVI) Inc. ("IMA Holdings  (BVI)"),  a British Virgin Islands  company.
IHC  has  one  direct  80.69%  owned  subsidiary,  IMPSA  Resources  Corporation
("IMPSA"),  a private British Columbia company,  and holds a direct 20% interest
in IMPSA (BVI).

IMA  Navidad  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.

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

IMA  Holdings  (BVI)  has  one  wholly-owned  subsidiary,   Inversiones  Mineras
Australes S.A., an Argentine company.

The Company's  current corporate  structure is depicted in Table A (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  in known mining areas  adjacent to, or in close  proximity to, known
major  discoveries,  with a focus in Argentina  and Peru. As of the date of this
annual  report,  all of the Company's  properties are without known reserves and
the Company's operations are exploratory in nature.

PRINCIPAL PROPERTIES

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

CHUBUT (PATAGONIA) AREA PROPERTIES

Since 2001 the  Company  has  acquired a 100%  interest in a number of claims in
western  Chubut  Province.  These  properties  include  the  Laguna de los Toros
property,  Evelina (Las Bayas) property, Toros II property,  Victoria properties
(several), Costa properties.  Lago Pico property,  Corcovado property, Loma Alto
property, Ruto property,  Alberto property,  Rolando property, Cecilia property,
Pedro property,  Fernando property, Ivan property and Daniel property.  Together
they  cover  an area  of  approximately  86,000  hectares.  A  number  of  these
properties have been sold or farmed-out to joint venture partners.  All of these
Chubut properties are in the exploration stage.

VALLE DE CURA AREA PROPERTIES

The Company has acquired  100%  interests in a number of properties in the Valle
de Cura area  totaling  approximately  34,000  hectares.  Beginning  in 1999 IMA
entered into an option  agreement  with Barrick  pursuant to which Barrick could
acquire an  interest  in the  properties.  Both  Barrick  and the  Company  have
fulfilled all their  obligations  under this agreement and Barrick  notified the
Company on December  15, 2003 that they would not be  exercising  their  option.
Accordingly   this  agreement  has  terminated  and  other  partners  are  being
considered  for these drill ready  projects.  One of these  properties  has been
farmed-out to another joint venture partner.


                                                                              27
<PAGE>

NORTHWEST SAN JUAN AREA PROPERTIES

The  Company  has  acquired  100%  interests  in a number of  properties  in the
Northwest area of San Juan province totaling  approximately 20,000 hectares. The
Arturo or Mogote  property is under option to the Company and is  currently  the
subject of a joint venture  agreement  with Amera whereby Amera can earn up to a
75% interest in the  property.  There are no current plans for work on the other
properties in this area.

GUALCAMAYO AREA PROPERTIES

The Company has also  acquired  interests in properties in other mining areas of
interest in San Juan province totaling approximately 50,000 hectares.  There are
no current plans for work on the properties in this area.

RIO TABACONAS PROPERTY (PERU)

The 9,000  hectare  Rio  Tabaconas  property  is located in  northwestern  Peru,
approximately  35  kilometers  south of the  southernmost  tip of Ecuador in the
District of Tabaconas,  Province of San Ignacio,  Department  of Cajamarca.  The
Company has an option to purchase  three  claims  covering a 2,890  hectare area
within  the  central  part of the  property  and holds 100%  ownership,  with no
outstanding  royalties,  on the  remainder  of the  property.  In June  2002 the
Company  announced it would take a more measured  approach to exploration on the
project to ensure that local cultural,  developmental and environmental concerns
pertaining  to  mining  activities  in  the  region  would  be  addressed.   All
exploration  activities  have been  deferred  until an agreement  with the local
community of Tamborapa  can be finalized.  IMA has declared  force  majeure,  as
allowed under the property option  agreement.  A Company Community plan has been
prepared with the aid of several  Peruvian social  economic  consultants and has
been presented for discussion to the community leaders, government officials and
interested party leaders and as of the date of this report no agreement has been
reached. Thus the Company will continue to work with the various social economic
consultants  to develop a plan which will be  acceptable  to all  parties in the
community  of  Tabaconas.  Upon  acceptance  by the  community  of  the  Company
Community  plan the  Company  plans to proceed  with the next phase of a diamond
drill program.

During the fiscal years ending  December 31, 2003, 2002 and 2001 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, 2001                $4,581,172                    $109,875                       $ 21,483
      December 31, 2002                $5,847,727                    $180,321                         $ Nil
      December 31, 2003                $6,883,641                    $226,956                       $776,626


</TABLE>





                                                                              28

<PAGE>


                            [Argentina Property Map]



















                                                                              29
<PAGE>


ARGENTINEAN PROPERTIES

NAVIDAD PROJECT

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

PROPERTY DESCRIPTION AND LOCATION

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

MINERAL TITLES INCLUDED IN THE NAVIDAD PROJECT:

--------------------------------------------------------------------------------
FILE NUMBER      YEAR    DATE                 TYPE      NAME      HECTARES
--------------------------------------------------------------------------------
13984            2002    December 6, 2002     CATEO     Gan        10,000
--------------------------------------------------------------------------------

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.
Minimum elevation within the Gan cateo is 1,060 m while the maximum elevation is
1,460 m. Relief is gentle with minor local exceptions.

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

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

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

A high voltage power line running from the Futaleufu site to an aluminum smelter
at  Puerto  Madryn  passes  roughly  50km  south  of the  Navidad  Project.  The
government has announced a contract tendered to construct 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

                                                                              30
<PAGE>

smelter  and other  projects.  Construction  of the  connection  will  bring the
national power grid with easy reach of Navidad.

HISTORY

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

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

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

REGIONAL AND LOCAL GEOLOGY

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

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

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

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

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

Apparently  one of the  controlling  features  of the  San  Jorge  Basin  is the
long-lived,  major  structure  known as the Gastre Fault.  This fault is a wide,
northwest-trending zone of fracturing that appears to have controlled deposition
of 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.


                                                                              31
<PAGE>


DIAMOND DRILLING PROGRAM

Connors Argentina S. A. ("Connors") of Mendoza Argentina  commenced  drilling on
November  26, 2003 and finished  drilling on March 10, 2004,  including a 29 day
break during the Christmas/New Years holidays. During the program 8,853.58m were
drilled  in 53  holes  for an  average  of 118m  per  day  including  moves  and
breakdowns and excepting only the holiday break noted above.

All but one of the holes  recovered HQ diameter  (61mm) core.  The exception was
NV03-04 which was cored to 244.20m with HQ and then recovered NQ core to the end
of the hole at 284.98m.  The drill supplied was  containerized  and mounted on a
tracked  undercarriage  capable of moving itself. Water for drilling was brought
to the drilling sites by a water truck of 9,000 liters that was subcontracted by
Connors.  The water was trucked from several local sources under  agreement with
local surface land owners.

Down hole  surveys  of the holes  were done on all but one hole  using a Tropari
instrument. This instrument is a magnetic compass and inclinometer with a timing
mechanism that blocks the  instrument  once it has stabilized in the hole. It is
then  retrieved  and read by the  geologist.  In  general  the holes had  little
deviation  because of the relatively  large diameter of the drill string and the
relatively short lengths of the holes.

SURVEYED COORDINATES AND ORIENTATIONS OF NAVIDAD DRILLHOLES

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                               dip
                                          E GK faja 2    N GK faja 2   elevation   Az wrt      down      length
Hole ID         local E       local N       (Campo         (Campo        m HAE     GK CI       from        (m)
                                          Inchauspe)     Inchauspe)                north    vertical
----------------------------------------------------------------------------------------------------------------
<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     109.50
----------------------------------------------------------------------------------------------------------------
NV03-02       50,000.0      9,971.1      2,514,802.0    5,304,429.8    1,211.2     30.0       -45.0     154.50
----------------------------------------------------------------------------------------------------------------
NV03-03       51,160.5      9,660.1      2,515,651.6    5,303,580.3    1,178.4     210.0      -45.0     178.50
----------------------------------------------------------------------------------------------------------------
NV03-04       51,160.1      9,669.6      2,515,655.9    5,303,588.6    1,178.6     30.0       -45.0     284.98
----------------------------------------------------------------------------------------------------------------
NV03-05       51,160.1      9,802.1      2,515,722.2    5,303,703.3    1,176.6     30.0       -60.0     217.70
----------------------------------------------------------------------------------------------------------------
NV03-06       49,961.7      9,972.3      2,514,769.5    5,304,449.9    1,218.4     30.0       -45.0     136.20
----------------------------------------------------------------------------------------------------------------
NV03-07       49,919.7      9,965.9      2,514,729.9    5,304,465.4    1,222.2     30.0       -45.0     108.90
----------------------------------------------------------------------------------------------------------------
NV03-08       49,959.8      10,016.3     2,514,789.8    5,304,489.0    1,226.4     210.0      -45.0     146.00
----------------------------------------------------------------------------------------------------------------
NV03-09       49,919.9      10,027.4     2,514,760.8    5,304,518.6    1,231.4     210.0      -45.0     106.10
----------------------------------------------------------------------------------------------------------------
NV03-10       49,961.9      9,953.4      2,514,760.2    5,304,433.5    1,215.1     30.0       -45.0     150.70
----------------------------------------------------------------------------------------------------------------
NV03-11       49,625.2      10,040.0     2,514,511.9    5,304,676.8    1,209.2     120.0      -45.0     133.20
----------------------------------------------------------------------------------------------------------------
NV04-12       51,160.6      9,577.9      2,515,610.5    5,303,509.0    1,155.4     30.0       -65.0     220.00
----------------------------------------------------------------------------------------------------------------
NV04-13       50,876.5      10,015.0     2,515,583.1    5,304,029.5    1,179.4     30.0       -45.0     142.70
----------------------------------------------------------------------------------------------------------------
NV04-14       50,997.6      9,911.7      2,515,636.3    5,303,879.6    1,178.1     210.0      -70.0     158.00
----------------------------------------------------------------------------------------------------------------
NV04-15       51,159.8      9,910.5      2,515,776.1    5,303,797.4    1,167.0     30.0       -60.0     139.55
----------------------------------------------------------------------------------------------------------------
NV04-16       51,161.0      9,451.4      2,515,547.6    5,303,399.2    1,138.2     30.0       -55.0     250.50
----------------------------------------------------------------------------------------------------------------
NV04-17       50,998.8      9,614.4      2,515,488.6    5,303,621.4    1,156.7     30.0       -85.0     164.20
----------------------------------------------------------------------------------------------------------------
NV04-18       51,001.3      9,364.5      2,515,365.9    5,303,403.8    1,137.0     30.0       -55.0     274.70
----------------------------------------------------------------------------------------------------------------
NV04-19       51,001.9      9,826.2      2,515,597.2    5,303,803.4    1,181.7     210.0      -80.0     188.10
----------------------------------------------------------------------------------------------------------------
NV04-20       50,801.6      9,897.6      2,515,459.5    5,303,965.3    1,163.0     210.0      -70.0     70.90
----------------------------------------------------------------------------------------------------------------
NV04-21       50,997.6      9,948.5      2,515,654.7    5,303,911.4    1,174.2     30.0       -45.0     198.10
----------------------------------------------------------------------------------------------------------------
NV04-22       50,998.5      9,977.9      2,515,670.2    5,303,936.4    1,171.9     210.0      -75.0     193.75
----------------------------------------------------------------------------------------------------------------
NV04-23       51,000.7      9,713.6      2,515,540.0    5,303,706.4    1,177.3     210.0      -85.0     191.10
----------------------------------------------------------------------------------------------------------------
NV04-24       50,804.7      10,023.1     2,515,524.9    5,304,072.4    1,173.8     30.0       -50.0     145.60
----------------------------------------------------------------------------------------------------------------
NV04-25       51,204.1      9,014.3      2,515,366.4    5,302,999.1    1,140.0     210.0      -45.0     199.80
----------------------------------------------------------------------------------------------------------------
NV04-26       50,802.1      9,728.9      2,515,375.6    5,303,818.9    1,153.5     32.0       -75.0     134.00
----------------------------------------------------------------------------------------------------------------
NV04-27       50,100.7      9,719.0      2,514,763.2    5,304,161.1    1,164.0     30.0       -45.0     181.50
----------------------------------------------------------------------------------------------------------------


                                                                              32
<PAGE>

<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                                               dip
                                          E GK faja 2    N GK faja 2   elevation   Az wrt      down      length
Hole ID         local E       local N       (Campo         (Campo        m HAE     GK CI       from        (m)
                                          Inchauspe)     Inchauspe)                north    vertical
----------------------------------------------------------------------------------------------------------------
<S>           <C>           <C>          <C>            <C>            <C>         <C>        <C>       <C>
NV04-28       51,164.5      9,865.2      2,515,757.6    5,303,755.8    1,170.6     30.0       -60.0     158.00
----------------------------------------------------------------------------------------------------------------
NV04-29       51,299.1      9,847.6      2,515,865.4    5,303,673.3    1,157.6     210.0      -80.0     158.00
----------------------------------------------------------------------------------------------------------------
NV04-30       51,300.4      9,765.7      2,515,825.5    5,303,601.7    1,159.8     210.0      -80.0     209.00
----------------------------------------------------------------------------------------------------------------
NV04-31       51,160.7      9,666.8      2,515,655.1    5,303,585.9    1,178.5     30.0       -80.0     296.00
----------------------------------------------------------------------------------------------------------------
NV04-32       50,598.0      10,088.9     2,515,378.9    5,304,232.8    1,154.7     30.0       -45.0     154.50
----------------------------------------------------------------------------------------------------------------
NV04-33       50,598.4      10,016.4     2,515,343.0    5,304,169.8    1,154.8     210.0      -80.0     149.00
----------------------------------------------------------------------------------------------------------------
NV04-34       50,180.9      9,955.5      2,514,950.9    5,304,325.8    1,180.0     30.0       -45.0     228.20
----------------------------------------------------------------------------------------------------------------
NV04-35       51,199.5      9,251.1      2,515,480.9    5,303,206.5    1,134.2     30.0       -80.0     293.00
----------------------------------------------------------------------------------------------------------------
NV04-36       50,898.2      9,988.0      2,515,588.3    5,303,995.3    1,176.5     210.0      -80.0     77.00
----------------------------------------------------------------------------------------------------------------
NV04-37       50,899.9      9,914.7      2,515,553.2    5,303,931.0    1,173.8     210.0      -80.0     102.50
----------------------------------------------------------------------------------------------------------------
NV04-38       50,897.2      9,819.7      2,515,503.3    5,303,850.0    1,164.4     30.0       -80.0     107.00
----------------------------------------------------------------------------------------------------------------
NV04-39       50,400.2      9,982.9      2,515,154.5    5,304,239.9    1,157.1     210.0      -80.0     215.00
----------------------------------------------------------------------------------------------------------------
NV04-40       50,399.8      10,098.9     2,515,212.2    5,304,340.5    1,155.9     30.0       -45.0     127.20
----------------------------------------------------------------------------------------------------------------
NV04-41       51,080.8      9,943.4      2,515,724.2    5,303,865.4    1,174.9     30.0       -45.0     145.20
----------------------------------------------------------------------------------------------------------------
NV04-42       51,080.4      9,938.8      2,515,721.5    5,303,861.6    1,174.5     210.0      -80.0     187.90
----------------------------------------------------------------------------------------------------------------
NV04-43       51,080.4      9,853.2      2,515,678.7    5,303,787.4    1,180.3     210.0      -75.0     230.60
----------------------------------------------------------------------------------------------------------------
NV04-44       51,079.3      9,750.3      2,515,626.3    5,303,698.9    1,188.1     210.0      -75.0     232.90
----------------------------------------------------------------------------------------------------------------
NV04-45       51,230.9      9,861.1      2,515,813.0    5,303,719.1    1,164.0     210.0      -80.0     167.00
----------------------------------------------------------------------------------------------------------------
NV04-46       51,232.3      9,760.2      2,515,763.8    5,303,630.9    1,168.6     210.0      -80.0     239.00
----------------------------------------------------------------------------------------------------------------
NV04-47       51,236.7      9,681.0      2,515,728.1    5,303,560.2    1,176.6     30.0       -75.0     236.00
----------------------------------------------------------------------------------------------------------------
NV04-48       51,302.3      9,980.9      2,515,934.8    5,303,787.1    1,147.2     30.0       -45.0     67.50
----------------------------------------------------------------------------------------------------------------
NV04-49       51,301.0      9,915.2      2,515,900.8    5,303,730.8    1,150.5     30.0       -80.0     82.80
----------------------------------------------------------------------------------------------------------------
NV04-50       51,159.9      9,954.9      2,515,798.5    5,303,835.8    1,165.7     30.0       -80.0     113.00
----------------------------------------------------------------------------------------------------------------
NV04-51       51,159.1      9,971.9      2,515,806.2    5,303,850.9    1,165.5     30.0       -45.0     100.50
----------------------------------------------------------------------------------------------------------------
NV04-52       50,896.0      9,948.4      2,515,566.7    5,303,962.1    1,173.4     30.0       -45.0     100.50
----------------------------------------------------------------------------------------------------------------
NV04-53       50,796.8      9,954.7      2,515,483.9    5,304,017.1    1,169.2     30.0       -50.0     97.50
----------------------------------------------------------------------------------------------------------------
                                                                                              Total m   8853.58
----------------------------------------------------------------------------------------------------------------
</TABLE>

All core designated for sampling was 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


                                                                              33
<PAGE>

testing was  undertaken by the Company on the ICP-ORE  technique  that confirmed
its  suitability  for  the  Navidad  mineralization.  That  testing  included  a
precision  test on 30  samples  as well as a  blind  duplicate  pulp  test on 32
samples  both  with  satisfactory  results.  Furthermore,  ICP-ORE  was  used in
characterization  of the in-house standards  developed (see below) and was found
to correlate  well with  methods used by other labs.  In fact all of the ICP-ORE
results for Cu and Pb lay within the two standard deviation limit and hence were
used in the definition of the accepted values for the standards.

QUALITY CONTROL

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

In addition  to the above,  a  systematic  program of  reanalysis  of pulps by a
second   independent  lab  has  been  used  throughout  the  program.   Randomly
pre-selected  samples  are sent from the  primary  laboratory  and they  include
blanks and standards.  Two samples form 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 144 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 company  contracted to transport samples
directly from the core shack in Gastre to the assay  laboratory in Mendoza (some
1,500km). They are not allowed to carry other cargo or make other stops.

GENERAL GEOLOGICAL UNDERSTANDING

Drilling of the Navidad  Hill,  Galena  Hill and  intervening  areas has greatly
increased the geological  understanding  of the main geological  units and their
relationships. Most of the new information was gained by drilling at Galena Hill
as that is where  the  drilling  was  concentrated,  but  advances  were made at
Navidad and Esperanza as well.


                                                                              34

<PAGE>

Stratigraphy  at  Galena  Hill is  comprised  of four  primary  sedimentary  and
volcanic units, from lowest to uppermost these are: a "lower" cycle comprised of
epiclastic,  volcaniclastic  and  volcanic  rocks  which are  unmineralized  and
unaltered  that dips  toward grid  south.  This is overlain by a volcanic  cycle
comprising  latitic volcanic rocks,  generally with quartz eyes, that is altered
and  mineralized  with silver and lead. The latite  sequence  comprises  massive
flows,  amygdaloidal  flows,  flow  breccias and  volcaniclastic  breccias.  The
latites are in turn overlain by pelitic  mudstones  and  limestones of which the
lowermost  portion may be highly  mineralized  with silver and lead. The latites
form a steadily  thickening  wedge towards grid south. It is unclear whether the
geometry of the uppermost  sediments  indicates tectonic folding or perhaps just
local slumping.

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.  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 could be interpreted
as fault gouge or a paleosol.

The  latite  sequence  dramatically  thickness  towards  grid  south  (southwest
relative  to true  north).  It is absent to the north and  thickens to over 220m
within some 500m.  While the capping  sedimentary  sequence  varies in thickness
from zero to about 40m in thick on top of Galena Hill in hole NV04-35 it attains
a thickness  of about 140m on section  51,200E but 200m  further grid south than
NV04-16 shown in figure 23. In hole NV04-35 the latite sequence is at least 150m
thick, but the base was not intersected.

GALENA HILL DRILLING RESULTS

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

The   geometry   of   the   mineralization,   a   gently-dipping,   exposed   to
shallowly-buried  zone of  significant  thickness  suggests  potential  for bulk
mining.  Hence in  determining  how to select  the  mineralized  intercepts  for
tabulation and data manipulation is was decided to use a minimum of about 50 g/t
silver  irrespective of the copper,  lead and zinc grades. The minimum grade was
not  strictly  applied  to the  selection  of the  intercepts  as  samples  with
sub-fifty  gram per tonne silver values were  permitted  for several  samples in
some instances. In some cases where there were long intercepts of mineralization
somewhat below 50 g/t silver, but where there were significant lead values these
intercepts were also listed below.  At this time definitive  "cut-off" grade can
not be established since metallurgical and engineering  parameters have not been
determined.  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,  35 drill holes have been drilled into the Galena Hill deposit.  These
holes outline a silver-lead  deposit ranging in vertical thickness from about 10
to 115 metres with horizontal  dimensions of approximately  400 by 500 metres at
generally greater than 50 g/t silver. The top of the mineralized body is exposed
at surface  in some areas and in other  areas is covered by as much as 40 metres
of barren  sedimentary  cap rock. The shape and aspect of the  mineralized  body
suggests  that it could be bulk  mineable.  Grade  distributions  show a zone of
high-grade silver values with lesser copper and relatively low lead values along
the  northeastern  boundary of the deposit;  this area is  interpreted to be the
source or feeder zone for mineralizing fluids which created the deposit.  Moving
to the  southwest  from this feeder zone,  lead:silver  ratios  increase and are
interpreted as more distal portions of the deposit.


                                                                              35
<PAGE>


MINERALIZED INTERCEPTS FROM DRILLHOLES AT THE GALENA HILL DEPOSIT

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                   composite    vertical
DDH                          from       to         length       thickness    g/t       %         %        %
                             -          -          -            -            Silver    Copper    Lead     Zinc
                inclination  metres     metres     metres       metres       LWA       LWA       LWA      LWA
===============================================================================================================
<S>             <C>          <C>        <C>        <C>          <C>          <C>       <C>       <C>      <C>
NV03-03         -45          3.00       178.50     175.50       124.61       26.2      0.00      1.35     0.04
---------------------------------------------------------------------------------------------------------------
including                    3.00       128.30     125.30       88.96        33.0      0.00      1.68     0.05
---------------------------------------------------------------------------------------------------------------
including                    72.50      107.50     35.00        24.85        49.9      0.01      3.47     0.06
---------------------------------------------------------------------------------------------------------------
including                    86.20      95.45      9.25         6.57         76.8      0.01      5.43     0.06
===============================================================================================================
NV03-04         -45          2.80       266.70     263.90       187.37       74.1      0.00      2.04     0.08
---------------------------------------------------------------------------------------------------------------
including                    2.80       203.00     200.20       142.14       92.3      0.00      2.49     0.11
---------------------------------------------------------------------------------------------------------------
including                    39.60      176.45     136.85       97.16        117.3     0.00      2.99     0.14
---------------------------------------------------------------------------------------------------------------
including                    39.60      121.25     81.65        57.97        141.5     0.00      3.15     0.14
---------------------------------------------------------------------------------------------------------------
including                    39.60      94.70      55.10        39.12        164.3     0.00      2.97     0.10
---------------------------------------------------------------------------------------------------------------
including                    65.00      94.70      29.70        21.09        189.5     0.00      3.06     0.10
---------------------------------------------------------------------------------------------------------------
including                    65.00      83.50      18.50        13.14        241.2     0.00      3.40     0.10
===============================================================================================================
NV03-05         -60          43.30      126.25     82.95        72.17        229.2     0.01      4.24     0.20
---------------------------------------------------------------------------------------------------------------
including                    46.70      113.25     66.55        57.90        271.8     0.01      4.82     0.20
---------------------------------------------------------------------------------------------------------------
including                    46.70      55.90      9.20         8.00         578.9     0.04      6.82     0.36
---------------------------------------------------------------------------------------------------------------
including                    89.00      107.25     18.25        15.88        503.0     0.01      11.19    0.36
===============================================================================================================
NV04-12         -65          18.80      27.80      9.00         8.19         41.6      0.00      8.01     2.56
---------------------------------------------------------------------------------------------------------------
including                    27.80      35.45      7.65         6.96         70.8      0.00      9.60     0.54
---------------------------------------------------------------------------------------------------------------
combined                     18.80      35.45      16.65        15.15        55.0      0.00      8.74     1.64
---------------------------------------------------------------------------------------------------------------
within                       18.80      60.60      41.80        38.04        35.5      0.00      4.46     0.68
===============================================================================================================
NV04-13         -45          20.00      64.70      44.70        31.74        223.4     0.16      0.56     0.09
===============================================================================================================
NV04-14         -70          27.70      142.80     115.10       109.35       453.6     0.08      5.26     0.50
---------------------------------------------------------------------------------------------------------------
including                    27.70      75.10      47.40        45.03        775.6     0.17      6.42     0.92
---------------------------------------------------------------------------------------------------------------
including                    32.70      50.70      18.00        17.10        1421.2    0.42      5.24     1.69
===============================================================================================================
NV04-15         -60          46.55      115.65     69.10        60.12        113.5     0.02      1.46     0.13
---------------------------------------------------------------------------------------------------------------
including                    47.05      55.55      8.50         7.40         461.7     0.08      6.54     0.49
===============================================================================================================
NV04-16         -55          63.45      72.45      9.00         7.56         34.2      0.00      2.47     0.07
===============================================================================================================
NV04-17         -85          21.20      40.20      19.00        18.81        96.7      0.01      7.79     0.70
---------------------------------------------------------------------------------------------------------------
including                    30.20      40.20      10.00        9.90         161.6     0.02      12.98    0.42
===============================================================================================================
NV04-18         -55          232.0      244.00     12.00        9.96         70.1      0.06      0.40     0.01
===============================================================================================================
NV04-19         -80          24.00      90.50      66.50        65.17        100.3     0.00      2.74     0.14
---------------------------------------------------------------------------------------------------------------
including                    25.10      37.10      12.00        11.76        165.2     0.02      3.20     0.34
---------------------------------------------------------------------------------------------------------------
including                    49.35      57.75      8.40         8.23         177.4     0.02      4.22     0.14
---------------------------------------------------------------------------------------------------------------
including                    74.00      81.55      7.55         7.40         174.0     0.00      4.69     0.11
===============================================================================================================
NV04-20         -70          35.50      40.60      5.10         4.79         54.8      0.02      1.82     0.03
===============================================================================================================
NV04-21         -45          42.45      126.00     83.55        56.81        321.7     0.23      0.47     0.21
---------------------------------------------------------------------------------------------------------------


