EXHIBIT 1 Consolidated Financial Statements December 31, 2004 and 2003       ATNA RESOURCES LTD.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 and 2003
(Expressed in Canadian dollars)
D E V I S S E R  G R A YCHARTERED ACCOUNTANTS
401 - 905 West Pender StreetVancouver, BC CanadaV6C 1L6
Tel: (604) 687-5447Fax: (604) 687-6737
AUDITORS' REPORT
To the Shareholders of Atna Resources Ltd.
We have audited the consolidated balance sheets of Atna Resources Ltd. as at December 31, 2004 and 2003 and the consolidated statements of operations and deficit and cash flows for each of the years in the three-year period
ended December 31, 2004.  These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards (GAAS) in Canada and the standards of the Public Company Accounting Oversight Board (United States) (PCAOB).  Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and 2003 and the results of its operations and cash flows for
each of the years in the three-year period ended December 31, 2004 in conformity with Canadian generally accepted accounting principles.
DeVisser Gray
CHARTERED ACCOUNTANTS
Vancouver, British ColumbiaFebruary 17, 2005
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 significant uncertainties and
contingencies such as those referred to in note 1 to these financial statements. Although we conducted our audits in accordance with both Canadian GAAS and the standards of the PCAOB, our report to the shareholders dated February 17, 2005 is
expressed in accordance with Canadian reporting standards which do not require a reference to such matters when the uncertainties are adequately disclosed in the financial statements.
DeVisser Gray
CHARTERED ACCOUNTANTS
Vancouver, British ColumbiaFebruary 17, 2005

ATNA RESOURCES LTD.Consolidated Balance SheetsAs at December 31,(Expressed in Canadian dollars)2004

2003$

$A S S E T SCurrentCash and cash equivalents



6,597,455

3,691,757Amounts receivable



19,197

12,175Marketable securities (note 3)



2,411,483

57,575Prepaid expenses



22,714

7,9939,050,849

3,769,500Reclamation deposit



6,950

-Resource properties (note 5)



5,134,894

9,736,561Equipment



65,471

41,35514,258,164

13,547,416L I A B I L I T I E SCurrentAccounts payable and accrued liabilities



671,188

65,217S H A R E H O L D E R S' E Q U I T YShare capital (note 8) (38,950,872 common shares
outstanding at December 31, 2004)

40,795,561

36,524,790Contributed surplus (note 8b)

151,193

94,576Deficit

(27,359,778
)
(23,137,16713,586,976

13,482,19914,258,164

13,547,416Approved on behalf of the Board of DirectorsGlen D. Dickson

David H. WatkinsGlen D. Dickson

David H. WatkinsSee notes to consolidated financial statements

ATNA RESOURCES LTD.Consolidated Statements of Operations and DeficitFor the Years Ended December 31,(Expressed in Canadian dollars)2004




2003



2002$




$



$ExpensesAmortization



7,929




11,860



14,555Exploration and business development



208,268




717,756



1,906,424Foreign exchange loss



7,306




99,488



49,442Listing and transfer agent fees



42,086




35,156



19,488Office



51,272




65,414



81,463Professional fees



45,628




69,597



72,756Rent and services



80,661




61,349



90,449Severance payments



-




175,175



378,356Shareholder communications



363,859




176,922



185,495Stock-based compensation expense (note 8b)



94,770




94,576



-Wages and benefits



202,546




139,464



180,6371,104,325




1,646,757



2,979,065Less interest and other income



(119,315
)



(69,167
)


(101,209
)Net loss before the following



985,010




1,577,590



2,877,856Net loss (gain) on sale of equipment



(1,288
)



1,526



-Net loss (gain) on sales of marketable securities



(45,858
)



(38,492
)


2,410Net loss (gain) on sale of resource property (note 5)



1,359,561




(4,586
)


-Write-down of investment in VGCG LP



-




-



78,098Write-down of marketable securities



-




32,799



485,455Write-off of equipment



3,494




4,088



4,994Write-off of resource properties



1,881,155




743



1,824,956Write-off of VAT receivable (note 4)



40,537




191,267



-Net loss for the year



(4,222,611
)

(1,764,935
)


(5,273,769
)Deficit - beginning of year

(23,137,167
)

(21,372,232
)


(16,098,463
)Deficit - end of year

(27,359,778
)

(23,137,167
)


(21,372,232
)Loss per share(note 11)


$
(0.14
)


$
(0.08
)

$
(0.24
)Weighted-Average Number ofCommon Shares Outstanding



31,156,922


22,323,260



21,757,037See notes to consolidated financial statements

ATNA RESOURCES LTD.Consolidated Statements of Cash FlowsFor the Years Ended December 31,(Expressed in Canadian dollars)2004


2003


2002$


$


$Cash provided by (used for):Operating ActivitiesNet loss for the year

(4,222,611
)

(1,764,935
)

(5,273,769
)Adjustments for items not involving cash:Amortization

7,929


11,860


14,555Equipment written-off

3,494


4,088


4,994Investment in VGCG limited partnership written-down

-


-


78,098Marketable securities written-down

-


32,799


485,455Net loss (gain) on sales of equipment

(1,288
)

1,526


-Net loss (gain) on sales of marketable securities

(45,858
)

(38,492
)

2,410Net loss (gain) on sales of resource properties

1,359,561


(4,586
)

-Resource properties written-off

1,881,155


743


1,824,956Shares issued in settlement of severance obligations

-


175,175


-Stock-based compensation expense

94,770


94,576


-VAT receivable written-off

-


191,267


-Changes in non-cash working capital components:Amounts receivable

(7,022
)

