SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F



(Mark One)







_  Registration statement pursuant to Section 12(b) or 12(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 March 31, 2005

or



_  Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





For the transition period from _____ to _____



Commission File Number

0-30462





VANNESSA VENTURES LTD.

(Exact Name of Registrant as Specified in its Charter)



NOT APPLICABLE

(Translation of Registrants Name into English)



British Columbia, Canada

(Jurisdiction of Incorporation or Organization)



Suite 220, 1010 - 1st Street SW, Calgary, Alberta, Canada, T2R 1K4

(Address of Principal Executive Offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

|Title of Each Class               | Name of Each Exchange
on Which Registered
|--------------------------------- | -----------------------------------------
|______________N/A________________ | ______________N/A_______________         

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



Common Shares Without Par Value

(Title of Class)



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

N/A

(Title of Class)

Indicate the number of outstanding shares of each of the issuers classes of capital stock as of March 31, 2005:



81,471,353 Common Shares







---







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

NO X





Indicate by check mark which financial statement item the registrant has elected to follow.



ITEM 17 X

ITEM 18



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.



NOT APPLICABLE









---





TABLE OF CONTENTS



|PART I   |                                                                              | PAGE
|-------- | ---------------------------------------------------------------------------- | ----
|ITEM 1   | Identity of Directors, Senior Management and Advisors                        | 1   
|ITEM 2   | Offer Statistics and Expected Timetable                                      | 1   
|ITEM 3   | Key Information                                                              | 1   
|ITEM 4   | Information on the Company                                                   | 8   
|ITEM 5   | Operating and Financial Review and Prospects                                 | 28  
|ITEM 6   | Directors, Senior Management and Employees                                   | 36  
|ITEM 7   | Major Shareholders and Related Party Transactions                            | 45  
|ITEM 8   | Financial Information                                                        | 48  
|ITEM 9   | The Offer and Listing                                                        | 52  
|ITEM 10  | Additional Information                                                       | 54  
|ITEM 11  | Quantitative and Qualitative Disclosure about Market Risk                    | 66  
|ITEM 12  | Description of Securities Other than Equity Securities                       | 66  
|         |                                                                              |     
|PART II  |                                                                              | PAGE
|ITEM 13  | Defaults, Dividend Arrearages and Delinquencies                              | 66  
|ITEM 14  | Material Modifications to the Rights of Security Holders and Use of Proceeds | 66  
|ITEM 15  | Controls and Procedures                                                      | 66  
|ITEM 16A | Audit Committee Financial Exerts                                             | 67  
|ITEM 16B | Code of Ethics                                                               | 67  
|ITEM 16C | Principal Accountant Fees and Services                                       | 67  
|ITEM 16D | Exemptions from the Listing Standards for Audit Committees                   | 68  
|ITEM 16E | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       | 68  
|         |                                                                              |     
|PART III |                                                                              | PAGE
|ITEM 17  | Financial Statements                                                         | 68  
|ITEM 18  | Financial Statements                                                         | 70  
|ITEM 19  | Exhibits                                                                     | 70  











---







The information contained in this Annual Report on Form 20-F for the fiscal year ended March 31, 2005 (the 2005 Form 20-F) of Vannessa Ventures Ltd. (the Company) is current at September 30, 2005 except where a different date is specified.



Unless otherwise specified, all monetary amounts are expressed in Canadian dollars.



Financial information is presented in accordance with accounting principles generally accepted in Canada.  Differences between accounting principles generally accepted in Canada and in the United States, as applicable to the Company, are set forth in Note 16 to the accompanying audited consolidated financial statements of Vannessa Ventures Ltd.









The following table sets forth certain standard conversions from the International System of Units (metric units) to the Standard Imperial Units:



|Conversion Table    
|--------------------
|Metric              
|1.0 millimetre (mm) 
|1.0 metre (m)       
|1.0 kilometre (km)  
|1.0 hectare (ha)    
|1.0 gram (g)        
|1.0 metric tonne (t)
|1.0 g/t             





i





---





Glossary of Terms



acanthite is a mineral. It is the most important silver ore next to galena.



alluvial means of or pertaining to material deposited by a stream along its course.



alluvium refers to a deposit of sediment left by a stream on the streams channel or floodplain.



amphibolite refers to a metamorphic rock composed mainly of amphibole, generally with an oriented fabric.



andesite refers to a dark-colored, fine-grained extrusive rock that when porphyritic, contains phenocrysts composed primarily of zoned acid plagioclase (especially andesine) and one or more of the mafic minerals (e.g., biotite, hornblende, pyroxene) and a groundmass composed generally of the same minerals as the phenocrysts.



anomaly refers to a geological, geochemical or geophysical event that is considered prospective and appreciably different from the surrounding background.



Archean refers to the period of time from the consolidation of the Earths crust to the base of the Cambrian. The terms Precambrian, Proterozoic and Azoic have been used either as synonyms or partial synonyms.



Au refers to gold.



auger is any of various hand tools, typically having a threaded shank and cross handle, used for boring holes in wood or ice.



auriferous means gold-bearing.



basal means of, relating to, located at, or forming a base.



basalt refers to a fine-grained, sometimes glassy basic volcanic rock.  Basalts are generally found in the form of lava flows which may be extensive and are often erupted from fissures and sometimes from central-type vents.



BCA refers to the British Columbia Business Corporations Act which became effective on March 29, 2004 and replaced the British Columbia Company Act.



brecciarefers to a rock consisting of sharp fragments embedded in a fine-grained matrix (such as sand or clay).



chalcopyrite is a mineral whose formal name is copper iron sulfide. It is a major ore of copper. Chalcopyrite is a common mineral and is found in almost all sulfide deposits.



clasticsare made up of fragments of pre-existing rocks.



cmrefers to centimetres.



colluvial or colluvium is a general term applied to any loose, heterogenous and incoherent mass of soil material or rock fragments deposited chiefly by mass-wasting, usually at the base of steep slope or cliff.



Commission refers to the British Columbia Securities Commission.



common shares refers to the common shares in the capital of the Company.



Company refers to Vannessa Ventures Ltd. or its predecessor companies, as applicable.



covellite is a mineral whose formal name is copper sulfide. Its uses are as a minor ore of copper and as mineral specimens.



ct refers to carats, a unit of weight for diamonds equivalent to 0.2 of a gram (0.007054 of an ounce).



ii





---





CVG refers to Corporación Venezolana de Guyana, Venezuelas state-run mining and minerals company.



dacite is a light gray volcanic rock containing a mixture of plagioclase and other crystalline minerals in glassy silica, similar in appearance to rhyolite.



deposit Mineralized material or deposit is a mineralized body which has been delineated by appropriately drilling and/or underground sampling to support a sufficient tonnage and average grade of metal(s).  Under SEC standards, such a deposit does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries and other factors conclude economic feasibility.



diabase is a dark-gray to black, fine-textured igneous rock composed mainly of feldspar and pyroxene and used for monuments and as crushed stone.



diamond refers to a cubic variety or crystalline carbon which may be of gem quality.



diamondiferous refers to rock or alluvial material containing or yielding diamonds.



epidote is a mineral with the formal name of calcium aluminum iron silicate hydroxide.  Its uses are typically that of a mineral specimen and rarely as a gemstone. Epidote, while not general known for exceptional crystals can produce some magnificent specimens.  Its unique green color which is often described as pistachio, is quite striking in well colored specimens.



exploration stage refers to the stage where a company is engaged in the search for minerals deposits (reserves) which are not in either the development or production stage.



felsic pertains to or containing a group of light-colored silicate minerals that occur in igneous rocks.



gabbro refers to a rock that is coarse grained igneous rock and the plutonic equivalent of the volcanic basalts.



goethite is a mineral known as hydrated iron oxide. Its chemical formula is FeO(OH). It is an important ore of iron.



granite is a common, coarse-grained, light-colored, hard igneous rock consisting chiefly of quartz, orthoclase or microcline, and mica, used in monuments and for building.



g/t refers to grams per tonne.



ilmenite refers to a usually massive iron-black mineral composed of iron, titanium, and oxygen that is a titanium ore.



lapilli is a small, solidified fragment of lava.



laterite refers to the hard subsurface deposit of oxides of aluminum and iron found in tropical soils where the water table fluctuates with seasonal changes in precipitation.



m refers to metres.



magnetite is a natural magnet. Its chemical formula is Fe3O4, also known as iron oxide. It forms a major component of iron ore.



metamorphic refers to a process through which a rock undergoes chemical or structural changes. Heat, pressure, or a chemical reaction may cause such changes.



mineralogy is the study of naturally occurring, usually inorganic, solid consisting of either a single element or a compound, and having a definite chemical composition and a systematic internal arrangement of atoms.



Miocene refers to the geologic time, rock series, or sedimentary deposits of the fourth epoch of the Tertiary Period, characterized by the development of grasses and grazing mammals.



iii





---





muscovite refers to a miceous mineral occurring as plates which are flexible and elastic.



NSR refers to net smelter return which is calculated based on the gross revenue of a tonne of metal less smelting and transportation cost.



Oligocene refers to the geologic time, rock series, or sedimentary deposits of the third epoch of the Tertiary Period, characterized by further development of modern mammalian fauna, including the rise of the true carnivores and their gradual replacement of the creodonts.



paleochannel refers to an old watercourse, usually buried.



phyllite refers to an argillaceous rock commonly formed by regional metamorphism and intermediate in metamorphic grade between slate and mica schist.



Precambrian refers to the geologic time period between Hadean Time and the Cambrian Period, often subdivided into the Archean and Proterozoic eras, comprising most of the earths history and marked by the appearance of primitive forms of life.



Proterozoic refers to the latter of the two divisions of Precambrian time, from approximately 2.5 billion to 570 million years ago, a period marked by the buildup of oxygen and the appearance of the first multicellular eukaryotic life forms.



pyrite is a mineral whose formal name is iron sulfide. Its chemical composition is FeS2. Its uses are as a very minor ore of sulfur for sulfuric acid.



pyroclastic means of or pertaining to rock fragments formed in a volcanic eruption.



pyroclastics refer to particles and chunks of igneous rock ejected from a volcanic vent during an eruption.



regolith is the layer of loose rock resting on bedrock, constituting the surface of most land.



saprolite refers to surface rock which has undergone various changes as a result of weathering, including changes in volume and loss of other minerals in the original rock structure.



schist refers to a regionally metamorphosed rock characterized by a parallel arrangement of the bulk of the constituent minerals.



stockworks refers to a mineral deposit in the form of a network of veinlets diffused in the country rock.



stratigraphy is the study of rock strata, especially the distribution, deposition, and age of sedimentary rocks.



tailings are refuse or dross remaining after ore has been processed.



tetrahedrite is a grayish-black mineral known as copper antimony sulfide.  It often contains other elements and is used as an ore of copper.



tuff is a rock composed of compacted volcanic ash varying in size from fine sand to coarse gravel.



turbidite is a sedimentary deposit formed by a turbidity current.



unconformity refers to a boundary separating two or more rocks of markedly different ages, marking a gap in the geologic record.



veinlet is a small or secondary vein.



iv





---





Forward-Looking Statements



This Annual Report on Form 20-F of Vannessa Ventures Ltd. (the Company) contains forward-looking statements that involve risks and uncertainties.  Forward-looking statements include statements about the Companys future business plans and strategies including planned exploration activities and property selection activities, statements about the Companys financing strategies and most other statements that are not historical in nature.  Because forward-looking statements involve risks and uncertainties, there are factors, including those discussed below under Item 3.  Key Information -- D.  Risk Factors, that could cause actual results to be materially different from any future results, performance or achievements expressed or implied.  Accordingly, readers should not place undue reliance on forward-looking statements.  The Company undertakes no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.





PART I



ITEM 1

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS





This Form 20-F is being filed as an Annual Report under the Securities Exchange Act of 1934 (the Exchange Act) and, as such, there is no requirement to provide any information under this Item.





ITEM 2

OFFER STATISTICS AND EXPECTED TIMETABLE





This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this Item.





ITEM 3

KEY INFORMATION





A.

Selected Financial Data



The following selected financial data for the Company on the following page should be read in conjunction with the audited consolidated financial statements and notes attached as a part hereof.  These financial statements have been prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP), which differ in certain respects from those principles that the Company would have followed had its consolidated financial statements been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP).  The major differences between Canadian GAAP and U.S. GAAP that would affect the measurement of the Companys financial position, loss or cash flows are set forth in Note 16 to the accompanying audited consolidated financial statements of the Company.



1





---







Selected Financial Data

(CDN$)

|                                                | YEARS ENDED MARCH 31,
|----------------------------------------------- | ---------------------
|                                                | 2005                 
|Interest Income                                 | 42,159               
|Net Loss                                        | (5,342,673)          
|Loss Per Share                                  | $(0.07)              
|                                                |                      
|Cash Used in Operating Activities               | (1,851,932)          
|Cash Provided by (Used in) Investing Activities | 634,569              
|Cash Provided from Financing Activities         | 2,047,600            
|                                                |                      
|Total Assets                                    | 8,382,237            
|Current Liabilities                             | 888,816              
|Mineral Properties (included in Total Assets)   | 6,533,625            
|Deficit at End of Period                        | (37,689,537)         
|Share Capital ($)                               | 43,100,845           
|                                                |                      
|Shares Outstanding at End of Year (#)           | 81,471,353           
|                                                |                      
|                                                |                      

The Company has not declared or paid any cash dividends during the periods indicated.



Selected Financial Data Adjusted for US GAAP

(CDN$ )

|                                                | YEARS ENDED MARCH 31,
|----------------------------------------------- | ---------------------
|                                                | 2005                 
|Net Loss                                        | (5,406,694)          
|Weighted Average Number of Shares               | 76,875,180           
|Loss Per Share                                  | $(0.07)              
|                                                |                      
|Cash Used in Operating Activities               | (2,770,313)          
|Cash Provided by (Used in) Investing Activities | 1,552,950            
|Cash Provided by Financing Activities           | 2,047,600            
|                                                |                      
|Mineral Properties                              | 4,405,626            
|Shareholders Equity                            | 4,839,266            
|                                                |                      
|                                                |                      



Currency and Exchange Rates



All dollar amounts set forth in this report are in Canadian dollars, except where otherwise indicated.





1.

On September 30, 2005, the noon buying rate in New York City for cable transfer in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York was $0.8615 U.S. = $1.00 Canadian.





All exchange rate calculations in #2 and #3 below are based on the noon buying rate in New York City for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York.



2





---







2.

The following table sets forth the high and low exchange rates for each month during the previous six months.



|Month     | 9/05  | 8/05  | 7/05  | 6/05  | 5/05  | 4/05 
|--------- | ----- | ----- | ----- | ----- | ----- | -----
|High Rate | .8615 | .8412 | .8300 | .8159 | .8082 | .8233
|Low Rate  | .8418 | .8207 | .8041 | .7950 | .7872 | .7957



3.

The following table sets forth the average exchange rates for each of the past 5 fiscal years, calculated by using the average of the exchange rates in effect on the last day of each month during the period indicated.



|                           | Year Ended March 31,
|-------------------------- | --------------------
|                           | 2005                
|Average Rate During Period | .7872               



B.

Capitalization and Indebtedness



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



C.

Reasons for the Offer and Use of Proceeds



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



D.

Risk Factors



The following is a brief discussion of those distinctive or special characteristics of the Companys operations and industry which may have a material impact on, or constitute risk factors in respect of, the Companys future financial performance.  Due to the nature of the Companys business and the present stage of exploration on the Companys properties, the following risk factors apply:



The Company is a mineral exploration company without operating history.



To date, the Company has had no revenue from the exploration activities on its properties.  The Companys exploration activities have not yet disclosed a commercially viable mineral deposit (a reserve) to warrant development.  Even if the Company does undertake development activity on any of its properties, the Company may continue to incur losses beyond the period of commencement of such activity.  There is no certainty that the Company will produce revenue, operate profitably or provide a return on investment in the future.



Depending on the price of any natural resources produced, the Company may determine that it is impractical to commence or continue commercial production.  There is no certainty that the expenditures to be made by the Company in the exploration of any of its properties as described herein will result in discoveries of commercial quantities of ore.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.



The Company has incurred net losses to date and is dependent on outside financing to fund its operations.



The Company has experienced, on a consolidated basis, losses in all years of its operations.  At March 31, 2005, the Companys deficit was $37,689,537 (March 31, 2004 - $32,346,864).  At December 31, 2005, the Companys deficit was $42,120,338. The Companys operations do not provide any cash flow.  In the past, the Company has relied on sales of equity securities and payments from joint venture partners to meet its cash requirements.



At March 31, 2005,  the Company had working capital of  $406,434 and at December 31, 2005, the Company had a working capital deficiency of $1,944,303. Should additional properties be acquired or programs be undertaken, the Company will require additional funding.



3





---





The exploration of the Companys properties depends upon the Companys ability to obtain financing through any or all of the joint venturing of projects, debt financing, equity financing or other means.  Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in its properties or reduce or terminate its operations on such properties.



The Company does not hold interests in land, or any other form of property interest or title in any properties.



The Company does not hold interests in land, or any other form of property interest or title in any of its properties.  The Companys interests in its properties are comprised of exclusive rights under government licenses and contracts to conduct operations in the nature of exploration, development and, in due course if warranted, mining, on the concession areas.  Maintenance of the Companys exclusive rights to conduct operations on its various foreign concessions is subject to ongoing exploration and development expenditures.  The Companys rights with respect to these concessions are also limited as to time.  The Company must develop and mine on a concession within specified periods in order to maintain its rights with respect to that concession.  Should the Company determine that a property has no economic merit, then the property is abandoned, all identifiable property costs are written off and the property reverts back to the government.





The Companys exploration activities are inherently risky.



The business of resource exploration and extraction involves a high degree of risk.  Few properties that are explored are ultimately developed into production.  At present, none of the Companys properties has a known body of commercial ore.  Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in the conduct of exploration programs, particularly in the later stages of exploration.  The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure.  The Company maintains liability insurance coverage of $2,000,000 per occurrence with respect to its mineral exploration operations, but no assurance can be made that such coverage will be sufficient in all situations.



The Company has relied and may continue to rely on consultants and others for construction and operating expertise.  The economics of developing mineral deposit properties is affected by many factors, including the cost of operations, variations of the material extracted, fluctuating natural resource markets, costs of processing equipment and such other factors as native claims, government regulations, including regulations relating to royalties, allowable production, importing and exporting of natural resources and environmental protection.  Depending on the price of any natural resources produced, the Company may determine that it is impractical to commence or continue commercial production.





The Company is at the exploration stage and has limited experience in placing mineral deposit properties into production.



The Company has limited experience in placing mineral deposit properties into production, and its ability to do so will be dependent upon using the services of appropriately experienced personnel or entering into agreements with other major resource companies that can provide such expertise.  There can be no assurance that the Company will have available to it the necessary expertise when and if the Company places its mineral deposit properties into production.



The Companys foreign operations, including its operations in Venezuela, are subject to additional inherent risks.



The Companys operations in Venezuela, Guyana and Costa Rica are subject to political and other risks.  Its mining exploration and development activities may be affected in varying degrees by the extent of political stability and the nature of various 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 and/or its holdings.  Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and safety factors.  The Companys material operations in Venezuela, Guyana and Costa Rica entail significant governmental, economic, social, medical and other factors common to all developing countries.



4





---





In Venezuela, the Company is currently in dispute with a state-owned corporation with respect to the Las Cristinas Project.  See  -- The Company is pursuing an interest in the Las Cristinas Project  below.  As well, Venezuela has recently experienced political unrest in the form of street marches and demands that the current president hold a referendum to determine whether to remove him from office.  An approximate two-month long general strike commenced in December 2002 and continued into February 2003. The result of the strike included shortages of oil and gas supplies in Venezuela and a severe economic downturn.  The general strike in Venezuela ended in early February 2003 but while this had no effect on the Companys operations in Venezuela,  no assurance can be provided that  the Companys operations would be unaffected by future strikes.



The situation in Venezuela at the end of March 2004 was still uncertain with the considerable uncertainty regarding the gathering of signatures to force a referendum on the continuing Presidency of Mr. Chavez.  Concerns regarding the independence of the judicial system in Venezuela had been raised by many including Human Rights Watch in July of 2004.



A referendum on Hugo Chavezs presidency was held in Venezuela on August 14, 2005. It marked the latest stage in an increasingly bitter opposition campaign to unseat the president, who has already survived a coup, a two-month general strike and a previous attempt to force a vote on his leadership.





The Company is pursuing an interest in the Las Cristinas Project where the ownership rights are in doubt and in dispute.



The Company is pursuing an interest in the Las Cristinas Project in Venezuela and the ownership rights are in doubt and in dispute.  See Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- Title Dispute and Legal Proceedings -- International Arbitration.  Over the past two years a number of legal actions undertaken by the Company in defense of its rights to the Las Cristinas project have been either filed in Venezuelan Court or have been followed up in court proceedings. Although some rulings were obtained in July of 2004 no significant progress was made during fiscal year 2004.  Consequently, on July 8, 2004 the Company commenced a process of International Arbitration by filing a document to initiate the process, or Request (the Request), with the International Centre for Settlement for Investment Disputes (ICSID) in Washington D.C.  The Request claimed that the Government of Venezuela expropriated the property without compensation and Vannessa is seeking remedies under the Bilateral Investment Treaty between Canada in Venezuela.  On October 28, 2004, the Secretary-General of the ICSID registered the Companys Request against the Bolivarian Republic of Venezuela with respect to the Las Cristinas property.As part of the Arbitration process the Company suspended all ongoing legal actions with respect to the matter under Arbitration in Venezuela.



Substantial uncertainty exists as to the ultimate resolution of the Companys rights and title issues and the level of compensation, if any, which may be received through the ICSID process. The dispute is likely to be protracted and may take several years to resolve.  Accordingly, as of February 10, 2005, the Company had divested itself of its remaining Venezuelan properties.



The Companys property interest in Costa Rica may be impaired by a  decree of a national moratorium on new open pit mining.



The Companys interest in the Cerro Crucitas Property may be impaired by the Government of Costa Ricas  decree  of a national moratorium on open pit mining.  See Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Costa Rica -- Cerro Crucitas Project -- Proposed Exploration Program.  The  decree states that any rights legally acquired prior to the decree will be respected.  The Company holds exploitation rights with approvals obtained prior to the decree.  In October 2002, the Supreme Court of Costa Rica confirmed the Cerro Crucitas project is exempt from the legislation prohibiting open pit mining.  However, in December 2004 the Company learned that the Supreme Court of Costa Rica, in responding to an injunction filed against the Ministry of the Environment or SETENA and the President of the Republic, ruled that the resolution that awarded the Exploitation Permit on Cerro Crucitas to the Company be annulled because it violated Article 50 of the Constitution of Costa Rica.  The ruling also indicated that the environmental approval process should not be impacted by the decision and ordered the State to pay costs, damages and compensation to the concession holder, which is the Companys subsidiary in Costa Rica.  The ruling does not go into effect until the parties are formally notified at which time details for the decision are expected.  In the absence of other explanations for the ruling, the Companys counsel speculates that the ruling may be a misunderstanding of the conditions that apply to the Mining Title.  The Exploitation Permit was issued in full compliance with all applicable laws and regulations in place at the time which in 2001 required that the Exploitation Permit be issued before the developer could apply for the required Environmental Permits.  With the change of law in 2002,  the developer now requires environmental approval prior to receiving an Exploitation Permit.  Since changes in the law are not retroactive, the Company believes the status of its Exploitation Permit should not be impacted.



5





---





On September 1, 2005, the Company, through its 100 percent owned subsidiary, Industrias Infinito S.A., received a Resolution from SETENA approving the Companys Environmental Impact Statement (EIS) dealing with the Crucitas gold project.  The SETENA approval of the EIS means that the Company has now complied with all of the requisites of the 2001 Mining License.  The approval is for the mining of the saprolite which is weathered and soft material overlying the unaltered rock below.  The saprolite makes up approximately one third of the resource and, the  environmental approval to mine the underlying hardrock will be requested in 2006.



On December 12, 2005, the Company, through its wholly owned subsidiary Industrias Infinito S.A., successfully concluded the environmental permitting process for its Crucitas gold project.  The final resolution (Resolución No 3638-2005-SETENA), was issued by SETENA on December 12, 2005.  The final resolution specified the amount of the required Environmental Performance Bond as US$ 600,000.  The Company has made preliminary arrangements for bonding to be put into place and this will be finalized now that the exact amount of the bond has been identified.

The Company competes with other companies for the acquisition of new properties



Increasing competition exists for the limited number of mineral acquisition opportunities available.  As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than the Company has, the Company may be unable to acquire additional attractive properties for exploration on terms it considers acceptable.



The Company is a Passive Foreign Investment Company for United States federal income tax purposes which may have adverse consequences for U.S. investors.



The Company believes that it is a passive foreign investment company for United States federal income tax purposes because it earns 75% or more of its gross income from passive sources.  As a result, a United States holder of common shares could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the United States holders common shares or upon receipt of excess distributions, unless such holder of common shares elect to be taxed currently on his or her pro rata portion of the Companys income, whether or not the income was distributed in the form of dividends or otherwise.  The election requires certain conditions be met such as filing on or before the due date, as extended, for filing the shareholders income tax return for the first taxable year to which the election will apply.  Otherwise, the election may only partially apply.  Further, the elections will increase the administrative and regulatory burden on the Company.  See Item 10.  Additional Information -- E.  Taxation -- United States Federal Income Tax Consequences --  Passive Foreign Investment Company.



The Companys potential profitability is subject in part to matters over which it has no control.



The mining industry in general is intensely competitive and, even if commercial quantities of mineral deposits are discovered, a profitable market may not exist for the sale of the minerals produced.  Factors beyond the control of the Company may affect the marketability of any substances discovered.  For example, the prices of gold and diamonds have experienced significant movement over short periods of time.  The gold price fell to a 20-year low of US$ 253 in July 1999 and recovered significantly since that time to reach a level of US$ 436 by December 31, 2004 and was US$ 517 at  December 31, 2005..  Such prices are affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods.  The supply of and demand for minerals are affected by various factors, including political events, economic conditions and production costs in major producing regions.  Mineral deposits discovered on the Companys properties may not be economic.



The Company depends on a number of key directors and employees and the loss of any one of the key directors or employees could have an adverse effect on the Company.



The Company depends on a number of key directors and employees, in particular Manfred Peschke, Chairman and a director of the Company; and John R. Morgan, President, CEO and director of the Company.  The loss of any of these directors or employees could have an adverse effect on the Company.  There are currently no management contracts outstanding with the key directors and employees and the Company does not maintain key man insurance on any of its management.  See Item 6 -- Directors, Senior Management and Employees.



6





---





The directors of the Company may have conflicts of interest in negotiating and concluding agreements.



Certain of the Companys directors and officers serve as directors or officers of other reporting companies or have significant shareholdings in other reporting companies.  For example, Vern Hall, a director of the Company is also President of Tamarack Inc., a mineral exploration and development company with properties in North and South America. To the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation.  See Item 6 -- Directors, Senior Management and Employees.



The Company is subject to risks in connection with currency fluctuations.



The Company incurs costs and expenses in a variety of international currencies, primarily Canadian dollars, U.S. dollars, Costa Rican colons, Venezuelan bolivares and Guyanese dollars.  Historical exchange rates of the latter three currencies against the Canadian dollar, the Companys functional currency is set forth in the  table below.  All the Companys financings to date have been in Canadian dollars and will continue to be in Canadian dollars for the foreseeable future.  Accordingly, the Company is subject to the risk of fluctuations in the relative values of the Canadian dollar as compared to the foreign currencies in which it transacts business.  The Company is required to recognize foreign currency translation gains or losses in the determination of net earnings and losses, except for exchange gains or losses relating to non-current monetary assets or liabilities, which are deferred and amortized over the remaining life of the asset or liability.  The Company does not engage in any activities to hedge against currency fluctuations.



|Foreign Currency Conversion Rates of $1 Canadian
|------------------------------------------------
|                                                
|                                                
|                                                
|                                                
|Costa Rica (Colon)                              
|Venezuela (Bolivar)                             
|Guyana (Dollar)                                 



The Companys share price has been volatile in recent years.



In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many mineral exploration companies have experienced wide fluctuations in price 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 fluctuated from a high of $0.80 to a low of $0.30 within the twelve month period preceding the date of this Annual Report on Form 20-F.



The Company has shares reserved for future issuance which presents a risk of dilution to current and future shareholders and possible downward pressure on the share price.



As at September 30, 2005, the Company had 86,971,353 common shares outstanding.  Also at that date, there were 6,085,000 stock options and 25,255,000 share purchase warrants outstanding pursuant to which common shares may be issued in the future, which could result in further dilution to the Companys shareholders and pose a dilutive risk to potential investors.  If all of these stock options and warrants are exercised, the number of the Companys currently outstanding shares would increase by approximately 36%, to 118,311,353.  The impact of the issuance of a significant amount of common shares from these option and warrant exercises may place substantial downward pressure on the market price of the Companys common shares.



The Company has not paid any dividends since incorporation and has no plans to pay dividends for the foreseeable future.



The Company has not paid any dividends since incorporation and it is not anticipated that dividends will be declared in the short or medium term.  The directors of the Company will determine if and when dividends should be declared and paid in the future based on the Companys financial position at the relevant time.



7





---







ITEM 4

INFORMATION ON THE COMPANY





A.

History and Development of the Company



Organization; Registered Office; Etc.



The Company was incorporated under the laws of British Columbia on January 22, 1981 under the name Ida-May Resources Ltd. with an authorized capital of 10,000,000 shares.  It changed its name to Limoges Porcelaines Ltd. on October 9, 1985 and increased its authorized capital to 20,000,000 shares.  On October 20, 1988, it changed its name to Boch & Limoges Ltd. and consolidated its share capital on the basis of one new share for every 10 old shares and increased its authorized capital to 20,000,000 shares.  On July 21, 1994, it changed its name to Vannessa Ventures Ltd. and consolidated its share capital on the basis of one new share for every 2.2 old shares and increased its authorized capital to 100,000,000 shares.  On January 15, 2004, the Company increased its authorized capital to 250,000,000 shares.



The Company is a reporting issuer in British Columbia and Alberta.  The common shares trade on the TSX Venture Exchange under the symbol VVV and on the Berlin Stock Exchange under the symbol VVT.  From January 1, 1999 to November 12, 2004, the Companys common shares were quoted on the Over-the-Counter Bulletin Board Electronic Quotation System (the OTC-BB) under the symbol VNVNF.  Since November 2004, the Companys common shares have not been quoted on the OTC-BB because the Company had not filed its Annual Report on Form 20-F for its fiscal year ended March 31, 2004 (the 2004 Form 20-F).  Pursuant to comments received from the Commission on the Companys Annual Report on Form 20-F for its 2003 fiscal year, concerning, among other matters, auditor independence issues, the Company, which replaced its former auditors during its 2004 fiscal year, retained its current auditors in October 2004 to undertake re-audits of the Companys financial statements for its fiscal years 2002 through 2003 inclusive.  These re-audits were completed and the 2004 Form 20-F was filed with the U.S. Securities and Exchange Commission on December 6, 2005.  Shortly following the filing of this 2005 Form 20-F, the Company plans to cause application to be made for its common shares to resume quotation on the OTC-BB.



The address of the head office of the Company is Suite 220, 1010  1st Street S.W., Calgary, Alberta, Canada, T2R 1K4.  The telephone number of the head office of the Company is (403) 444-5191 or toll free 1 888 339-6339.  The address for service and the registered and records office is located at DuMoulin Black, 10th Floor, 595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5.  The Companys website is www.vannessaventures.com and its e-mail address is info@vannessaventures.com.



Principal Capital Expenditures/Divestitures Over Last Three Fiscal Years



The Companys principal capital expenditures since April 1, 2002 were all related to its mineral properties as outlined in the table below and were incurred in the following countries:



Vannessa Ventures Ltd. Capital Expenditures

($ in Thousands)

Years Ended March  31,



|                          | 2005        | 2004       | 2003           
|------------------------- | ----------- | ---------- | ---------------
|Brazil                    |             |            |                
|Brazil Concessions        | $         4 | $       11 | $            47
|Costa Rica                |             |            |                
|Crucitas Gold Project     | 1,262       | 1,003      | 1,290          
|Guyana                    |             |            |                
|Maple Creek Concessions   | 1,194       | 1,031      | 1,220          
|Potaro Concessions        | 53          | 365        | 155            
|Marudi Gold Project       | 820         | 348        | 223            
|South Guyana Concessions  | -           | 3          | 73             
|Venezuela                 |             |            |                
|La Fe\Yuruan\Kilometer 88 | 329         | 306        | 391            
|Las Cristinas             | 582         | 655        | 1,311          
|TOTAL                     | $  4,244    | $   3,722  | $        4,710 



8





---







After reviewing the Companys interest in the projects, management, as appropriate, records an impairment charge for current expenditures incurred during the year even though there has been advancement of the mining and development process.



Expenditures were financed through  equity financings.  See Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources.



During November and December 2005, the Company was in the final stages of negotiating financing that would provide funds to continue with the fiscal 2006 planned expenditures.



Current and Planned Capital Expenditures/Divestitures



Planned capital expenditures for the year ending March 31, 2006, are expected to be approximately $9 million.  These expenditures will mostly be to maintain and advance the Companys mining and development activities in Guyana (Maple Creek and Marudi), the Las Cristinas project in Venezuela and the feasibility study, environmental bond  and development of the Crucitas gold project in Costa Rica. The Company will be utilizing available working capital and proceeds from equity financings to finance 2006 planned capital expenditures.



Public Takeover Offers



During the current and previous fiscal year, the Company has not received any public takeover offers from third parties nor has the Company made any such takeover offers.



B.

Business Overview



Summary



Since 1994, the Companys principal focus has been the acquisition and exploration of mineral properties in Central and South America, principally in Costa Rica, Venezuela, Brazil and Guyana.  The Company has interests in the following properties:  the Potaro Concessions (Guyana), the Marudi Mountain Property (Guyana) and the Cerro Crucitas Property (Costa Rica).  The Company is also pursuing an interest in the Las Cristinas Project in Venezuela; however, the ownership rights are in doubt and in dispute.  See Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- Title Dispute and Legal Proceedings; -- International Arbitration.  At March 31, 2004 and September 30, 2005, all of the Companys mineral interests were at the exploration stage.