                                                                              36
<PAGE>

<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                   composite    vertical
DDH                          from       to         length       thickness    g/t       %         %        %
                             -          -          -            -            Silver    Copper    Lead     Zinc
                inclination  metres     metres     metres       metres       LWA       LWA       LWA      LWA
===============================================================================================================
<S>             <C>          <C>        <C>        <C>          <C>          <C>       <C>       <C>      <C>
including                    49.95      70.50      20.55        13.97        703.0     0.47      0.54     0.40
===============================================================================================================
NV04-22         -75          38.65      101.65     63.00        61.11        418.4     0.15      1.82     0.32
---------------------------------------------------------------------------------------------------------------
including                    42.50      55.60      13.10        12.71        923.3     0.26      1.70     0.56
===============================================================================================================
NV04-23         -85          48.40      71.20      22.80        22.57        26.3      0.00      0.47     0.02
===============================================================================================================
NV04-24         -50          3.00       5.65       2.65         1.88         917.9     0.28      1.13     0.18
===============================================================================================================
NV04-26         -75          none                               0.00
===============================================================================================================
NV04-28         -60          45.70      134.75     89.05        77.47        120.4     0.01      1.77     0.32
---------------------------------------------------------------------------------------------------------------
including                    45.70      67.75      22.05        19.18        23.0      -0.01     0.65     0.90
---------------------------------------------------------------------------------------------------------------
including                    67.75      134.75     67.00        58.29        152.5     0.01      2.14     0.12
---------------------------------------------------------------------------------------------------------------
including                    68.10      71.55      3.45         3.00         760.9     0.05      10.96    0.60
===============================================================================================================
NV04-29         -80          28.50      38.65      10.15        9.95         71.8      0.00      1.84     0.05
===============================================================================================================
NV04-30         -80          44.80      52.70      7.90         7.74         47.8      0.00      1.11     0.04
===============================================================================================================
NV04-31         -80          3.05       23.85      20.80        20.38        51.7      0.00      1.25     0.05
---------------------------------------------------------------------------------------------------------------
and                          47.35      78.45      31.10        30.48        71.0      0.00      2.62     0.31
---------------------------------------------------------------------------------------------------------------
including                    73.85      75.95      2.10         2.06         618.6     -0.01     18.82    3.58
===============================================================================================================
NV04-36         -80          8.00       57.90      49.90        48.90        179.1     0.08      1.21     0.17
---------------------------------------------------------------------------------------------------------------
including                    35.30      49.30      14.00        13.72        209.5     0.10      0.97     0.15
===============================================================================================================
NV04-37         -80          12.80      89.10      76.30        74.77        139.4     0.04      1.28     0.12
---------------------------------------------------------------------------------------------------------------
including                    13.80      17.70      3.90         3.82         597.4     0.02      7.23     0.58
===============================================================================================================
NV04-38         -80          20.70      61.20      40.50        39.69        104.5     0.04      0.40     0.10
---------------------------------------------------------------------------------------------------------------
including                    34.10      52.55      18.45        18.08        166.8     0.07      0.15     0.13
===============================================================================================================
NV04-41         -45          58.10      129.00     70.90        50.34        78.5      0.08      0.33     0.20
===============================================================================================================
NV04-42         -80          48.35      161.55     113.20       110.94       150.8     0.03      1.98     0.11
---------------------------------------------------------------------------------------------------------------
including                    67.90      121.90     54.00        52.92        239.1     0.04      3.04     0.16
---------------------------------------------------------------------------------------------------------------
including                    148.90     161.55     12.65        12.40        121.6     0.04      1.74     0.11
===============================================================================================================
NV04-43         -75          44.20      127.25     83.05        81.39        153.2     0.01      5.48     0.90
---------------------------------------------------------------------------------------------------------------
including                    44.20      89.00      44.80        43.90        216.9     0.01      6.81     1.06
===============================================================================================================
NV04-44         -75          13.35      103.90     90.55        88.74        177.8     0.01      5.33     0.22
---------------------------------------------------------------------------------------------------------------
including                    13.35      28.90      15.55        15.24        445.3     0.02      8.77     0.14
===============================================================================================================
NV04-45         -80          43.00      69.85      26.85        26.31        355.4     0.00      5.34     0.33
---------------------------------------------------------------------------------------------------------------
including                    43.00      51.05      8.05         7.89         958.4     0.01      15.31    0.87
===============================================================================================================
NV04-46         -80          30.40      167.00     136.60       133.87       30.9      0.00      1.06     0.05
---------------------------------------------------------------------------------------------------------------
including                    30.40      65.00      34.60        33.91        61.8      0.00      1.51     0.06
===============================================================================================================
NV04-47         -75          12.90      131.00     118.10       113.38       36.6      0.00      2.06     0.13
---------------------------------------------------------------------------------------------------------------
including                    84.50      116.00     31.50        30.24        59.5      0.00      4.31     0.25
===============================================================================================================
NV04-48         -45          16.50      32.85      16.35        11.61        30.6      0.00      0.53     0.18
---------------------------------------------------------------------------------------------------------------


                                                                              37
<PAGE>

<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                   composite    vertical
DDH                          from       to         length       thickness    g/t       %         %        %
                             -          -          -            -            Silver    Copper    Lead     Zinc
                inclination  metres     metres     metres       metres       LWA       LWA       LWA      LWA
===============================================================================================================
<S>             <C>          <C>        <C>        <C>          <C>          <C>       <C>       <C>      <C>
including                    26.70      31.80      5.10         3.62         49.7      0.01      0.54     0.25
===============================================================================================================
NV04-49         -80          63.45      82.80      19.35        18.96        31.6      0.00      0.38     0.05
===============================================================================================================
NV04-50         -80          20.80      101.00     80.20        78.60        254.7     0.14      0.93     0.19
---------------------------------------------------------------------------------------------------------------
including                    20.80      65.00      44.20        43.32        391.0     0.23      0.44     0.26
===============================================================================================================
NV04-51         -45          64.50      81.85      17.35        12.32        185.9     0.05      2.37     0.46
===============================================================================================================
NV04-52         -45          16.50      62.55      46.05        32.70        270.6     0.10      0.62     0.21
===============================================================================================================
NV04-53         -50          15.70      30.80      15.10        10.72        52.0      0.04      0.72     0.85
===============================================================================================================
</TABLE>
Notes:
1. All length weighted average (LWA) results are "uncut"
2. Vertical  thicknesses  are calculated  considering the dip of the drill holes
   and assuming flat lying body.

NAVIDAD HILL DRILLING RESULTS

Much less  drilling  has been done at  Navidad  Hill  than at Galena  Hill.  The
results  of the  eight  holes  drilled  to  date  are  listed  below:  all  have
intersections  of silver  mineralization.  Seven of these holes were  drilled on
three sections  separated at 40m intervals while the eighth is located some 300m
to the  northwest.  Holes at Navidad Hill were drilled at  close-spacing  and as
"scissors"  crossing each other from opposite sides of the  mineralized  zone to
determine the dip and continuity of the narrow high grade structures that hosted
the mineralization at surface.

While these holes did confirm that the dip of the  structures  is near  vertical
two somewhat unexpected aspects were encountered:  firstly,  significant amounts
of clay  alteration  (argillic)  are  present;  secondly,  in between  the known
structures  there are many areas with minor veins and stockwork  veinlets.  High
silver grades were intersected in some of the structures in the drill holes (see
table  below);   however,   in  general  the  grades  in  the  drill  holes  are
significantly  less than the average  grades of the  structures on surface which
were  often in the  range of  5,000 to  20,000  grams  per  tonne  silver.  This
combination  of the features  suggests  that Navidad Hill should be considered a
bulk target rather than as individual high grade vein targets. Like Galena Hill,
intercepts  have been calculated at a 50 g/t silver minimum grade again somewhat
loosely  applied at this early  stage.  All of the seven  holes in the main area
drilled have significant  intercepts ranging from 48.0 to 143.5 m in core length
with 97.8 to 246.9 g/t silver with the best  individual  intercept being NV03-07
83.65m of 246.9 g/t silver with minor copper and lead values.  Assuming vertical
dips the true width of the mineralized intercept ranges from about 34 to 101m in
width. In most cases holes were started within the mineralized zone and the full
true width was not crossed by single holes and is only seen when considering the
scissor pair. 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.

Mineralization  in the main  group of  Navidad  Hill  drill  holes is  hosted by
massive latite to latite  breccias that generally  appear to be massive flows or
flow domes.  No internal  stratigraphy  has been recognized to date. None of the
holes penetrated the base of the latite sequence nor cut any obvious sedimentary
or volcaniclastic units with it. Mineralized structures appear to be of two main
types; firstly, sharp-walled structures filled with brecciated and re-brecciated
clasts of gangue and mineral and secondly,  veinlets and stockwork of gangue and
mineral. Gangue minerals include:  calcite which ranges from massive crystalline
to finely banded;  quartz as chalcedonic to crystalline  silica; and crystalline
barite.  "Ore"  minerals  visible by eye  include  minor  amounts  of  sulphides
included  pyrite, a grey sulphide  (tetrahedrite  or chalcocite),  minor galena,
rare native copper,  green copper oxides (probably  mainly  malachite) and black
copper oxides  (probably  mainly  neotocite or copper wad). No native silver was
observed by eye or hand lens. No clear division between oxide mineralization and
sulphide  mineralization  can be made with depth.


                                                                              38
<PAGE>

Minor  amounts of sulphides are present at surface and are also present a depth.
Copper  oxides are  present at surface  and to the bottom of the zone  tested to
date (about 80m below surface).

<TABLE>
MINERALIZED INTERCEPTS FROM THE NAVIDAD HILL DRILLING
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                               composite
DDH                                        from       to       length      true width  g/t     %         %        %
                                           -          -        -           -           Silver  Copper    Lead     Zinc
                 location    inclination   metres     metres   metres      metres      LWA     LWA       LWA      LWA
=======================================================================================================================
<S>            <C>           <C>           <C>        <C>      <C>         <C>         <C>     <C>       <C>      <C>
NV03-01        Navidad Hill  -45           3.05       61.45    58.40       41.29       111.1   0.22      0.06     0.07
-----------------------------------------------------------------------------------------------------------------------
including                                  10.10      31.35    21.25       15.03       233.3   0.35      0.09     0.11
-----------------------------------------------------------------------------------------------------------------------
including                                  10.10      17.50    7.40        5.23        535.6   0.81      0.07     0.14
-----------------------------------------------------------------------------------------------------------------------
including                                  15.70      16.50    0.80        0.57        2677.6  3.07      0.30     0.24
=======================================================================================================================
NV03-02        Navidad Hill  -45           2.50       50.50    48.00       33.94       97.8    0.15      0.06     0.05
-----------------------------------------------------------------------------------------------------------------------
including                                  6.45       6.70     0.25        0.18        858.0   8.07      0.26     0.02
-----------------------------------------------------------------------------------------------------------------------
including                                  17.60      25.00    7.40        5.23        227.1   0.25      0.16     0.09
-----------------------------------------------------------------------------------------------------------------------
including                                  40.40      41.45    1.05        0.74        1320.3  0.82      0.28     0.14
=======================================================================================================================
NV03-06        Navidad Hill  -45           3.00       63.20    60.20       42.57       161.6   0.26      0.10     0.06
-----------------------------------------------------------------------------------------------------------------------
including                                  23.30      28.80    5.50        3.89        424.7   0.74      0.20     0.10
=======================================================================================================================
NV03-07        Navidad Hill  -45           3.00       86.65    83.65       59.15       246.9   0.32      0.27     0.05
-----------------------------------------------------------------------------------------------------------------------
including                                  3.00       40.75    37.75       26.69       474.9   0.54      0.35     0.07
-----------------------------------------------------------------------------------------------------------------------
including                                  3.00       6.90     3.90        2.76        1997.9  0.92      0.32     0.07
-----------------------------------------------------------------------------------------------------------------------
including                                  30.85      33.25    2.40        1.70        2129.6  3.34      0.60     0.09
=======================================================================================================================
NV03-08        Navidad Hill  -45           2.50       146.00   143.50      101.47      146.0   0.20      0.19     0.04
-----------------------------------------------------------------------------------------------------------------------
including                                  2.50       71.10    68.60       48.51       274.5   0.35      0.40     0.06
-----------------------------------------------------------------------------------------------------------------------
including                                  26.10      40.15    14.05       9.93        1084.2  1.25      1.69     0.11
-----------------------------------------------------------------------------------------------------------------------
including                                  26.10      28.40    2.30        1.63        2660.7  1.64      2.63     0.16
-----------------------------------------------------------------------------------------------------------------------
including                                  35.45      37.20    1.75        1.24        3042.6  4.31      0.86     0.11
=======================================================================================================================
NV03-09        Navidad Hill  -45           2.50       84.30    81.80       57.84       125.4   0.12      0.10     0.04
-----------------------------------------------------------------------------------------------------------------------
including                                  21.00      21.70    0.70        0.49        5067.5  0.36      1.41     0.04
-----------------------------------------------------------------------------------------------------------------------

                                                                              39
<PAGE>


<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                               composite
DDH                                        from       to       length      true width  g/t     %         %        %
                                           -          -        -           -           Silver  Copper    Lead     Zinc
                 location    inclination   metres     metres   metres      metres      LWA     LWA       LWA      LWA
=======================================================================================================================
<S>            <C>           <C>           <C>        <C>      <C>         <C>         <C>     <C>       <C>      <C>
including                                  65.25      66.20    0.95        0.67        1440.7  1.62      0.86     0.07
=======================================================================================================================
NV03-10        Navidad Hill  -45           3.50       78.50    75.00       53.03       111.1   0.23      0.05     0.04
-----------------------------------------------------------------------------------------------------------------------
including                                  3.50       9.40     5.90        4.17        669.7   1.25      0.09     0.06
=======================================================================================================================
NV03-11        Navidad       -45           1.52       12.10    10.58       n/a         98.3    0.53      0.02     0.12
               Hill West
=======================================================================================================================
</TABLE>
Notes
1. All length weighted average (LWA) results are "uncut"
2. True widths are  calculated  assuming  -45 degree  drill  holes and  vertical
   structures.

OTHER AREAS DRILLING RESULTS

Eight drill holes were  collared  in areas  outside of Galena or Navidad  Hills.
These holes were drilled to test  stratigraphy  or suspected  mineralization  in
additional zones.

<TABLE>
MINERALIZED INTERCEPTS FROM DRILLING OTHER TARGETS
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                               composite     true
DDH                                       from      to         length        width       g/t      %          %        %
                                          -         -          -             -           Silver   Copper     Lead     Zinc
                location    inclination   metres    metres     metres        metres      LWA      LWA        LWA      LWA
==========================================================================================================================
<S>            <C>          <C>           <C>       <C>        <C>           <C>         <C>      <C>        <C>      <C>
==========================================================================================================================
NV04-32        Connector    -45           46.50     96.05      49.55         35.04       77.9     0.04       0.14     0.03
               Zone
==========================================================================================================================
NV04-33        Connector    -80           none
               Zone
==========================================================================================================================
NV04-34        Connector    -45           10.50     29.20      18.70         13.22       75.1     0.01       0.70     0.05
               Zone
==========================================================================================================================
NV04-39        Connector    -80           none
               Zone
==========================================================================================================================
NV04-40        Connector    -45           43.20     91.20      48.00         33.94       108.5    0.04       0.22     0.16
               Zone
--------------------------------------------------------------------------------------------------------------------------
including                                 67.20     88.20      21.00         14.85       160.4    0.08       0.19     0.09
==========================================================================================================================
NV04-25        Esperanza    -45           162.70    170.65     7.95          5.62        303.4    0.03       0.31     0.05
               Trend
==========================================================================================================================
NV04-35        recce        -80           none
==========================================================================================================================
NV04-27        recce        -45           7.00      7.73       0.73          unknown     61.5     0.01       0.56     2.25
--------------------------------------------------------------------------------------------------------------------------
and                                       66.90     68.10      1.20          unknown     377.2    0.01       0.10     0.05
==========================================================================================================================
</TABLE>
Notes
1. All length weighted average (LWA) results are "uncut".
2. True widths are  calculated  assuming  -45 degree  drill  holes and  vertical
   structures.

                                                                              40
<PAGE>

PLANNED FUTURE WORK

Planned and ongoing work at the Navidad Project includes a resource  estimate at
Galena  Hill,  metallurgical  work on  representative  samples from Galena Hill,
additional  drilling  on outlying  zones,  additional  surface  work on outlying
zones, and additional geophysical work.

An  additional  8,000 to 10,000  metres of  drilling  is planned for the Navidad
Project.  This work will  concentrate  on zones  peripheral  to the Galena  Hill
deposit such as: Barite Hill,  Navidad Hill,  the Esperanza  Trend,  and Calcite
Hill. It is expected that work will be ongoing throughout May, June and July.

Additional surface work will include:  soil sampling,  geological mapping,  rock
chip sampling and pole-dipole  I.P.  geophysics.  This work will continue as far
into the southern winter as is practical.

A preliminary budget of approximately $2,100,000 has been estimated for the work
recommended in the next stage of exploration on the Navidad Project.  The budget
is based on  experience  from  exploration  already  carried  out on the Navidad
Project.

NAVIDAD AREA PROPERTIES (OTHER THAN THE NAVIDAD PROJECT)

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

TAQUETREN PROPERTY

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

REGALO PROPERTY

The Regalo property is located 25 kilometres north-northwest of Cerro Condor and
90 kilometres  south-southwest  of the Navidad  project.  The Regalo claim (File
Number: 14016/03;  10,000 hectares) covers ground mapped as prospective Jurassic
Canadon  Asphalto  and  Lonco  Trapial  Formation  rocks  and  includes  several
regionally-important northwest trending structures.  Preliminary stream-sediment
sampling has returned highly anomalous gold values. Gold values from nine stream
sediment   samples,   along  6  kilometres  of  one  drainage   (and   adjoining
tributaries),  range in value from 0.134 to 0.831 ppm.  The  Company has entered
into an option  agreement  dated August 12, 2003 with  Consolidated  Pacific Bay
Minerals Ltd.  ("Consolidated Pacific Bay") whereby Consolidated Pacific Bay can
acquire up to a 70% interest in the Regalo mineral claim through the issuance of
900,000 shares of Consolidated Pacific Bay to the Company, and work expenditures
totalling  US$625,000 over three years.  Consolidated Pacific Bay must issue all
900,000  shares  (which have been issued,  with a deemed value of $180,000)  and
expend  US$50,000  on the  property by August 12,  2004,  in order to earn a 51%
interest  in the claims.  A further 19%  interest in the claims can be earned by
Pacific Bay if it  completes a  feasibility  study and  finances the property to
production.  A second  cateo  (Regalo  II) has been  staked  to the north of the
primary Regalo claim,  adding another 10,000 hectares to the property subject to
the Company's agreement with Consolidated Pacific Bay.

NOEL PROPERTY

The Noel claim  (File  Number:  14036/03;  10,000  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


                                                                              41
<PAGE>


extremely  anomalous values is has not been prospected to date and is considered
a high-priority target for follow-up work.

TRUCHA PROPERTY

The Trucha claim (File Number: 14014/03; 10,000 hectares) is contiguous with the
Regalo  and Noel  claims  and also  includes  a stream  sediment  sample  highly
anomalous in gold (single  sample,  0.556 ppm Au).  Regional  mapping  shows the
claim to be underlain by prospective Jurassic Canadon Asphalto and Lonco Trapial
Formation rocks, cut by several regional-scale  structures.  In conjunction with
evaluation of the Noel claims, the Trucha claim requires detailed prospecting to
identify the source of gold producing the high stream-sediment values.

MARA PROPERTY

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

CONDOR AND ALAMO PROPERTIES

The Condor claim (File Number: 14017/03;  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 number:  14018/03;  9,945 hectares) and Carlota claim (file
number: 14018/03; 9,945 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 3 PROPERTY

The Pampa 3 claim (File Number: 14004/03; 2,500 hectares) is located adjacent to
the Navidad  Project,  along trend and  immediately to the  southeast.  Although
predominantly covered with recent alluvium, it is interpreted to be underlain by
the Canadon Asphalto  Formation  limestone and  volcaniclastic  rocks which host
mineralization  at  Navidad.  Work  to date  has  been  minimal  with  only  two
stream-sediment  samples collected,  both of which drain areas peripheral to the
claim.

COLONIA PROPERTY

The Colonia claim (File Number:  14005/03;  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  southease of the Navidad  project and lies at the  regional  contact
between granitic rocks that underlie the prospective Jurassic stratigraphy,  and


                                                                              42
<PAGE>


Jurassic volcanic rocks.  Several important  LandSat-interpreted  structures are
present on this  claim;  regional  structure  has been  shown to be of  critical
importance at the Navidad discovery.  Preliminary stream-sediment sampling shows
anomalous  values of copper and  antimony,  although  management  believes it is
strongly warranted, no significant follow-up work has been done.

SIERRA 1 PROPERTY

The Sierra 1 claim (File Number: 14006/03;  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 shows patterns
very  similar to those seen in the area of the  Navidad  discovery.  Preliminary
stream-sediment  sampling has shown anomalous copper values,  these results have
yet to be followed up on.

SIERRA 2 PROPERTY

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

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

SIERRA 3 PROPERTY

The  Sierra  3  claim  (File  Number:  14008/03;  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.

OTHER CHUBUT PROVINCE PROPERTIES

If  the   reorganization  is  consummated  the  following   properties  will  be
transferred to Golden Arrow.

LAGUNA DE LOS TOROS PROPERTY

LOCATION AND ACCESS

This property is located just to the east of the continental  divide forming the
border between Chile and Argentina. In this area the continental divide is quite
subdued in elevation and is not marked by high mountainous peaks.  Elevations on
the property  reach about 750m and relief  within the property is only  slightly
more than fifty  meters.  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 fieldwork
in the winter.

Access to the property is possible year around by two-wheel  drive pick-up truck
as  provincial  route 40 bisects the property.  Gobernador  Costa is the nearest
significant  sized  town.  It has no  air  service:  the  nearest  airport  with
scheduled  service is Esquel four hours drive to the north by mostly paved road.
From  Gobernador  Costa  access  to Las

                                                                              43
<PAGE>


Bayas is by provincial route #40 south approximately 50 road kilometres.  During
good road conditions the trip from town to the property is less that one hour.

Gobernador Costa has basic services  including fuel, food and lodging as well as
a bank with an automatic teller machine.

MINERAL TITLES INCLUDED IN THE LOS TOROS PROPERTY

The Los Toros property comprises 11,612 hectares  consisting of three individual
claims,  two of which are  categorized as "cateos" and one as a  "manifestacion"
located in the Tehuelches  Department of the Province of Chubut. The property is
100% owned by the Company. It is centered at approximately 44.36 decimal degrees
south latitude and 70.65 degrees west longitude in the Campo Inchauspe datum.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
FILE NUMBER            YEAR      DATE OBTAINED                TYPE              NAME             HECTARES
----------------------------------------------------------------------------------------------------------
<S>                    <C>       <C>                          <C>               <C>              <C>
13645                  2001      January 24, 2001             Cateo             Unnamed          2,262
----------------------------------------------------------------------------------------------------------
13928                  2002      September 12, 2002           Cateo             Toros II         2,950
----------------------------------------------------------------------------------------------------------
14038                  2003      March 18, 2003               Manifestacion     Lucia            6,400
                                                                                Total            11,612
----------------------------------------------------------------------------------------------------------
</TABLE>

REGIONAL AND LOCAL GEOLOGY

The Los  Toros  Property  lies in  western  Chubut at the  margin of the  Andean
cordillera  volcano-plutonic  complex with the continental  volcanic-sedimentary
sequences.  The  oldest  rocks  are upper  Paleozoic  volcanics  of  continental
affinity  and are  overlain  by  Jurassic  volcanic  rocks  of the Lago La Plata
Formation  which are in turn  overlain  by mainly  sandstone  units of the Lower
Cretaceous  Apeleg Formation.  Known and postulated  mineralization is hosted by
the Jurassic volcanic rocks.

EXPLORATION HISTORY

A total of 233 rock samples and 435 soil samples have been collected  within the
limits of the current  property  boundaries for the Company.  There are no known
historical mining or exploration  environmental  liabilities associated with the
property.

DETAILED EXPLORATION - MORGUL NORTH

The Morgul  North area was mapped and sampled in detail at 1:1000 scale in order
to assess it's potential to host economic gold and/or silver  mineralization and
to permit planning for a significant  drill program.  The Morgul North structure
is  a  classic,   high-level,   low-sulphidation   epithermal  vein.  It  trends
north-south and dips approximately  45(0) to the east. It has been mapped over a
strike length of  approximately  800 metres and,  including the  silicified  and
altered  envelope  around the actual  vein,  has widths of less than 2 metres to
over 20 metres.  Silicification  is predominantly a replacement of volcanic rock
rather than a true open space filling vein, however, mapped and petrographically
defined  textures are  consistent  with a high-level  position in the epithermal
system, potentially above the important gold-rich boiling zone.

Fifty-one  rock samples were  collected  from the Morgul North vein,  these were
predominantly  measured  chip samples  across the  structure,  however rare grab
samples were also taken.  In general gold values are anomalous but low (0.005 to
2.17 g/t), while arsenic, antimony, and mercury values are highly elevated. This
distribution of low gold and high arsenic,  antimony,  and mercury is typical of
the upper levels of mineralized  low-sulphidation epithermal systems. One sample
(M2373)  contained  abundant coarse grained galena and returned 1.36% lead which
is very odd given the interpreted  high-level  setting of the Morgul North vein.
Generally,  higher values of lead are expected lower in an epithermal system, as
yet, no clear explanation for this value is apparent.

                                                                              44
<PAGE>



DETAILED EXPLORATION - MORGUL SOUTH

The Morgul South Vein was mapped and sampled in similar detail  (1:1,000  scale)
to the Morgul North Vein.  Sixty-two rock samples were taken,  of these, 40 were
measured chip samples across silicified or altered structures.

The Morgul South Vein is actually a series of structures which coalesce into one
north-trending  structure  in its  northern  extents.  To the south,  structures
appear to "horse-tail" out into more east and southeast  trending splays off the
main  north-trending  vein. In general,  better gold grades (up to 1.1 g/t) were
returned from these smaller "splays" in the southeastern  portions of the mapped
system.  Although  measured vein  orientations  are more erratic at Morgul South
than at Morgul  North,  the overall trend is close to  north-south  and dips are
generally in the range of 45(0) to 75(0) to the east.

Overall  strike length of the Morgul South vein  (including  areas of no outcrop
where the  presence of the vein is  inferred)  is  approximately  1,250  metres.
Measured  widths vary from less than 1 metre to greater than 25 metres.  Similar
to the Morgul North vein,  results from the Morgul South vein generally show low
gold values (<0.005 to 1.170 ppm) and highly elevated  arsenic (9 to 3,899 ppm),
antimony (<5 to 90 ppm), and mercury (0.180 to 21.500 ppm) values.  Again, these
values are consistent with levels of exposure which are above the "boiling zone"
and hence above the postulated zone of gold deposition.

DETAILED EXPLORATION - NAZGUL

The Nazgul  structure is a new discovery as a result of the most recent phase of
property-wide  exploration.  It  consists of a zone of  silicification  and open
space filling chalcedonic quartz within a wider zone of argillic alteration with
quartz  stockworking.  It has been mapped over a strike length of  approximately
260 metres and has widths of approximately 8 to greater than 30 metres including
the enveloping  argillic  alteration and quartz stockwork.  The structure trends
towards 220(0)  (northwest);  dips are not known due to the  relatively  limited
exposure.

Gold grades  returned from the 23 samples taken from this zone are uniformly low
(<0.005 to 0.014 ppm),  while arsenic (15 to 357 ppm),  antimony (<2 to 30 ppm),
and mercury (1.150 to 20.300 ppm) values are high,  again  supporting the thesis
that  elevated  gold grades may be present at depth below the present  levels of
exposure.

SOIL SAMPLE GRID - MORGUL NORTH AND SOUTH

East-west  oriented  lines of soil samples were  collected over the Morgul North
and South prospects in order to further  characterize the structures and to test
for  additional  zones that may not outcrop.  Sixteen lines were run,  generally
with 100 metre  spacing  between  lines but with up to 300 metre  spacing at the
north and south extremities of the grid.  Samples were collected every 25 metres
along lines.  Four hundred sixteen (416) original soil samples were collected in
this program in addition to the 19 duplicate samples for a total of 435 samples.

Gold values  returned  from the soil samples  are, as is often the case,  rather
erratic.  In the Morgul North area there is no clear correlation  between higher
gold  values and the known  vein.  Most of the most  strongly  anomalous  values
(greater  than 0.010 - 0.015 ppm) were  returned  from single  sample  sites (as
opposed to multi-sample  anomalies that generally are a more reliable  indicator
of mineralization) and can not be correlated with known  mineralization.  At the
Morgul South area, there is a better correlation with mapped mineralization over
portions of the vein structure,  but there are still many single point anomalies
that are not clearly  explained by the known  mineralization.  Gold values range
from less than  0.0011  ppm to 0.249 ppm and return an  arithmetic  mean of 0.03
ppm.

In general,  Arsenic values show a much more  interpretable  pattern.  At Morgul
South,  arsenic  values  correlate  well  with the known  structures,  generally
returning  values  of  over  100  ppm  over  several  sample  sites  near  known
structures.  At  Morgul  North,  there is a strong  bias with  highly  anomalous
samples to the east of the structure and markedly  lower values to the west. One
possible explanation for this distribution of arsenic lies in the 45(0) east dip
of the Morgul North structure. High arsenic values associated with the structure
near surface may be "leaking"  to surface  through a series of smaller  vertical
dipping veinlets.  Alternatively, the predominant winds which blow from the west
may have  selectively  redistributed  the  arsenic.  Arsenic  values in the soil
samples vary from 3 to 252 ppm with an arithmetic mean of 23.1 ppm.


                                                                              45
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While it was hoped that the soils would locate additional covered veins the data
failed to do so convincingly.

FUTURE WORK

Based on the results to date,  management believes a program of diamond drilling
at the Morgul North,  South,  and Nazgul  prospects is warranted.  A 2,500 metre
drilling campaign with drillholes testing all three areas has been recommended.

Prior to drilling,  a review should be made of the data  collected to date and a
field  visit  made  to  select  the  final  drill  hole  locations.  Minor  road
construction will be necessary in order to get people and equipment to the drill
sites,  although  if a track  mounted  drill  rig is used this will be kept to a
minimum.  At  this  time  significant  trenching  or  geophysical  work  is  not
recommended.

A preliminary  budget of $350,000 has been  estimated for the  recommended  work
based on the costs of similar programs in the region.

