U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



_________________________



FORM 20-F

_________________________



[   ]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934.



[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.



[   ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSACTION PERIOD FROM ______________ TO ___________________.



Commission File Number 000-50634



TAN RANGE EXPLORATION CORPORATION

(Exact name of Company as specified in its charter)



ALBERTA, CANADA

(Jurisdiction of Incorporation or Organization)



93 Benton Hill Road

Sharon, Connecticut

06069  U.S.A.

(Address of principal executive offices)



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



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



Common Shares, without Par Value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  NONE



The number of outstanding Common Shares as of August 31, 2004 was 82,464,037.



Indicate by check mark whether the Company (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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [   ]Yes  [   ]No

Not applicable

Indicate by check mark which financial statement item the Company 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 Company 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 CONTENTSCautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Mineral Resources
   1Currency
   
   
   1Foreign Private Issuer Filings
   1Glossary of Technical Terms
   2Part I
   
   
   6Item 1.
   Identity of Directors, Senior Management and Advisors
   6Item 2.
   Offer Statistics and Expected Timetable
   6Item 3.
   Key Information
   6A.
   Selected Financial Data
   6B.
   Capitalization and Indebtedness
   8C.
   Reasons for the Offer and Use of Proceeds
   8D.
   Risk Factors
   8Item 4.
   Information on the Company
   11A.
   History and Development of the Company
   11B.
   Business Overview
   15Plan of Operations
   16Governmental Regulations
   17C.
   Organization Structure
   18D.
   Property, Plant and Equipment
   18Itetemia Property
   18Luhala Property
   27Lunguya Project Area
   32Tulawaka Project Area
   35Lake Victoria Goldfield Properties
   35Item 5.
   Operating and Financial Review and Prospects
   43A.
   Operating Results
   44B.
   Liquidity and Capital Resources
   45C.
   Research and Development, Patents and License, etc.
   47D.
   Trend Information
   47E.
   Off Balance Sheet Arrangements
   47F.
   Tabular Disclosure of Contractual Obligations
   47Item 6.
   Directors, Senior Management and Employees
   47A.
   Directors and Senior Management
   47B.
   Compensation
   52C.
   Board Practices
   53D.
   Employees
   54E.
   Share Ownership
   55Item 7.
   Major Shareholders and Related Party Transactions
   55A.
   Major Shareholders
   55B.
   Related Party Transactions
   56C.
   Interest of Experts and Counsel
   57




---

- ii -





Item 8.
   Financial Statements
   58A.
   Consolidated Statements and Other Financial Information
   58B.
   Significant Changes
   58Item 9.
   The Offering and Listing
   58A.
   Offering and Listing Details
   58B.
   Plan of Distribution
   59C.
   Markets
   60D.
   Selling Shareholders
   60E.
   Dilution
   60F.
   Expenses of the Issue
   60Item 10.
   Additional Information
   60A.
   Share Capital
   60B.
   Articles of Association and Bylaws
   61C.
   Material Contracts
   63D.
   Exchange Controls
   64E.
   Taxation
   65F.
   Dividends and Paying Agents
   73G.
   Statement by Experts
   73H.
   Documents on Display
   73I.
   Subsidiary Information
   73Item 11.
   Quantitative and Qualitative Disclosures About Market Risk
   73Item 12.
   Description of Securities Other than Equity Securities
   74Part II
   
   74Item 13.
   Defaults, Dividend Arrearages and Delinquencies
   74Item 14.
   Material Modifications to the Rights of Security Holders and Use of Proceeds
   74Item 15.
   Controls and Procedures
   74Item 16.
   [Reserved]
   74Item 16 A.
   
   Audit Committee Financial Expert
   74Item 16 B.
   
   Code of Ethics
   75Item 16 C.
   
   Principal Accountant Fees and Services
   75Item 16 D.
   
   Exemptions from the Listing Standards for Audit Committees
   75Item 16 E.
   
   Purchase of Equity Securities by the Issuer and Affiliated Purchasers
   75Part III
   
   75Item 17.
   Financial Statements
   75Item 18.
   Financial Statements
   75Item 19.
   Exhibits
   75








---





Cautionary Note to U.S. Investors Concerning Estimates of Measured
and Indicated Mineral Resources



The Company advises U.S. Investors that while the terms
"measured mineral resources" and "indicated mineral resources" (see: "Glossary of Technical Terms
- Canadian Terminology" herein) are recognized and required by Canadian securities regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S. investors are cautioned not to assume that any part or all of mineral resources in these categories will ever be converted into mineral reserves.



Currency



All references to dollar amounts are expressed in the lawful currency of Canada, unless otherwise specifically stated.



Foreign Private Issuer Filings



As a foreign private issuer registered under section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Company is subject to section 13 of the Exchange Act, and is required to file Annual Reports on Form 20-F and Report of Foreign Private Issuer on Form 6-K with the Commission.  However, the Company is exempt from the proxy rules under section 14 of the Exchange Act, and the short-swing profit rules under section 16 of the Exchange Act.







1



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Glossary of Technical Terms



|Ag           | The elemental symbol for silver.                                                                                                                                                                                                                                                                                                                                                                                                    
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|alteration   | Usually referring to chemical reactions in a rock mass resulting from the passage of hydrothermal fluids.                                                                                                                                                                                                                                                                                                                           
|andesite     | Volcanic rock, low in quartz content, generally fine grained and moderately dark coloured.                                                                                                                                                                                                                                                                                                                                          
|anomalous    | A value, or values, in which the amplitude is statistically between that of a low contrast anomaly and a high contrast anomaly in a given data set.                                                                                                                                                                                                                                                                                 
|anomaly      | Any concentration of metal noticeably above or below the average background concentration.                                                                                                                                                                                                                                                                                                                                          
|assay        | An analysis to determine the presence, absence or quantity of one or more components.                                                                                                                                                                                                                                                                                                                                               
|Au           | The elemental symbol for gold.                                                                                                                                                                                                                                                                                                                                                                                                      
|background   | Traces of elements found in sediments, soils, and plant material that are unrelated to any mineralization and which come from the weathering of the natural constituents of the rocks.                                                                                                                                                                                                                                              
|BLEG         | Acronym for
    "bulk leach extractable gold" sampling.                                                                                                                                                                                                                                                                                                                                                                             
|chalcedony   | Very fine crystalline quartz which may be massive or banded (agate).                                                                                                                                                                                                                                                                                                                                                                
|chalcopyrite | Copper sulfide mineral.                                                                                                                                                                                                                                                                                                                                                                                                             
|Cretaceous   | The geologic period extending from 135 million to 63 million years ago.                                                                                                                                                                                                                                                                                                                                                             
|Cu           | The elemental symbol for copper.                                                                                                                                                                                                                                                                                                                                                                                                    
|dyke         | A tabular body of igneous rock that has been injected while molten into a fissure.                                                                                                                                                                                                                                                                                                                                                  
|epidote      | Calcium, aluminum, iron silicate mineral commonly occurring in hydrothermally altered carbonate-bearing rocks.                                                                                                                                                                                                                                                                                                                      
|fault        | A fracture in a rock where there has been displacement of the two sides.                                                                                                                                                                                                                                                                                                                                                            
|Fe           | The elemental symbol for iron.                                                                                                                                                                                                                                                                                                                                                                                                      
|fracture     | Breaks in a rock, usually due to intensive folding or faulting.                                                                                                                                                                                                                                                                                                                                                                     
|gossan       | Decomposed rock or vein material of reddish or rusty colour resulting from oxidized pyrites.                                                                                                                                                                                                                                                                                                                                        
|grab sample  | A sample of selected rock chips collected at random from within a restricted area of interest.                                                                                                                                                                                                                                                                                                                                      
|grade        | The concentration of each ore metal in a rock sample, usually given as weight percent.  Where extremely low concentrations are involved, the concentration may be given in grams per tonne (g/t or gpt) or ounces per ton (oz/t).  The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from throughout the deposit.



2



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|HLEM                                                   | Horizontal loop electromagnetic survey, a form of geophysical survey used in the exploration for minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|hectare or ha                                          | An area totalling 10,000 square metres.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|highly anomalous                                       | An anomaly which is 50 to 100 times average background, i.e. it is statistically much greater in amplitude.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|hydrothermal                                           | Hot fluids, usually mainly water, in the earth's crust which may carry metals and other compounds in solution to the site of ore deposition or wall rock alteration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|IP                                                     | Induced polarization survey, a form of geophysical survey used in the exploration for minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|intrusive                                              | A rock mass formed below earth's surface from magma which has intruded into a pre-existing rock mass.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|kilometres or km                                       | Metric measurement of distance equal to 1,000 metres (or 0.6214 miles).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|mill                                                   | A facility for processing ore to concentrate and recover valuable minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|mineral reserve                                        | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|mineralization                                         | Usually implies minerals of value occurring in rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|net smelter or NSR royalty                             | Payment of a percentage of net mining profits after deducting applicable smelter charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|ore                                                    | A natural aggregated of one or more minerals which may be mined and sold at a profit, or from which some part may be profitably separated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|outcrop                                                | An exposure of rock at the earth's surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|overburden                                             | A general term for any material covering or obscuring rocks from view.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Pb                                                     | The elemental symbol for lead.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|porphyry                                               | Rock type with mixed crystal sizes, i.e. containing larger crystals of one or more minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|ppm or parts per million                               | A unit of measurement which is 1000 times larger than parts per billion (i.e. ppb); 1 ppm is equivalent to 1000 ppb, and is also equivalent to 1 gram/tonne.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|prefeasibility study and preliminary feasibility study | Each mean a comprehensive study of the viability of a mineral project that has advanced to a stage where mining method, in the case of underground mining, or the pit configuration, in the case of open pit mining, as been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating, economic factors, and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.
|propylitic                                             | A rock alteration assemblage comprising calcite, epidote, chlorite, pyrite and other minerals, found typically in the periphery of a hydrothermal system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|pyrrhotite                                             | A bronze coloured mineral of metallic lustre that consists of ferrous sulfide and is attracted by a magnet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|pyrite                                                 | Iron sulfide mineral.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|quartz                                                 | Silica or SiO2, a common constituent of veins, especially those containing gold and silver mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



3



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|RAB                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Rotary air blast drilling.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|RC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Reverse circulation diamond drilling.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|reef                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | A geological formation or mineral within defined boundaries separating it from the adjoining rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Sb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The elemental symbol for antimony (stibnite).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|silicification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Replacement of the constituent of a rock by quartz.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|test pits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Shallow holes dug at spots along the strike of any mineralization or, if it is disseminated, anywhere in the area where the shallow holes might reach mineralized bedrock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|ton                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Imperial measurement of weight equivalent to 2,000 pounds (sometimes called a
    "short ton").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|tonne                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Metric measurement of weight equivalent to 1,000 kilograms (or 2,204.6 pounds).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|tuff                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | A rock comprised of fine fragments and ash particles ejected from a volcanic vent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|veins                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | The mineral deposits that are found filling openings in rocks created by faults or replacing rocks on either side of faults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Zn                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | The elemental symbol for zinc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Canadian Terminology
The following terms are used in the Company's technical reports to describe its mineral properties and have been used in this Annual Report (see:
"Cautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Mineral Resources" at page 1 hereof).  These definitions have been published by the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") as the CIM Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by the CIM Counsel on August 20, 2000, and have been approved for use by Canadian reporting issuers by the Canadian Securities Administrators under National Instrument 43-101,
"Standards of Disclosure for Mineral Projects":
|indicated mineral resource                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed planning and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
|inferred mineral resource                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | That part of a mineral resource for which the quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.  The estimate is based upon limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.  Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure.                                



4



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|measured mineral resource | That part of a mineral resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.  The estimates is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological grade and continuity.                                                                                                                                                                                                                                                                                                    
|------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|mineral reserve           | A mineral reserve is the economically mineable part of a Measured or Indicated mineral resource demonstrated by at least a preliminary feasibility study.  This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of the reporting, that economic extraction can be justified.  A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined.  Mineral resources are sub-divided in order of increasing confidence into
    "probable" and "proven" mineral reserves.  A probable mineral reserve has a lower level of confidence than a proven mineral reserve.  The term
    "mineral reserve" does not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received.  It does signify that there are reasonable expectations of such approvals.  
|mineral resource          | The estimated quantity and grade of mineralization that is of potential economic merit.  A resource estimate does not require specific mining, metallurgical, environmental, price and cost data, but the nature and continuity or mineralization must be understood.  Mineral resources are sub-divided in order of increasing geological confidence into
    "inferred", "indicated", and "measured" categories.  An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource.  An indicated mineral resource has a higher level of confidence than an inferred mineral resource, but has a lower level of confidence than a measured mineral resource.  A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth's crust in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction.



5



---



Part I



Item 1.

Identity of Directors, Senior Management and Advisors



A.

Directors and Senior Management:



Not Applicable.



B.

Advisers



Not Applicable.



Item 2.

Offer Statistics and Expected Timetable



Not Applicable.



Item 3.

Key Information



A.

Selected Financial Data



The following tables set forth and summarize selected consolidated financial data for the Company prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). For each of the last five fiscal years, the tables also summarize certain corresponding information prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP").  Canadian GAAP, as applied to the Company, materially differs from U.S. GAAP, as set forth in Note 11 to the consolidated financial statements of the Company.  Unless stated otherwise, reference to dollar amounts shall mean Canadian dollars.



For each of the years in the five year period ended August 31, 2004, the information in the tables was extracted from the more detailed audited financial statements of the Company.



The selected financial data should be read in conjunction with Item 5,
"Operating and Financial Review and Prospects" and in conjunction with the consolidated financial statements of the Company and the notes thereto contained elsewhere in this Annual Report.  The Company's fiscal period ends on August 31 of each year.



The following is a summary of certain selected financial information for the Company's five most recently completed fiscal years (in Canadian dollars, except number of shares):





|Canadian GAAP                     | As
      at Fiscal Year ended August 31,
|--------------------------------- | ----------------------------------------
|                                  | 2004                                    
|Operations:                       |                                         
|                                  |                                         
|Revenues                          | $                  --                   
|                                  |                                         
|Net loss                          | (1,616,364)                             
|                                  |                                         
|Basic and diluted 
loss per share | (0.02)                                  
|                                  |                                         

6



---





|Canadian GAAP    | As at Fiscal Year ended August 31,
|---------------- | ----------------------------------
|                 | 2004                              
|Balance sheet:   |                                   
|                 |                                   
|Working Capital  | 1,918,901                         
|                 |                                   
|Total Assets     | 22,092,373                        
|                 |                                   
|Net Assets       | 21,298,136                        
|                 |                                   
|Share Capital    | 42,145,471                        
|                 |                                   
|Number of Shares | 82,464,037                        
|                 |                                   
|Deficit          | (20,847,335)                      



During the year ended August 31,2004, the Company determined that it had previously incorrectly applied its accounting policy for U.S. GAAP purposes and had included property acquisition costs in the amounts to be expensed as exploration costs under U.S. GAAP.  Such acquisition costs are now capitalized and will be amortized on a unit of production basis once production commences.  The correction of the error in the application of the Company's accounting policy has been applied retroactively and has changed the amounts previously reported for U.S. GAAP purposes in the following table as follows:



(a)

the net loss has reduced by $416,854 and $7,077,133, or nil per share and $0.12 per share for the years ended August 31, 2003 and 2002, respectively;



(b)

total assets have increased by $8,009,146 and $8,150,874 as at August 31, 2003 and 2002, respectively;



(c)

net assets have increased by $7,493,987 and $7,077,133 as at August 31, 2003 and 2002, respectively; and



(b)

the deficit has decreased by $7,493,987 and $7,077,133 as at August 31, 2003 and 2002, respectively.



|U.S. GAAP                        | 2000                  | 2004                | 2003
(restated)     | 2002
(restated)      | 2001
      (unaudited)
|-------------------------------- | --------------------- | ------------------- | ------------------- | -------------------- | ----------------------
|Operations:                      |                       |                     |                     |                      |                       
|                                 |                       |                     |                     |                      |                       
|Revenues                         | $                  -- | $                -- | $                -- | $                 -- | $                --   
|                                 |                       |                     |                     |                      |                       
|Net loss                         | (2,204,505)           | (2,779,514)         | (5,457,815)         | (2,698,204)          | (3,157,571)           
|                                 |                       |                     |                     |                      |                       
|Basic and diluted loss per share | (0.06)                | (0.03)              | (0.07)              | (0.05)               | (0.07)                
|                                 |                       |                     |                     |                      |                       
|Balance sheet:                   |                       |                     |                     |                      |                       
|                                 |                       |                     |                     |                      |                       
|Working Capital                  | 1,028,558             | 1,918,901           | 2,092,912           | 1,921,418            | 2,186,371             
|                                 |                       |                     |                     |                      |                       
|Total Assets                     | 2,181,924             | 10,248,223          | 10,761,265          | 10,510,379           | 3,364,651             
|                                 |                       |                     |                     |                      |                       

7



---





|                 |              |              |              |              |             
|---------------- | ------------ | ------------ | ------------ | ------------ | ------------
|Net Assets       | 9,604,092    | 9,787,106    | 9,217,656    | 2,799,797    | 1,673,185   
|                 |              |              |              |              |             
|Share Capital    | 44,900,399   | 42,178,899   | 36,276,634   | 27,160,566   | 22,876,383  
|                 |              |              |              |              |             
|Number of Shares | 82,464,037   | 80,191,542   | 74,714,203   | 50,760,978   | 40,026,971  
|                 |              |              |              |              |             
|Deficit          | (35,296,307) | (32,516,793) | (27,058,978) | (24,360,769) | (21,203,198)





Exchange Rates

The Company's accounts are maintained in Canadian dollars.  In this Annual Report, all dollar amounts are expressed in Canadian dollars, except where otherwise indicated.  The following table sets forth information as to the period end, average, the high and the low exchange rate for Canadian Dollars ("CDN") and U.S. Dollars for the periods indicated 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 (Canadian dollar = US$1):

|Year
      Ended:
August
31 | Average | Period End | High   | Low   
|--------------------------- | ------- | ---------- | ------ | ------
|                            |         |            |        |       
|1999                        | 1.5071  | 1.4929     | 1.5677 | 1.4447
|2000                        | 1.4714  | 1.4776     | 1.5140 | 1.4310
|2001                        | 1.5283  | 1.5455     | 1.5822 | 1.4680
|2002                        | 1.5724  | 1.5591     | 1.6190 | 1.5024
|2003                        | 1.4819  | 1.3865     | 1.5991 | 1.3305
|2004                        | 1.3015  | 1.2034     | 1.4003 | 1.1714



The following table sets forth the high and low exchange rate for the past six months.  As of December 31, 2004, the exchange rate was CDN $1.2034 for each US$1.



|Month          | High    | Low    
|-------------- | ------- | -------
|July 2004      | $1.3348 | $1.3079
|August 2004    | $1.3326 | $1.2963
|September 2004 | $1.3068 | $1.2639
|October 2004   | $1.2725 | $1.2233
|November 2004  | $1.2263 | $1.1775
|December, 2004 | $1.2401 | $1.1856



B.

Capitalization and Indebtedness



Not Applicable.



C.

Reasons for the Offer and Use of Proceeds



Not Applicable.



D.

Risk Factors



In addition to other information presented in this Annual Report, the following should be considered carefully in evaluating the Company and its business.  This Annual Report contains forward-looking statements

8



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that involve risk and uncertainties.  The Company's actual results may differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Annual Report.  The management of the Company have identified the following risk factors, listed in the view of management in order from most significant to least significant:



We have incurred net losses since our inception and expect losses to continue.  We have not been profitable since our inception.  For the fiscal year ended August 31, 2004, we had a net loss of $1,616,364, and an accumulated deficit on August 31, 2004 of $20,847,335.  The Company has not generated revenues from operations during fiscal year 2004 and does not expect to generate revenues from operations until one or more of its properties are placed in production. There is a risk that none of the Company's properties will be placed in production, and that the Company's operations will not be profitable in the future.



Our exploration activities are highly speculative and involve substantial risks.  All of the Company's properties are in the exploration stage and no proven mineral reserves have been established.  The Company's exploration work may not result in the discovery of mineable deposits of ore in a commercially economical manner.  There may be limited availability of water, which is essential to milling operations, and interruptions may be caused by adverse weather conditions.  The Company's operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls.  The Company's exploration activities are subject to substantial hazards, some of which are not insurable or may not be insured for economic reasons.



We cannot accurately predict whether commercial quantities of ores will be established.Whether an ore body will be commercially viable depends on a number of factors beyond the control of the Company, including the particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as mineral prices and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  We cannot accurately predict the exact effect of these factors, but the combination of these factors may result in a mineral deposit being unprofitable.  The Company has no mineral producing properties at this time.  The Company has not defined or delineated any proven or probable reserves or resources on any of its properties.  Although the mineralized material estimates included herein have been carefully prepared by the Company, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and there is a risk that a particular level of recovery of gold or other minerals from mineralized material will not in fact be realized or that an identified mineralized deposit, if any, will not ever qualify as a commercially mineable or viable reserve.



We may not be able to establish the presence of minerals on a commercially viable basis.  Our ability to generate revenues and profits is expected to occur through exploration of our existing properties as well as through acquisitions of interests in new properties.  We will need to incur substantial expenditures in an attempt to establish the economic feasibility of mining operations by identifying mineral deposits and establishing ore reserves through drilling and other techniques, developing metallurgical processes to extract metals from ore, designing facilities and planning mining operations.  The economic feasibility of a project depends on numerous factors beyond our control, including the cost of mining and production facilities required to extract the desired minerals, the total mineral deposits that can be mined using a given facility, the proximity of the mineral deposits to a user of the minerals, and the market price of the minerals at the time of sale.  Our existing or future exploration programs or acquisitions may not result in the identification of deposits that can be mined profitably.



Our competition is intense in all phases of our business.  The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests, as well as for the recruitment and retention of qualified employees.



Our exploration activities are subject to various federal, state and local laws and regulations. Laws and regulation govern the development, mining, production, importing and exporting of minerals; taxes; labor standards; occupational health; waste disposal; protection of the environment; mine safety; toxic substances; and

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other matters.  We require licenses and permits to conduct exploration and mining operations.  Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a substantial adverse impact on the Company.  Applicable laws and regulations will require the Company to make certain capital and operating expenditures to initiate new operations.  Under certain circumstances, the Company may be required to close an operation once it is started until a particular problem is remedied or to undertake other remedial actions.



We have uninsurable risks.  We may be subject to unforeseen hazards such as unusual or unexpected formations and other conditions.  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 payment of such liabilities may have a material, adverse effect on the Company's financial position.



We depend on key management personnel.  The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management including James E. Sinclair, Chairman and Chief Executive Officer, Victoria Luis, Chief Financial Officer, and Jonathan Deane, President.  Investors must be willing to rely to a significant extent on their discretion and judgment.  We do not have employment contracts with the Chairman and Chief Executive Officer or the Chief Financial Officer.  We maintain key-man life insurance on the Chairman and Chief Executive Officer but not on the Chief Financial Officer or President of the Company.



We depend on consultants and engineers for our exploration programs.The Company has relied on and may continue to rely upon consultants for explorationdevelopment, construction and operating expertise.  Substantial expenditures are required to construct mines, to establish ore reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the exploration infrastructure at any suite chosen for exploration.  We may not be able to discover minerals in sufficient quantities to justify commercial operation, and we may not be able to obtain funds required for exploration on a timely basis.



We are subject to the volatility of metal and mineral prices.  The economics of developing metal and mineral properties are affected by many factors beyond our control including, without limitation, the cost of operations, variations in the grade ore or resource mined, and the price of such resources.  The market prices of the metals for which we are exploring are highly speculative and volatile.  Depending on the price of gold or other resources, the Company may determine that it is impractical to commence or continue commercial production.  The price of gold has fluctuated widely in recent years.  The price of gold and other metals and minerals may not remain stable, and such prices may not be at levels that will make it feasible to continue the Company's exploration activities, or commence or continue commercial production.



Our business activities are conducted in Tanzania. Our mineral exploration activities in Tanzania may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investment in that country.  The government of Tanzania may institute regulatory policies that adversely affect the exploration and development (if any) of the Company's properties.  Any changes in regulations or shifts in political conditions in this country are beyond the control of the Company and may adversely affect its business.  Investors should assess the political and regulatory risks related to the Company's foreign country investments.  Our operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, foreign exchange controls, income taxes, expropriation of property, environmental legislation and mine safety.



We may not have clear title to our properties.  Acquisition of title to mineral properties is a very detailed and time-consuming process, and the Company's title to its properties may be affected by prior unregistered agreements or transfers, or undetected defects.  Several of the Company's prospecting licenses are currently subject to renewal by the Ministry of Energy and Minerals of Tanzania.  In result, there is a risk that we may not have clear title to all our mineral property interests, or they may be subject to challenge or impugned in the future.

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We have requirements for and there is an uncertainty of access to additional capital.  At August 31, 2004, the Company had cash of approximately $1,067,448 and working capital of $1,918,901.  The Company will continue to incur exploration costs to fund its plan of operations and intends to fund its plan of operations from working capital and equity subscriptions from the Company's Chairman and C.E.O.  Ultimately, the Company's ability to continue its exploration activities depends in part on the Company's ability to commence operations and generate revenues or to obtain financing through joint ventures, debt financing, equity financing, production sharing agreements or some combination of these or other means.



We have no cash flow from operations and depend on equity financing for our operations.The Company's current operations do not generate any cash flow.  Any work on the Company's properties may require additional equity financing.  If the Company seeks funding from existing or new joint venture partners, its project interests will be diluted.  If the Company seeks additional equity financing, the issuance of additional shares will dilute the current interests of the Company's current shareholders.  We may not be able to obtain additional funding to allow the Company to fulfill its obligations on existing exploration properties.  Our failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and the possible partial or total loss of the Company's potential interest in certain properties or dilution of the Company's interest in certain properties.



Conflicts of interest may arise among our board of directors.  Marek J. Kreczmer, Ulrich E. Rath, and  Anton Esterhuizen, directors of the Company, are also directors, officers, or shareholders of other companies that are similarly engaged in the business of acquiring, developing, and exploiting natural resource properties.  Mr. Kreczmer is a director of Golden Patriot Mining Inc., a Canadian company exploring for minerals in the Yukon Territory, Mongolia, and India.  Mr. Rath is a director of Chariot Resources Ltd., a Canadian company exploring for minerals in Peru.  Mr. Esterhuizen is the Managing Director of Pangea Exploration (Pty.) Ltd., a South African company exploring for minerals in Africa and South America.  Dr. Betts is a director of Slam Exploration Inc., a Canadian company exploring for minerals in the Provinces of Ontario and New Brunswick in Canada. Such associations may give rise to conflicts of interest from time to time if the Company were to enter into negotiations to acquire an interest in a mineral project in which their other companies hold an interest, or the Company were to enter into negotiations to sell or joint venture an interest in its mineral properties to any of these companies.  The directors of the Company are required to act honestly and in good faith with a view to the best interests of the Company and disclose any interest which they may have in any project or opportunity of the Company.  If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter.



Penny stock rules may make it more difficult to trade the Company's common shares.The Securities and Exchange Commission has adopted regulations which generally define a
"penny stock" to be any equity security that has a market price, as defined, less than US$5.00 per share or an exercise price of less than US$5.00 per share, subject to certain exceptions.  Our securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as, institutions with assets in excess of US$5,000,000 or an individual with net worth in excess of US$1,000,000 or annual income exceeding US$200,000 or US$300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser's written agreement of the transaction prior to the sale.  Consequently, the rule may affect the ability of broker-dealers to sell our securities and also affect the ability of our investors to sell their shares in the secondary market.



Item 4.

Information on the Company



A.

History and Development of the Company



The Company was originally incorporated under the corporate name
"424547 Alberta Ltd." in the Province of Alberta on July 5, 1990, under the Business Corporations Act (Alberta).  The name was changed to
"Tan Range Exploration Corporation" on August 13, 1991.  The Company was registered in the Province of British Columbia as an extra provincial company under the Company Act (British Columbia) on August 5, 1994

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however, in 2004 the Company did not maintain its extra provincial registration in the Province of British Columbia  since the principal executive office and its executive personnel are located in Sharon, Connecticut.



The principal executive office of the Company is located at 93 Benton Hill Road, Sharon, Connecticut, 06069, U.S.A., and its telephone number is (860) 364-1830.



The Company is a mineral resource company with exploration stage properties, which means that the Company is engaged in the search for mineral deposits and that the properties are not in development or production.



Cautionary Note to U.S. Investors Concerning Estimates of
 Measured and Indicated Mineral Resources



As an Alberta corporation, the Company is subject to certain rules and regulation issued by Canadian securities administrators.  The Company files an Annual Information Form on Form 44-101F1 ("AIF") with the British Columbia, Alberta and Ontario Securities Commissions via the System for Electronic Document Analysis and Retrieval ("SEDAR").  Under the AIF, the Company is required to provide detailed information regarding its properties including mineralization, drilling, sampling and analysis, security of samples and mineral resource and mineral reserve estimates.  Further, the Company describes its properties utilizing mining terminology such as
"measured mineral resources" and "indicated mineral resources" that are required by Canadian regulations but are not recognized by the United States Securities and Exchange Commission ("SEC").  For clarification, the Company has no properties that contain
"reserves" as defined by either the SEC or Canadian regulations, and is providing the following information on inferred mineral resources, in part,  in order to meet its requirements under National Instrument 43-101 adopted by the Canadian securities administrators.  U.S. investors are cautioned not to assume that any part or all of mineral resources will ever be converted into reserves.