Exploration on the Companys properties is not significantly affected by seasonal changes.  To conduct its exploration, the Company is dependent on sub-contractors for equipment and supplies.  These are generally available but vary in price and immediacy of availability subject to demand.



The Company does not earn any revenues from its operations although for the years ended March 31, 2005, 2004 and 2003, the Company earned interest of $42,159,  $54,030 and $88,665 , respectively, on deposits.  The Company has financed its operations principally through the sale of its equity securities and through joint ventures.  Its ability to continue operations is dependent on the ability of the Company to obtain additional financing.  See Item 3.  Key Information -- D.  Risk Factors.



At March 31, 2005,  the Company had working capital of  $406,434. Should additional properties be acquired or programs be undertaken, the Company will require additional funding.  The exploration of the Companys properties depends upon the Companys ability to obtain financing through any or all of the joint venturing of projects, debt financing, equity financing or other means.  Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in its properties or reduce or terminate its operations on such properties.



At September 30, 2005, the Companys outstanding stock options and share purchase warrants represented a total of 31,340,000 common shares issuable for a maximum of $17,782,100 if these options and warrants are ultimately exercised in full.  The exercise of options and warrants are completely at the discretion of the respective holders.



Applicable Government Regulation



The Company currently operates in Venezuela, Guyana and Costa Rica.  Operations entail significant governmental regulatory and other factors common to mining ventures.  More particularly, mining operations are subject to government regulation under which operations may be affected in varying degrees by legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes, labor standards or changes in conditions under which minerals may be extracted and marketed.  The effect of these factors cannot be accurately determined.



9





---





As a company moves through advanced exploration to production, the scope of its activities increases and so does the potential for significant environmental effects. A key regulatory factor during these stages is the Environmental Impact Statement (EIS). To proceed, a company must submit an EIS to the respective government authorities and approval of the EIS means that the company has complied with all of the initial environmental requisites in the mine development and approval process.



C.

Organizational Structure



The chart  illustrates the corporate structure of the Company, including all subsidiaries, the respective jurisdictions of incorporation and the percentage of voting securities held directly or indirectly by the Company as at December 31, 2005.

[chart.jpg]



10





---





D.

Property, Plant and Equipment





The Company is a mineral exploration company engaged in the acquisition and exploration of mineral properties in Central and South America, principally in Costa Rica, Venezuela, Brazil and Guyana.  The Company has interests in the following properties:  the Potaro Concessions (Guyana), the Marudi Mountain Property (Guyana) and the Cerro Crucitas Property (Costa Rica).  The Company is also pursuing an interest in the Las Cristinas Project in Venezuela; however, the ownership rights are in doubt and in dispute as discussed under  -- Venezuela -- Las Cristinas Project -- Title Dispute and Legal Proceedings; -- International Arbitration.

The following is a  map of the Companys current project locations.These properties are without a known body of commercial ore, and the Companys activities on such properties to date have been exploratory in nature.



|Name of Property | % Ownership | Type of Exploration                  | Minerals          | Results/Actions                   
|---------------- | ----------- | ------------------------------------ | ----------------- | ----------------------------------
|VENEZUELA       
|Las Cristinas    | in dispute  | Inactive                             | gold              | ICSID Arbitration                 
|GUYANA          
|Potaro           | 100%        | Care and Maintenance                 | diamonds and gold | Ongoing exploration               
|Marudi Mountain  | 100%        | Infrastructure work and geochemistry | gold              | Mining license issued             
|COSTA RICA      
|Cerro Crucitas   | 100%        | Mine development                     | gold              | Banking feasibility study underway





VANNESSA VENTURES LTD. EXPLORATION PROPERTIES

Central / South America

[f31844120far05fi2004.gif]



11





---





Venezuela



Las Cristinas Project



Acquisition



Pursuant to an agreement dated July 13, 2001 (the Original Transaction Agreement) between Placer B-V Limited (PBV), an indirect subsidiary of Placer Dome Inc. (Placer Dome), the Company and Vannessa Holdings Corporation (VHC), VHC agreed to acquire all of the issued and outstanding shares of Placer Dome de Venezuela C.A. (PDV), a corporation organized under the laws of Venezuela which holds a 95% interest in Minera Las Cristinas C.A. (Minca), a corporation organized under the laws of Venezuela.  Minca was organized to explore and, if economic feasibility was established, to exploit the copper and gold deposits on the Las Cristinas Project located near Kilometre 88 in the Bolivar State of the Republic of Venezuela (the Las Cristinas Project).



The Las Cristinas Project consists of four contiguous concessions known as Las Cristinas 4, 5, 6 and 7.  Each concession covers an area of 5 km x 2 km.  The four concessions cover a total of 40 km2 or 4,000 hectares. On July 25, 1991, Placer Dome entered into a Shareholders Agreement with Corporacion Venezolana de Guayana (CVG) to explore and, if economically feasible, produce gold from the Las Cristinas 4, 5, 6 & 7 concessions.  Pursuant to the agreement, two Venezuelan companies were formed in January 1992:  Minca has a renewable mining lease giving it the sole right to mine alluvial and vein gold on the Las Cristinas Project for a period of 20 years while Relaves Mineros Las Cristinas, C.A. (Reminca), 51% owned by PDV and 49% by CVG, was formed to explore and exploit tailing material.



The Original Transaction Agreement was subsequently formalized by an amended and restated transaction agreement dated July 25, 2001 (the Las Cristinas Agreement) between PBV, the Company and VHC, pursuant to which PBV agreed to sell its shares of PDV to VHC for the sum of US $25, its loan obligations for the sum of US $50, and all indebtedness of PDV to PBV for the sum of US $25.  As a result, the Company assumed loans due to Placer Dome affiliates and the continuing obligations of PDV under the work contract governing the development of the Las Cristinas Project.



The property is the subject of a title dispute and legal proceedings.  The Company is requesting remedies under the Bilateral Investment Treaty and asking the Arbitration Tribunal to award restitution of the Companys contractual rights to develop the Las Cristinas project and the return of all property of Minca confiscated by the CVG and the Government of Venezuela and monetary damages.  See  -- Title Dispute and Legal Proceedings and  -- International Arbitration, below.



PBV will be paid an amount equal to 2% of the net smelter return on all copper sales multiplied by the Companys equity interest in Minca.  PBV will also be entitled to a participation in revenues from gold sales at a rate of 1% if the average gold price for the relevant fiscal quarter is below US $276, 3% if such gold price is US $276 or more but is less than US $350, or 5% if such gold price is US $350 or more, multiplied in each case by the Companys percentage equity interest in Minca which is presently 95%.



Placer Dome has a back-in right to repurchase all assets whenever PDV has made a production decision based on a feasibility study which demonstrates that the project is economically viable to sustain an operation in excess of 4 million ounces of gold at a production rate of at least 250,000 ounces of gold per year (subject to adjustment).  If the back-in right is exercised, Placer Dome will pay the Company the equivalent of 110% of the Companys capital costs and pre-production soft costs (subject to certain adjustments including those for debt incurred, remedying any of the Companys defaults, if applicable, and fair market valuations).



Provided the Company has expended at least US $2 million in capital costs on the project, or has maintained the mineral and mining rights for a continuous period in excess of one year (annual cost estimated to be US $300,000), then the Company will be paid by PBV a participation equivalent to 2% of gold sales and 2% of net smelter returns on copper sales, multiplied in each case by Placer Domes percentage equity interest in Minca.  PDV became a wholly owned subsidiary of the Company which is now named Vannessa de Venezuela C.A. (Vannessa Venezuela).



12





---





Location and Access



The Las Cristinas Project is located in the southeast corner of Venezuela in Bolivar State, approximately 760 km southeast of Caracas. The approximate geographical coordinates are N 006 12 and W 061 29.  The Guyana border is approximately 30 km to the east, while the border with Brazil is about 250 km south of the Las Cristinas site.  The project area is 390 km by highway south-southeast of Puerto Ordaz.  Access is by a four-lane highway to Upata, a distance of 55 km, and then by a well-maintained two lane paved road to the camp turn-off at Kilometre 84.  The two-lane highway continues south to the Brazilian border.  From the turn off at Kilometre 84 a wide gravel/dirt road leads to the Las Cristinas concessions. The distance from the highway to the camp is about six kilometres.  Under normal conditions the drive from Puerto Ordaz to the camp takes five hours. Puerto Ordaz is a port city on the Orinoco River with access to the Caribbean Sea.  The city of Puerto Ordaz is served by Aeropostal and Aserca airlines, with numerous daily flights to Caracas and other major Venezuelan cities.  The nearest public airstrip is at El Dorado, approximately one hour by highway north of the camp.  A charter flight from Puerto Ordaz to El Dorado takes about one hour.  Helicopters are available at Kilometre 32 and Kilometre 33, a forty-minute drive north of the site.



Geology



The Las Cristinas concessions are located in a granite-greenstone terrain known as the Guyana Shield.  The terrain has been exposed to an intense tropical weathering process which has produced a lateritic profile (saprolite) 30 to 100 m thick.  The most prominent regional feature at Las Cristinas is the strong north-northeast trending direction of gold occurrences.  Gold commonly occurs as free grains in quartz and as fracture-fillings in sulphide. Gold is spatially associated with chalcopyrite and/or pyrite and is coincident with an epidote-carbonate alteration event.



Although there are numerous gold occurrences within the concessions, the two pre-feasibility and four feasibility studies completed by Placer Dome focused on two zones:  the Conductora/Cuatro Muertos Zone and the Mesones/Sofia Zone.



Exploration History



Gold was first discovered in the Las Claritas area in 1910 by General Fernandez Amparan.  At that time, gold nuggets were found in the Quebrada Amarilla.  Today, the entire Kilometre 88 area is well known for the occurrence of gold nuggets.  Sporadic mining activity was reported until the gold rush in the early 1980s.  While a plethora of miners has extracted gold from the property, no systematic modern exploration work had been completed in the area prior to the work by CVG and Placer Dome.



The only organized mining activity was carried out by the English at the Carabobo mine, in the Hoffman pit area.  It was developed around 1934 and operated until just before the Second World War began in 1939.  An attempt to establish a mine took place in 1981, however the project did not prosper.  This was followed by the uncontrolled and erratic development of the area by 5,000 to 7,000 garimpeiros.  The miners worked alluvial and saprolitic gold by hydraulic mining.  Square kilometres of jungle have been stripped, with the soil, lateritic and saprolitic portion of the regolith being washed and processed using mercury and sluice boxes. The amount of gold recovered to date is unknown.  Much of the Kilometre 88 area, and particularly Las Cristinas concessions 4 and 5, is now virtually covered with tailings.



Exploration - 1991 to Present



Placer Dome began working on the property in November 1991.  Geological mapping and sampling were initiated as well as geochemical sampling and basic geophysical programs.  The following is a brief summary of exploration techniques used at Las Cristinas by Placer Dome.



Line cutting



In 1992, north-south lines were cut every 100 m over the main resource area, with stations spaced at 50 m (eastern portion of Las Cristinas Concession 4 and western portion of Concession 5).  In 1993-94, 200 metre spaced lines were cut over the remaining Las Cristinas concessions and adjacent Minca properties (Rosalba, Minerva, Esperanza, Yusmarie and Cristi).



13





---





Geological Mapping and Sampling



All pits on the property were mapped at 1:5,000 scale.  In addition, all surface exposures in the area covered by the cut grids were mapped at 1:500 scale. Over 1,200 channel samples were collected during this mapping phase.



In 1994, the property was re-mapped using bedrock and saprolite information gained in the 1992-93 drilling campaigns.  The objectives of this program were to better define the stratigraphy, alteration and structural regimes associated with the Las Cristinas mineralization.  An additional 2,500 channel samples were collected during the new mapping phase.  All surface samples were assayed for gold.



Geochemistry



Some 3,700 samples from the upper saprolite were collected over the entire gridded area (100 m x 50 m grid in the central area and 200 m x 50 m grid in all other areas).  All samples were assayed for gold and 17 other elements.  Detailed sampling using a mechanized auger was also completed.  To date some 1,100 auger samples, from 1,113 m in 95 holes, have been collected and assayed.  Surface geochemistry was quite efficient in locating exploration targets.



Geophysics



A thorough geophysical evaluation of the Las Cristinas concessions was completed.  Magnetic and electromagnetic methods have proven to be the most effective in the covered area.  Details on surveys completed are as follows:



Ground Magnetometer

100 m x 50 m spacing over pre-feasibility study area and surrounding areas.



Induced Polarization

Pole/dipole survey over selected targets within Concessions 4 and 5.



Radiometry

Airborne gamma radiation was recorded with a spectrometer that differentiated the energy from the decay of radiogenic Thorium, Uranium, and Potassium.  Recordings were taken at 100 m line spacing.



Airborne Magnetic

Coverage of all Las Cristinas and Minca Concessions, at 250 m line spacing (1991) and 100 m line spacing (1994).



Transient EM

100 m x 25 m spacing over Las Cristinas concessions 4 and 5, and 200 m x 25 m coverage over the balance of Minca properties is complete or in progress.  To date, some 200 km of TEM have been completed using a 5 metre square multiturn loop with an 8 turn coil at 1.5 amps and a 285 Hz transmitter.



Tailing Evaluation



A preliminary assessment of tailing completed in 1992 indicated the possibility for a substantial secondary resource on the Las Cristinas concessions.  Tailings are refuse or dross remaining after ore has been processed.  An independent consulting firm was mandated in 1993 to complete a mapping, sampling and drilling program on the tailing located within the study area.  A geological resource estimate was produced from this program however other tailing resources are present on the concessions outside the study area.  Additional work is required to assess the resource potential of this tailing material.



Diamond Drilling



Drilling on the Las Cristinas concessions took place from 1992 to 1997.  The table below presents a summary of the drilling by year and by zone.  Drilling on the Las Cristinas concessions totaled 155,370 metres of drilling in 1,167 drill holes.



14





---





Summary of Diamond Drilling for Las Cristinas Property 1992 to 1997



|Zone            | Code | 1992  | 1993  | 1994  | 1995   | 1996  | 1997   | Totals
|--------------- | ---- | ----- | ----- | ----- | ------ | ----- | ------ | ------
|Name            |      | Holes | m     | Holes | m      | Holes | M      | Holes 
|Conductora      | co   | 45    | 2,334 | 103   | 16,567 | 173   | 23,820 |       
|Cuatro Muertos  | cm   | 63    | 3,390 | 70    | 10,470 | 28    | 1,335  |       
|Cordova         | cc   | 12    | 531   |       |        |       |        | 139   
|Mesones         | ms   | 31    | 1,700 | 16    | 1,057  | 52    | 9,170  | 25    
|Potasso         | po   | 3     | 110   | 4     | 909    | 18    | 2,860  | 18    
|Hoffman         | ho   | 13    | 467   |       |        | 58    | 8,904  | 3     
|Tailing Dam     | td   |       |       |       |        | 30    | 4,074  | 17    
|Wildcat         | wc   |       |       |       |        | 24    | 3,591  | 3     
|East Cristinas  | ec   |       |       | 8     | 995    |       |        | 8     
|Factor Analysis | fa   |       |       |       |        |       |        | 13    
|Stockpile       | sp   |       |       |       |        |       |        | 10    
|Ground water    | gwp  |       |       |       |        |       |        | 5     
|Totals          |      | 167   | 8,532 | 201   | 29 998 | 383   | 53 754 | 241   



Placer Dome commenced construction of the US $600 million Las Cristinas gold mine in August 1997 but the project was suspended in January 1998 pending resolution of an ownership dispute before the Supreme Court of Venezuela relating to the gold and copper mining rights at Cristinas 4 and 6.  In June 1998, the Supreme Court of Venezuela ruled in favour of Minca, confirming that it had the sole and exclusive mining rights over all Las Cristinas concessions including 4 and 6.  Construction activities resumed in May 1999 but were suspended on July 15, 1999 due to changed gold market conditions and lower prices.  Since 1991, Minca has expended in excess of US $170 million, including US $25 million in capital infrastructure and community support, to determine reserves and the economic viability of the Las Cristinas deposit.



The Las Cristinas Project has been the focus of a significant amount of exploration, test work and engineering studies carried out primarily between 1991 to 1997 by Placer Dome. The work culminated in the definition of a resource estimate, two pre-feasibility studies, and four feasibility studies, the most recent completed by Minca in collaboration with Placer Dome Technical Services in April 2000.  The studies evaluated large-scale open pit plans that contemplated mining hard rock and saprolite ore.



Given gold prices and the Companys understanding of the Las Cristinas deposit, the Company was recommending a new direction for the project, focusing on a staged approach for the development of the deposit.  The intention was to reduce the up-front capital exposure, and hence risk, to allow the learning that inevitably occurs to be of benefit to the construction of the later stages.  Stage one development would have focused on the smaller, saprolite resource, which is estimated to be less expensive to mine and to process.  Saprolite is a term that describes near-surface, oxidized and heavily weathered rock.  Saprolites are often found in tropical environments and other areas that have not been glaciated.  Saprolites exhibit the in situ structure of the original rock but have much reduced strengths, similar to those of a soil.  The Las Crucitas saprolite also has well-defined mineral content, and given that the material requires no blasting, minimum comminution and contains oxidized free-gold, it represents an attractive deposit.  The Company had been compiling, integrating and interpreting existing data and studies to build-on and develop a saprolite-based bankable feasibility study.  This was discontinued in November 2001 when the CVG took over control of the property and no further work has been done by the Company on the Las Cristinas Project pending resolution of the title dispute described below.



Title Dispute and Legal Proceedings



Since August 2001, the Venezuelan government and CVG board members have refused to recognize the Companys status in Minca and have not attended meetings or acted on corporate matters.



In November 2001, the Venezuelan government and CVG cancelled the mining rights held by Minca and took possession of the properties. On April 29, 2002, President Chavez issued a Presidential Decree reserving Las Cristinas for direct exploitation by the Government of Venezuela.  A number of legal applications, proceedings and jurisdictional disputes have arisen between the Company CVG and government authorities over the concessions.



15





---





International Arbitration



On July 9, 2004 the Company commenced a process of international arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C.  Accordingly, the proceedings relating directly to the dispute between the Venezuelan government, CVG and the Company have been waived. The Company and its Venezuelan subsidiaries are claiming:



·

CVG and other government authorities had no basis contractually or in law to cancel Mincas rights to the concessions without an independent arbitration process.



·

Certain decrees, court applications and government decisions to extinguish Mincas rights, or grant possible rights to another company are either inappropriate, contrary to agreements and rights granted to Minca, or without legal status.



·

It has, or should have continuing rights to all concessions or be compensated for all expenditures incurred to date as well as compensated for lost future profits.



Substantial uncertainty exists as to the ultimate resolution of Mincas rights and title issues.  There is also uncertainty as to the scope of future legal and administrative costs required to continue legal proceedings.



The current political and economic climate in Venezuela may further impact resolution of these issues.



On October 28, 2004, the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. registered the Companys Request For Arbitration against the Bolivarian Republic of Venezuela with respect to the Las Cristinas gold and copper property.



The acceptance of the Companys Request by ICSID initiated the formal arbitration process against Venezuela for the alleged expropriation of Vannessas contractual rights to develop the Las Cristinas gold deposit located in Bolivar State, Venezuela.  The rights to develop the property are held by Minca, a 95 percent owned subsidiary of Vannessa de Venezuela.



Due to the Companys ongoing disputes outlined above, management is continuing to record impairment charges equal to the carrying costs incurred for its Las Cristinas interest.  During the Companys fiscal year ended March 31, 2005, the carrying costs related to Mincas mineral interests amounted to $581,760 (2004 - $655,433).



The Company is requesting remedies under the Bilateral Investment Treaty and asking the Arbitration Tribunal to award restitution of the Companys contractual rights to develop the Las Cristinas project and the return of all property of Minca confiscated by the CVG and the Government of Venezuela and monetary damages of US $50 million plus interest or in lieu of restitution, monetary damages in the amount of US $1,045 million plus interest which includes out of pocket expenses of approximately US $180 million and lost profits of approximately US $865 million.  Any awards arising from the claim will be shared with other shareholders or royalty holders of Minca and Vannessa de Venezuela according to pre-existing contractual rights.  Although the Company is confident in the validity of its claims, there can be no assurance that it will be successful in all, or part, of its claims.



See also Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources -- Subsequent Events.



Guyana



Potaro Concessions



Location, Description and Acquisition



Through agreements with various landowners, the Company has acquired exploitation rights to concessions in the Potaro Mining District of Guyana outlined below:  the Ewang River Block, Uewang Permits, Queen of Diamonds Block and the Pepper Creek Property.  The Potaro Concessions are accessible by highway and by riverboat from Mahdia.  The Company also completed construction of an airstrip which enables twin engine aircraft to fly to the Potaro Concessions in 1.5 hours from Georgetown.



16





---





Ewang River Block



Pursuant to the terms of a joint venture agreement dated September 16, 1996 and a financing agreement dated September 18, 1996 (the Ewang Agreement) between Vannessa Guyana and Edward Garnet Hopkinson of Georgetown, Guyana (Hopkinson), Vanessa Guyana was granted an option to acquire up to an 80% interest in eleven exploration licences known as the Ewang River Block with Hopkinson retaining a 20% interest.  In consideration of Vannessa Guyana financing 100% of the exploration costs, Hopkinson has agreed to convert his 20% interest into graduated participating royalties based on the value per cubic metre of alluvial diamonds and gold recovered from the Ewang River Block as follows:



|Value Per Cubic Metre Averaged
Over Three Month Operating Period (US $) | Percentage of Production Paid
|----------------------------------------------------------------------- | -----------------------------
|                                                                        |                              
|$0-$3                                                                   | 2%                           
|$31-$40                                                                 | 3%                           
|$41-$50                                                                 | 6%                           
|$51-$70                                                                 | 8%                           
|$70-$100                                                                | 10%                          
|Over $100                                                               | 20%                          



Vannessa Guyana has the option to buy out the foregoing royalties for US $3 million (the Buy-Out Option) which can be a combination of royalty and lump-sum payments at any time but not after Hopkinson has received US $1.5 million in royalties.  If the Buy-Out Option has not been completed by the time US $1.5 million in royalty payments have been made, then the royalty payments set out in the table above shall continue for the duration the Ewang Agreement is in effect.



Vannessa Guyana has also agreed to pay Hopkinson a 0.5% net smelter royalty on all gold produced by hard-rock mining operations.  Vannessa Guyana has the option to buy out the 0.5% net smelter royalty at any time for a one-time payment of US $1 million.



The Ewang River Block encompasses 11,758 acres in the Potaro Mining District #2, Potaro River Area, Guyana.  It contains no known body of commercial ore.



Uewang Permits



Pursuant to the terms of a joint venture agreement dated October 17, 1997, as amended September 20, 1998 (the Uewang Agreement) between Vannessa Guyana and Michael Viera of Georgetown, Guyana (Viera), Viera agreed to assign to Vannessa Guyana the exclusive exploration rights of two medium scale exploration licences, known as the Uewang Permits, for consideration as follows:



1.

US $3,000 payable in advance for the first year (paid);



2.

US $10,000 payable in each of the second, third, fourth and fifth years, due on the respective anniversary dates on the signing of the Uewang Agreement; and



3.

US $50,000 payable in advance for the sixth year and each subsequent year, due on the respective anniversary dates of the signing of the Uewang Agreement.  The Company is current with its required payments as of the date of this Annual Report on Form 20-F.



Vannessa Guyana has also agreed to pay Viera 7.5% of gross production for both gold and diamonds produced by alluvial mining operations so long as the 7.5% royalty exceeds US $3,000 in the first year, US $10,000 in the second, third, fourth and fifth years and US $50,000 in the sixth and subsequent years.  Viera is entitled to a 0.75% net smelter return derived from hard rock mining operations.  Vannessa Guyana has the option to purchase at any time the alluvial rights for the sum of US $500,000 and the 0.75% net smelter return for US $1.5 million.  Upon receipt of a mining permit on the Uewang Permits, Vannessa Guyana shall become the sole and exclusive mining operator on the property.



The Uewang Permits, issued as PPMS/051/95 and PPMS/052/95, total 2,255 acres located in the Potaro Mining District #2, Upper Potaro River area in the vicinity of the Uewang River.



17





---





The Uewang property contains no known body of commercial ore.



Queen of Diamonds Block



Pursuant to an agreement dated December 10, 1998 (the Queen of Diamonds Agreement) between Vannessa Guyana and Hopkinson, Hopkinson has agreed to sell to Vannessa Guyana 100% interest in nine exploration licences for a property known as the Queen of Diamonds Block in the Potaro River area, Guyana, totaling approximately 9,918 acres.



Consideration payable by Vannessa Guyana to Hopkinson is as follows:



1.

During exploration under prospecting permits, Vannessa Guyana has agreed to pay Hopkinson a 7.5% royalty on gold and diamond production from the Queen of Diamonds Block, net of any government royalties payable;



2.

Operating under mining permit or mining license, Vannessa Guyana has agreed to pay Hopkinson the same 7.5% royalty as stipulated in the foregoing paragraph, however Vannessa Guyana has the option to buy out the 7.5% royalty for US $3.0 million.  Any royalty paid under paragraph 1 or 2 will be applied to the US $3.0 million buy-out.  This arrangement will stay in effect until Hopkinson has received US $1.5 million at which time Vannessa Guyana will have the option of buying out Hopkinson by paying the balance of US $1.5 million or by continuing to pay the 7.5% royalty to Hopkinson as long as Vannessa Guyana mines on the property.



3.

At the anniversary of receiving a mining permit or mining license, Vannessa is obliged to pay Hopkinson a minimum US $30,000 annual royalty, which amount is applied to the overall royalty payable for the year from production.  The minimum royalty is payable in cash or common shares, at Vannessa Guyanas option.



Upon Vannessa Guyana supplying sufficient exploration to convert the prospecting permits to a mining license, Hopkinson agrees to execute an assignment of its interest in and to the Queen of Diamonds Block to Vannessa Guyana and Hopkinson agrees to execute transfers of title to Vannessa Guyana.



The Queen of Diamonds Block contains no known body of commercial ore.



Pepper Creek Property



Pursuant to the terms of a letter agreement dated July 21, 1999, as amended March 14, 2000 (the Pepper Creek Agreement) between Vannessa Guyana and Viera, Viera agreed to sell to Vannessa Guyana eleven prospecting permits, known as the Pepper Creek Property, for US $3,000 (paid).



During exploration, Vannessa Guyana has also agreed to pay Viera a 7.5% royalty, to a maximum of US $4 million, on gold and diamond production, net of any government royalties payable, subject to a 1% NSR for all other minerals recovered during exploration.  At Vannessa Guyanas request, and once sufficient exploration data has been accumulated, Viera will apply for a mining permit or conversion to mining license.  At the anniversary date of receiving a mining permit or mining license, Vannessa Guyana is obliged to pay Viera a minimum of US$30,000 annual royalty which is applied against the overall royalty payable for the year from production.  The minimum royalty is payable in cash or common shares at the Companys option.



The eleven prospecting permits comprising the Pepper Creek Property total approximately 12,500 acres located in the Potaro Mining District #2, Potaro River area.



The Pepper Creek Property contains no known body of commercial ore.



Joint Venture



Pursuant to a letter of intent dated April 19, 1999, as amended August 31, 1999 and November 15, 1999 (the Jamshidi Agreement) between the Company and Nazinine Jamshidi of Amman, Jordan (Jamshidi), the parties agreed to a joint venture for the exploration of certain Potaro Concessions referred to as the Maple Creek Concessions.  On February 28, 2000, Jamshidi paid the Company a non-refundable sum of US $250,000 for an accelerated phase II exploration program which was completed on February 28, 2000.



18





---





On February 29, 2000, Jamshidi exercised its option and Vannessa (Aruba) A.V.V. (Vannessa Aruba), a wholly owned subsidiary of the Company, and Jamshidi entered into a formal agreement for the joint exploration of certain of the Potaro Concessions.  The Jamshidi JV superseded all prior agreements and understandings between the Company and Jamshidi. Pursuant to the terms of the joint venture agreement, Vannessa Aruba and Jamshidi agreed to form a joint venture company, Vanarde Mining Corporation (VMC).  Vannessa Aruba has agreed to assign 100% of its mining rights to certain of the alluvial diamond concessions in the Potaro District to VMC in return for 60% of the outstanding shares of VMC.  In return for 40% of the outstanding shares of VMC, Jamshidi has agreed to invest US $2.2 million into VMC which is payable on demand by the Company during the mine construction/exploration period which began March 1, 2000 and which was to end on or before December 31, 2000.  Jamshidi has the right to acquire 100% of all diamonds recovered, however VMC shall receive the highest cash value based on two independent appraisals.  Jamshidi has also committed to accept and market 100% of future production runs in exchange for a marketing fee equal to 10% of the gross proceeds from each sale.  In addition, Jamshidi shall have the right of first refusal to participate in the exploration of the Ewang River Block.



Pursuant to this agreement, advances totaling $2,999,304 have been received from Jamshidi, net of finders fees.  This advance was designated to acquire specific capital assets and to undertake exploration programs.  Accordingly, for accounting purposes, capital assets acquired for the agreed upon exploration programs have been allocated to the exploration costs for the concessions and advances have been recorded as a recovery of exploration expenditures.



No gain has been recognized by the Company on effective transfer of its joint venture participation of 40% of the mining rights as the Company can only recover its investment through future mining profits or proceeds from disposition.



The Maple Creek concessions are alluvial diamond concessions which are contiguous to the Potaro Concessions.  During the fiscal year ended March 31, 2003, the Company initiated a program under the joint venture to do bulk sampling and determine a mining plan.  Based on results from this program, management determined the areas tested were not economic.  Accordingly, the Company recorded a current period impairment charge relating to current expenditures equal to costs incurred during the year.  In the fiscal year ended March 31, 2004, management evaluated the current program and determined the remaining carrying value of the concessions had not been impaired.



Upon commencement of commercial production, the accumulated acquisition and exploration costs will be amortized based on production and profit distribution.



On July 14, 2005, the Company announced it had reached an agreement to acquire the 40% minority interest in VMC for 1,500,000 common shares.  Please see Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources -- Subsequent Events.



Geology



The area lies within a fractured system of northeasterly trending groove-like rectilinear valleys and joints.  One major fracture runs in a northeasterly direction essentially parallel to the Potaro River up to the Uewang River mouth and swings into an eastern direction.  This fractured system seems to have affected both the Roraima sediments and the underlying volcanics.



The variation of the level of the underlying suite of rocks suggests possible folding before the Roraima formation was deposited.  Essentially flat-lying and horizontal beds of gravely and pebbly sandstone form an unconformity with the crystalline basement.



Workings for diamonds and gold are ubiquitous within the Maple Creek area.  Several parts of the creek have been diverted in its course for the purpose of working the streambeds.  Workings for the colluvium are also evident.  Most of the past mining activities were concentrated around the confluences of ravines where alluvial flats have developed.  One kilometre up the Maple Creek where there is an ox-bow bend, old workings are extensive.



Some workings for gold were observed within the laterite environment that marks an absence of white sands and angular quartz fragments.  This indicates that the gold is most likely derived from the laterite.  Exposure of quartz veins or veinlets were absent which leaves unknown the style of mineralization present in the area.



19





---





Rounded gold nuggets, as well as fine gold, were recovered from alluvium and from the white sand cover and sandstone formation, exposed in the ravine heads on the right bank of the creek.  Heavy mineral concentrates produced from the Roraima Formation derivatives show an associated abundance of black sand, magnetite and ilmenite.



Exploration History



The Maple Creek alluvial diamond and gold deposit is located in central Guyana in the Potaro mining district.



The Maple Creek deposit is situated within a large, ancient riverbed, or paleochannel, that was discovered by the Company through the use of ground penetrating radar (GPR).  Ground penetrating radar is the general term applied to high-resolution techniques which employ radio waves to detail and map subsurface features.  This discovery marked the uncovering of a hidden, unexploited river channel that remains open to both the north and south.  Along its northern trace, the channel widens and deepens with limits yet to be determined.  Thus the volume of mineable gravels may increase as more information is available.



Through GPR and trenching, a 4.2 kilometre segment of the channel has been well defined, however satellite imagery reveals that the channel likely continues north for a considerably greater distance.   Within the mapped area, the average width has been measured at 327 metres with the average depth at 19 metres. The deepest point measured to date is 45 metres.



Bulk sampling from 32 sites recovered 2,347 carats which were sold at an average price of $206/carat.  The diamonds were of excellent quality, being 70% octahedron, mostly white and with very few inclusions.  The largest stone recovered weighed 5.65 carats.  Eight of the bulk sample sites were also tested for gold, resulting in the recovery of 80 ounces.  Further exploration is ongoing.



The Company is also exploring the Potaro I, II and III claims, where mapping, ground-penetrating radar surveys, trenching and bulk sampling identified an unexploited diamondiferous and gold-bearing paleochannel that hosts the Maple Creek deposit.



Three phases of GPR surveys have been completed on the claims to date, the last included 3 long reconnaissance outside of the Potaro 1 claim boundaries.  Preliminary interpretation of these lines suggests sections of alluvial channel material.  More detailed GPR surveying and bulk testing of these channels is recommended.



Proposed Exploration Program



At the Maple Creek Property, bulk sampling work and regional exploration work is continuing although the results to date have not identified any significant volumes of material that would be economic to mine on a large scale basis processing the majority of channel sediments.  Exploration work and bulk sampling during the current year were focused on a previously unexplored part of the channel but again with sub-economic results.  Continuing exploration will focus on new target areas potentially suitable for smaller scale concentrated excavation near existing drainages.



After a review of plans and operations in this area during the fiscal year ended March 31, 2004, management of the Company determined impairment charges totaling $1,201,819 were required on the Potaro Concessions to reduce the carrying value to estimated recoverable value.