LAS BAYAS/VICTORIA PROPERTY

The Las  Bayas/Victoria  Property  property  is located in west  central  Chubut
Province, Argentina, 40 kilometres north of the town of Alto Rio Senguer and 200
kilometres  northwest of the port of Comodoro Rivadavia.  The property comprises
seven  cateos  including  Evelina  (Las  Bayas)  (File  Number:  14131,  3,450.3
hectares),  Victoria 1 (File Number  13801,  5,400  hectares),  Victoria 3 (File
Number  13808,  6,509  hectares) and Victoria 6 (File  Number:  13883,  9,932.44
hectares),   all  of  which  are  100%   owned  by  the   Company.   Preliminary
reconnaissance  geological mapping and rock sampling in 2001 indicated that host
strata at Las Bayas is cut by a series of  subparallel  epithermal  quartz veins
exposed over a minimum one kilometre strike length.  Subsequent  surface work in
2002  included over 700 rock chip samples and 1,200 soil samples which defined a
4 kilometre by 1.5 kilometre  area of  outcropping  low-sulphidation  epithermal
quartz veins. Geochemistry indicated potentially economic gold and silver values
and anomalous arsenic,  antimony, and mercury.  Results of the 2002 surface work
led to a 1,953 metre  diamond  drill  campaign in February,  2003.  This program
tested  approximately  900 linear  metres of the total 15,000  linear  metres of
quartz veins mapped on the property.

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

FUTURE WORK

No work is currently planned for the Las Bayas project. Due to the large size of
the mineralized  system exposed at Las Bayas, the Company's  geologists feel the
project has significant exploration potential.

COSTA PROPERTY

The Costa property is located  immediately south of the town of Gobernador Costa
in western Chubut.  The property  comprises  three cateos  including Costa (File
Number:  13886-02,  4,660.50  hectares),  Costa I (File  Number  13890-02,  3825
hectares) and Costa II (File Number 13982-02,  6,467 hectares), all of which are
owned  by  the  Company.   The  cateos  were   acquired   based  on   structural
interpretation, correlative Landsat-interpreted alteration, and geologic setting
similar  to  that  of  known   mineralization   in  the  nearby   Cherque  area.
Northwest-trending   linear   features   with   associated   Landsat-interpreted
alteration zones, with a strike length in excess of 5 kilometres, are present on
the Costa property.  The property is underlain by prospective  Jurassic volcanic
rocks which are intruded by Upper Cretaceous granitic  intrusions.  Although the
property  is at a  very  early  stage,  management  believes  it may  have  good
potential for epithermal gold deposits.

                                                                              46

<PAGE>


CORCOVADO PROPERTY

The Corcovado  property is located  approximately 50 kilometres south of Esquel,
10 kilometres northwest of the town of Corcovado.  The property is 100% owned by
the Company.  The property  comprises  one cateo (File Number  13892-02,  10,000
hectares) and was staked to cover an area of prospective Jurassic volcanic rocks
which are cut by Upper Cretaceous granitic intrusions that are located along the
same trend as the Esquel  deposit.  Airborne  reduced-to-pole  magnetics  show a
prominent  magnetic high in the southwest  part of the property which is related
to mapped intrusive rocks.  Northwest- and northeast-trending  linears emanating
from  the  magnetic  high are  suggestive  of  structures  which  could  control
mineralization.  No work is planned for the  property in the  immediate  future,
however,  management  believes  the  property  may  have  excellent  exploration
potential.

PENASCUDO PROPERTY

The Penascudo property is located in the southwestern corner of Chubut Province.
The property  comprises  seven  adjacent  Mine  Concessions  (Minas)  including:
Alberto,  1,100  hectares;  Rolando,  1,300 hectares;  Cecilia,  1,400 hectares;
Pedro,  1,300 hectares;  Fernando,  1,300 hectares;  Ivan,  1,300 hectares;  and
Daniel,  1,300  hectares.  The Company holds a 100% interest in the  properties.
Pursuant to an option  agreement  dated June 11,  2003,  between the Company and
Ballad Gold & Silver Ltd.  (formerly Ballad Ventures Ltd.) ("Ballad") Ballad can
earn,  subject  to a 1.5% NSR,  an  initial  70%  interest  in the  property  by
incurring  US$1.8  million in  expenditures  over five years,  making a one time
US$300,000  payment to  exercise  the  option,  and  issuing  500,000  shares on
approval of the option  (which have been issued,  at a deemed value of $250,000)
by the TSX-V and a further  500,000  shares upon exercise of the option.  Ballad
Venture Ltd. can increase its interest to 85% by funding a feasibility study.

Low sulphidation  epithermal  quartz veins with high-grade gold and silver,  and
locally  visible gold, are hosted by a 5-square  kilometre  rhyolite dome on the
property. Sampling by the Company of brecciated quartz veins, located 200 metres
apart, returned assays of 18.7 g/t gold over 0.45 metres and 216.6 g/t gold over
0.4 metres.  Ballad has reported  high-grade assays from chip sampling of the El
REY ("The King") Zone of between 0.08 g/t gold over 0.30 metres and 1,102.99 g/t
gold over 0.35  metres and 4.1 g/t silver  over 0.30 metres and 704.7 g/t silver
over 0.35 metres from their initial work on the property.

SAN JUAN PROVINCE PROPERTIES - VALLE DE CURA AREA

The Valle de Cura region of northwest  Argentina lies at the northern end of the
well-defined  El Indio  metallogenic  belt which  straddles the  Chile-Argentina
border between  approximately  29(degree) to  30.5(degree)  South.  This belt is
defined  by  world-class   high-sulphidation   epithermal  deposits,   such  as:
Pascua-Lama,  Veladero, and El Indio-Tambo.  Large-scale hydrothermal alteration
and  mineralization  in the El Indio belt is  associated  with Miocene to Recent
rhyolitic to dacitic volcanism;  known ore is predominantly  hosted within these
volcanic rocks.  Large colour  anomalies are present in areas of strong argillic
and  advanced   argillic   alteration,   these  colour   anomalies   are  easily
distinguished in aerial photographs and Landsat images and are generally present
in areas of significant mineralization.

In a 1997  agreement  with the  Company,  Barrick  subscribed  to a $1.5 million
private placement,  of which the Company had to spend a minimum of $1,125,000 on
its Valle de Cura properties in northwestern  Argentina  before August 17, 2000.
An August 1999  agreement  granted  Barrick an option to earn a 50%  interest in
EITHER  the Rio de las  Taguas or  Potrerillos  properties  in the Valle de Cura
region for a US$250,000  payment and  exploration  expenditure  commitments.  In
2000,  Barrick  exercised  warrants  for net  proceeds  to the  Company of $2.25
million,  part of which were used to fund the Company's  exploration  program in
the Valle de Cura region from  October  2000 to March  2001.  In December  2003,
Barrick served notice that they would not be exercising the option to earn a 50%
interest in either the Rio de las Taguas or Potrerillos properties.

RIO DE LAS TAGUAS PROPERTY

LOCATION AND ACCESS

The Rio de las Taguas  property  is located in  northwestern  San Juan  province
approximately  six  kilometres due east of Barrick's  Pascua-Lama  project which
straddles the  Chile-Argentina  border.  The property is roughly bisected by the
Arroyo de los Amerillos, a tributary to the Rio de las Taguas, and is accessible
by 4WD truck along Arroyo de los

                                                                              47
<PAGE>


Amerillos.  Elevations range from 3,800 metres at the mouth of the Arroyo de los
Amerillos to over 4,600 metres on the western boundary.

MINERAL TITLES INCLUDED IN RIO DE LAS TAGUAS

The Rio de las Taguas property comprises one cateo (File Number 0638-S-95, 1,820
hectares).

AGREEMENTS

The Company holds a 100% interest in the property.  The property was the subject
of an  option  agreement  with  Barrick  between  1999 and  2003.  See  "Item 4.
Information  on the Company - History and  Development of the Company" and "Item
4.  Information  on the Company -  Properties,  Plants and Equipment - Principal
Properties - Argentinean  Properties - San Juan  Province  Properties - Valle de
Cura Area."

EXPLORATION HISTORY

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

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

In November  2000, a program of road  construction  and bulldozer  trenching was
carried out on the Ridge Zone to provide  better  access and rock  exposure  for
detailed  geological mapping and rock sampling.  Approximately 3.5 kilometres of
road were constructed, of which approximately 500 meters was in bedrock. Mapping
and sampling of the new exposures and  surrounding  area were  completed in late
2000.  The  geologic  mapping  showed the area to  consist of a lower  andesitic
volcanic unit overlain by dacitic to rhyolitic pyroclastics.  Alteration exposed
in the road cuts is  mainly  sericite-clay  ranging  from  weak to  moderate  in
intensity.  The strongest  alteration effects appear to be associated with local
structures of limited extent.

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

PLANNED FUTURE WORK

A series of  exploration  programs  from 1999 to 2001 have  defined  significant
potential  for  high-sulphidation  epithermal  mineralization  at the Rio de las
Taguas property.  The Company is currently pursuing other partners for continued
exploration of this drill-ready property.

POTRERILLOS PROPERTY

LOCATION AND ACCESS

The  Potrerillos  property is located north of the Despoblado  flats and east of
the Rio de las Taguas in northwest San Juan  province,  approximately  10 km due
east of Barrick's  Veladero deposit.  Elevations range from 4,000 metres to

                                                                              48
<PAGE>



over 5,100 metres in the northeast corner of the property.  Access to most parts
of the property is possible using 4WD trucks from the  Veladero-Lama and El Toro
roads.

MINERAL TITLES INCLUDED IN POTRERILLOS

The Potrerillos  property comprises one cateo (File Number:  546010-L-94,  4,000
hectares).

AGREEMENTS

Potrerillos  forms  part of a group  of three  properties,  which  jointly  have
payments  pending  to the  property  vendor of $US  70,000  (Dec  20/04) and $US
170,000  (Dec 20/05) in addition to a one time  payment of $US 1 million  upon a
positive  feasibility study. The property was the subject of an option agreement
between the Company and Barrick between 1999 and 2003. See "Item 4.  Information
on  the  Company  -  History  and  Development  of the  Company"  and  "Item  4.
Information  on the  Company -  Properties,  Plants and  Equipment  -  Principal
Properties - Argentinean  Properties - San Juan  Province  Properties - Valle de
Cura Area."

EXPLORATION HISTORY

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

The Company  commenced a Phase I program of detailed  geochemical  sampling  and
geological  mapping in late 1999. The Phase I program  identified  three targets
for  detailed  follow-up  work.  The  Panorama  Zone in the central  part of the
property has returned  grab samples  assaying from nil to 0.63 g/t Au and from 1
g/t  to  276  g/t  Ag  from  a   north-trending   zone  of  quartz  veining  and
silicification which has been traced for approximately 1 kilometre along strike.
The Fabriana  Extension  zone,  located on the western  portion of the property,
consists  of a large area (800 meters x 300  meters) of altered  volcanic  rocks
with grab samples returning  strongly  anomalous values in arsenic and scattered
anomalous  gold  values.  The  Narelle  Zone,  on the  northeastern  part of the
property,  is a large (1.5 x 1  kilometre)  zone of strongly  silicified  felsic
volcanics with variably anomalous mercury and gold values.

In February 2000, a Phase II program  consisting of ground  geophysics  (CSAMT),
detailed  geochemical  sampling  and  geological  mapping was  commenced  on the
Fabriana Extension zone. The geophysical  surveys outlined an east-west trending
resistivity  anomaly  at least  500  meters  in length  which  underlies  felsic
volcanic breccias with strong alunite  alteration,  strongly  anomalous arsenic,
and erratic  anomalous  gold values.  In April-May  2000, a  reverse-circulation
drilling program was completed over the Fabriana  Extension  target.  Nine holes
totalling 1,785 meters were completed.

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


                                                                              49
<PAGE>


Between  November  2000 and  February  2001,  the  Company  carried  out further
exploration  on the  Potrerillos  property  consisting  of bulldozer  trenching,
geological  mapping,  and rock chip and talus fines goechemical  sampling.  This
work concentrated on the Narelle zone, with some additional work on the Panorama
zone.

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

At Panorama,  15 rock samples were collected from the northern  continuation  of
the zone from the area sampled in the 1999 - 2000 season through to the northern
property  boundary.  Five of the fifteen samples returned strongly  anomalous to
very high gold and/or silver values, with the overall range in gold values being
from  <0.01 g/t to 15.4 g/t and in silver  from 0.1 g/t to 2,900  g/t.  Elevated
mercury values ranging from <0.02 ppm to 4.93 ppm were also present.

PLANNED FUTURE WORK

A series of  exploration  programs  from 1999 to 2001 have  defined  significant
potential for  high-sulphidation  epithermal  mineralization  at the Potrerillos
property.  The  Company is  currently  pursuing  other  partners  for  continued
exploration of this drill-ready property.

GOLLETE

The Gollete property is located along the Pascua-Lama  lineament in the Valle de
Cura region, 25 km southeast of Barrick's Veladero property and 250 km northwest
of San Juan. The Gollete property comprises one cateo (File  Number:545243-L-94,
10,000 hectares).

Gollete is one of a group of three properties that the Company is earning a 100%
interest in by making  further  payments to the property  vendor of $70,000 (Dec
20/04)  and  $170,000  (Dec  20/05)  in  addition  to  a  one  time  payment  of
US$1,000,000 upon a positive feasibility study.  Pursuant to an option agreement
dated September 22, 2003 between the Company and Cloudbreak, the Company granted
to Cloudbreak an option to earn a 50% interest in Gollote in  consideration  for
the  issuance of 500,000  common  shares of  Cloudbreak  to the Company  (with a
deemed value of  $150,000),  subject to TSX-V  acceptance  (the initial  500,000
shares have been received), an additional 350,000 shares by October 1, 2004, and
exploration expenditures of US$1,000,000 over three years, with US$150,000 being
spent in the first year,  US$350,000  in the second year and  US$500,000  in the
third.  There  will be the option to  increase  the  interest  to 75 per cent by
making additional  exploration  expenditures of US$1,000,000 in the fourth year;
US$1,500,000  in the fifth year;  issuing an additional  1,000,000  shares;  and
providing a comprehensive  report on the results of the work performed up to the
date of the report.

Initial work in 1999 on Gollete outlined areas of argillic and advanced argillic
alteration,  associated  with anomalous  gold  geochemistry.  Three  potentially
important  areas of hydrothermal  alteration,  with features  characteristic  of
high-sulfidation  epithermal systems have been mapped on the property.  Sampling
returned  anomalous  gold values  ranging  from below  detection to 0.168 ppm in
rocks and from below  detection to 0.168 ppm as well as anomalous  As, Cu and Zn
results.  In early  2000,  the  Company  completed  additional  rock and  stream
sediment sampling confirming the presence of potentially important alteration in
the  northern  part of the  property  at the Condor  Zone.  Widespread  argillic
alteration and advanced  argillic  alteration occurs within an approximate 2.0 x
0.7 km area.  Management  believes a combination of hydrothermal  alteration and
favorable  structure,  as well as  proximity  to the  Pascua-Lama  and  Veladero
deposits,  makes  Gollete a significant  target for  epithermal  precious  metal
mineralization.


                                                                              50
<PAGE>


ORTIGUITA PROPERTY

The Ortiguita  property (File Number:  546369-L-94,  3,600  hectares) is located
approximately  35 kilometers  east-north-east  of Barrick's  Veladero  property.
Ortiguita forms part of a group of three properties, which jointly have payments
pending to the property  vendor of  US$70,000  (Dec 20/04) and  US$170,000  (Dec
20/05)  in  addition  to a one time  payment  of  US$1,000,000  upon a  positive
feasibility  study.  In early 2001, a short  reconnaissance  program was carried
out,  mainly directed at checking  several color anomalies  visible on satellite
imagery.  Eight rock and four  stream  sediment  samples  were  collected;  none
returned  anomalous  values in gold or silver;  anomalous  Cu, Pb, Zn, As and Hg
values were  identified in stream  sediment  samples.  Management  believes that
further work should be conducted on the property.

EL TORRO (PASO DE SOBERADO) PROPERTY

The  Company  holds a 100%  unencumbered  interest  in the El  Torro  (Paso  del
Soberado)   property   (File  Number:   546083-M-94,   873   hectares)   located
approximately 20 kilometres  north-northeast of Barrick's Veladero property. The
property was examined in early 2001.  Several  alteration  zones were identified
and 25 rock and stream sediment geochemical samples collected. Three of the rock
samples returned anomalous gold values ranging from 0.26 to 0.51 g/t. All of the
anomalous  samples are of float material,  with two of the three shedding from a
NE-trending  breccia  zone  containing  quartz and alunite.  Additional  work to
determine the extent of the  mineralized  breccia zone will be undertaken in the
future.

DESPOBLADOS PROPERTY

Despoblados comprises two properties (File Number: 542242-L-94,  1,260 hectares)
in the Valle de Cura region of northwestern San Juan Province. The Company holds
a 100%  interest  in the  property  subject to the cateo  being  advanced  to an
exploitation  phase.  A  payment  of  US$800,000  is due  to  Lirfer  S.A  after
completion of a positive  feasibility  study. The western claim is located 15 km
southeast  of  Barrick's   Veladero   deposit  along  the   Pascua-Lama-Veladero
lineament. Limited reconnaissance sampling and mapping has been completed on the
western  claim,  while no work has been  carried  out on the  eastern  property.
Management believes the property warrants further evaluation.

BANITOS (RONCHIETTO) PROPERTY

The Banitos  property  consists of one cateo (File  Number:  546604-R-94,  5,230
hectares) in the Valle de Cura region of  northwestern  San Juan  Province.  The
Company holds a 100% interest in the property;  in the event of  exploitation of
the property,  the property is subject to a royalty of US$960,000  paid in eight
instalments to V. Ronchietto.  Initial  reconnaissance  prospecting,  geological
mapping and geochemical sampling during 1999 and 2000 on Banitos have identified
anomalous  gold and  pathfinder  elements  in rock and  sediment  samples.  PIMA
analyses have identified  illite/smectite and kaolinite alteration minerals.  In
early 2002,  CMG carried out a  reconnaissance  geological  mapping and sampling
program.  This work indicated that much of the property is underlain by Tertiary
age volcanic and  sedimentary  rocks which overlie  gently  dipping  Permian age
sedimentary rocks. Most of the 29 rock samples collected were of float material,
and returned weakly  anomalous gold values ranging from nil to a maximum of 0.04
g/t. Management believes the property merits further evaluation.

VELADERO PROPERTY

The Company holds a 100%  unencumbered  interest in the Veladero property in the
Valle de Cura area.  The  property  comprises  two  separate  claim blocks (File
Number:  0477-S-95,  129.34 hectares) located contiguous with the Chilean border
10-15 kilometres south of Barrick's Veladero property.  Alteration is evident on
satellite  images of the northern claim area. No groundwork has been carried out
on the property and none is planned in the immediate future.


                                                                              51
<PAGE>



SAN JUAN PROVINCE PROPERTIES - NORTHWEST SAN JUAN

MOGOTE (ARTURO'S) PROPERTY

LOCATION AND ACCESS

The property is located in the  Departament  Iglesia,  Macho Muerto zone, in the
San  Juan  Province  close  to the  northern  border  with  La  Rioja  Province,
approximately  300  kilometers  northwest of the city of San Juan, and bordering
Chile.

MINERAL TITLES INCLUDED IN MOGOTE PROPERTY

The Mogote  (Arturo's)  property  consists of one cateo and three discoveries of
8,009 hectares  (19,790 acres) and five Minas. In 2004, Amera staked a number of
claims adjoining the northwestern part of the Mogote project on the Chilean side
of the border.
    ----------------------------------------------------------------------------
    NAME                FILE NUMBER          TYPE         OWNER         HECTARES
    ----------------------------------------------------------------------------
    -                   338579-R-92          Cateo        IMSA          2259
    ----------------------------------------------------------------------------
    Adela #1            425-098-A-2000       Discovery    N. Arturo     2000
    ----------------------------------------------------------------------------
    Mogotes Norte       520-0275-R097        Discovery    R. Viviani    1650
    ----------------------------------------------------------------------------
    Mogotes Sur         520-0274-R-97        Discovery    R. Viviani    2100
    ----------------------------------------------------------------------------
    Mogote 1            156.277-S-76         Mina         IMSA          48
    ----------------------------------------------------------------------------
    Mogote 9            156.285-S-76         Mina         N. Arturo     48
    ----------------------------------------------------------------------------
    Mogote 14           156.290-S-76         Mina         IMSA          48
    ----------------------------------------------------------------------------
    Mogote 4            156.280-S-76         Mina         IMSA          48
    ----------------------------------------------------------------------------
    Mogote 5            156.280-S-76         Mina         IMSA          48
    ----------------------------------------------------------------------------

AGREEMENTS

Under an option  agreement  dated  June 7, 2000 among the  Company,  Inversiones
Mineras  Argentinas  S.A.  and Nestor  Arturo,  as amended  August 3, 2000,  and
September  1, 2000,  the Company may acquire a 100%  interest in the property by
making cash payments totaling $280,000.  To date the Company has paid US$79,100.
Subsequent  payments  are  US$80,000  on  December  6, 2004  (when the option is
exercised);  and  US$110,000 on June 6, 2005. The vendors will have the right to
receive a royalty of 0.5% NSR, up to a maximum of US$500,000.

In March  2001 the  Company  entered  into an option  agreement  with Rio Tinto,
whereby Rio Tinto could  acquire up to a 70% interest in the property by meeting
certain work  commitments and cash payments to the Company.  At the end of 2001,
Rio Tinto  elected not to continue  with the option  agreement  due to budgetary
constraints.

The Company signed a letter of Intent on March 6, 2003, with Amera,  pursuant to
which  Amera  could earn an  undivided  51%  interest  in the Mogote  (Arturo's)
Property.  To earn a 51% interest in the  property,  Amera must issue  1,650,000
common shares to the Company and incur  US$1,250,000 of expenditures,  including
work programs and underlying  option payments,  all over five years. The Company
has  received  the  initial  100,000  shares and Amera is  proceeding  with work
expenditures.

In addition,  Amera agreed to reimburse  the Company for past  payments made and
expenditures  which had been  incurred by the  Company on the Mogote  (Arturo's)
Property. As at December 31, 2003, Amera had reimbursed the Company $192,952 and
$4,902  remained  outstanding  and is  included  in  amounts  receivable.  As at
December 31, 2003 the Company had received 100,000 shares of Amera at a recorded
amount of $45,000.

On April 8, 2004, the Company and Amera entered into a further agreement whereby
Amera can earn an  additional  24%  interest,  for a total 75%  interest,  after
earning the initial 51% interest,  by issuing  300,000 common shares (which have
been  issued) to the  Company  and  conducting  an  additional  US $3 million of
exploration expenditures over a three year period.


                                                                              52
<PAGE>

Amera has  committed to spend the initial  US$1,000,000  by May 30, 2005.  Amera
received  approval from the TSX-V for this transaction on April 22, 2004. Joseph
Grosso,  Nikolaos  Cacos and  David  Terry,  officers  and/or  directors  of the
Company,  are also officer,  directors  and/or  employees of Amera. See "Item 7.
Major Shareholders and Related Party Transactions - Related Party Transactions."

REGIONAL AND LOCAL GEOLOGY

The property is underlain  by basement  rocks of the Permian age Choiyoi  Group,
which are faulted against and overlain by Tertiary age volcanic rocks.

EXPLORATION HISTORY

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

In November-December 2000, a reconnaissance  geological and geochemical sampling
program was carried out over the property.  This work outlined an area measuring
approximately  3  kilometers  E-W  near the  northern  property  boundary  which
returned a high proportion of anomalous copper and gold results in both rock and
sediment  samples.  During  January  2003 the  Company  carried  out a four week
detailed  surface  exploration  program to establish drill targets for a Phase I
drill program. The results  significantly  expanded the gold-copper  exploration
potential of the project.

During the period  November 17 through  December 14, 2003,  Amera carried out an
exploration  program  comprising  detailed geologic  mapping,  ground magnetics,
Induced  Polarization ("IP"),  trench sampling,  and surface geochemistry in the
northern  part of the  property.  The work was  focused  on two  major  zones of
copper-gold  mineralization,  Filo Este and Filo  Central,  and one zone of high
sulphidation  alteration,  Zona  Colorada.  The  copper-gold  mineralization  is
characterized  by  strongly  anomalous  values in  copper  and gold  related  to
potassic  alteration of a Miocene diorite porphyry system. The high sulphidation
alteration  is the upper level  expression  of a separate,  but similar  diorite
porphyry.  The work  indicated  the  presence  of a major  mineralized  porphyry
beneath the Filo Este zone of potassic and propylitic alteration. Mineralization
is hosted within Oligocene  volcanic  breccias and phases of the Miocene diorite
porphyry which have undergone  moderate to strong biotite,  potassium  feldspar,
magnetite,  and quartz vein  alteration.  Hypogene  mineralization  consisted of
chalcopyrite  and bornite  within  quartz veins and as wallrock  disseminations.
Recent  supergene  oxidation has altered the primary copper  minerals to various
copper oxide and sulphate minerals to include malachite and antlerite.

A 600 metre trench was excavated over the Filo Este zone of potassic  alteration
and  encountered  510 meters of continuous  mineralization  that averaged 0.196%
copper  and 0.331 ppm gold.  Mineralization  consisted  of  fracture  controlled
sulfates and oxides and as  disseminations  in wallrock and A-type quartz veins.
Copper minerals were  approximately 80% oxide and 20% sulfides with the sulfides
consisting  of  chalcopyrite  and bornite.  Ground  magnetics  suggest a shallow
porphyry system underlying Filo Este ridge with strong magnetite alteration that
covers an area of at least 1.5  kilometres  by 800 meters.  The shallow depth of
intrusion is indicated by a steep magnetic  gradient and is consistent  with the
level of exposure of alteration and mineralization.  Two other distinct magnetic
sources were  encountered  at Filo Central and  underlying the East Cirque area.
The IP indicates several distinct copper sulfide bodies of 2-4% sulfide that are
coincident with magnetite alteration on Filo Este.

FILO ESTE DRILLING

In March, 2004, Amera carried out a 1,475 metre, 5 hole dimond drill program and
conduced further geological mapping and talus fine sampling on the northern part
of the Mogote property.  The drilling tested a portion of the Filo Este porphyry
target to a depth of up to 495 metres  over a strike  length of 860 metres and a
width of  approximately  250 metres.  Hole  MOG-04-1 had to be abandoned at 71.6
metres and hole  MOG-04-1A  was drilled from the same  location to target depth.
Highlights of the drill results are provided in table form below.

                                                                              53
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                     g/t         g/t          %
------------------------------------------------------------------------------------------------------------
Drillhole           Total Depth   From        To         Interval    Gold        Silver       Copper
------------------------------------------------------------------------------------------------------------
                    (metres)      (metres)    (metres)   (metres)    (LWA)       (LWA)        (LWA)
------------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>         <C>        <C>         <C>         <C>          <C>
MOG-04-1            71.6          2.0         70.0       68.0        0.43        13.9         0.244
------------------------------------------------------------------------------------------------------------
MOG-04-1A           495.3         6.0         495.3      489.3       0.23        2.6          0.170
------------------------------------------------------------------------------------------------------------
including                         258.0       424.0      166.0       0.19        2.2          0.243
------------------------------------------------------------------------------------------------------------
and                               308.0       396.0      88.0        0.20        1.9          0.290
------------------------------------------------------------------------------------------------------------
MOG-04-2            315.4         2.0         315.4      313.4       0.16        1.9          0.171
------------------------------------------------------------------------------------------------------------
including                         196.0       315.4      119.4       0.21        2.8          0.248
------------------------------------------------------------------------------------------------------------
MOG-04-3            300.0         6.0         300.0      294.0       0.11        1.3          0.078
------------------------------------------------------------------------------------------------------------
MOG-04-4            292.9         2.0         292.9      290.9       0.23        3.1          0.104
------------------------------------------------------------------------------------------------------------
</TABLE>

PLANNED FUTURE WORK

Amera is  continuing  to compile the data from the 2004 spring  program to guide
the next phase of exploration on the Mogote project.

LAS FLECHAS SOUTH 1-3

Las  Flechas  South  is  located  in  northwestern  San  Juan  province,  and is
approximately 340 km northwest of San Juan City. The property is located between
the  Maricunga  Au-Cu  belt to the north  and the El  Indio-Pascua-Lama-Veladero
Au-Ag-Cu belt to the south.  The Company holds a 100%  unencumbered  interest in
the the Las Flechas 1-3 cateos  (339258-G-92,  339259-S-92 and  295858-G-90) and
Adela discovery (1796-G-95).