The Company's Itetemia concession is our most advanced property (the
"Itetemia Property").  This property contains an inferred mineral resource of 500,000 tonnes grading 7 g/t gold, using a 2 g/t gold cut-off.



The Itetemia Property consists of eleven contiguous prospecting licenses.  One concession is subject to a 3% net smelter royalty.  The Company has a 90% interest in another of the concessions, which concession is subject to a 2% royalty interest.



By an option and joint venture agreement dated May 31, 1999 as amended April 24, 2001 between the Company and Barrick Gold Corporation ("Barrick"), Barrick was granted the exclusive option to earn an undivided 60% interest in the Itetemia Project.  In exchange for the option, Barrick agreed to provide funding to the Company totalling $4,000,000, which has been completed.  In November 2004, Barrick advised the Company that it was returning the Itetemia properties.  The Company will now explore the properties further itself or enter into a new joint venture agreement with another mining company.



The Company's Luhala property, also located in Tanzania, consists of seven (7) contiguous prospecting licenses.



The Luhala property was the focus of an exploration program under an option agreement dated April 25, 1999 with Newmont Overseas Exploration Limited ("Newmont").  This property contains an inferred mineral resource of 9,390,000 tonnes, averaging 1.0 g/t gold, using a 0.5 g/t gold cut-off.  Newmont terminated their option on the property during the year 2000, and the Company is now exploring the property further itself.



During the fiscal year ended 2003, the Company has also discovered three new gold occurrences on the Kigosi Property (forming a part of the Company's Lake Victoria Goldfield Properties held through Tanzam).  Two of the three occurrences are located at the north end of a three kilometre long northwest trending structure that may be responsible for concentrating the mineralization reported at the northern and southern limits of this prominent geological feature (see:
"Lake Victoria Goldfield Properties" below for further details).  At the present time the Company is exploring 121 mineral resource properties in the Lake Victoria Greenstone Belts region of

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Tanzania.  The Company currently has a total of 25 royalty agreements with three industry partners; two of these royalty agreements are with Barrick Gold Corporation; 10with Ashanti Goldfields Limited; and 13 with Northern Mining Explorations.



Significant Acquisitions and Significant Dispositions



The Company's principal capital expenditures and divestitures (including interests in other companies and amounts invested) for the last three fiscal years are described as follows:



Fiscal Year Ended August 31, 2002



On April 30, 2002, the Company completed the acquisition of 100% of the issued and outstanding shares of Tanzania American International Development Corporation 2000 Limited ("Tanzam"), in exchange for 20,000,000 shares of the Company at a value of CDN$0.35 per share (or a cost of CDN$7,000,000). Tanzam, a privately held mineral investment company, which at the time of acquisition held an interest in 52 prospecting licenses and reconnaissance licenses in the Lake Victoria Goldfields Belts of north-western Tanzania. The total land area currently held under these licenses is 3480km2.



By a Prospecting and Mining Option Agreement dated March 31, 1999, as amended March 31, 2000, between Northern Mining & Consultancy Company Limited ("Northern Mining") and Tanzam, Tanzam  acquired the right to form a joint venture with Northern Mining covering a prospecting license in the Lunguya area.  Tanzam will hold a 60% equity interest and Northern Mining a 40% equity interest in the joint venture.  Tanzam has paid US$50,000 on signing and a further US$25,000 to Northern Mining on the first anniversary of the agreement.  In addition, Tanzam is required to complete at least US$35,000 in annual exploration work during the first two years, and depending on commercial viability and geological potentials another US$250,000 in exploration work during the fourth, fifth and sixth years.  Until Tanzam is reimbursed for all of its expenses, Tanzam will be entitled to 80% of the net cash flows from production.



On December 14, 2001, Barrick Exploration Africa Limited ("BEAL") entered into an agreement with Tanzam (the
"BEAL Agreement"), wherein BEAL was granted the option to acquire the total rights, titles and interests of the Company in thirteen prospecting licenses (now reduced to two licenses under the terms of this agreement) in different properties (called the
"BEAL Project"; see "Lake Victoria Goldfields Properties" below for further details).



To exercise the option, BEAL was required to incur US$250,000 in exploration of the BEAL Project within the first year, and thereafter US$50,000 each year for each retained prospecting license.  In addition, BEAL must make the following annual payments for each retained prospecting license:



|December 14, 2002                      |  | US$10,000
|-------------------------------------- |  | ---------
|December 14, 2003                      |  | US$20,000
|December 14, 2004                      |  | US$30,000
|December 14, 2005 and
subsequent years |  | US$40,000



Within thirty days after commercial production, BEAL must pay US$1,000,000 and an additional US$1,000,000 on each of the next two years of production.  The BEAL Agreement is subject to a 1.5% net smelter returns royalty.



During the fiscal year ended August 31, 2002, the Company capitalized mineral property acquisition costs of $8,297,805.  Of this amount, $8,166,292 related to the acquisition of Tanzam.  The Company also completed $1,238,635 in exploration work on its mineral resource properties, including $443,603 on the Itetemia Property and $491,724 on the Luhala Property.  The Company wrote-off deferred exploration expenditures of $59,014 in 2002 relating to certain licenses of the Bukwimba, Mbogwe and Tulawaka properties, based on management's review of the exploration results and uncertainty over recoverability.



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Fiscal Year Ended August 31, 2003



The Company's exploration work for the 2002 fiscal year and up to February 28, 2003 identified two gold-bearing mineralized quartz reefs on the Lunguya Property, located in the Lake Victoria Goldfields area of Tanzania (the
"Lunguya Property"), ranging in thickness from 1.3 metres and extending for at least 350 metres along strike.  The two structures, designated as the East and West reefs, are about 50 feet apart and are roughly parallel to the mafic-granite contact (see:
"Lunguya Property" under Item 4D for further details).



The Company also discovered three new gold occurrences on the Kigosi Property (forming a part of the Company's Lake Victoria Goldfield Properties held through Tanzam).  Two of the three occurrences are located at the north end of a three kilometre long northwest trending structure that may be responsible for concentrating the mineralization reported at the northern and southern limits of this prominent geological feature (see:
"Lake Victoria Goldfield Properties" below for further details).



The Company has also signed nine (9) option and royalty agreements on prospecting licenses in the Lake Victoria goldfields area of Tanzania with Northern Mining Explorations/Explorations Minieres du Nord ("MDN").  In December 2003 MDN returned one of the subject prospecting licenses to the Company.  There remains 8 licenses subject to this agreement.  Under the agreements, MDN holds the right to earn 100% of the Company's underlying interest in the licenses for an up-front cash payment of US$80,000, plus US$1.8 million in option payments and US$1.5 million in property expenditures over the five year life of the agreements.  MDN must also complete a feasibility study and make a production decision by December 31, 2008 and achieve production within 18 months or be subject to cash penalties in lieu of royalty payments.  The Company retains the right to escalating net smelter royalties on commercial production that are tied to the price of gold and range from 0.5% below US$250 per ounce to a maximum of 2% at US$380 per ounce.  The first year's commitments call for option payments of US$160,000 and an exploration expenditures of US$200,000.



In July, 2003, the Company closed nine (9) (and now has 10) royalty agreements with Ashanti Goldfields Company Limited ("Ashanti") for prospecting licenses of the Company in the Kigosi property area (also forming a part of the Company's Lake Victoria Goldfield Properties held through Tanzam).  Under the terms of these royalty agreements, Ashanti has the right to earn 100% of the Company's underlying interests in the subject prospecting licenses, for staged cash payments totalling US$200,000 in the first year, plus minimum cash payments of US$930,000 over the remaining life of the five year agreement.  Ashanti must also incur aggregate property expenditures of US$800,000 in the first two years of the agreements of which US$300,000 must be expended in the first year.  In years three, four, and five of the agreements, Ashanti must complete 6,000, 8,000, and 10,000 metres of diamond drilling, respectively.



The Ashanti royalty agreements also call for Ashanti to complete a bankable feasibility report and make a positive production decision on or before the fifth anniversary of the effective date of the agreements.  Ashanti is liable for cash penalties should gold output at production not reach a minimum annual threshold of 50,000 ounces per year.



The Company retains the right to escalating net smelter royalties in commercial production that are tied to the price of gold, and range from 0.5% below US$250 per ounce to a maximum of 2% at US$380 per ounce.



All of the above investments have been made abroad and were financed internally.



During the fiscal year ended August 31, 2003, the Company incurred $1,151,327 in property acquisition costs and exploration work on its mineral resource properties (net of $184,965 in option payments received) of which $450,912 was incurred on the Lunguya Property.  The Company also wrote-off $1,031,436 in exploration expenditures, of which $729,309 related to claims relinquished within the Itetemia Property area.



Fiscal Year Ended August 31, 2004



During the fiscal year ended August 31, 2004, the Company's exploration office in Tanzania formed a new section called the
"Regional Studies Group" whose mandate is to acquire new ground, based on geologically

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sound research.  The primary objective in forming this group is to upgrade the Company's property position in Tanzania for further exploration. Three new project areas within the Lake Victoria greenstone gold belts have been chosen to date and the Company's land position now totals 121 prospecting licenses, covering an area of approximately 8,200 square kilometres.  One license in the Biharamulo North Project Area was returned to its owner during the year, but was written off in the previous fiscal year.



Exploration activity throughout the 2004 fiscal year was spent undertaking a first pass BLEG soils program over the Tanzam licenses in the Lake Victoria Goldfields Properties project area.  This work was conducted on eight licenses within six locations; namely, Geita, Ushirombo West, Biharamulo, Biharamulo North, Shinyanga, and Nyanzaga North.  The Shinyanga and Nyanzaga North project areas returned encouraging results that will require detailed follow-up next quarter.



Heavy mineral indicator sampling and ground magnetic follow-up was conducted during the year on aeromagnetic targets identified on the Tanzam properties.  Work was completed on the Kanagele, Lunguya, and Ushirombo project areas, where 34 anomalies were ground proofed and sampled for indicator minerals.  The bulk of this work program is now completed and only eight anomalies remain to be sampled.  The results from the sampling program are being used to further refine exploration methodologies.



A significant reorganization was undertaken at the Tanzam corporate office in Dar es Salaam during the period.  Virtually all of the administrative activities associated with Tanzam and Tancan are now being handled by the office in Dar es Salaam, where some of the Company's most skilled and experienced personnel reside.



For the year ended August 31, 2004, the Company reported a net loss of $1,616,364.  The largest expense categories being $254,991 for new property investigations, and staff salaries and benefits of $604,368.  Another $1,180,850 (net) was expended for exploration on existing properties.



The Company has not proposed any principal capital expenditures or divestitures which are currently in progress, other than the acquisition of a drill rig, including rods, hammer, bits and tools for CDN$783,130 (of which $482,069 has been paid).



B.

Business Overview



The Company is a natural resource company, which since its incorporation has engaged in the acquisition of interests in and the exploration of natural resource properties.  The Company commits its own resources to the initial evaluation of mineral properties and in select situations, if and when warranted, the Company will enter into joint venture agreements with other corporations to further the exploration of such properties, in exchange for annual rental/option payments and post-production royalty payments.  At present, the Company's natural resource activities do not generate any income from production.



The Company's general area of interest has been in the exploration of gold properties in regional East Africa.  The Company has explored gold properties in Ethiopia, Tanzania, Zambia, Swaziland and South Africa. At the present time, the Company is exploring 121 mineral resource properties in the Lake Victoria Greenstone Belt and Kabanga regions of Tanzania.  Tanzania remains the prime focus of the Company's activities.  Other corporations, including Barrick Gold Corporation ("Barrick"), Ashanti Goldfields Limited ("Ashanti Goldfields"), Northern Mining Explorations, and Newmont Overseas Exploration Corporation have funded most of the work on the Company's properties in this area since 1999 under option arrangements, with the exception of properties explored by Tanzania American International Development Corporation 2000 Limited ("Tanzam") which were privately funded.  The Company currently has a total of 25 joint venture and royalty agreements with its three industry partners: 2 of the agreements are with Barrick, 10 with Ashanti Goldfields, and 13 with Northern Mining Explorations.



In the Company's view, this joint venture and royalty strategy offers investors leverage to gold prices with lower risk and shareholder dilution.  Future production royalties from any producing properties discovered by the Company's joint venture partners would provide the Company with a direct interest in the mine's cash

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flow, with exposure to any benefits from new discoveries and production growth, but without the capital obligations, and environmental and social liabilities, associated with direct ownership.



Plan of Operations



Exploration Activities



All of the properties in which the Company holds an interest are in the exploration stage only.  Mineral exploration and development involves a high degree of risk and few properties, which are explored, are ultimately developed into producing mines.  There is no assurance that the Company's mineral exploration activities will result in any discoveries of commercial bodies of ore.  The long-term profitability of the Company's operations will be in part directly related to the cost and success of its exploration programs, which may be affected by a number of factors beyond the control of the Company.



By way of general description of the Company's operating activities, the Company's business operations involve using known or published geological and geophysical data to locate mineral resource properties meriting further exploration or development.  Once identified, the Company must stake and apply for registration to title of the mineral properties, or negotiate the acquisition of such properties from any third party owners.  Upon registration or acquisition of title, the Company then designs a program of preliminary exploration which can involve grid mapping, geophysical and magnetic surveying, geochemical surveying, geological sampling, grab sampling, assaying and other forms of prospecting as circumstances may require.  Based on the preliminary results, mineral properties are ranked according to merit for further exploration work, which may involve further mapping, more detailed geophysical and geochemical surveying, and trenching to identify potential drill targets.  If mineralization is indicated which merits further investigation, drill targets are selected, and a diamond drilling program for underground sampling and assaying will commence.



Based on the drilling program results, the Company will develop models of the underlying geology and mineralized zones for more detailed testing.  After further drilling, some mineralized zones may be classified as inferred or indicated mineral resources.  With sufficient infill drilling, these inferred or indicated mineral resources can be confirmed as a measured mineral resource, upon which a pre-feasibility study can be prepared by a qualified, independent mining engineer or geologist to determine whether mining activities are economic in the circumstances of the particular property.  A pre-feasibility study must be completed under the requirements of National Instrument 43-101 in Canada in order for mineral reserves to be designated.  A final or bankable feasibility study must be completed for the designation of reserves under the SEC's Industry Guide 7.  If the bankable feasibility study is favorable, the Company can then use the feasibility study to seek out the necessary financing from a merchant banker or other financial institution for mine construction and development. A further mine feasibility study would be prepared to confirm the appropriate mining method based on the metallurgical studies of the ore, and to develop a mining plan.



At any point along this plan of operation, the Company may seek to interest larger mining companies in its mineral properties, which show potential for further development.  It is highly unlikely that the Company would pursue any particular property through to mineral production by itself.  By exploring and developing properties to a point where major mining companies are interested, the Company will leave the risk of mine development and operations to those companies, while retaining a carried interest or royalty from any future production.



During 2005 fiscal year, the Company plans to continue evaluation of all prospecting licenses in its portfolio with a view of offering some of them for royalty agreements to other mining companies.  The evaluation of their potential comprises geological mapping, soil sampling and geophysical interpretations.  Currently, prospecting licenses which have potential diamond targets are being prospected using ground magnetic surveys, followed by loam sampling and analysis for indicator minerals.



The Company's plans for the first six months of 2005 is to continue efforts for the
"farming-out" of identified properties for royalty agreements with other mining companies, and continue to examine and review other exploration opportunities in Tanzania.

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Exploration



The Company's principal exploration properties are currently all located in the United Republic of Tanzania, Africa.  The government of Tanzania is a stable, multi-party democracy.  Mineral exploration in Tanzania is affected by local climatic, political, and economic conditions.  The Company's properties have year round access, although seasonal winter rains from December to March may result in flooding in low lying areas, which are dominated by mbuga (black organic rich laustrine flood soils).  Further, most lowland areas are under active cultivation for corn, rice, beans and mixed crops by subsistence farmers.  As a result, the area has been deforested by local agricultural practices for many years.  The seasonal rains and deforested areas can create a muddy bog in some areas, which can make access more difficult, and could impede or even prevent the transport of heavy equipment to the Company's mineral properties at certain times of the year between December to March.



Competition



The mining industry in which the Company is engaged is in general, highly competitive.  Competitors include well-capitalized mining companies, independent mining companies and other companies having financial and other resources far greater than those of the Company.  The Company competes with other mining companies in connection with the acquisition of gold and other precious metal properties.  In general, properties with a higher grade of recoverable mineral and/or which are more readily mineable afford the owners a competitive advantage in that the cost of production of the final mineral product is lower.  Thus, a degree of competition exists between those engaged in the mining industries to acquire the most valuable properties.  As a result, the Company may eventually be unable to acquire attractive gold mining properties.



Dependence on Customers and Suppliers



The Company is not dependent upon a single or few customers or supplier for revenues or its operations.



Governmental Regulations



The Company's mineral interests in Tanzania are initially held under prospecting licenses granted pursuant to the Mining Act, 1998 (Tanzania) for a period of up to three years, and are renewable two times for a period of up to two years each.  We must pay annual rental fees for our prospecting licenses based on the total area of the license measured in square kilometres, multiplied by US$20.00 per sq. km.  There is also an initial one-time
"preparation fee" of US$200.00 per license.  Upon renewal, we pay a renewal fee of US$200.00 per license.  Renewals of our prospecting licenses can take many months and even years to process by the regulatory authority in Tanzania.



All prospecting licenses in Tanzania also require the holder to expend funds in the employment and training of Tanzanian personnel, which expenditures typically amount to US$5,000 per year, and in exploration expenditures, which are set out in the Mining Act, 1998 (Tanzania).  At each renewal, at least 50% of our licensed area must be relinquished.  If the Company wishes to keep the relinquished one-half portion, it must file a new application for the relinquished portion.



We must hold a mining license to carry on mining activities, and a mining license will only be granted to the holder of a prospecting license over the area.  A mining license is granted for a period of 25 years or the life of the mine.  It is renewable for a period not exceeding 15 years.  We do not hold any mining licenses, only prospecting licenses.  Prospecting and mining license holders must submit regular reports in accordance with mining regulations.  Upon commercial production, the government of Tanzania imposes a royalty on the gross value of all production at the rate of 3% of all gold produced.  The applicable regulatory body in Tanzania is the Ministry of Energy and Minerals.



In July 1999, environmental management and protection regulations under the Mining Act, 1998 (Tanzania) came into force.  An environmental impact statement and an environmental management plan must

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accompany special mining license, mining license and gemstone mining license applications for mineral rights.  In addition to the establishment of environmental regulations, the Tanzanian Government has improved management procedures for effective monitoring and enforcement of these regulations by strengthening the institutional capacity, especially in the field offices.  The Government has provided rules for the creation of reclamation funds to reinstate land to alternative uses after mining and it has developed guidelines for mining in restricted areas, such as forest reserves, national parks, sources of water and other designated areas.  These regulations have not had any material adverse effect on the Company's operations, which are exploration in nature at this time.



C.

Organization Structure



The Company has the following five subsidiaries:



Name of SubsidiaryJurisdiction of IncorporationPercentage &Type of Securities Owned or Controlled by CompanyVoting Securities HeldNon-Voting SecuritiesDia Consult LimitedRepublic of Tanzania, Africa100% (common)n/aItetemia Mining Company Limited(1)Republic of Tanzania, Africa90% (common)n/aLunguya Mining Company Ltd.(2)Republic of Tanzania, Africa60% (commonn/aKabahelele Mining Company Limited(3)Republic of Tanzania, Africa80% (common)n/aTancan Mining Company Limited ("Tancan")Republic of Tanzania, Africa100% (common)n/aTanzania American International Development Corporation 2000 LimitedRepublic of Tanzania, Africa100% (common)n/a


(1)

The remaining 10% interest is held by Stamico.

(2)

The remaining 40% interest is held by Northern Mining Consulting Ltd.

(3)

The remaining 20% interest is held by Bungu Minerals Ltd.



D.

Property, Plant and Equipment



The Company's business is the acquisition and exploration of mineral properties, with a primary focus on exploring for gold properties in Tanzania.  The Company funds its activities by way of the sale and issuance of its securities to accredited investors.  The Company also obtains operating funds through sales of and options to sell its various mineral property interests to other parties, retaining a royalty interest.  The Company's properties are without a known body of commercial ore, with no established reserves, and the Company's activities to date on such properties have been exploratory in nature.



Itetemia Property



The following discussion regarding the geological information on the Itetemia Property is summarized from a technical report prepared in accordance with the requirements of NI 43-101F1 dated May 2, 2001 entitled,
"Independent Review of the Itetemia Project, Lake Victoria Greenstone Region, Tanzania" by Michael J. Michaud, M.Sc. P. Geo. of Steffen Robertson and Kirsten Consulting (Canada) Inc. (the
"Itetemia Report").  The reader is referred to the complete text of the Itetemia Report, which is available online at www.sedar.com, filed on March 10, 2003 under the heading,
"Engineering Report and Certificate of Qualifications".



18



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Property Description and Location



The Itetemia Property currently consists of eleven (11) contiguous prospecting licenses, covering
approximately 174 km2.  The eleven (11) prospecting licenses now comprising the Itetemia Property are held
in the names of the following companies and expire as indicated:



Prospecting LicenseName Of HolderDate GrantedLast Renewal ApplicationExpiry DateItetemia East
PL 2518/04
Tancan
May 18, 2004
na/
May 18, 2007Ngula North
PL 2374/03
Tanzam
November 25, 2003
n/a
November 24, 2006Itetemia
PL 1450/2000
PL 2523/04
Itetemia Mining Co.
March 10, 2003; May 18, 2004
n/a
n/a
March 10, 2005
May 18, 2007Ngula
PL 1612/2000
PL 2578/04
Tancan
Tancan
August 29, 2003
June 28, 2004
n/a
n/a
August 29, 2006
June 28, 2007Mwingilo
PL 2665/04
Tancan
September 1, 2004
n/a
September 1, 2007Itetemia Village
PL 2520/04
Tancan
May 18, 2004
n/a
May 18, 2007Itetemia North
PL 2038/2002
Tancan
November 1, 2002
n/a
November 1, 2005PL 1713/01 &
PL 2654/04Tancan 
TanzamMarch 24, 2001
September 1, 2004May 12, 2004
n/aMarch 24, 2004*
September 1, 2007


*

While the license has expired, the Company has applied for a renewal and has no reason to believe that such renewal application will not be granted in the ordinary course.



The Itetemia and Ngula prospecting licenses have been renewed once and may be renewed once more, each time for a period of two years. The rental payments and minerals permitted to be pursued under such licenses are summarized below:



Prospecting LicenseAnnual Rentals &Preparation FeesMinerals CoveredItetemia East
PL 2518/04
US$343.00
All except building materials and gemsNgula North
PL 2374/03
US$268.20
All except building materials and gemsItetemia
PL 1450/2000
PL 2523/04
US$557.10*
US$371.40
All except building materials and gems
All except building materials and gemsNgula
PL 1612/2000 
PL 2578/04
US$250.80*
US$116.40
All except building materials and gems
All except building materials and gemsMwingilo
PL 2665/04
US$640.40
All except building materials and gemsItetemia Village
PL 2520/04
US$514.40
All except building materials and gemsItetemia North
PL 2038/2002
US$343.00
All except building materials and gemsPL 1713/01
PL 2654/04US$257.10*
US$171.46All except building materials and gems
All except building materials and gems


*

First renewal annual rental fees = US$30/sq.km.



19



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Accessibility, Climate, Local Resources, Infrastructure and Physiography



The Itetemia Property is located in the Mwanza Region of the Lake Victoria Greenstone Region, Tanzania, approximately 90 kilometres by air southwest of the city of Mwanza, situated on the south shore of Lake Victoria.The property is accessed via local roads from Geita or by plane from Mwanza to an airstrip accommodating the neighbouring Bulyanhulu Mine, owned by Barrick.  The Barrick airstrip is 3.75 km west of the western boundary of the Itetemia prospecting license, and approximately 4 km northeast of the Nyamykonze village. Local resources are available at Mwanza, located on the southern shore of Lake Victoria.



[main20f001.jpg]



The topography in the region and on the property consists of large flat-lying areas surrounded by numerous small hills. The hills have elevations of up to 100 m above local terrain.  The hills are thickly vegetated and access is only possible along cut lines.  Little outcrop exists on the property. The climate is similar to the rest of the region.  The rainy season starts in November and lasts to the middle of April, but precipitation is irregular from one season to another. The dry seasons are usually hot. Mwanza, located along the southern shore of Lake Victoria, can, and has, provided limited supplies for mining and exploration operations in the area.  Dwellers in the area of the Itetemia Project, such as the neighbouring Nyamykonze village, are traditionally subsistence farmers and ranchers, and have limited mining experience from the Bulyanhulu operation and numerous small scale activities.  Water for the purpose of mining and processing is not readily available in the region; however, a pipeline from Lake Victoria built by Barrick for its Bulyanhulu Mine, provides an adequate supply.



20



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The large, relatively flat terrain surrounding the known gold mineralization may be suitable for potential tailings and waste rock storage and for heap leach pads and a potential processing plant. Electric power is available via the national grid within 5 km; due to the unreliability of such power, alternative forms of residual or back-up power would be necessary for mining or processing operations, such as diesel power generation used by Barrick at its Bulyanhulu mine.



Ownership



Prior Ownership



Only two of the prospecting licenses comprising the Itetemia Property, namely, Itetemia and Itetemia North, were previously held by third parties.  With respect to the Itetemia prospecting license, the interest of the Company was acquired from State Mining Corporation of Tanzania ("Stamico") pursuant to a joint venture agreement dated July 12, 1994 (the
"Stamico Venture Agreement").  The Stamico Venture Agreement obligated the Company to make two initial payments of Tsh1,000,000 and US$7,200, both of which were satisfied. With respect to the Itetemia North prospecting license, the interest of the Company was acquired from RSR (Tanzania) Limited by agreement dated April 20, 1995 (the
"RSR Royalty Agreement"). The RSR Royalty Agreement obligated the Company to pay a sum of US$35,000, which payment was made.



The Company's Interest



Prior to the Barrick Venture Agreement (defined below), four of the prospecting licenses comprising the Itetemia Property, namely, Itetemia Village, Mwingilo, Ngula and Itetemia East, were indirectly 100% held by the Company; in the case of the Itetemia North prospecting license, the Company held an indirect 100% interest therein, through Tancan, subject only to the 2% NSR Royalty payable pursuant to the RSR Royalty Agreement. In the case of the Itetemia prospecting license, Tancan acquired its interest pursuant to the Stamico Venture Agreement, as amended June 18, 2001, which provides, among other things, that:



1.

Tancan had to pay Stamico, on execution of the Stamico Venture Agreement, the sum of US$7,200 (as an advance against the 2% gross revenue royalty) and TS1,000,000.



2.

Tancan and Stamico were to form a joint venture company for the purpose of holding the prospecting license that shall be held 10% by Stamico (with no obligation to contribute) and 90% by Tancan, which was effected through the formation of Itetemia Mining Co.



3.

Stamico is entitled to acquire an additional 20% interest in the joint venture company by paying a sum equal to 20% of the cost of placing the property into commercial production based on the feasibility study submitted to the Government of Tanzania for such purpose.



4.

Tancan shall assist Stamico in raising the required capital to exercise the right referred to in (3) above.



5.

Tancan was to expend the sum of US$25,000 in the first year and US$50,000 annually thereafter in relation to the training of Tanzanian personnel.



6.

Upon commencement of commercial production, Stamico shall receive a 2% gross revenue royalty, which shall be increased to a 2.5% gross revenue royalty should a mine on the Itetemia prospecting license produce recoverable gold in excess of 12 grams per tonne.



7.

Tancan shall pay to Stamico, as an advance against the 2% gross revenue royalty, the sum of US$7,200 on or before every anniversary of the Stamico Venture Agreement up until the development phase, upon and after which the annual sum of US$10,000 shall be paid as an advance against such royalty.



21



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8.

Tancan shall show preference to Stamico for the provision of local materials and services during the period of mining operations.



9.

Tancan shall pay to Stamico the sum of US$20,000 on or before July 12 of each year beginning in 2001 and ending upon commercial production, provided that commercial production commences by December 31, 2007, failing which the aforementioned payment shall be revisited.



10.

Tancan may assign its rights under the agreement, subject to the prior written consent of Stamico.



By an option and joint venture agreement dated May 31, 1999 as amended April 24, 2001 between the Company and Barrick (the
"Barrick Venture Agreement"), Barrick agreed to provide funding to the Company totalling $4,000,000 in the form and amounts, and on or before the dates, set out as follows:



|Amount     | Exercise Date            | Form               | No. Shares | Price PaidPer Share
|---------- | ------------------------ | ------------------ | ---------- | -------------------
|$1,000,000 | Upon Regulatory Approval | Share Subscription | 1,428,571  | $0.70              
|$1,000,000 | April 30, 2000           | Share Subscription | 1,176,471  | $0.85              
|$1,000,000 | October 31, 2000         | Share Subscription | 1,000,000  | $1.00              
|$1,000,000 | June 14, 2001            | Warrant            | 740,741    | $1.35              



Barrick made the first three payments to the Company and requested an extension of the date to exercise the warrants from April 30, 2001 to June 14, 2001, which was then exercised at that date.  Pursuant to the terms of the Barrick Venture Agreement, the Company was required to use 80% of the Barrick payments to advance the exploration of the Itetemia Property.  To date, the Company has expended the funds received from the Barrick payments.  The Company has spent at least 80% of these funds on the exploration of the Itetemia Property in accordance with its commitment to Barrick, and has therefore met its expenditure requirements.  Barrick retains the right to participate in any sale or issue of further securities by the Company, provided it holds at least 10% of the outstanding common shares of the Company, subject to certain exceptions.  At present, Barrick does not hold 10% of the total issued common shares.