Marudi Mountain Property



Acquisition



Pursuant to the terms of a letter agreement dated December 8, 1998 (the Romanex Agreement) between the Company and Sutton Resources Ltd. (Sutton), Sutton agreed to sell to the Company a 100% interest in its wholly owned subsidiary, Romanex (Guyana) Exploration Ltd. (Romanex) which holds a 100% interest in an exploration license to the Marudi Mountain Gold Project in southern Guyana.  Consideration payable by the Company to Sutton is as follows:



20





---





1.

Pay to Sutton:



(i)

100,000 common shares on closing (issued on April 29, 1999);

(ii)

While the Romanex Agreement is in good standing on each anniversary of closing to and including the fifth anniversary, 50,000 additional common shares.  As at the date of this Annual Report on Form 20-F, all 250,000 common shares had been issued at a deemed price of $0.40 per share;

(iii)

Sutton agrees to offer the common shares to the Company at market price for 10 days prior to selling them on the open market.



2.

Conduct such programs as are necessary to keep the Marudi Mountain Property in good standing;



3.

Within 36 months of closing, complete a pre-feasibility study to bring the Marudi Mountain Property to production (this has been done);



4.

Subject to electing to proceed to production, agree to pay Sutton quarterly out of production US $10.00 per ounce of gold produced.  Such payment may be at the Companys election, be satisfied by the issuance of the Companys shares to Sutton based upon the average trading price of the Companys shares on the principal Canadian stock exchange on which such shares are traded for the thirty days preceding the date of said production.  If the common shares are not then trading, then the payment to Sutton shall be made in cash;



5.

Romanex Management Ltd. shall retain a net profits royalty of 3% (up to a maximum of US $3 million) if the Marudi Mountain Property goes into production after Suttons Tanzania Kabanga Nickel Project or a 5% net profits royalty (up to a maximum of US $5 million) if the Marudi Mountain Property goes into production prior to Suttons Tanzania Kabanga Nickel Project.



The Government of Guyana will, at the time a feasibility study recommending production on the Marudi Mountain Property is delivered to the Government of Guyana, initially receive a 10% equity interest in Romanex at no cost.  After eight years of production, the Government of Guyana may purchase an additional 10% equity interest in Romanex at fair market value.  After ten years but before the expiration of the twelfth year of production, the Government of Guyana may purchase an additional 15% equity interest in Romanex at fair market value.  The Government of Guyana will retain a 5% net smelter royalty which is reduced to 3% during the period in which the Company is recovering its costs of putting the Marudi Mountain Property into production.



Pursuant to a finders fee agreement dated April 25, 1998 between the Company and A-Q Marketing Corporation (A-Q), a finders fee of 10,000 common shares was issued to A-Q on April 29, 1999 in connection with the Companys acquisition of the Marudi Mountain Property.



Location and Description



The Marudi Mountain Property consists of one exploration license covering 5,574 hectares located in the Rupununi Mining District of southwestern Guyana.  The property is centred on Marudi Mountain in extreme southwestern Guyana at 2°15N latitude and 59°10W longitude. It is 35 kilometres southeast of Aishalton.  Surface access to Aishalton is possible via Lethem from Boa Vista in Brazil and from Georgetown.



The surface route from Georgetown to Lethem, about 500 km, has been used to mobilize equipment and vehicles and provide drilling supplies to the Marudi project since 1991. This route was significantly upgraded during 1991 and 1992 from Lethem northward to Karupukari - the crossing point on the Essequibo River.



At the Georgetown end, the road has benefited from the Omai development and offers good access to Maburi Hill.  The Maburi Hill to Karupukari section, which is about 100 kilometres, is very difficult and can be impassable during wet periods. Diesel and gasoline have been supplied to the project by truck from Boa Vista, Brazil through the border at Lethem and then southeast for 120 km through Dadanaw to Aishalton.



A good track leads southeast from Aishalton over 10 km of savanna to the forest edge at Bush Mouth. From Bush Mouth to Marudi Mountain, another 27.5 km, the track gradually deteriorates.  Four-wheel drive is essential and during rainy season, a farm tractor and trailer, sometimes assisted by a caterpillar tractor, is the dependable means of supply.



21





---





A camp that can accommodate up to 25 people is maintained throughout the year.  Other than the Companys camp, there is no infrastructure to the property and no access to power transmission lines.



Joint Venture



On March 23, 2002, the Company entered into a joint venture agreement with Nazinine Jamshidi & Associates (Jamshidi), a private company related to the Maple Creek deposit, to explore, develop and mine gold resources at the Marudi Mountain property.  Under terms of the agreement, the Company would assign specific areas of its mining rights to an operating company to be formed.  Jamshidi agreed to contribute a total of $1.2 million to the Company to provide funds for the acquisition of capital assets and operating infrastructure in return for a 45% interest in the operating company.  In addition, Jamshidi would receive a 3% interest in Romanex.  A finders fee of 10% was payable to a non-related third party.



The joint venture was entered into with the intent to start a small scale, high grade operation near the main mineralized area in order to gain information about the deposit while generating positive cash flow.  Management decided however that the benefit would not be sufficient for a public company and instead put in place an exploration program to better define and potentially enlarge the existing mineralized areas.  This program, currently underway is budgeted to cost US $500,000.  Due in part to the change in plans, the joint venture partner agreed to dissolve the joint venture on the condition that the original deposit of US $80,000 would be refunded.  This was done and the joint venture was cancelled by mutual agreement in September 2003.



Regional Geology



Marudi Mountain is near the geographic centre of the Precambrian Guyana Shield.  The oldest rocks at Marudi are assigned to the Marudi Formation, one of five belts or large rafts (hundreds of square kilometres each) of metamorphosed sediments and volcanics included in the Kwitaro Group. These rafts or enclaves are separated from each other by granitic rocks of the Southern Guyana Granite Complex.



Phyllites, biotite-muscovite schists, quartzites and amphibolite are the main components of all the Kwitaro Group formations.  Quartzite as used in this document is a pseudoquartzite resulting from the metamorphic crystallization of siliceous exhalite. Near Marudi, there is a small stock called the Marudi Granodiorite. It is considered to be post tectonic and is thought be associated with the gold mineralization.



Local Geology and Mineralization



The geology of the concessions consists of steeply dipping, auriferous, magnetite-bearing pseudoquartzites sandwiched between formations of metamorphosed sediments (muds) and volcanics (andesite). The pseudoquartzites, which show gold mineralization to the maximum depth tested of over 220 meters, may have been mineralized by a near-by granitic stock (Marudi Granite). The upper twenty to fifty meters of the rocks in the area have been weathered to saprolite.



The Mazoa Hill deposit is the most important concentration of gold identified to date on the Marudi Mountain property.  Gold occurs within a stratigraphic unit of quartz-magnetite iron formation (called quartzite) which strikes north 40 to 50 degrees west and dips about 75 degrees southwest.  The gold-bearing block of quartzite is limited to the northeast by a stratigraphic and structural footwall of meta-andesite. Thin bedded iron formation lies unconformably on the southeast contact.  A steep northeast-trending fault truncates the northwest end of the quartzite block and several faults of similar attitude are suspected in the area of difficult drilling at the southeast end of the drilled area.



At surface the rectangular outline of the gold zone is 70 to 80 metres wide, 170 metres long is oriented northwest, and forms a prominent topographic knob at the northwest end of a narrow linear ridge. The ridge extends to the south southeast for 900 metres and is suggestive that the quartzite zone may act as a spine of the ridge.



The other concentration of gold is centred at Marudi Ridge. The stratigraphy is represented by three distinct subsections, including a footwall of andesite flows, a middle section of carbonate and quartzite which contains the gold mineralization, and an upper section of fine clastics. The general strike of the quartzite zone is approximately east-west although the zone appears to be folded in a wide arch.



22





---





Exploration History



The Marudi Mountain Property was first investigated in the late 1930s.  However, considerable exploration was done in the late 1940s, the early 1980s and in the 1990s.  The latest work programs were conducted in 1994 by Romanex Management Ltd. of behalf of Sutton and included some 14,322 lineal meters of diamond drilling in 72 holes.



Although many auriferous pseudoquartzite showings and gold soil/boulder anomalies have been located, only, two gold mineralized zones have been tested to date; the Mazoa Hill and Marudi Ridge deposits.



The majority of the recent drilling (43 holes) has been conducted on the Mazoa Hill deposit, which averages some eighty meters wide and 160 meters long.  Drilling by Sutton has outlined a mineral deposit with 7,500,000 tonnes with an average grade of 1.83 grams gold per tonne.  For the most part, the amount of drilling on the Mazoa Hill has been adequate to assess its potential within close limits. A major exception to this is the lack of testing on the thick weathered portion of the deposit.



Nineteen diamond drill holes were drilled by Sutton on the Marudi Ridge deposit and Sutton outlined gold mineralization of approximately 1,400,000 tons grading 1.82 g Au/tonne.  This zone which has an average width of some twenty to twenty-five meters has been tested over a length of 220 m.  The Marudi quartzite zone, which may constitute the spine of Marudi Ridge, remains open to depth and along strike for a distance of 1,000 meters.  Possible secondary zones of enrichment in the weathered portion of the deposit have not been adequately tested.



Additional work to define additional quartzite in areas other than Mazoa Hill and Marudi Ridge was carried out by Sutton at various times during past exploration programs.  Five other prospects have been identified on the property but only limited exploration has been conducted.



Various companies have conducted metallurgical testwork.  The work to date shows good to excellent gold recoveries, ranging from 65% gold recovery in just 26 days on a simulated cyanide heap-leach test, to 98% for a standard grinding, jigging, and CIP cyanide process.



Exploration conducted by the Company during its 2001 fiscal year included establishing property lines, reinterpretation of existing data, mapping and sampling of alluvial workings.  Further evaluation was completed during the Companys fiscal year ended March 31, 2002.  Emphasis was put on improving the access to the property.  Activities during the fiscal 2003 and 2004 years were limited to care and maintenance.



Proposed Exploration Program



The Company completed initial preparatory work on road repairs and bridge building in preparation for a drilling program.  The drilling program was suspended due to the onset of the rainy season but has recently recommenced with actual drilling commencing in October 2004 and completed in April 2005.  The goal of the approximately 2,500 metre program is to better define the existing resource areas and to identify potential extensions and additions to areas of gold mineralization.



The Marudi drilling program was completed in mid-April 2005 and analysis of data and geological interpretation is ongoing.  Line cutting is also ongoing on parts of the Marudi concession that was not included in the drilling program and on the adjacent Paint Mountain property.



Costa Rica



Cerro Crucitas Project



Acquisition, Location and Description



Pursuant to the terms of a Share Purchase Agreement dated May 15, 2000 (the Crucitas Agreement) between the Company, Lyon Lake Mines (Barbados) Ltd. (LLMB) and Lyon Lake Mines Ltd. (Lyon Lake), the Company purchased 100% of the issued and outstanding shares of LLMB which is the ultimate beneficial owner of the Cerro Crucitas Project in Costa Rica.  The Company purchased all of the shares of LLMB for the following consideration to Lyon Lake:



23





---







(1)

Cash payment of US $25,000 (paid);

(2)

The issuance of 250,000 common shares at a deemed price of $1.15 per share (issued June 9, 2000);

(3)

Payment of certain payables of Lyon Lake totaling US $357,606 (paid);

(4)

Payment by Lyon Lake of all indebtedness and payables of LLMB and its subsidiaries not exceeding US $142,000 (paid);

(5)

Assumption of Lyon Lakes obligation to pay a 1% royalty to a maximum of US $3,000,000 from the date an exploitation permit is granted in respect of any of the concessions; and

(6)

Payment of a net smelter royalty of 1% on all production from start-up to a maximum of US $20 million.



On June 9, 2000, the Company also issued 80,000 common shares at a deemed price of $1.15 per share to Yorkton Securities Inc. as a finders fee for the Cerro Crucitas Property.



The Cerro Crucitas Project is an advanced exploration project consisting of 10 mining concessions covering an area of 176 square kilometres in north-central Costa Rica, 105 km north of San Jose and 16 km northeast of the small town of Coopevega, in the province of Alajuela. The San Juan River that forms the border with Nicaragua is located 5km north of the Cerro Crucitas site.



Access to the site from San Jose is via paved highway to Santa Rosa. From Santa Rosa there are two routes to the site, each of about 40 km in length. Both routes are gravel and clay-packed secondary roads that can be in very poor condition after heavy rains. Under normal conditions, the drive from San Jose to the project site can take about five hours.  A nearby private airstrip, located some 12 km from the property, has been used and is still available.



An exploration camp has been constructed at the site that accommodates about 80 people.  The camp structures were built with concrete brick walls and concrete floors, and have been under care and maintenance since exploration was suspended by Lyon Lake.



Geology



The Crucitas gold deposits are contained within altered rocks of felsic dome complexes of probable Middle Miocene age, or within altered trachyandesite to dacite flows with interbedded lapilli tuffs and breccias. The basement to this succession is composed of distal marine turbidites, probably Oligocene, that were faulted and folded before deposition of andesitic and basaltic volcanic rocks lying immediately below the felsic pyroclastic and dome and breccia units.  Younger basalts originally covered the entire felsic sequence and are locally preserved, possibly masking additional dome complexes. Late-stage diabase dyke complexes cut the felsic units.



Gold occurs within altered felsic volcanic rocks.  The most important alteration event is a pervasive quartz-adularia-pyrite overprint on earlier alteration, probably including in some areas intense silicification. The picture is complicated by local intense clay alteration.  Gold in the unweathered rocks was deposited in at least two pulses; an early disseminated phase with quartz-adularia-pyrite, followed by at least two stages of veining.  The earlier veins appear to have been quart-adularia-pyrite; these were then cut by veins with pyrite and minor amounts of quartz.



The observed metallic mineralogy in the un-oxidised rock is simple.  Pyrite is most common, with subordinate amounts of chalcopyrite, covellite, Ag-bearing tetrahedrite, acanthite and argentian gold.  The gold occurs as rounded inclusions in pyrite or as angular grains in quartz-adularia veins. In the weathered material, pyrite has been altered to goethite, with inclusions of gold. The fineness of the gold does not appear to vary from place to place, suggesting that there has been no relocation of the gold during weathering.  However, there is a distinct tendency for the silver content to be markedly less above the weathering contact, suggesting a breakdown of silver-bearing species and migration of silver during weathering.



Structural controls on mineralisation are not clearly understood, but it appears that there are conjugate sets of fractures in generally northwest and northeast directions.  It has been conjectured that the intersections of these zones may have acted as locii for mineralizing fluids.



24





---





Weathering of the various rock types has resulted in the development of a variable thickness of saprolite, with a relatively thin layer of lesser weathered material known as saprock between the saprolite and the un-weathered bedrock. In many cases, the definition of these units, and also of the surficial overburden, is somewhat subjective. In general in the area drilled, the overburden unit ranges from 0 to about 20 metres, averaging about 2 metres; saprolite ranges from 0 to about 60 metres, averaging about 13 metres; and saprock ranges from 0 to about 50 metres, averaging about 6 metres.



There are two well-defined gold-bearing zones, Fortuna and Botija, and a third less well-defined zone known as Fuentes to the south-west of Fortuna. Other zones may be present, given the scattered intersections observed in areas where drilling is sparse.



The larger zones are both centered on felsic dome and flow complexes in a thick pile of intermediate flows and pyroclastic rocks; Fuentes is in slightly less acid flow rocks.



Exploration History



The Crucitas Project was initially explored in 1992 by a small geological consulting firm, who recognized the geological potential of the area and who later applied for the mineral concession.  The basis of this initial exploration was that prospective volcanic rocks and structural features suitable for the formation or epithermal deposits underline the area.  The property was optioned to Placer Dome in 1992 and regional stream sampling by Placer Dome led to the initial discovery of anomalous gold values.



In 1993, further stream sediment sampling, soil geochemistry, and geologic mapping were carried out to define drill targets.  Diamond drilling commenced in October 1993 when the mineral concessions were legally granted. The first hole intersected what is now known to be the central part of the Botija Zone.  Drilling and other exploration work continued each year until 1996 by which time sufficient data was available to complete a resource estimate and a pre-feasibility study in late 1996.



Exploration work by Placer Dome and Lyon Lake totaled approximately US $32 million.  This includes 247 diamond drill holes, 16 geotechnical holes, and 138 auger holes which combine to provide a total of 36,300 metres of drilling.  The bulk of the drilling was carried out by Placer Dome and gold assay data is available for most of this drilling.  Silver assays were taken for most, but coverage is not complete.



In November 1998, Placer Dome sold the project to Lyon Lake who completed a 100 trado drill hole program and commissioned Cambior Project and Construction Group Ltd. (Cambior), along with several consultants, to prepare a new feasibility study that was completed (and revised) in August 1999.  The Company acquired the Crucitas Project from Lyon Lake in May 2000 and has been collecting the various studies and data sets from the authors over time.



Between April 2001 and March 2002, the Company directed its resources towards completing a number of environmental impact studies in advance of obtaining all necessary permits for the mining of the gold-enriched saprolite portion deposit.



Proposed Exploration Program



The Company has advanced the Cerro Crucitas Property to a stage where full production is intended.  The Company was awaiting receipt of an environmental permit when the Government of Costa Rica announced a proposed decree for a national moratorium on open pit mining on June 7, 2002.  The proposed decree stated that any rights legally acquired prior to the proposed decree will be respected.  The Company holds exploitation rights with approvals prior to the proposed decree.  In October 2002, the Supreme Court of Costa Rica confirmed Vannessas Crucitas project is exempt from the proposed legislation prohibiting open pit mining.



On October 27, 2003, the Company announced that it had been advised by the Costa Rican Minister of Environment that the resolution of Costa Ricas Environmental Protection Agency (Secretaria Tecnica Nacional Ambiental or SETENA) calling the Companys Environmental Impact Statement insufficient in scope was legally flawed and that he had annulled SETENAs ruling. His ruling, based on existing Costa Rican law, allowed the Company (which has already received its exploitation license) to resume its application process for the development of the Crucitas gold project. This latest development was encouraging and Vannessa withdrew its request to annul the controversial SETENA resolution from the legal proceedings currently in process in the Supreme Court.



25





---





The process with SETENA to have the Environmental Impact Statement approved has advanced and is ongoing.  During the first quarter of fiscal 2005, the Company continued to work with SETENA to advance the process of approval of the EIS.  Several experts in biology, zoology, hydro-geological studies and other disciplines visited the site to provide input to SETENA prior to the public meeting at the end of July 2004.  Also in June 2004 a group from SETENA visited the site and the surrounding communities together with Vannessa staff to see the property and area first hand.  An archeological study, focusing on a small part of the concession was completed.  The intensive series of public meetings, informational meetings, and technical meetings with SETENA and other groups culminated with a Public Meeting held in a community near the project site called Coopevega.  The Public Meeting was held on Saturday July 31, 2004 and was an official meeting chaired by staff from SETENA.  The meeting was well attended with over 1,200 people at the event from local communities, from surrounding towns and from many other locations.  The meeting lasted the entire day and all interested parties were allowed to state their opinions for, or against, the project and to ask questions of the Company regarding the technical aspects of the project.  Although there was opposition to the project from various groups the project also had strong support from many individuals and organizations from the local communities who felt the Company could develop the project in a safe and environmentally acceptable manner as laid out in the environmental impact assessment.  The local people also expressed an interest in the employment, economic development, and other opportunities that would flow from the project in this underdeveloped and under-serviced area of the country.  This meeting was a key step in advancing the process with SETENA to receive approval of the Companys environmental impact assessment.



At June 30, 2004, the Technical Review Committee of the Ministry of Environment had not approved the Environmental Assessment Study for the project. The Ministry of Environment which is ultimately responsible for approval of the license, had not made a decision, and has the Companys application under consideration. The receipt of the Environmental Permit is not assured. Should the permit not be received the reported carrying value may not reflect actual value.  The Company has notified the Canadian Government and Costa Rican Government it will maintain the Arbitration Process under the Financial Investment Protection Agreement (FIPA) signed between the two countries1.



During the Companys fiscal year ended March 31, 2004, after reviewing the Companys interest in the project, management decided to record an impairment charge of $1,629,869.  The Company has continued to record impairment charges for expenditures subsequent to March 31, 2004 until such time as the Company receives from the Government of Costa Rica definitive approval to build the Crucitas gold mine.



In December 2004 the Company learned that the Supreme Court of Costa Rica, in responding to an injunction filed against the Minister of the Environment or SETENA and the President of the Republic, ruled that the resolution that awarded the Exploitation Permit on Cerro Crucitas to the Company be annulled because it violated Article 50 of the Constitution of Costa Rica.  The ruling also indicated that the environmental approval process should not be impacted by the decision and ordered the State to pay costs, damages and compensation to the concession holder, which is the Companys subsidiary in Costa Rica.  The ruling does not go into effect until the parties are formally notified at which time details for the decision is expected.  In the absence of other explanations for the ruling, the Companys counsel speculates that the ruling may be a misunderstanding of the conditions that apply to the Mining Title.  The Exploitation Permit was issued in full compliance with all applicable laws and regulations in place at the time which in 2001 required that the Exploitation Permit be issued before the developer could apply for the required Environmental Permits.  With the change of law in 2002,  the developer now requires environmental approval prior to receiving an Exploitation Permit.  Since changes in the law are not retroactive, the Company believes the status of its Exploitation Permit should not be impacted.



On January 19, 2005, the Company received a request from SETENA to file responses to questions identified during the review of the Companys Environmental Impact Statement and during the public involvement process. The Companys response was in the form of an Annex to the Environmental Impact Statement.

_____________________________

1The Canadian government initiated a bilateral investment protection agreement program in 1989, resulting in the development of the Foreign Investment Protection Agreement, or FIPA.  This program reflected the needs of Canadian business for instruments to protect their direct investments in countries not yet covered by international agreements on investment issues. These treaties provide guarantees, transparency and access for Canadian investors in specific priority and emerging economies.  From 1990 to 1993, Canada negotiated five Foreign Investment Protection Agreements (FIPAs) modelled on the OECD model.  After 1994, a new Canadian FIPA was developed based on the investment protection standards of the NAFTA investment chapter, and since that time eleven FIPAs have been signed and are in force.  Six other FIPAs, including one with Costa Rica, have been signed but are not yet in force.



26





---





On September 1, 2005, the Company, through its 100 percent owned subsidiary, Industrias Infinito S.A., received a Resolution from SETENA approving the Companys Environmental Impact Statement (EIS) dealing with the Crucitas gold project.  The SETENA approval of the EIS means that the Company has now complied with all of the requisites of the 2001 Mining License.  The approval is for the mining of the saprolite which is weathered and soft material overlying the unaltered rock below.  The saprolite makes up approximately one third of the resource and, the  environmental approval to mine the underlying hardrock will be requested in 2006.



On December 12, 2005, the Company, through its wholly owned subsidiary Industrias Infinito S.A., successfully concluded the environmental permitting process for its Crucitas gold project.  The final resolution (Resolución No 3638-2005-SETENA), was issued by SETENA on December 12, 2005.  The final resolution specified the amount of the required Environmental Performance Bond as US$ 600,000.  The Company has made preliminary arrangements for bonding to be put into place and this will be finalized now that the exact amount of the bond has been identified.

Following the approval of the Environmental Impact Statement in early September 2005 the Company has been working towards producing a feasibility study to secure project financing building upon the extensive work already completed on the project by Placer Dome  and later  Cambior Project & Construction   Group  for Industrias  Infinito.  Geostat International Inc. has completed due diligence work in Costa Rica and is now completing a resource evaluation in compliance with Canadian National Instrument 43-101.  Micon International Limited will be responsible for the overall consolidation of the feasibility study and Golder Associates Ltd. will supply geotechnical services associated with the study.   Other consultants and contractors have been retained, both in Canada and Costa Rica, to assist the Company in planning and executing the development of the Crucitas project.

The Company continues to work with the small communities near the mine in Alejuela Province to ensure that community needs and concerns are addressed and to fulfill the commitments made in the Environmental Impact Statement and during the extensive Public Involvement Process.

See also Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources -- Subsequent Events.



27





---









ITEM 5

OPERATING AND FINANCIAL REVIEW AND PROSPECTS





Introduction



The Company is an exploration company engaged in the search for economic deposits of precious metals and stones primarily in Central and South America. The Company also evaluates properties available for acquisition.



The following Management Discussion and Analysis (MD&A) contains assumptions, estimates and other forward looking statements regarding future events.  Such forward-looking statements involve inherent risks and uncertainties and are subject to factors, many of which are beyond the Companys control that may cause actual results or performance to differ materially from those currently anticipated in such statements.  Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include among others gold price volatility and economic and political events, and other risk factors as discussed above under Item 3.  Key Information -- D.  Risk Factors.  Readers are cautioned not to put undue reliance on these forward-looking statements.



The MD&A provides an analysis of the Companys business and compares its fiscal year 2005 financial results with those of the previous 2004 fiscal year results.  The MD&A should be read in conjunction with the audited consolidated financial statements and related notes filed herewith.  The Company prepares and files its financial statements and MD&A in Canadian (CDN) dollars.



The Companys financial statements have been prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP), which differ in certain respects from those principles that the Company would have followed had its consolidated financial statements been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP).  Differences between Canadian GAAP and U.S. GAAP, as applicable to the Company, are set forth in Note 16 to the accompanying audited consolidated financial statements of the Company.

Critical Accounting Policies



The Companys accounting policies are set out in Note 2 of the accompanying audited consolidated financial statements.  All of the Companys mineral property interests are at the exploration stage.  Costs incurred for exploration or development are capitalized together with the cost of acquisition until such time as a property is in commercial production, sold or abandoned.  Capital assets which are dedicated to use for specific properties are capitalized together with costs incurred to the property to which they relate.  Carrying values as reported on the balance sheet ($6,533,625 at March 31, 2005 and  $5,821,061 at March 31, 2004) may not necessarily reflect actual present or future value.  Recovery of carrying costs is ultimately dependent upon future commercial success or proceeds from disposition of the mineral interests.



The Company holds all of its mineral property interests outside of Canada.  Exploration and development expenditures are deferred and are charged to a specific mineral property interest if identifiable.  Where an area of interest is defined encompassing multiple interests, costs are allocated on a systematic basis over the properties in the identified area.  Where the carrying value of a specific interest within an area of interest is impaired, the accumulated acquisition and deferred costs relating to that interest are either reallocated to the remaining interests in the area or are written down directly if identifiable.



The Company reviews the carrying value of mineral property interests on a periodic basis for impairment.



Under U.S. GAAP, exploration, certain development costs and acquisition costs which have been capitalized in the accounts under Canadian GAAP would be recorded as period expenses where full unrestricted exploitation or extraction rights are not established or if the Company is not able to determine value for purposes of performing an impairment analysis.



28





---





At March 31, 2005, the Company had not established exploitation rights on its mineral property interests nor are mineral interests sufficiently advanced to determine economic reserves or value.  Accordingly, for U.S. GAAP purposes the exploration costs deferred under Canadian GAAP would be expensed in the periods incurred.  Capital assets dedicated to specific exploration properties are categorized under Exploration Stage Mineral Property Interests and are capitalized for U.S. GAAP purposes as they retain their character as capital assets.  For U.S. GAAP purposes this processing equipment is being amortized using the rates and methods outlined in Note 2(b) of the consolidated financial statements of the Company.



Use of Estimates



The preparation of financial statements in conformity with Canadian generally accepted accounting principles 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 amounts of revenues and expenses during the reporting period.  Significant areas requiring the use of management estimates relate to the determination of impairment of assets, useful lives for depreciation and amortization and allocation of cost to specific mineral interests. Financial results as determined by actual events could differ from those estimates.



The carrying value of mineral property interests is based on costs incurred and managements estimate of net recoverable value.  Estimates may not necessarily reflect actual recoverable value as this will be dependent on the development program, the nature of the mineral deposit, commodity prices, adequate funding and the ability of the Company to achieve commercial production.



A.

Operating Results



Fiscal Year Ended March 31, 2005 Compared to Fiscal Year Ended March 31, 2004



The Company incurred a net loss of $5,342,673 or $0.07 per share for the fiscal year ended March 31, 2005 (Fiscal 2005) compared to a net loss of $5,581,042 or $0.09 per share for the fiscal year ended March 31, 2004 (Fiscal 2004).  The major components of the net loss in Fiscal 2005 were general and administrative expenses of $1,672,701 net of interest income of $42,159, impairment of mineral property interests totaling $2,824,335 and stock-based compensation of $624,736. In comparison, the net loss in Fiscal 2004 consisted of general and administrative expenses of $1,412,355, impairment of mineral interests totaling $4,160,561 and stock-based compensation of $454,671. This was partially offset by a gain of $392,515 on the disposal of capital assets  and interest income of $54,030.



General and administrative expenses were significantly reduced in 2005 from 2004 in the areas of consulting, travel and accommodation and office operation expenditures but increased in the areas of  office wages and services and professional fees.  Impairment charges were taken on the Companys Venezuela properties because of political uncertainties and continuing dispute with CVG over the Las Cristinas issue.  In Guyana, the impairments at Potaro were taken due to the continuing exploration and bulk sampling activities failing to identify sizable economic deposits. In Costa Rica, even though the Ministry of Environment reinstated the application process for the required environmental license, an impairment equal to current expenditures incurred during the year was recorded.



During Fiscal 2005, the Company granted 1,630,000 (2004 - 1,875,000) stock options to directors, consultants and employees.  Using the Black-Scholes fair value based option pricing method, stock options granted have been valued at $0.42212 (2004 - $0.28153) per stock option for a total value of $688,053 (2004 - $527,868 of which $624,736 (2004 - $454,671) was charged to operations and $63,317 (2004 - $73,197) was allocated to mineral interests.



Mineral property costs deferred, net of impairment charges, during Fiscal 2005 totaled $712,564 compared to ($872,150) in Fiscal 2004.  Capital assets decreased from $580,536 for Fiscal 2004 to $553,362 for Fiscal 2005.



29





---





The Company currently is not adversely affected by foreign currency fluctuations.  The Company incurs costs and expenses in a variety of international currencies, primarily Canadian dollars, U.S. dollars, Costa Rican colons and Venezuelan bolivares, and Guyanese dollars.  The Companys functional currency is the Canadian dollar.  All the Companys financings to date have been in Canadian dollars and will continue to be in Canadian dollars for the foreseeable future.  Accordingly, the Company is subject to the risk of fluctuations in the relative values of the Canadian dollar as compared to the foreign currencies in which it transacts business.  Although this has not had a materially adverse affect on the Companys results of operations to date, this may have a materially adverse affect on the Companys results of operations in the future.  The Company is required to recognize foreign currency translation gains or losses in the determination of net earnings and losses, except for exchange gains or losses relating to non-current monetary assets or liability, which are deferred and amortized over the remaining life of the asset or liability.  The Company does not engage in any activities to hedge against currency fluctuations.  For the year ended March 31, 2005, net gain/loss resulting from foreign currency fluctuations was immaterial.  The Company is not aware of any government currency policies or regulations which may affect the Companys operations.



Management periodically evaluates the economic viability of its mineral properties by reference to exploratory results generated both internally and by independent mining engineers.  Decisions to abandon, reduce or expand exploration efforts are based upon many factors including general and specific assessments of mineral deposits, the likelihood of increasing or decreasing those deposits, land costs, estimates of future mineral prices, potential extraction methods and cost, the likelihood of positive or negative changes to the environment, permitting, taxation, labour and capital costs.  There cannot be a predetermined hold period for any property as geological or economic circumstances render each property unique.



Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003



The Company incurred a net loss of $5,581,042 or $0.09 per share for the fiscal year ended March 31, 2004 (Fiscal 2004) compared to a net loss of $9,335,304 or $0.18 per share for the fiscal year ended March 31, 2003 (Fiscal 2003).  The major components of the net loss in Fiscal 2004 were general and administrative expenses of $1,412,355, impairment of mineral property interests totaling $4,160,561 and stock-based compensation of $454,671.  This was partially offset by a gain of $392,515 on the disposal of capital assets and interest income of $54,030.  In comparison, the net loss in Fiscal 2003 consisted of general and administrative expenses of $1,821,770, impairment of mineral interests totaling $6,824,981 and a loss of $77,214 on the disposal of capital assets.  This was slightly offset by interest income of $88,665.



General and administrative expenses were significantly reduced in the areas of investor relations and travel and accommodation but increased in the areas of consulting, office wages and services and professional fees.  Impairment charges were taken on the Companys Venezuela properties because of political uncertainties and continuing dispute with CVG over the Las Cristinas issue.  In Guyana, the impairments at Potaro were taken due to the continuing exploration and bulk sampling activities failing to identify sizable economic deposits. In Costa Rica, even though the Ministry of Environment reinstated the application process for the required environmental license, an impairment equal to current expenditures incurred during the year was recorded.



During Fiscal 2004, the Company granted 1,875,000 (2003  1,720,000) stock options to directors, consultants and employees.  Using the Black-Scholes fair value based option pricing method, stock options granted have been valued at $0.28153 (2003 - $0.5036) per stock option for a total value of $527,869 (2003 - $866,192) of which $454,671 (2003 - $700,004) was charged to operations and $73,198 (2003 - $166,188) was allocated to mineral interests.



Mineral property costs deferred, net of impairment charges, during Fiscal 2004 totaled ($872,150) compared to ($2,234,320) in Fiscal 2003.  Capital assets decreased from $607,013 for Fiscal 2003 to $580,536 for Fiscal 2004.



30





---





During Fiscal 2003, the Company adopted the recommendations of the CICA Handbook section 3870 which became effective January 1, 2002.  This section establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services.  The standard requires all stock-based awards made to non-employees and employees be measured and recognized using a fair value based method.  Recognition of these awards applies only to awards granted in fiscal years commencing on or after January 1, 2002.  During Fiscal 2003, the Company granted 1,720,000 stock options to directors, consultants and employees.  Options totaling 1,055,000 expired during the period.  Using the Black-Scholes fair value based option pricing method, stock options granted were valued at $0.5036 per option for a total value of $866,192.



B.

Liquidity and Capital Resources



The Company has relied upon external financing, through the issuance of equity securities and through joint ventures, to fund its activities to date.  The Company plans to continue to rely upon such forms of financing for the foreseeable future.