Las Flechas  South formed part of an extensive  land package in the area held by
the Company and Viceroy  Resource Corp.  ("Viceroy").  Work completed to date at
Las  Flechas  South has been  limited  to  first-pass  sampling  and  geological
mapping. The claims, predominantly underlain by Tertiary volcanic rocks, cover a
very prominent,  large silicic-argillic  hydrothermal  alteration zone 15 square
kilometres in size. In 1995 a 10-day program of prospecting, rock, silt and soil
sampling and  reconnaissance  geological  mapping was carried out.  Silt samples
collected in 1995 from creeks  draining  this  anomaly  returned  elevated  gold
values ranging from  negligible up to 0.122 ppm. Rock samples assayed from below
detection up to 0.8 g/t gold.  Management  believes Las Flechas South represents
an excellent exploration opportunity, which has seen only cursory work, and that
further work has is recommended.

ARROYO CAJON DE LA BREA

The Arroyo  Cajon de la Brea  property is located east of Mina Macho  Muerto,  a
historic copper  occurrence along the Cajon de la Brea belt. The Company holds a
100%  unencumbered  interest  in the  Arroyo  Cajon  de la Brea  property  which
comprises a single claim (File Number: 0617-S95, 4,440 hectares). Mineralization
in the belt is  characterized  by vein  and  tourmaline-breccia  related  copper
deposits.  Copper  mineralization  and gold  enrichment  are related to distinct
granitic and rhyolitic host rocks cut by quartz-feldspar  porphyry dykes. A date
from one of these dykes  yielded an Eocene age (52 Ma).  Initial rock and stream
sediment sampling on Arroyo Cajon de la Brea identified  anomalous As, Zn, Ba, V
and Sr values.  No work has been completed on the project since 1997 and none is
planned in the immediate future.

SAN JUAN PROVINCE PROPERTIES - GUALCAMAYO AREA

Gold  Mineralization in the Gualcamayo area is spatially and genetically related
to porphyritic  Tertiary  intrusive  rocks including  small stocks,  plugs,  and
dykes. Mineralization occurs as proximal skarn (Magdelena, Emilia Innes, General
Belgrano) and as distal disseminated  sediment-replacement  bodies (Quebrada del
Diablo,  Omar,  Pirrotina)  both  of  which  are  hosted  within  limestone  and
calcareous  siltstone units. The Quebrada del Diablo (1.35 million ounces gold @
1.2 g/t) and several other important  exploration targets were discovered during
the late 1990's by a joint venture  partnership between Viceroy and the Company.
The Company has since divested its portion of the joint venture  agreement,  but
retains a 2% N.S.R. on the deposits.


                                                                              54
<PAGE>

QUEBRADA DEL DURANZO

The Company  holds a 100%  interest in the Quebrada del Duranzo  property  (File
Number   339149-L-93,   8,000   hectares)   in  the   Gualcamayo   area  of  the
Pre-Cordillera.  The  property  is  subject  to a payment  of  US$800,000  after
completion of a positive  feasibility  study to Lirfer S.A.. The property covers
geological environments  prospective for gold and copper-gold skarn or carbonate
replacement mineralization.

SIERRA PESCADO I & II

The Sierra  Pescado  property is located in northeast  San Juan  province to the
south of the Quebrada del Diablo target comprises Sierra Pescado I (File Number:
338073-E-92,  800  hectares) and Sierra  Pescado II (File Number:  425-185-2001,
2,080 hectares).  The Company holds a 100% interest in the property subject to a
payment of US$800,000 after completion of a positive feasibility study to Lirfer
S.A..  Prospecting and geochemical  sampling was carried out in late 1999 on the
Sierra Pescado I and II claims.  The results from this  preliminary  examination
indicate the presence of skarn-style  alteration  associated with anomalous gold
values which range from detection up to 0.19 g/t gold.

SIERRA YANSO

The Sierra Yanso cateo (File Number: 546145-L-94,  9,997 hectares) is located to
the  southeast of the Quebrada del Durazno  property.  The Company  holds a 100%
interest in the property  subject to a payment of US$800,000 after completion of
a positive feasibility study to Lirfer S.A.

SAN JUAN PROVINCE PROPERTIES - OTHER AREAS

CHINGUILLOS

The Chinguillos property a cateo (File Number:  0616-S-95,  3,610 hectares) plus
manifestation,  is located in the  Pre-Cordillera of northern San Juan Province,
approximately  215 kilometers north of the city of San Juan. The Company holds a
100%  unencumbered  interest in the property.  In the  southwestern  part of the
property,  strong  argillic  alteration is developed over a one by two kilometre
area  underlain  by dacite  intrusive.  Thin  carbonate  veins occur  within the
alteration  zone and samples of the vein  material  are  strongly  anomalous  in
copper,  arsenic,  nickel and cobalt.  Gold  values  range from nil to 0.04 g/t.
Initial rock samples also returned  anomalous Cu, As, Sb, Ni, Co, and Zn values.
Management  believes  additional  follow-up mapping and sampling are recommended
for the property.

GUARDIA VIEJA

The Guardia Vieja propert comprises one claim (File Number: 0294-F-18-95,  3,407
hectares) located 150 kilometers northwest of San Juan city. The Company holds a
100% unencumbered  interest in the property. To date only a short visit has been
make to the property by Company  geologists but initial  evaluation of satellite
imagery  indicates  the  presence of a color  anomaly  associated  with a linear
structure  that cuts  across the  property in a  northeast-southwest  direction.
Management believes a field evaluation of the property is warranted.

ARROYO DE LOS DIFUNTOS

The Arroyo de los Difuntos  property is located 140 kilometers  southwest of the
city of San Juan,  in the  Cordillera  Principal,  and comprises one cateo (File
Number:  0224-F18-95,  3,125  hectares).  The Company holds a 100%  unencumbered
interest the  property.  Arroyo de los  Difuntos was visited by Apex  Geoscience
Ltd. in March 1997. Apex reported localized zones of hydrothermal alteration and
skarning, and anomalous lead, nickel, cadmium, manganese, barium and vanadium in
rock  grab  samples  collected  near the  southern  claim  boundary.  Additional
sampling and prospecting to evaluate the alteration zones is warranted.

                                                                              55

<PAGE>



PORTEZUELO DE AGUA NEGRA

The Company holds a 100%  unencumbered  interest in the property that is located
northwest  of San  Juan and  south  of the  Valle  de Cura  area.  The  property
comprises one Cateo (File Number:  0855-M-95,  1,424.2 hectares).  No groundwork
has been  carried out on the  property  to date by the  Company  and  management
believes an evaluation is recommended.

FILO DE LAS OPENAS

The  Company  holds a 100%  unencumbered  interest  in the  Filo  de las  Openas
property,  located in northern San Juan province, 50 kilometres by road from the
town of Rodeo. The property  comprises one Cateo (File Number:  0639-S-95,  5410
hectares).  The property  covers the contact  between  altered host  sedimentary
rocks and the Permian Colanguil  muscovite-granite pluton. A 1997 reconnaissance
program of the  property by Apex  Geoscience  Ltd.  identified a 500 x 200 metre
alteration zone on the northwestern quadrant of the claim returned anomalous Au,
Ag, Ba, Cu, Zn,  Mo,  Ni,  Co,  Cd, As, Sb and Te.  Rock  samples  from the area
returned anomalous Cu, Ni, Co, As and Cr results. No further groundwork has been
carried out on the property to date by the Company.

PORTEZUELO TORTOLAS

The  Portezuelo  Tortolas  property  is  located  in  central  western  San Juan
province,  15 km  southeast  of Tambo.  The  Company  holds a 100%  unencumbered
interest in the property  which  comprises one Cateo (File Number:  0224-F18-95,
4,500  hectares).  No groundwork has been carried out on the property to date by
the  Company;  however,  management  believes  a  reconnaissance  evaluation  is
warranted.

CERRO DEL SALADO

The  Cerro  del  Salado   property  is  located  east  of  the  Valle  de  Cura,
approximately 70 km southeast of Barrick's Veladero project. The Company holds a
100%  unencumbered  interest in the  property  which  comprises  one cateo (File
Number:  295687-G-90,  2,413  hectares).  The claim covers the contact between a
Permian  granitic  pluton  and host  Carboniferous  clastic  sedimentary  rocks.
Exploration targets include gold and base metal veins. Initial evaluation of the
project was carried out in 1995.  Results from stream sediment samples collected
on the project ranged from below detection up to 0.093 ppm Au. No groundwork has
been  carried  out on  the  property  since  1995  but  follow-up  of  anomalous
geochemistry is recommended.

PELAMBRES 2

The  Pelambres  2 property  (100%  owned by the  Company)  is located  along the
Chilean-Argentine  border in the southwestern corner of San Juan province. It is
a type of tenure called a discovery (File Number: 520-0626-97, 345 hectares) and
was staked to cover extensions of prospective rocks onto open ground. No work is
currently planned on this property.








                                                                              56


<PAGE>


                              [Peru Property Map 1]





















                                                                              57
<PAGE>


PERUVIAN PROPERTIES

RIO TABACONAS PROPERTY

PROPERTY DESCRIPTION, LOCATION, AND ACCESS

The  9,000  hectare  (22,230  acres)  Rio  Tabaconas   property  is  located  in
northwestern Peru,  approximately 35 kilometres south of the southernmost tip of
Ecuador and 760 kilometers  NNW of Lima.  Access to the property is by road from
the city of Chiclayo, approximately a 12-hour trip.

Pursuant  to  an  agreement   between   IMPSA  Peru  and   Sociedad   Minera  de
Responsabilidad  Limitada  Don  Alberto,  JJ De Piura  and  Sociedad  Minera  de
Responsibilidad  Limitada Nova JJ de Piura dated Janury 24, 1997, as  amended on
January 31, 2000, August 22, 2000, April 24, 2001, December 23, 2002, and August
15,  2003,  IMPSA Peru  acquired  an option from J and J Madueno  Bustamante  to
purchase a 100% interest in three  concessions  totalling  2,890 hectares (7,138
acres) in the Cajamarca  Department of San Ignacio Province in northern Peru. In
addition,  IMPSA Peru owns nine claims  totalling 5,400 hectares (13,338 acres),
which  surround  and overlie  the  optioned  concessions.  An  additional  2,700
hectares  (6,669 acres) were added during 2003.  Collectively these are known as
the Rio  Tabaconas  project.  The  terms  of the  option  agreement  require  an
aggregate  sum of  US$1,500,000  payable  over  seven  years and an  exploration
program  totalling  US$525,000 over three years (the exploration  commitment has
been fulfilled).  On June 28, 2002, the Company  suspended  further  exploration
activities at the Rio Tabaconas  project.  This decision was made in response to
the local community expressing its concerns with mineral exploration activities.
The Company is making progress towards the finalization of an agreement with the
local  community.  The Company has  deferred  any further  exploration  until an
agreement with the local community has been  finalized.  As a result the Company
declared  force  majeure,  as allowed under the option  agreement.  On August 1,
2003,  the  Company  commenced  paying  US$1,500  per month to the  optionor  as
compensation  until the Company can reach an agreement with the local community.
Accordingly,  the  Company  and the  optionor  have  revised  the  timing of the
remaining US$1,315,000 option payments.

Of the total option  payments  US$185,000 has been paid. The remaining  payments
and due dates were:  US$100,000 on December 20, 2003, US$200,000 on December 20,
2004 and  US$1,015,000  when the option  will be  executed  on  commencement  of
commercial exploitation of the property.  Alternatively, in the event commercial
exploitation  of the production  does not occur,  the payments are to be made in
four  installments  of  US$200,000  commencing  August 20,  2005 and  subsequent
installments on December 30 of each following year, with a final  installment of
US$215,000  due  December  31,  2009.  In the event that  commercial  production
commences during this period,  the full remaining  balance is due within 20 days
of production start-up.  As a result of the declaration of force majeure all the
above dates have been delayed until the Company removes its declaration of force
majeure.  At that point the timing will allow the Company to make these payments
based on the elapsed time added to the original committed dates.

During the 2004 fiscal  year,  $50,000  will be used to pay  government  charges
(known as "canons") for the right to do exploration  work. These charges are the
Company's  responsibility and are not credited to option payments or exploration
program requirements.

GEOLOGICAL SETTING

Rocks exposed at the Tabaconas property are dominated by volcanic flows,  tuffs,
and coarse pyroclastic rocks assigned to the Oyotun Formation,  of Jurassic age.
This formation also includes tuffaceous sedimentary rocks and volcanic sediments
with  intercalated  limestone  in the  higher  parts of the  volcanic  sequence.
Plutonic rocks of Cretaceous-Tertiary  age intrude all the supracrustal rocks in
the region except for the youngest  Tertiary  volcanic  sequences.  The dominant
intrusive type in the area of the Tamborapa  property is porphyritic  granite of
the Paltashaco pluton.

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

                                                                              58
<PAGE>

Zanja,  Jehuamarca and Las Huaquillas  volcanic or  sedimentary-hosted  gold and
polymetallic  deposits.  The deposits in the belt are  typically of Tertiary age
and  genetically  linked to heat  engines  or  convective  hydrothermal  systems
associated with Tertiary intrusive and volcanic centers.

EXPLORATION HISTORY

The first modern examination of what is now the Tabaconas property was conducted
in the late 1980s when a government-funded  Peruvian-German consortium re-opened
the old mine workings on Cerro Tablon and carried out  experimental  geochemical
and geological  studies in the mine area.  The Company  acquired the property in
January 1997.

The Company  carried out brief property  examinations  in 1997 and 1999.  During
mid-2000,  The Company carried out a four-week  exploration program. In November
2000, a  helicopter-borne  electromagnetic  ("EM") and magnetic survey was flown
over the property.  The magnetic results provided a structural framework for the
whole   property,   and  showed  the  presence  of  a  number  of   well-defined
east-northeast-trending  magnetic features. This east-northeast structural trend
is an  important  element at some  large  mineral  deposits  in  northern  Peru,
including Yanacocha, Antamina and Magistral.

In July 2001 a pre-drilling  surface  exploration program was carried out and in
September 2001, a 33 hole, 1,600-meter diamond drill program was undertaken. The
drill  program  tested three areas  (Tablon,  Tablon West and La Union Ridge) on
Cerro Tablon.  Other exploration  conducted  simultaneously  included grid-based
soil sampling,  geological  mapping and trenching.  The most recently  completed
work  program  was  conducted  from  February  to  March of  2002.  The  program
incorporated  IP-resistivity and magnetometer  surveys,  detailed geological and
structural mapping,  and rock, soil, and stream sediment  geochemical  sampling.
The results of this program facilitated  preparation of the proposed 3,000-metre
drill  program.  This program was put on hold due to unresolved  issues with the
local communities.

MINERALIZATION AND PROPERTY GEOLOGY

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

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

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

CERRO TABLON MINERALIZATION

There are seven named targets at Cerro Tablon, six of which have been classified
as drill-ready. These are, in order of importance: the Tablon Main, Tablon West,
Tablon South, Tablon Southwest Extension,  La Union, North, and Sphalerite Creek
Zones.  Gold-rich  massive  sulphide  boulders (22 samples average 9.3 g/t Gold)
derived  from the Tablon Main and West zones now lie at the base of Cerro Tablon
in Quebrada de las Minas.  These boulders  originally  drew the attention of the
Company's  geologists and led to the discovery of outcropping  mineralization on
Cerro Tablon.


                                                                              59
<PAGE>

TABLON MAIN ZONE

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

Mineralization  at the Tablon  Main Zone  consists  of massive to  semi-massive,
fine-  to   medium-grained   pyrrhotite,   pyrite,   sphalerite,   galena,   and
chalcopyrite.  Gold  grades  commonly  range  from  several  grams  per tonne to
approximately  30 g/t with rare intervals  returning up to 118 g/t Au.  Sulphide
bodies are generally  massive to semi-massive and often include sulphide veinlet
or "stringer" zones below the massive sulphide body. Visible gold has been noted
within   veinlet-style   mineralization.   Massive  sulphides  (mantos)  at  the
limestone/footwall  andesite  contact are commonly  several  metres thick (up to
7m).  Fault  related  and  intrusive  contact  related  mineralization  is quite
variable  in size  and  morphology;  drillhole  intersections  range  up to 16.4
metres. Significant intersections from the 2001 drill program include:
--------------------------------------------------------------------------------
DDH               From (m)         To (m)           Length (m)        Gold (g/t)
--------------------------------------------------------------------------------
RT01-06           9.07             30.48            21.41             3.10
--------------------------------------------------------------------------------
RT01-07           10.08            30.00            19.92             2.41
--------------------------------------------------------------------------------
RT01-11           15.54            18.20            2.66              14.20
--------------------------------------------------------------------------------
RT01-13           13.41            38.83            25.42             8.78
--------------------------------------------------------------------------------
RT01-15           17.68            19.36            1.68              5.47
--------------------------------------------------------------------------------
RT01-16           16.17            20.07            3.9               13.18
--------------------------------------------------------------------------------
RT01-21           1.52             10.97            9.45              5.08
--------------------------------------------------------------------------------
RT01-22           47.44            50.3             2.86              15.22
--------------------------------------------------------------------------------
RT01-29           34.85            51.25            16.4              17.99
--------------------------------------------------------------------------------
RT01-29           42               44.15            2.15              118.10
--------------------------------------------------------------------------------

TABLON WEST ZONE

Approximately  300 metres southwest of the Tablon Main Zone,  massive  sulphides
with  significant  gold grades  outcrop at the Tablon  West Zone.  This zone was
drill-tested  by holes RT01-23 to 27 during the 2001 drill program.  The drilled
massive  sulphides at Tablon West are hosted by the tuffaceous  siltstone  which
occurs stratigraphically above the more prospective  limestone/footwall andesite
contact.  This contact remains largely untested below the known  mineralization.
Significant drill intersections at the Tablon West Zone include:
--------------------------------------------------------------------------------
DDH               From (m)         To (m)           Length (m)        Gold (g/t)
--------------------------------------------------------------------------------
RT01-25           33.00            36.10            3.10              12.97
--------------------------------------------------------------------------------
RT01-26           0.00             6.00             6.00              6.95
--------------------------------------------------------------------------------
RT01-26           1.00             2.00             1.00              17.37
--------------------------------------------------------------------------------
RT01-27           9.76             12.00            2.24              1.49
--------------------------------------------------------------------------------

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

CERRO LAS MINAS TARGETS

The Cerro Las Minas area contains four known  mineralized zones with significant
concentrations  of gold.  Three of the four zones (Peak Zone, West Breccia Zone,
and Minas Sur) have been mapped, sampled, and tested by geophysical surveys with
positive results.  Styles of gold mineralization vary significantly  between the
different zones

                                                                              60

<PAGE>


on Cerro Las Minas  (disseminated  gold within  phyllic  alteration,  shear-zone
hosted  lode  gold),  but it is  interpreted  that all are  related  to a single
intrusion-related mineralizing event.

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

FUTURE WORK PLANNED

The Company has  continued to maintain the Rio  Tabaconas  properties in Peru in
good standing,  although the "force  majeure"  provision of the contact has been
invoked  until  a  resolution   of  the  local   cultural,   developmental   and
environmental  concerns  pertaining  to mining  activities  in the region can be
addressed. The Company and the optionor have revised the timing of the remaining
US $1,315,000  option payments.  On August 1, 2003, the Company commenced paying
US $1,500 per month to the optionor as compensation  during this waiting period.
Upon  reaching an  agreement  with the local  communities  the Company  plans to
proceed  with a Phase II  diamond  drill  program.  This  program  will  include
drilling of targets on Cerro Tablon, Cerro Las Minas and possibly other areas of
the property. Management expects to revise the term of the option agreement upon
resolution of this issue.

ALTO CHICAMA PROPERTIES

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

PRINCIPAL OFFICE

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

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.  See "Item 7. Major
Shareholders and Related Party  Transactions - Related Party  Transactions." For
the three month  period  ending on March 31,  2004,  the  Company  has  received
$21,315 (2003 - $6,000) from Amera.

OTHER ASSETS

INVESTMENT IN IMPSA

The Company  directly  owns 80% of the issued  share  capital of IMPSA (BVI) and
owns the remaining 20% through its wholly-owned subsidiary, IHC. IMPSA (BVI) has
one  wholly-owned  subsidiary,  IMPSA  Peru,  which  owns or has a right to own,
through  an option  agreement  and  staked  claims,  the  property  known as Rio
Tabaconas.  See "Item 4.  Information  on the Company -  Properties,  Plants and
Equipment  -  Principal   Properties  -  Peruvian  Properties  -  Rio  Tabaconas
Property."

MARKETABLE SECURITIES

In connection with the exchange of the Company's interest in Minas Barbados, the
Company received,  net of the distribution to its shareholders,  660,000 Viceroy
Common  Shares.  As at December 31,  2003,  the Company held shares in  Viceroy,
Quest Capital and Spectrumgold with a quoted market value of $161,546. The Quest
and  Specreumgold  shares  were  received as a result of the  reorganization  of
Viceroy.

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

                                                                              61
<PAGE>


31, 2003 the Company held 600,000 shares of Amera Resources  Corporation  with a
quoted market value of $546,000 and 500,000  shares of Ballad Gold & Silver Ltd.
with a quoted market value of $325,000.  It is the  Company's  intention to sell
the marketable securities so as to maximize its return.

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,  2003,  2002  and  2001  should  be  read in
conjunction  with the  consolidated  financial  statements  of the  Company  and
related notes included therein.

CRITICAL ACCOUNTING POLICIES

Reference  should be made to the change in  accounting  policy  and  significant
accounting  policies  contained  in  notes  2 and 3 of  the  December  31,  2003
consolidated   financial  statements  of  the  Company  attached  hereto.  These
accounting  policies can have a significant impact of the financial  performance
and financial position of the Company.

USE OF ESTIMATES

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

MINERAL PROPERTIES AND DEFERRED COSTS

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

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

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

The Company's  consolidated  financial statements are in Canadian dollars (CDN$)
and are prepared in accordance  with Canadian GAAP, the application of which, in
the case of the  Company,  conforms  in all  material  respects  for the periods
presented with U.S. GAAP except for the measurement  differences  referred to in
Note 10 of the consolidated financial statements of the Company included herein.
The noon rate of  exchange  on June 22,  2004,  reported  by the  United  States
Federal  Reserve Bank of New York for the  conversion  of Canadian  dollars into
United  States  dollars was  CDN$1.3592  (US$0.7357 = CDN$1.00).  The effects of
inflation  and price  changes  have not had a material  impact on the  Company's
income or net sales revenues during the past three years.

The Company and its  subsidiaries'  functional  currency is the Canadian dollar.
The majority of the Company's cash deposits and accounts are in Canadian  funds.
The Canadian dollar varies under market conditions, the continued

                                                                              62
<PAGE>


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
and exploration of mineral properties in South America, principally in Argentina
and  Peru.  At  this  stage  the  Company  has  no  producing   properties  and,
consequently, has no current operating income or cash flow.

The  Company's  accounting  policy is to defer all direct  costs  related to the
acquisition  and  exploration  of mineral  properties  held or controlled by the
Company on an  individual  property  basis  until  viability  of a  property  is
determined.  General exploration costs are expensed as incurred. When a property
is placed in commercial  production,  such deferred costs are depleted using the
units-of-production  method.  Management of the Company periodically reviews the
recoverability  of the capitalized  mineral  properties.  Management  takes into
consideration  various  information  including,  but not limited to,  results of
exploration  activities  conducted to date,  estimated future metal prices,  and
reports and opinions of outside geologists, mine engineers and consultants. When
it is  determined  that a project or property  will be abandoned or its carrying
value has been  impaired,  a write  down is taken for any  expected  loss on the
project  or  property.  At  December  31,  2003,  the  Company  had  capitalized
$3,719,087 (2002 -$3,181,277; 2001 - $2,777,458) on its Argentine properties and
$3,164,554 (2002 - $2,666,450; 2001 - $1,803,714) on the Peruvian properties.

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

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

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

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

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


                                                                              63
<PAGE>

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

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.

In  February  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
$342,500.  In addition the Company has received  $2,779,149 from the exercise of
warrants and options from January 1 to May 31, 2004.

During the year ended  December 31,  2001,  the Company did not issue any common
shares on the exercise of warrants. During the year ended December 31, 2002, the
Company  issued  2,085,361  common shares on the exercise of warrants and agents
warrants for  $837,512.  During the year ended  December  31, 2003,  the Company
issued  5,074,996  common shares on the exercise of warrants and agents warrants
for  $3,035,765.  As of December  31, 2003,  the Company had reserved  6,042,448
common shares for issuance upon the exercise of outstanding warrants.

Cash on hand at March 31,  2004 was  approximately  $8,000,000.  During the nine
month  period  from March 31,  2004 to  December  31,  2004,  the Company has no
planned exploration expenditures in Argentina for the Valle del Cura region, the
Gualcamayo  region,  or the NW San Juan  region.  The  Company  plans to  expend
$2,100,000 on the Phase II drilling program at the Navidad project. In the event
the  reorganization  is approved,  management  believes Golden Arrow will expend
$350,000 on an initial  drill  program at the Laguna de los Toros  property  and
$200,000 on the Rio Tabaconas project  (formerly known as Tamborapa  project) in
Peru during the nine month period from March 31, 2004 to December 31, 2004.

RESULTS OF OPERATIONS

The  following  discussion  of the results of  operations of the Company for the
fiscal  years  ended  December  31,  2003,  2002  and  2001  should  be  read in
conjunction with the consolidated  financial  statements of the Company attached
hereto and related notes included therein.

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 increase in the loss  experienced by the Company in 2003,  compared to
2002,  was due to a number of factors of which  $1,705,940  can be attributed to
operating expenses and $272,372 to non-operating items.

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 has continued to maintain the Rio  Tabaconas  properties in Peru in good
standing,  although the "force majeur" provision of the contact has been invoked
until a  resolution  of the  local  cultural,  developmental  and  environmental
concerns  pertaining to mining  activities  in the region can be  addressed.  On
December  15, 2003 Barrick  served  notice that it would not be  exercising  its
option on the  Potrerillos  or Rio de las Taguas  properties  and the Company is
pursuing  other  partners  for the  continued  exploration  of these drill ready
projects.  The Company entered into a number of joint venture  agreements  which
resulted in the farm-out of several of its properties.

                                                                              64

<PAGE>


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

The Company's 2003 operating  expenses were $3,164,216 an increase of $1,705,940
from 2002. A  significant  portion of the increase for 2003 is attributed to the
Company's  application  of the fair value method of accounting for stock options
granted to its employees and  directors.  As permitted,  the Company has elected
prospective  application,  effective January 1, 2003. Previously options granted
to the  Company's  directors and  employees  were only  disclosed on a pro forma
basis in the notes to the Company's  consolidated  financial statements.  During
2003 the Company recorded a non-cash compensation expense of $1,487,235 relating
to stock options granted to the Company's employees,  directors and consultants.
In 2002, the Company  recorded an expense of $128,260 for stock options  granted
to its  consultants  and  disclosed  a pro forma  charge of  $140,840  for stock
options  granted  to its  directors  and  employees.  Had  the  Company  applied
retroactive  treatment  it would have  recorded an expense of $269,100 for 2002.
Much of the balance of the increase in the operating  expenses can be attributed
to the Navidad Project program: (1) Corporate development and investor relations
increased  $103,333;  (2)  General  exploration  increased  $46,638;  (3) Travel
increased  $25,465.  The increase of $124,935 in professional  fees is primarily
due to legal costs incurred in connection with the Aquiline legal action.

The Company recorded a gain of $481,779 on the optioning of properties to Ballad
and Amera.

The Company wrote down the value of its mineral properties and deferred costs by
$776,626 in 2003.  This adjustment of property values reflects the expiration of
the agreement with Barrick on the Company's  Valle de Cura area  properties.  In
2002 the Company did not write off any mineral properties and deferred costs.

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  $12,097,844  at December  31,  2003.  The
Company's  cash  position at December  31,  2003 was  $4,454,241  an increase of
$3,018,117 from December 31, 2002.

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

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

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

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

As a result of extremely  encouraging  results from Phase I drilling in the fall
of 2001, the Company  continued to focus its main exploration  activities on the
Rio  Tabaconas  project  in Peru  for the  first  half of 2002 by  carrying  out
extensive  pre-drill work to further define drill targets on the property's most
advanced  gold zones,  Tablon and Cerro Las Minas.  As a result of the pre-drill
program the potential size of the mineralized zone was significantly expanded. A

                                                                              65
<PAGE>

substantial  follow  up  Phase  II  drill  program  was  developed  to test  the
identified drill targets. In order to obtain financing for the work. The Company
proceeded  with an extensive  market  awareness  program and investor  relations
campaign  throughout  North  America and Europe with the  assistance  of several
consultants.  During the first six months of 2002 the Company  raised net equity
proceeds of $1,659,827 for further exploration and property payments in Peru and
Argentina and general working capital.