47,542


(43,852
)Accounts payable

605,971


(287,562
)

162,764Prepaid expenses

(14,721
)

19,680


557VAT receivable

-


(9,950
)

(114,634
)(338,620
)

(1,526,269
)

(2,858,466
)Investing ActivitiesAcquisition of resource properties

(618,513
)

(239,426
)

(372,585
)Exploration and development

(2,815,617
)

(455,489
)

(680,584
)Option payments received

152,427


-


-Exploration recoveries and operating fees

207,747


-


-Government grants received

-


-


7,517Investment in VGCG limited partnership

-


-


(78,098
)Net (purchases)/proceeds of equipment

(55,444
)

2,725


(30,624
)Purchase of marketable securities

-


(39,375
)

(700,560
)Proceeds from sales of marketable securities

163,950


63,353


663,268Proceeds from sales of resource properties

2,000,000


-


-Reclamation deposits (paid)/refunded

(6,950
)

-


2,500(972,400
)

(668,212
)

(1,189,166
)Financing ActivityProceeds from issuance of share capital

4,571,961


2,540,849


-Share issue costs

(355,243
)

(342,322
)

-4,216,718


2,198,527


-Net increase (decrease) in cash and cash equivalents

2,905,698


4,046


(4,047,632
)Cash and cash equivalents - beginning of year

3,691,757


3,687,711


7,735,343Cash and cash equivalents - end of year

6,597,455


3,691,757


3,687,711
Supplementary cash flow disclosures (note 6)
See notes to consolidated financial statements

ATNA RESOURCES LTD.Notes to the Consolidated Financial StatementsDecember 31, 2004, 2003 and 2002(Expressed in Canadian dollars)
1.
NATURE OF OPERATIONSThe Company is incorporated in British Columbia and involved in the acquisition of resource properties that are considered sites of potential economic mineralization, and is currently engaged in the exploration of these
properties. Certain of the Companys properties contain defined mineral resources that cannot be considered economic until a commercial feasibility study is carried out. The ability of the Company to realize the costs it has incurred to date on
these properties is dependent upon it being able to develop a commercial ore body, to finance the required exploration and development costs and to acquire environmental, regulatory, and other such permits as may be required for the successful
development of the property.2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESPrinciples of ConsolidationThese consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Atna Resources Inc., incorporated in the State of Nevada, U.S.A.; Minera Atna Chile Limitada, incorporated in
Chile; and Atna Cayman Ltd., incorporated in Cayman Islands. Atna Cayman Ltd. was wound up during 2004. The financial statements are prepared in accordance with Canadian generally accepted accounting principles (GAAP), which differ from
U.S. GAAP as described in note 13.Resource PropertiesThe cost of mineral properties and their related direct exploration costs are deferred until the properties are placed into production, sold or abandoned. These deferred costs will be amortized on a unit-of-production basis
over the estimated useful life of the properties following the commencement of production, or written-off if the properties are sold, allowed to lapse or abandoned.Cost includes any cash consideration and advance royalties paid, and the fair market value of shares issued, if any, on the acquisition of mineral properties. Properties acquired under option agreements, whereby payments
are made at the sole discretion of the Company, are recorded in the accounts when the payments are made. The amounts recorded for mineral claim acquisitions and their related deferred exploration and development costs represent actual expenditures
incurred and are not intended to reflect present or future values.The Company reviews capitalized costs on its resource properties on a periodic basis and will recognize an impairment in value based upon current exploration results, if any, and upon managements assessment of the
probability of future profitable revenues from the property or from the sale of the property. Managements assessment of the propertys estimated current fair market value is also based upon a review of other property transactions that
have occurred in the same geographic area as that of the property under review.Administrative costs are expensed as incurred.Title to AssetsAlthough the Company has taken steps to insure the title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures may
not guarantee the Companys title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.Foreign Currency TranslationThe Company translates its foreign operations on the following basis: monetary assets and liabilities are translated at the rate of exchange in effect as at the balance sheet date and non-monetary assets and liabilities are
translated at their applicable historical rates. Revenues and expenses are translated at the average rates prevailing for the year, except for amortization which is translated at the historical rates associated with the assets being
amortized.Foreign exchange gains and losses from the translation of foreign operations are recognized in the current period.EquipmentEquipment is recorded at cost and amortized over its estimated useful economic life on a declining balance basis at annual rates of 30% and 20%, respectively, for computer and office equipment, and on a straight-line basis
over three years for exploration equipment and the assets of Minera Atna Chile Limitada.2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Cash EquivalentsCash equivalents consist of temporary investments in commercial paper and money market deposits that are highly liquid and readily convertible to known amounts of cash, although in some cases their maturity dates extend
beyond one year from the date of the financial statements. All cash equivalents are carried at their current market values, with any adjustments from cost recorded with interest income. Cash equivalents are inclusive of accrued interest amounts on
securities that bear coupon interest, as receipt of these amounts is also considered to be certain and measurable.Fair Value of Financial InstrumentsThe carrying amounts of cash and temporary investments, amounts receivable, marketable securities, and accounts payable and accrued liabilities approximate their aggregate fair values due to the short term nature of
virtually all of their component balances.Joint VenturesThe Company conducts some of its mineral property exploration activities in conjunction with other companies in unincorporated joint ventures. Under Canadian GAAP, the Company accounts for its interests in joint ventures
using the proportionate consolidation method; under U.S. GAAP, joint ventures are accounted for by the equity method. There is currently no material impact upon the Companys financial statement presentation resulting from the difference in
Canadian and U.S. accounting standards for joint ventures as the Companys share of all expenditures incurred by joint ventures has to date been deferred within mineral property costs. Refer to note 13 for a description of differences in
financial statements line items that would result from an application of U.S. GAAP.Share CapitalCommon shares issued for non-monetary consideration are recorded at their fair market value, based either upon the trading price of the Companys shares on the Toronto Stock Exchange (TSX) on the date of
the agreement to issue the shares or the average closing price of the last ten trading days of the Companys shares on the TSX prior to the date of issue. Costs incurred to issue common shares are deducted from share capital.Income TaxesThe Company accounts for potential future tax assets and liabilities by recognizing the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Future tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be settled. The effect on future tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of the change. When the future realization of income tax assets does not meet the test of being more likely than not to occur, a valuation
allowance in the amount of the potential future benefit is taken and no net future tax asset is recognized. Such an allowance currently applies fully to all of the Companys potential income tax assets.Stock-Based CompensationThe Company records compensation associated with stock options granted to consultants, directors and employees using a fair value measured basis and records the expense as the options vest with the recipients.The adoption of this accounting policy for stock-based compensation has been applied prospectively to all stock options granted subsequent to January 1, 2003. During 2002 the Company followed the policy of disclosing on a
pro-forma basis only the effect of accounting for stock options granted to employees and directors on a fair value basis. On the exercise of options, the proceeds received by the Company and the expense recognized at the time of the initial grant
are credited to share capital.2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)Asset Retirement ObligationsThe fair value of a liability for an asset retirement obligation is recognized on an undiscounted cash flow basis when a reasonable estimate of the fair value of the obligations can be made. The asset retirement obligation
is recorded as a liability with a corresponding increase to the carrying amount of the related long-lived asset. Subsequently, the asset retirement cost is allocated to expense using a systematic and rational method is adjusted to reflect
period-to-period changes in the liability resulting from the passage of time and from revisions to either expected payment dates or the amounts comprising the original estimate of the obligation. The Company does not currently have any asset
retirement obligations reflected in its financial statements.Impairment of Long-Lived AssetsLong-lived assets are assessed for impairment when events and circumstances warrant. The carrying value of a long-lived asset is impaired when the carrying amount exceeds the estimated undiscounted net cash flow from use
and fair value. In that event, the amount by which the carrying value of an impaired long-lived asset exceeds its fair value is charged to earnings.Marketable SecuritiesMarketable securities are recorded at cost and are subject to adjustment, on an aggregate basis, to the lower of cost and market value at the end of each reporting period.3.
MARKETABLE SECURITIESAt December 31, 2004, the Company held marketable securities as follows:December 31, 2004