The working capital of the Company is a direct result of funds raised from the sale of equity shares over the outflow into acquisition and exploration costs as well as administrative expenses.  The Companys working capital balance (deficit) at the end of the following periods was as follows: March 31, 2005 - $406,434; March 31, 2004 - $3,698,844; March 31, 2003  ($450,109). The fluctuations stem from timing differences between when money is raised from equity issues and when expenditures are committed on the acquisition or exploration of mineral property interests.



The Companys cash  at March 31, 2005 was $1,062,716 compared to cash and short term investments of $4,577,054 at March 31, 2004 and $571,637 at March 31, 2003.  Aside from cash and term deposits, the Company had no material unused sources of liquid assets.  Cash and term deposits were attributable primarily to the issue of equity securities for gross proceeds of $2,047,600 in Fiscal 2005, $8,283,500 in Fiscal 2004 and $5,205,000 in Fiscal 2003.



During Fiscal 2005, the Company completed non-brokered private placements totaling 6,420,000 units at prices ranging from $0.28 to $0.32 per unit for net proceeds of $2,047,600.  In the first private placement, 4,805,000 units were issued at a price of $0.32 per unit.  Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 per share until December 22, 2006.  The purchaser in this private placement was Exploram Enterprises Ltd., a subsidiary of Coril Holdings Ltd., the control person of the Company (see Item 7-- Major Shareholders and Related Party Transactions).  In the second private placement, 1,444,500 units were issued at a price of $0.32 per unit.  Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 per share until January 7, 2007.  Also during Fiscal 2005, stock options totaling 170,000 were exercised at a price of $0.28 for proceeds of $47,600.



During Fiscal 2004, the Company completed non-brokered private placements totaling 20,500,000 units at a prices ranging from $0.35 to $0.60 per unit for net proceeds of $8,283,500.  In the first private placement, 4,300,000 units were issued at a price of $0.35 per unit.  Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 per share until May 9, 2005.  In the second private placement, 13,500,000 units were issued at a price of $0.40 per unit.  Each unit consisted of one common share and three-quarters of one warrant.  Each whole warrant entitles the holder to purchase one additional common share at a price of $0.45 per share until October 15, 2005.  In the third private placement, 2,250,000 units were issued at a price of $0.60 per unit.  Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one additional common share at a price of $0.66 per share until February 17, 2006.  The Company issued 250,000 common shares as a finders fee in connection with this financing.  Also during Fiscal 2004, stock options totaling 200,000 common shares were exercised at $0.28 per share for gross proceeds of $56,000 and 50,000 common shares were issued at a deemed price of $0.40 per share pursuant to the Romanex Agreement for the Marudi Mountain Property.  See Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Guyana -- Marudi Mountain Property.



31





---





At March 31, 2005, the Company had working capital of  $406,434. Should additional properties be acquired or programs be undertaken, the Company will require additional funding.  The Company does not currently anticipate any deficiencies in long-term liquidity but if any such deficiencies arise, the Company would expect to raise additional funds through private placements of its shares as it has in the past, or through borrowings if share placements are not feasible.  The Company might also farm out interests in certain of its properties to other exploration companies that would assume some of the exploration costs.



As of December 16, 2005 the Company was in the final stages of negotiating financing that would provide funds to continue with the feasibility work in Costa Rica and provide funding for overhead and other project activity.



Administration, maintenance of properties and exploration can materially affect the Companys liquidity and capital resources.  Failure to obtain additional financing on a timely basis may cause the Company to forfeit its interest in its properties and/or reduce or terminate its operations.  The Company continuously reviews its properties to determine whether to increase or curtail exploration, to reduce projects to a care and maintenance status or to relinquish properties.



The projected expenditures for the fiscal year ending March 31, 2006 are forecast to be $9 million and can be summarized as follows:



|Item                                                             | Total                              
|---------------------------------------------------------------- | -----------------------------------
|General and administrative expenses (1)                          | $1,850,000                         
|Exploration                                                      |                                    
|                                                                 | Brazil (2)                         
|                                                                 | Costa Rica (3)                     
|                                                                 | Venezuela (4)                      
|                                                                 | Guyana                             
|                                                                 | New Property Evaluation/Development
|Total estimated expenditures for April 1, 2005  March 31, 2006: | $9,000,000                         



(1)

Not including non-cash items, stock-based compensation and amortization.



(2)

The sole expenditures are an option maintenance fee, corporate registration fees and a consultant.



(3)

After initially refusing the Companys environmental study, the government of Costa Rica agreed to continue the permitting process.  The Company will continue to fund the process.  Additional funding will be needed once the permitting process is completed; however, no decision has been made at this stage whether the development will be funded by equity financing or debt/joint venture financing. Projected expenditures of $6,020,000 include feasibility studies and an environmental bond.

The Company has an indicative offer for project financing from a financial institution, and private investors subject to permitting.



(4)

The bulk of the costs in Venezuela relate to the expected arbitration costs dealing with the Las Cristinas property.



See also Subsequent Events, below.



Subsequent Events



Properties



Subsequent to March 31, 2005, the Company reported the following developments concerning its Las Cristinas, Cerro Crucitas and other properties:



32





---





(a)  Las Cristinas, Venezuela -- Arbitration



As described under Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- International Arbitration, on October 28, 2004, the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. registered the Companys Request For Arbitration against the Bolivarian Republic of Venezuela with respect to the Las Cristinas gold and copper property.



The acceptance of the Companys Request by ICSID initiated the formal arbitration process against Venezuela for the alleged expropriation of Vannessas contractual rights to develop the Las Cristinas gold deposit located in Bolivar State, Venezuela.  The rights to develop the property are held by Minca, a 95 percent owned subsidiary of Vannessa de Venezuela.



On June 7, 2005, ICSID announced the Arbitration Panel had been selected and the first meeting of the Tribunal was held on July 29, 2005 in London, England and was attended by counsel for both parties and by management representatives from Vannessa.  The arbitration process was laid out during the meeting and Vannessa is working to prepare filings for the next step.



Vannessa is seeking remedies under the Bilateral Investment Treaty between Canada and Venezuela and asking the Arbitration Tribunal to award restitution of Vannessas contractual rights to develop the project and the return of all property confiscated by the CVG and the Government of Venezuela and monetary damages or, in lieu, monetary damages in compensation for out of pocket expenses, plus interest, and for lost profits.  The claim for sunk costs and lost profits, before interest, is US $1,045 million.



Substantial uncertainty exists as to the ultimate resolution of the Companys rights and title issues and the level of compensation, if any, which may be received through the ICSID process.  Any awards arising from the claim will be shared with other shareholders or royalty holders of Minca and Vannessa de Venezuela according to pre-existing contractual rights.



(b)  Cerro Crucitas, Costa Rica -- Environmental Impact Statement



As described under Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Costa Rica -- Cerro Crucitas Project -- Proposed Exploration Program, in January 2005, the Company received a Resolution from SETENA directing the Company to prepare an Annex in order to provide clarification on specific questions identified by SETENA during the Environmental Impact Statement (EIS) review process.



The Company completed its detailed response to the issues required by SETENA in the Resolution of January 19, 2005.  In the last week of April 2005, the Company filed an Annex with SETENA which contains the Companys responses. As discussed below, in September 2005 the Company received a Resolution from SETENA approving the EIS.



In April 2005, the Company also secured the rights to additional land that would be required for the tailings dam and tailings retention area in the current mining plan.  The Company now holds or controls the land required for the mine and related infrastructure.



On July 22, 2005, the Company filed a Request to advance the process of International Arbitration with the ICSID in Washington, D.C.  This action is to seek remedies from the Government of the Republic of Costa Rica for the effective denial of the benefits of the Companys rights to develop the gold deposit located at Las Crucitas de Cutris (Las Crucitas) in San Carlos, Costa Rica.  In this claim, the Company is requesting the Arbitration Tribunal to restore the Companys rights to develop the Las Crucitas property and pay monetary damages of US $5 million and legal and other administrative costs plus interest for lost profits.  In lieu of restitution Vannessa is seeking damages of US $276 million plus compound interest which includes out-of-pocket expenses of US $36 million plus lost profits of not less than US $240 million.  Although Vannessa is confident in the validity of its claims, there can be no assurance that it will be successful in any, or part, of its claims.



The SETENA has completed its review of the Companys responses to questions arising from the public review process and the Environmental Impact Statement contained in the Annex filed with SETENA in late April 2005.



33





---





The rights to develop the property are held by the Companys wholly owned Costa Rican subsidiary Industrias Infinito S.A. (Industrias Infinito).



On September 1, 2005, the Company, through its 100 percent owned subsidiary, Industrias Infinito S.A., received a Resolution from SETENA approving the Companys Environmental Impact Statement (EIS) dealing with the Crucitas gold project.  The SETENA approval of the EIS means that the Company has now complied with all of the requisites of the 2001 Mining License.  The approval is for the mining of the saprolite which is weathered and soft material overlying the unaltered rock below.  The saprolite makes up approximately one third of the resource and, the  environmental approval to mine the underlying hardrock will be requested in 2006.



On December 12, 2005, the Company, through its wholly owned subsidiary Industrias Infinito S.A., successfully concluded the environmental permitting process for its Crucitas gold project.  The final resolution (Resolución No 3638-2005-SETENA), was issued by SETENA on December 12, 2005.  The final resolution specified the amount of the required Environmental Performance Bond as US$ 600,000.  The Company has made preliminary arrangements for bonding to be put into place and this will be finalized now that the exact amount of the bond has been identified.

Following the approval of the Environmental Impact Statement in early September the Company has been working towards producing a feasibility study to secure project financing building upon the extensive work already completed on the project by Placer Dome  and later  Cambior Project & Construction Group for Industrias Infinito.  Geostat International Inc. has completed due diligence work in Costa Rica and is now completing a resource evaluation in compliance with Canadian National Instrument 43-101.  Micon International Limited will be responsible for the overall consolidation of the feasibility study and Golder Associates Ltd. will supply geotechnical services associated with the study.  Other consultants and contractors have been retained, both in Canada and Costa Rica, to assist the Company in planning and executing the development of the Crucitas project.

The Company continues to work with the small communities near the mine in Alejuela Province to ensure that community needs and concerns are addressed and to fulfill the commitments made in the Environmental Impact Statement and during the extensive Public Involvement Process.

(c)  Vanarde Mining Inc.



On July 14, 2005, the Company announced it had reached an agreement to acquire the 40% minority interest in Vanarde Mining Inc. (VMI) for 1,500,000 common shares.  VMI is the holder of the mining rights to the Maple Creek concessions located in Guyana.  Please see  -- (e) Maple Creek, below.



(d)  Marudi Drilling Program



The Marudi drilling program was completed in mid-April 2005 and analysis of data and geological interpretation is ongoing.  Line cutting is also ongoing on parts of the Marudi concession that was not included in the drilling program and on the adjacent Paint Mountain property.



(e)  Maple Creek



At Maple Creek the care and maintenance program continues along with light reclamation work and re-vegetation.  On July 14, 2005 the Company announced that it had purchased the 40 percent minority interest in Vanarde Mining Inc. for 1,500,000 common shares of Vannessa.  Vannessa now indirectly controls 100 percent of Vanarde Mining Inc.  This will allow the Company more flexibility in the future with respect to potential exploration and development in the entire Maple Creek  Potaro area and will simplify dealings for any other commercial activity connected with the area.



Financings Subsequent to March 31, 2005



(a)

On May 20, 2005, 2,900,000 warrants of the Company were exercised by Exploram Enterprises Ltd., (Exploram), the Companys controlling shareholder, at a price of $0.40 per warrant for proceeds of $1,160,000.



(b)   On June 3, 2005, 1,100,000 warrants of the Company were exercised by three warrant holders, at a price of $0.40 per warrant for proceeds of $440,000.



34





---





(c)   On September 12, 2005, 100,000 warrants of the Company were exercised by a warrant holder, at a price of $0.40 per warrant for proceeds of $40,000.



(d)   On October 14, 2005, 187,500 warrants of the Company were exercised by a warrant holder, at a price of $0.45 per warrant for proceeds of $84,375 (see (h) below).



(e)   On December 21, 2005, the Company borrowed $2,000,000 from Exploram. Interest was payable on the loan at a rate of 9.5% per annum, payable monthly. A 3% structuring fee was paid by the Company to Exploram. The loan was payable on demand after February 15, 2006 and was secured by a general security agreement over the Companys assets. On March 2, 2006, the Company repaid  the loan (see (f) below).



(f)   On March 1, 2006, the Company completed a non-brokered private placement of a secured convertible debenture in the amount of $5,000,000 and a Special Right with Exploram.



The convertible debenture matures on January 31, 2009 and interest is payable on the outstanding principal amount at a rate of 9.5% per annum, payable semi-annually on July 31 and January 31.  The principal amount outstanding under the convertible debenture may be: (i) converted into common shares at any time after January 31, 2007 at a price of $0.635 per share; and (ii) repaid by the Company at any time before January 31, 2007 upon payment of a 5% prepayment penalty or thereafter upon thirty days notice (within which period Exploram may convert) without payment of a prepayment penalty.  In addition, the Company has issued a Special Right under which, for every dollar of principal outstanding under the convertible debenture on February 1, 2007, the Company will issue one common share purchase warrant to Exploram, each warrant entitling Exploram to acquire one common share at any time up to March 1, 2008 at $0.635 per share.



The Company's obligations under the convertible debenture are secured by a general security agreement over the Company's assets and a pledge of the shares of its subsidiaries.  The Company has agreed to pay Exploram a structuring fee of $90,000 in respect of the placement.



The convertible debenture, the Special Right and any securities issued thereunder issued are subject to a four  month hold period expiring on July 2, 2006.



(g)

Regulatory approval was obtained to extend the expiry date of 1,700,000 share purchase warrants (the First Warrants) issued on August 26, 2002 and to extend the expiry date of 2,000,000 share purchase warrants (the Second Warrants) issued on August 28, 2002.  All Warrants currently entitle the holders to acquire one additional common share of the Company, the First Warrants at a price of $1.06 per share up until August 26, 2005, as extended on August 13, 2004, and the Second Warrants at a price of $0.89 per share up until August 28, 2005, as extended on August 13, 2004.



The Company extended the expiry date of the outstanding First Warrants to August 26, 2006 and the Second Warrants to August 28, 2006.  No other terms of the First Warrants or Second Warrants were amended.



(h) Of the Companys 10,125,000  warrants issued on October 16, 2003 for a term of two years, 9,937,500 units expired on October 14, 2005 and 187,500 units were exercised at a price of $0.45 per unit (see (d) above).



(i)  Of the Companys 2,000,000 warrants  issued on December 17, 2002 for a term of  two  years and further extended for a term of one year to December 17, 2005, 2,000,000 units expired on December 16, 2005.



C.

Research and Development, Patents and Licenses





As the Company is a mineral exploration company, the information required by this section is inapplicable.



35





---





D.

Trend Information



The Company has incurred losses in each of the last five fiscal periods due to the lack of an operating property or other revenue generating activity.  Management anticipates that net losses of the Company will continue for at least the next few years as a result of ongoing corporate general and administrative expenses, exploration write-downs of mineral properties and deferred costs.  Presently, the Company is in the exploration stage and there is no assurance that there exists a commercially viable ore deposit on any of its properties until further exploration is done and a comprehensive economic evaluation based upon that work concludes economic and legal feasibility.  As well, a number of significant events must occur before commercial production at any property can begin.  These include, but are not limited to, receipt of certain permits necessary to continue construction of a mine and commence operations.  Even if the Company does commence production on any of its properties, there is no assurance that such mining activities will be profitable.



E.

Off-Balance Sheet Arrangements



The Company has no off-balance sheet arrangements required to be disclosed in this Annual Report on Form 20-F.



F.

Tabular Disclosure of Contractual Obligations



The Companys contractual obligations for future payments are summarized as follows, as of March 31, 2005:



|Contractual Obligations       | Payments due by period
|----------------------------- | ----------------------
|Total                         | < 1 Year              
|Calgary office premises lease | $    96,057           
|Guyana office premises lease  | 23,232                
|Marudi drilling contract      | 50,000                
|Total                         | $  169,289            





ITEM 6

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A.

Directors and Senior Management



The following table sets forth the names and addresses of the directors and members of senior management of the Company, their positions and offices with the Company and their terms of office.  Each director is elected at the annual shareholders meeting to serve until the earlier of his replacement or election of a successor at a subsequent annual shareholders meeting.



The following named individuals are not related by blood or marriage.  There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to below was selected as a director or member of senior management.



36





---







|Name, Position and
Jurisdiction of Residence                            | Principal Occupation or Employment and other Directorships                            | Date Appointed                                              
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------
|MANFRED PESCHKE(1)
Chairman and Director
Whitehorse, Yukon Territory    | Chairman of the Board and self-employed consultant                                    | Director - December 1994
Chairman - January 2004            
|JOHN R. MORGAN
President, CEO and Director
Calgary, Alberta             | President and CEO of Vannessa Ventures Ltd.                                           | Director - December 2003
President and CEO - January 2004   
|VERN HALL
Director
Kodiak, Alaska                                       | President of Tamarack Inc., a private alluvial mining company                         | July 1994                                                   
|GEORGE D. CHAPEL(1)
Director
Calgary, Alberta                           | Retired; Director of Coril Holdings Ltd., a private asset management company          | September 2000                                              
|ERICH RAUGUTH
Director
Dawson Creek, Yukon Territory                    | Independent mining consultant and President of Vencan Corp. (mining consulting)       | Consultant since January 1995; Director since September 2001
|JOHN THOMAS(1)
Director
Vancouver, British Columbia                     | Independent mining consultant                                                         | September 2002                                              
|JOHN AMUNDRUD
Director
Calgary, Alberta                                 | President & CEO of Coril Holdings Ltd. Director of Coril and its subsidiary companies | September 2004                                              
|CAMERON B. BOYER
Controller
Calgary, Alberta                            | Controller of Vannessa Ventures Ltd.                                                  | February 2004                                               
|CARL L. CAUMARTIN
Manager, Exploration and Development
Calgary, Alberta | Manager, Exploration and Development, of Vannessa Ventures Ltd.                       | May 2004                                                    



(1)

Member of the Audit Committee



Manfred Peschke, Chairman and Director



Mr. Peschke has over 25 years experience as a public accountant and was a full partner in an accounting and data processing firm responsible for managing the day-to-day operations for public accounting and heavy equipment companies and the management of both private and publicly financed mining/exploration companies.  Mr. Peschke began his career in the Yukon Territory as an Accountant for the Keno Hill Mines Transportation Division.  He later joined Caterpillars Yukon dealership as an accountant and soon became the companys Controller, a position he held for nine years.  Following his experience with Caterpillar, Mr. Peschke founded his own consulting company for the mining industry and at the same time co-founded Data Systems Processing.  DSP produced information systems for municipal, territorial and federal governments as well as large mining companies including Keno Hill Mines, Cantung and Anvil Mines.



From 1979 to 1981, Mr. Peschke was Managing Director during the development phase of a $15 million dollar alluvial mining company.  In 1980, he formed a private company dedicated to mining and exploration.  After years of successful operations, the company moved its operations to South America.



37





---





Mr. Peschke was a director of Carson Gold Corporation from August 1991 to March 1993 and a director of Ballad Enterprises Ltd. from March 1994 to March 1995.  As a director for Carson Gold Mines Inc. in 1991, Mr. Peschke oversaw the exploration of a number of gold projects in Venezuela until a larger mining company purchased the firm.  He and two partners took over Vannessa Ventures Ltd. in 1994 and brought it public in 1996.  Mr. Peschke, who served as President, CEO and CFO of the Company since 1994, was appointed to the position of Chairman effective January 13, 2004.



John R. Morgan, President, CEO and Director



Mr. Morgan, who has a B.Sc. in geology, acquired extensive operational and administrative experience over 23 years with Manalta Coal Ltd., which at the time was the largest coal mining company in Canada, including several years as V.P. and General Manager.  More recently, he served for four years as Vice President Operations in charge of a large tonnage coal operation in Venezuela, the Paso Diablo mine.  This mine was operated by Carbones del Guasare, a joint venture between RAG of Germany, Anglo Coal of South Africa and Petroleos de Venezuela, the Venezuelan state owned oil company.



Vern Hall, Director



One of the Companys founding members, Mr. Hall is a financier and entrepreneur whose career spans three decades within the mining and oil industries of Alaska, Russia, the U.S., Canada, Venezuela and Brazil.  Among Mr. Halls many ventures and accomplishments, some of the more notable include the multi-million-dollar acquisition of the Paradise & Savoya Hill Mines in 1979 and the acquisition of the 80 Pup Mine in Western Canada  in 1982.  As owner and manager of the 80 Pups operating company, Tamarack Inc., Mr. Hall implemented revolutionary recovery techniques (among them the Total Recirculation Method), and his approach resulted in substantially increasing efficiency.  Over the last twenty years, his Gravity Recovery System made the 80 Pup operation, one of the most productive privately owned gold mines in Western Canada.  In addition to the Company, Mr. Hall is also a director and officer of Tombstone Exploration Co. Ltd., a Toronto Stock Exchange listed mineral exploration company with properties in North and South America.



George D. Chapel, Director



Mr. Chapel brings over 40 years of resource engineering, capital cost estimation/evaluation and senior management experience to the Board where he also acts as technical advisor to the company.  Most notably Mr. Chapels career includes four years as Vice President of Operations, three years as Vice President and General Manager and eight years as CEO and President of Manalta Coal Ltd. from 1991 to 1998.  Mr. Chapel also served for three years as a director of Pembina Resources Ltd., an oil and gas exploration, production and pipeline company.



Mr. Chapel holds a B.Sc. in Civil Engineering from the University of Manitoba and is a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta.  Mr. Chapel is a civil engineer with a proven track record in the development of large resource projects.



Erich Rauguth, Director



Mr. Rauguth is a 25-year veteran in mine management and development. His achievements include a seminal role in property acquisitions for 15 Canadian exploration firms in South America and, as CEO, turning a previously closed mine into the largest privately-owned gold producer in Venezuela.  A co-founder of the Company, Mr. Rauguth brings important technical expertise to the Companys projects plus extensive knowledge of regional geology, politics and culture in Central and South America.



John Thomas, Director



Mr. Thomas is an independent mining consultant with over 25 years experience in South America, Russia, Canada and Zambia.   His experience covers a wide range of mining services, from management of feasibility studies, construction, start up to operation.  He is a graduate of the University of Manchester Institute of Science and Technology where he received a B.Sc. (Hons) in chemical engineering, an M.Sc. and Ph.D.  He also received a Diploma in Accounting and Finance from the U.K. Association of Certified Accountants.



38





---





John Amundrud, Director



Mr. Amundrud is the President and Chief Executive Office of Coril Holdings Ltd. and a director of Coril and its subsidiary companies which include Exploram Enterprises Ltd., a major shareholder of the Company.  See Item 7.  Major Shareholders and Related Party Transactions -- A.  Major Shareholders.  Mr. Amundrud holds a Bachelor of Law, from the University of Alberta and is a graduate of the University of Arkansas as a B.Sc. in Business Administration.  He served  in increasingly senior positions in  Pembina Corporation including Corporate Counsel until 1995.  From 1996 to 2000 Mr. Amundrud was Vice President, General Manager of Coril and its predecessor company.  He later became the President of CXE International Bank Ltd. (Barbados), a Coril subsidiary, for four years until taking up his current position with Coril Holdings Ltd in September 2004.



Cameron B. Boyer, Controller



Mr. Boyer graduated, in October 1983, with The Society of Management Accountants of Alberta accounting degree.  Since 1974, he has served with the Loram Group of Companies in various senior positions responsible for the effective and efficient coordination of accounting, information systems, financial controls and reporting, human resources and office administration functions.  Through his technical knowledge, management and administrative experience as well as his communication skills, he is adept in managing the principal activities of planning, organizing, motivating and harmonizing all control functions.



Carl L. Caumartin, Manager Exploration and Development



Mr. Caumartin holds a Bachelor of Science (B. Sc) degree in geological engineering (mining and exploration) and a Masters of Business Administration (MBA) degree specializing in international business.  He has 18 years experience in the mining industry as senior manager, executive and consultant.  He has conducted project evaluation, exploration and valuation work, feasibility study assessments, as well as the development and operations of various gold and base metals projects in Canada, Europe, Australasia, West Africa and South America.  He was Chief Geologist at TVX Golds Kassandra Mines in Greece, prior to holding the position of Vice-President Exploration for Philippine Gold Plc, a UK-based mining company, which, under his responsibility, defined resources totalling more than 5 million oz. of gold.  He also participated in several international financing campaigns, involving namely Rothschilds Australia Ltd, Bankers Trust and the Commonwealth Development Corporation (UK).



B.

Compensation



Summary Compensation Table



The following table sets forth all annual and long term compensation for services in all capacities to the Company for the three most recently completed financial years in respect of each of the individuals comprised of the Chief Executive Officer and the Chief Financial Officer as at March 31, 2005, and the other three most highly compensated executive officers of the Company as at March 31, 2005 whose individual total salary and bonus for the most recently completed financial year exceeded $150,000 and any individual who would have satisfied these criteria but for the fact that individual was not serving as such an officer at the end of the most recently completed financial year (collectively the Named Executive Officers or NEOs).



39





---





Summary Compensation Table

|                                           |           | Annual Compensation | Long Term Compensation |                               
|------------------------------------------ | --------- | ------------------- | ---------------------- | ------------------------------
|                                           |           |                     |                        |                               
|NEO
Name
and
Principal Position            | Year      | Salary
($)          | Bonus
($)              | Other Annual Compen-sation
($)
|John R. Morgan(1)President, CEO & Director | 2005
2004 | 150,000
150,000     | Nil
Nil                | Nil
Nil                       
|Cameron B. Boyer(2)Controller              | 2005
2004 | 125,652
125,652     | Nil
Nil                | Nil
Nil                       

(1)

John Morgan was appointed President and Chief Executive Officer of the Company on January 12, 2004.  Prior to that date Manfred Peschke held the position of President and CEO.

(2)

Cameron B. Boyer has not been appointed chief financial officer but, for the purposes of satisfying the Companys disclosure obligations has performed the functions of chief financial officer during the fiscal year ended March 31, 2005.



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, or the price of the Companys shares 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 LTIPs during the past fiscal year.





Stock Appreciation Rights



Stock appreciation rights (SARs) 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 Companys shares.  No SARs were granted to or exercised by the Named Executive Officers or directors during the fiscal year ended March 31, 2005.





Option Grants in Last Fiscal Year



The following table sets forth stock options granted under the Companys Stock Option Plan or otherwise during the fiscal year ended March 31, 2005 to each of the Named Executive Officers.



|                 | Securities under Options Granted(1)
(#) | % of Total Options Granted to Employees in Financial Year | Exercise or Base Price(2)($/Security) | Market Value of Securities Underlying Options on Date of Grant
($/security) | Expiration
Date
|---------------- | --------------------------------------- | --------------------------------------------------------- | ------------------------------------- | --------------------------------------------------------------------------- | ---------------
|John R. Morgan   | 250,000                                 | 15.3%                                                     | $0.45                                 | $0.50                                                                       | Sept 2, 2009   
|Cameron B. Boyer | 50,000                                  | 3.1%                                                      | 0.45                                  | 0.50                                                                        | Sept 2, 2009   

(1)

The options for common shares become exercisable on the date of grant, subject to regulatory and shareholder approval.

(2)

The exercise price of stock options is determined by the Board of Directors but shall in no event be less than the trading price of the common shares of the Company on the TSX Venture Exchange (the TSX-V) at the time of the grant of the option, less the maximum discount permitted under the regulations of the TSX-V.



40





---





Options Exercised during the Fiscal Year Ended March 31, 2005 and Fiscal Year End Option Values



The following table sets forth details of all exercises of stock options during the fiscal year ended March 31, 2005 by each of the Named Executive Officers, the number of unexercised options held by the Named Executive Officers and the financial year-end value of unexercised options on an aggregated basis, held by the Named Executive Officers.



|NEO
Name         | Securities Acquired
on Exercise
(#)
(a) | Aggregate
Value
Realized(1)($)
(b) | Unexercised Options/
SARs
at Financial
Year-End
(#)
Exercisable/
Unexercisable
(c) | Value of Unexercised
In-the-Money
Options/SARs
at Financial Year-End(1)($)
Exercisable/
Unexercisable
(d)
|---------------- | --------------------------------------- | ---------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------
|John R. Morgan   | Nil                                     | Nil                                | 425,000                                                                             | $ 17,500                                                                                                  
|Cameron B. Boyer | Nil                                     | Nil                                | 50,000                                                                              | 3,500                                                                                                     



(1)

Dollar value is equal to column (b) times the difference between the market value of the securities underlying the options at exercise or financial year-end, respectively, and the exercise or base price of the options.



Pension Plans



The Company has no pension plan and does not provide retirement benefits for directors or executive officers.



Termination of Employment, Change in Responsibilities and Employment Contracts



The Company does not have employment contracts with any Named Executive Officer.



The Company has no compensatory plan, contract or arrangement where a Named Executive Officer is entitled to receive more than $100,000 to compensate such officer in the event of resignation, retirement or other termination, a change of control of the Company or its subsidiaries or a change in responsibilities following a change in control.



Compensation of Directors



The Company has no arrangements, standard or otherwise, pursuant to which directors are compensated by the Company or its subsidiaries for their services in their capacity as directors, or for committee participation, involvement in special assignments or for services as consultants or experts during the most recently completed financial year or subsequently, up to and including the date of this Annual Report on Form 20-F.  The directors are reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as directors.



The Company has a stock option plan for the granting of incentive stock options to the officers, employees and directors.  The Company granted an aggregate of 1,050,000 stock options to the directors during the most recently completed financial year.  The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the shareholders.



The following table sets forth information concerning individual grants of options to purchase securities of the Company made during the fiscal year ended March 31, 2005 to the directors of the Company (excluding the Named Executive Officers):



41





---







|                | Securities Under Options Granted (#)(1) | % of Total Options Granted to All Employees in the Financial Year | Exercise or Base Price ($/Securities) | Market Value of Securities Underlying Options on the Date of Grant ($/Security) | Date of Grant | Expiration Date
|--------------- | --------------------------------------- | ----------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------------------------------------- | ------------- | ---------------
|Vern Hall       | 100,000                                 | 6.13%                                                             | $0.45                                 | $0.44                                                                           | Sept 2, 2004  | Sept 2, 2009   
|George Chapel   | 100,000                                 | 6.13%                                                             | $0.45                                 | $0.44                                                                           | Sept 2, 2004  | Sept 2, 2009   
|Erich Rauguth   | 250,000                                 | 15.33%                                                            | $0.45                                 | $0.44                                                                           | Sept 2, 2004  | Sept 2, 2009   
|John Thomas     | 100,000                                 | 6.13%                                                             | $0.45                                 | $0.44                                                                           | Sept 2, 2004  | Sept 2, 2009   
|Manfred Peschke | 250,000                                 | 15.33%                                                            | $0.45                                 | $0.44                                                                           | Sept 2, 2004  | Sept 2, 2009   



(1)

The options generally become exercisable on the date of grant, subject to regulatory approval.



In prior years the Company entered into management agreements with two companies controlled by two directors, Manfred Peschke and  Erich Rauguth, for the provision of management, administrative services and certain fixed expenses in Canada and Venezuela totaling $17,575 U.S. per month.  At March 31, 2004, the agreement with Mr. Peschke expired and was not renewed, as Mr. Peschke became an employee of the Company, as well as a consultant, on April 1, 2004.  The agreement with Mr. Rauguth is still in force at the rate of $6,200 U.S. per month and will remain in force from year to year until such time as notice of termination is given by either party.



Expenditures pursuant to these contracts were allocated as follows:



|                                                                 | Fiscal Year Ended March 31,
|---------------------------------------------------------------- | ---------------------------
|                                                                 | 2005                       
|Management fees and other fixed expenditures (Manfred Peschke)   | $   60,000                 
|Fees and services allocated to mineral interests (Erich Rauguth) | 89,280                     
|Total                                                            | $ 149,280                  



C.

Board Practices



The Board of Directors presently consists of seven directors.  Each director is elected at the annual shareholders meeting to serve until the earlier of his replacement or election of a successor at a subsequent annual shareholders meeting, unless his office is earlier vacated in accordance with the Articles of the Company, or with the provisions of the British Columbia Business Corporations Act(BCA).





No director of the Company is currently party to a service contract with the Company or any of its subsidiaries that provides for benefits upon termination of employment.



42





---







Audit Committee



The Companys Audit Committee is composed of John Thomas, George Chapel and Manfred Peschke.  Mr. Peschke acts as Chairman of the Audit Committee.  All members of the Audit Committee are financially literate and at least one member, Mr. Peschke, is considered to be a financial expert and has been designated by the board as the Audit Committee Financial Expert as that term is defined under Section 407 of the Sarbanes-Oxley Act of 2002.  The Audit Committee is appointed by the Board of Directors and its members hold office until removed by the Board of Directors or until the next annual shareholders meeting of the Company, at which time their appointments expire and they are eligible for reappointment.



The primary function of the Committee is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Companys systems of internal controls regarding finance and accounting and the Companys auditing, accounting and financial reporting processes.



The principal responsibilities of the Audit Committee include reviewing annual and quarterly financial statements, ensuring that internal controls over accounting and financial systems are maintained and that accurate financial information is disseminated to shareholders, reviewing the results of internal and external audits and any change in accounting procedures or policies, evaluating the performance of the Companys auditors, pre-approving all audit and non-audit services provided by the auditors and establishing the remuneration of the auditors.



Compensation Committee



The Companys Compensation Committee is composed of John Thomas, John Amundrud and Manfred Peschke.  Mr. Amundrud acts as Chairman, and terms of reference for the Committee are currently being developed.



D.

Employees



At March 31, 2005, the Company had 89 employees comprising 22 office employees and 67 field employees. In comparison, the Company had 123 employees comprising  21 office employees and 102 field employees at March 31, 2004 and 16 office employees and another 59 field employees as at  March 31, 2003.