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

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

Information  on the  Company -  Properties,  Plants and  Equipment  -  Principal
Properties - Peruvian Properties - Rio Tabaconas  Property." The Company intends
to conduct further  exploration only after an agreement with the local community
of Tamborapa has been finalize.

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

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

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

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

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

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

                                                                              66
<PAGE>


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

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

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

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

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

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

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

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

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

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

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

                                                                              67
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company's  cash position at December 31, 2003 was  $4,454,241 an increase of
$3,018,117  from December 31, 2002.  Total assets  increased from  $7,432,489 at
December 31, 2002 to $12,097,844 at December 31, 2003, funded primarily from the
issue of common shares for net proceeds of  $6,352,774.  See "Item 5.  Operating
and Financial Review and Prospects - Overview."

The Company has capitalized  expenditures of approximately $1,500,000 subsequent
to  December  31, 2003 on the  Navidad  Project  related to the Phase I drilling
program which continued into March 2004.

As at May 31, 2004 the Company had working capital of approximately $7,600,000.

The Company  considers  that it has  adequate  resources to maintain its ongoing
operations but currently does not have sufficient working capital to fund all of
its planned exploration work and property commitments. A Phase II budget for the
Navidad Project has been approved in the amount of $2,100,000.  The Company will
continue to rely on successfully  completing  additional equity financing and/or
conducting joint venture  arrangements to further exploration on its properties.
There can be no assurance  that the Company will be  successful in obtaining the
required  financing or  negotiating  joint  venture  agreements.  The failure to
obtain such financing or joint venture agreements could result in the loss of or
substantial dilution of its interest in its properties.

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

As at December 31, 2003 the Company's  accounts payable and accrued  liabilities
included approximately $250,000 of costs related to the Phase I Navidad drilling
program  which was underway at that date.  The balance was for normal  operating
expenses and accruals for professional fees. The March 31, 2004 accounts payable
and accrued liabilities included  approximately $500,000 of costs related to the
Navidad drilling program which was completed in early 2004.

During the period from  January 1, 2004 through  December 31, 2004,  the Company
has property payments and rent (on the Company's offices) obligations  totalling
$324,000.

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.

                                                                              68
<PAGE>


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                    $2,427,000     $247,000        $538,000       $270,000      $1,372,000
Long-term Debt Obligations
Capital (Finance) Lease Obligations
Operating Lease Obligations                $205,000       $77,000         $128,000
Purchase Obligations
Other Long-Term Liabilities Reflected in
the Company's Balance Sheet under the
GAAP of the Primary Financial Statements
--------------------------------------------------------------------------------------------------------------------
Total                                      $2,632,000     $324,000        $666,000       $270,000      $1,372,000
====================================================================================================================
</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(2)<F2>                      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 58                                    British Columbia mineral exploration     Director since February 15, 1999.
                                          company from March 2002 to present.
                                          President of Nevada Star Resources
                                          Corp, from March 5, 2002 to present.
                                          President and CEO of LaTeko
                                          Resources Ltd. from December 1996 to
                                          February 2002.
-----------------------------------------------------------------------------------------------------------------------
JOSEPH GROSSO -                           Director and officer of the Company      President since February 1990.
President, Chief Executive Officer        since February 1990.  President of
and Director                              Oxbow International Marketing Corp.,     Chief Executive Officer since
Age 66                                    a private British Columbia company.      February 1990.

                                                                                   Director since February 1990.
-----------------------------------------------------------------------------------------------------------------------
ARTHUR LANG  -                            Chief Financial Officer of the           Chief Financial Officer since April
Chief Financial Officer,                  Company since April 2, 2004.             2, 2004.
Vice-President, and Director              Consultant providing financial
Age 60                                    management services to various           Vice-President since April 2, 2004.
                                          clients from 1999 to April 2004
                                          through Arthur G Lang Inc., a            Director since April 2, 2004.
                                          private British Columbia company.
-----------------------------------------------------------------------------------------------------------------------

                                                                              69
<PAGE>

<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                            PRINCIPAL OCCUPATION DURING PAST              PERIOD OF SERVICE AS A
  NAME, AGE AND POSITION (1)<F1>                      FIVE YEARS(2)<F2>                      DIRECTOR/OFFICER
-----------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                                      <C>
NIKOLAOS CACOS -                          Corporate Secretary and                  Secretary since June 25, 1998.
Corporate Secretary and Director          Vice-President Investor Relations of
Age 37                                    the Company since 1993. Director of      Director since June 20, 2002
                                          Info Touch Technologies, a
                                          technology company, since August
                                          1998.  President and CEO of Gatco
                                          Technology Corp. a capital pool
                                          corporation, from May 2000 to Oct.
                                          2001.  President and director of
                                          Amera Resources Corporation, a
                                          private British Columbia company,
                                          since April 2000.
-----------------------------------------------------------------------------------------------------------------------
SEAN HURD  -                              Investor relations manager for the       Director since September 2001.
Director                                  Company  from June 2002 to present
Age 37                                    and director since September 2001.
                                          Investor relations manager for Mercury
                                          Scheduling  Systems  Inc.  from August
                                          2001  to  March  31,  2002.   Investor
                                          relations manager for the Company from
                                          June  2000 to  August  2001.  Investor
                                          relations  for  Senate   Capital  from
                                          February 1996 to May 2002.
-----------------------------------------------------------------------------------------------------------------------
ROBERT STUART (TOOKIE) ANGUS              Director of the Company from May         Director since May 2003
Director                                  2003 to present.  Managing Director,
Age 55                                    Mergers and Acquisitions, Endeavour
                                          Financial Ltd., November 2003 to
                                          present. Partner in law firm, Fasken
                                          Martineau DuMoulin LLP from February
                                          2001 to October 2003.  Partner in
                                          law firm, Stikeman Elliott from 1998
                                          to 2001.
-----------------------------------------------------------------------------------------------------------------------
CHET IDZISZEK                             Director of the Company from May         Director since May 2003
Director                                  2003 to present.  President, CEO and
Age 56                                    director of Madison Enterprises
                                          Corp. from 1993 to present. President,
                                          CEO and  director of Adrian  Resources
                                          Ltd. from June 1990 to present.
-----------------------------------------------------------------------------------------------------------------------
DAVID TERRY                               Director of the Company from May         Director since May 2004
Director                                  2004 to present.  Vice President,
Age 39                                    Exploration for Amera Resources
                                          Corporation   from   March   2004   to
                                          present.  Regional  geologist with the
                                          British  Columbia  Ministry  of Energy
                                          and   Mines  in   Cranbrook,   British
                                          Columbia  from May 2001 to March 2004.
                                          Project Geologist with Boldien Limited
                                          prior to May 2001.
-----------------------------------------------------------------------------------------------------------------------
DAVID HORTON                              Senior Vice-President of Canaccord       Nominee for Director
Nominee for Director                      Capital Corporation from 1996 to
Age 68                                    present.
-----------------------------------------------------------------------------------------------------------------------
<FN>
(1)<F1>  The persons listed have been proposed to the shareholders  as  nominees
         for the board of  directors  at the  meeting of shareholders to be held
         June 24, 2004.

                                                                              70
<PAGE>


(2)<F2>  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.  With the exception of the agreement with Endeavour  Financial Ltd.
relating to Mr. Angus' appointment to the board of directors, to the best of the
Company's knowledge,  there are no known arrangements or understandings with any
major shareholders, customers, suppliers or others, pursuant to which any of the
Company's  officers or  directors  was selected as an officer or director of the
Company.  See "Item 7. Major  Shareholders  and  Related  Party  Transactions  -
Related Party Transactions."

CONFLICTS OF INTEREST

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

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

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

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


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

Nikolaos Cacos                      Amera Resource Corporation                President/Director    Apr/00 to present

Arthur Lang                         Mr. Lang is not an officer or director
                                    of any other public company.

Joseph Grosso                       Amera Resource Corporation                Chairman/Director     Feb/04 to present

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

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


                                                                              71
<PAGE>
<CAPTION>
NAME OF DIRECTOR                    NAME OF COMPANY                           POSITION              TERM OF SERVICE
<S>                                 <C>                                       <C>                   <C>

                                    Nevsun Resources Ltd.                     Director              Jan/03 to present
                                    Canico resource Corp.                     Director              Sept/02 to present
                                    Plutonic Capital Inc.                     Director              June/99 to present
                                    First Quantum Minerals Ltd.               Director              Dec/97 to present
                                    Blackstone Ventures Inc.                  Director              Sept/97 to present
                                    Adrian Resources Ltd.                     Director              July/03 to present
                                    Dynasty Gold Corp.                        Secretary/Director    Oct/99 to present
                                    Bema Gold Corporation                     Director              June/92 to present

Chet Idziszek                       Adrian Resources Ltd.                     Chairman/CEO/         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
                                    Oromin Explorations Ltd.                  President/Director    Feb/94 to present
                                    The Havana Group Inc.                     Director              Aug/02 to present


David Terry                         Amera Resource Corporation                Vice President        Mar/04 to present
                                                                              Exploration

David Horton                        Mr. Horton is not an officer or
                                    director of any other public company

</TABLE>

COMPENSATION

During the fiscal year ended  December 31, 2003,  the  directors and officers of
the Company, as a group, had received or charged the Company a total of $330,600
(2002 - $326,326;  2001 - $326,707)  for services  rendered by the directors and
officers or companies owned by the individuals.

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

EXECUTIVE COMPENSATION

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

During the year ended  December  31, 2003,  the Company had one Named  Executive
Officer:  Joseph  Grosso,  President  and Chief  Executive  Officer  (the "Named
Executive  Officer").  The  following  table sets forth all annual and long-term
compensation  awarded,  paid  to or  earned  by the  Company's  Named  Executive
Officers during the financial years ended December 31, 2001, 2002 and 2003.

                                                                              72
<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          2003        $102,000       -         -         200,000          -           -           -
President and Chief    2002        $102,000       -         -         500,000          -           -           -
Executive Officer      2001        $102,000       -         -         300,000          -           -           -
--------------------------------------------------------------------------------------------------------------------
<FN>
(1) <F1> Fiscal years ended December 31, 2003, 2002 and 2001.
(2) <F2> See "Options and Stock Appreciation Rights".
</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  Officer  during  the most
recently completed fiscal year.

OPTIONS AND STOCK APPRECIATION RIGHTS

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

OPTION GRANTS

The following  table sets forth stock options  granted by the Company during the
financial  year ended December 31, 2003 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            200,000              10.42%                 $1.87                  $1.87           August 27, 2008
<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>

                                                                              73
<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              375,000             $454,500                325,000/Nil                $156,250 / 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, 2002,
         $1.75, 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, 2003 for
their services in their capacity as directors.

During the last completed  financial year ending  December 31, 2003, the Company
paid a total of $156,600 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)     FINANCIAL YEAR(2)    BASE PRICE(3)   ON DATE OF GRANT      EXPIRATION DATE
                              (#)                              ($/Security)       ($/Security)
<S>                         <C>                 <C>               <C>               <C>             <C>
Directors as a group        300,000             15.64%            $0.90             $1.07             May 30, 2008
who are not Named           225,000             11.73%            $1.87             $1.87           August 27, 2008
Executive Officers
<FN>
(1)<F1>  All options are for the Company's Common Shares.

(2)<F2>  Percentage of all options granted in the period.

(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>


                                                                              74
<PAGE>

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             379,600             $235,228                547,900/Nil                $515,915 / 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,  2002,  $0.55,  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.

MANAGEMENT CONTRACTS

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, 2003, Oxbow was paid $102,000.

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

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

NIKOLAOS CACOS

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

                                                                              75
<PAGE>


SEAN HURD

By  agreement  dated June 11, 2001,  as  extended,  Sean Hurd, a director of the
Company,  was paid $4,000 per month for professional  services rendered.  During
the fiscal year ended  December  31,  2003,  Mr. Hurd was paid  $48,000  (2002 -
$52,050; 2001 - $30,882). On January 5, 2004 this contract was amended to reduce
the fee paid, which currently is $2,400 per month.

GERALD CARLSON

By agreement  dated  February 15, 2001,  between the Company and KGE  Management
Ltd., a private  company owned by Gerald Carlson,  Chairman of the Company,  Mr.
Carlson  was paid a  consulting  fee of $36,000  per year,  plus $550 per day if
services are rendered for more than five days per month,  through KGE Management
Ltd. The agreement expired January 14, 2001 and was renewed until June 18, 2003.
By mutual  agreement on October 3, 2002, the fee was changed to $2,000 per month
plus $550 per day if services  were  rendered for more than four days per month.
During the fiscal year ended  December 31, 2003, the Company paid $41,400 to KGE
Management  Ltd.  (2002 -  $33,000;  2001 -  $33,000).  On April  1,  2004 a new
agreement was executed providing for a monthly retainer of $2,000 per month plus
a fee of $600 per day for  additional  days in excess of 3 days per  month.  Mr.
Carlson is  required  to  provide a minimum of eight days of service  per month.
This agreement continues to March 31, 2005.

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

ARTHUR LANG

By agreement dated April 23, 2004,  Arthur Lang, the Chief Financial Officer and
a director of the Company, is paid a salary of $80,000 per year for professional
services rendered. Mr. Lang is also reimbursed for certain monthly club dues.

DAVID TERRY

As of the date of this report,  the Company does not have an agreement  with Mr.
Terry; however, Mr. Terry has entered into a Consulting Agreement dated February
16, 2004,  with Amera  pursuant to which Mr.  Terry is paid a monthly  salary of
$7,500. In addition, Mr. Terry is to be granted stock options from Amera and the
Company.  Mr. Terry receives a $500 per month  automobile and parking  allowance
from Amera and Amera gave Mr.  Terry a  relocation  allowance  of  $25,000.  The
agreement  is  effective  from March 16,  2004 to March 16,  2006.  Prior to the
effective  date of the  agreement,  Mr. Terry  billed Amera  $405.00 per day for
services.  In the event the  agreement  is  terminated  Amera may pay Mr.  Terry
$7,500 (plus GST) in lieu of one month's notice.

The Company has agreed to reimburse Amera for a portion of Mr. Terry's costs.

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:


                                                                              76
<PAGE>

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

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

INDIVIDUAL BANKRUPTCIES

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

BOARD PRACTICES

REMUNERATION COMMITTEE

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

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

AUDIT COMMITTEE

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

The Audit Committee must review the annual  financial  statements of the Company
before they are approved by the board of directors of the Company.  The board of
directors of the Company must review, and if considered appropriate, approve the
annual  financial   statements  of  the  Company  before   presentation  to  the
shareholders  of the Company.  In addition,  the Audit  Committee is responsible
for:

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

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

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

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

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


                                                                              77
<PAGE>

EMPLOYEES

As of  December  31,  2003,  the Company had nine  full-time  employees  and two
part-time  employees in the area of management and administration  compared with
eight full-time  employees and two part-time employees in the area of management
and  administration  at December 31, 2002 and seven full-time  employees and one
part-time  employee in the area of management and administration at December 31,
2001.  Exploration  activities  are  conducted  by  consultants,   laborers  and
technicians hired for the duration of the exploration program.

SHARE OWNERSHIP

As of May 31, 2004, the Company had 41,115,376 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 31, 2004.

<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                                   2,037,026(2)<F2>             4.85
Common Stock             Nikolaos Cacos                                   233,551(3)<F3>              0.57
Common Stock             Sean Hurd                                        251,100(4)<F4>              0.61
Common Stock             Gerald Carlson                                   380,000(5)<F5>              0.92
Common Stock             David Terry                                      70,000(6)<F6>               0.17
Common Stock             Chet Idziszek                                    308,000(7)<F7>              0.75
Common Stock             Robert Stuart (Tookie) Angus                     190,000(8)<F8>              0.46
Common Stock             Arthur Lang                                      50,000(9)<F9>               0.12
Common Stock             Officers and Directors (as a group, 8           3,519,677(10)<F10>           8.13
                         persons)
<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 or
        warrants within 60 days from May 31, 2004, 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  41,115,376  shares of common stock  outstanding  as of May 31,
        2004.

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

        (a)  641,902 shares held by Mr. Grosso;
        (b)  262,000 shares held by Mr. Grosso's wife;
        (c)  220,724 shares held by Oxbow;
        (d)  Options held by Mr. Grosso to acquire 397,500 shares;
        (e)  Options held by Ms. Grosso to acquire 142,500 shares;
        (f)  Warrants held by Mr. Grosso to acquire 150,000 shares at a price of
             $0.60 per share, exercisable until September 27, 2004;
        (g)  Warrants held by Ms. Grosso to acquire  50,000 shares at a price of
             $0.60 per share, exercisable until September 27, 2004; and
        (h)  Warrants  held  by Oxbow to  acquire 172,400  shares at  a price of
             $0.75 per share, exercisable until September 15, 2004.

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

                                                                              78
<PAGE>


(3)<F3>   Includes 48,551 shares held by Mr. Cacos and options held by Mr. Cacos
          to acquire  an  additional  185,000  shares.  See "Item 6.  Directors,
          Senior Management and Employees - Options,  Warrants  and Other Rights
          to Acquire Securities - Stock Options."

(4)<F4>   Includes  21,100  shares held by Mr. Hurd and options held by Mr. Hurd
          to acquire  an  additional  230,000  shares.  See "Item 6.  Directors,
          Senior Management and Employees - Options,  Warrants  and Other Rights
          to Acquire Securities - Stock Options."

(5)<F5>   Includes 45,000 shares  held  by Mr.  Carlson and options  held by Mr.
          Carlson  to  acquire  an  additional  335,000  shares.  See  "Item  6.
          Directors,  Senior  Management and Employees - Options,  Warrants  and
          Other Rights to Acquire Securities - Stock Options."

(6)<F6>   Includes 20,000 shares held by Mr. Terry and options held by Mr. Terry
          to acquire an additional 50,000 shares. See "Item 6. Directors, Senior
          Management  and Employees - Options,  Warrants  and  Other  Rights  to
          Acquire Securities - Stock Options."

(7)<F7>   Includes 83,000 shares  held  by Mr.  Idziszek and options held by Mr.
          Idziszek  to  acquire  an  additional  225,000  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 190,000 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 50,000 shares. See "Item
          6. Directors, Senior Management and Employees - Options,  Warrants and
          Other Rights to Acquire Securities - Stock Options."

(10)<F10> Includes  the shares,  options,  and warrants set forth in footnotes 2
          through  9  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 31, 2004, 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  7,944,449  common  shares of the Company may be issued.  The  following is a
brief summary of these stock options, warrants and agreements.

STOCK OPTIONS

The TSX-V requires all TSX-V listed  companies to adopt stock options plans, and
such plans must  contain  certain  provisions.  At the annual and  extraordinary
general  meeting of  shareholders  of the  Company  held on June 26,  2003,  the
shareholders approved the Company's stock option plan (the "Stock Option Plan").
The purpose of the Stock Option Plan is to provide  incentive  to the  Company's
employees,  officers,  directors,  and consultants responsible for the continued
success of the Company. The following is a summary of the Stock Option Plan.

ADMINISTRATION OF THE STOCK OPTION PLAN

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

DESCRIPTION OF STOCK OPTION PLAN

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

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


                                                                              79
<PAGE>

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

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

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

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

Options will also be non-assignable  and  non-transferrable,  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  31,  2004,  the  Company  had  granted  an  aggregate  of  3,743,500
non-transferable  incentive stock options to purchase common shares  outstanding
to the following persons:

                                                                              80
<PAGE>


<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>
Nikolas Cacos             Director                       75,000        $1.87      Aug. 27/08          $1.87
                                                        110,000        $3.10      Mar. 24/09          $3.10

Joseph Grosso             Director                       47,500        $0.50     Sept. 23/07          $0.50
                                                        200,000        $1.87      Aug. 27/08          $1.87
                                                        150,000        $3.10      Mar. 24/09          $3.10

Sean Hurd                 Director                      100,000        $1.87      Aug. 27/08          $1.87
                                                        130,000        $3.10      Mar. 24/09          $3.10

Gerald Carlson            Director                      200,000        $0.40      Jul. 19/06          $0.40
                                                         50,000        $1.87      Aug. 27/08          $1.87
                                                         85,000        $3.10      Mar. 24/09          $3.10

Nick DeMare               Employee                       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

Evelyn Grosso(2)<F2>      Employee                       67,500        $0.50     Sept. 23/07          $0.50
                                                         75,000        $3.10      Mar. 24/09          $3.10

A. Sanchez                Employee                        5,000        $0.40      Jul. 19/06          $0.40
                                                         15,000        $0.84      Mar. 07/08          $0.84

Keith Patterson           Employee                       50,000        $0.84      Mar. 07/08          $0.84
                                                         25,000        $3.10      Mar. 24/09          $3.10

David Terry               Director                       50,000        $3.10      Mar. 24/09          $3.10

Chet Idziszek             Director                      150,000        $0.90       May 30/08          $0.90
                                                         75,000        $3.10      Mar. 24/09          $3.10

J. C. Berretta            Employee                       30,000        $1.87      Aug. 27/08          $1.87
                                                         25,000        $3.10      Mar. 24/09          $3.10

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

Robert Stuart             Director                      150,000        $0.90       May 30/08          $0.90
(Tookie) Angus                                           40,000        $3.10      Mar. 24/09          $3.10

Diane Reeves              Employee                       60,000        $3.10      Mar. 24/09          $3.10

Jeanne Denee              Employee                       10,000        $3.10      Mar. 24/09          $3.10

Claudia Sandoval          Employee                       10,000        $3.10      Mar. 24/09          $3.10

Maria Villacis            Employee                       10,000        $3.10      Mar. 24/09          $3.10


                                                                              81
<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>
Carlos D'Amico            Employee                      220,000        $1.87      Aug. 27/08          $1.87
                                                         75,000        $3.10      Mar. 24/09          $3.10

Carlos Timossi            Employee                       75,000        $3.10      Mar. 24/09          $3.10

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

Joanne Faccin             Employee                       10,000        $3.10      Mar. 24/09          $3.10

Marianna De               Employee                       59,500        $0.50       May 02/07          $0.50
Simone                                                   80,000        $3.10      Mar. 24/09          $3.10

J. Caplan                 Employee                        2,500        $0.50      Sep. 23/07          $0.50

I. Chiarantano            Employee                       59,500        $0.50       May 02/07          $0.50

David J. Horton           Employee                      100,000        $3.10      Mar. 24/09          $3.10

John Capman               Employee                       80,000        $3.10      Mar. 24/09          $3.10

Arthur Lang               Director                       50,000        $3.10      Mar. 24/09          $3.10

Gordon James              Employee                        7,000        $3.10      Mar. 24/09          $3.10

R. Aragon                 Employee                       50,000        $1.87      Aug. 27/08          $1.87

A. Colucci                Employee                      120,000        $1.87      Aug. 27/08          $1.87

M. Saldana                Employee                        5,000        $0.40      Jul. 19/06          $0.40
                                                         25,000        $0.84      Mar. 07/08          $0.84

I. Saldana                Employee                       40,000        $0.50       May 02/07          $0.50

D. Bussandri              Employee                       15,000        $1.87      Aug. 27/08          $1.87

S. Kain                   Employee                       15,000        $1.87      Aug. 27/08          $1.87

L. Salley                 Employee                       15,000        $1.87      Aug. 27/08          $1.87

P. Hedblom                Employee                       30,000        $1.87      Aug. 27/08          $1.87

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

M. Maksym                 Employee                       10,000        $1.87      Aug. 27/08          $1.87


                          TOTAL                       3,743,500
                                                      =========
Officers and                                          1,805,000
directors, as a group                                 ---------
8 persons)(4)<F4>

                                                                              82
<PAGE>

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

(2)<F2>  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 office and director of
         the Company effective April 2, 2004.

(4)<F4>  Includes options held by Joseph Grosso's wife, Evelyn Grosso.
</FN>
</TABLE>

WARRANTS AND OTHER COMMITMENTS

As of May 31, 2004, there were  non-transferable  common share purchase warrants
exercisable for the purchase of 4,200,949 common shares, as follows:


           NUMBER OF SHARES      EXERCISE PRICE    EXPIRATION DATE

               1,039,322              $0.75        September 15, 2004
               1,042,960              $0.60        September 27, 2004
                 850,000              $3.70        February 20, 2005
                 200,000              $3.25        February 20, 2005
               1,068,667              $0.90        March 16, 2005
           ----------------
               4,200,949              TOTAL
           ================

As of May 31, 2004, the Company's officers and directors,  as a group, including
entities controlled or under significant  influence of officers and directors of
the Company,  held  warrants to purchase up to 372,400 of the  Company's  common
shares.

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


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

PRINCIPAL HOLDERS OF VOTING SECURITIES

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

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

                                                                              83
<PAGE>

(9.22%). To the best of the Company's  knowledge,  subsequent to April 30, 2003,
Barrick sold common shares of the Company and is no longer a major shareholder.

On April 28,  2003,  Prudent  Bear Funds,  Inc.  advised the Company that it had
acquired  control  and  direction,  through  Prudent  Bear Fund,  a mutual  fund
controlled by it, over 818,500 of the Company's common shares.  This resulted in
Prudent  Bear  Funds,  Inc.  having  ownership  of and  control  over a total of
3,209,637 common shares together with warrants to purchase an additional 754,137
common  shares.  As of April 30, 2003, if such warrants were  exercised  Prudent
Bear Funds,  Inc. would have control and direction of 3,963,774 common shares of
the Company  (12.18%).  To the best of the  Company's  knowledge,  subsequent to
April 30, 2003, Prudent Bear Funds Inc. sold common shares of the Company and is
no longer a major shareholder.

SHARES HELD IN THE UNITED STATES

As of May 31,  2004,  there were  approximately  187  registered  holders of the
Company's  shares in the United  States,  with  combined  holdings of  4,809,968
shares (9.9% of the 41,115,376 outstanding shares at May 31, 2004).

CHANGE OF CONTROL

As of June 22, 2004, 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 March 31, 2004, the
Company did not enter into any transactions or loans between the Company and any
(a) enterprises that directly or indirectly through one or more  intermediaries,
control or are controlled by, or are under common control with the Company;  (b)
associates;  (c) individuals owning, directly or indirectly,  an interest in the
voting  power of the  Company  that gives them  significant  influence  over the
Company,  and close members of any such individual's  family; (d) key management
personnel and close members of such individuals' families; or (e) enterprises in
which  a  substantial  interest  in the  voting  power  is  owned,  directly  or
indirectly by any person  described in (c) or (d) or over which such a person is
able to exercise significant influence.

   1.    The Company shares office facilities, capital assets and personnel with
         Amera. Joseph Grosso,  Nikolaos Cacos, and David Terry, officers and/or
         directors of the Company,  are officers,  directors and/or employees of
         Amera.  Amera  currently  pays a  minimum  of  $2,500  per month to the
         Company for shared  rent and  administration  costs.  During the fiscal
         year ended  December  31, 2003 the  Company  received  $35,110  (2002 -
         $6,000).  For the three  month  period  ending on March 31,  2004,  the
         Company received $21,315 (2003 - $6,000) from Amera.

   2.    The Company leases its office space from Beauregard,  a private company
         50% owned by Joseph Grosso, an officer and director of the Company, and
         50% owned by Mr.  Grosso's  wife,  Mrs.  Evelina  Grosso.  The  Company
         commenced  occupation of the office  premises in January 1999. The term
         of the lease was for three years and had been  extended for another two
         years. On February 5, 2004 the Company and Beauregard executed a letter
         agreement  relating  to a new lease  with  minimum  lease  payments  of
         $50,250 per annum, plus operating costs. As of the date of this report,
         the lease was in the process of being drafted.  It is intended that the
         2004 lease  will be for a term of three  years with an option to extend
         the term for an  additional  two years at  prevailing  market rent.  In
         addition,  the Company is responsible  for all leasehold  improvements.
         During the fiscal year ended  December 31, 1999,  the Company  incurred
         $12,366 for leasehold  improvements  conducted on the office  premises.
         The Company made no further leasehold improvement expenditures in 2003.
         See "Item 4.  Information  on the  Company  -  Properties,  Plants  and
         Equipment - Principal  Office".  During the fiscal year ended  December
         31,  2003,  the  Company  paid rent in the  amount of

                                                                              84
<PAGE>


         $60,924  (2002 - $60,924;  2001 - $60,924).  For the three month period
         ending on March 31,  2004,  the  Company has paid rent in the amount of
         $16,597 (2002 - $15,230; 2001 - $15,230).

   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, 2003,  Oxbow was paid  $102,000  (2002 - $102,000;  2001 -
         $102,000),  and during the three months ended March 31, 2004, Oxbow was
         paid $25,500.

   4.    The Company has entered  into an  agreement  with  Nikolaos  Cacos,  an
         officer  and  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,  2003,  Mr. Cacos was paid $66,000
         (2002 - $66,000;  2001 - $66,000).  During the three months ended March
         30, 2004, Mr. Cacos was paid $5,225.