On November 23, 2004 Barrick advised that they would return the Itetemia Property (with the exception of PL 2374/03 which is held under the BEAL Agreement) to the Company.



The Company has incurred total net costs (after any recoveries) of $6,565,003 on the Itetemia Property  to August 31, 2004.  The Company plans to carry out exploration work on the property, as Barrick has returned the Itetemia Property to the Company.



History



The exploration history of the Itetemia Property from 1988 to 1999 may be summarized as follows:

Itetemia Exploration History Synopsis

|Year            | Operator                            | Work Performed                                                                                                                                                                                                                                  
|--------------- | ----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1988
    - 1992 | BRG, a Tanzanian-German Corporation | First modern exploration program conducted, consisting of geological mapping, ground geophysics, magnetometer, horizontal loop electromagnetic ("HLEM"), pulse electromagnetic, and induced polarization ("IP") surveys, trenching and sampling.
|1993            | Stamico                             | Continued BRG's work and completed an air photo interpretation of the region, resulting in the identification of a northerly trenching gold bearing structure.                                                                                  

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|1994 | Stamico                                       | Completed regional geological mapping, and geochemical soil sampling on the northern and southwestern portions of the licensed area.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- | --------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1995 | Tancan                                        | Detailed soil sampling in several areas confirmed strong gold anomalies along the northwest trend.  A 100 m long trench trending northwesterly was dug, returning anomalous grades of gold.  Pangea drilled six reverse circulation ("RC") holes by mistake on the southwest corner of Itetemia.  Tancan also begins first RC drilling program consisting of 4 holes totalling 374 m, in the southwest corner, but subeconomic intersections were recovered.                                                                                                                                                                                                                                                                                                                                                                         
|1996 | Geodass (under contract to Pangea and Tancan) | Airborne magnetic and radiometric surveys completed over Itetemia, Itetemia North and Ngula prospecting licenses.  A magnetic survey was conducted on the Golden Horseshoe Reef and 25 kms of IP which further defined the reef and extended the reef for more than one kilometre.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|1996 | Tancan                                        | Next phase of RC drilling continued with 39 holes totalling 3,596 m (Oct.
    '95 to July '96) covering the main HLEM anomalies.  Most of the conductors were explained by the presence of argillite horizons, containing 1-50% sulphides.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|1997 | Tancan                                        | A fence of 66 RC holes totalling 2,188 m were drilled in the southern portion of the license.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|1998 | Tancan                                        | A further 14 RC holes were drilled totalling 1,350 m in the southwest portion to test several IP anomalies, the best results returned 0.65 g/t Au over 9.0 m and 1.1 g/t Au over 8.0 m, respectively.  A second phase of 14 RC holes totalling 831 m, were drilled in the area of the Golden Horseshoe Reef to test IP anomalies and the south eastern extension of the reef near the granite contact.  Holes RC-65 and RC-66 intersected 0.7 g/t Au over 5.0 m, respectively, west of the reef.
    
The next phase of diamond drilling focused on the Golden Horseshoe Reef with 21 holes totalling 2,032 m drilled to test the gold showing.  The holes were drilled at a spacing of 15 m to 50 m.  The Golden Horseshoe Reef appears to be terminated to the southeast by an intrusion and seems to be pinching to the northwest.
|1999 | Tancan                                        | A rotary air blast ("RAB") drilling program of 151 holes totalling 6,660 m, in seven fences were drilled; the northwestern extension of the Golden Horseshoe Reef was intersected, returning 0.28 g/t Au over 33 m.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



Very little exploration work has been carried out on the Itetemia East, Itetemia Village and Mwingilo prospecting licenses.  Only limited mapping and soil sampling have been carried out.  At present, no work is being carried out on the Ngula prospecting license.

23



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Recent Exploration (Including Drilling)



2000 Exploration Program



Barrick provided the funds for the 2000 program to the Company through share subscriptions, as provided in the Barrick Venture Agreement.  Pursuant to the Barrick Venture Agreement, 80% of the funds subscribed for are required to be incurred in respect of the Itetemia Property. The total cost of the 2000 program, including support services was $809,148.



On behalf of Barrick, the Company carried out the following exploration program in 2000: A total of 211 geochemical soil samples were collected on 21 line segments utilizing a 50 m sample interval. Twenty-eight samples came from Itetemia, 90 from Itetemia North, 9 from Itetemia Village and 84 from Mwingilo.  This soil survey confirmed most of the main anomalies, and some secondary and isolated anomalies interpreted from the earlier survey.



A RAB drilling program, comprising 448 holes and totalling 9,862 m was undertaken on the Itetemia and Ngula licenses during the period from May 23 to June 19, 2000.  The main targets of this drilling were gold soil anomalies, HLEM conductors, I.P. anomalies and mafic/felsic contacts. With respect to the Ngula prospecting license, two fences, NA and NB, were drilled to test HLEM conductors located in the central part of the license. These conductors are thought to reflect a north-northwest shear zone.  The fences intersected the shear zone, but did not encounter any significant gold mineralization. On the Itetemia prospecting license, three areas were designated for RAB drilling during the 2000 program, namely, (i) the Golden Horseshoe Reef area, (ii) the southwest corner area and (iii) the southeast corner area.



A multi-purpose drilling program, consisting of a combination of RC and diamond drilling in the same hole, was carried out during the period from June 28 to August 5, 2000 on the Itetemia prospecting license.  Four holes were drilled for an aggregate total of 1,558.2 m comprising 526.0 m of RC drilling and 1,032.2 m of diamond drilling.  Two holes ITDD-69 and 70 tested the
"QFP/Reef 2" located in the southwest corner of the license, targeting the lateral and depth extensions of the QFP intersected in diamond drill hole ITDD-37, grading 0.40 g/t Au over 40.1 m.  Holes ITRC-71 and 72 holes tested the northwest extension of the Golden Horseshoe Reef. A subsequent diamond drilling program was carried out during the period from August 17 to October 20, 2000 and consisted of 12 holes totalling 2,376.8 m. The objective of this program was to test the Golden Horseshoe Reef at depth and along strike to the west, the southwest corner area and 7 anomalies identified during the 1999 soil sampling program.  The drilling results are summarized in the table below:

|2000
      MULTIPURPOSE AND DIAMOND DRILLING PROGRAM
      (significant
      assays >0.19 g/t Au and >1,000ppm Cu+Zn+Pb)
|-------------------------------------------------------------------------------------------------------------------------
|HOLE                                                                                                                     
|                                                                                                                         
|                                                                                                                         
|ITRC-69                                                                                                                  
|ITRC-71                                                                                                                  
|ITRC-72                                                                                                                  
|ITDD-40                                                                                                                  
|including                                                                                                                
|including                                                                                                                
|including                                                                                                                
|including                                                                                                                

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|2000
      MULTIPURPOSE AND DIAMOND DRILLING PROGRAM
      (significant
      assays >0.19 g/t Au and >1,000ppm Cu+Zn+Pb)
|-------------------------------------------------------------------------------------------------------------------------
|HOLE                                                                                                                     
|                                                                                                                         
|                                                                                                                         
|ITDD-41                                                                                                                  
|including                                                                                                                
|ITDD-42                                                                                                                  
|ITDD-43                                                                                                                  
|ITDD-44                                                                                                                  
|ITDD-46                                                                                                                  



2001 Exploration Program



During 2001, the Company carried out, on behalf of Barrick, the following exploration program.  Barrick provided the funds for the 2001 program to the Company through share subscriptions, as provided in the Barrick Venture Agreement.  Pursuant to the Barrick Venture Agreement, 80% of the funds subscribed for are required to be incurred in respect of the Itetemia Property.  The total cost of the 2001 program, including support services was $554,046.



In May 2001, the Company reported that two holes, totalling approximately 1,100 meters, were drilled to evaluate the down dip potential of gold mineralization in the Golden Horseshoe Reef deposit. The results of this drilling are summarized in the following table:



MINERALIZED INTERVALGrade (gDDH#
   Au/t)
   
   Width (m)
   
   Interval (m)
   ZoneGHDD-25
   2.10
   
   27.20
   
   479.40-506.60
   Mineralized Envelope2450E; 100SLocation Includes:
   3.14
   
   16.45
   
   483.45-499.90Contains:
   4.58
   
   6.50
   
   484.35-490.85
   South Zone6.73
   
   1.40
   
   498.00-499.90
   North Zone11.0
   
   1.00
   
   518.50-519.50
   Quartz Feldspar PoryphyryGHDD-25W
   2.15
   
   49.8
   
   464.50-514.30
   Mineralized Envelope2450E; 100S4.42
   
   2.9
   
   470.50-473.40
   South ZoneContains:
   5.59
   
   2.2
   
   476.10-478.30
   North Zone




The recent deep core drilling of the Golden Horseshoe has confirmed that gold mineralization over widths of approximately 50 meters has been traced from surface to a vertical depth of 440 meters. The gold mineralization occurs primarily within two discrete gold zones, the South and North zones, and appears to plunge 55° to the northwest. Gold mineralization intersected in Hole GHDD-26 indicates that the geologic structure hosting the gold mineralization of the Golden Horseshoe Reef deposit may transect the felsic package of rocks. This suggests that the gold mineralization may extend further to the west, beyond the basaltic rocks that were previously thought to represent the western limit of the gold mineralization.



The Company is of the opinion that the drill results correlate well with the geology and gold mineralization identified by previous surface trenching and shallow core drilling. Additional drilling is required

25



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to provide adequate information of the continuity of the geometry and grade of the gold mineralization for updating the current resource estimate.



2002 to 2004 Exploration Work



During the 2002 fiscal year, the Company has carried out only minor surface work on the Itetemia Property at a cost of $443,603.  No drilling was conducted and no significant new results were reported.  During the 2003 fiscal year, the Company incurred only minor geochemical and geophysical work of $13,910 on the Itetemia Property.  The Company will be receiving reports from Barrick detailing the exploration work they have conducted on the property in 2004.



Geology



Regional



The Lake Victoria area contains 12 Archean Nyanzian greenstone belts which are surrounded by and have been interrupted by numerous granitic intrusions.  The Nyanzian belts comprise a volcano-sedimentary sequence composed of mafic to felsic volcanics (lavas and tuffs), BIF and shales. The greenstone belts have been grouped into locally distinct geographic regions.  One of these regions is the Southwest Mwanza Region which includes a large area south of town of Mwanza, located on the south shore of Lake Victoria.  There are five greenstone belts in the Southwest Mwanza Region, one of which is the Ushirombo belt. The Ushirombo belt is an east-west trending belt, the eastern end of which is located approximately 25 km west of the southern end of Smith Sound on Lake Victoria. The eastern end of the belt is arcuate in shape and trends northerly tangential to the northwestern flank of the Siga Hills.



Property



The Itetemia Property is underlain by the northerly trending eastern portion of the Ushirombo Nyanzian greenstone belt.  Granite underlies the eastern and northern portions of the property.  The greenstone/granite contact trends northerly through the east-central portion of the Itetemia prospecting license and through the central portion of the Itetemia East prospecting license onto the Itetemia Village license; at which point, the contract tends westerly through the Mwingilo license cutting the northeast corner of the Ngula license. Sixty percent of the Itetemia, Itetemia North and Ngula licenses are underlain by the Nyanzian greenstone belt.  The remaining 40% is underlain by granite.  Granite variably underlies 90 to 100% of the Itetemia East, Itetemia Village and Mwingilo prospecting licenses. The mbuga soil covers 10 to 40% of the property.



Lithology



The lithologies encountered on the Itetemia and Itetemia North prospecting licenses can be divided into three volcano-sedimentary domains: (i) Northeast Domain, (ii) Central Domain and (iii) Southwest Domain. The granite truncates these domains to the east. The Northeast Domain is composed of basalt, felsic flows, thick to thin sequences of argillite and dykes/sill of gabbro.  The domain is up to 3 km thick, exhibits a north to north-northeasterly trend and has numerous extensive HLEM conductors.  The conductors are related to argillite dominantly located in one horizon at the top of the sequence.  A massive sulphide unit/zone is situated at the bottom of this horizon marking change in the volcanism.



Mineralization



The sulphide mineralization encountered on the Itetemia Property comprise massive to semi-massive, stringers, veins and veinlets, disseminated and nodular mineralization.  The types of mineralization are (i) sulphides associated with volcanism activity; (ii) remobilized sulphides associated with deformation (shear hosted); and (iii) sulphides associated with sedimentation.  The gold and metallic contents associated with this

26



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mineralization are variable and the relation between the grades and the mineralized type is not well known at this stage.



The massive to semi-massive sulphide mineralization seems to be related to volcanism.  It occurs in two areas on the Property.  One area is located in the northern part of the licenses and has been intersected by the hole ITDD-06.  More than 30 m. of sulphides were intersected at the contact between a QFP and an argillite horizon separating two pillowed basalts.  The sulphide content ranges from 10 to 90% pyrrhotite, 2 to 5% pyrite, trace to 5% sphalerite, trace to 1% copper.



The Golden Horseshoe Reef mineralization occurs as massive sulphide veins locally ranging from 15-30 cm wide.  Sulphides dominantly appear in veins/veinlets less than 5 cm wide in felsic volcanic rocks.  Five to thirty percent pyrite-pyrrhotite is common over sections of 1 to 15 m along the holes.  They are sub-concordant and parallel to the schistosity.  The strong shearing at the Golden Horseshoe Reef probably represents a remobilization of the sulphides.



Mineral Resource Estimation



Cautionary Note to U.S. Investors Concerning Estimates of
 Measured and Indicated Mineral Resources



This section uses the terms
"mineral resource" and "inferred mineral resource".  We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.



In 1998, Minestart Management Inc. ("Minestart") was retained by Tancan to prepare a mineral resource estimation for the Golden Horseshoe Reef.  The mineral resource was calculated based on 13 diamond drill holes which were drilled at 25 m. intervals along strike for approximately 300 m. and to a depth of approximately 50 m. The mineral resource was calculated using polygons on cross-sections incorporating a 2 g/t gold cutoff and a constant bulk density of 2.7 tonnes/cubic meter. Minestart estimated the mineral resource for the Golden Horseshoe Reef to be 500,000 tonnes grading 7 g/t gold.  As an integral part of its review, the Company hired Steffen, Robertson and Kirsten Consulting (Canada) Inc. ("SRK") to review the mineral resource estimate prepared by Minestart, and SRK provided the following observations:



- SRK believes there is a need for more near-surface and down-dip information in order to better define the controls on the mineralization and the geometry of the mineralized horizon. With respect to the density, SRK notes that the bulk density was used for estimating the bulk tonnage. Given the climate and the weathering environment, the density of sulfide rich rocks and volcanics could vary considerably and based on their experience it may be required to weigh the assays during compositing and estimating the bulk tonnage of the mineralized and unmineralized zones.
- With respect to the 2.0 g/t cutoff grade used in the estimation, SRK believes that initially, it might be possible to mine the reef by way of a very narrow and shallow open pit.  However, it is more likely that given the higher grade mineralization, narrow widths and current limited strike length the Golden Horseshoe Reef would be more amenable to underground mining methods.  As such, the cutoff grade of 2.0 g/t gold initially used to estimate the mineral resource may be too low.
- With respect to the diamond drilling core recovery, SRK considers the NQ size to be appropriate and that it has been appropriately split using a diamond saw.  The split core remains in good condition and is stored on-site in a proper facility. The rock quality is very good. The core recovery is excellent.



27



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SRK believes the mineral resource estimation prepared by Minestart to be an inferred mineral resource as defined by standards set by the Canadian Institute of Mining, Metallurgy and Petroleum (see:
"Glossary of Technical Terms - Canadian Terminology" at page 5 herein).



THE ITETEMIA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY PROPOSED PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.



Luhala Property



The following discussion regarding both the Luhlala and Lunguya Properties below is summarized from a technical report prepared in accordance with the requirements of NI 43-101F dated February 28, 2003 entitled,
"Report on the 2002 Exploration of the Luhala Concessions and the Lunguya Concessions, Lake Victoria Goldfields District, North-Central Tanzania" by Dr. Jim L. Oliver, Ph.D., P. Geo. (the
"Luhlala and Lunguya 2002 Report").  The reader is referred to the complete text of the Luhala and Lunguya 2002 Report, which is available at www.sedar.com, filed on March 10, 2003 under the heading,
"Other".



Property Description and Location



The Luhala property is located in Misungwi District of Mwanza Region of Tanzania (see property location map on page 22). It lies approximately 70 kilometres south of the city of Mwanza.  The Luhala property consists of seven (7) prospecting licenses (namely, Luhala PL 1451/00, Luhala PL 2519/04, Shilalo PL 2297/03, Ngobo PL 1559/00, Ngobo PL 2680/04, Sima PL 1560/00 and Sima PL 2681/04).  These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania.



The Company has a 100% interest in the Luhala prospecting license, and has the right to acquire a 100% interest in the Ngobo and Sima prospecting licenses by making a series of payments to the property holder, Widescope Promotion Ltd. ("Widescope"), totaling US$120,000 over six years for the Ngobo license and US$84,000 over six years for the Sima license.  Widescope retains a 2% net smelter returns royalty on both the Ngobo and Sima licenses, which the Company may buy back, in each case, one-half (i.e. 1%) for US$1,000,000. For the Shilalo license, the Company has earned the right to acquire a 100% interest by having madea series of payments to the property owner totaling US$16,000.  The Shilalo property owner retains a 2% net smelter return royalty, of which the Company may buy back one-half (i.e.1%) for US$ 250,000.



Each of the prospecting licenses forming the Luhala property has the following mandatory annual work and rental payments:



|Prospecting License          | Work Program | Annual Rentals        | Minerals Covered                         
|---------------------------- | ------------ | --------------------- | -----------------------------------------
|Luhala
PL 1451/00
PL 2519/04 | None         | US$835.80*
US$575.30  | all excluding building materials and gems
|Shilalo
PL 2297/03           | None         | US$74.40              | all excluding building materials and gems
|Ngobo
PL 1559/00
PL 2680/04  | None         | US$360.00* 
US$240.00 | all excluding building materials and gems
|Sima
PL 1560/00
PL 2681/04   | None         | US$617.40*
US$480.00  | all excluding building materials and gems

*First renewal annual rental fees = US$30/sq.km.



The Luhala property covers an area of approximately 128 square kilometers.  The target on the Luhala property is gold stockwork mineralization associated with felsic rock units in dilational structures.  There is widespread gold mineralization on the property over a 6.25 square kilometer area.



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The Company has incurred total net costs (after any recoveries) of $2,819,621 on the Luhala Property to August 31, 2004.



Accessibility, Climate, Local Resources, Infrastructure and Physiography



Access to the Luhala Property is via the main Mwanza
- Shinyanga road, which is a single lane, good to excellent quality, asphalt highway.  Approximately 45 kms south of Mwanza, a dirt road from a junction at the settlement of Manawa, leads southwest to the town of Misasi.  The property has year round access, although seasonal winter rains, December to March, may result in flooding in low lying areas which are dominated by mbuga (black organic rich laustrine flood soils).  Most lowland areas are under active cultivation, corn, rice, beans and mixed crops, by subsistence farmers.  Low scrub and thorn bushes cover the small hills.  The area has been, for many years, deforested by local agricultural practices.



At Luhala, the mean elevation is approximately 1,200 m above sea level, with a series of small sub-rounded hills, rising up to one hundred metres above the surrounding plain.  These hills are typically formed by either resistive iron formations or felsic volcanic rocks.  Mafic volcanic rocks weather recessively and are typically only exposed in trenches through well formed laterite profiles.  Laterite development is extensive with brick-red laterites overlying weak mottled zones and saprolites at a depth of approximately 3-5 m's.  Deep weathering penetrates 45 - 60 m's vertically within the subsurface.



An enthusiastic and competent labor force is available through the surrounding villages, and local people have been routinely hired during the trenching, drilling and soil sampling programs conducted on this property.  However, no other significant infrastructure is available.



History



Luhala has had a significantly more protracted exploration history than Lunguya, beginning with the initial exploration by the then Tanganyikan Geological Survey in 1947.  The exploration history of Luhala may be summarized as:



LUHALA EXPLORATION HISTORY SYNOPSIS



|Year   | Operator                      | Work Performed                                                                                                                                
|------ | ----------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------
|1947   | Tanganyikan
Geological Survey | Underground adit, Shilalo West                                                                                                                
|1960's | Unknown                       | Minor test pits and trenches                                                                                                                  
|1994   | Tan Range                     | Grab sampling and panning, Luhala Hills                                                                                                       
|1996   | Tan Range                     | Airbourne magnetic survey, 505 m diamond drilling in two drillholes                                                                           
|1997   | JCI/Tan Range                 | MMI survey, 5,700 samples collected, geological mapping and sampling, 243 grab samples, gradient array IP over Lahula Hills, 5 DDH's for 549 m
|2000   | Newmont/Tan Range             | 251 Rotary Air Blast (RAB) drillholes                                                                                                         
|2001   | Tan Range                     | 10 DDH's, 1204  m, trenching and sampling, 32 RAB holes, totaling 1969 m. Regional mapping                                                    
|2002   | Tan Range                     | Property mapping.                                                                                                                             
|2003   | Tan Range                     | Updated geological model                                                                                                                      
|2004   | Tan Range                     | Trenching Kisunge hill, 14 RC holes drilled on new model on Kisunge Hill.                                                                     



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The sole activities conducted on the Luhala project during 2002 were mapping and surface sampling. No drilling programs were completed on the property in 2002.  The work programs at Luhala to date have greatly enhanced the Company's understanding of the geological and structural environment on the property.  Drill  targets on the Kisunge hill based on an updated geological model, were drilled in 2004. 14 shallow RC holes were drilled to test the sub surface oxide potential of the area.



Geology



Luhala is found within the eastern portion of the Buhungukira Belt, a local place name assigned to one to the eight greenstone belts in the Lake Victoria District.  These rocks are believed to be the eastern continuation of the Geita  Greenstone Belt and consist of dominantly Upper Nyanzian rock sequences.



In the Luhala area, the predominant structural grain is dominated by an early deformational event which has deformed all supracrustal rocks into tight, south to southwest plunging, west overturned, synforms and antiforms.  The short limbs of these folds may have east-west strikes and modest, 40 degree south dips. The long limbs of these folds have north to northeast strikes and generally much steeper, 60
- 80 degree, and east dips.



At Luhala, three principal mineralized zones have been identified. These include Kisunge Hill, Shilalo South, and Shilalo West.  All of the three principal mineralized areas are linked by a common southwest plunging antiform, the limbs of which are separated by 500 to 800 m's and converge just south of Line 6200 E and 3800 N.  Mineralization to Kisunge Hill is associated with a chert - felsic volcanic contact.  As Shilalo South, structurally controlled gold mineralization closely tracks the position of a massive to locally well-bedded chert or cherty iron formation.  The results of diamond drilling in Shilalo West strongly outline the importance of the felsic volcanic - chert
- structural sites and gold association.  For example, borehole LSD - 08A is collared in the hangingwall to the Shilalo West mineralized zone, traverses the host rhyolite-chert lithology, and terminates in the footwall.  This borehole intersected significant gold mineralization of 3.55 g/t Au over 5 m near the hangingwall contact of the felsic volcanic rocks, and is mineralized repeatedly at over one gram ranges throughout much of the felsic host interval, which in this borehole is over 35 metres thick.



The felsic volcanic rock package at Shilalo West once again presents an excellent structural site for the development of dilatant sites and gold mineralization.  As at Shilalo South, a well defined planar, brittle-ductile structural zone was not identified at Shilalo West.  Gold distribution is likely related to volumes of extensional and shear extensional veinlets, which are developed within the felsic volcanic rocks at or near, the felsic volcanic
"red tuff" contact.



Exploration



Exploration at Luhala has included the following material work:



1.

The development of a strong, 1:5,000 scale geological map base tied to sub-surface geological data. The

geological base has strong predictive value and may be used to guide and interpret both the results of

historical drilling and plan future programs.



2.

RC and diamond drilling conducted during 2001 on the Luhala property was successful in
"ground

truthing" the interpreted structural style and conclusively demonstrating the association of multi-gram per

tonne gold mineralization at well defined structural and stratigraphic sites, particularly antiform
- synform

closures near felsic volcanic
-  tuff contacts.



Mineralization



At Luhala, gold mineralization is associated with zones of diffuse silicification, localized around small cm and mm scale fractures within competent chert and felsic volcanic rock units.  Major discordant vein structures are not identified and planar high strain zones are absent.  The width of these intersections may be estimated as approximately true width but this may only be ascertained through the construction of a complete set

30



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of geological sections which reconcile sub-surface and surface geological data.  Currently these kinds of sections are available for only a few of the total required areas.



No specific gravity data have been calculated for any of the rocks cored in these intervals and without strong cross sectional control, no reliable resource estimates for any of the principal mineralized zones at Kisunge, Shilalo South and Shilalo West may be calculated.



Drilling



Drilling programs were completed on the Luhala prospecting license in 2001, consisting of nine diamond drill holes, totaling 1,865 metres with an average depth of 207 metres.  The holes were planned along the three best RAB section lines (7400E, 7600E and 8000E) on Kisunge Hill, as well as some testing of a lower ranked target on the Shilalo South.  Some gold mineralization was encountered, including 4.3 metres at 1.84 g/t, 8.5 metres at 1.23 g/t, and 14.4 metres at 5.72 g/t, using a 1g/t cut-off.  Diamond drilling has shown that these gold zones do not continue at depth.  The distribution of gold at Kisunge would appear to be flat or near flat dipping.  There is insufficient drill hole coverage to tie up the numerous different rock types found at depth.  Most of the drill holes stopped in fresh rock, but it is not possible to model the significance of these rock types at depth.



No drilling programs were conducted during 2002 or 2003 on the Luhala Property, but a further US$100,000 in RC drilling was performed during the 2004 exploration season.  The Kisunge hill area was targeted where trenching in 2001 identified numerous zones of surface mineralization.



In March-April, 2004, old trenches from L7400E to L7600E as well as the trench on L8000E were cleaned to expose the floor of the trench for remapping. Four new trenches were excavated, the first along L7650E. The remaining three trenches were excavated along E-W lines to determine if N-S structures (similar to that shown at Kisunge outlier) might have a determining control on gold mineralization at Kisunge hill.



The trenches intersected the following positive results:



T7650E

12.4 g/t Au / 9m including 16.6 g/t Au / 6m

T4180N

1.27 g/t Au / 8m

T4265N

8.43 g/t Au / 2m

T4290N

2.82 g/t Au / 29m including 4.69 g/t Au / 11m



Based on these results 14 shallow RC holes were drilled on Kisunge returning the following better results:



|KISUNGE WEST ZONE:          |  |  |      |  |              |          |               
|--------------------------- |  |  | ---- |  | ------------ | -------- | --------------
|                            |  |  |      |  |              |          |               
|Section 1:                  |  |  |      |  |              |          |               
|                            |  |  |      |  |              |          |               
|Hole No                     |  |  | From |  | Intersection | Grade    | Including     
|LRC-19:                     |  |  | 0m   |  | 40m          | 2.40 g/t | 8m @ 4.45g/t  
|LRC-20:                     |  |  | 2m   |  | 39m          | 1.69g/t  | 7m @ 3.86g/t  
|                            |  |  | 57m  |  | 3m           | 1.09g/t  |               
|                            |  |  | 65m  |  | 5m           | 1.25g/t  | (end of hole).
|LRC-21:                     |  |  | 26m  |  | 14m          | 1.81g/t  | 4m @ 2.67g/t  
|                            |  |  | 62m  |  | 4m           | 1.10g/t  |               
|LRC-22:                     |  |  | 46m  |  | 12m          | 0.92g/t  |               
|                            |  |  |      |  |              |          |               
|Section 2:                  |  |  |      |  |              |          |               
|                            |  |  |      |  |              |          |               
|Hole No                     |  |  | From |  | Intersection | Grade    | Including     
|LRC-25:                     |  |  | 10m  |  | 26.5m        | 1.10g/t  | 6m @ 2.11g/t  
|NB, hole ends in gold zone. |  |  |      |  |              |          |               



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|KISUNGE CENTRAL ZONE: |      |  |              |  |              |          |              
|--------------------- | ---- |  | ------------ |  | ------------ | -------- | -------------
|                      |      |  |              |  |              |          |              
|Section 4:            |      |  |              |  |              |          |              
|                      |      |  |              |  |              |          |              
|Hole No               |      |  | From         |  | Intersection | Grade    | Including    
|LRC-26:               |      |  | 3m           |  | 8m           | 4.48 g/t |              
|LRC-27:               |      |  | 11m          |  | 8m           | 1.91g/t  | 4m @ 3.04g/t 
|LRC-28:               |      |  | 2m           |  | 6m           | 1.26g/t  |              
|                      |      |  | 20m          |  | 14m          | 1.28g/t  | 3m @ 2.09g/t 
|                      |      |  |              |  |              |          |              
|                      |      |  |              |  |              |          |              
|Section 5:            |      |  |              |  |              |          |              
|                      |      |  |              |  |              |          |              
|Hole No               | From |  | Intersection |  |              | Grade    |              
|LRC-23:               | 1m   |  | 12m          |  |              | 1.42g/t  |              
|                      | 23m  |  | 2m           |  |              | 1.11g/t  | (end of hole)





KISUNGE EAST ZONE:

Section 6:

|Hole No | From |  | Intersection | Grade   | Including     | From
|------- | ---- |  | ------------ | ------- | ------------- | ----
|LRC-24: | 52m  |  | 4m           | 3.29g/t | (end of hole) |     
|LRC-29: | 44m  |  | 5m           | 0.85    |               |     



This mineralization will be followed up with a more detailed RC program in early 2005.  The above technical information for the 2004 trenching and drilling program was reviewed and verified by Mr. Peter Chadwick, M.Sc., the Company's qualified person for the Luhala Property.