The Company and its subsidiaries engage directors, officers and independent contractors to supply work on specific corporate business and project exploration programs.



|                                                      | 2005   | 2004   | 2003  
|----------------------------------------------------- | ------ | ------ | ------
|Canada
Management
Professional
Administrative/support | 3
1
1  | 3
-
2  | 1
-
3 
|Guyana
Management
Administrative/support
Field        | 1
4
56 | 3
3
98 | 1
1
51
|Venezuela
Management
Administrative/support           | 2
2    | 5
-    | 5
-   
|Costa Rica
Management
Administrative/support
Field    | 1
4
11 | 1
4
4  | 1
4
8 
|Total                                                 | 86     | 123    | 75    



43





---





E.

Share Ownership



The following table sets forth the share ownership of those persons listed (or whose compensation is otherwise disclosed) in subsection 6.B above, and includes details of all options to purchase shares of the Company held by such persons:



|Name             | Number of common shares
(1) | Number of Options                             | Beneficial Ownership Percentage (2) | Purchase Price of Options
(if any) | Exercise
Price            | Expiry Date                                                        
|---------------- | --------------------------- | --------------------------------------------- | ----------------------------------- | ---------------------------------- | ------------------------- | -------------------------------------------------------------------
|                 |                             |                                               |                                     |                                    |                           |                                                                    
|Manfred Peschke  | 1,523,178                   | 300,000
300,000
250,000
850,000               | 2.75%                               | N/A                                | $0.95
0.28
0.45           | July 4, 2007
Aug. 25, 2008
Sept. 2, 2009                           
|John R. Morgan   | 60,000                      | 175,000
250,000
425,000                       | *                                   | N/A                                | $0.64
0.45                | Mar. 11, 2009
Sept. 2, 2009                                        
|Vern Hall        | 2,681,564(3)                | 50,000
50,000
100,000
100,000
100,000
400,000 | 3.59%                               | N/A                                | $0.96
0.95
0.95
0.28
0.45 | May 17, 2005
July 24, 2006
July 4, 2007
Aug. 25, 2008
Sept. 2, 2009
|George D. Chapel | 10,000                      | 100,000
100,000
200,000                       | *                                   | N/A                                | $0.95
0.45                | July 4, 2007
Sept. 2, 2009                                         
|Erich Rauguth    | 123,500                     | 300,000
300,000
250,000
850,000               | 1.13%                               | N/A                                | $0.95
0.28
0.45           | July 4, 2007
Aug. 25, 2008
Sept. 2, 2009                           
|John Thomas      | 2,600                       | 100,000
100,000
200,000                       | *                                   | N/A                                | $0.28
0.45                | Aug. 25, 2008
Sept. 2, 2009                                        
|John Amundrud    | Nil                         | Nil                                           | *                                   | N/A                                | N/A                       | N/A                                                                
|Cameron B. Boyer | Nil                         | 50,000                                        | *                                   | N/A                                | $0.45                     | Sept. 2, 2009                                                      

*  Less than 1%.



(1)

Includes beneficial, direct and indirect shareholdings.



44





---





(2)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.  In computing the number of shares owned by a person and the percentage ownership of that person, common shares subject to options or warrants (if any) held by that person that are currently exercisable or exercisable within 60 days of the ownership calculation date, are deemed outstanding.  Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.  This table has been prepared based on 85,471,353 common shares outstanding as of August 12, 2005.

(3)

Of the 2,681,564 common shares beneficially owned by Mr. Hall, 1,273,270 common shares are held directly, 221,668 common shares are held by his wife and 1,186,626 common shares are held by controlled corporations.



No share purchase warrants are currently held by the aforementioned persons as of September 30, 2005.



Stock Option Plan



On August 12, 2003, the Company implemented a Stock Option Plan (the Plan) which was approved by the TSX Venture Exchange (the TSX-V) and the shareholders of the Company.  The number of common shares which may be issued pursuant to options previously granted and those granted under the Plan is a maximum of 10% of the issued and outstanding common shares at the time of the grant.  In addition, the number of shares which may be reserved for issuance to any one individual may not exceed 5% of the issued shares on a yearly basis or 2% if the optionee is engaged in investor relations activities or is a consultant.  Under the TSX-V policy, all such rolling stock option plans which set the number of common shares issuable under the plan at a maximum of 10% of the issued and outstanding common shares must be approved and ratified by shareholders on an annual basis.  The shareholders most recently approved and ratified the Plan at the Companys Annual General Meeting held on September 15, 2005.



The purpose of the Plan is to allow the Company to grant options to directors, officers, employees and consultants, as additional compensation, and as an opportunity to participate in the success of the Company.  The granting of such options is intended to align the interests of such persons with that of the shareholders.  Options will be exercisable over periods of up to ten years as determined by the Board of Directors of the Company and are required to have an exercise price no less than the closing market price of the Companys shares prevailing on the day that the option is granted less the applicable discount, if any, permitted by the policies of the TSX-V and approved by the Board of Directors.  Pursuant to the Plan, the Board of Directors may from time to time authorize the issue of options to directors, officers, employees and consultants of the Company or employees of companies providing management or consulting services to the Company or its subsidiaries.  The Plan contains no vesting requirements, but permits the Board of Directors to specify a vesting schedule in its discretion.  The Plan provides that if a change of control, as defined therein, occurs, all shares subject to option shall immediately become vested and may thereupon be exercised in whole or in part by the option holder.





ITEM 7

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A.

Major Shareholders



To the knowledge of management of the Company, as of August 12, 2005,  no shareholder beneficially owned five percent (5%) or more of any class of the Companys voting securities, nor has any shareholder owned 5% or more of any class of the Companys voting shares during the previous three years, other than Exploram Enterprises Ltd., as shown below.



45





---







|Identity of Person or Group   | Number of common shares | Number of Warrants | Beneficial Ownership Percentage (2)
|----------------------------- | ----------------------- | ------------------ | -----------------------------------
|                              |                         |                    |                                    
|Exploram Enterprises Ltd. (1) | 44,563,276              | 16,180,500         | 59.76%                             



The following is a summary of the significant changes in the percentage ownership held by such major shareholder during the past three years.  No shareholder has any special rights with respect to its common shares beyond those rights accorded all shareholders of the Companys common shares.





|Identity of Person or Group   | Date                                         | Number of common shares          | Number of Warrants              | Beneficial Ownership Percentage (2)(3)
|----------------------------- | -------------------------------------------- | -------------------------------- | ------------------------------- | --------------------------------------
|Exploram Enterprises Ltd. (1) | March 31, 2003
March 31, 2004
March 31, 2005 | 21,257,776
36,657,776
41,663,276 | 2,000,000
14,275,000
19,080,500 | 41.16%
57.02%
60.41%                  



Notes:

(1)

Exploram Enterprises Ltd. is a wholly owned subsidiary of Coril Holdings Ltd., a company controlled by Ron Mannix of Calgary, Alberta.  Shareholdings listed for March  2003 were held by Coril Holdings Ltd.

(2)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.  In computing the number of shares owned by a person and the percentage ownership of that person, common shares subject to options or warrants (if any) held by that person that are currently exercisable or exercisable within 60 days of the ownership calculation date are deemed outstanding.  Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.

(3)

This table has been prepared based on shares outstanding as of March 31of each of the respective years, as follows:



Shares outstanding at

March 31, 2003  54,501,353 common shares



March 31, 2004  75,051,353 common shares



March 31, 2005  81,471,353 common shares



As of March 31, 2005, 6,259,593 common shares were held by 62 registered holders in the United States.  The Company is not listed for trading on any securities exchange in the United States.  From January 1, 1999 to November 12, 2004, the Companys common shares were quoted on the Over-the-Counter Bulletin Board Electronic Quotation System maintained by the National Association of Securities Dealers, Inc.  See Item 9.  The Offer and Listing -- C.  Markets.



To the best of the Companys knowledge, it is not directly or indirectly owned or controlled by another corporation(s) except as set forth above, or by any foreign government.



The Company is not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.



46





---





B.

Related Party Transactions



Listed below are the only material transactions that were effected within the past three years (or are proposed) between the Company or any of its subsidiaries and:



(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, that is, those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including directors and senior management of companies and close members of such individuals families; and

(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 including enterprises owned by directors or major shareholders of the Company and enterprises that have a member of key management in common with the Company.



In prior years the Company entered into management agreements with two companies controlled by two directors, Manfred Peschke and Erich Rauguth, for the provision of management, administrative services and certain fixed expenses in Canada and Venezuela totaling $17,575 U.S. per month.  At March 31, 2004, the agreement with Mr. Peschke expired and was not renewed, as Mr. Peschke became an employee of the Company on April 1, 2004.  The agreement with Mr. Rauguth is still in force at the rate of $6,200 U.S. per month and will remain in force from year to year until such time as notice of termination is given by either party.



The Company incurred expenditures for management fees, consulting, administrative services and certain fixed expenses from companies controlled by Mr. Peschke and Mr. Rauguth, as follows:



|                | 2005         | 2004        | 2003      
|--------------- | ------------ | ----------- | ----------
|Manfred Peschke | $     60,000 | $   140,016 | $  139,596
|Erich Rauguth   | 89,280       | 191,697     | 191,262   
|                | $   149,280  | $   331,713 | $  330,858



The foregoing services were paid for at market rates, and on terms at least as favorable to the Company as those that could have been obtained in arms-length transactions.



See Item 6.  Directors, Senior Management and Employees -- B.  Compensation for further information about the above contractual arrangements.



During Fiscal 2005, the Company completed a non-brokered private placement in which 4,805,000 units were issued at a price of $0.32 per unit.  Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 per share until December 22, 2006.  The purchaser in this private placement was Exploram Enterprises Ltd., a subsidiary of Coril Holdings Ltd., the control person of the Company (see -- Major Shareholders above).



On May 20, 2005, 2,900,000 warrants of the Company were exercised by Exploram  at a price of $0.40 per warrant for proceeds of $1,160,000.



On December 21, 2005, the Company borrowed $2,000,000 from Exploram. Interest was payable on the loan at a rate of 9.5% per annum, payable monthly. A 3% structuring fee was paid by the Company to Exploram. The loan was payable on demand after February 15, 2006 and was secured by a general security agreement over the Companys assets. On March 2, 2006, the Company repaid  the loan.



On March 1, 2006, the Company completed a non-brokered private placement of a secured convertible   debenture in the amount of $5,000,000 and a Special Right with Exploram.



47





---





The convertible debenture matures on January 31, 2009 and interest is payable on the outstanding principal amount at a rate of 9.5% per annum, payable semi-annually on July 31 and January 31.  The principal amount outstanding under the convertible debenture may be: (i) converted into common shares at any time after January 31, 2007 at a price of $0.635 per share; and (ii) repaid by the Company at any time before January 31, 2007 upon payment of a 5% prepayment penalty or thereafter upon thirty days notice (within which period Exploram may convert) without payment of a prepayment penalty.  In addition, the Company has issued a Special Right under which, for every dollar of principal outstanding under the convertible debenture on February 1, 2007, the Company will issue one common share purchase warrant to Exploram, each warrant entitling Exploram to acquire one common share at any time up to March 1, 2008 at $0.635 per share.



The Company's obligations under the convertible debenture are secured by a general security agreement over the Company's assets and a pledge of the shares of its subsidiaries.  The Company has agreed to pay Exploram a structuring fee of $90,000 in respect of the placement.



The convertible debenture, the Special Right and any securities issued thereunder issued are subject to a four  month hold period expiring on July 2, 2006.



Please see also  Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources -- Subsequent Events.



No officer or director of the Company, or any associate of such person, was indebted to the Company at any time during the fiscal years ended March 31, 2005, 2004 or 2003.



Certain directors of the Company are officers and/or directors of, or are associated with, other natural resource companies that acquire interests in mineral properties.  Such associations may give rise to conflicts of interest from time to time.  The directors are required by law, however, to act honestly and in good faith with a view to the best interests of the Company and its shareholders and to disclose any personal interest which they may have in any material transaction which is proposed to be entered into with the Company and to abstain from voting as a director for the approval of any such transaction.  See Item 3.  Key Information -- D.  Risk Factors -- The directors of the Company may have conflicts of interest in negotiating and concluding agreements.



C.

Interests of Experts and Counsel



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.





ITEM 8

FINANCIAL INFORMATION





A.

Audited Financial Statements and Other Financial Information





This Annual Report contains the audited consolidated financial statements of the Company for the years ended March 31, 2005, 2004 and 2003, including an Independent Auditors Report dated July 14, 2005 except Notes 10(d) and 16 which are as of July 22, 2005 and Note 12 which is as of April 6, 2006. The following financial statements are included: Consolidated Balance Sheets as at March 31, 2005 and  2004; Consolidated Statements of Operations and Deficit for the Fiscal Years Ended March 31, 2005, 2004 and 2003; and Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2005, 2004 and 2003.  Also included are Notes to the Consolidated Financial Statements for the Fiscal Years Ended March 31, 2005, 2004 and 2003.  The Companys audited financial statements have been prepared in accordance with Canadian generally accepted accounting principles.  Except as described in Note 16 to the audited financial statements, there are no material differences, for the purposes of these financial statements, between accounting principles generally accepted in Canada and the United States.



48





---







Legal Proceedings



The Company is involved in legal proceedings that relate to its mining rights for the Las Cristinas project in Venezuela.  See Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- Title Dispute and Legal Proceedings; -- International Arbitration.  As described therein, in July 2004 the Company commenced a process of international arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C.  Substantial uncertainty exists as to the ultimate resolution of the rights and title issues.  There is also uncertainty as to the scope of future legal and administrative costs required to continue legal proceedings.  Other than the foregoing, no material legal proceedings are pending to which the Company is a party or of which any of its properties is the subject.





Dividend Policy



The Company has not paid any dividends on its common shares and has no dividend policy with respect to the payment of dividends.  Presently, the Company anticipates that it would retain future earnings for use in its operations and the expansion of its business.



B.

Significant Changes



Properties



Subsequent to March 31, 2005, the Company reported the following developments concerning its Las Cristinas, Cerro Crucitas and other properties:



(a)  Las Cristinas, Venezuela -- Arbitration



As described under Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Venezuela -- Las Cristinas Project -- International Arbitration, on October 28, 2004, the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. registered the Companys Request For Arbitration against the Bolivarian Republic of Venezuela with respect to the Las Cristinas gold and copper property.



The acceptance of the Companys Request by ICSID initiated the formal arbitration process against Venezuela for the alleged expropriation of Vannessas contractual rights to develop the Las Cristinas gold deposit located in Bolivar State, Venezuela.  The rights to develop the property are held by Minca, a 95 percent owned subsidiary of Vannessa de Venezuela.



On June 7, 2005, ICSID announced the Arbitration Panel had been selected and the first meeting of the Tribunal was held on July 29, 2005 in London, England and was attended by counsel for both parties and by management representatives from Vannessa.  The arbitration process was laid out during the meeting and Vannessa is working to prepare filings for the next step.



Vannessa is seeking remedies under the Bilateral Investment Treaty between Canada and Venezuela and asking the Arbitration Tribunal to award restitution of Vannessas contractual rights to develop the project and the return of all property confiscated by the CVG and the Government of Venezuela and monetary damages or, in lieu, monetary damages in compensation for out of pocket expenses, plus interest, and for lost profits.  The claim for sunk costs and lost profits, before interest, is US $1,045 million.



Substantial uncertainty exists as to the ultimate resolution of the Companys rights and title issues and the level of compensation, if any, which may be received through the ICSID process.  Any awards arising from the claim will be shared with other shareholders or royalty holders of Minca and Vannessa de Venezuela according to pre-existing contractual rights.



(b)  Cerro Crucitas, Costa Rica -- Environmental Impact Statement



As described under Item 4.  Information on the Company -- D.  Property, Plant and Equipment -- Costa Rica -- Cerro Crucitas Project -- Proposed Exploration Program, in January 2005, the Company received a Resolution from SETENA directing the Company to prepare an Annex in order to provide clarification on specific questions identified by SETENA during the Environmental Impact Statement (EIS) review process.



49





---





The Company completed its detailed response to the issues required by SETENA in the Resolution of January 19, 2005.  In the last week of April 2005, the Company filed an Annex with SETENA which contains the Companys responses. As discussed below, in September 2005 the Company received a Resolution from SETENA approving the EIS.



In April 2005, the Company also secured the rights to additional land that would be required for the tailings dam and tailings retention area in the current mining plan.  The Company now holds or controls the land required for the mine and related infrastructure.



On July 22, 2005, the Company filed a Request to advance the process of International Arbitration with the ICSID in Washington, D.C.  This action is to seek remedies from the Government of the Republic of Costa Rica for the effective denial of the benefits of the Companys rights to develop the gold deposit located at Las Crucitas de Cutris (Las Crucitas) in San Carlos, Costa Rica.  In this claim, the Company is requesting the Arbitration Tribunal to restore the Companys rights to develop the Las Crucitas property and pay monetary damages of US $5 million and legal and other administrative costs plus interest for lost profits.  In lieu of restitution Vannessa is seeking damages of US $276 million plus compound interest which includes out-of-pocket expenses of US $36 million plus lost profits of not less than US $240 million.  Although Vannessa is confident in the validity of its claims, there can be no assurance that it will be successful in any, or part, of its claims.



The SETENA has completed its review of the Companys responses to questions arising from the public review process and the Environmental Impact Statement contained in the Annex filed with SETENA in late April 2005.



The rights to develop the property are held by the Companys wholly owned Costa Rican subsidiary Industrias Infinito S.A. (Industrias Infinito).



On September 1, 2005, the Company, through its 100 percent owned subsidiary, Industrias Infinito S.A., received a Resolution from SETENA approving the Companys Environmental Impact Statement (EIS) dealing with the Crucitas gold project.  The SETENA approval of the EIS means that the Company has now complied with all of the requisites of the 2001 Mining License.  The approval is for the mining of the saprolite which is weathered and soft material overlying the unaltered rock below.  The saprolite makes up approximately one third of the resource and, the  environmental approval to mine the underlying hardrock will be requested in 2006.



On December 12, 2005, the Company, through its wholly owned subsidiary Industrias Infinito S.A., successfully concluded the environmental permitting process for its Crucitas gold project.  The final resolution (Resolución No 3638-2005-SETENA), was issued by SETENA on December 12, 2005.  The final resolution specified the amount of the required Environmental Performance Bond as US$ 600,000.  The Company has made preliminary arrangements for bonding to be put into place and this will be finalized now that the exact amount of the bond has been identified.

Following the approval of the Environmental Impact Statement in early September the Company has been working towards producing a feasibility study to secure project financing building upon the extensive work already completed on the project by Placer Dome  and later  Cambior Project & Construction Group for Industrias Infinito.  Geostat International Inc. has completed due diligence work in Costa Rica and is now completing a resource evaluation in compliance with Canadian National Instrument 43-101.  Micon International Limited will be responsible for the overall consolidation of the feasibility study and Golder Associates Ltd. will supply geotechnical services associated with the study.  Other consultants and contractors have been retained, both in Canada and Costa Rica, to assist the Company in planning and executing the development of the Crucitas project.

The Company continues to work with the small communities near the mine in Alejuela Province to ensure that community needs and concerns are addressed and to fulfill the commitments made in the Environmental Impact Statement and during the extensive Public Involvement Process.

(c)  Marudi Drilling Program



The Marudi drilling program was completed in mid April 2005 and analysis of data and geological interpretation is ongoing.  Line cutting is also ongoing on parts of the Marudi concession that was not included in the drilling program and on the adjacent Paint Mountain property.



50





---





(d)  Maple Creek



At Maple Creek the care and maintenance program continues along with light reclamation work and re-vegetation.  On July 14, 2005 the Company announced that it had purchased the 40 percent minority interest in Vanarde Mining Inc. for 1,500,000 common shares of Vannessa.  Vannessa now indirectly controls 100 percent of Vanarde Mining Inc.  This will allow the Company more flexibility in the future with respect to potential exploration and development in the entire Maple Creek\Potaro area and will simplify dealings for any other commercial activity connected with the area.



Financings Subsequent to March 31, 2005



(a)   On May 20, 2005, 2,900,000 warrants of the Company were exercised by Exploram Enterprises Ltd. (Exploram), the Companys controlling shareholder, at a price of $0.40 per warrant for proceeds of $1,160,000.



(b)

On June 3, 2005, 1,100,000 warrants of the Company were exercised by three warrant holders, at a price of $0.40 per warrant for proceeds of $440,000.



(c)

On September 12, 2005, 100,000 warrants of the Company were exercised by a warrant holder, at a price of $0.40 per warrant for proceeds of $40,000.



(d)   On October 14, 2005, 187,500 warrants of the Company were exercised by a warrant holder, at a price of $0.45 per warrant for proceeds of $84,375 (see (h) below).



(e)   On December 21, 2005, the Company borrowed $2,000,000 from Exploram. Interest was payable on the loan at a rate of 9.5% per annum, payable monthly. A 3% structuring fee was paid by the Company to Exploram. The loan was payable on demand after February 15, 2006 and was secured by a general security agreement over the Companys assets. On March 2, 2006, the Company repaid  the loan (see (f) below).



(f)   On March 2, 2006, the Company completed a non-brokered private placement of a secured convertible   debenture and a Special Right with Exploram.



The convertible debenture matures on January 31, 2009 and interest is payable on the outstanding principal amount at a rate of 9.5% per annum, payable semi-annually on July 31 and January 31.  The principal amount outstanding under the convertible debenture may be: (i) converted into common shares at any time after January 31, 2007 at a price of $0.635 per share; and (ii) repaid by the Company at any time before January 31, 2007 upon payment of a 5% prepayment penalty or thereafter upon thirty days notice (within which period Exploram may convert) without payment of a prepayment penalty.  In addition, the Company has issued a Special Right under which, for every dollar of principal outstanding under the convertible debenture on February 1, 2007, the Company will issue one common share purchase warrant to Exploram, each warrant entitling Exploram to acquire one common share at any time up to March 1, 2008 at $0.635 per share.



The Company's obligations under the convertible debenture are secured by a general security agreement over the Company's assets and a pledge of the shares of its subsidiaries.  The Company has agreed to pay Exploram a structuring fee of $90,000 in respect of the placement.



The convertible debenture, the Special Right and any securities issued thereunder issued are subject to a four month hold period expiring on July 2, 2006.



(g)  Regulatory approval was obtained to extend the expiry date of 1,700,000 share purchase warrants (the First Warrants) issued on August 26, 2002 and to extend the expiry date of 2,000,000 share purchase warrants (the Second Warrants) issued on August 28, 2002.  All Warrants currently entitle the holders to acquire one additional common share of the Company, the First Warrants at a price of $1.06 per share up until August 26, 2005, as extended on August 13, 2004, and the Second Warrants at a price of $0.89 per share up until August 28, 2005, as extended on August 13, 2004.



51





---





The Company extended the expiry date of the outstanding First Warrants to August 26, 2006 and the Second Warrants to August 28, 2006.  No other terms of the First Warrants or Second Warrants were amended.



(h) Of the Companys 10,125,000  warrants  issued on October 16, 2003 for a term of two years, 9,937,500 units expired on October 16, 2005 (see (d) above).



(i)  Of the Companys 2,000,000 warrants issued on December 17, 2002 for a term of  two  years and further extended for a term of one year to December 17, 2005, 2,000,000 units expired on December 16, 2005.



Please see also  Item 5.  Operating and Financial Review and Prospects -- B.  Liquidity and Capital Resources -- Subsequent Events.  Other than the foregoing, no significant change has occurred since the date of the annual financial statements included in this Annual Report on Form 20-F.





ITEM 9

THE OFFER AND THE LISTING





A.

Offer and Listing Details



The common shares of the Company are quoted for trading on the TSX Venture Exchange (the TSX-V) under the symbol VVV and on the Berlin Stock Exchange under the symbol VVT.  From January 1, 1999 to November 12, 2004, the Companys common shares were quoted on the Over-the-Counter Bulletin Board Electronic Quotation System (the OTC-BB) under the symbol VNVNF.



Since November 2004, the Companys common shares have not been quoted on the OTC-BB because the Company had not filed its Annual Report on Form 20-F for its fiscal year ended March 31, 2004 (the 2004 Form 20-F).  Pursuant to comments received from the Commission on the Companys Annual Report on Form 20-F for its 2003 fiscal year, concerning, among other matters, auditor independence issues, the Company, which replaced its former auditors during its 2004 fiscal year, retained its current auditors in October 2004 to undertake re-audits of the Companys financial statements for its fiscal years 2002 through 2003 inclusive.  These re-audits were completed and the 2004 Form 20-F was filed with the U.S. Securities and Exchange Commission on December 6, 2005.  Shortly following the filing of this 2005 Form 20-F, the Company plans to cause application to be made for its common shares to resume quotation on the OTC-BB.



The following table sets forth the annual high and low market prices for the five fiscal years ended March 31, 2005:



|YEARS ENDED
MARCH 31 | TSX-V

HIGH
CDN $ | TSX-V

LOW
CDN $ | US Market
(1)
HIGH
USD $ | US Market
(1)
LOW
USD $
|-------------------- | ----------------- | ---------------- | ------------------------ | -----------------------
|2005                 | $0.66             | $0.32            | $0.41                    | $0.20                  
|2004                 | $0.85             | $0.26            | $0.71                    | $0.18                  
|2003                 | $3.10             | $0.30            | $2.03                    | $0.13                  
|2002                 | $2.10             | $0.50            | $1.35                    | $0.34                  
|2001                 | $1.50             | $0.64            | $1.04                    | $0.46                  
|                     |                   |                  |                          |                        

The following table sets forth the high and low market prices for the common shares for each full quarterly period within the within the two most recent fiscal years:



52





---







|PERIOD         | TSX-V HIGH

CDN $ | TSX-V LOW

CDN $ | US Market
(1)
USD $ | US Market
(1)
USD $
|-------------- | ----------------- | ---------------- | ------------------- | -------------------
|2005           |                   |                  |                     |                    
|Fourth Quarter | $0.66             | $0.37            | $0.41               | $0.34              
|Third Quarter  | $0.50             | $0.32            | $0.36               | $0.20              
|Second Quarter | $0.58             | $0.43            | $0.36               | $0.35              
|First Quarter  | $0.54             | $0.40            | $0.36               | $0.30              
|2004           |                   |                  |                     |                    
|Fourth Quarter | $0.78             | $0.53            | $0.60               | $0.39              
|Third Quarter  | $0.85             | $0.38            | $0.71               | $0.245             
|Second Quarter | $0.44             | $0.34            | $0.33               | $0.22              
|First Quarter  | $0.40             | $0.26            | $0.29               | $0.18              



The following table sets forth the high and low market prices for the most recent six months:



|MONTH          | TSX-V HIGH

CDN $ | TSX-V LOW

CDN $ | US Market
(1)
USD $ | US Market
(1)
USD $
|-------------- | ----------------- | ---------------- | ------------------- | -------------------
|September 2005 | $0.72             | $0.495           | $0.52               | $0.46              
|August 2005    | $0.68             | $0.52            | $0.54               | $0.46              
|July 2005      | $0.65             | $0.45            | $0.45               | $0.31              
|June 2005      | $0.50             | $0.38            | $0.33               | $0.20              
|May 2005       | $0.48             | $0.40            | $0.37               | $0.30              
|April 2005     | $0.52             | $0.45            | $0.42               | $0.33              
|               |                   |                  |                     |                    

(1)   Up until November 14, 2004, the Companys shares were quoted on the OTC-BB under the ticker VNVNF.BB and subsequent thereto, under the ticker VNVNF.PK on the Pink Sheets.  (Please see  -- A.  Offer and Listing Details for further discussion.)



The closing price of the Companys shares on September 30, 2005 was $0.49 on the TSX-V and US $0.50 in the United States market.



B.

Plan of Distribution



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



C.

Markets



The Companys common shares are listed for trading on the TSX-V under the symbol VVV and the Berlin Stock Exchange under the symbol VVT.  From January 1, 1999 to November 12, 2004, the Companys common shares were quoted on the OTC-BB under the symbol VNVNF.  (Please see  A.  Offer and Listing Details for further discussion.)



D.

Selling Shareholders



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



E.

Dilution



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



F.

Expenses of the Issue



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



53





---







ITEM 10

ADDITIONAL INFORMATION





A.

Share Capital





This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



B.

Memorandum and Articles of Association



The Companys constating documents are its Notice of Articles and Articles.  For clarity, the Notice of Articles is referred to herein as the Memorandum.



1.  The Companys objects and purposes as set forth in its Memorandum and Articles:



The Companys Memorandum and Articles are silent as to the Companys objects and purposes.





2.  Matters relating to Directors of the Company:



(a)  Directors power to vote on a proposal, arrangement or contract in which the director is materially interested:



Part 17 of the Companys Articles deals with the directors involvement in transactions in which they have an interest.  Article 17.2 provides that a director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.



(b)  Directors power, in the absence of an independent quorum, to vote compensation to themselves or any members of their body:



Part 13.5 of the Companys Articles provides that The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine.  If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders.  That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.  Part 13.7 states If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Companys business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.  In addition, Part 13.8 of the Companys Articles provides that Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director or to his or her spouse or dependents and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.



(c)  Borrowing powers exercisable by the directors and how such borrowing powers can be varied:



Part 8 of the Companys Articles deals with borrowing powers.  The Company, if authorized by the directors, may: (i) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (ii) 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; (iii) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (iv) 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.



(d)  The Companys Memorandum and Articles are silent with regard to the retirement or non-retirement of directors under an age limit requirement.



54





---





(e)  Number of shares, if any, required for qualification:



Part 13.4 of the Companys Articles states that A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the BCA to become, act or continue to act as a director.



3.  Rights, preferences and restrictions attaching to each class of shares:



(a)  Dividend rights, including time limit after which dividend entitlement lapses



All of the authorized shares of common stock of the Company are of the same class and, once issued, rank equally as to dividends.  The Memorandum and Articles are silent as to lapse of dividend entitlement.



(b)  Voting rights; staggered re-election intervals; cumulative voting



The holders of common shares are entitled to one vote for each share on all matters to be voted on by the shareholders.  Shareholders of the Company do not have cumulative voting.



(c)  Rights to share in surplus in event of liquidation



All of the authorized shares of common stock of the Company are of the same class and, once issued, rank equally as to participation in assets and in all other respects, on liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs after the Company has paid out its liabilities.



(d)  Other



The issued common shares are not subject to call or assessment rights or any pre-emptive or conversion rights.  There are no provisions for redemption, purchase for cancellation, surrender or purchase funds.



There are no provisions discriminating against any existing or prospective holder of common shares of the Company as a result of such shareholder owning a substantial number of common shares.



4.  Actions necessary to change the rights of holders of the Companys stock:



The rights of holders of issued shares of the Company may be altered only with the approval of the holders of 2/3 or more of the shares of the Company voted at a meeting of the shareholders of the Company called and held in accordance with applicable law.



5.  Conditions governing manner in which annual general meetings and extraordinary general meetings of shareholders are convoked, including conditions of admission:



Part 10.1 of the Companys Articles states that Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.



The directors may convene an extraordinary general meeting of the shareholders.  All meetings of the shareholders may be attended by registered shareholders or persons who hold powers of attorney or proxies given to them by registered shareholders.



6.  Limitations on rights to own securities of the Company



Except as provided in the Investment Canada Act (the IC Act), there are no limitations under the laws of Canada, the Province of British Columbia or in any constituent documents of the Company on the right of non-Canadians to hold or vote the common shares of the Company.



55





---





The IC Act governs acquisitions of Canadian business by a non-Canadian person or entity.  The IC Act requires a non-Canadian (as defined in the IC Act) making an investment to acquire control of a Canadian business, the gross assets of which exceed certain defined threshold levels, to file an application for review with the Investment Review Division of Industry Canada.  The IC Act provides, among other things, for a review of an investment in the event of acquisition of control in certain Canadian businesses in the following circumstances:



1. If the investor is a non-Canadian and is a national of a country belonging to the North American Free Trade Agreement (NAFTA) and/or the World Trade Organization (WTO) (NAFTA or WTO National), any direct acquisition having an asset value exceeding $250,000,000 (for 2005) is reviewable.  This amount is subject to an annual adjustment on the basis of a prescribed formula in the IC Act to reflect inflation and real growth within Canada.  This threshold level does not apply in certain sections of Canadian industry, such as uranium, financial services (except insurance), transportation services and cultural services (i.e. the publication, distribution or sale of books, magazines, periodicals (other than printing or typesetting businesses), music in print or machine readable form, radio, television, cable and satellite services; the publication, distribution, sale or exhibition of film or video recordings on audio or video music recordings), to which lower thresholds as prescribed in the IC Act are applicable.



2. If the investor is a non-Canadian and is not a NAFTA or WTO National, any direct acquisition having an asset value exceeding $5,000,000 and any indirect acquisition having an asset value exceeding $50,000,000 is reviewable.



3. If the investor is a non-Canadian and is NAFTA or WTO National, an indirect acquisition of control is reviewable if the value of the assets of the business located in Canada represents more than 50% of the asset value of the transaction or the business is involved in uranium, financial services, transportation services or cultural services (as set forth above).



Finally, certain transactions prescribed in the IC Act are exempted from review altogether.



In the context of the Company, in essence, three methods of acquiring control of a Canadian business are regulated by the IC Act: (i) the acquisition of all or substantially all of the assets used in carrying on business in Canada; (ii) the acquisition, directly or indirectly, of voting shares of a Canadian corporation carrying on business in Canada; or (iii) the acquisition of voting shares of an entity which controls, directly or indirectly, another entity carrying on business in Canada.



An acquisition of a majority of the voting shares of a Canadian entity, including a corporation, is deemed to be an acquisition of control under the IC Act.  However, under the IC Act, there is a rebuttable presumption that control is acquired if one-third of the voting shares of a Canadian corporation or an equivalent undivided interest in the voting shares of such corporation are held by a non-Canadian person or entity.  An acquisition of less than one-third of the voting shares of a Canadian corporation is deemed not to be an acquisition of control.  An acquisition of less than a majority, but one-third or more, of the voting shares of a Canadian corporation is presumed to be an acquisition of control unless it can be established that, on the acquisition, the Canadian corporation is not, in fact, controlled by the acquirer through the ownership of voting shares.  For partnerships, trusts, joint ventures or other unincorporated Canadian entities, an acquisition of less than a majority of the voting interests is deemed not to be an acquisition of control.