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

   6.    By agreement dated June 21, 1996, as amended December 10, 1996, William
         Lee, a former officer and director of the Company, was paid a salary of
         $6,000 per month.  During the fiscal year ended  December 31, 2003, Mr.
         Lee was paid $72,000 (2002 - $72,000; 2001 - $72,000). During the three
         months  ended  March 31,  2004 Mr. Lee was paid  $68,769 for salary and
         retiring allowance.

   7.    The Company has entered into an  agreement  with KGE  Management  Ltd.,
         pursuant to which  Gerald G.  Carlson,  an officer and  director of the
         Company,  provides  services to the  Company.  See "Item 6.  Directors,
         Senior Management and Employees - Compensation - Management Contracts."
         During the fiscal year ended  December 31, 2003, Mr.  Carlson,  through
         KGE,  was paid  $41,400  (2002 - $33,000;  2001 - $33,000).  During the
         three months ended March 31, 2004, Mr.  Carlson,  through KGE, was paid
         $13,800.

   8.    The Company has entered into an agreement with Mr. Sean Hurd,  investor
         relations  manager and  director of the  Company  (effective  September
         2000), pursuant to which Mr. Hurd provides services to the Company. See
         "Item 6.  Directors,  Senior  Management and Employees - Compensation -
         Management  Contracts."  During the year ended  December 31, 2003,  Mr.
         Hurd was paid  $48,000  (2002 - $52,050;  2001 -  $30,882).  During the
         three months ended March 30, 2004, Mr. Hurd was paid $7,200.

   9.    During the year ended December 31, 2003, the Company  recorded  $61,067
         (2002 - $64,641;  2001 - $45,381) for reimbursement of expenditures and
         disbursements  incurred on behalf of the Company by Mr.  Grosso.  As at
         December 31,  2003,  $7,538  (2002 - $1,496;  2001 - $17,683)  remained
         unpaid  and  has  been   included  in  accounts   payable  and  accrued
         liabilities.

   10.   The  Company  signed a letter of Intent on March 6,  2003,  as  amended
         September  30, 2003,  with Amera,  pursuant to which Amera could earn a
         undivided 51% interest  (subject to regulatory  approval) in the Mogote
         (Arturo's)  Property.  In an  agreement  dated  April  8,  2004,  Amera
         acquired an option to earn an  additional  24% interest (for a total of
         75% interest) in the Mogote property. Joseph Grosso, Nikolaos Cacos and
         David Terry,  officers and/or  directors of the Company,  are officers,
         directors  and/or  employees of Amera.  See "Item 4. Information on the
         Company -  Properties,  Plants and  Equipment - Principal  Properties -
         Argentinean  Properties - San Juan Province  Properties - Northwest San
         Juan - Mogote (Arturo's) Property."

   11.   On March 6, 2003 the Company  entered  into an agreement to sell a 100%
         undivided  interest in Lago Pico (10,000 ha), Loma Alta (10,000 ha) and
         Nueva  Ruta  (4,180  ha) to  Amera.  The  terms of the  agreement  were
         approved by the  independent  committee of the Company.  Amera received
         approval  from the TSX-V on  November  3, 2003 and has  issued  500,000
         common  shares  to the  Company  with a deemed  value of  $225,000.  In
         addition,  in the  event  that a  decision  is made to place any of the
         properties into commercial production, the Company will receive a bonus
         of US$250,000 and a 3 % net smelter return royalty.

                                                                              85
<PAGE>


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

   13.   The Company has agreed to issue  options to David Terry,  a director of
         the Company, and to reimburse Amera for a portion of Mr. Terry's salary
         for  services  provided  to the  Company  by Mr.  Terry.  See  "Item 6.
         Directors,  Senior Management and Employees - Compensation - Management
         Contracts."  Mr. Terry became a director of the Company in May 2004, as
         such,  during the fiscal  year ended  December  31,  2003 and the three
         months ended March 31,  2004,  the Company did not make any payments to
         Amera for Mr. Terry's services.

   14.   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.  See "Item
         6.  Directors,   Senior  Management  and  Employees  -  Compensation  -
         Management  Contracts."  Mr.  Lang  became  CFO and a  director  of the
         Company  on April 2,  2004,  as such,  during  the  fiscal  year  ended
         December  31,  2003 and the three  months  ended  March 31,  2004,  the
         Company did not make any payments to Mr. Lang for his services.

   15.   The Company has entered into an Arrangement Agreement with Golden Arrow
         pursuant to which the Company will  transfer  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."
         As of the date of this report, Mr. Grosso is the sole officer, director
         and  shareholder  of  Golden  Arrow.  Mr.  Grosso is acting as the sole
         officer,  director and  shareholder of Golden Arrow for convenience and
         to implement the Arrangement Agreement. If the Arrangement Agreement is
         consummated,   the   shareholders   of  the  Company  will  become  the
         shareholders of Golden Arrow,  and it is anticipated that the Company's
         management will also become the management of Golden Arrow.  Mr. Grosso
         will also return the share back to Golden Arrow on the  effective  date
         of the arrangement. In connection with the reorganization,  the Company
         intends to enter into an indemnity, in form and substance acceptable to
         Golden  Arrow,  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, 2003, 2002 and 2001.

SIGNIFICANT CHANGES

On  February  11,  2004,  the  Company  announced  that it had  entered  into an
agreement  with two  underwriters  who had agreed to purchase,  on a bought-deal
basis, 1,500,000 units of the Company at a purchase price of $3.10 per unit, for
total proceeds of $4.65 million. This transaction closed on February 23, 2004.

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 certain of the Company's properties in the Navidad area.
See "Item 8. Financial Information - Legal Proceedings."

                                                                              86
<PAGE>


On  May  3,  2004,  the  Company  announced  its  intention  to  proceed  with a
reorganization of the Company which will have the result of dividing its present
mineral  resource  assets between two separate  public  companies.  See "Item 4.
Information on the Company - History and Development of the Company."

LEGAL PROCEEDINGS

In March 2004,  Minera  Aquiline  Argentina  S.A., a wholly-owned  subsidiary of
Aquiline  Resources  Inc.,  commenced  a legal  proceeding  against  the Company
asserting that the Company  unlawfully  used  confidential  information,  and is
seeking damages and a constructive  trust over the Navidad Area Properties.  The
Company is defending this action. The trial has been set for October 11, 2005 in
Vancouver, British Columbia.

In the event the  reorganization  is  approved,  the Company  intends to provide
Golden Arrow, on or  before  the effective date, with an  indemnity  in form and
substance  acceptable to Golden Arrow 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.

The Company  commenced an action against Aquiline  Resources Inc. by way of Writ
of Summons  filed on October 15, 2003 in the Supreme  Court of British  Columbia
Vancouver  Registry Action No. S035507.  In the action, the Company alleges that
Aquiline wrongfully  interfered with a "bought deal" private placement financing
scheduled  to close on October 2, 2003  through the  issuance of a letter  which
falsely asserted that the Company had misused confidential information belonging
to Aquiline or its subsidiary in staking its Navidad  mineral  claims.  Aquiline
filed an  Appearance  to the claim on October 24,  2003.  As of the date of this
annual report, no further steps have been taken in the action.

DIVIDEND POLICY

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

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

PRICE HISTORY

The  Company's  common  shares are listed on the TSX-V.  From April 15,  1996 to
November  28,1999,  the  Company's  shares  were listed on the  Vancouver  Stock
Exchange (the "VSE"). Effective November 29, 1999, the VSE and the Alberta Stock
Exchange  (the  "ASE")  merged  and began  operations  as the  Canadian  Venture
Exchange or CDNX. On August 1, 2001,  the CDNX was acquired by the Toronto Stock
Exchange and became known as the TSX-V.  The Company is  classified  as a Tier I
company on the TSX-V and trades under the symbol "IMR".  Companies which satisfy
the minimum initial listing  requirements of the TSX-V are designated as Tier II
companies and are subject to listing  requirements which are stricter than those
for companies which are designated as Tier I companies.

The following table lists the volume of trading and high and low sales prices on
the TSX-V (or  predecessor),  for shares of the  Company's  common stock for the
last five fiscal years,  each quarterly  period during the last two fiscal years
and each month from December 2003 through May 2003.

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          TSX VENTURE EXCHANGE (OR PREDECESSOR) STOCK TRADING ACTIVITY


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

December 31, 2003             49,855,800          $2.54              $0.49
December 31, 2002             17,608,424          $0.94              $0.34
December 31, 2001              5,564,250          $0.62              $0.27
December 31, 2000              4,330,674          $1.15              $0.30
December 31, 1999              2,126,666          $0.88              $0.40



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

March 31, 2004                15,546,600          $3.81              $1.73

December 31, 2003             14,206,200          $2.37              $1.42
September 30, 2003            12,946,600          $2.54              $1.32
June 30, 2003                  9,170,600          $1.65              $0.78
March 31, 2003                13,712,400          $1.06              $0.49

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


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

May 31, 2004                   3,220,600          $2.90              $1.93
April 30, 2004                 2,507,000          $3.57              $2.39
March 31, 2004                 6,103,600          $3.60              $2.13
February 29, 2004              5,687,200          $3.81              $2.46
January 31, 2004               3,755,800          $2.50              $1.73
December 31, 2003              4,285,700          $2.30              $1.42


             OVER-THE-COUNTER BULLETIN BOARD STOCK TRADING ACTIVITY

As of October 8, 2002, the Company's  shares  received  clearance for trading on
the OTC  Bulletin  Board  operated by the  National  Association  of  Securities
Dealers in the United States.  The Company  currently trades on the OTC Bulletin
Board under the symbol "IMXPF".  The following tables set forth the market price
ranges and the  aggregate  volume of trading of the common shares of the Company
on the OTC Bulletin Board system for the periods indicated:

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

December 31, 2003              6,964,497           $1.89             $0.36
December 31, 2002                 97,497           $0.36             $0.22



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

March 31, 2004                 8,798,755           $2.93             $1.31

December 31, 2003              3,376,297           $1.78             $1.01
September 30, 2003             1,743,800           $1.89             $0.97
June 30, 2003                    983,900           $1.25             $0.52
March 31, 2003                   860,500           $0.75             $0.36

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

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

May 31, 2004                     782,588           $2.15             $1.40
April 30, 2004                 1,335,303           $2.70             $1.70
March 31, 2004                 3,257,963           $2.70             $1.61
February 29, 2004              3,875,898           $2.93             $1.87
January 31, 2004               1,664,894           $1.91             $1.31
December 31, 2003              1,394,123           $1.78             $1.06

Management is  considering,  and during the next 12 months the Company may apply
for,  listings on the Toronto Stock Exchange and/or the American Stock Exchange.
Management  does not know if, or when,  any  applications  for  listing  will be
filed. Additionally, even if th Company applies for these listings, there are no
assurances that such listings will be approved.

ITEM 10.  ADDITIONAL INFORMATION.
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MEMORANDUM AND ARTICLES OF ASSOCIATION

The  Company  was  incorporated  under the COMPANY  ACT  (British  Columbia)  on
September 17, 1979,  as Gold Star  Resources  Ltd. The  Company's  Incorporation
Number is 197061.  On May 1, 1990,  the Company  filed an Altered  Memorandum to
reflect its name change to EEC Marketing  Corp. On January 13, 1992, the Company
filed an Altered Memorandum to reflect its name change to Amera Industries Corp.
On February 9, 1995, the Company filed an Altered Memorandum to reflect its name
change to International Amera Industries Corp. On February 20, 1996, the Company
filed  an  Altered  Memorandum  to  reflect  its  name  change  to IMA  Resource
Corporation.  Effective July 7, 1998, the Company  underwent a statutory plan of
arrangement (the "Arrangement") with Viceroy Resource  Corporation  ("Viceroy"),
changed its name to IMA Exploration Inc.,  consolidated its share capital on the
basis of four old shares for one new share and filed an  Altered  Memorandum  to
give effect to the foregoing. See "Item 4. Information on the Company".

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

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

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

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

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

Accordingly,  the  shareholders  of the Company will be asked at a meeting to be
held on June 24, 2004, to pass a special resolution  removing the application of
the Pre-Existing Company Provisions.

ADOPTION OF NEW ARTICLES

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

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

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

BORROWING POWERS

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

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

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the shareholders to set the remuneration or the shareholders to authorize, on an
annual basis, the directors to set the remuneration.  Historically, shareholders
of the Company have always  authorized the directors to appoint the auditors and
to set the auditor's  remuneration.  As a result, the inclusion of the authority
for  directors to set the  auditor's  remuneration  in the New  Articles  merely
codifies existing practice. More importantly, however, this change also codifies
new corporate  governance rules and regulations relating to audit committees and
the appointment and remuneration of auditors.

SPECIAL MAJORITY FOR RESOLUTIONS

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

SHARE ISSUANCES

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

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

OFFICERS

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

PUBLICATION OF ADVANCE NOTICE OF MEETING

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

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SHARE CERTIFICATES

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

DISCLOSURE OF INTEREST OF DIRECTORS

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

INDEMNITY PROVISION

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

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

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

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 has determined  that it will alter 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  and  that  such  altered  authorized  share  capital  will be
reflected in its New Notice of  Articles.  This change forms part of the Plan of
Arrangement.

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

Under the Existing  Articles,  quorum for a shareholder  meeting was two persons
present  and being,  or  representing  by proxy,  members  holding not less than
one-tenth of the shares that may be voted at the meeting. The New Articles

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

ALTERATIONS TO CONSTATING DOCUMENT

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

Accordingly,  the  shareholders  of the Company will be asked at the shareholder
meeting on June 24, 2004 to pass a special  resolution  adopting  the changes to
the Company's Articles.

SUMMARY OF MATERIAL PROVISIONS

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

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

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

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

                1.     the   situation   that  would   otherwise   constitute  a
                       disclosable  interest  arose before the coming into force
                       of the BCBCA,  or the interest was disclosed and approved
                       under,   or  was  not  required  to  be  disclosed  under
                       legislation that applied to the Company before the coming
                       into effect of the BCBCA;

                2.     both the Company  and the other party to the  contract or
                       transaction  are wholly  owned  subsidiaries  of the same
                       corporation;

                3.     the  Company is a wholly  owned  subsidiary  of the other
                       party to the contract or transaction;

                4.     the  other  party to the  contract  or  transaction  is a
                       wholly owned subsidiary of the Company ; or

                5.     the director or senior officer is the sole shareholder of
                       the Company or of a corporation of which the Company is a
                       wholly owned subsidiary.

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

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

                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

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                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 new  Articles of the Company to be put before the  shareholders  at
         the Company's annual general meeting on June 24, 2004, will reflect the
         provisions of the BCBCA.

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

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

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

         The Company, if authorized by the directors, may:

                1.     borrow money in the manner and amount,  on the  security,
                       from the  sources  and on the terms and  conditions  that
                       they consider appropriate;

                2.     issue bonds, debentures and other debt obligations either
                       outright or as security for any  liability or  obligation
                       of the Company or any other person and at such  discounts
                       or  premiums  and on such  other  terms as they  consider
                       appropriate;

                3.     guarantee  the  repayment of money by any other person or
                       the  performance  of any  obligation of any other person;
                       and

                4.     mortgage,  charge, whether by way of specific or floating
                       charge,  grant a  security  interest  in,  or give  other
                       security  on,  the whole or any part of the  present  and
                       future assets and undertaking of the Company.

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

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

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

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

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

DESCRIPTION OF SHARE CAPITAL

The authorized  capital of the Company  consists of  200,000,000  shares divided
into  100,000,000  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.

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The Company has proposed amending its authorized capital, in accordance with the
BCBCA, to an unlimited number of common shares and 100,000,000 preferred shares,
of which 18,283,053 will be designated as Preferred Shares, Series I.

COMMON SHARES

Of the 100,000,000 authorized common shares, a total of 41,115,376 common shares
were issued and  outstanding  as of May 31, 2004.  All of the common  shares are
fully paid and not subject to any future call or  assessment.  All of the common
shares of the  Company  rank  equally as to voting  rights,  participation  in a
distribution  of the assets of the  Company  on a  liquidation,  dissolution  or
winding-up of the Company and the  entitlement to dividends.  The holders of the
common shares are entitled to receive notice of all shareholder  meetings and to
attend and vote at such meetings. Each common share carries with it the right to
one vote.  The common shares do not have  preemptive or  conversion  rights.  In
addition,  there are no sinking fund or redemption  provisions applicable to the
common  shares  or  any  provisions   discriminating  against  any  existing  or
prospective  holders of such  securities as a result of a  shareholder  owning a
substantial  number of shares.  The Company has proposed to the  shareholders to
amend the Company's  Articles to increase the number of authorized common shares
to an unlimited number of common shares without par value.

PREFERRED SHARES

The Company is authorized to issue up to 100,000,000  preferred shares in one or
more  series.  The  preferred  shares are  entitled to priority  over the common
shares with respect to the payment of dividends and distribution in the event of
the  dissolution,  liquidation  or  winding-up  of the  Company.  The holders of
preferred  shares as a class shall not be entitled as such to receive notice of,
to attend or to vote at any meeting of the  shareholders  of the Company,  other
than at a meeting of holders of Preferred Shares. As of May 31, 2004, there were
18,283,053 Preferred Shares, Series I, outstanding. There are no sinking fund or
redemption provisions or any provisions  discriminating  against any existing or
prospective  holders of such  securities as a result of a  shareholder  owning a
substantial number of shares applicable to the preferred shares.

PREFERRED SHARES, SERIES I

The  Company  is  authorized  to issue  100,000,000  preferred  shares  of which
18,283,053  have been  designated as Preferred  Shares,  Series I (the "Series I
Shares").  The holders of Series I Shares are not entitled to receive notice of,
attend or vote at any meeting of the shareholders of the Company,  other than at
a meeting of  holders of  Preferred  Shares,  Series I. The  holders of Series I
Shares  are  entitled  to  receive,  if,  as and when  declared  by the board of
directors  of  the  Company,   non-cumulative   dividends.   Upon   dissolution,
liquidation  or  winding-up  of the Company,  the holders of Series I Shares are
entitled  to  receive  an  amount  equal  to the  redemption  amount,  which  is
determined  by  dividing  $3,495,800  by the  number of Series I Shares  issued,
together with all declared and unpaid dividends thereon. The Series I Shares may
be  redeemed  at the option of the Company or the holder of the Series I Shares.
Upon  redemption of the Series I Shares,  the Company shall pay to the holder of
the Series I Shares the Redemption  Amount together with all declared and unpaid
dividends  thereon.  As of May 31, 2004,  there are  18,283,053  Series I Shares
outstanding.  There  are  no  sinking  fund  or  redemption  provisions  or  any
provisions  discriminating  against any existing or prospective  holders of such
securities  as a result of a shareholder  owning a substantial  number of shares
applicable  to the  Series I Shares.  The  Series I Shares  are not  subject  to
further capital calls or assessments.

CHANGES TO RIGHTS AND RESTRICTIONS OF SHARES

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

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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 EXTRAORDINARY 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 13 months from
the last annual general  meeting) at such time and place to be determined by the
Directors  of the Company.  The Company  must  publish an advance  notice in the
manner required by the Company Act of any general meeting at which Directors are
to be elected.  The Company must give shareholders not less than 21 days' notice
of any general meeting of the shareholders.

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

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

DIFFERENCES FROM REQUIREMENTS IN THE UNITED STATES

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

MATERIAL CONTRACTS

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

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

   2.    The Company has entered  into an  agreement  with  Nikolaos  Cacos,  an
         officer  and  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" and
         "Item 7. Major  Shareholders  and Related Party  Transactions - Related
         Party Transactions."

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

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

   5.    Purchase  Agreement  with  Victor  Ronchietto,  dated March 24, 1999 as
         amended April 6, 2000, between IMASA and Mr.  Ronchietto.  See "Item 4.
         Information  on the  Company  -  Properties,  Plants  and  Equipment
         - Principal Properties  -  Argentinean Properties  - San Juan  Province
         Properties - Valle de Cura Area - Banitos (Ronchietto) Property".

   6.    Option Agreement with Sociedad Minera de Responsabilidad  Limitado Nova
         JJ de Piura and Sociedad Minera de Responsabilidad  Limitada (SMR Ltda)
         Don Alberto JJ de Piura,  dated January 24, 1997 as amended January 31,
         2000, August 22, 2000, April 22, 2001, December 23, 2002 and August 15,
         2003. See "Item 4. Information on the Company - Properties,  Plants and
         Equipment - Principal Properties - Peruvian Properties".

   7.    The Company has entered into an agreement with Mr. Sean Hurd,  investor
         relations  manager and  director of the  Company  (effective  September
         2000), pursuant to which Mr. Hurd provides services to the Company. See
         "Item 6.  Directors,  Senior  Management and Employees - Compensation -
         Management Contracts" and "Item 7. Major Shareholders and Related Party
         Transactions - Related Party Transactions."

   8.    An Option  Agreement  between  Nestor Arturo and IMASA,  signed June 7,
         2000 as amended  August 3, 2000 and  September  1, 2000,  granting  the
         Company an option to acquire mineral rights.  See "Item 4.  Information
         on  the  Company  -  Properties,   Plants  and  Equipment  -  Principal
         Properties - Argentinean  Properties - San Juan  Province  Properties -
         Northwest San Juan - Mogote (Arturo's) Property."

   9.    Letter  agreement  between the Company and Beauregard dated February 5,
         2004,  regarding  the  Company's  office  lease.  See  "Item  7.  Major
         Shareholders   and  Related   Party   Transactions   -  Related   Party
         Transactions."

   10.   The  Company  signed a letter of Intent on March 6,  2003,  as  amended
         September 30, 2003,  with Amera,  pursuant to which Amera could earn an
         undivided 51% interest  (subject to regulatory  approval) in the Mogote
         (Arturo's)  Property.  In an  agreement  dated  April  8,  2004,  Amera
         acquired an option to earn an  additional  24% interest (for a total of
         75% interest) in the Mogote property. Joseph Grosso, Nikolaos Cacos and
         David Terry,  officers and/or  directors of the Company,  are officers,
         directors  and/or  employees of Amera.  See "Item 4. Information on the
         Company -  Properties,  Plants and  Equipment - Principal  Properties -
         Argentinean  Properties - San Juan Province  Properties - Northwest San
         Juan - Mogote (Arturo's)  Property" and "Item 7. Major Shareholders and
         Related Party Transactions - Related Party Transactions."

   11.   On  December  16,  2003 the  Company  entered  into an  agreement  with
         Endeavour  Financial Ltd. a company with which Mr. Angus, a director of
         the Company is  associated.  A monthly fee of US$5,000  for services is


                                                                              97
<PAGE>

         payable  under this  agreement  for a minimum  period of one year.  See
         "Item 7. Major  Shareholders  and Related Party  Transactions - Related
         Party Transactions."

   12.   The  Company  has  entered  into an  agreement  with  Mr.  Lang,  Chief
         Financial Officer and a director of the Company,  dated April 23, 2004,
         pursuant to which Mr. Lang provides services to the Company.  See "Item
         6.  Directors,   Senior  Management  and  Employees  -  Compensation  -
         Management Contracts" and "Item 7. Major Shareholders and Related Party
         Transactions - Related Party Transactions."

   13.   The Company has agreed to issue  options to David Terry,  a director of
         the Company, and to reimburse Amera for a portion of Mr. Terry's salary
         for  services  provided  to the  Company  by Mr.  Terry.  See  "Item 6.
         Directors,  Senior Management and Employees - Compensation - Management
         Contracts"   and  "Item  7.  Major   Shareholders   and  Related  Party
         Transactions - Related Party Transactions."

   14.   Arrangement  Agreement by and among the  Company,  Golden Arrow and IMA
         Holdings  Corp.  dated May 14, 2004.  See "Item 4.  Information  on the
         Company - History and Development of the Company."

   15.   Agreement  between the Company and Amera dated March 6, 2003,  relating
         to the Lago  Pico,  Loma Alta and Nueva Ruta  properties.  See "Item 7.
         Major  Shareholders  and Related  Party  Transactions  - Related  Party
         Transactions."

   16.   In the event the reorganization is consummated,  the Company intends to
         enter into an indemnification agreement with Golden Arrow. See "Item 8.
         Financial Information - Legal Proceedings."

   17.   Option  Agreement dated  September 22, 2003, with Cloudbreak  Resources
         Ltd. relating to the Gollette property. See "Item 4. Information on the
         Company -  Properties,  Plants and  Equipment - Principal  Properties -
         Argentinean  Properties - San Juan Province  Properties - Valle de Cura
         Area - Gollette."

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

   19.   Option  agreement  dated June 11, 2003,  with Ballad Gold & Silver Ltd.
         relating to the Penascudo  Property.  See "Item 4.  Information  on the
         Company -  Properties,  Plants and  Equipment - Principal  Properties -
         Argentinean  Properties - Other Chubut Province  Properties - Penascudo
         Property."

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.

                                                                              98
<PAGE>


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

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

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

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

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

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

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

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

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

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

      (ii)    provides any financial services;

      (iii)   provides any transportation service; or

      (iv)    is a cultural business.

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;

                                                                              99
<PAGE>

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

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

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

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

(e)   a trust:

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

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

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

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

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

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

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

The Act specifically  exempts certain  transactions from either  notification or
review. Included among the category of transactions is the acquisition of voting
shares or other voting  interests  by any person in the ordinary  course of that
person's business as a trader or dealer in securities.

TAXATION

MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES

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

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

DIVIDENDS

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

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<PAGE>

corporation  which is a resident of the United States which owns at least 10% of
the voting shares of the corporation paying the dividend.

CAPITAL GAINS

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

     (a)   the non-resident holder;

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

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

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

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

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

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

U.S. HOLDERS

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

DISTRIBUTIONS ON SHARES OF COMMON STOCK

U.S. Holders receiving dividend distributions (including constructive dividends)
with  respect to the  Company's  common  stock are  required to include in gross
income for United  States  federal  income tax purposes the gross

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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.

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

                                                                             102
<PAGE>

(2) 60% or more of the Company's income consisted of certain interest,  dividend
or other  enumerated  types of income,  then the Company would be a FPHC. If the
Company  were a FPHC,  then each U.S.  Holder  (regardless  of the amount of the
Company's  Common Shares owned by such U.S. Holder) would be required to include
in its taxable  income as a  constructive  dividend  its share of the  Company's
undistributed income of specific types.

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

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

INFORMATION REPORTING AND BACKUP WITHHOLDING

U.S. information reporting requirements may apply with respect to the payment of
dividends to U.S. Holders of the Company's  shares.  Under Treasury  regulations
currently in effect,  non-corporate holders may be subject to backup withholding
at a 31% rate with respect to dividends when such holder (1) fails to furnish or
certify a correct  taxpayer  identification  number to the payor in the required
manner,  (2) is  notified  by the IRS that it has failed to report  payments  of
interest or dividends  properly or (3) fails,  under certain  circumstances,  to
certify  that it has been  notified  by the IRS  that it is  subject  to  backup
withholding for failure to report interest and dividend payments.

DOCUMENTS ON DISPLAY

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


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

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


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

Not applicable.


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

See  "Item 4.  Information  on the  Company  - History  and  Development  of the
Company"  and  "Item  10.  Other   Information  -  Memorandum  and  Articles  of
Association"  for  information  on the Company's  proposed  reorganization,  the
adoption  of the BCBCA in  British  Columbia,  and the  proposed  changes to the
Company's governing documents.

                                                                             103
<PAGE>


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, 2003.  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,  2003,  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. Arthur Lang, who serves on the Company's audit
committee.

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

The Company has not yet adopted a code of ethics that  applies to the  Company's
principal executive officers,  principal financial officer, principal accounting
officer  or  controller,  or persons  performing  similar  functions.  Given the
Company's  current  operations,  management does not believe a code of ethics is
necessary at this stage of the Company's development.


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

AUDIT FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant  is  expected  to bill  approximately  $30,000  and  billed  $30,000,
respectively,  for the audit of the  Company's  annual  financial  statements or
services  that are  normally  provided  by the  accountant  in  connection  with
statutory and regulatory filings or engagements for those fiscal years.

AUDIT-RELATED FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant  is  expected  to bill  $16,000 and billed  $nil,  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, 2003 and 2002,  the Company's  principal
accountant  is expected to bill $28,000 and billed $nil,  respectively,  for tax
compliance, tax advice, and tax planning services.

                                                                             104
<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.  Except as disclosed  below,  the
audit committee in accordance  with  procedures for the Company  approved all of
the services described above.

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

Since January 1, 2004,  the Company's  auditors have billed the Company  $16,000
for audit related services in connection with the reorganization. These services
were  authorized  by  non-independent  members of the board of  directors of the
Company, who were also members of the audit committee, but were not pre-approved
by the full audit  committee.  Subsequent to the auditors'  engagement the audit
committee was informed of such engagement and service.

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

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

Not applicable.

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

Not applicable.