December 31, 2003Number of

Carrying

Market

Carrying

MarketCompany

Shares

Amount

Value

Amount

Value$

$

$

$Novicourt Inc.

20,000

26,200

37,800

26,200

32,600Doublestar Resources Ltd.

100,000

22,000

25,500

22,000

23,000Southern Rio Resources

62,500

9,375

6,875

9,375

20,625Granderu Resources Corp.

300,000

75,000

69,000

-

-Pacific Ridge Exploration Ltd.

100,000

10,000

10,500

-

-Prospector Consolidated Resources Ltd.

300,000

36,000

52,500

-

-Pacifica Resources Ltd.

872,393

193,221

222,460

-

-Yukon Zinc Corp.

9,480,000

1,959,687

2,844,000

-

-Yukon Gold Corporation Inc.

133,333

80,000

80,000

-

-2,411,483

3,348,635

57,575

76,225
4.
WRITE-OFF OF VALUE-ADDED TAX (VAT) RECEIVABLEValue-added tax (VAT) is levied by the Internal Revenue Service of Chile on imports and local sales and services at the rate of 18 percent. VAT paid on imports and on acquisitions and services incurred in order
to export may be recovered either as a credit against tax due or by requesting reimbursement. The Company anticipates that all or a portion of VAT incurred will be refunded to it, however, since it is not possible to estimate the date of receipt or
the amount that will be refunded the Company has written-off any VAT receivable. Any amounts received in the future will be recorded as a recovery at that time.5.
RESOURCE PROPERTIESThe Company incurred acquisition and exploration expenditures on its mineral properties as follows:Balance




Balance





Writeoffs/


BalanceDecember 31,




December 31,





Sale of


December 31,2002

Expenditures


2003


Expenditures


Property


2004CANADAYUKONWolverine PropertyExploration costs

5,564,069

923


5,564,992


65,569


(5,630,561
)

-Wolf PropertyAcquisition costs

210,000

-


210,000


-


(210,000
)

-Exploration costs

1,476,001

2,480


1,478,481


-


(1,478,480
)

11,686,001

2,480


1,688,481


-


(1,688,480
)

1Marg PropertyAcquisition costs

250,000

-


250,000


80,000


-


330,000Exploration costs

131,453

-


131,453


11,051


-


142,504Option payments received

-

-


-


(210,000
)

-


(210,000
)381,453

-


381,453


(118,949
)

-


262,504BRITISH COLUMBIAEcstall Property

292,428

657


293,085


3,498


-


296,583White Bull Property

153,089

277


153,366


7,033


-


160,399Uduk Property

10,689

(10,689
)

-


-


-


-456,206

(9,755
)

446,451


10,531


-


456,982CANADA TOTAL

8,087,729

(6,352
)

8,081,377


(42,849
)

(7,319,041
)