THE LUHALA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY PROPOSED EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.



Lunguya Project Area



Property Description and Location



The Lunguya Property is located in the Kahama District of Tanzania (see property location map on page 22), and the Company's interest therein is held indirectly through Tanzam.  The Lunguya Property is situated in the Lake Victoria Greenstone Belts, approximately 100 kms by air to the southwest of Mwanza and about 15 kms south of  Bulyanhulu.  The Lunguya Property consists of seven (7) prospecting licenses (namely, the Lunguya 1766/01 and 2828/04, Lunguya East 1887/02, Shilela North 2059/02, Shilela 2472/04, Lunguya West PL 2193/03 and PL 1990/02).  These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania, although the Shilela prospecting license is under application for renewal.



With respect to Lunguya PL 1766/02, in January, 2003, a Shareholder's Agreement was entered into wherein a new company, Lunguya Mining Company Limited ("LMC"), was created to form a joint venture between Northern Mining Consultancy Company Limited ("NMCCL"), Tanzam and LMC.  Tanzam has a 60% shareholding and NMCCL has the remaining 40% shareholding in LMC.



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The Lunguya Property covers an area of 333 square kilometers.  There are no work requirements, and property payments on each of licenses are as follows:



|Prospecting License            | Annual Rentals &Preparation Fees | Minerals Covered                          
|------------------------------ | -------------------------------- | ------------------------------------------
|Lunguya 
PL 1766/01
PL 2828/04 | US$1,071.30*
US$714.20           | all excluding building
materials and stone
|Lunguya East 
PL 1887/02       | US1,696.80                       | as above                                  
|Shilela North 
PL 2059/02      | US$685.60                        | as above                                  
|Shilela 
PL 2472/04            | US$1,025.00                      | as above                                  
|Lunguya West 
PL 2193/03       | US$1,622.80                      | as above                                  
|PL 1990/02                     | US$205.80                        | as above                                  

* First renewal annual rental fees = US$30/sq.km.



Through prospecting and mining option agreements, the Company has options to acquire interests ranging from 60% to 75% in the seven (7) licenses.  To maintain the options, the Company is required to make certain expenditures and fund all exploration costs of the properties.  During the fiscal year ended August 31, 2003, the Company abandoned one of the licenses, and wrote-off $35,342 in costs deferred to such license.  There are no royalties to the original license holder.  At Shilela North, through a Prospecting and Mining Option Agreement signed by Tanzam dated June 25, 1999, the Company has a right to obtain a 70% working interest in this project and no royalties are required.  The payment schedule is identical at Shilela.  At Lunguya East, the Company can earn up to a 70% interest and no royalty is required.  For PL 1990/02, through a Prospecting and Mining Option Agreement dated June 10, 1999, the Company can earn a right to obtain a 75% working interest in this project and no royalty is required; an initial payment of US$50,000 was made and no annual payments are required.



Internal to the Lunguya prospecting license (1766/01) is a small approximately 1.0 square kilometre primary mining license ("PML").  The PML is currently held by Mr. Joseph Magunila who is exploiting the Nyamakwenge Reefs.  Negotiations for control and the validity of this license is currently under discussion with relevant private and government third parties.  Portions of the currently known veins at Lunguya and some of the RC and Lunguya diamond drilling, conducted by the Company in 2002, lie within this mining license.



The Company has incurred total net costs (after any recoveries) of $2,788,862 on the Lunguya Property to August 31, 2004.  The Company carried out limited exploration in 2004 undertaking region biogeochemical surveys across the entire Project Area. Results are pending.



Accessibility, Climate, Local Resources, Infrastructure and Physiography



The Lunguya Property can be reached by plane from Mwanza to an airstrip accommodating Bulyanhuylu or by road via Geita up to the Bulyanhulu/Kahama road intersection. From Kahama, the property is located approximately 8 kms to the south, toward Lunguya village. Secondary roads and trails traverse the property. The Nyamakwenge Reef, located in the northeastern part of the property, can be accessed using a 12 kms dirt tract passing to the north of the property.  Climate and elevation are similar to the Luhala Property.



Very little outcrop (less than 1%) has been identified at Lunguya.  The entire property is flat and covered largely by granitic sands and grey orange laterities derived from granitic sources.  Like Luhala, Lunguya is

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actively cultivated, but also is being actively mined by a few score artisenal miners along the trend of the Nyamakwenge Reefs.  No significant infrastructure, power or water is available on site.  However, the entire infrastructure of the region including electricity, air transport, health clinics, schools, and improved road networks, have been greatly improved due to the proximity to Barrick's Bulyanhulu mine, some 20 kms to the north.



History



Exploration in the Lunguya area has had a much briefer history than the exploration of the Luhala area.  Reconnaissance overviews of this area are documented, but no significant historical exploration activities are known to the Company.  The license was acquired by the Company in 2001 and a program of bulk leach extractable gold (BLEG) sampling, geological mapping, rock sampling, reverse circulation (RC) and diamond drilling was initiated.



Geology



The very limited outcrop exposures on the Lunguya concession necessitate development of a geological and interpretive environment largely based on geophysical interpretations.



Regionally, Lunguya is located near the eastern terminus of the inner volcanic arc, lower Nyanzian, of the Sukumaland Greenstone belt.  The succession is dominated by tholeiitic volcanic rocks containing lesser felsic tuffaceous rocks and  argillaceous horizons cut by thin quartz porphyry dykes and sills.  The thick, banded iron formation and felsic flows characteristic of the outer arc Upper Nyanzian sequence are absent. Most of the map scale granite
- greenstone contacts strike north-south.  No information is available with respect to the orientation of sub-surface contacts.



At Lunguya, all currently known, auriferous structural zones track at an oblique angle, the eastern granodiorite-mafic volcanic contact.  Auriferous veins strike at 020° to 030° with the dominant intrusive volcanic contact trending at approximately 360°.  On the property scale, two 330° trending fault  structures are interpreted to offset the Lunguya vein into two fault repeated vein segments, having strike lengths of  approximately 180 and 300 m.  A few score artesinal miners have exploited these veins to a depth not exceeding 30 vertical m's subsurface. A second set of auriferous reefs, the Nyikoboko Reefs, are located 12 kilometres to the south. This area is associated with a smaller set of largely inactive artisanal dumps and workings.



Based on the aeromagnetic data a new model has been proposed whereby a large NS trending shear zone is believed to exist below a thick black cotton soil (mbuga) cover. The thin veins associated with the Nyikoboko and Nyamakwengwe reefs probably represent secondary structures from the main shear. This idea has been tested using biogeochemistry and results are pending.



Exploration



Exploration at Lunguya has included the following material work:



1.

Rock geochemical surveys were successful in defining the principal mineralized trends of auriferous vein

systems at Lunguya.  Reconnaissance mapping programs have established a spatial relationship of granite

greenstone contacts to the localization of auriferous quartz veins.  The proximity of these contacts is clear at

both the Nyamakewnge and Nyikoboko Reefs.



2.

Diamond drilling programs on the Nyamakwenge and Nyikoboko Reefs have been successful in

demonstrating excellent geological continuity of the vein systems. Continuity of gold grades within  these vein

systems is more problematic.



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3.

In combination with geological mapping, diamond drill programs have established the strong likelihood that the

Western and Eastern Reefs at Nyamakwange represent a common, fault repeated vein system with dextral

and reverse offsets.  The re-constructed length of the known segments of this vein system is approximately

475 m's.  The vein ranges in thickness, cross sectional indicated, from 1.0 to 8.0 m's.



4.

Using right handed or dextral offsets, several apparently unrelated geochemical anomalies may be tied to

interpreted dextral fault offsets of the Lunguya vein system.



Mineralization



Lunguya is a mineralized brittle ductile strain zone, developing internal to a major granite-greenstone contact. Gold is associated with one fault offset vein which is likely broken into two segments, the Western and Eastern reefs.  Lesser veins are also present.  Initial sampling of artisenal vein waste dumps indicated the presence of well mineralized dump samples.  The site contained greater than 200 of these small pits-shafts ranging from 1 to 20 metres deep.



Diamond drill and RC programs at Lunguya have demonstrated excellent geological continuity of the Nyamakwenge West and East Reefs but weaker continuity of grade.  The difficulty in obtaining representative gold grades from small core samples of vein material containing coarse particulate gold is a well documented phenomenon.  Significant assays obtained during the 2002 diamond drill program at Lunguya are summarized in Table 4 of the Luhala and Lunguya 2002 Report.  Widths in these boreholes are approximately true widths and the boreholes have been collared roughly perpendicular to the strike and dip of the mineralized structural zones.



Drilling



Two programs of drilling where initiated on the Lunguya property during 2002. This included a seven hole RC program totaling 535 metres completed in late August 2002.  A follow-up diamond drill program consisting of 1175 metres, in 18 boreholes was completed in November and December of 2002.



Core recovery measurements where made on site by geotechnician of the Company.  RC boreholes (LGRC 01
- 07) utilized the same grid system as the diamond drill program.  The location of all drill collars were marked with concrete monuments.  Drilling was concentrated on the Lunguya Reefs (11 boreholes) with three boreholes completed on the Nyikoboko Reefs.  A series of geological cross-sections and plans (Figures 10 to Figure 18 in the Luhala and Lunguya 2002 Report), summarize the results of these programs.  Both RC and diamond drill data are combined on these sections.  Drill collar locations for 12 diamond holes and 7 RC holes on the Nyamakwenge Reefs are shown on Figure 9 of the Luhala and Lunguya 2002 Report.  Drill logs for diamond drill holes are compiled on Appendix III and for RC holes in Appendix IV of the Luhala and Lunguya 2002 Report.  Assay results for diamond drill holes are compiled in Appendix V and RC assay data in Appendix VI of the Luhala and Lunguya 2002 Report.



THE LUNGUYA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.



Tulawaka Project Area



The Tulawaka Project is located in the Biharamulo District of Kagera Region of Tanzania and is approximately 160 kilometers west-southwest of Mwanza town.  The Tulawaka Project consists of ten (10) prospecting licenses, including two (2) licenses held through Tanzam.  These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania.  The Company has incurred $1,528,023 in total costs on the Tulawaka Project to August 31, 2004.



The Tulawaka Project covers an area of approximately 391 square kilometers.  The property lies on an east-west magnetic trend, between the Kakindu gold discovery (Ashanti) and the Tuluwaka gold discovery

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(Pangea).  RAB (rotary air blast) drilling on the Mnekezi property intersected mineralized chert sequences which included intersections of 5 meters @ 0.26 grams/tonne gold, 3 meters @ 0.24 grams/tonne gold and 1 meter @ 0.37 grams/tonne gold.  The majority of this project has been joint ventured to MDN.



THE TULAWAKA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.



Lake Victoria Goldfield Properties



The following discussion regarding the Lake Victoria Goldfield Properties below is summarized from a technical report prepared in accordance with the requirements of NI 43-101F dated March 21, 2002 entitled,
"Project Technical Review on 52 Prospecting Licenses, Lake Victoria Goldfields Tanzania" by Stephen R. McMullan, P. Geo. of  Poseidon Geophysics (Pty) Ltd. (the
"52 PL Report").  The reader is referred to the complete text of the 52 PL Report, which is  available at www.sedar.com, filed on March 28, 2002 under the heading,
"Technical Reports".



Property Description and Location



Tanzam, a privately held mineral investment company wholly-owned by the Company, currently holds various interests in 76 prospecting licenses in the Lake Victoria Goldfields Belts of north-western Tanzania (the
"LVGB") in order to explore for economic mineral deposits.



Tanzam engaged Geodass (Pty) Limited of Johannesburg, South Africa (now Fugro Airborne Surveys (Pty) Limited) to undertake and manage an integrated mineral exploration program in the LVGB in August 1999. The exploration program was designed primarily to explore for gold mineralisation, without bias for mode of occurrence. Other commodities including base metals, diamonds and industrial minerals were also considered and suitable exploration methods were adopted for a multi-commodity approach.



As of the date hereof, Tanzam holds interests in the following 76 licenses (including previously discussed Itetemia, Luhala, Lunguya and Tulawaka Project Areas):



Book #JV PartnerJV%Project AreaOld PL#New PL#Sq Km1Wazawa Limited65%Ushirombo, Kahama752/971846/200140.22Martedo Investment65%Diabohika Bukombe1795/01Appl. R-29924.013Afrigold Limited65%Igando, Biharamulo1798/01Appl. R-30268.394Tanzam100%Bwanga, Kahama1163/981946/0272.365Jope Buisness/ Mineral Industries65%Nyambale, Geita1226/991951/02102.96Tanzam100%Runazi, Biharamulo1252/992198/0334.417Tesemining/F-Bminerals51%Runazi, Biharamulo750/972102/0290.38Jope Business65%Kisengo, Biharamulo1275/992448/0478.889Jope Business65%Nyaesero, Biharamulo1218/992182/0382.3110Tanzam100%Kaniha, Biharamulo1164/981947/02120.411Tanzam100%Kaniha, Biharamulo1161/981945/0285.7212Tanzam100%Kaniha, Biharamulo1162/981944/0285.7213Tanzam100%Kaniha, Biharamulo1250/982192/03132.614Tanzam100%Ushirombo West1249/992197/0316.015Tese Mining/ F-B Minerals51%Kigosi936/982040/0283.9916Bazo Enterprises65%Kigosi1775/01Appl. R-29539.7717Afrigold Limited65%Kigosi1796/01Appl. R-30084.018Martedo Investment65%Kigosi1400/992449/0434.28


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Book #JV PartnerJV%Project AreaOld PL#New PL#Sq Km19Tanzam100%Kigosi1251/992191/03147.420Abby's Mining Co65%Kigosi1180/981854/2001154.321Madaba Minerals Ltd.70%Lunguya33/921887/0284.8422Wazawa Limited65%Ushirombo1749/01Appl. R-27733.5197Wazawa Limited/Tanzam65%UshiromboRelinquished 1/2  1749/012832/0433.7323Martedo Investment65%Ushirombo1794/01Appl. R-29852.6224Charles Shumbi70%Kigosi1762/01Appl. R-28317.2896Charles Shumbi/Tanzam70%KigosiRelinquished 1/2  1762/012833/0417.2925Abby's Mining Co65%Mbogwe1758/01Appl. R-2768.57295Abby's Mining/Tanzam65%MbogweRelinquished 1/2  1758/012830/048.57726Tese Mining/ F-B Minerals51%Mbogwe1754/01Appl. R-27555.7294Tese Minerals/F-B Minerals/Tanzam51%MbogweRelinquished 1/2  1754/012829/0455.7227Tese Mining/ F-B Minerals51%Mbogwe1930/02Appl. 218051.4428Northern Mining Consultancy60%Lunguya1766/01Appl. R-28235.793Northern  Mining Consultancy/Tanzam60%LunguyaRelinquished 1/2  1766/012828/0435.7129Reapa Bus. Assoc. Inc.65%Mbogwe1225/991942/02154.330Abby's Mining Co.65%Lunguya639/972193/0381.1431Abby's Mining Co.65%MbogweRL196/992194/03138.232Abby's Mining Co.65%MbogweRL195/992195/03161.233JSN Limited70%Itetemia1300/992374/0413.4134Dalles & Shamwada65%Biharamulo1269/992510/04102.935Germina Lukuvi65%Kanegele1815/01Appl. 220737.4736Zahabu Investments70%Lunguya1320/992059/0234.2837Fenites Limited70%Lunguya1307/992472/0451.2538Afrigold Limited70%Mbogwe1308/992455/04143.439Afrigold Limited65%Ushirombo1797/01Appl. R-30152.6240Fenites Limited75%Lunguya1291/991990/0210.2942JSN Limited65%Kanegele847/972056/0223.1443Afrigold Limited65%Kanegele1311/992502/0451.4144Zahabu Investments70%Ushirombo West1319/99Appl. 72263.0945Sigo Gems65%Kigosi66/921853/20012246Digitel Holdings70%Geita1087/982044/0260.8947Digitel Holdings70%Geita1086/982506/0451.4550Tamo Geo-Consult80%Ushirombo1401/991401/9974.6881Tamo Geo-Consult/Tanzam80%UshiromboRelinquished 1/2   1401/992466/0474.6051Tamo Geo-Consult80%Ushirombo1402/991402/9943.7982Tanzam80%UshiromboRelinquished 1/2   1402/992467/0443.5752Tanzam100%Geita2196/0311.2353Tangulf Express Ltd.85%Majimoto2070/0250.8154RSR (T) Ltd.90%Mwadui2513/048.35155RSR (T) Ltd.85%Kanegele2514/0459.42


37



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Book #JV PartnerJV%Project AreaOld PL#New PL#Sq Km56Teddy & Co.90%Igunga2541/0458.2357Hasanet Limited90%Mwadui2285/03102.758State Mining Co.80%Nzega2576/04103.859Capri General85%Kanegele1761/01Appl. R-28444.4760F. Mjasambu & Partners90%Mwadui2701/0428.4461Tanzam100%Mwadui2704/0414.7562Tanzam100%Mwadui2705/04128.363Tanzam100%KabangaPLR 2707/04205.264Tanzam100%Kabanga2708/0464.0465Abby's Mining Co.90%Kanegele2688/0413.7166Tanzam100%KabangaPLR 2827/04146.267Tanzam100%KabangaPLR 2831/04117.368Hydro-Geos Consulting90%MwaduiPLR 2813/04217.869Tanzam100%KabangaPLR 2706/04428.470Assalaam Almasi85%Mwadui2843/0472.071Givex Company Limited90%Kibara2785/0490.9687Tanzam100%ItetemiaRelinquished 1/2   1713/012654/048.573




As of the date hereof, Tancan holds interests in the following 45 prospecting licenses (including previously discussed  Itetemia, Luhala and Tulawaka Project Areas):



Book #License HolderTancanJV%Project AreaOld PL#New PL#Sq Km101Itetemia Mining Co. Ltd.90%Itetemia1450/001450/0018.5784Itetemia Mining Co. Ltd.90%ItetemiaRelinquished 1/2   1450/002523/0418.57102TancanLuhala1451/001451/0027.8683TancanLuhalaRelinquished 1/2   1451/002519/0427.865103Tancan100%Itetemia1713/01App R-2348.57104Tancan100%Itetemia268/952038/0217.15105Tancan100%Itetemia241/942665/0432.02106Tancan100%Itetemia1612/001612/008.3685Tancan100%ItetemiaRelinquished 1/2   1612/002578/045.82107Tancan100%Itetemia509/962520/0425.72108Widescope Promotion100%Luhala1559/001559/0012.088Widescope Promotion100%LuhalaRelinquished 1/2   1559/002680/0412.0109Widescope Promotion100%Luhala1560/001560/0020.5889Widescope Promotion100%LuhalaRelinquished 1/2   1560/002681/0424.0110Tancan (Dismas Calist)100%Luhala1303/992297/033.72


38



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Book #License HolderTancanJV%Project AreaOld PL#New PL#Sq Km111Tancan100%Geita276/951856/1102.9112Kabahelele Mining Co.80%Tulawaka1452/001452/0015.9590Kabahelele Mining Co.80%TulawakaRelinquished 1/2  1452/002682/0415.95113Dia Consult Ltd.100%Tulawaka427/962473/0454.0198Dia Consult Ltdf.100%TulawakaRelinquished 1/2    427/962803/0455.76114Tancan100%Itetemia1115/982518/0417.15119Dia Consult100%Tulawaka2798/041757/015.219120Eb-Hance90%Kibara2058/0234.58124Charles Shumbi90%Kanagele1375/991375/995.2692Charles Shumbi/Tancan90%KanageleRelinquished 1/2 1375/992699/045.415125Mega Deposit Explorers90%KigosiPLR 2019/02495.1127Mega Deposit Explorers90%MiyabiPLR 2020/02150.8130Dismas Calist90%Shinyanga2217/03123.4131Makweba/Kusundwa90%Tulawaka2295/0339.46132Eb-Hance Co.90%Kibara2308/0353.35133Mussah Mussah90%Nyanzaga North2279/0335.79134Hasanet Ltd.90%Manonga2272/0354.82135Trust Marck Investments90%Manonga2007/0310.64136Mbonimpa, J&F90%Manonga2461/04116.5137Bey & Daniel90%Manonga1187/0137.96138Hasanet90%Manonga2487/0424.84139Dismast Calist90%Igunga2458/04152.4140Tancan100%Manonga2655/0475.65141Tancan100%Nyanzaga North2656/04143.7142Tancan100%Manonga2657/04120.3143Tancan100%Manonga2658/04100.3144Tancan100%Manonga2667/047.7145Tancan100%Igunga2668/0430.25146Tancan100%Manonga2669/0491.58147Tancan100%IgungaPLR 2670/04219.3




The total land area currently held under license is approximately 8200 km2.



History



Prior to Tanzam's acquisition of the original fifty-two prospecting licenses ("PL") in its current portfolio, little systematic work using modern exploration methods had been undertaken on the licenses. Tanzam acquired the licenses through negotiation with local vendors and prospectors, and by direct application to the Geological Survey (Madini), within the Mineral Resources Department of the Ministry of Water, Energy and Minerals of Tanzania.



Tanzam's interest in the prospecting licenses is variable, depending on the agreements with the individual vendors. However, it is common to all agreements with the vendors that Tanzam has exclusive rights to sell the project to a third party without restraint. Compensation to the vendors remains the responsibility of Tanzam.

39



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Tanzam has granted to Barrick Exploration Africa Limited ("BEAL") an option to acquire the total rights, titles and interests held by Tanzam in the following two (2) prospecting licenses:



PL 2374/03

PL 2455/04



If such option is exercised, Tanzam is entitled to (i) certain payments after the Commercial Production Date (as defined) with respect to the first mine constructed by BEAL on any property covered by the licenses; and (ii) a 1.5% net smelter return (which may, in certain circumstances, be reduced).  Refer to Item 4A for further information on the option granted to BEAL.



The Company has incurred total net costs of $1,541,833 on the Lake Victoria Goldfields Properties to August 31, 2004.



Mineralisation



Lake Victoria Goldfields Belts



The Lake Victoria Goldfields have produced the greatest proportion of Tanzania's mineral wealth and are still the most fertile and prospective for gold exploration.  Ninety percent of Tanzania's gold production to 1991 had come from the district and new production is likely.  Significant gold resources have been discovered in the Lake Victoria Goldfields in the last decade by other third parties.



Artisanal Gold Mining



Official estimates indicate that artisanal gold mining in Tanzania produces 8 to 15 tonnes of gold per annum. Black market dealers have previously purchased most of this production, but Meremeta (a state-owned gold company) has set up regional buying centres to capture most of this production. The net benefit is both to the State in gaining foreign currency, and to the artisanal miners who can sell gold at set prices based on world commodity markets.



Historically, artisanal miners have only operated on a cash basis, i.e. where the gold grade was less than approximately 40g/t, the artisanals could not profitably mine the ore.  Artisanals actively explored the Lake Victoria Goldfields, and have discovered several significant deposits that are currently being developed commercially by other mining companies.



Geology



Tanzania is underlain by the Tanzanian Craton, a crustal block of predominately Archaean (>2,500 Ma) rocks surrounded and overlain by younger sediments and mobile belts.  It is one of the core blocks of Africa, and is essentially a continuation of the Congo Craton.



The Lake Victoria Goldfields consist of a granite greenstone terrain that extends northwards into SW Kenya.  The internal stratigraphy of the greenstone belts is reasonably well constrained.  It consists of a lower, essentially mafic, volcanic unit in which ultramafic rocks are rare, overlain by chemical and classic sediments and then felsic volcanics.  This assemblage is called the Nyanzian Group.  The Nyanzian Group is unconformably overlain by a classic sedimentary sequence, also Archean, known as the Kavirondian Group.  These sediments contain clasts of all Nyanzian lithogies, some of which appear to have been deformed before erosion.  In addition they contain debris of some granitoids.  However, the main period of granitoid emplacement post-dates the Kavirondian.  Although there was early tectonism, the main pervasive deformation post-dates the bulk of the granites, imparting a foliation to all these lithogies.  Some Archaean granitoids of the Belt appear to pot-date this foliation.  Further discussion on the regional and local geology is set out above, under the section on
"Geology" for the Itetemia Property.





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Exploration



The exploration program on behalf of Tanzam comprised the following elements:



ComponentDescriptionNo of Samples/KilometresDesk StudiesLiterature databaseCompilation of all available technical literature on geology and mineralisation of Tanzania, document scanning, indexing and OCR>300 references;
10,000 pagesAir Photography InterpretationGovernment uncontrolled panchromatic airphotos used as reference for field mapping450 photos @ 1:50,000 scaleGeographic Information SystemAll available published Government topocadastral, geophysics and geology maps scanned, georeferenced and digitised35 topocadastral maps;
10 geology maps; and
30 geophysics mapsLandsat TMGeoreferencing using map control points, calculation of iron oxide, clay ratios, various band combinations, principal component analysis (Crosta alteration index)One scene 160 X 185kmSPOT satellite imageryGeoreferencing using map control points, scene mosaic, digital base map, structural analysis, identification of artisanal workingsEight scenes 60 X 60kmOrientation ProgramSoil profile mappingMapping of the soil profile in trenches and artisanal workingsTrenches in PL1846/01Lunguya Kimberlite OrientationExamination of previous Open File exploration work, indicator mineral samplingLunguya kimberlite areaMine visitsGeological tours of Golden Pride (Resolute) and Chocolate Reef (Anglo American/Pangea)2 toursAirborne GeophysicsMagnetic gradiometer, radiometrics and VLF-EMFugro Airborne Surveys Triax® aeromagnetic gradiometer, 256 channel radiometrics and VLF-EM36714 line kilometres @ 250m line spacing;
approximately 8500km2GEOTEM test surveyFugro Airborne Surveys (Geoterrex Canada), Utambala, Musindikwa and Katente artisanal workings in PL1401/99 near Ushirombo village.200 lkm @ 250m line spacing; 6 X 8 km area


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|Component                            | Description                                                                                                                                                                                                                       | No of
    Samples/Kilometres                            
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------
|Field Program                       
|Regional Aeromagnetic Interpretation | Identification of magnetic lineaments indicative of structure, magnetic fabric indicating foliation, shearing and stratigraphy, pseudo-geology mapping                                                                            | 36714 line kilometres;
approximately 8500km2            
|Soils Mapping                        | Combination of Landsat TM imagery, airborne radiometrics, and DEM to identify soils and erosional surfaces for interpretation of underlying geology and planning geochemical programs                                             | Entire project area; approximately 8500km2              
|Artisanal Mapping                    | Identification of artisanal workings from SPOT imagery and records from airborne survey                                                                                                                                           | 139 artisanal workings identified                       
|Regional mapping                     | Integrated interpretation of Air photos, geophysical and satellite imagery and geophysics, regional structural interpretation, identification of areas of alteration, detailed interpretation of high ranked prospecting licenses | Entire project area;
approximately 8500km2              
|Gold Analysis Samples                | 726 samples fire assay Humac Laboratory Mwanza
1045 samples Aqua Regia wet chemical assay Humac laboratory Mwanza                                                                                                                 | 726 samples fire assay;
1045 samples wet chemical method
|Multi element geochemistry Samples   | 726 samples 45-element ICP-MS Omac Laboratory Ireland                                                                                                                                                                             | 726 samples                                             
|License boundary survey              | OmniStar differential GPS survey on corners of prospecting licenses                                                                                                                                                               | 184 points                                              
|Kimberlite program                   | Identification of discordant sub-circular aeromagnetic targets                                                                                                                                                                    | 195 targets identified;
98 targets sampled              



Prospecting License Ranking Criteria



The prospecting licenses in the Tanzam portfolio in Phase I have been ranked according to the following criteria for potential to host gold mineralisation:



(a)

Regional structural controls for mineralisation (including relative ages) interpreted from airborne geophysics and satellite imagery should be present.



(b)

The presence of artisanal mining on a prospecting license, especially if it is currently active.



(c)

Underlying
"prospective" lithologies (eg. banded iron formation that had been sheared is a known host for gold).



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(d)

Indications from assay data that gold or a marker element present in anomalously high concentrations. This criterion will take into consideration possible near-surface leaching, nature of the sample (regolith, grab rock specimen, etc).



(e)

Indication of hydrothermal alteration associated with mineralisation.



(f)

Proximity to known gold occurrences.



From the Phase I program, nine prospecting licenses have been ranked high potential for gold mineralization, and an additional eight have been categorized as moderate-high potential for gold mineralization. Within the high ranking prospecting licenses, twenty-nine targets over a 715.36km2 area warrant detailed follow-up.



|Prospecting Licenses
Ranked "High" | Prospecting Licenses Ranked
      "Moderate-High"
|---------------------------------- | -------------------------------------------------
|1846/01(2)                         | 1762/01(3)                                       
|1798/01                            | 1942/02                                          
|2182/03(2)                         | 2195/03                                          
|1854/01(3)                         | 2194/03                                          
|1749/01                            | 2510/04(2)                                       
|1766/01 / 2828/04                  | 2059/02                                          
|2374/03(1)                         | 2472/04                                          
|2455/04(1)                         | 1853/01(3)                                       
|1401/99 / 2466/04                  |                                                  

(1)

Prospecting licenses over which BEAL has an option.