                                    PART III

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

See pages F-1 though F-26


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

Not applicable.


                                                                             105
<PAGE>


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

EXHIBITS

<TABLE>
<CAPTION>
    EXHIBIT
     NUMBER                                         EXHIBIT
<S>              <C>

      1.1        Notice of Articles

      1.2        Articles (1)<F1>

      4.1        Share Purchase Agreement Between Shareholders and 389863 B.C. Ltd. (1)<F1>

      4.2        Arrangement Agreement Between Viceroy Resource Corporation and IMA Resource
                 Corporation (1)<F1>

      4.3        Consulting Services Agreement Between Oxbow International Marketing Corp. and IMA
                 Resource Corporation (1)<F1>

      4.4        Employment Agreement with William Lee (1)<F1>

      4.5        Consulting Services Agreement Between Nikolaos Cacos and IMA Resource Corporation
                 (1)<F1>

      4.6        Consulting Agreement Between KGE Management Ltd. and IMA Exploration Inc. dated
                 April 1, 2004

      4.7        Consulting Agreement Between Lindsay R. Bottomer and IMA Exploration Inc. (1)<F1>

      4.8        Exploration and Option Agreement with Barrick Exploraciones Argentina S.A. (1)<F1>

      4.9        Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio Lirio
                 representing Lir-Fer Construcciones S.R.L. (1)<F1>

     4.10        Option Agreement with Lirio and Lir-Fer Construcciones S.R.L. (1)<F1>

     4.11        Option Agreement with Oscar Garcia and others (1)<F1>

     4.12        Purchase Agreement with Modesto Enrique Arasena (1)<F1>

     4.13        Option Agreement with Hugo Arturo Bosque (1)<F1>

     4.14        Option Agreement with Guillermo Munoz, Lydia Gonzalez, Ricardo Sanchez and
                 Antonio Monteleone (1)<F1>

     4.15        Option Agreement with Jorge Ernesto Rodriguez and Gerardo Javier Rodriguez (1)<F1>

     4.16        Option Agreement with Jorge Ernesto Rodriguez and Raul Alberto Garcia (1)<F1>

     4.17        Purchase Agreement with Victor Ronchietto (1)<F1>

     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)<F1>

     4.19        Amendment to Option Agreement with Hugo Arturo Bosque (2)<F2>

     4.20        Amendment to Purchase Agreement with Victor Ronchietto (2)<F2>

     4.21        Option Agreement with Dionisio Ramos (2)<F2>

     4.22        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation (2)<F2>

     4.23        Amendment to consulting Agreement between IMA Exploration Inc. and Nikolaos Cacos
                 (3)<F3>

     4.24        Agreement between the Company and Sean Hurd dated June 2, 2002 (3)<F3>



                                                                             106
<PAGE>

<CAPTION>
    EXHIBIT
     NUMBER                                         EXHIBIT
<S>              <C>

     4.25        Option Agreement between Nestor Arturo and IMA S.A. (3)<F3>

     4.26        Amendment to Option Agreement with Guillermo Munoz, Lydia Gonzalez, Ricardo
                 Sanchez and Antonio Monteleone (3)<F3>

     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)<F3>

     4.28        Option Agreement with Rio Tinto Mining and Exploration Limited (4)<F4>

     4.29        Amendment to Exploration and Option Agreement with Barrick Exploraciones
                 Argentina S.A. (4)<F4>

     4.30        Consulting Agreement between the Company and Lindsay Bottomer dated April 1,
                 2002(4)<F4>

     4.31        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. (4)<F4>

     4.32        Amendment to Option Agreement with Juan Demetrio Lirio and Lir-Fer Construcciones
                 S.R.L. (4)<F4>

     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)<F4>

     4.34        Amendment to Option Agreement between Nestor Arturo and IMA S.A. (4)<F4>

     4.35        Amendment to Consulting Agreement Between KGE Management Ltd. and IMA Exploration
                 Inc. (4)<F4>

     4.36        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. (5)<F5>

     4.37        Amendment to Option Agreement with Juan Demetrio Lirio and Lir-Fer Construcciones
                 S.R.L. (5)<F5>

     4.38        Amendment to Option Agreement between Nestor Arturo and IMA S.A. (5)<F5>

     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)<F5>

     4.40        Short Form Offering Document (5)<F5>

     4.41        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation (5)<F5>

     4.43        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. (5)<F5>

     4.44        Amendment to Agreement between the Company and Sean Hurd (5)<F5>

     4.45        Amendment to Exploration and Option Agreement with Barrick Exploraciones
                 Argentina S.A. dated March 26, 2003. (6)<F6>

     4.46        Letter of Intent dated March 6, 2003 with Amera Resources Corporation (6)<F6>

     4.47        Letter Agreement with Amera Resources Corporation re: reimbursement of office
                 expenses (6)<F6>


                                                                             107
<PAGE>

<CAPTION>
    EXHIBIT
     NUMBER                                         EXHIBIT
<S>              <C>

     4.48        Amendment to Option Agreement with Sociedad Minera de Responsabilidad Limitado
                 Nova JJ de Piura and Sociedad Minera de Responsabilidad Limitada (SMR Ltda) Don
                 Alberto JJ de Piura dated December 23, 2002 (6)<F6>

     4.49        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. dated July 10, 2002 (6)<F6>

     4.50        Amendment to Option Agreement with Juan Demetrio Lirio Jr. and Juan Demetrio
                 Lirio representing Lir-Fer Construcciones S.R.L. dated December 27, 2002 (6)<F6>

     4.51        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation dated July 15, 2002 (6)<F6>

     4.52        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. dated June 14, 2002 (6)<F6>

     4.53        Amendment to Consulting Agreement Between KGE Management Ltd. And IMA Exploration
                 Inc. dated October 3, 2002 (6)<F6>

     4.54        Amendment to Agreement between the Company and Sean Hurd dated June 10, 2002 (6)<F6>

     4.55        Amendment to Consulting Services Agreement Between Oxbow International Marketing
                 Corp. and IMA Resource Corporation dated April 17, 2003 (6)<F6>

     4.56        Arrangement Agreement between IMA Exploration Inc., IMA Holdings Corp.
                 and Golden Arrow Resources Corporation dated May 14, 2004 (7)<F7>

     4.57        Amendment to consulting Agreement with Nikolaos Cacos dated January 5, 2004

     4.58        Amendment to Agreement with Sean Hurd dated January 5, 2004

     4.59        Financial Advisory Services Agreement with Endeavour Financial Ltd.

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

     4.61        Amendment to Letter of Intent with Amera Resources Corporation dated September
                 30, 2003

     4.62        Amendment to Letter of Intent with Amera Resources Corporation dated April 8, 2004

     4.63        Letter Agreement with Beauregard Holdings Corp. dated February 5, 2004 regarding
                 office lease

     4.64        Option Agreement dated September 22, 2003, between the Company and Cloudbreak
                 Resources Ltd.

     4.65        Option Agreement dated August 12, 2003 between the Company and Consolidated
                 Pacific Bay Minerals Ltd.

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

     4.67        Amendment to Option Agreement with Sociedad Minera de Responsabilidad Limitado
                 Nova JJ de Piura and Sociedad Minera de Responsabilidad Limitada (SMR Ltda) Don
                 Alberto JJ de Piura dated August 15, 2003.

     4.68        Letter Agreement with Arthur Lang dated April 23, 2004

      8.1        List of Subsidiaries

     12.1        Certification of Joseph Grosso Pursuant to Rule 13a-14(a)


                                                                             108
<PAGE>


     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

<FN>
(1)<F1> 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)<F2> 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)<F3> 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)<F4> Previously  filed as  an exhibit to the  Company's Annual Report on Form
20-F filed May 8, 2001.  File Number 0-30464.

(5)<F5>  Previously  filed as an  exhibit to the Company's Annual Report on Form
20-F filed May 8, 2002. File Number 0-30464.

(6)<F6> Previously filed  as  an  exhibit to the Company's Annual Report on Form
20-F filed May 16, 2003.  File Number 0-30464.

(7)<F7> Previously filed as with the Company's Report on Form 6-K filed June 18,
2004. File Number 0-30464.
</FN>
</TABLE>













                                                                             109

<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:  June 23, 2004
                       --------------------------------





























                                                                             110

<PAGE>





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



                              IMA EXPLORATION INC.

                         (AN EXPLORATION STAGE COMPANY)


                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2003, 2002 AND 2001

                         (EXPRESSED IN CANADIAN DOLLARS)

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














                                      F-1
<PAGE>

PRICEWATERHOUSECOOPERS

                                                    PricewaterhouseCoopers LLP
                                                    Chartered Accountants
                                                    PricewaterhouseCoopers Place
                                                    #700 - 250 Howe Street
                                                    Vancouver, BC  Canada
                                                    V6C 3S7
                                                    Tel:  604-806-7000
                                                    Fax:  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, 2003 and 2002 and the  consolidated  statements of  operations  and
deficit and cash flows for the years ended  December  31,  2003,  2002 and 2001.
These financial  statements are the responsibility of the company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

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

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the company as at December 31, 2003
and 2002 and the  results  of its  operations  and its cash  flows for the years
ended  December 31, 2003,  2002 and 2001 in accordance  with Canadian  generally
accepted accounting principles.


/s/ PricewaterhouseCoopers LLP

CHARTERED ACCOUNTANTS

Vancouver, B.C., Canada
April 27, 2004 (except for note 12(b) which is as of May 3, 2004)


COMMENTS BY AUDITORS FOR US READERS ON CANADA-US REPORTING DIFFERENCE

In the United States,  reporting  standards for auditors require the addition of
an  explanatory  paragraph  (following  the opinion  paragraph)  when there is a
change in accounting  principles that has a material effect on the comparability
of the company's financial statements such as the changes described in Note 2 to
the  financial  statements.  Our report  dated  April 27, 2004 is  expressed  in
accordance with Canadian reporting standards,  which do not require reference to
such a change in accounting  principles in the auditor's  report when the change
is properly accounted for and adequately disclosed in the financial statements.

/s/ PricewaterhouseCoopers LLP

CHARTERED ACCOUNTANTS
Vancouver, BC, Canada
April 27, 2004




                                      F-2
<PAGE>



                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                        AS AT DECEMBER 31, 2003 AND 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


                                                       2003            2002
                                                         $               $
                                     ASSETS

CURRENT ASSETS

Cash and cash equivalents                             4,454,241       1,436,124
Amounts receivable and prepaids                         176,030          79,661
Marketable securities (Note 4)                          543,460          23,460
                                                   ------------    ------------
                                                      5,173,731       1,539,245
EQUIPMENT net of accumulated depreciation
   of $228,692 (2002 - $201,771)                         40,472          45,517
MINERAL PROPERTIES AND DEFERRED COSTS (Note 5)        6,883,641       5,847,727
                                                   ------------    ------------
                                                     12,097,844       7,432,489
                                                   ============    ============

                                   LIABILITIES

CURRENT LIABILITIES

Accounts payable and accrued liabilities                426,494         108,351
                                                   ------------    ------------

                              SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 6)                               27,707,597      21,354,823

CONTRIBUTED SURPLUS                                   1,541,116         128,260

DEFICIT                                             (17,577,363)    (14,158,945)
                                                   ------------    ------------
                                                     11,671,350       7,324,138
                                                   ------------    ------------
                                                     12,097,844       7,432,489
                                                   ============    ============
NATURE OF OPERATIONS (Note 1)
SUBSEQUENT EVENTS (Note 12)



APPROVED BY THE BOARD

/s/ Joseph Grosso    , Director
-------------------------------
/s/ Art Lang         , Director
-------------------------------



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

                                      F-3
<PAGE>



                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>

                                                                       2003            2002            2001
                                                                         $               $               $
<S>                                                              <C>             <C>             <C>

EXPENSES

Administrative and management services                                  243,515         224,109         219,891
Bank charges and interest                                                10,319          10,492           7,464
Corporate development and investor relations                            352,706         249,373          88,198
Depreciation                                                             26,920          22,772          24,657
General exploration                                                     226,956         180,321         109,875
Office and sundry                                                        57,959          34,823          37,875
Printing                                                                 46,388          22,304          12,133
Professional fees                                                       297,763         172,828         105,052
Rent, parking and storage                                                72,192          72,268          68,522
Salaries and employee benefits                                          199,411         196,042         193,544
Stock based compensation (Note 6 (d))                                 1,487,235         128,260               -
Telephone and utilities                                                  37,934          34,368          25,138
Transfer agent and regulatory fees                                       34,078          35,831          15,596
Travel and accommodation                                                105,950          80,485          37,740
Cost recoveries (Note 7(d))                                             (35,110)         (6,000)              -
                                                                   ------------    ------------    ------------
                                                                      3,164,216       1,458,276         945,685
                                                                   ------------    ------------    ------------
OTHER EXPENSE (INCOME)

Foreign exchange                                                         25,916           8,415         (17,030)
Interest and other income                                               (66,561)        (26,585)        (97,280)
Gain on options and disposition of mineral properties                  (481,779)              -               -
Write-off of mineral properties and deferred costs                      776,626               -          21,483
Write-down of marketable securities                                           -               -          22,483
Loss on sale of marketable securities                                         -               -           6,534
                                                                   ------------    ------------    ------------
                                                                        254,202         (18,170)        (63,810)
                                                                   ------------    ------------    ------------
LOSS FOR THE YEAR                                                    (3,418,418)     (1,440,106)       (881,875)

DEFICIT - BEGINNING OF YEAR                                         (14,158,945)    (12,718,839)    (11,836,964)
                                                                   ------------    ------------    ------------
DEFICIT - END OF YEAR                                               (17,577,363)    (14,158,945)    (12,718,839)
                                                                   ============    ============    ============


BASIC AND DILUTED LOSS PER COMMON SHARE                                  $(0.11)         $(0.06)         $(0.06)
                                                                   ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING                                       32,251,753      23,188,485      15,104,239
                                                                   ============    ============    ============

</TABLE>



        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 CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>

                                                                       2003            2002            2001
                                                                         $               $               $
<S>                                                              <C>             <C>             <C>

CASH PROVIDED FROM (USED FOR)

OPERATING ACTIVITIES

Net loss for the year                                                (3,418,418)     (1,440,106)       (881,875)
Items not affecting cash
     Depreciation                                                        26,920          22,772          24,657
     Stock based compensation                                         1,487,235         128,260               -
     Gain on options and disposition of mineral properties             (481,779)              -               -
     Write-down of marketable securities                                      -               -          22,483
     Loss on sale of marketable securities                                    -               -           6,534
     Write-off of mineral properties and deferred costs                 776,626               -          21,483
                                                                   ------------    ------------    ------------
                                                                     (1,609,416)     (1,289,074)       (806,718)
Increase in amounts receivable and prepaids                             (96,369)         (9,772)        (17,984)
Increase (decrease) in accounts payable and accrued liabilities         318,143          (7,365)        (73,703)
                                                                   ------------    ------------    ------------
                                                                     (1,387,642)     (1,306,211)       (898,405)
                                                                   ------------    ------------    ------------
INVESTING ACTIVITIES

Expenditures on mineral properties and deferred costs                (1,850,761)     (1,266,555)     (1,320,777)
Purchase of equipment                                                   (21,875)        (11,201)         (8,012)
Proceeds on sale of marketable securities                                     -               -          16,966
                                                                   ------------    ------------    ------------
                                                                     (1,872,636)     (1,277,756)     (1,311,823)
                                                                   ------------    ------------    ------------
FINANCING ACTIVITIES

Issuance of common shares                                             6,467,245       3,453,382       1,563,940
Share issuance costs                                                   (188,850)       (189,056)       (100,684)
                                                                   ------------    ------------    ------------
                                                                      6,278,395       3,264,326       1,463,256
                                                                   ------------    ------------    ------------
INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                             3,018,117         680,359        (746,972)

CASH AND CASH EQUIVALENTS
     - BEGINNING OF YEAR                                              1,436,124         755,765       1,502,737
                                                                   ------------    ------------    ------------
CASH AND CASH EQUIVALENTS - END OF YEAR                               4,454,241       1,436,124         755,765
                                                                   ============    ============    ============


CASH AND CASH EQUIVALENTS IS COMPRISED OF:
CASH                                                                  1,654,241         631,255         605,765
TERM DEPOSITS                                                         2,800,000         804,869         150,000
                                                                   ------------    ------------    ------------
                                                                      4,454,241       1,436,124         755,765
                                                                   ============    ============    ============

</TABLE>

SUPPLEMENTARY CASH FLOW INFORMATION (Note 11)

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

                                      F-5
<PAGE>



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

<TABLE>
<CAPTION>

                                                                                    ARGENTINA
                                                   ----------------------------------------------------------------------------
                                                      LIRIO                          RIO DE                          LAGUNA DE
                                                      GROUP           NAVIDAD       LAS TAGUAS        EVELINA        LOS TOROS
                                                        $                $              $                $               $
<S>                                               <C>             <C>             <C>             <C>             <C>

Balance, beginning of year                            1,966,934           5,090         543,889         107,209         138,203
                                                   ------------    ------------    ------------    ------------    ------------
Expenditures during the year
    Assays                                                    -          62,232               -          14,048               -
    Contractors - access                                      -          10,923               -          18,268               -
    Contractors - surveying                                   -         102,595               -               -               -
    Contractors - environmental                               -          40,664               -             301               -
    Drilling                                                  -         193,836               -         191,923               -
    Field supplies                                            -          28,423               -           3,801               -
    Field workers                                             -               -               -               -               -
    Geological                                            2,250         297,005               -          27,990           1,207
    Geological supplies                                       -          50,317               -           4,896               -
    Geochemistry                                              -           1,659               -               -               -
    Geophysics                                                -          88,886               -               -               -
    Geophysics supplies                                       -          29,702               -               -               -
    Legal fees                                            2,382             198               -             162             162
    Option payments                                      90,810               -               -               -               -
    Staking and statutory fees                            1,900           2,900               -               -               -
    Taxes                                                   204             669             191             417             214
    Travel                                                    -          37,369               -           9,595              50
    Office                                                  746           9,924             704           1,262              53
    Other                                                 5,327               -               -               -               -
    Project management                                      659          10,879             279           2,002             973
    Vehicles                                                  -          28,940               -           9,431               2
                                                   ------------    ------------    ------------    ------------    ------------
                                                        104,278         997,121           1,174         284,096           2,661
                                                   ------------    ------------    ------------    ------------    ------------

Option payments received and cost recoveries            (94,803)              -               -               -               -
Write-off of mineral properties                        (649,094)              -               -               -               -
Proceeds on sale of mineral properties                        -               -               -               -               -
Foreign value added tax                                       -               -               -               -               -
                                                   ------------    ------------    ------------    ------------    ------------
                                                       (743,897)              -               -               -               -
                                                   ------------    ------------    ------------    ------------    ------------
Balance, end of year                                  1,327,315       1,002,211         545,063         391,305         140,864
                                                   ============    ============    ============    ============    ============

</TABLE>


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

                                      F-6
<PAGE>

      CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS, 2003 - CONTINUED

<TABLE>
<CAPTION>

                                                             ARGENTINA                 PERU         TOTAL
                                                   ----------------------------    ------------    ------------
                                                                                        RIO
                                                      MOGOTE           OTHER         TABACONAS
                                                         $               $               $              $
<S>                                              <C>             <C>             <C>              <C>

Balance, beginning of year                              107,940         312,012       2,666,450       5,847,727
                                                   ------------    ------------    ------------    ------------
Expenditures during the year
    Assays                                                8,050          13,233           1,580          99,143
    Contractors - access                                  1,483               -               -          30,674
    Contractors - surveying                                   -               -               -         102,595
    Contractors - environmental                               -               -         104,844         145,809
    Drilling                                                  -               -               -         385,759
    Field supplies                                        9,013             501          12,036          53,774
    Field workers                                             -               -          18,850          18,850
    Geological                                           52,011           4,626         146,576         531,665
    Geological supplies                                   3,859           2,244               -          61,316
    Geochemistry                                              -               -               -           1,659
    Geophysics                                                -               -               -          88,886
    Geophysics supplies                                       -               -               -          29,702
    Legal fees                                            2,375           3,760          54,336          63,375
    Option payments                                      15,291               -          41,247         147,348
    Staking and statutory fees                              825          80,979          49,260         135,863
    Taxes                                                   237          21,899              14          23,845
    Travel                                                  718             285          38,176          86,193
    Office                                                1,434             826          18,286          33,236
    Other                                                     -               -           1,958           7,285
    Project management                                    2,431           7,557               -          24,780
    Vehicles                                                498           4,970           8,849          52,690
                                                   ------------    ------------    ------------    ------------
                                                         98,225         140,880         496,012       2,124,447
                                                   ------------    ------------    ------------    ------------
Option payments received and cost recoveries           (206,165)        (45,979)              -        (346,947)
Write-off of mineral properties                               -        (127,532)              -        (776,626)
Proceeds on sale of mineral properties                        -         (22,981)              -         (22,981)
Foreign value added tax                                       -          55,929           2,092          58,021
                                                   ------------    ------------    ------------    ------------
                                                       (206,165)       (140,563)          2,092      (1,088,533)
                                                   ------------    ------------    ------------    ------------
Balance, end of year                                          -         312,329       3,164,554       6,883,641
                                                   ============    ============    ============    ============

</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, 2002
                         (EXPRESSED IN CANADIAN DOLLARS)


<TABLE>
<CAPTION>

                                                                                    ARGENTINA
                                                   ----------------------------------------------------------------------------
                                                      LIRIO                          RIO DE                          LAGUNA DE
                                                      GROUP           NAVIDAD       LAS TAGUAS        EVELINA        LOS TOROS
                                                        $                $              $                $               $
<S>                                               <C>             <C>             <C>             <C>             <C>

Balance, beginning of year                            1,879,134               -         540,720           7,853          72,017
                                                   ------------    ------------    ------------    ------------    ------------

Expenditures during the year
    Assays                                                    -               -              19          39,836          20,251
    Contractors - access                                      -               -               -               -               -
    Contractors - surveying                                   -               -               -               -               -
    Contractors - environmental                               -             487               -             856               -
    Drilling                                                  -               -               -               -               -
    Field supplies                                            -               -             100               -               -
    Field workers                                             -               -               -               -               -
    Geological                                            1,941             785               -          43,799          37,815
    Geological supplies                                       -               -               -           2,451           1,092
    Geochemistry                                              -               -               -               -               -
    Geophysics                                                -               -               -               -               -
    Geophysics supplies                                       -               -               -               -               -
    Legal fees                                            2,343               -               -              34              34
    Option payments                                      71,585               -               -               -               -
    Staking and statutory fees                                -           3,818               3               -           1,232
    Taxes                                                 1,653               -           1,653             121             562
    Travel                                                    -               -               -           7,445             575
    Office                                               10,278               -             385             729           1,014
    Other                                                     -               -               -               -               -
    Project management                                        -               -           1,009              36              36
    Vehicles                                                  -               -               -           4,049           3,575
                                                   ------------    ------------    ------------    ------------    ------------
                                                         87,800           5,090           3,169          99,356          66,186
                                                   ------------    ------------    ------------    ------------    ------------
Foreign value added tax                                       -               -               -               -               -
                                                   ------------    ------------    ------------    ------------    ------------
Balance, end of year                                  1,966,934           5,090         543,889         107,209         138,203
                                                   ============    ============    ============    ============    ============

</TABLE>

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

                                      F-8
<PAGE>


      CONSOLIDATED SCHEDULE OF MINERAL PROPERTY INTERESTS, 2002 - CONTINUED

<TABLE>
<CAPTION>

                                                             ARGENTINA                 PERU           TOTAL
                                                   ----------------------------    ------------    ------------
                                                                                        RIO
                                                      MOGOTE           OTHER         TABACONAS
                                                         $               $               $              $
<S>                                              <C>             <C>             <C>              <C>

Balance, beginning of year                               74,565         203,169       1,803,714       4,581,172
                                                   ------------    ------------    ------------    ------------

Expenditures during the year
    Assays                                                    -               -          24,428          84,534
    Contractors - access                                      -               -               -               -
    Contractors - surveying                                   -               -          20,923          20,923
    Contractors - environmental                               -               -         112,689         114,032
    Drilling                                                  -               -               -               -
    Field supplies                                        1,220               -          18,122          19,442
    Field workers                                             -               -          49,790          49,790
    Geological                                           14,034          57,075         236,231         391,680
    Geological supplies                                       -               -               -           3,543
    Geochemistry                                              -               -               -               -
    Geophysics                                                -               -               -               -
    Geophysics supplies                                       -               -               -               -
    Legal fees                                              469               -          63,266          66,146
    Option payments                                      13,969               -         227,079         312,633
    Staking and statutory fees                              757          39,753               -          45,563
    Taxes                                                   424               -               -           4,413
    Travel                                                1,710               -          41,856          51,586
    Office                                                  792               -          19,266          32,464
    Other                                                     -               -          12,882          12,882
    Project management                                        -               -               -           1,081
    Vehicles                                                  -               -          36,204          43,828
                                                   ------------    ------------    ------------    ------------
                                                         33,375          96,828         862,736       1,254,540
                                                   ------------    ------------    ------------    ------------
Foreign value added tax                                       -          12,015               -          12,015
                                                   ------------    ------------    ------------    ------------
Balance, end of year                                    107,940         312,012       2,666,450       5,847,727
                                                   ============    ============    ============    ============
</TABLE>

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

                                      F-9
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


1.       NATURE OF OPERATIONS

         The Company is in the process of exploring  its mineral  properties  in
         South  America and  evaluating  other mineral  properties.  The Company
         presently  has no  proven  or  probable  reserves  and on the  basis of
         information to date, it has not yet determined whether these properties
         contain economically recoverable ore reserves. Consequently the Company
         considers itself to be an exploration stage company.  The amounts shown
         as mineral  properties and deferred costs  represent  costs incurred to
         date, less amounts amortized and/or written off, and do not necessarily
         represent present or future values. The underlying value of the mineral
         properties and deferred costs is entirely dependent on the existence of
         economically  recoverable reserves,  securing and maintaining title and
         beneficial  interest in the  properties,  the ability of the Company to
         obtain the  necessary  financing  to complete  development,  and future
         profitable  production.  The  Company  considers  that it has  adequate
         resources to maintain its core operations for the next fiscal year. See
         also Note 12.


2.       CHANGE IN ACCOUNTING POLICY

         Effective January 1, 2003, the Company  prospectively  adopted the fair
         value method of accounting  for the stock options  granted to employees
         and directors,  as  recommended by the Canadian  Institute of Chartered
         Accountants' Handbook ("CICA 3870") STOCK-BASED  COMPENSATION AND OTHER
         STOCK  BASED  PAYMENTS.  CICA  3870  provides  alternative  methods  of
         transition  for the adoption of the fair value method and as permitted,
         the Company has elected the prospective  application,  which allows the
         fair value method to be applied to stock options  granted,  modified or
         settled  on or  after  January  1,  2003 to  employees  and  directors.
         Pro-forma disclosure for stock options issued prior to January 1, 2003,
         as required by the standard, had the Company used the fair value method
         is presented in Note 6 (d).

         Stock-based compensation has been credited to contributed surplus.

         The  fair  value  of  stock   options  is   determined   by  using  the
         BLACK-SCHOLES  OPTION  PRICING  MODEL with  assumptions  for  risk-free
         interest rates,  dividend  yields,  volatility  factors of the expected
         market price of the Company's common shares and an expected life of the
         options.

         For stock  options  granted to other than  employees  and directors the
         Company continues to apply the fair value method.


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.



                                      F-10
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         USE OF ESTIMATES

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

         PRINCIPLES OF CONSOLIDATION

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

         CASH AND CASH EQUIVALENTS

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

         MARKETABLE SECURITIES

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

         MINERAL PROPERTIES AND DEFERRED COSTS

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

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

         Although  the  Company  has  taken  steps to  verify  title to  mineral
         properties  in  which  it  has an  interest,  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.


                                      F-11

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         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.

         EQUIPMENT

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

         ASSET RETIREMENT OBLIGATIONS

         The fair value of a liability  for an asset  retirement  obligation  is
         recognized  when a reasonable  estimate of fair value can be made.  The
         asset  retirement   obligation  is  recorded  as  a  liability  with  a
         corresponding increase to the carrying amount of the related long-lived
         asset. Subsequently, the asset retirement cost is allocated to expenses
         using a  systematic  and  rational  method and is  adjusted  to reflect
         period-to-period  changes in the  liability  resulting  from passage of
         time and  revisions  to  either  timing or the  amount of the  original
         estimate of the  undiscounted  cash flow. As at December 31, 2003,  the
         Company does not have any asset retirement obligations.