719,487UNITED STATESARIZONALone Pine PropertyAcquisition costs

100,000

756


100,756


739


-


101,495Exploration costs

253,743

-


253,743


-


-


253,743353,743

756


354,499


739


-


355,238NEVADATriple Junction/Dixie Fork PropertiesAcquisition costs

57,672

76,440


134,112


-


-


134,112Exploration costsProfessional Fees and wages

13,564

41,237


54,801


3,691


-


58,492Geology

-

13,450


13,450


-


-


13,450Geochemistry

760

2,449


3,209


-


-


3,209Travel and transportation

314

-


314


-


-


314Camp, equipment and supplies

-

99


99


-


-


99Field office

-

5,699


5,699


116


-


5,81572,310

139,374


211,684


3,807


-


215,491Golden Cloud PropertyAcquisition costs

63,239

66,752


129,991


29,937


(159,928
)

-Exploration costsProfessional fees and wages

4,358

52,318


56,676


-


(56,676
)

-Geology

-

7,406


7,406


-


(7,406
)

-Geochemistry

660

1,718


2,378


-


(2,378
)

-Travel and transportation

-

87


87


-


(87
)

-Camp, equipment and supplies

-

1,050


1,050


-


(1,050
)

-Field office

45

1,752


1,797


80


(1,877
)

-RecoveriesOption payments

-

(35,025
)

(35,025
)

(31,096
)

66,121


-68,302

96,058


164,360


(1,079
)

(163,281
)

-
5
.

RESOURCE PROPERTIES(continued)Balance




Balance





Writeoffs/

BalanceDecember 31,




December 31,





Sale of

December 31,2002

Expenditures


2003


Expenditures


Property

2004Beowawe PropertyAcquisition costs

41,151

139,790


180,941


92,554


-

273,495Exploration costsProfessional Fees and wages

4,196

78,125


82,321


28,432


-

110,753Geology

-

13,804


13,804


8


-

13,812Geochemistry

299

2,655


2,954


2,050


-

5,004Physical work

-

-


-


5,518


-

5,518Drilling

-

-


-


49,254


-

49,254Travel and transportation

-

891


891


1,680


-

2,571Camp, equipment and supplies

-

375


375


6,382


-

6,757Field office

-

5,031


5,031


4,938


-

9,969RecoveriesOption payments

-

-


-


(38,427
)

-

(38,427
)Cost billed to 3rdparties

-

-


-


(170,523
)

-

(170,523
)Management fees

-

-


-


(25,578
)

-

(25,578
)45,646

240,671


286,317


(43,712
)

-

242,605Clover PropertyAcquisition costs

-

81,862


81,862


52,052


-

133,914Exploration costsProfessional Fees and wages

-

16,483


16,483


7,473


-

23,956Geochemistry

-

146


146


-


-

146Travel and transportation

-

87


87


1,088


-

1,175Camp, equipment and supplies

-

1,262


1,262


-


-

1,262Field office

-

2,518


2,518


261


-

2,779Recoveries












-Option payments

-

(35,025
)

(35,025
)

(75,000
)

-

(110,025
)-

67,333


67,333


(14,126
)

-

53,207Sno PropertyAcquisition costs

-

60,521


60,521


14,547


-

75,068Exploration costsProfessional Fees and wages

-

20,021


20,021


3,241


-

23,262Geology

-

1,751


1,751


-


-

1,751Geochemistry

-

1,597


1,597


1,526


-

3,123Travel and transportation

-

87


87


533


-

620Camp, equipment and supplies

-

2,145


2,145


-


-

2,145Field office

-

3,770


3,770


21


-

3,791RecoveriesOption payments

-

-


-


(10,000
)

-

(10,000
)-

89,892


89,892


9,868


-

99,760Jarbidge PropertyAcquisition costs

-

28,084


28,084


144,180


-

172,264Exploration costsProfessional Fees and wages

-

11,204


11,204


257,872


-

269,076Geology

-

-


-


4,215


-

4,215Geochemistry

-

1,196


1,196


88,726


-

89,922Travel and transportation

-

2,768


2,768


19,345


-

22,113Camp, equipment and supplies

-

1,362


1,362


30,376


-

31,738Field office

-

32


32


6,823


-

6,855-

44,646


44,646


551,537


-

596,1835
.

RESOURCE PROPERTIES(continued)Balance




Balance





Writeoffs/


BalanceDecember 31,




December 31,





Sale of


December
31,2002

Expenditures


2003


Expenditures


Property


2004Coal Canyon PropertyAcquisition costs

-

18,709


18,709


-


(18,709
)

-Exploration costsProfessional Fees and wages

-

4,608


4,608


-


(4,608
)

-Geology

-

3,644


3,644


-


(3,644
)

-Travel and transportation

-

1,403


1,403


-


(1,403
)

-Camp, equipment and supplies

-

968


968


-


(968
)

-Field office

-

62


62


-


(62
)

--

29,394


29,394


-


(29,394
)

-Searchlight PropertyAcquisition costs

-

-


-


20,248


-


20,248Exploration costsProfessional Fees and wages

-

-


-


18,262


-


18,262Geology

-

-


-


110


-


110Geochemistry

-

-


-


4,143


-


4,143Travel and transportation

-

-


-


910


-


910Camp, equipment and supplies

-

-


-


2,449


-


2,449Field office

-

-


-


1,913


-


1,913-

-


-


48,035


-


48,035Pinson Mine PropertyAcquisition costs

-

-


-


224,286


-


224,286Exploration costsProfessional Fees and wages

-

-


-


480,523


-


480,523Geochemistry

-

-


-


88,240


-


88,240Physical work

-

-


-


9,948


-


9,948Drilling

-

-


-


1,389,887


-


1,389,887Travel and transportation

-

-


-


14,149


-


14,149Camp, equipment and supplies

-

-


-


116,176


-


116,176Field office

-

-


-


42,837


-


42,837-

-


-


2,366,046


-


2,366,046UNITED STATES TOTAL

540,001

708,124


1,248,125


2,921,115


(192,675
)