(2)

Prospecting licenses over which MDN has an option.

(3)

Prospecting licenses over which Ashanti has an option.



Conclusions from Phase I



The LVGB is generally under explored using modern exploration methodology. The Tanzam exploration program tested the effectiveness of several exploration techniques and has assembled a considerable database of literature, digital data and exploration methodologies Greenstone rocks that are favorable hosts to gold mineralisation are more widespread than previously mapped.  Thick soil development obscures virtually all bedrock exposures, and geophysics is the only effective geological mapping tool. Areas that were mapped previously as granite based on soils and float are seen to be underlain by greenstone rocks which are favorable for gold mineralization.  Artisanal miners in PL 1854/01 have led to the discovery of an unknown mineralized occurrence previously mapped as granitic terrain with low potential for gold mineralization.



THE LAKE VICTORIA GOLDFIELDS PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.



Biogeochemistry



A key component in this optimization process is the deployment of biogeochemistry techniques in our field programs.



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One of the major problems confronting mineral explorers in the LVGB - and for that matter in most other greenstone belts in the world - is the presence of deep overburden which frequently masks the existence of favorable host rocks for gold, diamonds and other mineral commodities.



Over the past year, the Company has expended considerable effort to identify an exploration tool that would help our in-house geoscientists identify mineral potential beneath heavy cover. After carefully reviewing a variety of options, management concluded that biogeochemistry was a cost-effective methodology for the preliminary evaluation of its mineral properties.



Protocols have been developed relating to the selection and analysis of sample materials and specially trained crews have been put into the field to gather samples for analysis.  In addition, a biogeochemistry laboratory has been established in Mwanza for the preparation of sample materials which are then sent to independent laboratories.



At the present time, the Company is examining the possibility of protecting its internally developed biogeochemical methodology via international laws governing intellectual property.



Item 5.

Operating and Financial Review and Prospects



This discussion and analysis of the operating results and the financial position of the Company for the years ended August 31, 2004, 2003 and 2002, and should be read in conjunction with the consolidated financial statements and the related notes attached hereto.



Critical Accounting Policies



The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain mineral deposits that are economically recoverable.  The continued operations of the Company and the recoverability of the amounts shown for mineral properties and related deferred costs are dependent upon the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, obtaining necessary financing to explore and develop the properties, and upon future profitable production or proceeds from disposition of the mineral properties.



In accordance with Canadian generally accepted accounting principles, acquisition costs and exploration and development costs relating to mineral properties are deferred until the properties are brought into production, at which time they are amortized on a unit-of-production basis, or until the properties are abandoned or sold or management determines that the mineral property is not economically viable, at which time the deferred costs are written off.  Option payments on mineral properties are exercisable at the discretion of the Company and, accordingly, are only recognized as paid.



Amounts recovered from third parties to earn an interest in the Company's mineral properties are applied as a reduction of the deferred exploration costs.  The amounts shown as deferred expenditures and property acquisition costs represent net costs to date, less amounts amortized and/or written off, and do not necessarily represent present or future values.



Overhead costs directly related to exploration are allocated to the mineral properties explored during the year and are deferred and amortized using the same method applied to property-specific exploration costs.  All other overhead and administration costs are expensed in the year they are incurred.



For the purposes of United States generally accepted accounting principles ("US GAAP"), the Company expenses all exploration expenditures made prior to commercially mineable deposits being identified.  Property acquisition costs are capitalized as incurred and are subject to impairment analysis on occurrence of a triggering event.  During the year ended August 31, 2004, the Company determined that it had previously incorrectly applied its accounting policy for US GAAP purposes and had included property acquisition costs in the amounts to be expenses under US GAAP.  Such acquisition costs are now capitalized and will be amortized on a unit of

44



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production basis once production commences.  The correction of the error in the application of the Company's US GAAP accounting policy has been applied retroactively.  See Note 11(a) of the Consolidated Financial Statements of the Company.



The Consolidated Financial Statements utilize estimates and assumptions principally regarding mineral properties and going concern that reflect management's expectations at the date of preparation.  Events or circumstances in the future, many of which are beyond the control of the Company, may impact these expectations and accordingly could lead to different assumptions and estimates from those utilized.  Factors that could impact the estimates and assumptions that were made at the date of preparation of the Consolidated Financial Statements have been previously discussed under the heading
"Risk Factors".



A.

Operating Results



The following discussion and analysis of the financial condition and operating results of the Company for the three years ended August 31, 2004, 2003 and 2002 should be read in conjunction with the Consolidated Financial Statements and related notes to the financial statements which have been prepared in accordance with Canadian GAAP.  The discussion and analysis set for the below covers the results measured under Canadian GAAP.  Material differences between the application of Canadian GAAP and U.S. GAAP to the Company's audited financial statements exist as described in Note 11 to the Consolidated Financial Statements.



Fiscal year ended August 31, 2004 compared to fiscal year ended August 31, 2003



The Company incurred a net loss of $1,616,364 for the year ended August 31, 2004 or $0.02 per share, compared to a net loss of $3,014,778 for the year ended August 31, 2003.  The decrease in net loss in the period-to-period comparison is $1,398,414, which is due primarily to the write-off of mineral properties and deferred exploration costs in 2003 of $1,031,436, compared to nil for 2004.  Property investigation costs were also $125,095 lower in 2004, as the Company focused on exploring its current properties.  Professional fees were $108,389 lower in 2004; consulting fees were $30,369 lower in 2004; and office rent was $39,014 lower in 2004.  The lower consulting and management fees in 2004 were due to reductions in consulting and management staff, and the lower professional fees were due to the settlement of an outstanding lawsuit.  The lower office rent is due to a reduction in leased space, and is part of a general reduction in office overhead expenses.



Fiscal year ended August 31, 2003 as compared to fiscal year ended August 31, 2002



The Company incurred a net loss for year ended August 31, 2003 of $3,014,778 or $0.04 per share, compared to a net loss of $1,343,958 or $0.02 per share in 2002.  The increase in net loss in the year-to-year comparison is $1,670,820.  The increase in net loss prior to future income tax recovery is $2,110,820.  Throughout the fiscal year ending August 31, 2003, exploration staff performed exploration over the territory acquired from Tanzam and on new properties acquired for the Company's account during the year.  At the end of the fiscal year, a total of ten licenses were relinquished.  The write-offs associated with these licenses of $1,031,436 comprise the largest expense category for the 2003 fiscal year, while the write-off in the 2002 fiscal year was only $59,014.  A license within the Itetemia Property area accounted for the largest portion ($729,309) of this write-off.  In addition, the expense to investigate new properties for the Company's portfolio increased by $175,134 from the prior year's amount of $204,952, to a total of $380,086.  Administration expenses amounted to $1,978,041 in 2003 compared to $1,144,038 in 2002.  The increase is primarily due to an increase in consulting and management fees, office rentals, professional fees and salaries and benefits, as a result of an increase in activities in all these areas.



Consulting and management fees increased to $170,468 in 2003, compared to $98,899 in 2002 mainly due to the increase in the Company's focus and exploration efforts in Tanzania.  Office and administration costs decreased to $110,123 in 2003, from $116,264 in 2002, and office rentals increased to $142,148 in 2003, from $88,467 in 2002, the increase in office rentals relating to the Company's offices in Tanzania as a result of the

45



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Tanzam acquisition.  Professional fees increased to $309,556 in 2003, from $90,202 in 2002 mainly due to the increase in property acquisition, exploration, and financing activities of the Company, increase in auditing costs associated with the acquisition of Tanzam, and legal fees associated with an outstanding law suit.  Promotions and shareholder relations expense increased to $92,876 in 2003, from $83,790 in 2002.  Salaries and benefits costs increased to $637,327 in 2003, from $351,975 in 2002, mainly due to increased staffing levels.



Travel and accommodation costs increased to $78,906 in 2003, from $53,875 in 2002 mainly due to increased travel as a result of more activity in Tanzania.  Foreign exchange loss increased to $104,989 in 2003, from $13,509 in 2002 mainly due to a weaker Tanzanian schilling versus the Canadian dollar.



Inflation



Historically, inflation has not affected the Company's business in the current locations where it is doing business and the Company does not expect it to affect the Company's operations in the future.



B.

Liquidity and Capital Resources



The Company had $1,067,448 in cash at August 31, 2004, as well as $415,201 in short term investments, compared to $1,550,072 in cash and $926,192 in short term investments as at August 31, 2003.  The Company had working capital of $1,918,901 at August 31, 2004, compared to $2,092,912 at August 31, 2003.  Although the Company believes it has enough resources through working capital and share subscription agreements to finance operations for its 2005 fiscal year, ultimately the Company will need to obtain additional financing to sustain operations at the present rate of activity.  Historically, the Company has raised funds through equity financing, entering into joint venture or royalty agreements with other mining companies, and the exercise of options and warrants to fund its operations.  The Company's funding requirements by major expenditure category, listed in order of priority are:



(a)

exploration work,

(b)

new property investigations, and

(c)

general and administrative costs.



Exploration work and new property investigations can generally be deferred until adequate capital resources are available, and general and administrative costs can be reduced during periods when funding is not available.



At this time, the Company has no operating revenues, and does not anticipate any operating revenues unless the Company is able to find, acquire, place in production and operate a profitable mining property.



The Company has completed the following twenty-two (22) tranches of a twenty-four (24) tranche private placement pursuant to a Subscription Agreement dated March 5, 2003 made between the Company and James E. Sinclair, Chairman and Chief Executive Officer of the Company:



(a)

March 19, 2003 - 58,480 common shares at a price of $1.71 per share;

(b)

April 11, 2003 - 73,368 common shares at a price of $1.363 per share;

(c)

May 15, 2003 - 101,875 common shares at a price of $1.227 per share;

(d)

June 26, 2003 - 77,930 common shares at a price of $1.604 per share;

(e)

July 30, 2003 - 88,968 common shares at a price of $1.405 per share;

(f)

August 27, 2003 - 73,443 common shares at a price of $1.702 per share;

(g)

September 26, 2003 - 65,445 common shares at a price of $1.91 per share;

(h)

October 21, 2003 - 68,757 common shares at a price of $1.818 per share;

(i)

November 21, 2003 - 76,876 common shares at a price of $1.626 per share;

(j)

December 12, 2003 - 66,525 common shares at a price of $1.879 per share;

(k)

January 13, 2004
- 77,785 common shares at a price of $1.607 per share;

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(l)

February 24, 2004
- 82,508 common shares at a price of $1.515 per share;

(m)

March 26, 2004
- 83,001 common shares at a price of $1.506 per share;

(n)

April 29, 2004
- 82,946 common shares at a price of $1.507 per share;

(o)

May 20, 2004
- 98,580 common shares at a price of $1.268 per share;

(p)

July 2, 2004
- 110,035 common shares at a price of $1.136 per share;

(q)

August 16, 2004
- 107,759 common shares at a price of $1.16 per share;

(r)

September 27, 2004
- 109,361 common shares at a price of $1.143 per share;

(s)

October 18, 2004
- 108,696 common shares at a price of $1.15 per share;

(t)

November 10, 2004
- 101,461 common shares at a price of $1.232 per share;

(u)

November 22, 2004
- 95,493 common shares at a price of $1.309 per share; and

(v)

December 8, 2004
- 97,050 common shares at a price of $1.288 per share.



The Company also completed a $1,000,000 private placement pursuant to a separate Subscription Agreement dated January 5, 2004 between the Company and James E. Sinclair for 622,278 common shares at a price of $1.607 per share.



On January 13, 2005, the Company entered into private placement subscription agreement with the Company's Chairman and C.E.O. for the purchase of an aggregate of $3,000,000 worth of common shares of the Company in eight separate quarterly tranches of $375,000 each.  The initial quarterly period is to commence February 1, 2005.



Mineral Property Projects:



As at August 31, 2004, amounts capitalized in respect of mineral properties were $19,853,296, an increased from August 31, 2003 when the balance was $18,672,446 and August 31, 2002 when the balance was $18,552,555.



During the fiscal year ended August 31, 2003, the Company capitalized under Canadian GAAP $1,151,327 (net of option payments received of $184,965) for property acquisition and exploration work, of which $450,912 was incurred on the Lunguya Property.  The Company also wrote-off $1,031,436 in exploration expenditures, of which $729,309 related to claims relinquished in the Itetemia Property area.



During the fiscal year ended August 31, 2002, the Company capitalized mineral property acquisition costs of $8,297,805.  Of this amount, $8,166,292 related to the acquisition of Tanzam.  The Company also completed $1,238,635 in exploration work on its mineral resource properties, including $443,603 on the Itetemia Property and $491,724 on the Luhala Property.  On Itetemia, the exploration work was primarily trenching and drilling and on Luhala, it related primarily to geophysical and geochemcial analysis.



During the fiscal year ended August 31, 2004, the Company capitalized mineral property exploration costs of $1,180,850 (net of option payments received of $331,934) on its mineral resource properties.



For information on the Company's commitments for property and rental payments, refer to Item 4.



C.

Research and Development, Patents and License, etc.



Not Applicable.



D.

Trend Information



No known trend.



47



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E.

Off Balance Sheet Arrangements



The Company has no material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition.



F.

Tabular Disclosure of Contractual Obligations



The following table sets out the Company's known contractual obligations as of the latest fiscal year end:



|Contractual Obligations       | Payments Due by Period
|----------------------------- | ----------------------
|Total                         | Less than
1 year      
|Mwanza Office Lease(1)        | US$12,000             
|Dar es Salaam Office Lease(2) | US$5,760              
|Vancouver Office Lease(3)     | CDN$20,400            
|Field Staff House Lease(4)    | US$4,800              

(1)

Renewable annually in October, 2005.

(2)

Renewable annually in January, 2005.

(3)

Expires on May 31, 2005.

(4)

Renewable annually in July, 2005.



Item 6.

Directors, Senior Management and Employees



A.

Directors and Senior Management



The following is a list of the Company's current directors and officers.  The directors named below were all re-elected by the Company's shareholders on February 16, 2004, except for Dr. Betts, who was appointed to the Board on January 4, 2005:



|Name, Municipality of Residence and Position With the Company                        | Principal occupation or employment and, if not a previously elected director, occupation during the past 
5 years                                                  | Served as a Director Continuously Since
|------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------
|James E. SinclairSharon, Connecticut

Chairman, Chief Executive Officer and Director | Chairman and CEO of the Company; Chairman and CEO of Tanzania American International Development Corporation 2000 Limited                                          | April 30, 2002                         
|Victoria LuisKent, Connecticut

Chief Financial Officer, Secretary and Director      | CFO and Secretary of the Company; CFO, Tanzania American International Development Corporation 2000 Limited; Process Improvement Manager, General Electric Capital | April 30, 2002                         

48



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|Name,
      Municipality of Residence and Position With the Company | Principal occupation or employment and, if not a previously elected director, occupation during the past 
5 years                                                                                                               | Served as a Director Continuously Since
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------
|Jonathan G. DeaneMwanza, Tanzania
President                         | Exploration Manager of the Company from 1996; Vice-President, Exploration of the Company from February, 2004 to September 2004; President from September 2004 to present                                                        | Not a director                         
|Marek J. KreczmerVancouver, 
British Columbia

Director             | President of the Company from 1991 to December, 2003; Chairman of the Technical Committee since October, 2003                                                                                                                   | July 24, 1991                          
|Ulrich E. RathToronto, Ontario

Director                            | Chief Executive Officer, Compania Minera Milpo (Peru) from May, 1999 to April, 2002; Chief Executive Officer, EAGC Ventures Ltd. from May, 2002 to April, 2003; Director, Chariot Resources Ltd. from December, 2002 to present | October 7, 2003                        
|Anton EsterhuizenJohannesburg, South Africa

Director               | Managing Director, Pangea Exploration (Pty)                                                                                                                                                                                     | January, 2001                          
|William HarveySharon, Connecticut

Director                         | Psychologist                                                                                                                                                                                                                    | April 30, 2002                         
|Rosalind MorrowWillowdale, Ontario
Director                         | Lawyer; Partner, Borden Ladner Gervais LLP                                                                                                                                                                                      | October 20, 2003                       
|Dr. Norman BettsStoreytown,New Brunswick
Director                   | President and CEO Oak Ledge Management Inc.; Associate Professor, Faculty of Administration, University of New Brunswick                                                                                                        | January 4, 2005                        



Directors and Senior Management



James E. Sinclair

Chairman, Chief Executive Officer and Director



Mr. Sinclair became Chairman and CEO of the Company following the Company's acquisition in April, 2002 of Tanzam, a Tanzanian gold exploration company formerly controlled by the Sinclair family.  Mr. Sinclair, aged 63, devotes his full time to the business and affairs of the Company.

49



---







Mr. Sinclair is primarily a precious metals specialist and a commodities and foreign currency trader.  His past experience includes that of founder of the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles.  The companies, which operated branches in New York, Kansas City, Toronto, Chicago, London and Geneva, were sold in 1983.  Mr. Sinclair served as a Precious Metal Advisor to Hunt Oil and the Hunt family from 1981 to 1984 for the liquidation of their silver position. Mr. Sinclair was a general partner and member of the executive committee of two New York Stock Exchange firms and also President of Sinclair Global Clearing Corporation (Commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).  Mr. Sinclair was President of James Sinclair Financial Research SARL in Luxembourg. Mr. Sinclair held the position of Chairman of Sutton Resources from 1989 to 1995.



Mr. Sinclair is the author of numerous magazine articles and three books, which deal with a variety of investment subjects, including precious metals, trading strategies and geopolitical events and their relationship to world economics and the markets.



Victoria Luis, M.B.A., CSCPA and AICPA Member

Chief Financial Officer, Secretary and Director



Prior to her association with the Company, she was a board member of Tanzam in addition to being its Chief Financial Officer, a position she also held with an associated company, Sinclair Financial.



Before joining Tanzam, Mrs. Luis held various management positions with General Electric Capital Corporation where she was part of a team that facilitated the amalgamation of companies acquired by GE.



She earned her Masters of Business Administration with a specialization in Accounting in 1998 and her Bachelors of Science in Finance in 1990.  Ms. Luis, aged 35, devotes her full time to the business and affairs of the Company.



Jonathan G. Deane, M.Sc. (Geol.), B.Sc. (Honors)

President



Prior to his association with the Company, he held various positions with Gold Fields Namibia, including Senior Exploration Geologist, from 1988 to 1994 and Senior Mine Geologist with Otjihase Copper Mine, Central Namibia from April, 1994 to July, 1996.



Mr. Deane, aged 43, devotes his full time to the business and affairs of the Company.



Marek J. Kreczmer, M.Sc. (Geol.), B.Sc. (Geol.)

Director



Mr. Kreczmer was the President of the Company since its inception in 1991until December 31, 2003.  He established the Company's operating subsidiary in Tanzania, Tancan Mining Company Limited ("Tancan").  Mr. Kreczmer has initiated, formed and operated several exploration joint ventures with senior gold companies.  He is responsible for representing the Company's interests in various management and technical committees required to operate these joint ventures, and is currently the Chairman of the Technical Committee of the Company.  Jonathan Deane, President of the Company, has assumed Mr. Kreczmer's former responsibilities for the day-to-day management and administration of the Company's exploration programs, and local negotiations for new property acquisitions.  Mr. James Sinclair, Chairman and Chief Executive Officer, has assumed Mr. Kreczmer's former responsibilities for strategic planning and negotiations for major acquisitions.



Mr. Kreczmer has an extensive background in the mineral exploration business.  He was a project geologist for two leading Canadian explorers, Cameco and Granges Exploration.  The exploration focus for these companies included base metals, uranium and gold.  His responsibilities included all aspects of administering the

50



---



exploration budget, on-site field management, and the set-up and establishment of an exploration team to deal with specific project objectives.  Mr. Kreczmer, aged 53, devotes approximately 10% of his time to the business and affairs of the Company.



Ulrich E. Rath

Director



Mr. Rath has a wide range of experience in the mining industry, and has specific experience in South Africa and Peru.  Currently a director of Chariot Resources Ltd. since December 2002, he was formerly the CEO and a director of EAGC Ventures Inc. from May 2002 to April 2003, and the CEO and director of Compania Minera Milpo from May 1999 to April 2002.  Mr. Rath was also formerly Vice-President, Corporate Development, for Rio Algom Ltd. from December 1992 to October 1998.  Rio Algom Ltd. was a U.S. reporting issuer, whose common shares were listed on the American Stock Exchange.  Mr. Rath, aged 57, devotes approximately 10% of his time to the business and affairs of the Company.



Anton Esterhuizen

Director



Mr. Esterhuizen is based in Johannesburg, South Africa is currently the Managing Director of Pangea Exploration (Pty) Ltd., a South African company with exploration interests in Africa and South America and not related to Pangea Goldfields Inc.  Mr. Esterhuizen developed the exploration model which led to the discovery of the Tulawaka gold deposit.  He successfully managed Pangea Goldfields' gold and mineral sands exploration in East Africa until July, 2000 when that company was sold to Barrick.  Mr. Esterhuizen, aged 53, devotes approximately 15% of his time to the business and affairs of the Company.



Dr. William Harvey, B.A., Ph.D.

Director



Dr. Harvey is presently a consultant and technical expert to a variety of research centres and state and federal programs in the United States.  He is a consultant to: National Drug Information Centre for Families in Action; American Institute of Research; Office of Juvenile Justice & Delinquency Prevention; National Institute on Drug Abuse; and National Institute on Alcoholism and Alcohol Abuse.  He is involved in the formulation of new programs and policies aimed at the betterment of society.  The Sinclair family has already made a significant donation to a private trust, The Tanzanian Relief Fund, which in turn has funded the hospital at Bulyanhulu.  Dr. Harvey will expand the role which the Company has at the local level to ensure that stakeholder interests are addressed.  Dr. Harvey, aged 71, devotes approximately 10% of his time to the business and affairs of the Company.



Rosalind Morrow, B.A., B.Ed., LL.B.

Director



Ms. Morrow's practice includes a special emphasis on financings and acquisitions for the financial services and communications industry sectors, project and government financings, and corporate governance.  She advises issuers, underwriters, and investors in connection with debt and equity offerings and investments, including domestic and trans-border public offerings and private placements, capital restructurings and corporate and securities law compliance.  Ms. Morrow, aged 50, devotes approximately 10% of her time to the business and affairs of the Company.



Dr. Norman Betts, Ph.D.

Director



Dr. Betts Dr. Betts is an Associate Professor, Faculty of Administration, University of New Brunswick (UNB) Canada and is a Fellow of the New Brunswick Institute of Chartered Accountants (FCA). He also serves





51



---



as
a director and chair of the Audit Committee of Minacs Worldwide Inc. and Slam
Exploration Ltd. in addition to being a director and member of the Audit
Committee of New Brunswick Power Corporation.



Dr.
Betts is a co-chair of the Board of Trustees of the UNB Pension Plan for
Academic Employees and is a director of the Nature Conservancy for the
Atlantic region.  A former Finance Minister and Minister of Business with
the Province of New Brunswick, Dr. Betts was awarded a PhD in Management from
the School of Business at Queen's University in Kingston, Ontario in
1992.



Penalties
or Sanctions



No
directors or officers of the Company, or a shareholder holding a sufficient
number of securities of the Company to affect materially the control of the
Company has:



(a)

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



(b)

been
subject to an other penalties or sanctions imposed by a court or regulatory body
that would likely be considered important to a reasonable investor in making an
investment decision;



except
for Mr. James E. Sinclair who entered into a settlement agreement dated July 22,
1998 with the British Columbia Securities Commission and paid a fine of $2,000
in connection with the issuance of a news release and proxy circular prepared in
connection with a proxy contest for Sutton Resources Ltd. ("Sutton"), a
reporting issuer of which Mr. Sinclair was a director, which contained a
statement which was not accurate, since the statement was not properly qualified
to distinguish between the acquisition cost and current market cost of the
Sutton shares in question.



Personal
Bankruptcies



No
director or officer of the Company, or a shareholder holding a sufficient number
of securities of the Company to affect materially the control of the Company, or
a personal holding company of any such persons has, with the 10 years before the
date of this Annual Report, became bankrupt, made a proposal under any
legislation relating to bankruptcy or insolvency or was subject to or instituted
any proceedings, arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets of the director or
officer; except for Victoria Luis who was discharged from personal bankruptcy on
September 18, 1995.



Conflicts
of Interest



There
is no existing material conflict or interest between the Company or its
subsidiaries and a director or officer of the Company or its subsidiaries.
 However, certain directors and officers of the Company are and may
continue to be involved in the mining and mineral exploration industry through
their direct and indirect participation in corporations, partnerships or joint
ventures which are potential competitors.  Situations may arise in
connection with potential acquisitions and investments where the other interests
of these directors and officers may conflict with the interests of the Company.
 As required by law, each of the directors of the Company is required to
act honestly, in good faith and in the best interests of the Company.  Any
conflicts which arise shall be disclosed by the directors and officers in
accordance with the Business Corporation Act (Alberta) and they will
govern themselves in respect thereof to the best of their ability with the
obligations imposed on them by law.



B.

Compensation



The
Company has three (3) executive officers, namely James E. Sinclair, Chief
Executive Officer of the Company, Victoria Luis, Chief Financial Officer of the
Company, and Jonathan G. Deane, President.



52



---



The
following table sets forth particulars concerning the compensation since their
appointments of the executive officers, as defined in Form 51-102F6 prescribed
by the "Regulations" under the Securities Act of the Province of
Alberta, for the Company's last three fiscal years ended August 31, 2004:



|Name
      and Principal Position
      (a)                    | Fiscal
      Year
      (b)  | Annual
      Compensation                             | Long
      Term Compensation  | All Other Compen-
      sation ($)
      (i)                  
|-------------------------------------------------------------- | ---------------------------- | ----------------------------------------------------- | ----------------------------- | --------------------------------------------------------------
|Salary
      ($)
      (c)                                     | Bonus
      ($)
      (d)    | Other Annual Compen-
      sation
      ($)
      (e) | Awards                        | Shares
      or Units Subject to Resale Restrictions
      (g)
|Securities
      under Options Granted (#)
      (f)           | LTIP
      Payouts
      (h)
|James
      E. Sinclair,
      Chief Executive
      Officer   | 2004
      2003
      2002   | $119,100
      $105,968
      $46,406                 | Nil
      Nil
      Nil       | $10,000
      Nil
      Nil                                   
|Victoria
      Luis,
      Secretary & Chief Financial Officer | 2004
      2003
      2002   | $66,430
      $61,886
      N/A                       | $4,792
      $5,625
      N/A | $10,000
      Nil
      N/A                                   
|Marek
      J. Kreczmer,
      Former President(1)             | 2004
      2003
      2002   | Nil
      $161,483
      $161,079                     | Nil
      $29,700
      Nil   | $12,500
      Nil
      Nil                                   
|Jonathan
      G. Deane,
      President(2)                    | 2004
      2003
      2002   | $113,974
      N/A
      N/A                          | $5,574
      N/A
      N/A    | $4,020
      N/A
      N/A                                    

(1)
 Mr. Kreczmer resigned as President effective December 31, 2003.

(2)
 Mr. Deane was appointed President effective September 20, 2004.



The
Company has not set aside or accrued any funds for pension, retirement or
similar benefits.



Long
Term Incentive Plan Awards to Named Executive Officers



The
Company has made no long-term incentive plan awards during the fiscal year ended
August 31, 2004, to any executive officers of the Company, and none are
proposed.



Options
and SAR's Exercised by Named Executive Officers



The
following options were exercised during the fiscal year ended August 31, 2004 by
the named executive officers:



|Name
      (a)                                                   | Securities
      Acquired on
      Exercise
      (#)
      (b) | Aggregate
      Value
      Realized
      ($)
      (c) | Unexercised
      Options/SARs
      at August 31, 2004
      (#)
      Exercisable/
      Unexercisable
      (d) | Value
      of
      Unexercised
      in-the-Money
      Options/SARs
      at August 31, 2004 ($)
      Exercisable/
      Unexercisable
      (e)
|---------------------------------------------------------------- | --------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------
|James
      E. Sinclair,
      CEO                               | Nil                                                             | N/A                                                      | Nil                                                                                                                | N/A                                                                                                                                                 
|Victoria
      Luis,
      Chief Financial Officer and Secretary | Nil                                                             | N/A                                                      | 75,000                                                                                                             | $28,500                                                                                                                                             
|Marek
      J. Kreczmer,
      Former President                  | 380,000                                                         | $565,000                                                 | 250,000                                                                                                            | $95,000                                                                                                                                             

|Jonathan
      Deane,
      President | N/A | N/A | N/A | N/A
|------------------------------------- | --- | --- | --- | ---

53



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C.

Board
Practices



The
directors of the Company serve a one year term and are elected at the Annual
General Meeting of shareholders.  At the last Annual General Meeting, held
on February 16, 2004, the shareholders elected James E. Sinclair, Marek J.
Kreczmer, Victoria Luis, Anton Esterhuizen, William Harvey, Rosalind Morrow and
Ulrich E. Rath as directors.  The officers of the Company are elected
by the Board serve at the pleasure of the Board.



The
Company has an audit committee consisting of Ulrich E. Rath, Rosalind Morrow,
William Harvey and Dr. Norman Betts.  The roles and responsibilities of the
audit committee have been specifically defined as described in the Company's
Information Circular dated January 5, 2005, and include responsibilities for
overseeing management reporting on internal control.  The audit
committee has direct communication channels with the external auditors.