In addition, if a Canadian corporation is controlled by a non-Canadian, the acquisition of control of any other Canadian corporation by such corporation may be subject to the prior approval of the Investment Review Division, unless it can be established that the Canadian corporation is not in fact controlled by the acquirer through the ownership of voting shares.



Where an investment is reviewable under the IC Act, the investment may not be implemented unless it is likely to be of net benefit to Canada.  If an applicant is unable to satisfy the Minister responsible for Industry Canada that the investment is likely to be of net benefit to Canada, the applicant may not proceed with the investment.  Alternatively, an acquirer may be required to divest control of the Canadian business that is the subject of the investment.



In addition to the foregoing, the IC Act provides for formal notification under the IC Act of all other acquisitions of control by Canadian businesses by non-Canadian investors.  The notification process consists of filing a notification within 30 days following the implementation of an investment, which notification is for information, as opposed to review, purposes.



56





---





7.  Provisions of Companys articles, charter or by-laws that have the effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition, or corporate restructuring involving the Company:



There are no provisions in the Companys Articles or charter documents that would have the effect of delaying, deferring or preventing a change in the control of the Company, or that would operate with respect to any proposed merger, acquisition or corporate restructuring involving the Company or any of its subsidiaries.



8.  Provisions governing the ownership threshold above which shareholder ownership must be disclosed:



The British Columbia Securities Act provides that a person that has direct or indirect beneficial ownership of, control or direction over, or a combination of direct or indirect beneficial ownership of, and control or direction over, securities of the issuer carrying more than 10% of the voting rights attached to all the issuers outstanding voting securities must, within 10 days of becoming an insider, file an insider report in the required form effective the date on which the person became an insider, disclosing any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer.  The British Columbia Securities Act also provides for the filing of a report by an insider of a reporting issuer who acquires or transfers securities of the issuer.  This insider report must be filed within 10 days after the end of the month in which the change takes place.





The U.S. rules governing the ownership threshold above which shareholder ownership must be disclosed are more stringent than those discussed above.  Section 13 of the Exchange Act imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in the Rule 13d-3 under the Exchange Act) of more than 5 per cent of a class of an equity security registered under Section 12 of the Exchange Act.  In general, such persons must file, within 10 days after such acquisition, a report of beneficial ownership with the Securities and Exchange Commission containing the information prescribed by the regulations under Section 13 of the Exchange Act.  This information is also required to be sent to the issuer of the securities and to each exchange where the securities are traded.



9.  Significant differences between law applicable to the Company and law of the United States.  See 8, above.



C.

Material Contracts





Following is a summary of each material contract, other than contracts entered into the ordinary course of business, to which the Company is a party, during the previous two fiscal years:



(a)

Stock Option Plan approved by the Board of Directors on August 12, 2003 and by the shareholders (annual shareholder approval required; most recently approved by shareholders as of  September 15, 2005).  See Item 6.  Directors, Senior Management and Employees -- E.  Share Ownership -- Stock Option Plan.



(b)

Management Consulting  Agreement between S.A. Managing Group. A.V.V. and the Company, dated April 1, 1999, concerning provision of management, administrative and accounting  services plus accommodation and automobile expenditures. At March 31, 2004, the agreement with Mr. Peschke expired and was  not renewed as Mr. Peschke became an employee of the Company on April 1, 2004.



(c)

The Company is a party to a management agreement with a company controlled by a director, Erich Rauguth, for the provision of management, administrative services and certain fixed expenses inCanada,Central and South America. totaling $6,200 U.S. per month.  This contract is to remain in force from year to year until such time as notice of termination is given by either party.



(d)

Lease Agreement between the Company and 915035 Alberta Ltd. effective March 1, 2004 for office premises for a term of three years expiring February 28, 2007. The monthly rent under the lease is $4,111 including $420 per month for parking space.



57





---





D.

Exchange Controls



Canada has no system of exchange controls.  There are no exchange restrictions on borrowing from foreign countries nor on the remittance of dividends, interest, royalties and similar payments, management fees, loan repayments, settlement of trade debts or the repatriation of capital.  Any such remittances to United States residents, however, may be subject to a withholding tax pursuant to the Canadian Income Tax Act as modified by the reciprocal tax treaty between Canada and the United States.  See  -- E.  Taxation, below.



E.

Taxation



Canadian Federal Income Tax Consequences



The following discussion is a summary of the principal Canadian federal income tax considerations generally applicable to purchasers of the Companys Common Shares who, for purposes of the Income Tax Act (Canada) and Income Tax Regulations (the Canadian Act), deal at arms length with the Company, hold Common Shares as capital property, and are not deemed to be residents of Canada at any time when holding Common Shares, do not use or hold and are not deemed to use or hold Common Shares in or in the course of carrying on business in Canada, are not tax exempt under the Canadian Act, are not financial institutions as defined in the Canadian Act that are subject to the mark to market rules in the Canadian Act and, are not insurers who carry on an insurance business in Canada and elsewhere. Such a purchaser is referred to in this discussion as a shareholder.



This summary is based on the current provisions of the Canadian Act and the Canada-United States Income Tax Convention (1980) (the Treaty) as amended.  This summary takes into account specific proposals to amend the Canadian Act publicly announced by the Minister of Finance prior to the date hereof and the Companys understanding of the current published administrative and assessing practices of the Canada Revenue Agency.  This summary does not take into account Canadian provincial income tax law or the income tax laws of any country other than Canada.



A shareholder of the Company will generally not be subject to tax pursuant to the Canadian Act on a capital gain realized on a disposition of Common Shares unless the Common Shares are taxable Canadian property to the shareholder for purposes of the Canadian Act and the shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty.  The Common Shares will not be taxable Canadian property to a shareholder provided that such Common Shares are listed on a prescribed Canadian or foreign stock exchange within the meaning of the Canadian Act and provided that such shareholder, or persons with whom such shareholder did not deal at arms length (within the meaning of the Canadian Act), or any combination thereof, did not own 25% or more of the issued shares of any class or series of the Company at any time within five years immediately preceding the date of disposition.  In addition, the Treaty will generally exempt a shareholder who is a resident of the United States for purposes of the Treaty from tax in respect of a disposition of Common Shares provided that the value of the shares of the Company is not derived (directly or indirectly) principally from a real property interest (including resource property) situated in Canada.



Under the Canadian Act, a disposition of shares that constitute taxable Canadian property will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of such shares, net of any reasonable costs of disposition, exceeds (or is less than) the adjusted cost base of such shares to the shareholder.  Generally, unless exempt under an applicable bilateral tax treaty, one half of any such capital gain (a taxable capital gain) realized by the shareholder on a disposition or deemed disposition of such shares is included in computing his Canadian income tax for that year as a taxable capital gain.  One half of any capital loss (an allowable taxable loss) realized by a shareholder on a disposition or deemed disposition of such a share in a taxable year may generally be deducted from his Canadian taxable capital gains for that year.  Allowable capital losses for a taxation year in excess of taxable capital gains for that year may generally be carried back and deducted in any of the three proceeding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years to the extent and under the circumstances described in the Canadian Act.



Under the Canadian Act, the disposition of a share by a shareholder may occur or be deemed to occur in a number of circumstances including on a sale or gift of such share upon the shareholder becoming or ceasing to be resident in Canada or upon the death of the shareholder.



58





---





The initial adjusted cost base of a share to a shareholder will be the cost to him of that share.  Under the Canadian Act, certain additions to or reductions of the cost of a share may be required from time to time.  The adjusted cost base of each share of a corporation owned by a shareholder at any particular time will be the average adjusted cost base to him of all shares of the same class of that corporation owned by him at that time.



Any dividend, including stock dividends, paid or credited, or deemed to be paid or credited, by the Company to or for the benefit of a shareholder will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, subject to reduction in accordance with the provisions of any applicable bilateral income tax treaty.  Pursuant to the Treaty, the rate of withholding tax generally will be reduced to 15% in respect of dividends paid to a shareholder who is a resident of the United States for purposes of the Treaty.  The rate of withholding is further reduced to 5% if the beneficial owner of the shares is a corporation that is a resident of the United States for purposes of the Treaty and owns at least 10% of the voting shares of the Company.

United States Federal Income Tax Consequences



The following is a general discussion of the material U.S. federal income tax consequences, under current law, which may be applicable to a U.S. Holder (as defined below) of common shares of the Company.  This discussion does not address all potentially relevant U.S. federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of U.S. federal income tax law, such as those described below as excluded from the definition of a U.S. Holder.  In addition, this discussion does not cover any state, local or foreign tax consequences.  (See  Canadian Federal Income Tax Consequences above.)



The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended to the date hereof (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 any future legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.



This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any U.S. Holder or prospective U.S. Holder of common shares of the Company, and no opinion or representation with respect to the U.S. federal income tax consequences to any such U.S. Holder or prospective U.S. Holder is made.  Accordingly, U.S. Holders and prospective U.S. Holders of common shares of the Company should consult their own financial advisor, legal counsel, or accountant regarding the U.S. federal, state, local and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.

U.S. Holders



As used herein, a U.S. Holder is a holder of common shares of the Company who or which is a citizen or individual resident (or is treated as a citizen or individual resident) of the United States for U.S. federal income tax purposes, a corporation or partnership created or organized (or treated as created or organized for federal income tax purposes) in or under the laws of the United States or any political subdivision thereof, or a trust or estate the income of which is includable in its gross income for U.S. federal income tax purposes without regard to its source, if, (i) a court within the United States is able to exercise primary supervision over the administration of the trust and (ii) one or more United States trustees have the authority to control all substantial decisions of the trust.  For purposes of this discussion, a U.S. Holder does not include persons subject to special provisions of U.S. 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 and Holders who acquired their stock through the exercise of employee stock options or otherwise as compensation, persons subject to the alternative minimum tax, and persons who own their common shares of the Company other than as a capital asset within the meaning of Section 1221 of the Code.



59





---





Distributions on common shares of the Company



U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for U.S. federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange date on such date) 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 U.S. federal income tax liability or, alternatively, may be deducted in computing the U.S. Holders U.S. 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 shares and thereafter as gain from the sale or exchange of the common shares.  Preferential tax rates for long-term capital gains are applicable to a U.S. Holder that is an individual, estate or trust.  There are currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation.



In the case of foreign currency received as a distribution that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Generally, any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.  However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.



Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.  A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% or 80% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a foreign personal holding company or a passive foreign investment company, as defined below) if such U.S. Holder owns common shares representing at least 10% or 20%, respectively, of the voting power and value of the Company.  The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.



Under current temporary Treasury Regulations, dividends paid, and the proceeds of a sale of the Companys common shares, in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 30% U.S. backup withholding tax for payments made in 2002 and 2003 (29% in 2004 and 2005), unless the paying agent is furnished with a duly completed and signed Form W-9.  Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holders U.S. federal income tax liability, provided the required information is furnished to the IRS.



With effect from January 1, 2003, the United States reduced the maximum tax rate on certain qualifying dividend distributions to 15% (5% for certain U.S. Holders). In order for dividends paid by foreign corporations to qualify for the reduced rates, (1) the foreign corporation must meet certain requirements, including that it not be classified as a foreign investment company or a passive foreign investment company for U.S. federal income tax purposes in either the taxable year of the distribution or the preceding taxable year, and (2) the U.S. Holder must meet the required holding period.  In order to meet the required holding period, the U.S. Holder must hold the Company common shares for at least 60 days during the 120-day period beginning 60 days before the ex-dividend date.



60





---





Foreign Tax Credit



A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company 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 U.S. 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.  There are significant and complex limitations, which apply to the credit; among which is the general limitation that the credit cannot exceed the proportionate shares of the U.S. Holders United States income tax liability that the U.S. Holders foreign source income bears to his or its world-wide taxable income.  In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  There are further limitations on the foreign tax credit for certain types of income such as passive income, high withholding tax interest, financial services income, shipping income, and certain other classifications of income.  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 shares of the Company should consult their own tax advisors regarding their individual circumstances.



Disposition of common shares of the Company



A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between the amount of cash plus the fair market value of any property received, and the Holders tax basis in the common shares of the Company.  This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder unless the Company were to become a controlled foreign corporation.  For the effect on the Company of becoming a controlled corporation, see Controlled Foreign Corporation Status below.  Any capital gain will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder.  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.



Eligibility of U.S. Holders who are Individuals for the Reduced Federal 15% rate on Dividends



As a result of the Jobs and Growth Tax Relief Reconciliation Act of 2003, U.S. Holders who are individuals will pay the top federal 15% tax rate on eligible common stock dividends received from January 1, 2003, through December 31, 2008.  Eligible dividends are the dividends received during the tax year from (i) a domestic corporation, or (ii) a qualified foreign corporation (incorporated in a U.S. possession; traded on a U.S. exchange; or eligible for benefits under a comprehensive income tax treaty).  There is the possibility that the Companys common shares are passive foreign investment company shares.  As such, any dividends on the Companys common shares may not be eligible for the reduced maximum tax rates.  Dividends paid by foreign corporations that are (i) a foreign investment company (FIC), (ii) a passive foreign investment company (PFIC), or (iii) a foreign personal holding company (FPHC) (as defined below) do not qualify for the reduced 15% federal tax rate.  Also, beginning in 2009 the reduced 15% federal tax rate on dividends for individuals expires and those dividends will be taxed again at a marginal tax rate (35%).



Other Considerations for U.S. Holders



In the following circumstances, the above sections of this discussion may not describe the U.S. federal income tax consequences resulting from the holding and disposition of common shares of the Company:



61





---





Foreign Personal Holding Company



If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Companys outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 50% (60% in the first year) or more of the Companys gross income for such year was derived from certain passive sources (e.g., from dividends received from its subsidiaries), the Company would be treated as a foreign personal holding company. In that event, U.S. Holders that hold common shares of the Company would be required to include in income for such year their allocable portion of the Companys passive income which would have been treated as a dividend had that passive income actually been distributed.  For corporate tax years beginning after December 31, 2004, the foreign personal holding company rules have been eliminated.



Foreign Investment Company



If 50% or more of the combined voting power or total value of the Companys outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company might be treated as a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares of the Company to be treated as ordinary income rather than capital gains.  For corporate tax years beginning after December 31, 2004, the foreign investment company rules have been eliminated.



Passive Foreign Investment Company



A U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a passive foreign investment company (PFIC) is subject to U.S. federal income taxation of that foreign corporation under one of two alternative tax methods at the election of each such U.S. Holder.



Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (i) 75% or more of its gross income is passive income, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by value (or, if the Company is a controlled foreign corporation or makes an election, adjusted tax basis), of its assets that produce or are held for the production of passive income is 50% or more.  For taxable years of U.S. persons beginning after December 31, 1997, and for tax years of foreign corporations ending with or within such tax years, Section 1297(f) of the Code provides that publicly traded corporations must apply this test on a fair market value basis only.



As a PFIC, each U.S. Holder must determine under which of the alternative tax methods it wishes to be taxed.  Under one method, a U.S. Holder who elects in a timely manner to treat the Company as a Qualified Electing Fund (QEF), as defined in the Code, (an Electing U.S. Holder) will be subject, under Section 1293 of the Code, to current U.S. federal income tax for any taxable year in which the Companys qualifies as a PFIC on his pro-rata share of the Companys (i) net capital gain (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) ordinary earnings (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the U.S. Holders taxable year in which (or with which) the Company taxable year ends, regardless of whether such amounts are actually distributed.



A QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his common shares (or deemed to be realized on the pledge of his common shares) as capital gain; (ii) treat his share of the Companys net capital gain, if any, as long-term capital gain instead of ordinary income, and (iii) either avoid interest charges resulting from PFIC status altogether (see discussion of interest charge below), or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the Companys annual realized net capital gain and ordinary earnings subject, however, to an interest charge.  If the Electing U.S. Holder is not a corporation, such an interest charge would be treated as personal interest that is not deductible at all in taxable years beginning after 1990.



62





---





The procedure a U.S. Holder must comply with in making a timely QEF election will depend on whether the year of the election is the first year in the U.S. Holders holding period in which the Company is a PFIC.  If the U.S. Holder makes a QEF election in such first year, (sometimes referred to as a Pedigreed QEF Election), then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files its tax return for such first year.  If, however, the Company qualified as a PFIC in a prior year, then in addition to filing documents, the U.S. Holder may also elect to recognize as an excess distribution (i) under the rules of Section 1291 (discussed below), any gain that he would otherwise recognize if the U.S. Holder sold his stock on the application date or (ii) if the Company is a controlled foreign corporation (CFC), the Holders pro rata share of the Companys earnings and profits. (But see Elimination of Overlap Between Subpart F Rules and PFIC Provisions).  Either the deemed sale election or the deemed dividend election will result in the U.S. Holder being deemed to have made a timely QEF election.



With respect to a situation in which a Pedigreed QEF election is made, if the Company no longer qualifies as a PFIC in a subsequent year, normal Code rules and not the PFIC rules will apply.



If a U.S. Holder has not made a QEF Election at any time (a Non-electing U.S. Holder), then special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reason of a pledge) of his common shares and (ii) certain excess distributions, as specially defined, by the Company.



A Non-electing U.S. Holder generally would be required to pro-rate all gains realized on the disposition of his common shares and all excess distributions over the entire holding period for the common shares.  All gains or excess distributions allocated to prior years of the U.S. Holder (other than years prior to the first taxable year of the Company during such U.S. Holders holding period and beginning after January 1, 1987 for which it was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income.  The Non-electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year.  A Non-electing U.S.  Holder that is not a corporation must treat this interest charge as personal interest which, as discussed above, is wholly non-deductible.  The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance.



If the Company is a PFIC for any taxable year during which a Non-electing U.S. Holder holds common shares, then the Company will continue to be treated as a PFIC with respect to such common shares, even if it is no longer by definition a PFIC.  A Non-electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such common shares had been sold on the last day of the last taxable year for which it was a PFIC.



Under Section 1291(f) of the Code, the Department of the Treasury has issued proposed regulations that would treat as taxable certain transfers of PFIC stock by Non-electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death.



If a U.S. Holder makes a QEF Election that is not a Pedigreed Election (i.e., it is made after the first year during which the Company is a PFIC and the U.S. Holder holds shares of the Company) (a Non-Pedigreed Election), the QEF rules apply prospectively but do not apply to years prior to the year in which the QEF first becomes effective.  U.S. Holders should consult their tax advisors regarding the specific consequences of making a Non-Pedigreed QEF Election.



Certain special, generally adverse, rules will apply with respect to the common shares while the Company is a PFIC whether or not it is treated as a QEF.  For example under Section 1297(b)(6) of the Code (as in effect prior to the Taxpayer Relief Act of 1997), a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such stock.



63





---





The foregoing discussion is based on currently effective provisions of the Code, existing and proposed regulations there under, and current administrative rulings and court decisions, all of which are subject to change.  Any such change could affect the validity of this discussion.  In addition, the implementation of certain aspects of the PFIC rules requires the issuance of regulations which in many instances have not been promulgated and which may have retroactive effect.  There can be no assurance that any of these proposals will be enacted or promulgated, and if so, the form they will take or the effect that they may have on this discussion.  Accordingly, and due to the complexity of the PFIC rules, U.S. Holders of the Company are strongly urged to consult their own tax advisors concerning the impact of these rules on their investment in the Company.  For a discussion of the impact of the Taxpayer Relief Act of 1997 on a U.S. Holder of a PFIC, see Mark-to-Market Election For PFIC Stock Under the Taxpayer Relief Act of 1997 and Elimination of Overlap Between Subpart F Rules and PFIC Provisions below.



Mark-to-Market Election for PFIC Stock Under Section 1296 of the Code



Section 1296 of the Code provides that a U.S. Holder of a PFIC may make a mark-to-market election with respect to the stock of the PFIC if such stock is marketable as defined below.  This provision is designed to provide a current inclusion provision for persons that are Non-Electing Holders.  Under the election, any excess of the fair market value of the PFIC stock at the close of the tax year over the Holders adjusted basis in the stock is included in the Holders income.  The Holder may deduct any excess of the adjusted basis of the PFIC stock over its fair market value at the close of the tax year.  However, deductions are limited to the net mark-to-market gains on the stock that the Holder included in income in prior tax years, or so called unreversed inclusions.



For purposes of the election, PFIC stock is marketable if it is regularly traded on (1) a national securities exchange that is registered with the SEC, (2) the national market system established under Section 11A of the Securities Exchange Act of 1934, or (3) an exchange or market that the IRS determines has rules sufficient to ensure that the market price represents legitimate and sound fair market value.



A Holders adjusted basis of PFIC stock is increased by the income recognized under the mark-to-market election and decreased by the deductions allowed under the election.  If a U.S. Holder owns PFIC stock indirectly through a foreign entity, the basis adjustments apply to the basis of the PFIC stock in the hands of the foreign entity for the purpose of applying the PFIC rules to the tax treatment of the U.S. owner.  Similar basis adjustments are made to the basis of the property through which the U.S. persons hold the PFIC stock.



Income recognized under the mark-to-market election and gain on the sale of PFIC stock with respect to which an election is made is treated as ordinary income.  Deductions allowed under the election and loss on the sale of PFIC with respect to which an election is made, to the extent that the amount of loss does not exceed the net mark-to-market gains previously included, are treated as ordinary losses.  The U.S. or foreign source of any income or losses is determined as if the amount were a gain or loss from the sale of stock in the PFIC.



If PFIC stock is owned by a CFC (discussed below), the CFC is treated as a U.S. person that may make the mark-to-market election.  Amounts includable in the CFCs income under the election are treated as foreign personal holding company income, and deductions are allocable to foreign personal holding company income.



The above provisions apply to tax years of U.S. persons beginning after December 31, 1997, and to tax years of foreign corporations ending with or within such tax years of U.S. persons.



The rules of Code Section 1291 applicable to nonqualified funds generally do not apply to a U.S. Holder for tax years for which a mark-to-market election is in effect.  If Code Section 1291 is applied and a mark-to-market election was in effect for any prior tax year, the U.S. Holders holding period for the PFIC stock is treated as beginning immediately after the last tax year of the election.  However, if a taxpayer makes a mark-to-market election for PFIC stock that is a nonqualified fund after the beginning of a taxpayers holding period for such stock, a coordination rule applies to ensure that the taxpayer does not avoid the interest charge with respect to amounts attributable to periods before the election.



64





---





Controlled Foreign Corporation Status



If more than 50% of the voting power of all classes of stock or the total value of the stock of the Company is owned, directly or indirectly, by U.S. Holders, each of whom own 10% or more of the total combined voting power of all classes of stock of the Company, the Company would be treated as a controlled foreign corporation or CFC under Subpart F of the Code.  This classification would bring into effect many complex results including the required inclusion by such 10% U.S. Holders in income of their pro rata shares of Subpart F income (as defined by the Code) of the Company and the Companys earnings invested in U.S. property (as defined by the Code).  In addition, under Section 1248 of the Code, gain from the sale or exchange of common shares of the Company by such a 10% U.S. Holder of Registrant at any time during the five year period ending with the sale or exchange is treated as ordinary dividend income to the extent of earnings and profits of the Company attributable to the stock sold or exchanged.  Because of the complexity of Subpart F, and because the Company may never be a CFC, a more detailed review of these rules is beyond the scope of this discussion.



Elimination of Overlap Between Subpart F Rules and PFIC Provisions



Under Section 1297(e) of the Code, a PFIC that is also a CFC will not be treated as a PFIC with respect to certain 10% U.S. Holders.  For the exception to apply, (i) the corporation must be a CFC within the meaning of section 957(a) of the Code and (ii) the U.S. Holder must be subject to the current inclusion rules of Subpart F with respect to such corporation (i.e., the U.S. Holder is a United States Shareholder, see Controlled Foreign Corporation, above).  The exception only applies to that portion of a U.S. Holders holding period beginning after December 31, 1997.  For that portion of a United States Holder before January 1, 1998, the ordinary PFIC and QEF rules continue to apply.



As a result of this new provision, if the Company were ever to become a CFC, U.S. Holders who are currently taxed on their pro rata shares of Subpart F income of a PFIC which is also a CFC will not be subject to the PFIC provisions with respect to the same stock if they have previously made a Pedigreed QEF Election.  The PFIC provisions will however continue to apply to PFIC/CFC U.S. Holders for any periods in which they are not subject to Subpart F and to U.S. Holders that did not make a Pedigreed QEF Election unless the U.S. Holder elects to recognize gain on the PFIC shares held in the Company as if those shares had been sold.



The PFIC provisions of the Code are very complicated, and U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the PFIC rules and how they may impact their U.S. federal income tax situation.



F.

Dividends and Paying Agents



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.





G.

Statement by Experts



This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.



H.

Documents on Display





Copies of the Companys exhibits and documents are available for inspection at the Companys head office located at Suite 220, 1010 - 1st Street SW, Calgary, Alberta, Canada T2R 1K4.



I.

Subsidiary Information



The information referred to in this section is not required for reports filed in the United States.



65





---







ITEM 11

QUANTITATIVE AND QUALITATIVE DISCLOSURES



ABOUT MARKET RISK







The Company is a Small Business Issuer as such term is defined in Rule 12b-2 under the Exchange Act and, as such, there is no requirement to provide any information under this Item.





ITEM 12

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





This Form 20-F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this Item.



PART II





ITEM 13

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES







There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company or any of its subsidiaries.  There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.





ITEM 14

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY



HOLDERS AND USE OF PROCEEDS







Neither the Company nor any other person has (i) modified materially any instrument defining the rights of holders of any class of registered securities, (ii) modified materially or qualified the rights evidenced by any class of registered securities by issuing or modifying any other class of securities, or (iii) withdrawn or substituted a material amount of the assets securing any class of registered securities.  There has been no change in the trustees or paying agents for any of the Companys securities during the previous fiscal year.





ITEM 15

CONTROLS AND PROCEDURES





Disclosure Controls and Procedures.  As of March 31, 2005, an evaluation was carried out by the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, as amended).



This is the initial filing of the Companys Annual Report on Form 20-F for Fiscal 2005 (the 2005 Form 20-F).  The Companys initial filing with the Commission of its Annual Report on Form 20-F for Fiscal 2004 (the Original 2004 Form 20-F) was made in December 2005 and was followed by Amendment No. 1 thereto (Amendment No. 1) filed on March 6, 2006.  As discussed in the introductory portion of the Original 2004 Form 20-F under Explanatory Note, that filing (now as amended by Amendment No. 1) reflected modifications to the Companys 2003 Annual Report on Form 20-F that the Company made in light of comments received from the Staff of the Commission in connection with its review of that report concerning, among other matters, auditor independence issues.  Also of particular significance, as noted by the Staff, because the Company had restated previously issued and audited financial statements, it was necessary for the Company to obtain a re-audit of that information for U.S. filing purposes.  The Company, which replaced its former auditors during its 2004 fiscal year, retained its current auditors in October 2004 to undertake re-audits of the Companys financial statements for its fiscal years 2002 through 2003 inclusive.  These re-audits have been completed and the audited statements were filed with the Original 2004 Form 20-F.  The Companys Audit Committee has been fully apprised of these developments on a timely basis.



66





---





Accordingly, as filing of the Original 2004 Form 20-F was first made in December 2005 and the initial filing of the 2005 Form 20-F is being made in April 2006, the Companys Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were not effective as of March 31, 2005 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.



The Company is of the view that the filing delays described above constituted a material weakness in the Companys controls and procedures.  The delays were primarily caused by the need to have the financial statements for fiscal years 2002 and 2003 reaudited.  In connection with this, the Company replaced its former auditors during its 2004 fiscal year and retained its current auditors in October 2004.  The audit efforts and scope required a significant amount of time.  Delays were also caused by the time required to respond to the Staffs comments as issued in the comment letter dated September 10, 2004.  The Companys staff and resources are limited and accordingly Company personnel could not devote their efforts to the foregoing matters on a full-time basis.  Therefore the time required to complete these matters was greater than would have been required had the Company been able to assign staff full-time to these tasks.  As a result of these factors, the Company was delinquent in filing its Annual Reports on Form 20-F for its 2004 and 2005 fiscal years.



To remedy the situation and to avoid similar weaknesses in the future, the Company has taken a number of steps in addition to engaging the new auditors as noted.  The Company has hired permanent in-house personnel, including a Controller who was retained in February 2004.  The Controller works closely with the auditors, Company personnel, the Companys Audit Committee and with the Companys U.S. counsel to comply with disclosure requirements and ensure timeliness and accuracy of the Companys filings with the Commission.  This effort is and will continue to be a priority of the Audit Committee.  Therefore, in connection with the preparation of the Original 2004 Form 20-F as amended by Amendment No. 1, and this 2005 Form 20-F, the Company believes that it has instituted controls and procedures to enable it to file future Annual Reports with the Commission on a timely basis.



Changes in Internal Control over Financial Reporting.  During the fiscal year ended March 31, 2005, there were no changes in the Companys internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.





ITEM 16A

AUDIT COMMITTEE FINANCIAL EXPERT







The Company has an Audit Committee established by the Board of Directors.  The members of the Audit Committee are Manfred Peschke, George Chapel and John Thomas.  The Board has designated Mr. Peschke as the Audit Committee Financial Expert as that term is defined under Section 407 of the Sarbanes-Oxley Act of 2002.  As at September 30, 2005, Mr. Chapel was independent as that term is defined under the rules of the American Stock Exchange.





ITEM 16B

CODE OF ETHICS







The Company has adopted a Code of Business Conduct and Ethics (the Code) that applies to all directors, officers and employees, including its Chief Executive Officer, Chief Financial Officer and principal accounting officer.  The Code is posted on the Companys website, www.vannessaventures.com.





ITEM 16C

PRINCIPAL ACCOUNTANT FEES AND SERVICES







The aggregate amounts billed to the Company by the Companys principal accountants, Ernst & Young, LLP, Chartered Accountants (E&Y) with respect to services performed for each of the fiscal years ended March 31, 2005 (Fiscal 2005) and 2004 (Fiscal 2004), respectively, for audit fees, audit-related fees, tax fees and all other fees are set forth below, in thousands of dollars:



67





---







|                       | Fiscal 2005 | Fiscal 2004
|---------------------- | ----------- | -----------
|                       |             |            
|Audit Fees (1)         | $103        | $ 87       
|Audit-Related Fees (2) | 7           | 17         
|Tax Fees               | -           | -          
|All Other Fees         | -           | -          
|Totals                 | $110        | $104       





NOTES:





(1)  Audit Fees represent fees for the audit of the Companys annual financial statements.





(2) Audit-Related Fees represent fees for assurance and related services with respect to regulatory filings.



The Company incurred additional audit and audit-related fees in Fiscal 2005 and Fiscal 2004 by other  independent accountants who assisted the Companys principal accountants.



The Audit Committee has adopted procedures requiring Audit Committee review and approval in advance of all particular engagements for services provided by the Companys independent auditors.  Consistent with applicable laws, the procedures permit limited amounts of services, other than audit, review or attest services, to be approved by one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided the Audit Committee is informed of each particular service.  All of the engagements and fees for Fiscal 2005 were pre-approved by the Audit Committee.  The Audit Committee reviews whether the non-audit services to be provided are compatible with maintaining the auditors independence. Permissible non-audit services will be limited to fees for tax services, accounting assistance or audits in connection with acquisitions, and other services specifically related to accounting or audit matters such as audits of employee benefit plans.





ITEM 16D

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT



COMMITTEES





As the Companys common shares are not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association as provided under Rule 10A-3 under the Exchange Act, the requirements of that Rule are not applicable to the Company and, as such, there is no requirement to provide any information under this Item.





ITEM 16E              PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND

AFFILIATED PURCHASERS





The Company made no purchases of its equity securities during the fiscal year ended March 31, 2005.



PART III



ITEM 17

FINANCIAL STATEMENTS





The following financial statements are attached and incorporated herein:



68





---







| | Description of Document                                                                                                                           | Page
| | ------------------------------------------------------------------------------------------------------------------------------------------------- | ----
| | Independent Auditors Report dated July 14, 2005 except Notes 10(d) and 16 which are as of July 22, 2005 and Note 12 which is as of April 6, 2006 | F-1 
| | Consolidated Balance Sheets as at March 31, 2005 and  2004                                                                                        | F-2 
| | Consolidated Statements of Operations and Deficit for the Years Ended March 31, 2005, 2004 and 2003                                               | F-3 
| | Consolidated Statements of Cash Flows for the Years Ended March 31, 2005, 2004 and 2003                                                           | F-4 
| | Notes to Financial Statements for the Years Ended March 31, 2005, 2004 and 2003                                                                   | F-5 





























69









---











VANNESSA VENTURES LTD.

(an exploration stage company)



Consolidated Financial Statements

Years Ended March 31, 2005, 2004 and 2003

(In Canadian Dollars)





















---





Report of Independent Registered Public Accounting Firm



To the Directors of

Vannessa Ventures Ltd.





We have audited the consolidated balance sheets of Vannessa Ventures Ltd. as at March 31, 2005 and 2004, and the consolidated statements of operations and deficit and cash flows for each of the years in the three year period ended March 31, 2005.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion.  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.  We believe that our audits provide a reasonable basis for our opinion.



In our opinion, these financial statements present fairly, in all material respects, the consolidated financial position of Vannessa Ventures Ltd. as at March 31, 2005 and 2004, and the results of its operations and its cash flows for each of the years in the three year period ended March 31, 2005 in conformity with Canadian generally accepted accounting principles.







/s/ Ernst & Young LLP

Vancouver, Canada

Chartered Accountants

July 14, 2005 except Notes 10 (d) and 16 which are

as of July 22, 2005 and Note 12 which is as of April 6, 2006



Comments by Auditors for U.S. Readers
on Canada - U.S. Reporting Conflict



In the United States, reporting standards for auditors require the addition of an explanatory paragraph, following the opinion paragraph, when the financial statements are affected by conditions and events that cast substantial doubt on the Companys ability to continue as a going concern, such as those described in note 1 to these consolidated financial statements. Our report to the Directors dated July 14, 2005 except Notes 10 (d) and 16 which are as of July 22, 2005 and Note 12 which is as of April 6, 2006, is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the report of the independent auditor when these are adequately disclosed in the financial statements.