3,976,565CHILECeleste PropertyAcquisition costs

9,753

20,114


29,867


17,608


-


47,475Exploration costs

-

-


-


-


-


-9,753

20,114


29,867


17,608


-


47,475Cachinal PropertyAcquisition costs

-

2,200


2,200


1,874


-


4,074Exploration costsProfessional fees and wages

-

4,755


4,755


4,827


-


9,582Geology

-

195


195


-


-


195Travel and transportation

-

703


703


-


-


703Field office

-

95


95


-


-


95RecoveriesOption payments received

-

-


-


(20,000
)

-


(20,000
)-

7,948


7,948


(13,299
)

-


(5,351
)CHILE TOTAL

9,753

28,062


37,815


4,309


-


42,124OTHER PROPERTIES

315,123

54,121


369,244


27,474


-


396,718TOTAL RESOURCE

8,952,606

783,955


9,736,561


2,910,049


(7,511,716
)

5,134,894PROPERTIES5.
RESOURCE PROPERTIES(continued)CANADAYUKONWolverine PropertyThe Company had a 40% joint venture interest in the Wolverine property with Yukon Zinc Corporation (YZC) (formerly Expatriate Resources Ltd.) as the property operator and owner of the remaining 60%
interest.During the year, the Company sold its interest to YZC for $2,000,000 cash and 10,000,000 units of YZC valued at $2,271,000. Each unit consisted of one common share and one half warrant, each whole warrant is
exercisable to purchase one common share of YZC for $0.32 for two years. The disposition resulted in a loss of $1,359,561; however, the Company maintains a net proceeds royalty of 4-10% indexed to the price of silver.Wolf PropertyThe Company acquired an initial 65% interest in the Wolf property from YGC Resources Ltd. (YGC), the owner of the remaining 35% interest, by incurring $1,500,000 in exploration expenditures and
by paying $210,000 in cash to YGC.YGC has not participated in work programs undertaken by the Company since 2000 and therefore its interest has been diluted to 34.4%, with the Companys interest being increased to 65.6%.Due to a lack of recent exploration work conducted on the claims, at December 31, 2004 the Company wrote its interest in the Wolf property down to a nominal amount.Marg PropertyThe Company purchased a 2/3 joint venture interest in the Marg property by making a cash payment of $250,000. Cameco Corporation is the owner of the remaining 1/3 interest.During 2004, the Company purchased Camecos stake in the Marg joint venture by making cash payment of $80,000. On November 25, 2004, the Company entered into an option agreement with another party whereby that
party can earn a 100% interest in the Marg Property by making total cash payments of $600,000 ($130,000 received) and issuing 400,000 common shares (133,333 shares received) to the Company on or before December 8, 2007.BRITISH COLUMBIAEcstall PropertyThe Company has a 100% interest in 23 Crown Granted Mineral claims (21 claims with mining rights and two claims with surface rights), subject to a 3% (reducible to 2.5%) NSR royalty.White Bull PropertyThe Company has a 100% interest in 24 mineral claim units acquired by the issuance of 25,000 common shares.UNITED STATESARIZONALone Pine PropertyThe Company purchased a 100% interest, subject to a 2% NSR granted as a finders fee (capped at U.S.$2,000,000), in the Lone Pine property by making a cash payment of U.S.$100,000.5.
RESOURCE PROPERTIES(continued)UNITED STATES(continued)NEVADATriple Junction and Dixie Fork PropertiesThe Company acquired a 100% interest, subject to a 3% NSR (uncapped), in the 36 Triple Junction lode claims and 31 Dixie Fork lode claims located at the south end of the Carlin Gold Trend in Elko
county, Nevada, by paying U.S.$35,000 in cash and issuing 100,000 common shares.In an agreement dated September 7, 2004, the Company granted an option to Sahelian Goldfields Ltd. (Sahelian) to earn up to a 70% interest in the Companys Triple Junction/Dixie Fork gold project. Sahelian
may earn a 55% interest in the properties by drilling 15,000 feet before November 2006, and may then elect to form a joint venture with the Company, or to increase its interest to 70%, before forming a joint venture, by funding and completing a
bankable feasibility study.Beowawe PropertiesDuring 2002, the Company obtained an option to acquire a 100% interest, subject to a 3% royalty on gold revenue less U.S.$15 per realized ounce, in the 95 Beowawe lode claims located at the north end of the
Carlin Gold District in Nevada. To exercise the option, the Company has to pay to the optionor an aggregate of U.S.$80,000 (paid) in cash, allot and issue to the optionor up to 150,000 common shares in three separate tranches of 50,000 shares
each (100,000 shares issued), and carry out a combined minimum 20,000 feet of exploratory drilling on the Golden Cloud and/or Beowawe properties prior to November 6, 2005. Following exercise of the option, the Company will have to make annual
advance royalty payments of U.S. $50,000 and U.S. $75,000, respectively, for the first two years and U.S.$100,000 each subsequent year until the commencement of commercial production. A finders fee is payable to a third party,
equal to 5% of the first U.S.$500,000 expenditures and payments made by the Company during the first two years of the agreement, and 3% of all expenditures and payments that are in excess of U.S.$500,000 during the first two years of the
agreement. The finders fee is capped at U.S.$500,000.In an agreement dated March 26, 2003, the Company obtained an option to acquire a 100% interest in 40 acres of fee land adjacent to the main Beowawe claim group, subject to a 3% royalty on gold revenue which can be
purchased for U.S.$250,000 or 700 ounces of gold, whichever is greater, per percentage point. To exercise the option, the Company has to pay to the Optionor an aggregate of U.S.$42,500 (U.S.$22,500 paid) in cash prior to December 1, 2006
and an annual minimum royalty of U.S.$5,000 thereafter.In a separate agreement dated June 5, 2003, the Company obtained an exclusive lease and option to acquire a 100% interest in an additional 40 acres of fee land adjacent to the main Beowawe claim group, subject to a 1% NSR