         LONG-LIVED ASSETS IMPAIRMENT

         Long-lived   assets  are  reviewed  for  impairment   when  changes  in
         circumstances   suggest  their  carrying  value  has  become  impaired.
         Management  considers  assets  to be  impaired  if the  carrying  value
         exceeds  the  estimated  undiscounted  future  projected  cash flows to
         result  from the use of the  asset  and its  eventual  disposition.  If
         impairment is deemed to exist,  the assets will be written down to fair
         value. Fair value is generally  determined using a discounted cash flow
         analysis.

         TRANSLATION OF FOREIGN CURRENCIES

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

         CONCENTRATION OF CREDIT RISK

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



                                      F-12
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


3.       SIGNIFICANT ACCOUNTING POLICIES (continued)

         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. As of December
         31, 2003,  the market value of  marketable  securities  was  $1,032,546
         (2002 - $78,200).

         INCOME TAXES

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

         EARNINGS (LOSS) PER SHARE

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

         COMPARATIVE FIGURES

         Certain of the 2002 and 2001 fiscal year figures have been reclassified
         to conform with the presentation used in fiscal 2003.


4.       MARKETABLE SECURITIES
<TABLE>
<CAPTION>

                                                               2003                            2002
                                                   ----------------------------    ----------------------------
                                                                      QUOTED                          QUOTED
                                                     RECORDED         MARKET         RECORDED         MARKET
                                                       VALUE          VALUE            VALUE          VALUE
                                                         $              $                $              $
        <S>                                       <C>             <C>             <C>             <C>

         Ballad Gold & Silver Ltd.
               - 500,000 common shares                  250,000         325,000               -               -
         Amera Resources Corporation ("Amera")
               - 600,000 common shares                  270,000         546,000               -               -
         Other                                           23,460         161,546          23,460          78,200
                                                   ------------    ------------    ------------    ------------
                                                        543,460       1,032,546          23,460          78,200
                                                   ============    ============    ============    ============
</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, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


5.       MINERAL PROPERTIES AND DEFERRED COSTS
<TABLE>
<CAPTION>
                                                                       2003                            2002
                                                   --------------------------------------------    ------------
                                                                     DEFERRED
                                                   ACQUISITION     EXPLORATION
                                                      COSTS            COSTS           TOTAL           TOTAL
                                                        $                $               $               $
        <S>                                       <C>             <C>             <C>             <C>

         Argentina
             Navidad                                          -       1,002,211       1,002,211           5,090
             Lirio Group                                221,020       1,106,295       1,327,315       1,966,934
             Rio de las Taguas                          133,262         411,801         545,063         543,889
             Evelina                                          -         391,302         391,302         107,209
             Laguna de los Toros                              -         140,867         140,867         138,203
             Other                                       11,639         300,690         312,329         419,952
                                                   ------------    ------------    ------------    ------------
                                                        365,921       3,353,166       3,719,087       3,181,277
         Peru
             Rio Tabaconas                              741,293       2,423,261       3,164,554       2,666,450
                                                   ------------    ------------    ------------    ------------
                                                      1,107,214       5,812,132       6,883,641       5,847,727
                                                   ============    ============    ============    ============
</TABLE>

         (a)      Argentinean Properties

                  The Company has either staked,  fully paid or holds options to
                  acquire 100% working interests in mineral properties,  located
                  in San Juan Province and Chubut Province in Argentina.

                  As of  December  31,  2003,  the  Company  must  make  further
                  payments with respect to option  agreements on the Lirio Group
                  of properties, totalling US $240,000, as follows:

                        YEAR                            US $

                        2004                             70,000
                        2005                            170,000
                                                   ------------
                                                        240,000
                                                   ============

                  The  Company  has  also  agreed  to  pay  net  smelter  return
                  royalties  ("NSR")  of  up to US  $7,000,000  once  commercial
                  production is achieved on the Lirio Group of properties.

                  During fiscal 2003, the Company  reviewed its non-core mineral
                  properties and determined to write off mineral  properties and
                  related deferred exploration costs of $776,626.

         (b)      Rio Tabaconas, Peru

                  The  Company  holds an option to  acquire a 100%  interest  in
                  three concessions,  in the Cajamarca Department of San Ignacio
                  Province in northern  Peru. In addition,  the Company owns ten
                  concessions,   which   surround   and  overlie  the   optioned
                  concessions. Collectively these are known as the Rio Tabaconas
                  Project.

                                      F-14
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


5.       MINERAL PROPERTIES AND DEFERRED COSTS (continued)

                  Under the terms of the option agreement,  the Company has paid
                  US  $185,000  and  was  required  to  make  further   payments
                  totalling  US  $1,340,000.  On  June  28,  2002,  the  Company
                  suspended further exploration  activities at the Rio Tabacanos
                  project.  This  decision  was made in  response  to the  local
                  community  expressing  its concerns  with mineral  exploration
                  activities.  The Company has deferred any further  exploration
                  until  an  agreement   with  the  local   community  has  been
                  finalized.  As a result the Company declared force majeure, as
                  allowed under its option agreement.  Accordingly,  the Company
                  and the optionor  have  deferred  payment of the  remaining US
                  $1,155,000   option   payments  until  the  force  majeure  is
                  discontinued.  On August 1, 2003, the Company commenced paying
                  US $1,500 per month to the  optionor  as  compensation  during
                  this waiting period.

         (c)      During fiscal 2003, the Company  entered into  agreements with
                  Amera, a  publicly-traded  company with common  management and
                  shareholders, whereby the Company:

                  (i)      optioned  its  Mogote  Property  in the  NW San  Juan
                           Region of  Argentina.  Amera has the option to earn a
                           51% interest in the 8,009 hectare Mogote  Property by
                           issuing a total of 1,650,000  common  shares of Amera
                           to the Company and by incurring  US $1.25  million of
                           expenditures,  including work programs and underlying
                           option  payments,  all over a five year period ending
                           July 1, 2007.  Amera has also agreed to reimburse the
                           Company for past payments made and expenditures which
                           had  been  incurred  by the  Company  on  the  Mogote
                           Property.   As  at  December  31,  2003,   Amera  has
                           reimbursed the Company $192,952,  and $4,902 remained
                           outstanding  and is included  in amounts  receivable.
                           The Company has also received 100,000 shares of Amera
                           at a recorded amount of $45,000.

                           On April 8, 2004,  the Company and Amera entered into
                           a  further   agreement  whereby  Amera  can  earn  an
                           additional  24%  interest,  for a total 75% interest,
                           after  earning the initial 51%  interest,  by issuing
                           300,000  shares of Amera  (issued) and  conducting an
                           additional US $3 million of exploration  expenditures
                           over a three year period ending May 20, 2007.

                  (ii)     sold a  100%  undivided  interest  in  three  mineral
                           properties,  comprising  24,280 hectares (the "Chubut
                           Properties"),  located in Chubut Province, Argentina,
                           for  500,000  common  shares of Amera for a  recorded
                           amount of $225,000.  In addition, in the event that a
                           decision is made to place the Chubut  Properties into
                           commercial  production,  Amera will pay the Company a
                           bonus  of  US$250,000  and a 3% net  smelter  returns
                           royalty.

                                      F-15

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL

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

                                                      NUMBER             $
         Issued - common shares

         Balance, December 31, 2000                  13,529,219      16,627,241

         Private placements                           5,063,000       1,563,940
         Less share issue costs                               -        (100,684)
                                                   ------------    ------------
         Balance, December 31, 2001                  18,592,219      18,090,497

         Private placements                           5,703,026       2,552,870
         Exercise of options                            170,000          68,000
         Exercise of warrants                         2,085,361         837,512
         Less share issue costs                               -        (194,056)
                                                   ------------    ------------
         Balance, December 31, 2002                  26,550,606      21,354,823

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


         (a)      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.

                  In  connection  with the  financing,  the Company  granted the
                  agent an option to  purchase  195,750  units on the same basis
                  and terms as the private  placement.  The agent has  exercised
                  options to purchase  105,930 units,  for $95,337 cash, and, as
                  of December 31, 2003, 89,820 units remained outstanding.

         (b)      During  fiscal  2002,  the  Company  completed  the  following
                  private placements:

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


                                      F-16
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


6. SHARE CAPITAL (continued)

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

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

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

         (c)      During  fiscal  2001,  the  Company  completed  the  following
                  private placements:

                  i)     3,000,000  units at a price of $0.26 for cash  proceeds
                         of $746,250,  net of share issue costs of $33,750. Each
                         unit  consisted  of one common share of the Company and
                         one-half warrant. Each full warrant entitled the holder
                         to purchase one common share for the exercise  price of
                         $0.40 on or before July 3, 2002.  The  President of the
                         Company  purchased  240,000  units.  The  Company  also
                         issued  agents  warrants  to  purchase  259,000  common
                         shares at a price of $0.35 on or before July 3, 2002;

                  ii)    2,063,000  units at a price of $0.38 for cash  proceeds
                         of $717,006,  net of share issue costs of $66,934. Each
                         unit  consisted  of one common share of the Company and
                         one-half warrant. Each full warrant entitled the holder
                         to purchase one common share for the exercise  price of
                         $0.45 on or before  March 31,  2003.  The Company  also
                         issued  agents  warrants  to  purchase  206,300  common
                         shares  for the  exercise  price of $0.45 on or  before
                         March 31, 2003.

         (d)      Stock Options

                  The  Company  grants  stock  options  in  accordance  with the
                  policies of the TSX Venture  Exchange  ("TSXV").  A summary of
                  the Company's  outstanding  options at December 2003, 2002 and
                  2001 and the  changes  for the years  ending on those dates is
                  presented below:


                                      F-17

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)
<TABLE>
<CAPTION>

                                                      2003                    2002                    2001
                                             ----------------------    ----------------------    ----------------------
                                               OPTIONS     WEIGHTED      OPTIONS     WEIGHTED      OPTIONS     WEIGHTED
                                             OUTSTANDING    AVERAGE    OUTSTANDING    AVERAGE    OUTSTANDING    AVERAGE
                                                 AND       EXERCISE        AND       EXERCISE        AND       EXERCISE
                                             EXERCISABLE     PRICE     EXERCISABLE     PRICE     EXERCISABLE     PRICE
                                                               $                        $                          $
                 <S>                        <C>            <C>       <C>             <C>      <C>              <C>

                  Balance,
                       beginning of year        2,465,500    0.44        1,635,500     0.40        1,224,000     0.54
                  Granted                       1,918,500    1.60        1,050,000     0.50        1,635,500     0.40
                  Exercised                    (1,855,850)   0.44         (170,000)    0.40                -        -
                  Cancelled                             -       -          (50,000)    0.40       (1,224,000)    0.54
                                             ------------             ------------              ------------
                  Balance, end of year          2,528,150    1.32        2,465,500     0.44        1,635,500     0.40
                                             ============             ============              ============
</TABLE>

                  Stock options outstanding and exercisable at December 31, 2003
                  are as follows:


                     NUMBER            EXERCISE PRICE         EXPIRY DATE
                                             $

                    254,150                0.40               July 19, 2006
                    159,000                0.50               May 2, 2007
                    225,000                0.50               September 23, 2007
                    195,000                0.84               March 7, 2008
                    300,000                0.90               May 30, 2008
                  1,395,000                1.87               August 27, 2008
                  ---------
                  2,528,150
                  =========

                  During fiscal 2002, the Company  granted 540,000 stock options
                  to its employees and directors and applied the intrinsic value
                  based method of accounting.  Had the Company followed the fair
                  value based method of accounting  in fiscal 2002,  the Company
                  would have  recorded  an  additional  compensation  expense of
                  $140,840  in respect of its  employees  and  directors'  stock
                  options.  Pro-  forma  loss  and loss  per  share  information
                  determined  under the fair value  method in fiscal 2002 are as
                  follows:

                                                                       $

                  Net loss for fiscal 2002
                       - as reported                                 (1,440,106)
                       - compensation expense                          (140,840)
                                                                   ------------
                       - pro-forma                                   (1,580,946)
                                                                   ============

                  Basic and diluted loss per share
                       - as reported                                   (0.06)
                       - pro-forma                                     (0.07)

                  During  fiscal  2002,  the  Company  recognized   compensation
                  expense of $128,260 for stock options granted to consultants.


                                      F-18
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


6.       SHARE CAPITAL (continued)

                  The  fair  value  of  stock  options   granted  to  employees,
                  directors and  consultants 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:

                                                       2003             2002

                  Risk-free interest rate          3.76% - 4.16%   3.89% - 4.25%
                  Estimated volatility               74% - 78%       73% - 87%
                  Expected life                      2.5 years       2.5 years


                  The weighted  average  fair value per share of stock  options,
                  calculated  using  the  Black-Scholes  option  pricing  model,
                  granted   during  the  period  to  the  Company's   employees,
                  directors and consultants was $0.63 (2002 - $0.26) per share.

                  Option-pricing   models  require  the  use  of  estimates  and
                  assumptions including the expected volatility.  Changes in the
                  underlying  assumptions  can materially  affect the fair value
                  estimates and,  therefore,  existing models do not necessarily
                  provide  reliable  measure of the fair value of the  Company's
                  stock options.

         (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,  2003,  2002  and  2001 and the
                  changes for the years ending on those dates is as follows:
<TABLE>
<CAPTION>

                                                        2003            2002            2001
                <S>                               <C>             <C>             <C>

                  Balance, beginning of year          9,511,550       6,588,967       3,592,167
                  Issued                              1,502,965       5,007,944       2,996,800
                  Exercised                          (4,969,066)     (2,085,361)              -
                  Expired                                (3,001)              -               -
                                                   ------------    ------------    ------------
                  Balance, end of year                6,042,448       9,511,550       6,588,967
                                                   ============    ============    ============
</TABLE>

                  Common shares reserved pursuant to warrants and agent warrants
                  outstanding at December 31, 2003 are as follows:

                     NUMBER            EXERCISE PRICE         EXPIRY DATE
                                             $
                    1,477,222               0.60              May 23, 2004
                      778,471               0.60              September 27, 2004
                    1,066,822               0.75              September 15, 2004
                    1,253,667               0.90              March 16, 2005
                      173,667               0.75              April 19, 2004
                    1,292,599               1.10              April 28, 2004
                    ---------
                    6,042,448
                    =========

         (f)      See also Note 12.


                                      F-19
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


7.       RELATED PARTY TRANSACTIONS

         (a)      During  fiscal  2003,   the  Company  paid  $330,600  (2002  -
                  $136,276;  2001 - $157,825) to companies controlled by current
                  and  former  directors  and  officers  of  the  Company,   for
                  accounting, management, and consulting services provided.

         (b)      The Company has  agreements  with a company  controlled by the
                  President  of the Company  for the rental of office  premises.
                  The  Company is  required  to make  monthly  rent  payments of
                  $5,077.  During fiscal 2003,  the Company paid $60,924 (2002 -
                  $60,924; 2001 - $60,924) for rent.

         (c)      During  fiscal  2003,  the Company  recorded  $61,067  (2002 -
                  $64,641; 2001 - $45,381) for reimbursement of expenditures and
                  disbursements  incurred  on  behalf  of  the  Company  by  the
                  President  of the Company.  As at December  31,  2003,  $7,538
                  (2002 - $1,496 ; 2001 - $17,683)  remains  unpaid and has been
                  included in accounts payable and accrued liabilities.

         (d)      The Company shares its office facilities with Amera.  Amera is
                  currently  paying a minimum of $2,500 per month to the Company
                  for shared rent and administration  costs. During fiscal 2003,
                  the Company received $35,110 (2002 - $6,000; 2001 - $nil) from
                  Amera.

         (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, 2003, the amount under the agreement would be $891,000.

         (f)      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>

                                                                       2003            2002            2001
                                                                         $               $               $

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

         Statutory tax rate                                              37.62%          39.62%          44.62%
         Provision for income taxes based on statutory
              Canadian combined federal and provincial
                   income tax rates                                  (1,286,009)       (570,570)       (393,493)
         Differences in foreign tax rates                              (383,116)         (4,234)        179,918
         Losses for which an income tax benefit
              has not been recognized                                 1,669,125         574,804         213,575
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============
</TABLE>


                                      F-20
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


8.       INCOME TAXES (continued)

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


                                                       2003            2002
                                                         $               $

         Future income tax assets
              Financing costs                           116,985          98,934
              Operating loss carryforward             4,051,130       4,164,745
              Excess of tax values of mineral
                properties and property, plant
                and equipment over book value           465,045         330,957
                                                   ------------    ------------
                                                      4,633,160       4,594,636
         Valuation allowance for future tax assets   (4,633,160)     (4,594,636)
                                                   ------------    ------------
                                                              -               -
                                                   ============    ============

         The Company has Canadian  non-capital loss  carryforwards of $9,002,084
         that may be available for tax purposes. The losses expire as follows:


                  EXPIRY DATE                                   $

                      2004                                  1,554,225
                      2005                                  1,266,386
                      2006                                  1,255,915
                      2007                                  1,277,771
                      2008                                    845,836
                      2009                                  1,319,284
                      2010                                  1,482,667
                                                         ------------
                                                            9,002,084
                                                         ============


9.       SEGMENTED INFORMATION

         The  Company  is  involved  in  mineral   exploration  and  development
         activities,  which are conducted principally in Argentina and Peru. The
         Company is in the exploration stage and, accordingly, has no reportable
         segment revenues or operating results for each of fiscal 2003, 2002 and
         2001.

         The Company's total assets are segmented geographically as follows:
<TABLE>
<CAPTION>

                                                                               2003
                                                   ------------------------------------------------------------
                                                     CORPORATE       ARGENTINA         PERU            TOTAL
                                                         $               $               $               $
        <S>                                       <C>             <C>             <C>             <C>

         Current assets                               5,075,092          65,637          32,999       5,173,728
         Equipment                                       28,974           7,032           4,466          40,472
         Mineral properties and deferred costs                -       3,719,087       3,164,554       6,883,641
                                                   -------------   ------------    ------------    ------------
                                                      5,104,066       3,791,756       3,202,019      12,097,844
                                                   =============   ============    ============    ============

</TABLE>

                                      F-21

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


9. SEGMENTED INFORMATION (continued)
<TABLE>
<CAPTION>

                                                                               2002
                                                   ------------------------------------------------------------
                                                     CORPORATE       ARGENTINA         PERU            TOTAL
                                                         $               $               $               $
        <S>                                       <C>             <C>             <C>             <C>

         Current assets                               4,161,455          49,117          40,914       1,539,245
         Equipment                                       34,323           5,817           5,377          45,517
         Mineral properties and deferred costs                -       3,181,277       2,666,450       5,847,727
                                                   ------------    ------------    ------------    ------------
                                                      4,196,278       3,236,211       2,712,741       7,432,489
                                                   ============    ============    ============    ============
</TABLE>


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

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

         The significant  measurement  differences  between Canadian GAAP and US
         GAAP for certain items on the consolidated  balance sheets,  statements
         of operations and deficit and statements of cash flows are as follows:
<TABLE>
<CAPTION>

                                                                       2003            2002            2001
                                                                         $               $               $
        <S>                                                       <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF OPERATIONS

         Loss for the year under Canadian GAAP                       (3,418,418)     (1,440,106)       (881,875)
         Mineral properties and deferred costs for the year (i)      (1,812,540)     (1,266,555)     (1,320,777)
         Mineral properties and deferred costs written off
              during the year which would have been
              expensed in the year incurred (i)                         776,626               -          21,483
         Stock-based compensation (iii)                                (144,000)       (102,150)              -
                                                                   ------------    ------------    ------------
         Loss for the year under US GAAP                             (4,598,332)     (2,808,811)     (2,181,169)
         Unrealized gains on available-for-sale securities (ii)         434,346          54,740               -
                                                                   ------------    ------------    ------------
         Comprehensive loss (iv)                                     (4,163,986)     (2,754,071)     (2,181,169)
                                                                   =============   ============    ============
         Loss per share under US GAAP                                     (0.14)          (0.12)          (0.14)
                                                                   =============   ============    ============
         Diluted loss per share under US GAAP                             (0.14)          (0.12)          (0.14)
                                                                   =============   ============    ============
</TABLE>

<TABLE>
<CAPTION>

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

         SHAREHOLDERS' EQUITY
         Balance per Canadian GAAP                                   11,671,350       7,324,138
         Mineral properties and deferred costs expensed (i)          (6,883,641)     (5,847,727)
         Accumulated other comprehensive income (ii)                    489,086          54,740
                                                                   ------------    ------------
         Balance per US GAAP                                          5,276,795       1,531,151
                                                                   ============    ============

</TABLE>


                                      F-22
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


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


                                                       2003            2002
                                                         $               $

         MINERAL PROPERTIES AND DEFERRED COSTS

         Balance per Canadian GAAP                    6,883,641       5,847,727
         Mineral properties and deferred costs
              expensed under US GAAP (i)             (6,883,641)     (5,847,727)
                                                   ------------    ------------
         Balance per US GAAP                                  -               -
                                                   ============    ============

<TABLE>
<CAPTION>

                                                       2003            2002            2001
                                                         $               $               $
        <S>                                       <C>             <C>             <C>

         CONSOLIDATED STATEMENTS OF CASH FLOWS

         OPERATING ACTIVITIES
         Cash used per Canadian GAAP                 (1,387,642)     (1,306,211)       (898,405)
         Mineral properties and deferred costs (i)   (1,850,761)     (1,266,555)     (1,320,777)
                                                   ------------    ------------    ------------
         Cash used per US GAAP                       (3,238,403)     (2,572,766)     (2,219,182)
                                                   ============    ============    ============
</TABLE>


<TABLE>
<CAPTION>

                                                       2003            2002            2001
                                                         $               $               $
        <S>                                       <C>             <C>             <C>

         INVESTING ACTIVITIES
         Cash used per Canadian GAAP                 (1,872,636)     (1,277,756)     (1,311,823)
         Mineral properties and deferred costs (i)    1,850,761       1,266,555       1,320,777
                                                   ------------    ------------    ------------
         Cash provided (used) per US GAAP               (21,875)        (11,201)          8,954
                                                   ============    ============    ============
</TABLE>

         i)       Mineral properties and deferred costs

                  Mineral  properties  and deferred  costs are  accounted for in
                  accordance  with  Canadian GAAP as disclosed in Note 3. For US
                  GAAP   purposes,   the  Company   expenses   acquisition   and
                  exploration  costs relating to unproven mineral  properties as
                  incurred. 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-23
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (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 2003.

                  Under  US  GAAP,   when  stock   options  are   cancelled  and
                  immediately  reissued  at a revised  price (the  "Repricing"),
                  these options are accounted for as variable  compensation from
                  the date of the  Repricing.  Under this method,  following the
                  repricing  date,  compensation  expense is recognized when the
                  quoted market value of the Company's common shares exceeds the
                  amended  exercise  price.   Should  the  quoted  market  value
                  subsequently  decrease, a recovery of a portion, or all of the
                  previously   recognized    compensation   expense,   will   be
                  recognized.

                  During  fiscal  2003,  for US GAAP  purposes,  the Company has
                  prospectively  adopted the fair based method of accounting for
                  stock-based  compensation  in  accordance  with FAS 148.  This
                  application is consistent  with the early  application of CICA
                  3870 under  Canadian  GAAP (Note 3).  Accordingly  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)       New Accounting Standards

                  In May 2003,  the FASB issued  Statement No. 150,  "ACCOUNTING
                  FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH
                  LIABILITIES AND EQUITY" ("SFAS No. 150"),  which addresses how
                  to classify and measure  certain  financial  instruments  with
                  characteristics   of  both  liabilities  (or  assets  in  some
                  circumstances)  and  equity.  SFAS No.  150 is  effective  for
                  financial  instruments  entered into or modified after May 31,
                  2003, and otherwise is effective at the beginning of the first
                  interim period beginning after June 15, 2003. Adoption of SFAS
                  No.  150 on  July  1,  2003  had no  impact  on the  Company's
                  financial position and results of operations.

                  In  January  2003,  the  FSAB  issued  Interpretation  No.  46
                  "CONSOLIDATION OF VARIABLE  INTEREST  ENTITIES" ("FIN No. 46")
                  (revised  December 2003). FIN No. 46 clarifies the application
                  of Accounting Research Bulletin No. 51 "CONSOLIDATED FINANCIAL
                  STATEMENTS" to only certain entities in which equity investors
                  do not have the  characteristics  of a  controlling  financial
                  interest  or do not  have  sufficient  equity  at risk for the
                  equity  to   finance   its   activities   without   additional
                  subordinated  financial support from other parties. FIN No. 46
                  applies  immediately  to variable  interest  entities  created
                  after  January 31, 2003,  and the variable  interest  entities
                  obtained  after that date.  It applies at the end of the first
                  annual  reporting  period  beginning  after June 15, 2003,  to
                  variable  interests  in which an  enterprise  holds a variable
                  interest which was acquired before February 1, 2003.  Adoption
                  of FIN No. 46 on  January 1, 2004 will not  materially  impact
                  the Company's financial position or results of operations.


                                      F-24

<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)


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

                  A similar guideline has been introduced in Canada,  Accounting
                  Guideline 15 "CONSOLIDATION  OF VARIABLE  INTEREST  ENTITIES".
                  This guideline applies to annual and interim periods beginning
                  on or after  November 1, 2004.  The Company is  continuing  to
                  evaluate the potential impact of Accounting Guideline 15.

                  In July  2003,  the  CICA  released  Section  1100  "GENERALLY
                  ACCEPTED ACCOUNTING PRINCIPLES".  This new section establishes
                  standards for financial reporting in accordance with generally
                  accepted accounting principles.  It describes what constitutes
                  Canadian GAAP and its sources,  replacing "FINANCIAL STATEMENT
                  CONCEPTS" paragraph  1000.59-61.  Also, in July 2003, the CICA
                  released  Section  1400,   "GENERAL   STANDARDS  OF  FINANCIAL
                  STATEMENT   PRESENTATION".   This   section   clarifies   what
                  constitutes  fair  presentation  in  accordance  with Canadian
                  GAAP.  Both these  sections  are  effective  for fiscal  years
                  beginning  on or after  October  1,  2003 and the  Company  is
                  currently evaluating their impact.


11.      SUPPLEMENTARY CASH FLOW INFORMATION

         Non-cash  investing  and  financing  activities  were  conducted by the
         Company as follows:
<TABLE>
<CAPTION>

                                                                       2003            2002            2001
                                                                         $               $               $
        <S>                                                       <C>             <C>             <C>

         Investing activities
              Proceeds on disposition of mineral properties            (272,982)              -               -
              Acquisition of marketable securities                      272,982               -               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============


         Financing activities
              Finder's fees payable                                           -          (5,000)              -
              Shares issued for payment of finder's fees                      -           5,000               -
              Shares issued on exercise of options                       74,379               -               -
              Contributed surplus                                       (74,379)              -               -
                                                                   ------------    ------------    ------------
                                                                              -               -               -
                                                                   ============    ============    ============

         Other supplementary cash flow information:

                                                                       2003            2002            2001
                                                                         $               $               $

         Interest paid in cash                                                -               -               -
                                                                   ============    ============    ============
         Income taxes paid in cash                                            -               -               -
                                                                   ============    ============    ============

</TABLE>

                                      F-25
<PAGE>


                              IMA EXPLORATION INC.
                         (AN EXPLORATION STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                         (EXPRESSED IN CANADIAN DOLLARS)

12.      SUBSEQUENT EVENTS

         a)       In March 2004, Minera Aquiline  Argentina S.A., a wholly-owned
                  subsidiary  of  Aquiline  Resources  Inc.,  commenced  a legal
                  proceeding  against the  Company,  asserting  that the Company
                  unlawfully  used  confidential  information,  and is seeking a
                  constructive   trust  over  the  Navidad   Project  and  other
                  surrounding  properties  in Chubut  Province,  Argentina.  The
                  Company is  defending  this  action and, as at the date of the
                  Auditor's Report, the outcome is not determinable.

         b)       On  May  3,  2004,   the   Company   announced   a   corporate
                  restructuring  which  would  have the result of  dividing  its
                  existing  portfolio  of mineral  properties  into two separate
                  public  companies.  Following the corporate  restructuring the
                  Company will continue to hold the Navidad  project,  while the
                  newly  created  company will hold all other  mineral  property
                  interests.  The proposed reorganization of the Company will be
                  accomplished  by way of a statutory plan of arrangement and is
                  subject to shareholder, regulatory and court approvals.

         c)       Subsequent to December 31, 2003, the Company:

                  (i)    completed a brokered  private  placement  of  1,500,000
                         units at $3.10 per unit, for proceeds of $4,307,500 net
                         of $279,000  agent's  commission and $63,500 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 units,  at a
                         recorded amount of $620,000 to its agent;

                  (ii)   granted  1,462,000 stock options for $3.10 per share to
                         its directors,  employees and  consultants for a period
                         of five years; and

                  (iii)  issued  2,634,291  common shares for  $2,308,015 on the
                         exercises of stock options and warrants.




                                      F-26