/s/ Ernst & Young LLP

Vancouver, Canada

Chartered Accountants

July 14, 2005 except Notes 10 (d) and 16 which are

as of July 22, 2005 and Note 12 which is as of April 6, 2006.





F-1



---





VANNESSA VENTURES LTD.

(an exploration stage company)

Consolidated Balance Sheets

March 31, 2005 and 2004

(In Canadian Dollars)

|                                                  | 2005            | 2004          
|------------------------------------------------- | --------------- | --------------
|                                                  | - $ -           | - $ -         
|A S S E T S                                       |                 |               
|                                                  |                 |               
|Current                                           |                 |               
|Cash                                              | $     1,062,716 | $     232,479 
|Short term investments                            | -               | 4,344,575     
|Amounts receivable                                | 179,779         | 70,808        
|Prepaid expenses                                  | 52,755          | 43,908        
|                                                  | 1,295,250       | 4,691,770     
|Capital Assets (Note 4)                           | 553,362         | 580,536       
|Mineral Interests (Note 5)                        | 6,533,625       | 5,821,061     
|                                                  | $   8,382,237   | $   11,093,367
|L I A B I L I T I E S                             |                 |               
|Current Liabilities                               |                 |               
|Accounts payable and accrued liabilities (Note 7) | $      888,816  | $     992,926 
|                                                  |                 |               
|S H A R E H O L D E R S  E Q U I T Y             |                 |               
|Share Capital (Note 6)                            | 43,100,845      | 41,053,245    
|Contributed Surplus(Note 8)                       | 2,082,113       | 1,394,060     
|Deficit                                           | (37,689,537)    | (32,346,864)  
|                                                  | 7,493,421       | 10,100,441    
|                                                  | $   8,382,237   | $   11,093,367
|                                                  |                 |               

Nature of Operations (Note 1)

Commitments (Note 13)

Contingency (Note 14)

Subsequent Events (Note 10)



On behalf of the Board:



John Morgan (Director)

George Chapel (Director)

-See Accompanying Notes-





F-2



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Consolidated Statements of Operations and Deficit
Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                         | 2005                | 2004              | 2003             
|------------------------------------------------------------------------ | ------------------- | ----------------- | -----------------
|Expenses                                                                 |                     |                   |                  
|Amortization                                                             | $          40,648   | $          24,570 | $        63,189  
|Automotive                                                               | 112                 | 9,776             | 8,014            
|Bank charges and interest                                                | 13,221              | 9,568             | 12,856           
|Consulting (Note 7)                                                      | 389,580             | 415,935           | 254,931          
|Insurance                                                                | 10,750              | 23,318            | 41,290           
|Investor relations                                                       | 90,299              | 61,336            | 606,220          
|Management fees (Note 7)                                                 | -                   | 113,640           | 113,220          
|Office and miscellaneous                                                 | 72,992              | 44,447            | 46,520           
|Office wages and services                                                | 470,542             | 225,522           | 126,355          
|Professional fees                                                        | 414,243             | 212,495           | 154,721          
|Rent                                                                     | 80,417              | 100,208           | 106,238          
|Telephone                                                                | 25,448              | 40,404            | 49,913           
|Transfer agent and listing fees                                          | 26,298              | 38,483            | 49,977           
|Travel and accommodation                                                 | 80,310              | 92,653            | 188,326          
|                                                                         | (1,714,860)         | (1,412,355)       | (1,821,770)      
|Other Items                                                              |                     |                   |                  
|Impairment of mineral interests (Note 5)                                 | (2,824,335)         | (4,160,561)       | (6,824,981)      
|Loss on disposal of mineral interests (Note 3)                           | (220,901)           | -                 | -                
|Stock-based compensation (Note 8)                                        | (624,736)           | (454,671)         | (700,004)        
|Gain(loss) on disposal of capital assets
(Note 5(d (ii)))                | -                   | 392,515           | (77,214)         
|Interest income                                                          | 42,159              | 54,030            | 88,665           
|                                                                         | (3,627,813)         | (4,168,687)       | (7,513,534)      
|Net loss for year                                                        | (5,342,673)         | (5,581,042)       | (9,335,304)      
|Deficit, beginning of period                                             | (32,346,864)        | (26,765,822)      | (17,430,518)     
|                                                                         |                     |                   |                  
|Deficit, end of period                                                   | $ (37,689,537)      | $ (32,346,864)    | $(26,765,822)    
|                                                                         |                     |                   |                  
|Net loss per share  basic and diluted                                   | $            (0.07) | $          (0.09) | $          (0.18)
|Weighted average number of common
shares outstanding  basic and diluted | 76,875,180          | 60,431,353        | 51,249,109       



-See Accompanying Notes-





F-3



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Consolidated Statements of Cash Flows
Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                    | 2005           | 2004           | 2003          
|--------------------------------------------------- | -------------- | -------------- | --------------
|                                                    |                |                |               
|Operating activities                                |                |                |               
|Net loss for the year                               | $  (5,342,673) | $  (5,581,042) | $  (9,335,304)
|Items not involving cash:                           |                |                |               
|Amortization                                        | 40,648         | 24,570         | 63,189        
|(Gain) loss on disposal of capital assets           | -              | (392,515)      | 77,214        
|Stock based compensation                            | 624,736        | 454,671        | 700,004       
|Loss on disposal of mineral interests               | 220,901        | -              | -             
|Impairment of mineral interests                     | 2,824,335      | 4,160,561      | 6,824,981     
|                                                    |                |                |               
|                                                    | (1,632,053)    | (1,333,755)    | (1,669,916)   
|                                                    |                |                |               
|Changes in non-cash working capital items           |                |                |               
|Amounts receivable                                  | (108,913)      | (23,499)       | 57,294        
|Prepaid expenses                                    | (8,847)        | 14,218         | 133,209       
|Accounts payable                                    | (102,119)      | (134,255)      | (20,237)      
|                                                    |                |                |               
|Cash used in operating activities                   | (1,851,932)    | (1,477,291)    | (1,499,650)   
|                                                    |                |                |               
|Investing activities                                |                |                |               
|Sale (purchase) of short term investments           | 4,344,575      | (4,344,575)    | -             
|Purchase of capital assets                          | (88,748)       | (77,988)       | (11,758)      
|Proceed on disposal of mineral interests
(Note 3)   | 107,820        | -              | -             
|Proceeds on disposal of capital assets              | -              | 392,515        | 48,000        
|Mineral interests expenditures (net of
recoverable) | (3,729,078)    | (3,115,319)    | (4,265,833)   
|                                                    |                |                |               
|Cash provided by (used in) investing activities     | 634,569        | (7,145,367)    | (4,229,591)   
|                                                    |                |                |               
|Financing activities                                |                |                |               
|Shares issued for cash (Note 6)                     | 2,047,600      | 8,283,500      | 5,205,000     
|Restricted cash                                     | -              | -              | 95,000        
|Bank loan                                           | -              | -              | (326,667)     
|                                                    |                |                |               
|Cash provided by financing activities               | 2,047,600      | 8,283,500      | 4,973,333     
|                                                    |                |                |               
|Increase (decrease) in cash                         | 830,237        | (339,158)      | (755,908)     
|Cash, beginning of period                           | 232,479        | 571,637        | 1,327,545     
|                                                    |                |                |               
|Cash, end of period                                 | $   1,062,716  | $     232,479  | $    571,637  



-See Accompanying Notes-





F-4



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



1.

NATURE OF OPERATIONS



The Company is a development stage enterprise, as defined by CICA accounting guideline AcG 11, Enterprises in the Development Stage, and is engaged in the acquisition and exploration of mineral interests. For United States generally accepted accounting principle purposes, the Company is defined as an exploration stage enterprise (see Note 16 (a) (vi)).



Funding for operations is raised primarily through public and private share offerings. Future operations are dependent on the Company's ability to raise sufficient funding through share offerings, debt, or profitable operations to support current and future expenditures.



2.

SIGNIFICANT ACCOUNTING POLICIES



(a)

Consolidation



These consolidated financial statements include the accounts of the Company and its wholly-owned and controlled subsidiaries.



All inter-company transactions and balances have been eliminated upon consolidation.



(b)

Amortization



Capital assets are recorded at cost.  Amortization of assets in use is provided at the following annual rates:



| | Computer equipment                   | 30%
Declining balance
| | ------------------------------------ | ---------------------
| | Computer software                    | 100%
Straight line   
| | Exploration and processing equipment | 20%
Declining balance
| | Office furniture and equipment       | 20%
Declining balance
| | Vehicles                             | 30%
Declining balance



Capital assets are amortized at one-half the rates in the year of acquisition.



Capital assets used in exploration activities, where substantially all the economic life or value of the asset is expected to be derived from a specific project, are accounted for as dedicated capital assets and included as a separate category within the costs allocated to the related exploration stage mineral interests.  Amortization for these assets is provided over the estimated life based on utilization and is charged to exploration costs of the related project.



F-5



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(b)

Amortization (continued)



Capital assets in use but not specifically dedicated to exploration stage mineral projects are included in capital assets in the balance sheet and amortized as provided above (Note 4).



Capital assets not in use and not specifically dedicated to exploration stage mineral projects are included in capital assets in the balance sheet (Note 4).



The carrying value of all categories of capital assets are reviewed for impairment at least annually or whenever events or circumstances indicate the recoverable value may be less than the carrying amount.  An impairment charge would be recognized when estimates of undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than the carrying amount.  An impairment charge would represent the excess of the carrying amount over the fair value of an asset. Impairment charges are recorded in the reporting period in which determination of impairment is made by management.



(c)

Foreign Exchange



The accounts of subsidiaries are translated into Canadian dollars using the temporal method. Under this method, monetary assets and liabilities are translated at the year end exchange rates.  Non-monetary assets and liabilities are translated using historical rates of exchange.  Revenues and expenses are translated at average rates for the period and exchange gains and losses on translation are included in income.



Transactions denominated in foreign currencies are translated into Canadian dollars at the exchange rate prevailing at transaction dates.



(d)

Mineral Interests and Exploration Costs



The Company is in the process of exploring mineral interests in several countries through wholly-owned and controlled subsidiaries.  None of the Company's mineral interests have reached commercial production.  Title to mineral interests include options, leases, concessions, participating interests and direct title as detailed in Note 5.



Costs incurred for acquisition, including option payments under acquisition agreements, are capitalized until such time as the related interest is placed into production, sold, abandoned or where management has determined an impairment in value.



F-6



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(d)

Mineral Interests and Exploration Costs (continued)



All mineral interests which are being maintained, with the exceptions of the Maple Creek, Potaro and Marudi concessions in Guyana (Note 5), are currently under extended legal, political, environmental or permitting restrictions.  Accordingly, for the current and future years, management has determined until such time as current impediments to future development are resolved, all exploration and other costs incurred to maintain such interests will be considered impaired and charged as impairment charges in the period incurred.



For mineral interests not affected by restrictions referred to above, where specific exploration programs are planned and budgeted by management, mineral exploration costs are capitalized until the properties to which they relate are advanced to the development stage, placed into commercial production, sold, abandoned or determined by management to be impaired in value.



Management evaluates each mineral interest on a reporting period basis and makes a determination based on the above criteria and availability of funding as to whether the carrying amounts are impaired. Mineral interests, where future cash flows are not reasonably determinable, are evaluated for impairment based on managements intentions and determination of the extent to which future exploration programs are warranted and likely to be funded.



Cost recoveries during exploration



Joint Venture Participation and Accounting



From time to time the Company enters into agreements that provide for specified percentage interests in mineral property rights to be allocated to joint venture participants in exchange for funding or joint funding of exploration programs.



Where agreements specify the Company as the operator, and controlling interest of the exploration program of the venture, such arrangements are considered to be participation funding and not considered to be joint ventures.



Joint venture accounting is applied by the Company only when commercial feasibility is established and the parties enter into formal comprehensive agreements for ownership and mining participation terms.  Accordingly, the Company records funding contributions prior to such agreements as reductions of carrying costs and no gain or loss on disposition of a partial interest is recorded.



F-7



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(d)

Mineral Interests and Exploration Costs (continued)



Cost recoveries during exploration (continued)



Partial dispositions



Proceeds from partial dispositions of mineral interests during the exploration stage are credited as a reduction of carrying costs.  No gain or loss is realized until all carrying costs of the specific interest have been recovered.



Bulk sampling recoveries



The Company records the selling or market value from the sale or retention of bulk sampling recoveries as reductions of carrying costs until commercial production is established.



Bulk sampling inventories incidental to the overall program and that are held for verification and assessment purposes are capitalized as exploration mineral interests and are not classified as current inventory.



Capital assets dedicated to specific mineral interests are capitalized to the interests to which they relate.



Carrying values of mineral interests as reported in the balance sheet may not necessarily reflect actual present or future value.  Recovery of carrying values is dependent upon future commercial success or proceeds from disposition of the mineral interests.



Upon the establishment of commercial production, carrying values of deferred acquisition and exploration costs will be amortized over the estimated life of the mine on the units of production method.



(e)

Administrative Costs



Administrative costs not directly associated with mineral properties are recognized as period costs and are expensed in the period incurred.



(f)

Loss per share



The treasury stock method is used to determine the dilutive effect of stock options and other dilutive instruments.  The treasury stock method assumes proceeds received from in-the-money stock options are used to repurchase common shares at the prevailing market rate.



F-8



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(f)

Loss per share (continued)



Basic loss per share figures have been calculated using the weighted average number of shares outstanding during the reporting periods.  Diluted loss per share figures are equal to those of basic loss per share for each year since the effects of warrants and stock options have been excluded as they are anti-dilutive.



(g)

Use of estimates



The preparation of financial statements in conformity with Canadian generally accepted accounting principles 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 amounts of revenues and expenses during the reporting period.  Significant areas requiring the use of management estimates relate to the determination of impairment of assets, useful lives for depreciation and amortization and allocation of cost to specific mineral interests. Financial results as determined by actual events could differ from those estimates.



The carrying value of mineral property interests is based on costs incurred and managements estimate of net recoverable value.  Estimates may not necessarily reflect actual recoverable value as this will be dependant on the development program, the nature of the mineral deposit, commodity prices, adequate funding and the ability of the Company to achieve commercial production.



(h)

Risk Management



The Company does not use derivative instruments to reduce its exposure to credit, foreign currency, interest rate or cash flow risks.



The Company maintains the majority of its cash and short-term investments in Canadian and U.S. dollar denominated securities with well capitalized financial institutions. Other financial instruments include accounts receivable and accounts payable. There are no significant differences between the carrying amounts of these instruments and their estimated fair value.



F-9



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(i)

Future Income Taxes



The liability method of tax allocations is used in accounting for income taxes.  Under this method an enterprise would recognize a future income tax liability whenever recovery or settlement of the carrying amount of an asset or liability would result in future income tax outflows.  Similarly, an enterprise would recognize a future income tax asset whenever recovery or settlement of the carrying amount of an asset or liability would generate future income tax reductions.  In the case of unused tax losses, foreign resource expenditure pools, income tax reductions, and certain items that have a tax basis but cannot be identified with an asset or liability on the balance sheet, the recognition of future income tax benefits is determined by reference to the likely realization of a future income tax reduction.



Net future tax assets are subject to valuation allowances when it is more likely than not they will be realized in the future.



(j)

Stock-based compensation and other stock-based transactions



The Company grants stock options to executive officers, directors, employees and consultants and records the fair value of all awards as a credit to contributed surplus. The Company is allocating the fair value of all stock based compensation as a direct charge to income in its financial statements for administrative personnel and to mineral interests for field personnel.



The fair value of options and other stock based awards to employees or consultants, issued or altered in the period, are determined using the Black-Scholes option pricing model.



(k)

Allowance for doubtful accounts



In a prior year, the Company established an allowance for doubtful accounts of $83,888 (2004  $83,888; 2003  $83,888) related to receivables of a Venezuelan subsidiary (Minca, see Note 5). The allowance was established on a specific account basis and is still in place.



(l)

Financial instruments



Financial instruments include cash and short term investments, accounts receivable, and accounts payable.  Carrying value of all instruments approximates fair value due to their short term nature.



F-10



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)



(m)

Cash equivalents



The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.  Cash equivalents are recorded at the lower of cost plus accrued interest and market.



(n)

Short-term investments



The Company considers all highly liquid financial instruments with an original maturity greater than three months and less than one year to be short-term investments.  Short-term investments are recorded at the lower of cost plus accrued interest and market.



3.

DISPOSAL OF MINERAL INTERESTS



(a)

During the year ended March 31, 2005, the Company disposed of its mineral interests in the La Fe/Yuruan/Kilometre 88 region located in Venezuela due to negative political environment following the initiation of International Arbitration against the Venezuelan Government regarding the Companys Las Cristinas property. (Note 5 (d)(i))



The loss on disposal of these concessions is as follows:

| |                                      | $          
| | ------------------------------------ | -----------
| | Acquisition costs                    | 902,251    
| | Accumulated exploration expenditures | 2,540,233  
| | Accumulated impairment charges       | (3,113,763)
| | Net book value                       | 328,721    
| | Cash proceeds of disposition         | (107,820)  
| | Loss on disposition                  | 220,901    



(b)

The concessions located in the Kilometre 88 region were returned to Boralis Holdings A.V.V. for nil proceeds and consideration to pay the Company 80% of all future net benefits realized from these concessions. No value has been attributed to future consideration. (Note 7)



The disposition of these concessions will relieve the Company from costs associated with maintaining and continuing the development process required in order to hold concessions in Venezuela. (Note 5 (d)(i))



F-11



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



4.

CAPITAL ASSETS



| |                                      | 2005           | 2004                    
| | ------------------------------------ | -------------- | ------------------------
| | Assets in use:                       | Cost           | Accumulated Amortization
| | Computer equipment                   | $       88,976 | $       52,590          
| | Computer software                    | 52,253         | 52,253                  
| | Office furniture and equipment       | 228,171        | 150,873                 
| | Exploration and processing equipment | 814,044        | 630,533                 
| | Vehicles                             | 314,623        | 240,798                 
| |                                      | 1,498,067      | 1,127,047               
| | Assets  not in use:                  |                |                         
| | Exploration and processing equipment | 182,342        | -                       
| |                                      | $   1,680,409  | $  1,127,047            



Amortization of exploration equipment not in use has not been recorded in the current or prior year. Assets not in use are being held for future use or resale. Management has reviewed these assets for impairment and has concluded, based on estimates of future cash flows from sale or use, the net recoverable value of capital assets not in use exceeds their carrying value.



5.

MINERAL INTERESTS



A summary of the carrying values of the Companys mineral interests by areas of interest is as follows:



|                        | 2005                                      | Current Expenditure | 2004           
|----------------------- | ----------------------------------------- | ------------------- | ---------------
|BRAZIL                  |                                           |                     |                
|Parima                  |                                           |                     |                
|                        | Acquisition costs                         | $           1       | $             -
|                        | Exploration costs                         | 60,603              | 3,629          
|                        | Impairment charges                        | (60,603)            | (3,629)        
|                        | Total  Brazil                            | 1                   | -              
|COSTA RICA              |                                           |                     |                
|Crucitas Gold Project   |                                           |                     |                
|                        | Acquisition costs                         | 2,669,504           | 269,932        
|                        | Exploration costs                         | 4,453,540           | 991,868        
|                        | Impairment charges                        | (2,621,737)         | (991,868)      
|                        | Total  Costa Rica                        | 4,501,307           | 269,932        
|GUYANA                  |                                           |                     |                
|Maple Creek Concessions |                                           |                     |                
|                        | Exploration costs (net of recoveries)     | 4,480,899           | 1,193,377      
|                        | Impairment charges                        | (3,435,451)         | (1,193,377)    
|                        | Dedicated capital assets (Note 5 (c) (i)) | 1,915,797           | (434,390)      
|                        | Diamond inventory from bulk sampling      | 65,481              | 56,361         
|                        |                                           | 3,026,726           | (378,029)      
|                        | Less: contributed by joint venturer       | (2,999,304)         | -              
|                        |                                           | 27,422              | (378,029)      
|Potaro Concessions      |                                           |                     |                
|                        | Acquisition costs                         | 54,378              | -              
|                        | Exploration costs (net of recoveries)     | 3,291,144           | 53,701         
|                        | Diamond inventories from bulk sampling    | 41,170              | -              
|                        | Impairment charges                        | (3,286,692)         | (53,701)       
|                        |                                           | 100,000             | -              



F-12



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



|Marudi Mountain Gold Project  |                    |             |             
|----------------------------- | ------------------ | ----------- | ------------
|                              | Acquisition costs  | 144,000     | -           
|                              | Exploration costs  | 1,659,979   | 820,662     
|                              |                    | 1,803,979   | 820,662     
|South Guyana  Paint Mountain |                    |             |             
|                              | Acquisition costs  | 218,557     | -           
|                              | Exploration costs  | 448,246     | -           
|                              | Impairment charges | (576,042)   | -           
|                              |                    | 90,761      | -           
|                              | Total  Guyana     | 2,022,162   | 442,633     
|VENEZUELA                     |                    |             |             
|La Fe / Yuruan / Kilometre 88 |                    |             |             
|                              | Acquisition costs  | -           | (902,251)   
|                              | Exploration costs  | -           | (2,211,512) 
|                              | Impairment charges | -           | 3,113,762   
|                              |                    | -           | (1)         
|                              |                    |             |             
|Las Cristinas                 |                    |             |             
|                              | Acquisition costs  | 122,635     | -           
|                              | Carrying costs     | 4,499,235   | 581,760     
|                              | Impairment charges | (4,611,715) | (581,760)   
|                              |                    | 10,155      | -           
|                              | Total - Venezuela  | 10,155      | (1)         
|TOTAL  MINERAL INTERESTS     | 6,533,625          | 712,564     | $  5,821,061



(a)

Brazil



Parima



In October 1996, the Company entered into an agreement for the acquisition of up to an 85% interest in 15 concessions located in the Sierra Parima region of the State of Roraima, Brazil.



The Brazilian government lifted certain mining restrictions and state government institutions are continuing the process of changing their laws to accommodate mining activity.  The Company, together with the vendor, will endeavour to secure necessary mining and development permits.  Once permits are secured, the Company will enter into a formal agreement with the Vendor to earn up to an 85% interest in 15 concessions located in the Sierra Parima region of the State of Roraima.



F-13



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(a)

Brazil (continued)



Due to continuing uncertainties over the process of changing laws to accommodate future mining in the region, management is recording impairment charges sufficient to reduce the carrying value of its interest to a nominal amount.



As at year end, the region remains closed to mining.  The Company intends to pursue the interests in the region and monitor the legal process.



(b)

Costa Rica



In May 2000, the Company signed an agreement to acquire a 100% interest in 10 mining concessions known as the Crucitas Gold Project located in northern Costa Rica.



Acquisition costs are comprised of the following:

| |                                                                                                                                             |          
| | ------------------------------------------------------------------------------------------------------------------------------------------- | ---------
| |                                                                                                                                             | $        
| | A cash payment                                                                                                                              | 25,000   
| | Issuance of 250,000 common shares                                                                                                           | 287,500  
| | Payment of certain trade payables                                                                                                           | 619,976  
| | Staged payments totaling $ 1,000,000 US                                                                                                     | 1,487,932
| | A December 31, 2004 payment finalizes all initial acquisition obligations.                                                                  |          
| | Interest on staged payments                                                                                                                 | 133,470  
| | Finders fee of 80,000 common shares                                                                                                        | 92,000   
| | Acquisition fees and other costs                                                                                                            | 23,626   
| | Payment of a net smelter royalty of 1% on all production from start-up to a maximum of $20 million U.S. and $3 million U.S. to the vendors. |          
| |                                                                                                                                             | 2,669,504





F-14



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(b)

Costa Rica (continued)



The Company has explored the property to a stage where full production is intended and is awaiting receipt of an environmental permit. On June 7, 2002, the Government of Costa Rica announced a proposed decree for a national moratorium on open pit mining. The decree was enacted and states that any rights legally acquired prior to the proposed decree will be respected. The Company holds exploitation rights with approvals prior to the decree. In October 2002, the Supreme Court of Costa Rica confirmed Vannessas Crucitas project is exempt from the legislation prohibiting open pit mining. In October of 2003 the environmental protection ministry in Costa Rica, or SETENA, ruled that the process to obtain an environmental permit for Crucitas could recommence. The Company and its consultants advanced the process during the year and a public meeting was held on July 31, 2004 in the village of Copavega near the proposed mining site. The SETENA is in the process of reviewing the application.



In December 2004 the Company learned that the Supreme Court of Costa Rica, in responding to an injunction filed against the Minister of the Environment, or SETENA, and the President of the Republic, ruled that the Resolution that awarded the Exploitation Permit on Cerro Crucitas to the Company be annulled because it violated Article 50 of the Constitution of Costa Rica. The ruling also indicated that the Environmental approval process should not be impacted by the decision and ordered the State to pay costs, damages and compensation to the concession holder, which is the Companys subsidiary in Costa Rica. The ruling did not take into consideration that the Exploitation Permit was issued in full compliance with all applicable laws and regulations in place at the time which in 2001 required that the Exploitation Permit be issued before the developer could apply for the required Environmental Permits. In 2002 the laws changed and the developer now requires environmental approval prior to receiving an Exploitation Permit. Since changes in the law are not retroactive, the Company believes the status of its Exploitation Permit should not be impacted.



At March 31, 2005, the Technical Review Committee of the Ministry of Environment had not approved the Environmental Assessment Study for the project. The receipt of the Environmental Permit is not assured. Should the permit not be received the reported carrying value may not reflect actual value.



The Company has notified the Canadian Government and Costa Rican Government it will maintain its option to pursue the Arbitration Process under the Financial Investment Protection Agreement (FIPA) signed between the two countries. (Note 10 (d))



F-15



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(b)

Costa Rica (continued)



After reviewing the Companys interest in the project, management is continuing to record an impairment charge for current expenditures incurred during the year even though there has been an advancement of the approval process.



(c)

Guyana



(i)

Maple Creek Concessions



Dedicated capital assets in the Maple Creek concessions consist of the following amounts:



| |                       | 2005        | 2004         
| | --------------------- | ----------- | -------------
| |                       | Cost        | Amortization 
| | Exploration equipment | $ 1,851,683 | $   709,282  
| | Processing plant      | 1,043,544   | 336,052      
| | Vehicles              | 136,920     | 71,016       
| |                       | $ 3,032,147 | $   1,116,350



The Company entered into a joint venture agreement in February, 2000 (amended March, 2000) to develop and mine two of the Companys properties located in the Potaro Mining District #2 through an operating company, Vanarde Mining Inc. (Vanarde). The Company agreed to assign 100% of the mining rights of the two properties to Vanarde in return for 60% of the outstanding shares of Vanarde.



Pursuant to this agreement, advances totaling $2,999,304 have been received from the joint venture participant, net of finders fees. This advance was designated to acquire specific capital assets and to undertake exploration programs. Accordingly, for accounting purposes, capital assets acquired for the joint venture exploration programs have been allocated to the exploration costs for the concessions and advances have been recorded as a recovery of exploration expenditures.



No gain has been recognized by the Company on effective transfer to its joint venture participant of 40% of the mining rights as the Company can only recover its investment through future mining profits or proceeds from disposition.



The Maple Creek concessions are alluvial diamond concessions which are contiguous to the Potaro concessions. In prior years, the Company initiated a program under the joint venture to do bulk sampling and determine a mining plan. Until the bulk sampling indicates economic values, the Company is recording an impairment charge relating to current expenditures equal to costs incurred during the year.



F-16



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(c)

Guyana (continued)



(i)

Maple Creek Concessions (continued)



Upon commencement of commercial production the accumulated acquisition and exploration costs will be amortized based on production and profit distribution. (Note 10 (c))



(ii)

Potaro Concessions



The Company entered into several agreements in prior years to acquire a 100% interest, subject to royalties, in mineral permits and concessions located in the Potaro Mining District #2.



Consideration for the acquisition of these permits and concessions was as follows:



| | Cash payment $29,000 US              | $  42,828
| | ------------------------------------ | ---------
| | Finders fee of 15,000 common shares | 11,550   
| |                                      | $ 54,378 



After a review of plans and operations in this area, management is continuing to record impairment charges to reduce the carrying value to estimated recoverable value.



(iii)

Marudi Mountain



In December 1998, the Company signed a letter agreement to acquire 100% of the exploration license to the Marudi Mountain Gold Project in southern Guyana.  This letter agreement has been replaced by a purchase and royalty agreement with the vendor in July 2003.



Consideration for the acquisition was as follows:



| | 350,000 common shares           | $  140,000
| | ------------------------------- | ----------
| | A finders fee of 10,000 shares | 4,000     
| |                                 | $  144,000



In addition, the Company is committed to keeping the interest in good standing, assumption of the net profit participation obligation when the interest goes into production, and the payment of $10.00 U.S. per ounce of gold production. See also Note 13 (c).



In March 2002, the Company entered into a joint venture agreement to develop and mine the Marudi Mountain saprolite mineral interest through a proposed new company (Newco) to be registered.



F-17



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(c)

Guyana (continued)



(iii)

Marudi Mountain (continued)



The agreement was cancelled during the year ended March 31, 2004 by mutual consent and the initial payment previously received in the amount of $114,480 was refunded.



On September 1, 2004 the Company received an Environmental Permit from the Guyanese Environmental Protection Agency giving environmental approval for mining in the Marudi area subject to certain conditions.



(iv)

Paint Mountain



In July 2003, the Company, through a wholly owned subsidiary, Vannessa (Guyana) Inc., was granted by the Government of Guyana the exclusive right to occupy and conduct geological and geophysical surveys for all minerals in an area in southern Guyana. As a result of the survey, the Company applied for and was granted one prospecting license known as Paint Mountain. In September of 2004 the Company was granted a Prospecting License by the Guyana Geology and Mines Commission granting the Company exclusive rights to occupy and explore approximately 32.92 square kilometers of territory adjacent to the Marudi property. Exploration plans in this regard are being evaluated by management for future implementation.



(d)

Venezuela



(i)

La Fe / Yuruan / Kilometre 88



Disposal



Various agreements signed between 1994 and 1999 gave the Company certain mining rights and ownership of certain concessions within Bolivar State. During the year, management disposed of these concessions for proceeds of $107,820. (Note 3 (a))



(ii)

Las Cristinas



Acquisition



By agreements dated July 13, 2001, as amended, the Company acquired through a newly incorporated subsidiary, Vannessa Holdings Corp. (Vannessa Barbados), all of the issued and outstanding shares of Vannessa de Venezuela C.A. (VV) (formerly Placer Dome de Venezuela C.A.), a Venezuelan holding company owned by Placer Dome Inc. VV owns 95% of the shares of Minera Las Cristinas C.A. (Minca).



F-18



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(d)

Venezuela (continued)



(ii)

Las Cristinas (continued)



Acquisition (continued)



The remaining 5% of Minca shares are owned by Corporacion Venezolana de Guayana (CVG), a state-owned holding company responsible for certain mining concessions in Bolivar State, Venezuela. CVG holds rights to increase its interest in Minca by an additional 25%.



Under the agreement, Vannessa (Barbados) has granted Placer Dome a participation in future revenues derived from sales of gold and copper ranging between 1% and 5% depending on the price of gold and equity percentage held by Vannessa.



The agreement also provides Placer Dome certain irrevocable option rights to repurchase the shares of VV in the event of acts of default, or lack of financial capacity. Vannessa has granted a security mortgage to Placer Dome over the shares of VV in support of the participation and repurchase rights.



The agreement further provides Placer Dome with rights of first refusal and a share purchase option allowing Placer Dome to repurchase the shares of VV by paying Vannessa the greater of fair market value of post-acquisition, tangible capital property subject to independent determination and the book value of all post-acquisition costs incurred by Vannessa directly or indirectly, plus 10%.



Consideration under the agreement for the purchase of VV was $50 U.S. including certain back in rights to Placer Dome (see above) as well as an additional $50 U.S. for the purchase of certain debt obligations between Minca and Placer Dome.



At the time of acquisition, Minca held certain rights to mineral concessions known as Las Cristinas 4, 5, 6 and 7 in the Kilometre 88 area in the State of Bolivar.



Since 1992, Placer Dome Inc., through its subsidiaries had funded Minca to conduct extensive exploration and development programs at a cost of approximately of $170 million U.S. to identify gold reserves of 11.5 million ounces, develop mining feasibility studies and development programs for the concessions. Vannessa continues to fund ongoing expenditures relating to its interest in Las Cristinas (see Carrying Costs below).



F-19



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(d)

Venezuela (continued)



(ii)

Las Cristinas (continued)



Acquisition (continued)



Title dispute and legal proceedings



Since August 2001, the Venezuelan government and CVG board members have refused to recognize Vannessas status in Minca and have not attended meetings or acted on corporate matters.



In November 2001, the Venezuelan government and CVG cancelled the mining rights held by Minca and took possession of the properties. On April 29, 2002, President Chavez issued a Presidential Decree reserving Las Cristinas for direct exploitation by the Government of Venezuela. A number of legal applications, proceedings and jurisdictional disputes have arisen between Vannessa, CVG and government authorities over the concessions.



International Arbitration



On July 9, 2004 Vannessa commenced a process of international arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. Accordingly, as part of the requirements for entering into the process of International Arbitration, the Court proceedings relating directly to the dispute between the Venezuelan government, CVG and Vannessa in Venezuela have been waived.



Vannessa and its Venezuelan subsidiaries are claiming:



·

CVG and other government authorities had no basis contractually or in law to cancel Mincas rights to the concessions without an independent arbitration process.

·

Certain decrees, court applications and government decisions to extinguish Mincas rights, or grant possible rights to another company, are either inappropriate, contrary to agreements and rights granted to Minca, or without legal status.

·

It has, or should have continuing rights to all concessions or be compensated for all expenditures incurred to date plus interest as well as lost profits.



Any awards arising from the claim will be shared with other shareholders or royalty holders of MINCA or Vannessa de Venezuela according to contractual rights.



F-20



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5.

MINERAL INTERESTS (Continued)



(d)

Venezuela (continued)



(ii)

Las Cristinas (continued)



International Arbitration (continued)



On July 8, 2004 the Company filed a Request for International Arbitration alleging that Venezuela was in breach of the Bilateral Investment Treaty in place between Venezuela and Canada. On October 28, 2004, the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. registered the Companys Request For Arbitration against the Bolivarian Republic of Venezuela with respect to the Las Cristinas gold and copper property (Note 14).