The
Company also has a compensation committee comprised of Ulrich E. Rath, Rosalind
Morrow, William Harvey and Dr. Norman Betts.  The Compensation Committee
periodically reviews the compensation paid to directors, management, and
employees based on such factors as time commitment, comparative fees
paid by other companies in the industry in North America and Africa, level
of responsibility and the Company's current position as an exploration company
with limited operating revenue.



The
Company has formed a Technical Committee comprised of Marek J. Kreczmer
(Chairman), Ulrich E. Rath, Anton Esterhuizen, and Jonathan G. Deane.  The
Committee sets the definitive exploration policy for the Company and reports
directly to the Board of Directors.



Directors'
Fees and Stock Option Plan



The
Board of Directors has recently implemented an arrangement to compensate
directors for their services to the Company by the payment of $10,000 per annum,
and $2,500 per committee served by each director.



In
addition to these arrangements, directors are also compensated by the Company
for their services in their capacity as directors under a Stock Option Plan (the
"Plan").  The Plan is administered by the Company's Board of
Directors and options are granted at their discretion.  The number of
shares reserved and available for issue under the Plan shall not exceed
8,144,132 or such greater number of shares as may be determined by the Board and
approval, if required, by the shareholders of the Company and by any relevant
stock exchange or other regulatory authority.  Options must expire no later
than five years from the date such options are granted.  As of April 3,
2003, the Board resolved that the Company will not to grant any further options
under the Plan, subject to further resolutions of the Board.  There has
been no other arrangement pursuant to which directors were compensated by the
Company in their capacity as directors; however, directors' fees of $88,470
were paid to directors during the fiscal year ended August 31, 2004, prior to
implementing the compensation package described above.



54



---





Employee
Share Ownership Plan



By
an agreement dated May 1, 2003, the Company appointed Olympia Trust Company of
Calgary, Alberta, as trustee (the "Trustee") to manage and administer an
employee share ownership plan ("ESOP").  Under the ESOP, eligible
employees, directors, and consultants can elect to contribute up to 30% of their
salary or compensation on a monthly basis for investment by the Trustee in
shares of the Company.  The Company will contribute funds equal to 100% of
the employee's contribution up to an amount equal to 5% or less of the
employee's salary.  The Company will contribute funds equal to 50% of the
employee's contribution for the next 6% to 30% inclusive of the employee's
salary.  All share purchases will be at market prices at the time of
purchase, through the facilities of the Toronto Stock Exchange using registered
representatives.  To date, eight employees have purchased a total of 5,500
common shares under the ESOP.  Monthly employee contributions are $3,905,
and the Company's matching contribution currently is $3,804 per month.



Employment
Agreements



There
are currently no service or employment contracts with directors or officers of
the Company, except for the employment contract dated June 8, 2004 with
Jonathan Deane, President of the Company, which provides for a remuneration of
US$375 per day, on an after tax basis, and payable monthly, plus employee
benefits including accommodation and board in Mwanza at the Company's staff
house.



D.

Employees



The
Company has two (2) full time employees located in Vancouver, British Columbia,
Canada, 30 full time employees located in Mwanza, Tanzania, and two (2) full
time employees located in Dar es Salaam, Tanzania.



The
Company also contracts three or more persons on a full time or part time basis
as dictated by the exploration activities on its properties.  The full time
and temporary employees of the Company as at the most recent fiscal year end can
be grouped according to main category of activity and geographic location as
follows:

|Location                            | Category       | Full
      Time Employees | Temporary
      Employees | Full
      Time Consultants | Part
      Time Consultants
|----------------------------------- | -------------- | ------------------------- | ------------------------- | --------------------------- | ---------------------------
|Vancouver,
      Canada             | Administration | 1                         | Nil                       | Nil                         | 1                          
|Exploration                         | 1              | Nil                       | Nil                       | Nil                        
|Mwanza,
      Tanzania              | Administration | 5                         | Nil                       | Nil                         | Nil                        
|Exploration                         | 25             | Nil                       | 2                         | 1                          
|Dar
      es Salaam,
      Tanzania | Administration | 2                         | Nil                       | 1                           | Nil                        
|Exploration                         | Nil            | Nil                       | Nil                       | Nil                        
|Connecticut,
      USA              | Administration | Nil                       | Nil                       | 2                           | 1                          
|Exploration                         | Nil            | Nil                       | Nil                       | Nil                        



E.

Share
Ownership



The
following table sets forth the share ownership of the directors and officers of
the Company as of December 31, 2004:



|Name
      of Owner     | Number
      of Shares | Percent
|----------------------- | ---------------------- | -------
|James
      E. Sinclair | 2,498,620              | 3.0%   
|Marek
      J. Kreczmer | 257,637                | 0.31%  
|Victoria
      Luis     | 230,000                | 0.28%  
|Ulrich
      E. Rath    | Nil                    | --     

55



---



|Name
      of Owner | Number
      of Shares | Percent
|------------------- | ---------------------- | -------

|Anton
      Esterhuizen | 150,000 | 0.18%
|----------------------- | ------- | -----
|William
      Harvey    | 345,000 | 0.41%
|Rosalind
      Morrow   | 404,100 | 0.48%
|Jonathan
      G. Deane | 12,184  | 0.01%





Options
Granted to Directors and Officers During the Fiscal Year Ended August 31, 2004



No
stock options were granted to directors or officers during the fiscal year ended
August 31, 2004, or subsequent thereto, to the date of this Annual Report.



Outstanding
Options



The
following information as of August 31, 2004, reflects outstanding options held
by directors and officers of the Company:

|Name                                                           | No.
      of Shares | Date
      of Grant | Exercise
      Price | Expiration
      Date
|-------------------------------------------------------------- | ------------------- | ------------------- | -------------------- | ---------------------
|James
      E. Sinclair                                        | Nil                 |                     |                      |                      
|Marek
      J. Kreczmer                                        | 250,000             | May
      3, 2002   | $0.79                | May
      3, 2007    
|Victoria
      Luis                                            | 75,000              | May
      3, 2002   | $0.79                | May
      3, 2007    
|William
      Harvey                                           | 75,000              | May
      3, 2002   | $0.79                | May
      3, 2007    
|Options
      held by officers
      and directors as a group: | 400,000            



Item
7.

Major
Shareholders and Related Party Transactions



A.

Major
Shareholders



As
far as it is known to the Company, it is not directly or indirectly owned or
controlled by any other corporation or by the Canadian Government, or any
foreign government.  The Company has no knowledge of any arrangements which
at a subsequent date would result in a change of control.  All of the
Company's issued common shares rank equally as to voting rights, dividends,
and any distribution of assets on winding-up or liquidation.



As
of December 31, 2004, the Company knows of no person who owned more than five
(5%) of the outstanding shares of each class of the Company's voting
securities.



The
above major shareholder has held its shares interests in the Company for over
the past three years.  The major shareholder does not have different voting
rights.



The
following table sets out the portion of common shares of the Company held by
shareholders of record in Canada, the United States of America, and all other
countries by total number of holders, total shareholdings, percentage of total
issued shares, and percentage of total holders:



|Jurisdiction
      Shareholders of Record | No.
      of Shareholders | No.
      of Common Shares | Percentage
      of Total Issued Shares | Percentage
      of Total Holders
|----------------------------------------- | ------------------------- | -------------------------- | --------------------------------------- | ---------------------------------
|United
      States                       | 2,556                     | 35,160,628                 | 42.3%                                   | 70.7%                            
|Canada                                    | 1,043                     | 39,384,071                 | 47.5%                                   | 28.8%                            
|Other
      Countries                     | 18                        | 8,441,399                  | 10.2%                                   | 0.5%                             
|TOTAL:                                    | 3,617                     | 82,986,098                 | 100%                                    | 100%                             

56



---





B.

Related
Party Transactions



Financing



Pursuant
to a Subscription Agreement dated March 5, 2003 made between the Company and
James E. Sinclair, Mr. Sinclair has elected to proceed with his earlier
commitment to purchase common shares of the Company over a two-year period
representing a value between $1,500,000 and $3,000,000.  Mr. Sinclair has
agreed to conduct these share purchases in 24 separate tranches, each tranche
having a minimum subscription price of $62,500.  At the sole option of
Mr. Sinclair, each tranche may be increased to a maximum of $125,000.



The
price paid for the shares will be equal to the weighted average trading price of
the Company's shares for the last five consecutive trading days of each month
immediately preceding the closing of each tranche.  Each tranche is subject
to approval by the Toronto Stock Exchange.



As
at the date of this Annual Report, Mr. Sinclair has completed the following
twenty-two (22) tranches:



(a)

March
19, 2003 - 58,480 common shares at a price of $1.71 per share;

(b)

April
11, 2003 - 73,368 common shares at a price of $1.363 per share;

(c)

May
15, 2003 - 101,875 common shares at a price of $1.227 per share;

(d)

June
26, 2003 - 77,930 common shares at a price of $1.604 per share;

(e)

July
30, 2003 - 88,968 common shares at a price of $1.405 per share;

(f)

August
27, 2003 - 73,443 common shares at a price of $1.702 per share;

(g)

September
26, 2003 - 65,445 common shares at a price of $1.91 per share;

(h)

October
21, 2003 - 68,757 common shares at a price of $1.818 per share;

(i)

November
21, 2003 - 76,876 common shares at a price of $1.626 per share;

(j)

December
12, 2003 - 66,525 common shares at a price of $1.879 per share;

(k)

January
13, 2004 - 77,785 common shares at a price of $1.607 per share;

(l)

February
24, 2004 - 82,508 common shares at a price of $1.515 per share;

(m)

March
26, 2004 - 83,001 common shares at a price of $1.506 per share;

(n)

April
29, 2004 - 82,946 common shares at a price of $1.507 per share;

(o)

May
20, 2004 - 98,580 common shares at a price of $1.268 per share;

(p)

July
2, 2004 - 110,035 common shares at a price of $1.136 per share;

(q)

August
16, 2004 - 107,759 common shares at a price of $1.16 per share;

(r)

September
27, 2004 - 109,361 common shares at a price of $1.143 per share;

(s)

October
18, 2004 - 108,696 common shares at a price of $1.15 per share;

(t)

November
10, 2004 - 101,461 common shares at a price of $1.232 per share;

(u)

November
22, 2004 - 95,493 common shares at a price of $1.309 per share; and

(v)

December
8, 2004 - 97,050 common shares at a price of $1.288 per share.



The
Company also completed a $1,000,000 private placement pursuant to a separate
Subscription Agreement dated January 5, 2004 between the Company and James E.
Sinclair for 622,278 common shares at a price of $1.607 per share.



Pursuant
to a Subscription Agreement dated January 13, 2005 made between the Company and
James E. Sinclair, Mr. Sinclair has subscribed for a placement of common shares
of the Company for aggregate proceeds to the Company of C$3,000,000.  Mr.
Sinclair has agreed to subscribe for eight (8) quarterly tranches of C$375,000
each, commencing February 1, 2005.  The pricing of each quarterly tranche
will be based on the weighted average trading price of the Company's common
shares for the last five consecutive trading days of each quarterly period.
 Each tranche is subject to approval by the Toronto Stock Exchange.



57



---





Other



During
the year ended August 31, 2004, $22,435 (2003 - $178,894; 2002 - $143,635) was
paid or payable by the Company to certain directors and a former director for
consulting fees, and $88,470 (2003 - $5,600; 2002 - $nil) was paid to
directors for directors' fees.



Accounts
receivable include advances to related parties of $21,000 (2003 - $nil; 2001 -
$42,599), which consisted of funds advanced to officers and directors for
exploration and corporate activities conducted in the normal course of business.
 Also included in accounts receivable is an amount of $15,291 (2003 -
$16,081; 2002 - $52,000) payable to certain directors and a former
director for consulting fees.



C.

Interest
of Experts and Counsel



Not
Applicable.



Item
8.

Financial
Statements



A.

Consolidated
Statements and Other Financial Information



This
Annual Report contains the audited consolidated financial statements of the
Company for the fiscal years ended August 31, 2004, 2003 and 2002 with Audit
Reports and Comments by Auditors for U.S. Readers on Canada-U.S. Reporting
Differences, comprised of:



(a)

Consolidated
Balance Sheets as of August 31, 2004 and 2003;



(b)

Consolidated
Statements of Operations and Deficit for the years ended August 31, 2004, 2003
and 2002;



(c)

Consolidated
Statements of Cash Flows for the years ended August 31, 2004, 2003 and 2002; and



(d)

Notes
to the consolidated financial statements.



Dividend
Policy



The
Company has never paid dividends and does not intend to in the near future.



Litigation



There
is no outstanding litigation against or otherwise involving the Company.



B.

Significant
Changes

None.

Item
9.

The
Offering and Listing

A.

Offering
and Listing Details

The
common stock of the Company was listed on the Toronto Stock Exchangeunder the symbol "TNX" on October 29, 2001, and prior to that date
the Company's common stock was listed on the Canadian Venture Exchange ("CDNX"),
now known as the TSX Venture Exchange.



As
of December 31, 2004, there were 2,556 record holders in the United States
holding 42.3% of the Company's outstanding common stock, representing
approximately 70.7% of the total number of shareholders.  The Company's
Common stock is issued in registered form and the percentage of shares reported
to be held by



58



---



record
holders in the United States is taken from the records of the ComputershareTrust
Company of Canada in the City of Vancouver, the registrar and transfer agent for
the common stock.



The
number of record holders resident in the United States is attributed as to 3.04%
to directors and officers of the Company who are United States residents; a
further 9.38% held by United States residents who are immediate family
members of a director and officer of the Company; a further 0.73% by United
States residents who were formerly shareholders of Tanzam; and the balance of
29.05% are United States residents who have purchased shares in the secondary
market, through the facilities of the Toronto Stock Exchange.



The
high and low prices expressed in Canadian dollars on the Toronto Stock Exchange
for the Company's common stock for the last six months and for each quarter
for the last three fiscal years:





Toronto
        Stock Exchange(Canadian
        Dollars)Last
        Six Months
      
      High
      
      
      
      
      Low
      
      VolumeDecember,
        2004
      $
      1.27
      
      
      $
      
      1.02
      
      4,382,691November,
        2004
      $
      1.43
      
      
      $
      
      1.15
      
      4,781,540October,
        2004
      $
      1.57
      
      
      $
      
      1.24
      
      3,767,249September,
        2004
      $
      1.28
      
      
      $
      
      1.06
      
      1,529,431August,
        2004
      $
      1.25
      
      
      $
      
      0.99
      
      1,499,648July,
        2004
      $
      1.42
      
      
      $
      
      1.10
      
      1,680,6262004-2003
      High
      
      
      Low
      
      VolumeFourth
        Quarter ended August 31, 2004
      
      1.35
      
      
      
      
      1.06
      
      4,590,068Third
        Quarter ended May 31, 2004
      $
      1.45
      
      
      $
      
      1.18
      
      7,170,606Second
        Quarter ended February 29, 2004
      $
      1.83
      
      
      $
      
      1.46
      
      10,584,543First
        Quarter ended November 30, 2003
      $
      1.97
      
      
      $
      
      1.56
      
      15,207,2192003-2002
      High
      
      
      Low
      
      VolumeFourth
        Quarter ended August 31, 2003
      $
      1.86
      
      
      $
      
      1.44
      
      14,552,920Third
        Quarter ended May 31, 2003
      $
      1.66
      
      
      $
      
      1.15
      
      16,604,990Second
        Quarter ended February 28, 2003
      $
      1.44
      
      
      $
      
      1.05
      
      18,998,816First
        Quarter ended November 30, 2002
      $
      0.89
      
      
      $
      
      0.69
      
      6,531,4432002-2001
      High
      
      
      Low
      
      VolumeFourth
        Quarter ended August 31, 2002
      $
      0.86
      
      
      $
      
      0.63
      
      8,873,199Third
        Quarter ended May 31, 2002
      $
      0.81
      
      
      $
      
      0.54
      
      13,061,443Second
        Quarter ended February 28, 2002
      $
      0.45
      
      
      $
      
      0.24
      
      3,941,433First
        Quarter ended November 30, 2001
      $
      0.38
      
      
      $
      
      0.23
      
      1,166,353Last
        Five Fiscal Years
      High
      
      
      Low2004
        Annual
      $
      1.65
      
      
      $
      
      1.312003
        Annual
      $
      1.46
      
      
      $
      
      1.082002
        Annual
      $
      0.63
      
      
      $
      
      0.412001
        Annual
      $
      0.48
      
      
      $
      
      0.352000
        Annual
      $
      0.37
      
      $
      0.33
        (CDNX)








B.

Plan
of Distribution



Not
Applicable.



59



---





C.

Markets



The
Company's common stock is listed on the Toronto Stock Exchange under the
trading symbol "TNX".  The Company may apply to list its common shares
on the American Stock Exchange.  If such an application is made, there can
be no assurance made that any such application will be successful.



D.

Selling
Shareholders



Not
Applicable.



E.

Dilution



Not
Applicable.



F.

Expenses
of the Issue



Not
Applicable.



Item
10.

Additional
Information



A.

Share
Capital



As
of April 3, 2003, the Board resolved that the Company authorize for issuance up
to a maximum 91,000,000 common shares, subject to further resolutions of the
Company's Board of Directors, from time to time.  Of the 91,000,000 common
shares authorized, without par value, 82,464,037 shares were issued and
outstanding as of August 31, 2004.



Each
of the common shares has equal dividend, liquidation and voting rights.
 Voters of the common shares are entitled to one vote per share on all
matters that may be brought before them.  Holders of the common shares are
entitled to receive dividends when declared by the Board from funds legally
available therefor.  The common shares are not redeemable, have no
conversion rights and carry no pre-emptive or other rights to subscribe for
additional shares.  The outstanding common shares are fully paid and
non-assessable.



The
following table reconciles the total number of shares outstanding for the last
three fiscal years:



|                                                  | No.
      of Shares | Amount              | Price
      and Terms
      (if any)
|------------------------------------------------- | ------------------- | ------------------- | ------------------------------------
|Total
      Outstanding Shares at August 31, 2001 | 50,760,978          | $26,747,161         |                                     
|Add:
      Stock
      Options Exercised for cash | 1,756,000           | $
          795,995 | $0.45/share
      (deemed value)    
|Issued
      on Exercise of Warrants              | 2,197,225           | $
       1,380,550  | $0.63/share
      (deemed value)    
|Issued
      on acquisition of Tanzam             | 20,000,000          | $
       7,000,000  | $0.35/share
      (deemed value)    
|Subscriptions
      receivable                    | --                  | $
       (102,000)  |                                     
|Total
      Outstanding Shares at August 31, 2002 | 74,714,203          | $35,821,706         |                                     
|Add:
      Stock
      Options Exercised for cash | 2,454,000           | $
       1,255,700  | $0.51/share
      (deemed value)    
|Issued
      on Exercise of Warrants              | 2,549,275           | $
       1,544,565  | $0.61/share
      (deemed value)    

60



---





| | No.
      of Shares | Amount | Price
      and Terms
      (if any)
| | ------------------- | ------ | ------------------------------------

|Issued
      for cash                                      | 474,064    | $
          700,000 | $1.48/share
      (deemed value)
|---------------------------------------------------------- | ---------- | ------------------- | --------------------------------
|Collection
      of previous years subscription receivable | 0          | $
          102,000 |                                 
|Total
      Outstanding at August 31, 2003                 | 80,191,542 | $39,423,971         |                                 
|Add:
      Stock
      Options Exercised for cash          | 730,000    | $
          346,500 | $0.47/share
      (deemed value)
|Issued
      for cash                                      | 1,477,050  | $
       2,250,000  | $1.52/share
      (deemed value)
|Issued
      for share subscription previously received    | 65,445     | $
          125,000 |                                 
|Total
      Outstanding at August 31, 2004                 | 82,464,037 | $42,145,471         |                                 



Due
to the issuance of 20,000,000 common shares for the acquisition of Tanzam in
April, 2002, more than 10% of the total outstanding shares have been issued for
non-cash consideration within the last five years.



Shares
are issued by the Company with the regulatory acceptance of the Toronto Stock
Exchange, upon resolution of the Board of Directors of the Company.  There
are a total of 82,986,098 common shares issued and a further 515,000 common
shares reserved for issuance under outstanding stock options.



B.

Articles
of Association and Bylaws



The
Company was originally incorporated under the corporate name "424547
Alberta Ltd." in the Province of Alberta on July 5, 1990, under the Business
Corporations Act (Alberta).



The
Articles of 424547 Alberta Ltd. were amended on August 13, 1991 as
follows:

- the
    name of the Company was changed to its present name, "Tan Range
    Exploration Corporation";
- the
    restriction on the transfer of shares was removed; and
- a
    new paragraph regarding the appointment of additional directors was added as
    follows:



"(b)

The
Directors, may, between annual general meetings, appoint one or more additional
directors of the Company to serve until the next annual general meeting, but the
number of additional Directors shall not at any time exceed one-third (1/3) of
the number of Directors who held office at the expiration of the last annual
meeting of the corporation."



The
Company was registered in the Province of British Columbia as an extra
provincial company under the Company Act (British Columbia) on August 5,
1994.



The
Articles of the Company were further amended on February 15, 1996 as follows:



- the
    provisions of the Articles authorizing the issue of Class "B" Voting
    shares, Class "C" Non-Voting shares and Class "D" Preferred shares
    were deleted;
- Class
    "A" voting shares were redesignated as Common shares; and
- a
    provision was added to allow meetings of shareholders to be held outside
    Alberta in either of the cities of Vancouver, British Columbia or Toronto,
    Ontario.





61



---





Common
Shares



All
issued and outstanding common shares are fully paid and non-assessable.
 Each holder of record of common shares is entitled to one vote for each
common share so held on all matters requiring a vote of shareholders, including
the election of directors.  The holders of common shares will be entitled
to dividends on a pro-rata basis, if and when as declared by the board of
directors.  There are no preferences, conversion rights, preemptive rights,
subscription rights, or restrictions or transfers attached to the common shares.
 In the event of liquidation, dissolution, or winding up of the Company,
the holders of common shares are entitled to participate in the assets of the
Company available for distribution after satisfaction of the claims of
creditors.



The
rights of shareholders cannot be changed without a special resolution of at
least 2/3 of the votes cast by the shareholders who voted in respect of the
resolution, and separate classes of shareholders are entitled to separate class
votes.  Any such alteration of shareholder's rights would also require
the regulatory acceptance of the Toronto Stock Exchange.  There are no
provisions of the Company's Articles or Bylaws that would have the effect of
delaying, deferring, or preventing a change of control of the Company, and that
would operate only with respect to a merger, acquisition, or corporate
restructuring involving the Company (or any of its subsidiaries).



However,
the Company has implemented a Shareholder Rights Plan dated April 19, 2000 (the "Rights Plan") whereunder in the event of a take-over bid (i.e. an offer to
purchase 20% or more of the Company's issued shares, when aggregated with the
offeror's shareholdings), which fails to meet certain conditions, the Rights
Plan entitles all shareholders to rights to purchase additional shares of the
Company.  Take-over bids which meet the required conditions ("Permitted
Bids") do not trigger the issuance of rights to purchase additional shares.



Permitted
Bids are offers which meet all of the following conditions:



1.

The
offer is made to all shareholders and include shares issuable upon exercise of
share purchase warrants, stock options and other convertible securities;



2.

The
offer must contain an irrevocable and unqualified provision that no shares will
be taken up or paid for prior to the close of business on a date less than 60
days following the date of the Bid, and only if at such date more than 50% of
the shares held by independent shareholders have been deposited or tendered and
not withdrawn;



3.

The
offer must contain an irrevocable and unqualified provision that any share
deposited may be withdrawn at any time until being taken up and paid for; and



4.

The
offer must contain an irrevocable and unqualified provision that if the deposit
conditions set out in subparagraph 2 above are met, then the offeror will make a
public announcement of that fact, and the bid will remain open for deposits or
tenders of additional shares for not less than 10 business days from the date of
the public announcement.



The
Rights Plan is designed to ensure that all shareholders are treated fairly and
equitably in the event of a take-over bid.  The Rights Plan will expire on
April 19, 2005, unless renewed by the Company.



Powers
and Duties of Directors



The
directors shall manage or supervise the management of the affairs and business
of the Company and shall have authority to exercise all such powers of the
Company as are not, by the Business Corporations Act (Alberta) or by the
Articles or Bylaws, required to be exercised by the Company in a general
meeting.



Directors
will serve as such until the next annual meeting.  In general, a director
who is, in any way, directly or indirectly interested in an existing or proposed
contract or transaction with the Company whereby a duty or interest might be
created to conflict with his duty or interest director, shall declare the nature
and extent



62



---



of
his interest in such contract or transaction or the conflict or potential
conflict with his duty and interest as a director.  Such director shall not
vote in respect of any such contract or transaction with the Company in which he
is interested and if he shall do so, his vote shall note be counted, but he
shall be counted in the quorum present at the meeting at which such vote is
taken.  However, notwithstanding the foregoing, directors shall have the
right to vote on determining the remuneration of the directors.



The
directors may from time to time on behalf of the Company:  (a) borrow money
in such manner and amount from such sources and upon such terms and conditions
as they think fit; (b) issue bonds, debentures and other debt obligations; or
(c) mortgage, charge or give other security on the whole or any part of the
property and assets of the Company.



At
least half of the directors of the Company should be persons ordinarily resident
in Canada and all must be at least 18 years of age.  At least half of the
Company's directors are not Canadian residents; however, this has no material
adverse effect on the Company's operations.  There is no minimum share
ownership to be a Director.  No person shall be a Director of the Company
who is not capable of managing their own affairs; is an undischarged bankrupt or
who is a person who is not an individual.



Shareholders



An
annual general meeting shall be held once in every calendar year at such time
and place as may be determined by the directors.  A quorum at an annual
general meeting and special meeting shall be two shareholders or one or more
proxy holder representing two shareholders, or one shareholder and a proxy
holder representing another shareholder.  There is no limitation imposed by
the laws of Canada or by the charter or other constituent documents of the
Company on the right of a non-resident to hold or vote the common shares, other
than as provided in the Investment Canada Act, (the "Investment Act")
discussed below under "Item 10. Additional Information, D. Exchange Controls."



In
accordance with Alberta law, directors shall be elected by an "ordinary
resolution" which means (a) a resolution passed by the shareholders of the
Company in general meeting by a simple majority of the votes cast in person or
by proxy, or (b) a resolution that has been signed by all shareholders entitled
to vote on the resolution.



Under
Alberta law certain items such as an amendment to the Company's articles or
entering into a merger, requires approval by a special resolution, which means
(a) a resolution passed by a majority of not less than 2/4 of the votes cast by
the shareholders of the Company who, being entitled to do so, vote in person or
by proxy at a general meeting of the company (b) a resolution consented to in
writing by every shareholder of the Company who would have been entitled to vote
in person or by proxy at a general meeting of the Company, and a resolution so
consented to is deemed to be a special resolution passed at a general meeting of
the Company.



C.

Material
Contracts



The
following are the material contracts of the Company (other than contracts in the
ordinary course of business) entered into within the last two years:





63



---





|Date                    | Names
      of Parties                                                | Description
      of General Nature of the Contract                                                                                                        | Consideration
      Paid; Terms and Conditions                                                                                                                                                                                                                   
|----------------------- | --------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|January
      13, 2005  | James
      E. Sinclair and the Company                               | Subscription
      Agreement for purchase of common shares over a two year period, in 8
      separate quarterly tranches commencing February 1, 2005      | The
      pricing of each quarterly tranche will be based on the weighted average
      trading price of the Company's common shares for the last five
      consecutive trading days of each quarterly period.                                                  
|September
      7, 2004 | Northern
      Mining Explorations Ltd. ("NME") and the Company       | Letter
      of Intent granting to NME the right to acquire all of the Company's
      interests in 3 prospecting licenses                                 | US$10,000,
      plus up to US$560,000 in installments over the next five years; US$75,000
      in exploration work within the next 2 years; up to 12,000 metres in
      diamond drilling over the next 5 years; and a sliding scale NSR royalty up
      to 2%
|January
      5, 2004   | James
      E. Sinclair and the Company                               | Subscription
      Agreement for purchase of 622,278 common shares                                                                                         | $1.607
      per share for a total of $1,000,000                                                                                                                                                                                                                 
|July
      21, 2003     | Ashanti
      Goldfields (Cayman) Limited ("Ashanti") and the Company | Letter
      of Intent granting to Ashanti the right to acquire all of the Company's
      interests in 9 licenses                                         | Over
      US$1.4 million over five years; US$800,000 in exploration work; up to
      10,000 meters in diamond drilling; and a feasibility study to earn its
      interests; and payment of a NSR royalty up to 2%                                             
|March
      18, 2003    | Northern
      Mining Explorations Ltd. ("NME") and the Company       | Amending
      Letter Agreement to January 20, 2003 agreement                                                                                              | Not
      applicable                                                                                                                                                                                                                                             
|March
      5, 2003     | James
      E. Sinclair and the Company                               | Subscription
      Agreement for purchase of common shares over a two year period, in 24
      separate monthly tranches                                   | Market
      price at the time of purchase; to date a total of $1,700,002 for 1,078,267
      shares, or an average price of $1.58 per share                                                                                                                     
|January
      20, 2003  | Northern
      Mining Explorations Ltd. ("NME") and the Company       | Letter
      of Intent granting to NME the right to acquire all of the Company's
      interests in 7 prospecting licenses and one application for license | US$70,000;
      assuming underlying property payments; feasibility study; pre-production
      payments; and NSR royalty of up to 2%                                                                                                                            



D.