royalty. The lease agreement requires the Company to pay advance royalties of U.S.$500 (paid) on signing the agreement, U.S.$1,000 (paid) prior to June 2004 and U.S.$2,000 each subsequent year until the commencement of commercial
production. The Company has the right to buy a 100% interest in the property, including surface and mineral rights, at any time for U.S.$250,000.The Company entered into an agreement with Prospector Consolidated Resources Inc. (PRR), dated July 15, 2004, to combine their respective Beowawe gold property interests. PRR obtained the option to acquire a 60%
interest in the Companys Beowawe property by issuing to the Company a total of 1,800,000 common shares (300,000 shares received), and spending US$750,000 on exploration over a three-year period. Upon completion of the work commitment, PRR
may increase its interest to 70% by completing a bankable feasibility study. The Company will be granted a 40% interest in PRRs property when PPR earns its interest in the Companys claims.5.
RESOURCE PROPERTIES(continued)UNITED STATES(continued)NEVADA(continued)Clover PropertyIn an agreement dated March 11, 2003, the Company obtained an option to acquire a 100% interest in 22 claims on the Clover property,
subject to a 3% NSR royalty, which can be purchased for U.S.$1,000,000 per percentage point.  Terms of the agreement include cumulative total payments to the vendor of U.S.$305,000 (U.S.$50,000 paid) prior to
March 11, 2010. The Clover property is subject to a Finders Agreement dated February 10, 2003, amended April 22, 2003, whereby the Company agreed to pay a finders fee of U.S.$5,000 (paid) upon execution of the acquisition agreement,
and U.S.$10,000 (paid) and U.S.$20,000, respectively, for the first two years after the agreement and U.S.$30,000 on each subsequent anniversary until the commencement of commercial production.  The Finders fee is capped at a
maximum of U.S.$500,000.The Company entered into a letter agreement dated March 16, 2004 with Grandcru Resources Corp. (Grandcru) whereby Grandcru can earn up to a 55% interest in the Clover project by issuing an aggregate of 1,000,000
common shares (300,000 shares received) to the Company by June 1, 2007 and incurring aggregate exploration expenditures of Cdn$2,500,000 by June 1, 2008. Grandcru may then earn an additional 15% interest by completing a bankable feasibility
study on the property.Sno PropertyBy an agreement dated April 29, 2003, the Company obtained an option to acquire a 100% interest on the Sno property located in Elko County, Nevada, by making a cash payment of U.S.$15,000 (paid). The
property is subject to a 3% NSR royalty on gold revenue, less U.S.$15 per realized ounce.  To exercise the option, the Company must make additional payments totalling U.S.$280,000 (US$20,000 paid) prior to April 10, 2008, issue 50,000
common shares (issued) to the optionor, and carry out a minimum 2,000 meters (completed) of exploratory drilling prior to April 10, 2006.  Following the exercise of the option, the Company shall make annual advance royalty payments of
U.S.$100,000 until the commencement of commercial production.Jarbidge PropertiesBy an agreement dated December 5, 2003 the Company obtained an option to acquire a 100% interest in the 127 Jarbidge claims located in Elko County, Nevada by paying a total of U.S.$600,000 (U.S.$25,000
paid) to the optioner by December 5, 2009 and incurring aggregate exploration expenditures of U.S.$300,000 in stages by December 5, 2006. The property is subject to NSRs ranging from 1.5 -2.5% .On December 15, 2004, the Company signed a separate lease agreement and option to acquire 10 unpatented mining claims, subject to a 2.5% production royalty, adjacent to the Jarbidge claims.  The Company must make lease
payments totalling US$19,800 in stages to December 14, 2007 and annual payments of US$9,000 each year thereafter. The Company may purchase the property and the production royalty at any time for US$375,000.Refer also to note 14.Searchlight PropertyIn an agreement dated January 17, 2004, the Company purchased a 100% interest on the Searchlight property by the issuance of 30,000 common shares.Pinson PropertyThe Company entered an Exploration Agreement (the agreement), effective August 12, 2004, with Pinson Mining Company (Pinson) wherein the Company may acquire up to 100% interest in the Pinson Mine
Property, Humboldt County, Nevada. Pursuant to the terms of the agreement, the Company may acquire a 70% interest in the Pinson Property by spending US$12 million over four years with a commitment to spend US$1.5 million (incurred) in the
first year. Upon the Company acquiring a 70% interest and delivering a preliminary feasibility study, Pinson may elect to back-in to reacquire a 70% interest by spending an additional US$30 million on the project over a 3-year period, form a
70:30 joint venture with the Company; or sell its remaining 30% interest to the Company for US$15 million.5.
RESOURCE PROPERTIES(continued)CHILECeleste PropertyDuring 2002, the Company entered into an agreement with Minera Teck Cominco Chile Limitada whereby the Company acquired a 100% interest in the Celeste property, subject to a 2% NSR, for consideration of
CH$3,700,000 (equivalent to U.S.$9,753). A land-use fee of U.S.$50 per hectare of surface, payable if the land is used for waste dump, fill leaching or ancillary mining facilities, also applies.Cachinal PropertyThe Company entered into an option agreement with Valencia Ventures (Valencia) wherein Valencia may earn up to 70% interest in the Companys Cachinal de la Sierra property in Chile by making cash payments
totaling Cdn$95,000 (Cdn$20,000 received) and spending Cdn$1,500,000 within three years.OTHER PROPERTIESThe Company has interests in other properties in the Yukon Territory and Chile.6.
SUPPLEMENTARY CASH FLOW DISCLOSURESSupplementary disclosure of non-cash investing and financing activities:2004