Carrying costs



During the year, carrying costs relating to Mincas mineral interests comprised the following:

| |                           | 2005          | 2004         
| | ------------------------- | ------------- | -------------
| |                           |               |              
| | Administrative salaries   | $    72,160   | $    179,385 
| | Community relations       | 39,053        | 68,871       
| | General administration    | 138,586       | 82,382       
| | Legal costs               | 259,226       | 250,482      
| | Rent, utilities and taxes | 52,837        | 27,557       
| | Travel                    | 19,898        | 46,756       
| |                           | $     581,760 | $     655,433



Due to the Companys ongoing disputes outlined above, management is continuing to record impairment charges equal to the carrying costs incurred for its Las Cristinas interest.



Disposal of Capital Asset



In 2004, the Company disposed of a capital asset located in the United States acquired as part of the Placer Dome de Venezuela C.A. acquisition for proceeds of $392,515. The asset had been idle, had not been used in operations and had no value assigned to it on the acquisition of Placer Dome de Venezuela C.A. Accordingly, a gain of $392,515 was recorded in income during the year ended March 31, 2004.



F-21



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6.

SHARE CAPITAL



The Companys authorized and issued share capital is as follows:



| |                                             | 2005       | 2004         
| | ------------------------------------------- | ---------- | -------------
| |                                             | Number     |              
| |                                             | of Shares  | Value        
| | Authorized                                  |            |              
| | 250,000,000 common shares without par value |            |              
| | Issued                                      |            |              
| | Balance, beginning of year                  | 75,051,353 | $  41,053,245
| | Private placement (a)                       | 4,805,500  | 1,537,760    
| | Options exercised (b)                       | 170,000    | 47,600       
| | Private placement (c)                       | -          | -            
| | Private placement (d)                       | 1,444,500  | 462,240      
| | Mineral properties (e)                      | -          | -            
| | Finder's fee (cash)                         | -          | -            
| | Balance, end of year                        | 81,471,353 | $  43,100,845



During the year ended March 31, 2005, transactions relating to share capital were as follows:



(a)

Pursuant to a non-brokered private placement, 4,805,000 (2004  4,300,000) units were issued at a price of $0.32 (2004 - $0.35) per unit. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 (2004 - $0.40) per share until December 22, 2006 (2004  June 4, 2005 (Note 10 (a)).



(b)

Stock options totaling 170,000 (2004  200,000) were exercised at a price of $0.28 (2004 - $0.28) per share.



(c)

Pursuant to a non-brokered private placement in 2004, 13,500,000 units were issued at a price of $0.40 per unit. Each unit consists of one common share and three quarters of one warrant entitling the holder to purchase one additional share at a price of $0.45 per share until October 15, 2005.



(d)

Pursuant to a non-brokered private placement, 1,444,500 (2004  2,250,000) units were issued at a price of $0.32 (2004 - $0.60) per unit. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of $0.40 (2004 - $0.66) per share until January 7, 2007 (2004  February 17, 2006). A finders fee of $nil (2004 - $27,500) was paid pursuant to this financing.



(e)

In fiscal 2004 and pursuant to a letter agreement to acquire 100% of the exploration license to the Marudi Mountain Gold Project in Guyana, a final payment of 50,000 common shares were issued to the vendor at the price established at the date of the agreement of $0.40 per share (Note 5 (c) (iii)).



F-22



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6.

SHARE CAPITAL (Continued)



The Company entered into transactions relating to stock options as follows:



| |                          | Options   | Weighted Average Exercise Price | Weighted Average Remaining Life
| | ------------------------ | --------- | ------------------------------- | -------------------------------
| | Balance  March 31, 2003 | 2,025,000 | $0.94                           | 4.07                           
| | Granted                  | 1,875,000 | $0.28                           |                                
| | Exercised                | (200,000) | $0.28                           |                                
| | Expired                  | (200,000) | $(0.85)                         |                                
| | Balance  March 31, 2004 | 3,500,000 | $0.64                           | 3.57                           
| | Granted                  | 1,630,000 | $0.28                           |                                
| | Exercised                | (170,000) | $0.28                           |                                
| | Expired                  | (210,000) | $(0.85)                         |                                
| | Balance  March 31, 2005 | 4,750,000 | $0.64                           | 3.29                           



At March 31, 2005, the Company had share purchase options outstanding to directors and employees as follows:



| | Outstanding | Exercise price  | Expiry date      
| | ----------- | --------------- | -----------------
| | 110,000     | $0.96 per share | May 17, 2005     
| | 165,000     | $0.95 per share | July 4, 2006     
| | 1,400,000   | $0.95 per share | July 4, 2007     
| | 1,270,000   | $0.28 per share | August 25, 2008  
| | 175,000     | $0.64 per share | March 11, 2009   
| | 1,630,000   | $0.45 per share | September 2, 2009
| | 4,750,000   |                 |                  



The Company entered into transactions relating to share purchase warrants as follows:



| |                          | Warrants Outstanding | Exercise Price | Expiry Date | Weighted Average Remaining Life
| | ------------------------ | -------------------- | -------------- | ----------- | -------------------------------
| | Balance  March 31, 2003 | 6,780,000            |                |             |                                
| |                          | 4,300,000            | 0.40           | June 4/05   | 0.03                           
| |                          | 10,125,000           | 0.45           | Oct. 16/05  | 0.19                           
| |                          | 2,500,000            | 0.66           | Feb. 18/06  | 0.08                           
| | Balance  March 31, 2004 | 23,705,000           |                |             | 1.21                           
| |                          | 4,805,500            | 0.40           | Dec. 22/06  | 0.28                           
| |                          | 1,444,500            | 0.40           | Jan. 7/07   | 0.09                           
| |                          | (300,000)            | 2.00           | May 22/04   |                                
| | Balance  March 31, 2005 | 29,655,000           |                |             | 0.78                           



F-23



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6.

SHARE CAPITAL (Continued)



Regulatory approval was obtained for the extension of the expiry dates relating to the following share purchase warrants:



(a)

2,000,000 warrants with an expiry date of December 17, 2004 have been extended to December 17, 2005; the exercise price is $0.50 per share.



(b)

780,000 warrants with an expiry date of February 18, 2005 have been extended to February 18, 2006; the exercise price is $1.15 per share.



As at March 31, 2005, there were no escrow shares outstanding or voluntary pooling arrangements.



7.

RELATED PARTY TRANSACTIONS



Accounts payable includes an amount due of $nil (2004 - $8,300) to a company controlled by a Director.



During the year, the Company incurred expenditures for consulting services from two companies controlled by two Directors. The expenditures were allocated as follows:



| |                                       | 2005         | 2004        | 2003       
| | ------------------------------------- | ------------ | ----------- | -----------
| | Charged to head office administration | $     60,000 | $   140,016 | $   139,596
| | Charged mineral interests             | 89,280       | 191,697     | 191,262    
| |                                       | $   149,280  | $   331,713 | $   330,858



Both agreements are on a month-to-month basis and will remain in force from year to year until such time as notice of termination is given by either party.



Stock-based compensation related to options awarded to directors of the Company totaled $506,543 (2004 - $387,104).



Effective November, 2004, the Company returned properties in the Kilometer 88 area in Venezuela to Boralis Holdings A.V.V., a company in which a Director has an interest. Consideration for this transaction is an agreement for Boralis to pay the Company 80% of all net benefits realized from these properties (Note 3).



Related party transactions have been recorded at their exchange amount.



F-24



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



8.

CONTRIBUTED SURPLUS



During the year, the Company granted 1,630,000 (2004  1,875,000; 2003 - 1,720,000) stock options to directors and employees.  Using the Black-Scholes fair value based option pricing method, stock options granted have been valued at $0.42 (2004 - $0.28) per option for a total value of $688,053 (2004 - $527,868; 2003 - $866,192) of which $624,736 (2004 - $454,671: 2003 - $700,004) was charged to operations and $63,317 (2004 - $73,197; 2003 - $166,188) was allocated to mineral interests.



Assumptions used in this model were as follows:



| |                                                      | 2005          | 2004           | 2003            
| | ---------------------------------------------------- | ------------- | -------------- | ----------------
| | Risk free interest rate                              | 2.63%         | 3.89%          | 4.21%           
| | Dividend yield                                       | -             | -              | -               
| | Volatility factor                                    | 121%          | 91%            | 45.75%          
| | Expected option life                                 | 5 years       | 5 years        | 5 years         
| |                                                      |               |                |                 
| | The continuity of contributed surplus is as follows: |               |                |                 
| | Balance, beginning of year                           | $   1,394,060 | $      866,192 | $              -
| | Value of stock-based compensation granted            | 688,053       | 527,868        | 866,192         
| | Balance, end of year                                 | $   2,082,113 | $   1,394,060  | $   866,192     





9.

NON-CASH ITEMS EXCLUDED FROM CASH FLOWS



The following non-cash amounts have been excluded from mineral interests and share capital on the statements of cash flows:

| |                                                        | 2005            | 2004        | 2003       
| | ------------------------------------------------------ | --------------- | ----------- | -----------
| | Mineral interests                                      |                 |             |            
| | Stock-based compensation                               | $    63,317     | $    73,197 | $   166,188
| | Amortization of capital assets used in exploration     | 515,104         | 512,952     | 183,156    
| | Shares issued for the acquisition of mineral interests | -               | 20,000      | 40,000     
| |                                                        | $  578,421      | $  606,149  | $  389,344 
| |                                                        |                 |             |            
| | Share capital                                          |                 |             |            
| | Shares issued for the acquisition of mineral interests | $             - | $   20,000  | $    40,000



10.

SUBSEQUENT EVENTS



(a)

In May and June 2005, the Company received a total of $1,600,000 upon the exercise of 4,000,000 share purchase warrants at a price of $0.40 per share. The warrants relate to a private placement of 4,300,000 units undertaken by the Company in June 2003. The remaining 300,000 warrants expired unexercised.



(b)

The International Centre for Settlement of Investment Disputes in Washington, D.C., has scheduled the first meeting of the Arbitral Tribunal relating to the Companys arbitration against the Bolivarian  Republic of Venezuela  regarding the



F-25



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10.

SUBSEQUENT EVENTS (Continued)



(b)

Las Cristinas gold and copper property. The Secretary of the Tribunal has informed the Company this meeting will be held on July 29, 2005 in London, England.



(c)

On July 14, 2005, the Company announced it had reached an agreement to acquire the 40% minority interest in Vanarde Mining Inc. (VMI) for 1,500,000 common shares. VMI is the holder of the mining rights to the Maple Creek concessions located in Guyana.



(d)

On July 22, 2005, the Company filed a Request to advance the process of International Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. This action is to seek remedies from the Government of the Republic of Costa Rica (Costa Rica) for the effective denial of the benefits of the Companys rights to develop the gold deposit located at Las Crucitas de Cutris (Las Crucitas) in San Carlos, Costa Rica. The rights to develop the property are held by the Companys wholly owned Costa Rican subsidiary Industrias Infinito S.A. (Industrias Infinito).



The Costa Rican Environmental Protection Agency (SETENA) is currently reviewing responses to questions arising from the SETENA review of the Environmental Impact Statement and from the public involvement process. These responses were submitted in late April of 2005 as an ANNEX, and the Company is expecting a decision from SETENA regarding acceptance of the Environmental Impact Study in the near future.



The filing of the Request was required in order to comply with the terms of the Bilateral Investment Treaty (Treaty) between Canada and Costa Rica, with respect to the timing of the process events in order to protect the Companys position under the Treaty. The Company will continue its efforts to continue the approval process for the Crucitas project through interaction with SETENA and other Government agencies in Costa Rica. The anticipated advancement of the Crucitas project may result in the Company suspending the Arbitration process and continuing with the development of the project.



In the event the Crucitas project can not be advanced, the Company is seeking remedies under the Treaty and requesting the Arbitration Tribunal restore the Companys rights to develop Las Crucitas and pay monetary damages of $US 5 million and legal and administrative costs plus interest for lost profits. In lieu of restitution, the Company is seeking damages of US$ 276 million plus compound interest, which includes out of pocket expenditures of US$ 36 million and lost profits of not less than $US 240 million.



F-26



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11.

SEGMENTED INFORMATION



| |                                                             | 2005          | 2004          | 2003       
| | ----------------------------------------------------------- | ------------- | ------------- | -----------
| | Identifiable assets by geographical location are as follows |               |               |            
| | Canada                                                      | $   1,116,362 | $   4,700,703 | $   701,754
| | Brazil                                                      | 8,944         | 8,944         | 8,944      
| | Costa Rica                                                  | 4,785,724     | 4,458,220     | 4,220,620  
| | Guyana                                                      | 2,359,667     | 1,754,909     | 2,690,885  
| | Venezuela                                                   | 111,540       | 170,591       | 355,093    
| |                                                             | $  8,382,237  | $  11,093,367 | $ 7,977,296



12.

POTENTIAL FUTURE INCOME TAX ASSETS



The significant components of the Companys Canadian tax-effected future income tax assets in accordance with corporate income tax filings  are made up as follows:



| |                                                       | 2005             | 2004                  | 2003                
| | ----------------------------------------------------- | ---------------- | --------------------- | --------------------
| | Future income tax assets:                             |                  |                       |                     
| | Non-capital losses carried forward                    | $   8,190,001    | $    6,689,712        | $    5,607,610      
| | Property plant and equipment                          | 1,504,470        | 1,522,597             | 1,426,083           
| | Mineral property interests                            | 2,323,247        | 2,323,247             | 2,323,247           
| |                                                       |                  |                       |                     
| |                                                       | 12,017,718       | 10,535,556            | 9,356,940           
| |                                                       |                  |                       |                     
| | Estimated Tax Rate                                    | 37%              | 37%                   | 37%                 
| |                                                       |                  |                       |                     
| | Subtotal                                              | 4,446,556        | 3,898,156             | 3,462,068           
| |                                                       |                  |                       |                     
| | Capital losses carried forward (est. tax rate of 25%) | 3,133,783        | 2,281,016             | 2,281,016           
| |                                                       |                  |                       |                     
| | Future income tax assets before valuation             | 7,580,339        | 6,179,172             | 5,743,084           
| |                                                       |                  |                       |                     
| | Valuation allowance                                   | (7,580,339)      | (6,179,172)           | (5,743,084)         
| | Net Future income tax assets                          | $              - | $                   - | $                  -



Potential future income tax balances are recorded at known or estimates of substantially enacted tax rates applicable in jurisdictions to which tax bases, adjustments and balances apply.



At March 31, 2005 the Company has non-capital losses remaining to be carried forward of approximately $8,190,000 (2004 - $6,690,000; 2003 - $5,608,000) which may be available to offset future income for income tax purposes.  These losses expire over the next seven years.  The Companys foreign exploration and development expenses approximating $2,323,000 (2004 - $2,323,000; 2003 - $2,323,000) which can be carried forward indefinitely, may be available to offset future foreign resource profit.  In addition the Company has capital losses of approximately $12,535,000 (2004 - $9,124,000; 2003 - $9,124,000) which can be carried forward indefinitely and may be available to offset future capital gains.  Due to the uncertainty of realization of these carry-forwards, a full valuation allowance has been provided in the financial statements against future tax assets.,



F-27



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13.

COMMITMENTS



(a)

Effective March 1, 2004, the Company moved its head office to Calgary, Alberta and entered into a lease agreement for office premises in its new location for a period of three years at a cost of $49,457 per annum.



(b)

The Company entered into a lease agreement expiring March 31, 2005 for its premises in Guyana requiring lease payments of $19,200 U.S. per year. The lease was renewed, effective April 1, 2005, for another one year term at a cost of $19,200 U.S. per year.



(c)

The Company has a commitment of approximately $50,000 to complete the exploration drilling program at Marudi, Guyana which was scheduled to be completed by mid April 2005.



14.

CONTINGENCY



Matters detailed in Note 5 (d)(ii) relating to the Companys holdings in Mineras de Las Cristinas S.A. (Minca) in Venezuela and in Note 10 (d)relating to the Companys Las Crucitas project in Costa Rica, create uncertainty as to the ultimate assets and liabilities that may be realized.



Management is not able to assess at this time the outcome of the legal proceedings and international arbitration in process or further quantify what, if any, additional financial impact may result from final resolution of the disputes.



15.

COMPARATIVE FIGURES



Certain comparative figures have been reclassified to conform with the current years presentation.





F-28



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP



(a)

The financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) which differ in certain material respects from US GAAP.  Material differences between Canadian GAAP and US GAAP and their effects on the Companys financial statements are summarized in the tables below (certain comparative figures have been reclassified to conform with the current years presentation).



|                                                                                             | 2005         | 2004         | 2003        
|-------------------------------------------------------------------------------------------- | ------------ | ------------ | ------------
|                                                                                             | $            | $            | $           
|Mineral interests (i) (ii)                                                                   |              |              |             
|Under Canadian GAAP                                                                          | 6,533,625    | 5,821,061    | 6,693,211   
|Deferred exploration expenditures                                                            | (18,893,646) | (17,460,161) | (14,172,873)
|Deferred exploration impairment                                                              | 14,351,964   | 13,739,141   | 9,828,579   
|Contributions from joint venture participant                                                 | 2,999,304    | 2,999,304    | 2,999,304   
|Accumulated amortization of dedicated capital assets                                         | (585,621)    | (747,134)    | (845,891)   
|Advances from joint venture participant                                                      | -            | -            | 114,480     
|Under US GAAP                                                                                | 4,405,626    | 4,352,211    | 4,616,810   
|                                                                                             |              |              |             
|Liabilities                                                                                  |              |              |             
|Under Canadian GAAP                                                                          | 888,816      | 992,926      | 1,127,181   
|Advances from joint venture participant                                                      | -            | -            | 114,480     
|Under US GAAP                                                                                | 888,816      | 992,926      | 1,241,661   
|                                                                                             |              |              |             
|Minority interest (ii)                                                                       |              |              |             
|Under Canadian GAAP                                                                          | -            | -            | -           
|Contributions from joint venture participant                                                 | 2,999,304    | 2,999,304    | 2,999,304   
|Joint venture participants share of deferred exploration expenditures                       | (1,792,360)  | (1,315,009)  | (902,520)   
|Joint venture participants share of accumulated amortization of dedicated capital assets (i) | (680,788)    | (563,011)    | (420,600)   
|Under US GAAP                                                                                | 526,156      | 1,121,284    | 1,676,184   
|                                                                                             |              |              |             
|Deficit                                                                                      |              |              |             
|Under Canadian GAAP                                                                          | (37,689,537) | (32,346,864) | (26,765,822)
|Deferred exploration expenditures                                                            | (18,893,646) | (17,460,161) | (14,172,873)
|Deferred exploration impairment                                                              | 14,351,964   | 13,739,141   | 9,828,579   
|Joint venture participants share of deferred exploration costs                              | 1,792,360    | 1,315,009    | 902,520     
|Joint venture participants share of accumulated amortization of dedicated capital assets     | 680,788      | 563,011      | 420,600     
|Accumulated amortization of dedicated capital assets                                         | (585,621)    | (747,134)    | (845,891)   
|Compensation expense on escrow shares (iv)                                                   | (416,957)    | (416,957)    | (358,262)   
|Under US GAAP                                                                                | (40,760,649) | (35,353,955) | (30,991,149)



F-29



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP (Continued)



|                                               | 2005                      | 2004         | 2003        
|---------------------------------------------- | ------------------------- | ------------ | ------------
|                                               | $                         | $            | $           
|Contributed surplus                            |                           |              |             
|Under Canadian GAAP                            | 2,082,113                 | 1,394,060    | 866,192     
|Compensation expense on escrow shares (iv)     | 416,957                   | 416,957      | 358,262     
|Under US GAAP                                  | 2,499,070                 | 1,811,017    | 1,224,454   
|                                               |                           |              |             
|Shareholders equity                           |                           |              |             
|Share capital                                  | 43,100,845                | 41,053,245   | 32,749,745  
|Contributed surplus                            | 2,499,070                 | 1,811,017    | 1,224,454   
|Deficit under US GAAP                          | (40,760,649)              | (35,353,955) | (30,991,149)
|Shareholders equity under US GAAP             | 4,839,266                 | 7,510,307    | 2,983,050   
|                                               |                           |              |             
|Net loss for the year                          |                           |              |             
|Under Canadian GAAP                            | (5,342,673)               | (5,581,042)  | (9,335,304) 
|Deferred exploration expenditures (i)          | (1,433,485)               | (3,287,288)  | (4,314,411) 
|Deferred exploration impairment (i)            | 612,823                   | 3,910,562    | 6,303,591   
|Minority interests (ii)                        | 595,129                   | 554,899      | 652,220     
|Amortization of dedicated capital assets (i)   | 161,512                   | 98,757       | (214,088)   
|Compensation expense on escrow shares (iv)     | -                         | (58,695)     | (120,439)   
|Under US GAAP                                  | (5,406,694)               | (4,362,807)  | (7,028,431) 
|                                               |                           |              |             
|Basic and diluted loss per share under US GAAP | (0.07)                    | (0.07)       | (0.14)      
|                                               |                           |              |             
|Weighted average number of common shares       |                           |              |             
|                                               | outstanding under US GAAP | 76,875,180   | 60,365,956  
|                                               |                           |              |             
|Comprehensive loss                             |                           |              |             
|Net loss for the year under US GAAP            | (5,406,694)               | (4,362,807)  | (7,028,431) 
|Comprehensive income (v)                       | -                         | -            | -           
|Comprehensive loss under US GAAP               | (5,406,964)               | (4,362,807)  | (7,028,431) 
|                                               |                           |              |             



F-30



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP (Continued)



|                                                              | 2005        | 2004        | 2003       
|------------------------------------------------------------- | ----------- | ----------- | -----------
|                                                              | $           | $           | $          
|Consolidated statements of cash flows                         |             |             |            
|Operating activities                                          |             |             |            
|Cash used under Canadian GAAP                                 | (1,851,932) | (1,477,291) | (1,499,650)
|Advance received from joint venture partner                   | -           | -           | 114,480    
|Exploration expenditures                                      | (918,381)   | (2,774,336) | (4,131,255)
|Cash used in operating activities under US GAAP               | (2,770,313) | (4,251,627) | (5,516,425)
|                                                              |             |             |            
|Investing activities                                          |             |             |            
|Cash provided (used) under Canadian GAAP                      | 634,569     | (7,145,367) | (4,229,591)
|Exploration expenditures                                      | 918,381     | 2,774,336   | 4,131,255  
|Contributions from joint venture partners                     | -           | -           | (114,480)  
|Cash provided by (used in) investing activities under US GAAP | 1,552,950   | (4,371,031) | (212,816)  
|                                                              |             |             |            
|Financing activities                                          |             |             |            
|Cash provided under Canadian GAAP                             | 2,047,600   | 8,283,500   | 4,973,333  
|Minority interests                                            | -           | -           | -          
|Cash provided by financing activities under US GAAP           | 2,047,600   | 8,283,500   | 4,973,333  



(i)

Mineral interests and exploration costs





Mineral interests and exploration costs are accounted for in accordance with Canadian GAAP as disclosed in Note 2(d). For US GAAP purposes, only third party acquisition costs are capitalized. Subsequently, all exploration and carrying costs are expensed as incurred until a positive feasibility study is completed and a positive mine development decision has been approved by the Board of Directors and appropriate financing has been obtained.  The capitalized costs of such claims would then be measured, on a periodic basis, to ensure that the carrying value can be recovered on an undiscounted cash flow basis. If the carrying value cannot be recovered on this basis, the mineral claims would be written down to net recoverable value on a discounted cash flow basis.





Capital assets dedicated to specific exploration properties as disclosed in Note 5 (c)(i) are categorized under deferred exploration costs and are capitalized for US GAAP purposes because they retain the character of capital assets. For Canadian GAAP purposes, assets are amortized when in use, and for US GAAP purposes amortization commences when the assets are available for use.



F-31



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP (Continued)



(ii)

Minority interest





For Canadian GAAP purposes, participant contributions are treated as a reduction of exploration expenditure where the substance of the transaction is that of a farm out arrangement typical of the mineral and oil exploration sectors. Typically in these financing arrangements an interest can be earned in a property by spending a certain amount on exploration expenditures. Once the amount is spent the interest in the property is legally earned and disclosed. The holder of the mineral interest does not record any disposition or minority interest for exploration expenditure incurred by the party. The party would have no recourse to have the exploration expenditure incurred refunded should the mineral interest prove worthless. For US GAAP purposes, a minority interest is recognized equal to the participant contributions, less the  participants share of exploration costs.



(iii)

Stock-based Compensation





In the year ended March 31, 2002 and prior, the Company elected to follow Accounting Principles Board No. 25 Accounting for Stock Issued to Employees (APB 25).  Under APB 25, no compensation expense is recognized in connection with options granted to employees except if options are granted at a strike price below the fair value of the underlying stock.





Effective April 1, 2002, the Company adopted the fair value recognition provision of FASB Statement No. 123 Accounting for Stock-Based Compensation(SFAS 123).  Under the modified prospective method of adoption selected by the Company under the provisions of FASB Statement No. 148 Accounting for Stock-based Compensation  Transition and Disclosure(SFAS 148), compensation cost recognized in the years ended March 31, 2004 and 2003 is the same as that which would have been recognized had the recognition provisions of SFAS 123 been applied from its original effective date.  Results of prior years have not been restated.



(iv)

Escrow Shares





Under Canadian GAAP, common shares issued with escrow restrictions are recorded at the issue price and are not revalued upon release from escrow.





Under US GAAP, escrow shares that are released upon the Company meeting certain performance criteria are considered contingently issuable.  These escrow shares are excluded from the computation of weighted average number of common shares outstanding.  The difference between the fair value of the escrow shares at



F-32



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP (Continued)



(iv)

Escrow Shares (Continued)





the time of their release from escrow and the original issue price is accounted for as compensation expense at the time the escrow shares are released from escrow.



(v)

Other Comprehensive Income





US GAAP requires that a statement of comprehensive income be displayed with the same prominence as other financial statements and that the aggregate amount of comprehensive income excluding the deficit be disclosed separately in shareholders equity.  Comprehensive income, which incorporates the net loss, includes all changes in shareholders equity during a period except those resulting from investments by and distributions to owners. There is currently no requirement to disclose comprehensive income under Canadian GAAP.



(vi)

Exploration Stage Enterprise





The Securities and Exchange Commissions Industry Guide 7 requires companies without proven and probable reserves to refer to themselves as exploration stage enterprises. Canadian GAAP does not require any such disclosure.



(vi)

Impairment of long-lived assets





The Company applied Statements of Financial Accounting Standards No. 144 (SFAS 144) to account for the impairment or disposal of long-lived assets.  Under SFAS 144, the Company tests assets for impairment in carrying value whenever events or circumstances indicate that the Company may not be able to recover the carrying value of the assets.  An impairment loss is measured as the excess of carrying amount of an asset or group of assets over fair value.  Fair value is determined using expected net present value by reference to undiscounted expected future cash flows from operations or from future sale net of selling or abandonment costs.  SFAS 144 requires separate tests for assets to be held and used, assets to be disposed of by sale and assets to be disposed of other than by sale.  SFAS 144 does not differ materially from Canadian GAAP requirements for impairment and recoverability tests for long-lived assets.



(vii)

Income Tax





Under Canadian GAAP, future income tax assets are calculated based on enacted or substantially enacted tax rates applicable to future years.  Under US GAAP, only enacted rates are used in the calculation of deferred income taxes.  This difference in Canadian GAAP and US GAAP did not have any effect on the financial position



F-33



---







|VANNESSA VENTURES LTD.
(an exploration stage company)
Notes to the Consolidated Financial Statements
For the Years Ended March 31, 2005, 2004 and 2003
(In Canadian Dollars)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16.

RECONCILIATION TO U.S. GAAP (Continued)



(vii)

Income Tax (Continued)





or the results of operations of the Company for the years ended March 31, 2005, 2004, and 2003.



(b)

Recent Accounting Pronouncements



On March 30, 2005, the Financial Accounting Standards Board (FASB) ratified the consensus of the Emerging Issues Task Force (EITF) of the FASB Issue 04-6 that stripping costs incurred during the production phase of a mine are variable production costs that should be included in the costs of the inventory produced during the period that the stripping costs are incurred. This consensus is effective for the first reporting period in fiscal years beginning after December 15, 2005, with early adoption permitted. The Company plans to adopt the consensus effective April 1, 2006.



On April 15, 2005, the U.S. Securities and Exchange Commission (SEC) announced that it would provide for a phased-in implementation process for FASB Statement No. 123(R), Share-Based Payment (SFAS 123(R)). The SEC would require that registrants adopt SFAS 123(R)s fair value method of accounting for share-based payments to employees no later than the beginning of the first interim or annual reporting period beginning after December 15, 2005. The Company now plans to adopt SFAS 123(R) effective January 1, 2005.



F-34



---







ITEM 18

FINANCIAL STATEMENTS





See Item 17.





ITEM 19

EXHIBITS





The following exhibits are attached and incorporated herein:



| |     | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | 1.1 | Notice of Articles, dated September 23, 2004
-- Incorporated by Reference to Form 20-F 2004 Annual Report --                                                                                                                                                                                                                                                                                                                                                            | 
| | 1.2 | Articles
-- Incorporated by Reference to Form 20-F 2004 Annual Report --                                                                                                                                                                                                                                                                                                                                                                                                | 
| | 4.1 | Stock Option Plan of Vannessa Ventures Ltd. dated August 12, 2003
--Incorporated by Reference to Form 20-F 2004 Annual Report --                                                                                                                                                                                                                                                                                                                                        | 
| | 4.2 | Letter agreement dated October 26, 1996 between Vannessa Ventures Ltd. and Mineraçao Parima Ltda. of Boa Vista, Brazil pursuant to which the Company was granted the right to earn up to an 85% interest in the Parima Concessions (if and when the Brazilian government lifts the restrictions currently in place and issues exploration licences) by making a US $30,000 payment to Mineraçao Parima.
-- Incorporated by Reference to Form 20-F 2000 Annual Report -- | 
| | 4.3 | Joint venture agreement dated October 17, 1997, as amended September 20, 1998 between Vannessa (Guyana) Inc. and Michael Viera of Georgetown, Guyana (Viera) pursuant to which Viera agreed to assign to Vannessa Guyana the exclusive exploration rights of two medium scale exploration licenses, known as the Uewang Permits.
-- Incorporated by Reference to Form 20-F 2000 Annual Report --                                                                      | 
| | 4.4 | Agreement dated December 10, 1998 between Vannessa (Guyana) Inc. and Edward Garnet Hopkinson pursuant to which Hopkinson has agreed to sell to Vannessa Guyana a 100% interest in nine exploration licences for a property known as the Queen of Diamonds Block in the Potaro River area, Guyana, totalling approximately 9,918 acres.
-- Incorporated by Reference to Form 20-F 2000 Annual Report --                                                                  | 



70





---







| | 4.5  | Management Consulting  Agreement between S.A. Managing Group. A.V.V. and the Company, dated April 1, 1999, concerning provision of management, administrative and accounting  services plus accommodation and automobile expenditures. At March 31, 2004, the agreement with Mr. Peschke expired and was  not renewed as Mr. Peschke became an employee of the Company on April 1, 2004.
-- Incorporated by Reference to Form 20-F 2000 Annual Report --                                                                                                                                                                                                                                                                                                                                                                                | 
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | 4.6  | Vannessa Guyana has  agreed to pay Viera 7.5% of gross production for both gold and diamonds produced by alluvial mining operations so long as the 7.5% royalty exceeds US $3,000 in the first year, US $10,000 in the second, third, fourth and fifth years and US $50,000 in the sixth and subsequent years.  Viera is entitled to a 0.75% net smelter return derived from hard rock mining operations.  Vannessa Guyana has the option to purchase at any time the alluvial rights for the sum of US $500,000 and the 0.75% net smelter return for US $1.5 million.  Upon receipt of a mining permit on the Uewang Permits, Vannessa Guyana shall become the sole and exclusive mining operator on the property.
--Incorporated by Reference to Form 20-F 2000 Annual Report --                                                      | 
| | 4.7  | Amended and Restated Transaction Agreement dated July 25, 2001 between Placer B-V Limited, an indirect subsidiary of Placer Dome Inc., Vannessa Ventures Ltd. and Vannessa Holdings Corporation, a wholly owned subsidiary of the Company, pursuant to which Placer B-V Limited agreed to sell its shares of Placer Dome de Venezuela C.A. to Vannessa Holdings Corporation for the sum of US $50, its loan obligations for the sum of US $50, and all indebtedness of Placer Dome de Venezuela C.A. to Placer B-V Limited for the sum of US $25.  As a result, the Company assumed loans due to Placer Dome affiliates and the continuing obligations of Placer Dome de Venezuela C.A. under the work contract governing the exploration of the Las Cristinas Project.
-- Incorporated by Reference to Form 20-F 2001 Annual Report -- | 
| | 4.8  | Lease  Agreement between the Company and 915035 Alberta Ltd. effective March 1, 2004 for the Calgary, Alberta office lease for a period of three years ending on February 28, 2007.
-- Incorporated by Reference to Form 20-F 2004 Annual Report --                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
| | 4.9  | Demand Promissory Note made by the Company in favor of Exploram Enterprises Ltd. dated December 20, 2005, for $2,000,000 at an annual interest rate of 9.5%, payable monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 4.10 | Secured Convertible Debenture between the Company and Exploram Enterprises Ltd. dated March 1, 2006, maturing January 31, 2009 for $5,000,000 at an annual interest rate of 9.5%, payable semi-annually (July 31 and January 31) with first interest payment on July 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 8    | Subsidiaries of the Company
-- Incorporated by Reference to Form 20-F 2004 Annual Report --                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 12.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
| | 12.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
| | 13.1 | Statement of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | 13.2 | Statement of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 





71





---









SIGNATURE







Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.





VANNESSA VENTURES LTD.

Registrant







By:

/s/ John R. Morgan



Name:  John R. Morgan



Title:    President and Chief Executive Officer







Date:  April 10, 2006













72