Exchange
Controls



Canada



There
is no law, governmental decree or regulation in Canada that restricts the export
or import of capital or affects the remittance of dividends, interest or other
payments to a non-resident holder of common shares other than withholding tax
requirements.  Any such remittances to United States residents are subject
to withholding tax.  See "Taxation."



There
is no limitation imposed by the laws of Canada or by the charter or other
constituent documents of the Company on the right of a non-resident to hold or
vote the common shares, other than as provided in the Investment Act.  The
following discussion summarizes the principal features of the Investment Act for
a non-resident who proposes to acquire the common shares.



The
Investment Canada Act generally prohibits implementation of a reviewable
investment by an individual, government or agency thereof, corporation,
partnership, trust or joint venture (each an "entity") that is not a "Canadian"
as defined in the Investment Canada Act (a "non-Canadian"), unless after
review, the Director of Investments appointed by the minister responsible for
the Investment Canada Act is satisfied that the investment is likely to be of
net benefit to Canada.  An investment in the common shares by a
non-Canadian





64



---



other than a "WTO Investor" (as that term is defined by the Investment Canada Act, and
which term includes entities which are nationals of or are controlled by
nationals of member states of the World Trade Organization) when the Company was
not controlled by a WTO Investor, would be reviewable under the Investment
Canada Act if it was an investment to acquire control of the Company and the
value of the assets of the Company, as determined in accordance with the
regulations promulgated under the Investment Canada Act, was $5,000,000 or more,
or if an order for review was made by the federal cabinet on the grounds that
the investment related to Canada's cultural heritage or national identity,
regardless of the value of the assets of the Company.  An investment in the
common shares by a WTO Investor, or by a non-Canadian when the Company was
controlled by a WTO Investor, would be reviewable under the Investment Canada
Act if it was an investment to acquire control of the Company and the value of
the assets of the Company, as determined in accordance with the regulations
promulgated under the Investment Canada Act was not less than a specified
amount, which for 2004 was any amount in excess of $237 million.  A
non-Canadian would acquire control of the Company for the purposes of the
Investment Canada Act if the non-Canadian acquired a majority of the common
shares.  The acquisition of one third or more, but less than a majority of
the common shares would be presumed to be an acquisition of control of the
Company unless it could be established that, on the acquisition, the Company was
not controlled in fact by the acquirer through the ownership of the common
shares.



Certain
transactions relating to the common shares would be exempt from the Investment
Canada Act, including:  (a) an acquisition of the common shares by a person
in the ordinary course of that person's business as a trader or dealer in
securities; (b) an acquisition of control of the Company in connection with the
realization of security granted for a loan or other financial assistance and not
for a purpose related to the provisions of the Investment Canada Act; and (c) an
acquisition of control of the Company by reason of an amalgamation, merger,
consolidation or corporate reorganization following which the ultimate direct or
indirect control in fact of the Company, through the ownership of the common
shares, remained unchanged.



Foreign
Investments and Exchange in Tanzania



Tanzania
adopted in 1997 an Investment Act under which the Tanzania Investment Centre
(TIC), as agency for investment promotion and facilitation, was established.
 Foreign investment is welcome and in order to enjoy certain tax benefits
under the Investment Act, the minimum equity contribution whether in kind or in
cash must be not less than US$300,000.



In
1992, the stringent foreign exchange legislation was repealed and the
restriction on foreign commercial banks abolished. Any person whether resident
or not may establish foreign currency accounts with any of the commercial banks
and transfer foreign currency outside Tanzania without restriction.  The
Bank of Tanzania regulates commercial banks and approves the establishment
of offshore foreign currency accounts by residents.  There are no controls
on foreign exchange rates or interest rate on loans and overdrafts.



E.

Taxation



Canadian
Federal Income Tax Consequences



The
following summarizes the principal Canadian federal income tax consequences
applicable to the holding and disposition of common shares in the capital of the
Company by a United States resident, a corporation or partnership created or
organized in or under the laws of the United States or of any political
subdivision thereof, an entity created or organized in or under the laws of the
United States or of any political subdivision thereof, which has elected to be
treated as a corporation for U.S. federal income tax purposes, an estate whose
income is taxable in the U.S. irrespective of source, or a trust subject to
primary supervision of a court within the U.S. and control of a U.S. fiduciary,
and who holds common shares solely as capital property and who owns (directly
and indirectly) no more than 5% of the value of the total outstanding stock of
the Company (a "U.S. Holder").  This summary is based on the current
provisions of the Income Tax Act (Canada) (the "Tax Act"), the regulations
thereunder, all amendments thereto publicly proposed by the government of
Canada, the published administrative practices of Canada Revenue Agency, and on
the current provisions of the





65



---



Canada-United
States Income Tax Convention, 1980, as amended (the "Treaty").  Except
as otherwise expressly provided, this summary does not take into account any
provincial, territorial or foreign (including without limitation, any U.S.) tax
law or treaty.  It has been assumed that all currently proposed amendments
will be enacted substantially as proposed and that there is no other relevant
change in any governing law or practice, although no assurance can be given in
these respects.



Each
U.S. Holder is advised to obtain tax and legal advice applicable to such U.S.
Holder's particular circumstances.



Every
U.S. Holder is liable to pay a Canadian withholding tax on every dividend that
is or is deemed to be paid or credited to the U.S. Holder on the U.S. Holder's
common shares.  The statutory rate of withholding tax is 25% of the gross
amount of the dividend paid.  The Treaty reduces the statutory rate with
respect to dividends paid to a U.S. Holder for the purposes of the Treaty.
 Where applicable, the general rate of withholding tax under the Treaty is
15% of the gross amount of the dividend, but if the U.S. Holder is a company
that owns at least 10% of the voting stock of the Company and beneficially owns
the dividend, the rate of withholding tax is 5% for dividends paid or credited
after 1996 to such corporate U.S. Holder.  The Company is required to
withhold the applicable tax from the dividend payable to the U.S. Holder, and to
remit the tax to the Receiver General of Canada for the account of the U. S.
Holder.



Pursuant
to the Tax Act, a U.S. Holder will not be subject to Canadian capital gains tax
on any capital gain realized on an actual or deemed disposition of a common
share, including a deemed disposition on death, provided that the U.S. Holder
did not hold the common share as capital property used in carrying on a business
in Canada, and that neither the U. S. Holder nor persons with whom the U.S.
Holder did not deal a arms length (alone or together) owned or had the right or
an option to acquire 25% or more of the issued shares of any class of the
Company at any time in the five years immediately preceding the disposition.



United
States Federal Income Tax Consequences



The
following is, in the opinion of the Company after consultation with its
professional advisors, a discussion of material United States federal income tax
consequences, under current law, generally applicable to a U.S. Holder (as
defined above) of common shares of the Company. This discussion does not address
all potentially relevant federal income tax matters and it does not address
consequences peculiar to persons subject to special provisions of federal income
tax law. In addition, this discussion does not cover any state, local or foreign
tax consequences. (See "Taxation - Canadian Federal Income Tax
Consequences" above). Accordingly, holders and prospective holders of common
shares of the Company are urged to consult their own tax advisors about the
specific federal, state, local, and foreign tax consequences to them of
purchasing, owning and disposing of common shares of the Company, based upon
their individual circumstances.



The
following discussion is based upon the sections of the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations, published Internal
Revenue Service ("IRS") rulings, published administrative positions of the
IRS and court decisions that are currently applicable, any or all of which could
be materially and adversely changed, possibly on a retroactive basis, at any
time and which are subject to differing interpretations. This discussion does
not consider the potential effects, both adverse and beneficial, of any proposed
legislation which, if enacted, could be applied, possibly on a retroactive
basis, at any time.



Passive
Foreign Investment Company.



The
Company believes that it could be a passive foreign investment company ("PFIC")
for United States federal income tax purposes with respect to a U.S. Holder (as
defined above).  The Company will be a PFIC with respect to a U.S. Holder
if, for any taxable year in which such U.S. Holder held the Company's shares,
either (i) at least 75% of the gross income of the Company for the taxable year
is passive income, or (ii) at least 50% of the Company's assets are
attributable to assets that produce or are held for the production of passive
income.  In each case, the Company must take into account a pro rata share
of the income and the assets of any company in which



66



---





the Company
owns, directly or indirectly, 25% or more of the stock by value (the "look-through"
rules).  Passive income generally includes dividends, interest, royalties,
rents (other than rents and royalties derived from the active conduct of a trade
or business and not derived from a related person), annuities, and gains from
assets that produce passive income.  As a publicly traded corporation, the
Company would apply the 50% asset test based on the value of the Company's
assets.



Because
the Company may be a PFIC, unless a U.S. Holder who owns shares in the Company
(i) elects (a section 1295 election) to have the Company treated as a "qualified
electing fund" (a "QEF") (described below), or (ii) marks the stock to
market (described below), the following rules apply:



1.

Distributions
made by the Company during a taxable year to a U.S. Holder who owns shares in
the Company that are an "excess distribution" (defined generally as the
excess of the amount received with respect to the shares in any taxable year
over 125% of the average received in the shorter of either the three previous
years or such U.S. Holder's holding period before the taxable year) must be
allocated ratably to each day of such shareholder's holding period.  The
amount allocated to the current taxable year and to years when the corporation
was not a PFIC must be included as ordinary income in the shareholder's gross
income for the year of distribution.  The remainder is not included in
gross income but the shareholder must pay a deferred tax on that portion.
 The deferred tax amount, in general, is the amount of tax that would have
been owed if the allocated amount had been included in income in the earlier
year, plus interest.  The interest charge is at the rate applicable to
deficiencies in income taxes.



2.

The
entire amount of any gain realized upon the sale or other disposition of the
shares will be treated as an excess distribution made in the year of sale or
other disposition and as a consequence will be treated as ordinary income and,
to the extent allocated to years prior to the year of sale or disposition, will
be subject to the interest charge described above.



A
shareholder that makes a section 1295 election will be currently taxable on his
or her pro rata share of the Company's ordinary earnings and net capital gain
(at ordinary income and capital gains rates, respectively) for each taxable year
of the Company, regardless of whether or not distributions were received. The
shareholder's basis in his or her shares will be increased to reflect taxed
but undistributed income.  Distributions of income that had previously been
taxed will result in a corresponding reduction of basis in the shares and will
not be taxed again as a distribution to the shareholder.



A
shareholder may make a section 1295 election with respect to a PFIC for any
taxable year of the shareholder (shareholder's election year).  A section
1295 election is effective for the shareholder's election year and all
subsequent taxable years of the shareholder.  Procedures exist for both
retroactive elections and filing of protective statements.  Once a section
1295 election is made it remains in effect, although not applicable, during
those years that the Company is not a PFIC.  Therefore, if the Company
re-qualifies as a PFIC, the section 1295 election previously made is still valid
and the shareholder is required to satisfy the requirements of that election.
Once a shareholder makes a section 1295 election, the shareholder may revoke the
election only with the consent of the Commissioner.



If
the shareholder makes the section 1295 election for the first tax year of the
Company as a PFIC that is included in the shareholder's holding period, the
PFIC qualifies as a pedigreed QEF with respect to the shareholder.  If a
QEF is an unpedigreed QEF with respect to the shareholder, the shareholder is
subject to both the non-QEF and QEF regimes.  Certain elections are
available which enable shareholders to convert an unpedigreed QEF into a
pedigreed QEF thereby avoiding such dual application.



A
shareholder making the section 1295 election must make the election 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. A shareholder must make
a section 1295 election by completing Form 8621; attaching said Form to its
federal income tax return; and reflecting in the Form the information provided
in the PFIC Annual Information Statement or if the shareholder calculated the
financial information, a statement to that effect.  The PFIC Annual



67



---



Information
Statement must include the shareholder's pro rata shares of the ordinary
earnings and net capital gain of the PFIC for the PFIC's taxable year or
information that will enable the shareholder to calculate its pro rata shares.
 In addition, the PFIC Annual Information Statement must contain
information about distributions to shareholders and a statement that the PFIC
will permit the shareholder to inspect and copy its permanent books of account,
records, and other documents of the PFIC necessary to determine that the
ordinary earnings and net capital gain of the PFIC have been calculated
according to federal income tax accounting principles.  A shareholder may
also obtain the books, records and other documents of the foreign corporation
necessary for the shareholder to determine the correct earnings and profits and
net capital gain of the PFIC according to federal income tax principles and
calculate the shareholder's pro rata shares of the PFIC's ordinary earnings
and net capital gain.  In that case, the PFIC must include a statement in
its PFIC Annual Information Statement that it has permitted the shareholder to
examine the PFIC's books of account, records, and other documents necessary
for the shareholder to calculate the amounts of ordinary earnings and net
capital gain.  A shareholder that makes a Section 1295 election with
respect to a PFIC held directly or indirectly, for each taxable year to which
the Section 1295 election applies, must comply with the foregoing submissions.



Because
the Company's stock is "marketable" under section 1296(e), a U.S. Investor
may elect to mark the stock to market each year.  In general, a PFIC
shareholder who elects under section 1296 to mark the marketable stock of a PFIC
includes in income each year an amount equal to the excess, if any, of the fair
market value of the PFIC stock as of the close of the taxable year over the
shareholder's adjusted basis in such stock.  A shareholder is also
generally allowed a deduction for the excess, if any, of the adjusted basis of
the PFIC stock over the fair market value as of the close of the taxable year.
 Deductions under this rule, however, are allowable only to the extent of
any net mark to market gains with respect to the stock included by the
shareholder for prior taxable years.  While the interest charge regime
under the PFIC rules generally does not apply to distributions from and
dispositions of stock of a PFIC where the U.S. Investor has marked to market,
coordination rules for limited application will apply in the case of a U.S.
Investor that marks to market PFIC stock later than the beginning of the
shareholder's holding period for the PFIC stock.



Special
rules apply with respect to the calculation of the amount of the foreign tax
credit with respect to excess distributions by a PFIC or inclusions under a QEF.



Distribution
on Common Shares of the Company



In
general, 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 United States 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 rate 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 federal income tax liability or, alternatively, may be
deducted in computing the U.S. Holder's federal taxable income. (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 property. Preferential tax rates for long-term capital gains are
applicable to a U.S. Holder which is an individual, estate or trust. There are
currently no preferential tax rates for long-term capital gains for a U.S.
Holder which is a corporation.



In
the case of foreign currency received as a dividend that is not converted by the
recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a
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, provided that there are no
expenses associated with the transaction that meet the requirements for
deductibility as a trade or business





68



---



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 generally will not 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
and which owns shares representing at least 10% of the voting power and value of
the Company may, under certain circumstances, be entitled to a 70% (or 80% if
the U.S. Holder owns shares representing at least 20% of the voting power and
value of the Company) deduction equal to the United States source portion of
dividends received from the Company (unless the Company qualifies as a "foreign
personal holding company" as defined below, or a "passive foreign investment
company" (a PFIC) as defined above). The Company does not anticipate that it
will earn any United States income, however, and therefore does not anticipate
that any U.S. Holder will be eligible for the dividends received deduction.



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 receive a deduction or a tax credit
for such foreign tax paid or withheld. Generally, it will be more advantageous
to claim a credit because a credit reduces United States federal income taxes on
a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's
income subject to tax. This election is made on a year-by-year basis and
generally 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 share 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 worldwide 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.
In addition, this limitation is calculated separately with respect to specific
classes of income such as "passive income", " "high withholding tax
interest," "financial services income," "shipping income," and certain
other classifications of income. Dividends distributed by the Company will
generally constitute "passive income" or, in the case of certain U.S.
Holders, "financial services income" for these purposes. The availability of
the foreign tax credit and the application of the limitations on the credit are
fact specific, and U.S. Holders of common shares of the Company should consult
their own tax advisors regarding their individual circumstances.  U.S.
Holders should be aware that recently enacted legislation eliminates the "financial
services income" category for taxable years beginning after December 31, 2006.
 Under the recently enacted legislation, the foreign tax credit limitation
categories are limited to "passive income" and "general income".



Disposition
of Common Shares of the Company



In
general, U.S. Holders will recognize gain or loss upon the sale of common shares
of the Company equal to the difference, if any, between (i) the amount of
cash plus the fair market value of any property received, and (ii) the
shareholder's tax basis in the common shares of the Company. Preferential tax
rates apply to long-term capital gains of U.S. Holders which are individuals,
estates or trusts. In general, gain or loss on the sale of common shares of the
Company will be long-term capital gain or loss if the common shares are a
capital asset in the hands of the U.S. Holder and are held for more than one
year. Deductions for net capital losses are subject to significant limitations.
For U.S. Holders which are not corporations, 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 that are corporations (other
than corporations subject to Subchapter S of the Code), an unused net capital
loss may be carried back three years and carried forward five years from the
loss year to be offset against capital gains until such net capital loss is
thereby exhausted.





69



---





Controlled
Foreign Corporations.



Sections
951 through 964 and Section 1248 of the Code relate to controlled foreign
corporations ("CFCs").  A foreign corporation that qualifies as a CFC
will not be treated as a PFIC with respect to a shareholder during the portion
of the shareholder's holding period after December 31, 1997, during which the
shareholder is a 10% United States shareholder and the corporation is a CFC.
 The PFIC provisions continue to apply in the case of PFIC that is also a
CFC with respect to shareholders that are less than 10% United States
shareholders.



The
10% United States shareholders of a CFC are subject to current U.S. tax on their
pro rata shares of certain income of the CFC and their pro rata shares of the
CFC's earnings invested in certain U.S. property.  The effect is that the
CFC provisions may impute some portion of such a corporation's undistributed
income to certain shareholders on a current basis and convert into dividend
income some portion of gains on dispositions of stock, which would otherwise
qualify for capital gains treatment.



The
Company does not believe that it will be a CFC.  It is possible that the
Company could become a CFC in the future.  Even if the Company were
classified as a CFC in a future year, however, the CFC rules referred to above
would apply only with respect to 10% shareholders.



Personal
Holding Company/Foreign Personal Holding Company/Foreign Investment Company.



A
corporation will be classified as a personal holding company (a "PHC") if at
any time during the last half of a tax year (i) five or fewer individuals
(without regard to their citizenship or residence) directly or indirectly or by
attribution own more than 50% in value of the corporation's stock and (ii) at
least 60% of its ordinary gross income, as specially adjusted, consists of
personal holding company income (defined generally to include dividends,
interest, royalties, rents and certain other types of passive income).  A
PHC is subject to a United States federal income tax of 39.6% on its
undistributed personal holding company income (generally limited, in the case of
a foreign corporation, to United States source income).



A
corporation will be classified as a foreign personal holding company (an "FPHC")
and not a PHC if at any time during a tax year (i) five or fewer individual
United States citizens or residents directly or indirectly or by attribution own
more than 50% of the total combined voting power or value of the corporation's
stock and (ii) at least 60% of its gross income consists of foreign personal
holding company income (defined generally to include dividends, interest,
royalties, rents and certain other types of passive income).  Each United
States shareholder in a FPHC is required to include in gross income, as a
dividend, an allocable share of the FPHC's undistributed foreign personal
holding company income (generally the taxable income of the FPHC, as specially
adjusted).  The FPHC rules are repealed for tax years of foreign
corporations beginning after December 31, 2004 (and for tax years of U.S.
Holders with or within which such tax years of foreign corporations end).



A
corporation will be classified as a foreign investment company (an "FIC") if
for any taxable year it (i) is registered under the Investment Company Act of
1940, as amended, as a management company or share investment trust or is
engaged primarily in the business of investing or trading in securities or
commodities (or any interest therein) and (ii) 50% or more of the value or the
total combined voting power of all the corporation's stock is owned directly
or indirectly (including stock owned through the application of attribution
rules) by United States persons.  In general, unless an FIC elects to
distribute 90% or more of its taxable income (determined under United States tax
principles as specially adjusted) to its shareholders, gain on the sale or
exchange of FIC stock is treated as ordinary income (rather than capital gain)
to the extent of such shareholder's ratable share of the corporation's
earnings and profits for the period during which such stock was held.  The
FIC rules are repealed for tax years of corporations beginning after December
31, 2004 (and for tax years of U.S. Holders with or within which such tax years
of foreign corporations end).



The
Company believes that it is not and will not be a PHC, FPHC or FIC.
 However, no assurance can be given as to the Company's future status.



70



---





U.S.
Information Reporting and Backup Withholding.



Dividends
are generally subject to the information reporting requirements of the Code.
 Dividends may be subject to backup withholding at the rate of 28% unless
the holder provides a taxpayer identification number on a properly completed
Form W-9 or otherwise establishes an exemption.



The
amount of any backup withholding will not constitute additional tax and will be
allowed as a credit against the U.S. Holder's federal income tax liability,
provided the required information is furnished to the IRS.



Filing
of Information Returns.



Under
a number of circumstances, a U.S. Holder acquiring shares of the Company may be
required to file an information return.  In particular, any U.S. Holder who
becomes the owner, directly or indirectly, of 10% or more of the shares of the
Company will be required to file such a return.  Other filing requirements
may apply, and U.S. Holders should consult their own tax advisors concerning
these requirements.



Tanzania



Taxation



Tax
in Tanzania is levied on the income of any person which is deemed to have
accrued in or was derived in Tanzania, in the case of individuals, if he was
resident in Tanzania during the year of income for a total of 183 days, or an
average of 122 days per year over 3 tax years.  Prevailing income tax rate
is 30% in the case of both corporate entities and individuals.



Value
Added Tax ("VAT")



|Taxable
      Supplies                                    | Rate
|--------------------------------------------------------- | ----
|Supply
      of goods and services in Mainland Tanzania   | 20% 
|Import
      of goods and services in Mainland Tanzania   | 20% 
|Export
      of goods and services from Mainland Tanzania | 0%  



VAT
registrable threshold is Tshs. 20 Million (or about US$20,000 at prevailing
exchange rates).



Withholding
Tax



Withholding
tax is charged at the rates specified below:



Resident
      Non-ResidentDividend
        (unlisted companies)
      10%
      10%Interest
      15%
      15%Royalty
      0%
      20%Management
        and Professional Fees
      0%
      20%Rental
        Income
      15%
      20%Pension/Retirement
        Annuity
      0%
      15%Insurance
        Commission
      7.5%
      0%Goods
        and Services (not applicable to TIN Cert. Holders)
      2%
      2%




71



---





Special
Rates for Persons Engaged in "Mining Operations" Rates



Resident
      Non-ResidentDividend
      10%
      10%Technical
        Service Fee
      3%
      3%Management
        Fee up to 2% of Operating Costs
      0%
      3%Management
        Fee - Excess Over 2%
      0%
      20%Interest
        on Foreign Sourced Loans*
      0%
      0%Companies
        listed on the Dar es Salaam Stock Exchange enjoy a preferential
        withholding tax on 5% on dividends.


*

In
respect of mining companies having Development Agreements with Government.



Capital
Gains Tax



Capital
Gains Tax is chargeable on Premises and Financial Assets.  The prevailing
rate is 10%.



Stamp
duty



Stamp
duty is changeable on conveyance of property, shares and registration of
securities as follows:



RateConveyance
      4%Transfer
        of Shares or Debenture
      1%Insurance
        Commission
      7.5%




Customs
Duty



Imports
into Tanzania are subject to duty as follows:



RateCapital
        Goods
      5%Semi-processed
        inputs and spare parts other than for motor vehicles
      10%Fully
        processed inputs and motor vehicle spare parts
      15%Consumer
        Goods
      25%Equipment
        and supplies imported by persons engaged in mining operations
        subcontractors - up to one (1) year after production
      0%Thereafter
      5%
        (max)




Mining
Sector



There
is a special fiscal regime for mining companies which provides for 100%
depreciation allowance on all mining capital expenditures.  Losses may be
carried forward for an unlimited period of time.  There is also an
exemption on import duty for mining equipment and supplies up to one year after
start up of production as well as a 10% withholding tax on dividends and maximum
3% withholding tax on management fees up to 2% of operating costs and 20% for
any excess over 2% of the operating costs.  Mining companies may opt to
keep their books of account in the United States Dollar Currency.  The
special regime applies for subcontractors and providers of technical services to
the mining sector as well.  The government of Tanzania also imposes a
royalty on the gross value of all production equal to 5% for diamonds and 3% for
all gold produced.



72



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Double
Taxation Agreement



Tanzania
has an Agreement to prevent double taxation with Sweden, Denmark, Norway,
Zambia, Canada, India, Finland and Italy.  Treaties with Kenya, Uganda,
South Africa, South Korea and Zimbabwe have been signed but not yet ratified.



F.

Dividends
and Paying Agents



Not
Applicable.



G.

Statement
by Experts



Not
Applicable.



H.

Documents
on Display



The
Company will file annual reports and other information with the Securities and
Exchange Commission. You may read and copy any document that we file at the
Commission's Public Reference Room at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549.  Please call the Securities and Exchange Commission
at 1-800-SEC-0330 for more information about the Public Reference Rooms.
 The Securities and Exchange Commission also maintains a website,
www.sec.gov, where you may obtain our reports.  We also file certain
reports with the Canadian Securities Administrators that you may obtain through
access of the Sedar website, www.sedar.com.



Copies
of the Company's material contracts are kept in the Company's administrative
headquarters.



I.

Subsidiary
Information



Not
Applicable.



Item
11.

Quantitative
and Qualitative Disclosures About Market Risk



The
Company is exposed to market risk, primarily related to foreign exchange and
metals prices (gold in particular).  The Company uses the Canadian dollar
as its reporting currency, but the Company converts Canadian dollars to U.S.
dollars, and then U.S. dollars to Tanzanian schillings.  The Company is
therefore exposed to foreign exchange movements in Tanzania where the Company is
incurring costs in conducting exploration activities.  Most of the Company's
exploration work is conducted in U.S. dollars; however, some general and
administrative expenses are paid in Tanzanian schillings.



The
following table sets forth the percentage of the Company's administrative
expense by currency for the year ended August 31, 2004.



By
Currency



|                          | 2003
|------------------------- | ----
|Canadian
      Dollar     | 35% 
|U.S.
      Dollar         | 40% 
|Tanzanian
      Schilling | 25% 
|Total:                    | 100%



Such
administrative expense by currency may change from time to time, but it has been
roughly the same year to year.  Further, the Company incurred
exploration costs of $1,180,850 and $1,151,327 for the years ended August
31, 2004 and 2003, respectively, which are primarily paid in U.S. dollars.

73



---







The
Company has not entered into any material foreign exchange contracts to minimize
or mitigate the effects of foreign exchange fluctuations on the Company's
operations. The Company exchanges Canadian dollars to U.S. dollars to fund
its Tanzanian operations.  Based on prior years, the Company does not
believe that it is subject to material foreign exchange fluctuations.
 However, no assurance can be given that this will continue to be true in
the future.



The
Company has no long-term debt, therefore, the Company does not believe that the
interest rate market risk to be material.



The
market prices of most precious metals, including gold, have generally increased
over the past three years, but are subject to market fluctuations based
primarily on supply and demand.



The
following table sets out the cumulative average prices of gold for the past five
years, based on the London Metals Market afternoon price fix in U.S. dollars:



|2000    | 2001    | 2002    | 2003    | 2004   
|------- | ------- | ------- | ------- | -------
|$279.11 | $271.04 | $309.73 | $363.38 | $409.72



The
cumulative average price of gold to January 14, 2005 was $423.82, based on the
London afternoon price fix.



Item
12.

Description
of Securities Other than Equity Securities



Not
Applicable.



Part
II



Item
13.

Defaults,
Dividend Arrearages and Delinquencies



None.



Item
14.

Material
Modifications to the Rights of Security Holders and Use of Proceeds



None.



Item
15.

Controls
and Procedures



The
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's chief
executive officer and principal financial officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14.  Based upon that evaluation, the
Company's chief executive officer and principal financial officer concluded
that the Company's disclosure controls and procedures as of the end of the
fiscal year covered by this Annual Report are effective in timely alerting them
to material information relating to the Company required to be included in this
Annual Report.



Item
16.

[Reserved]



Item
16 A.

Audit
Committee Financial Expert



The
Company's audit committee financial expert is Dr. Norman Betts, who is an "independent
director", as defined pursuant to National Association of Securities Dealers
(NASD) Rule 4200(a)(15) (as such definition may be modified or supplemented).
 The Securities and Exchange Commission has indicated that the designation

74



---





of
an audit committee financial expert does not make that person an "expert"
for any purpose, impose any duties, obligations, or liability on that person
that are greater than those imposed on members of the audit committee and board
of directors who do not carry this designation, or affect the duties,
obligations, or liabilities of any other member of the audit committee.



Item
16 B.

Code
of Ethics



We
have adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer, controller and other
persons performing similar functions.  A copy of our code of ethics can be
found on our website at www.tanrange.com.
 The Company will report any amendment or wavier to the code of ethics on
our website within five (5) days.



Item
16 C.

Principal
Accountant Fees and Services



The
independent auditor for the fiscal year ended August 31, 2003 and 2004 was KPMG
LLP, Chartered Accountants.  The following summarizes the significant
professional services rendered by KPMG to the Company for the year ended August
31, 2004:



|Financial
      Year Ending August 31 | Audit
      Fees                                   | Audit
      Related Fees | Tax
      Fees(1) | All
      other Fees(2)
|------------------------------------- | -------------------------------------------------- | ------------------------ | ----------------- | -----------------------
|2004                                  | Canada
      - C$74,750
      Tanzania - US$12,680 | Nil                      | $6,500            | Nil                    
|2003                                  | $69,200                                            | Nil                      | $950              | $13,023                

(1)

Tax
advice and planning assistance including review of and assistance with capital
tax assessments.