2003

2002$

$

$Equipment amortization recorded as deferred property
costs

21,193

7,747

4,203Common shares issued for property

15,900

99,950

-Marketable securities received for option payments- Pacific Ridge Exploration Ltd. (Sno property)

10,000

-

-- Grandcru Resources Corp. (Clover property)

75,000

-

-- Yukon Gold Corporation Inc. (Marg property)

80,000

-

-- Prospector Consolidated Resources Ltd. (Beowawe property)

36,000

-

-Marketable securities received for sale of property- Southern Rio Resources Ltd. (Uduk property)

-

22,500

-- Yukon Zinc Corporation (Wolverine Property)

2,271,000

-

-Common shares issued in settlement of severance obligations

-

175,175

-7.
RELATED PARTY TRANSACTIONSThere were no related party transactions in 2004, 2003 or 20028.
SHARE CAPITALa) Authorized share capital of the Company consists of 100,000,000 common shares and 50,000,000 preferred shares without par value.Issued

2004

2003

2002Number of




Number of





Number ofShares

Amount


Shares


Amount


Shares


AmountOpening balance

30,194,667

36,524,790


21,757,037


$34,051,138


21,757,037


34,051,138Issued for:Private placement

7,280,000

3,648,758
(2)).

6,976,000


2,099,277
(1)

-


-Exercise of warrants

1,036,205

458,460Exercise of stock options

410,000

109,500


400,000


99,250


-


-Exercise of stock options- Stock-based Compensation

-

38,153
(3)

-


-


-


-Property

30,000

15,900


300,000


99,950


-


-Severance settlement

-

-


761,630


175,175


-


-Closing balance

38,950,872

40,795,561


30,194,667


$36,524,790


21,757,037


34,051,138
(1)
net of share issue costsof $342,322.(2)
net of share issue costs of $355,243.(3)
represents the amounts initially expensed on grant of the options.b)Stock OptionsStocks options to purchase common shares have been granted to directors, employees and consultants of the Company at exercise prices determined with reference to the market value on the date of the grant. At December 31,
2004, the Company had stock options outstanding for 2,085,000 common shares.
 Weighted-AverageExercise PriceOptions


$

Expiry Date RangeOptions outstanding at December 31, 2003

1,680,000


0.25

06/14/04 to 06/16/06Exercised

(410,000
)

0.27

09/20/04 to 06/16/06Cancelled/Expired

(50,000
)

0.45

06/14/04Granted

865,000


0.41

01/09/07 to 07/05/07Options outstanding at December 31, 2004

2,085,000


0.31

12/05/05 to 07/05/07
 During the current year, the Company recorded stock-based compensation expense of $94,770.If the Company had accounted for the stock options granted to directors and employees using the fair value method during 2002, the pro-forma effect would have increased the net loss by $24,023 to $5,297,792 with no
material change to loss per share for the year ended December 31, 2002.The fair value of options included in the pro-forma information above and in the expense recorded in 2003 and the current year has been estimated using the Black-Scholes Option Pricing Model based on the following
assumptions: a risk free interest of 2.25 to 2.50% (2003 3.0 to 3.8%;2002 - 6.0%); an expected life of 3 years; an expected volatility of 35% (2003 - 10 to 35%;2002 - 30 to 32%); and no expectation for the payment of dividends.Option pricing models require the input of highly subjective assumptions, particularly as to the expected price volatility of the stock. Changes in these assumptions can materially affect the fair value estimate and
therefore it is managements view that the existing models do not necessarily provide a single reliable measure of the fair value of the Companys stock option grants.8.
SHARE CAPITAL(continued)c)Stock Options and Warrants Outstanding at
December 31, 2004:Type

Number Outstanding

Exercise Price $

Expiry Date(1)Options

275,000

0.22

December 5, 200575,000

0.23

June 2, 200610,000

0.23

June 16, 200610,000

0.255

June 16, 2006850,000

0.25

June 16,2006400,000

0.50

January 9, 2007425,000

0.325

April 20, 200740,000

0.45

July 5, 20072,085,000Warrants

710,000

0.74

April 19, 20052,783,715

0.45

September 30, 2005343,820

0.425

September 30, 2005309,910

0.45

September 30, 20053,640,000

0.70

December 6, 2005728,000

0.60

December 6, 20058,515,445
(1)At December 31, 2004 the weighted-average remaining contractual life of outstanding stock options is 1.62 years.9.
SEGMENTED INFORMATIONAssets by geographical segment:2004

2003$

$Canada

9,426,839

12,191,930Cayman Islands

-

2,238Chile

128,074

70,967United States

4,703,251

1,282,28114,258,164

13,547,41610.
COMMITMENTThe Company has a lease commitment for its office premises which expires June 30, 2010. The cost of the entire premises is shared amongst several companies in proportion to the area occupied. The Companys
proportionate share of annual rental payments under this arrangement is approximately $64,000.11.
LOSS PER SHARELoss per share has been calculated using the weighted-average number of common shares outstanding during the year. Diluted loss per share is not presented as it is anti-dilutive.12.
INCOME TAXESThe Company has non capital losses of approximately $4.7 million expiring in stages to 2012 as follows:AmountExpiry Date

$December 31, 2005

256,000December 31, 2006

85,000December 31, 2007

405,000December 31, 2008

259,000December 31, 2009

1,016,000December 31, 2010

1,273,000December 31, 2011

738,000December 31, 2012

681,0004,713,000In addition, the Company has resource and other tax pools available to reduce taxable income that aggregate approximately $13.6 million at December 31, 2004 (2003 - $17.7 million). The potential benefit from the
application of these amounts has not been reflected in the financial statements as it cannot be considered likely that they will be utilized.13.
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)Resource Property CostsUnder Canadian GAAP, mineral exploration expenditures may be deferred on prospective properties until such time as it is determined that further exploration is not warranted, at which time the property costs are
written-off. Under U.S. GAAP, all exploration expenditures must be expensed until an independent feasibility study has determined that the property is capable of economic commercial production. The following items (a) to (d) provide a summary of the
impact on the Companys balance sheets and statements of operations and deficit that would result from the application of US accounting principles to resource property costs2004


2003


2002a)
AssetsResource PropertiesResource properties following Canadian GAAP

$
5,134,894

$
9,736,561

$
8,952,606Less deferred exploration costs


(5,134,894)


(9,736,561)


(8,952,606)$
-

$
-

$
-Resource properties following U.S. GAAPb)OperationsNet loss following Canadian GAAP

$
(4,222,611)

$
(1,764,935)

$
(5,273,769)Property costs expensed under U.S. GAAP  net


(2,910,049)


(784,698)


(1,049,855)Deferred property costs written-off under Canadian GAAP


1,881,155


743


1,824,956Proceeds received on sale of property


4,271,000


-


-Loss on property sold under Canadian GAAP


1,359,561


-


-Net income (loss) under U.S. GAAP


379,056


(2,548,890)


(4,498,668)c)DeficitClosing deficit under Canadian GAAP


(27,359,778)


(23,137,167)


(21,372,232)Adjustment to deficit for exploration expenditures of prior years written-off under U.S. GAAP


(5,134,894)


(9,736,561)


(8,952,606)Closing deficit under U.S. GAAP

$
(32,494,672)

$
(32,873,728)

$
(30,324,838)d)Earnings (loss) per share under U.S. GAAPEarnings (loss) per share

$
0.01

$
(0.11)

$
(0.21)13.
DIFFERENCE BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)(continued)e)
Stockholders Equityi)
Accumulated Other Comprehensive IncomeUnder SFAS 130, the Company is now required to record certain gains and losses as a component of Stockholders Equity, with the current changes in the component balances comprising the balance sheet figure disclosed in
a separate statement or in a financial statement note. The only item in the Companys financial statements impacting Comprehensive Income is the unrealized gains and losses on the Companys marketable securities.The following provides the continuity of Accumulated Other Comprehensive Income or Loss under US GAAP:$Other Comprehensive Income  2003

18,650Accumulated Other Comprehensive Income  December 31, 2003

18,650Other Comprehensive Income  2004

918,502Accumulated Other Comprehensive Income  December 31, 2004

937,152ii)
Marketable SecuritiesUnder Canadian GAAP, no write-down to market value is required if an investment is considered by management to be held for the long-term, unless there has been an other-than-temporary decline in the value of that
investment. Under US SFAS 115, the investments held by the Company are considered to be available for sale securities and are required to be reported at fair value, with any unrealized holding gains and losses included in current Other
Comprehensive Income, a component of Stockholders Equity.The following provides a reconciliation to US GAAP of a pro-forma application of SFAS 115 to these financial statements:2004

2003$

$Investments under Canadian GAAP

2,411,483

57,575Other Comprehensive Income under U.S. GAAP  2003

18,650

18,650Other Comprehensive Income under U.S. GAAP  2004

918,502

-Investments under US GAAP

3,348,635

76,225
14.
SUBSEQUENT EVENTSIn addition to items disclosed elsewhere in these notes, the following occurred during the period subsequent to December 31, 2004:a.
35,000 stock options and 46,250 warrants were exercised for total proceeds of $28,487.b.
250,000 stock options were granted at an exercise price of $0.59 expiring February 8, 2008.c.
In an agreement dated February 4, 2005, the Company obtained a mining lease with an option for the partial purchase of a royalty on eight (8) patented mining claims adjacent to the main Jarbidge claim group, subject to a 5%
production royalty. Fifty percent (50%) of the production royalty may be purchased for U.S. $2 million. The lease requires annual payments to the Lessor by the Company totalling U.S. $117,500 over the first eight (8) years of the agreement
(an initial payment of U.S. $5,000 was paid upon signing on February 4, 2005). Thereafter, an annual minimum royalty of U.S. $25,000 is payable on or before the anniversary date of the agreement.d.
In an agreement dated February 4, 2005, the Company obtained an option to acquire a 100% interest in six unpatented federal lode claims adjacent to the main Jarbidge claim group, subject to a 1.5% to 3.0% production royalty
which varies with the price of gold sold. To exercise the option, the Company will pay to the Optionor an aggregate of U.S. $19,500 during the first four years of the agreement (U.S. $1,500 was paid upon signing on February 4, 2005).
Thereafter, an annual advance royalty payment of U.S. $6,000 is due on or before the anniversary date of the agreement until a total of U.S. $500,000 is received by the owner.