(2)

Investigative
services and review of exercised share options by company personnel.



Item
16 D.

Exemptions
from the Listing Standards for Audit Committees



Not
Applicable.



Item
16 E.

Purchase
of Equity Securities by the Issuer and Affiliated Purchasers



Not
Applicable.



Part
III



Item
17.

Financial
Statements



The
consolidated financial statements are prepared in accordance with Canadian
generally accepted accounting principles and are expressed in Canadian dollars.
 The consolidated financial statements attached have been reconciled to
U.S. Generally Accepted Accounting Principles.  See Item 8 (A).

---

| | Consolidated
      Financial Statements
      (Expressed
      in Canadian dollars)
      
      TAN
       RANGE  EXPLORATION  CORPORATION
      (An
      Exploration Stage Company)
      
      Years
      ended August 31, 2004, 2003 and 2002
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







---

| |                                                                                                                                                                | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | KPMG
        LLP
        Chartered
        Accountants
        PO
        Box 10426  777 Dunsmuir Street
        Vancouver
         BC  V7Y 1K3
        Canada | 





|REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
        To
        the Directors of Tan Range Exploration Corporation
        
        We
        have audited the consolidated balance sheets of Tan Range Exploration
        Corporation as at August 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 August 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 Canadian generally accepted
        auditing standards and the standards of the Public Company Accounting
        Oversight Board (United States).  Those standards require that we
        plan and perform an audit to obtain reasonable assurance whether the
        financial statements are free of material misstatement.  An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the financial statements.  An audit also includes
        assessing the accounting principles used and significant estimates made
        by management, as well as evaluating the overall financial statement
        presentation.
        In
        our opinion, these consolidated financial statements present fairly, in
        all material respects, the financial position of the Company as at
        August 31, 2004 and 2003 and the results of its operations and its cash
        flows for each of the years in the three-year period ended August 31,
        2004 in accordance with Canadian generally accepted accounting
        principles.
        
        KPMG
        LLP (Signed)
        Chartered
        Accountants
        Vancouver,
        Canada
        November
        9, 2004, except as to notes 10(d) and (e)
        which are as of January 13, 2005
        
        COMMENTS
        BY AUDITOR FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE
        In
        the United States, reporting standards for auditors require the addition
        of an explanatory paragraph (following the opinion paragraph) when there
        is a correction of an error in application of accounting principles that
        has a material effect on the comparability of the Company's financial
        statements, such as the change reported in note 11(a) to the
        financial statements.  Our report to the board of directors dated
        November 9, 2004, except as to note 10(d) and (e) which are as of
        January 13, 2005, is expressed in accordance with Canadian reporting
        standards which do not permit a reference to such change in the auditors'
        report when the correction of the application of an accounting policy is
        properly accounted for and adequately disclosed in the comparative
        financial statements.
        
        KPMG
        LLP (Signed)
        Chartered
        Accountants
        Vancouver,
        Canada
        November
        9, 2004, except as to notes 10(d) and (e)
        which are as of January 13, 2005
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



KPMG
  LLP, a Canadian limited liability partnership is the Canadian

member
  firm of KPMG International, a Swiss cooperative.





---



TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Consolidated
          Balance Sheets
          (Expressed
          in Canadian dollars)
          
          August
          31, 2004 and 20032004
        2003AssetsCurrent
          assets:Cash
          and cash equivalents
        $
        1,067,448
        $
        1,550,072Short-term
          investments
        415,201
        926,192Accounts
          and other receivables (note 8)
        61,035
        44,288Prepaid
          expenses
        521,889
        31,3602,065,573
        2,551,912Mineral
          properties and deferred exploration costs (note 4)
        19,853,296
        18,672,446Equipment
          and leasehold improvements (note 5)
        173,504
        200,207$
        22,092,373
        $
        21,424,565Liabilities
          and Shareholders' EquityCurrent
          liabilities:Accounts
          payable and accrued liabilities
        $
        146,672
        $
        459,000Future
          income taxes (notes 3 and 6)
        647,565
        647,565Shareholders'
          equity:Share
          capital (note 7)
        42,145,471
        39,423,971Share
          subscriptions received (note 7(b))
        -
        125,000Deficit
        (20,847,335)
        (19,230,971)21,298,136
        20,318,000$
        22,092,373
        $
        21,424,565Nature
          of operations (note 1)Commitments
          (note 9)Subsequent
          events (note 10)See
          accompanying notes to consolidated financial statements.






1



---





TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Consolidated
          Statements of Operations and Deficit
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002-
        
        -
        
        --
        -
      
      2004
      
      2003
      
      2002Expenses:Amortization
      $
      54,643
      $
      63,509
      $
      92,227Annual
        general meeting
      
      21,894
      
      11,889
      
      10,611Capital
        tax
      
      (46,052)
      
      125,477
      
      -Consulting
        and management fees
      
      140,099
      
      170,468
      
      98,899Insurance
      
      65,744
      
      48,735
      
      40,011Memberships,
        courses and publications
      
      6,551
      
      14,628
      
      16,192Office
        and administration
      
      82,643
      
      110,123
      
      116,264Office
        rentals
      
      103,134
      
      142,148
      
      88,467Press
        releases
      
      23,642
      
      16,638
      
      12,448Printing
        and mailing
      
      19,266
      
      9,261
      
      4,658Professional
        fees
      
      201,167
      
      309,556
      
      90,202Promotions
        and shareholder relations
      
      8,408
      
      92,876
      
      83,790Salaries
        and benefits
      
      604,368
      
      637,327
      
      351,975Sustainable
        development
      
      -
      
      18,879
      
      -Telephone
        and fax
      
      29,592
      
      42,189
      
      33,420Training
      
      14,433
      
      -
      
      -Transfer
        agent and listing
      
      68,895
      
      85,432
      
      36,236Travel
        and accommodation
      
      40,284
      
      78,906
      
      53,8751,438,711
      
      1,978,041
      
      1,144,038Other
        earnings (expenses):Foreign
        exchange
      
      48,630
      
      (104,989)
      
      (13,509)Interest,
        net
      
      30,626
      
      75,876
      
      83,692Loss
        on sale of asset
      
      (12,692)
      
      -
      
      (6,137)Gain
        on sale of short-term investment
      
      10,774
      
      (36,102)
      
      -Property
        investigation costs
      
      (254,991)
      
      (380,086)
      
      (204,952)Write-off
        of mineral properties and deferred exploration costs (note 4)
      
    
    -
    
    (1,031,436)
    
    (59,014)(177,653)
      
      (1,476,737)
      
      (199,920)Loss
        before income taxes
      
      (1,616,364)
      
      (3,454,778)
      
      (1,343,958)Future
        income tax recovery
      
      -
      
      440,000
      
      -Loss
        for the year
      
      (1,616,364)
      
      (3,014,778)
      
      (1,343,958)Deficit,
        beginning of year
      
      (19,230,971)
      
      (16,216,193)
      
      (14,872,235)Deficit,
        end of year
      $
      (20,847,335)
      $
      (19,230,971)
      $
      (16,216,193)Basic
        and diluted loss per share
      $
      (0.02)
      $
      (0.04)
      $
      (0.02)Weighted
        average number of sharesoutstanding
        (note 2(i))
      
    
    81,056,126
    
    78,839,344
    
    56,759,051See
        accompanying notes to consolidated financial statements.






2

---







|TAN
        RANGE EXPLORATION CORPORATION
        (An
        Exploration Stage Company)
        Consolidated
        Statements of Cash Flows
        (Expressed
        in Canadian dollars)
        
        Years
        ended August 31, 2004, 2003 and 2002
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|Cash
        provided by (used in):                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                  
|Operations:                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
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|                                                                                                                                                                                                                                                                  
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|                                                                                                                                                                                                                                                                  
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|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|Investments:                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|Financing:                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|-                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                  
|Increase
        (decrease) in cash and cash equivalents                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                  
|Cash
        and cash equivalents, beginning of year                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                  
|Cash
        and cash equivalents, end of year                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                  
|Supplementary
        information:                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                  
|See
        accompanying notes to consolidated financial statements.                                                                                                                                                                                              

| |  | 
| |  | 

3



---





TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 20021.
        Nature
          of operations:The
          Company is in the process of exploring its mineral properties and has
          not yet determined whether these properties contain mineral deposits
          that are economically recoverable.  Consequently, the Company
          considers itself to be an exploration stage company.  Although at
          August 31, 2004 the Company has funding commitments (note 4)
          which exceed funds on hand, subsequent to year end the Company has
          realized additional funds from equity transactions (note 10) and, if
          necessary, could adjust the extent and timing of certain expenditures.
           The recoverability of the amounts shown for mineral properties
          and related deferred costs are ultimately dependent upon the existence
          of economically recoverable reserves, securing and maintaining title
          and beneficial interest in the properties, obtaining necessary
          financing to explore and develop the properties, entering into
          agreements with others to explore and develop the mineral properties,
          and upon future profitable production or proceeds from disposition of
          the mineral properties. The amounts shown as mineral properties and
          deferred exploration expenditures represent net costs incurred to
          date, being less amounts recovered from third parties and/or written
          off, and do not necessarily represent present or future values.2.
        Significant
          accounting policies:These
          consolidated financial statements are prepared in accordance with
          Canadian generally accepted accounting principles.  A
          reconciliation of material measurement differences to accounting
          principles generally accepted in the United States and practices
          prescribed by the Securities and Exchange Commission is provided in
          note 11.(a)
        Principles
          of consolidation:These
          consolidated financial statements include the accounts of Tan Range
          Exploration Corporation and its subsidiaries.  All intercompany
          amounts are eliminated on consolidation.(b)
        Translation
          of foreign currencies:The
          measurement currency of the Company in these consolidated financial
          statements is the Canadian dollar.  The Company's subsidiaries
          are considered integrated foreign subsidiaries and their accounts are
          translated using the temporal method.  Under this method,
          monetary assets and liabilities are translated at the prevailing
          year-end exchange rates.  Non-monetary assets are translated at
          historical exchange rates.  Revenue and expense items are
          translated at the average rate of exchange for the year except for
          those arising from non-monetary assets which are translated at the
          historical exchange rate.  Translation gains and losses are
          included in the statements of operations and deficit.(c)
        Cash
          and cash equivalents:Cash
          and cash equivalents consist of cash on deposit with banks or highly
          liquid short-term interest-bearing securities with maturities at
          purchase dates of three months or less when acquired.(d)
        Short-term
          investments:Interest-bearing
          securities having a term in excess of three months but less than one
          year are classified as short-term investments.  Short-term
          investments are stated at the lower of cost and market value.


| |  | 
| |  | 





4

---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




2.
        Significant
          accounting policies (continued):(e)
        Mineral
          properties and deferred exploration costs:The
          Company holds various positions in mineral property interests,
          including prospecting licences, reconnaissance licences, and options
          to acquire mining licences or leases.  All of these positions are
          classified as mineral properties for financial statement purposes.Acquisition
          costs and exploration costs, including option payments, relating to
          mineral properties are deferred until the properties are brought into
          production, at which time they are amortized on a unit-of-production
          basis, or until the properties are abandoned, sold or to be sold or
          management determines that the mineral property is not economically
          viable, at which time the unrecoverable deferred costs are written
          off.  Option payments arising on the acquisition of mineral
          property interests are exercisable at the discretion of the Company
          and are recognized as paid or payable.Amounts
          recovered from third parties to earn an interest in the Company's
          mineral properties are applied as a reduction of the mineral property
          and deferred exploration costs.Overhead
          costs directly related to exploration are allocated to the mineral
          properties explored during the year and are deferred and are to be
          amortized using the same method applied to property-specific
          exploration costs.  All other overhead and administration costs
          are expensed in the year they are incurred.Under
          CICA Handbook Section 3061, "Property, Plant and Equipment",
          for a mining property, the cost of the asset includes exploration
          costs if the enterprise considers that such costs have the
          characteristics of property, plant and equipment.  Emerging Issue
          Committee Abstract 126, "Accounting by Mining Enterprises for
          Exploration Costs", ("EIC-126") states that a mining enterprise
          that has not established mineral reserves objectively, and therefore
          does not have a basis for preparing a projection of the estimated cash
          flow from the property, is not precluded from considering the
          exploration costs to have the characteristics of property, plant and
          equipment.  EIC-126 also sets forth the EIC's consensus that a
          mining enterprise in the development stage is not required to consider
          the conditions in Accounting Guideline No. 11 "Enterprises in the
          Development Stage" ("AcG 11") regarding impairment in
          determining whether exploration costs may be initially capitalized.
           With respect to impairment of capitalized exploration costs,
          EIC-126 sets forth the EIC's consensus that a mining enterprise in the
          development stage that has not established mineral reserves
          objectively, and, therefore, does not have a basis for preparing a
          projection of the estimated cash flow from the property, is not
          obliged to conclude that capitalized costs have been impaired.
           However, such an enterprise should consider the conditions set
          forth in AcG 11 and CICA Handbook Section 3061 in determining whether
          a subsequent write-down of capitalized exploration costs related to
          mining properties is required.The
          Company considers that its exploration costs have the characteristics
          of property, plant and equipment, and, accordingly, defers such costs.
           Furthermore, pursuant to EIC-126, deferred exploration costs
          would not automatically be subject to regular assessment of
          recoverability, unless conditions, such as those discussed in AcG 11,
          exist.


| |  | 
| |  | 

5



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






2.
        Significant
          accounting policies (continued):(e)
        Mineral
          properties and deferred exploration costs (continued):The
          Company follows these recommendations and therefore the unproven
          mineral property claim costs are initially capitalized.  Such
          assets are tested for impairment in accordance with the provisions of
          the CICA Handbook Section 3063, "Impairment of Long-Lived Assets".
           Mineral properties and deferred exploration costs are tested for
          recoverability whenever events or changes in circumstances indicate
          that their carrying amount may not be recoverable.  An impairment
          loss is recognized if, at the date it is tested for recoverability,
          the carrying amount of the mineral property exceeds the sum of the
          undiscounted cash flows expected to result from its production and/or
          eventual disposition.  The impairment loss is measured as the
          amount by which the carrying amount of the mineral property exceeds
          its fair value.(f)
        Equipment
          and leasehold improvements:Equipment
          and leasehold improvements, other than mineral properties and deferred
          exploration and development costs, are recorded at cost and
          amortization is provided for on a declining balance basis using the
          following rates:Assets
        RateMachinery
          and equipment
        20%
          to 30%Automotive
        30%Computer
          equipment
        30%Leasehold
          improvements
        20%(g)
        Stock-based
          compensation:Effective
          September 1, 2002, the Company adopted the new standard of the
          Canadian
          Institute
          of Chartered Accountants with respect to
          the accounting for stock-based
          compensation
          and other stock-based payments.
           The new standards have been applied
          prospectively.
           All stock-based compensation will be determined based on the
          fair value
          method
          and expensed over the vesting
          period.As
          the Company did not grant any stock options or had no other
          stock-based payments
          during
          the years ended August 31, 2004 and
          2003, the new accounting standard has had
          no
          effect on these consolidated
          financial statements.  Consideration paid on the exercise
          of
          stock options is credited to share
          capital.(h)
        Income
          taxes:The
          Company follows the asset and liability method of accounting for
          income taxes.  Under the asset and liability method, future
          income tax assets and liabilities are determined based on differences
          between the financial statement carrying values of existing assets and
          liabilities and their respective income tax bases (temporary
          differences) and loss carry forwards, and are measured using the
          enacted or substantively enacted tax rates expected to be in effect
          when the temporary differences are likely to reverse.  Future tax
          benefits, such as non-capital loss carry forwards, are recognized if
          realization of such benefits is considered more likely than not.




6



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






2.
        Significant
          accounting policies (continued):i)
        Loss
          per share:Loss
          per share has been calculated using the weighted average number of
          common shares
          issued
          and outstanding.  Shares held in escrow subject to performance
          conditions for release are
          considered
          contingently issuable shares and are excluded from the weighted
          average number of
          shares
          used in calculating loss per share.  Outstanding stock options,
          special warrants and
          share
          purchase warrants, all of which could potentially dilute basic loss
          per share, have not been
          included
          in the computation of diluted loss per share because to do so would be
          anti-dilutive.(j)
        Financial
          instruments:The
          Company's financial assets and liabilities consist of cash and cash
          equivalents, short-term investments, accounts and other receivables
          and accounts payable and accrued liabilities.  The fair value of
          the Company's financial assets and liabilities is estimated to
          approximate their carrying value.(k)
        Use
          of estimates:The
          preparation of financial statements requires management to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingencies at the date of the
          financial statements and the reported amounts of revenues and expenses
          during the year.  Areas requiring the use of estimates and
          measurement uncertainties include the valuation and impairment of
          value of mineral properties and deferred exploration costs and the
          determination of future income taxes.  Actual results may differ
          from management's estimates.(l)
        Segmented
          information:The
          Company's principal operations are located in Tanzania.  The
          Company conducts its business in a single operating segment being the
          investment in and exploration of mineral properties.
           Substantially all mineral properties (note 4) and equipment and
          leasehold improvements are situated in Tanzania (note 5).3.
        Acquisition
          of the business of Tanzania American International Development
          Corporation Limited ("Tanzam 2000"):On
          April 30, 2002, the Company completed the acquisition of 100% of the
          issued and outstanding shares of Tanzam 2000 in exchange for
          20,000,000 shares of the Company valued at $0.35 per share, which
          value reflected the market price of the Company's common shares around
          February 15, 2002, the date the Company agreed to acquire Tanzam 2000
          by way of a letter agreement and announced the acquisition.  Tanzam
          2000 is engaged in gold exploration in the Republic of Tanzania.
           The results of operations and cash flows of Tanzam 2000 have
          been included in these financial statements from April 30, 2002.


| |  | 
| |  | 

7



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002


3.
        Acquisition
          of the business of Tanzania American International Development
          Corporation Limited ("Tanzam 2000") (continued):The
          purchase price has been allocated to the identifiable assets acquired
          and liabilities assumed based upon their fair values at the date of
          acquisition.Assets
          acquired:Current
          assets
        
        
        $
        13,454Equipment
        
        
        
        29,323Mineral
          properties
        
        
        
        8,166,2928,209,069Liabilities
          assumed:Accounts
          payable
        
        
        
        (12,821)Future
          income tax liability
        
        
        
        (1,087,565)(1,100,386)Net
          assets acquired
        
        
        $
        7,108,683Consideration
          paid:Shares
          issued
        
        
        $
        7,000,000Acquisition
          costs
        
        
        
        108,683$
        7,108,6834.
        Mineral
          properties and deferred exploration costs:The
          Company acquires gold or other precious metal concessions through its
          own efforts or through the efforts of its subsidiaries.  All of
          the Company's concessions are located in Tanzania.For
          each concession granted in Tanzania under a prospecting or a
          reconnaissance licence, the Company is required to carry out a minimum
          amount of exploration work before a mining licence can be granted for
          further development.  Commencing with the new mining act issued
          in Tanzania in 1998, a prospecting licence is issued for a period of
          up to three years and renewable two times for a period up to two years
          each.  At each renewal at least 50% of the remaining area is
          relinquished.  A reconnaissance licence is issued for one year
          and renewed for a period not exceeding a year.  All prospecting
          licences are granted subject to an annual rental fee of not more than
          U.S. $30 per square kilometer payable to the government of Tanzania, a
          minimum exploration work commitment, and employment and training of
          Tanzanians.  In addition, the government of Tanzania imposes a
          royalty on the gross value of all production at the rate of 3% of all
          gold produced.


| |  | 
| |  | 



8

---





|4. | Mineral
        properties and deferred exploration costs (continued):     
|-- | ---------------------------------------------------------------------------
|   | The
        continuity of expenditures on mineral properties is as follows:
|   |                                                                            
|   |                                                                            
|   |                                                                            
|   | Balance,
        August 31, 2001                                           
|   | Camp,
        field supplies and travel                                    
|   | Exploration
        and field overhead                                     
|   | Geological
        consulting and field wages                              
|   | Geophysical
        and geochemical                                        
|   | Property
        acquisition costs (note 3)                                
|   | Property
        option costs                                              
|   | Parts
        and equipment                                                
|   | Trenching
        and drilling                                             
|   |                                                                            
|   |                                                                            
|   | Write-offs                                                                 
|   |                                                                            
|   | Balance,
        August 31, 2002                                           
|   | Camp,
        field supplies and travel                                    
|   | Exploration
        and field overhead                                     
|   | Geological
        consulting and field wages                              
|   | Geophysical
        and geochemical                                        
|   | Property
        option costs                                              
|   | Parts
        and equipment                                                
|   | Trenching
        and drilling                                             
|   | Option
        payments received                                           
|   | Reclassifications                                                          
|   |                                                                            
|   |                                                                            
|   | Write-offs                                                                 
|   |                                                                            
|   | Balance,
        August 31, 2003                                           
|   | Camp,
        field supplies and travel                                    
|   | Exploration
        and field overhead                                     
|   | Geological
        consulting and field wages                              
|   | Geophysical
        and geochemical                                        
|   | Property
        option costs                                              
|   | Parts
        and equipment                                                
|   | Trenching
        and drilling                                             
|   | Option
        payments received                                           
|   | Reclassifications                                                          
|   |                                                                            
|   |                                                                            
|   | Balance,
        August 31, 2004                                           





9



---

TAN
          RANGE EXPLORATION CORPORATION
          Notes
          to Consolidated Financial Statements
          
          Years
          ended August 31, 2004, 2003 and 2002






4.
        Mineral
          properties and deferred exploration costs (continued):The
          Company has assessed the carrying value of mineral properties and
          deferred exploration costs as at August 31, 2004 and concluded that
          additional write-downs are not required.(a)
        Itetemia
          Project:The
          Itetemia property consists of nine contiguous prospecting licences
          (2003 - six prospecting licences).  Collectively, the Company
          refers to these concessions as the Itetemia Project.One
          prospecting licence is subject to a 3% net smelter royalty.The
          Company acquired a 90% interest in another of the prospecting licences
          through an agreement with the State Mining Corporation ("Stamico")
          dated July 18, 1994.  Stamico retains a 2% royalty interest as
          well as a right to earn back an additional 20% interest in the
          prospecting licence by meeting 20% of the costs required to place the
          property into production.  The Company retains the right to
          purchase one-half of Stamico's 2% royalty interest in exchange for
          US$1,000,000.On
          December 6, 1999, Barrick Gold Corporation (Barrick) closed an
          agreement with the Company granting Barrick the exclusive option to
          earn an undivided 60% interest in the Itetemia Project.  To
          exercise its option and maintain its rights beyond April 30, 2005,
          Barrick must make a positive production decision with respect to the
          Itetemia Project which contemplates a rate of production of not less
          than 100,000 ounces per annum by April 30, 2005.  In
          addition, Barrick must finance the entire project, with the Company to
          repay its portion of the costs from its share of the net proceeds of
          production.  Once a production decision is taken by Barrick, if
          the property is not in production on a stand-alone basis within 18
          months, or within 12 months on a custom-milling basis, Barrick must
          make penalty payments to the Company as follows:Year
          one
        
        
        US$
        500,000Year
          two
        
        
        
        750,000Year
          three
        
        
        
        1,000,000Year
          four and subsequent years
        
        
        
        1,200,000Payments
          due after year five will be adjusted for inflation based on the
          Canadian Consumer Price Index.In
          addition to the above, upon exercise of its option, Barrick will
          assume the Company's right to purchase Stamico's 10% interest in the
          prospecting licence acquired from Stamico.  Should this occur,
          Barrick has agreed to pay the Company's portion of all production
          royalties payable from the Itetemia concession to the Tanzanian
          government.


| |  | 
| |  | 



10



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




4.
        Mineral
          properties and deferred exploration costs (continued):(b)
        Luhala
          Project:The
          Luhala property consists of five contiguous prospecting licences.
           Collectively, the Company refers to these concessions as the
          Luhala Project.During
          the years ended August 31, 2001 and 2000, the Company entered into
          option agreements to acquire three additional licences, named Shilalo,
          Ngobo and Sima.  For Ngobo, the Company must make payments
          totalling US$120,000 over six years (US$66,000 paid to date) and for
          Sima, payments totalling US$84,000 over six years (US$50,000 paid to
          date) in order to maintain the options.  The vendor in each case
          retains a 2% net smelter return royalty, of which the Company may buy
          back, in each case, one-half (i.e., 1%) for US$1,000,000.For
          the Shilalo licence, the vendor retains a 2% net smelter return
          royalty, of which the Company may buy back one-half (i.e., 1%) for
          US$250,000.(c)
        Kigosi:The
          Kigosi property consists of nine prospecting licences.  During
          the year ended August 31, 2003, the Company reclassified five
          licences from the Ushirombo and Ushirombo West with deferred costs of
          $371,411 (note 4(g)) to the Kigosi property.  The Company has a
          100% interest in one of the licences and, through prospecting and
          mining option agreements entered into in the 2003 fiscal year, has
          options to acquire between 51% to 90% interests in the other eight
          licences.  The Company must make payments totalling US$162,000
          over eight years (US$22,000 paid to date) and is required to fund all
          costs of exploration of the properties in order to maintain the
          options.On
          July 21, 2003, the Company entered into an agreement with Ashanti
          Goldfields (Cayman) Limited ("Ashanti"), granting Ashanti the option
          to acquire the total rights, titles and interests of the Company in
          the nine prospecting licences in the Kigosi area, save and except for
          a royalty varying between 0.5% to 2% of net smelter returns, depending
          on the market price of gold, to be paid by Ashanti to the licence
          owners.  To maintain and exercise the option, Ashanti must expend
          US$300,000 within the first year and US$800,000 within the second year
          of closing the agreement, complete various diamond drilling
          requirements and complete a bankable feasibility report within five
          years of the closing of the agreement.Ashanti
          must also make the following payments to the Company:Year
          one (US$75,00 paid to date)
        
        
        US$
        200,000Year
          two
        
        
        
        150,000Year
          three
        
        
        
        180,000Year
          four
        
        
        
        260,000Year
          five
        
        
        
        340,000Ashanti
          and the Company have verbally agreed to a delay in some of these
          payments pending the conversion of a six month access permit to a
          twelve month access permit.


| |  | 
| |  | 





11



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






4.
        Mineral
          properties and deferred exploration costs (continued):(c)
        Kigosi
          (continued):In
          addition, Ashanti must make payments to the Company of US$25,000 for
          each licence in excess of three held 24 months subsequent to the
          closing of the agreement and US$25,000 for each licence held in excess
          of two in subsequent years.Should
          Ashanti complete a bankable feasibility report and make a positive
          production decision before the fifth anniversary date of the closing
          of the agreement, then the above payments and drilling by Ashanti
          shall no longer be required.(d)
        Lunguya:The
          Lunguya property consists of six prospecting licences (2003 - six
          prospecting licences).  Through prospecting and mining option
          agreements the Company has options to acquire interests ranging from
          60% to 75% in the six licences.  To maintain the options, the
          Company is required to make certain expenditure requirements and fund
          all exploration costs of the properties.(e)
        Kanagele:The
          Kanagele property consists of six prospecting licences.  In 2002,
          the Company entered into an option agreement requiring payments
          totaling US$72,000 over eight years (US$15,000 paid to date) in
          exchange for a 90% interest in one prospecting licence and an option
          to purchase the remaining 10% upon production decision.  In 2004,
          the Company entered into an option agreement for one prospecting
          license requiring payments of US$145,000 (US$10,000 paid to date) over
          nine years and another option agreement for one prospecting licence
          requiring payments of US$90,000 over five years (none paid to date).
           The Company has options to acquire a 65% interest in the other
          three licences acquired through prospecting and option agreements.
           The Company is required to fund all exploration costs of the
          properties.(f)
        Tulawaka:The
          Tulawaka property consists of eight prospecting licences (2003 - eight
          prospecting licences).  Four of the licences are held by the
          Company and through prospecting and option agreements has options to
          acquire interests ranging from 65% to 90% in the other four licences.
           Four licences are subject to an option agreement with Northern
          Mining Explorations Ltd. ("Northern") (note 4(l)).During
          the year ended August 31, 2003, the Company entered into a
          prospecting mining option agreement to acquire a 90% interest in a
          prospecting license.  The Company must make payments of
          US$117,000 over nine years, (US$19,000 paid to date) and is required
          to fund all exploration costs of property to maintain its option.


| |  | 
| |  | 





12



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




4.
        Mineral
          properties and deferred exploration costs (continued):(g)
        Ushirombo
          and Ushirombo West:The
          Ushirombo and Ushirombo West properties consist of twelve prospecting
          licences (2003 - eight prospecting licences).  The Company holds
          100% interest in two of these licences and through prospecting and
          option agreements has options to acquire interests ranging from 65% to
          80% in the other six licences.  The Company is required to fund
          all exploration costs of the properties.  Two licences are
          subject to the option agreement with BEAL (note 4(k)) and one
          licence is subject to the option agreement with Northern (note 4(l)).(h)
        Mbogwe:The
          Mbogwe property consists of seven licences.  The Company, through
          prospecting and option agreements, has options to acquire interests
          ranging from 51% to 80% in these licences.  The Company is
          required to fund all exploration costs of the properties.  One of
          the licences is subject to the option agreement with BEAL (note 4(k)).(i)
        Biharamulu:The
          Biharamulu property consists of six prospecting licences.  The
          Company has a 100% interest in two of these licences and through
          prospecting and option agreements has options to acquire interests
          ranging from 51% to 65% in the other four licences. The Company is
          required to fund all exploration costs of the properties.  Four
          of the licences are subject to the option agreement with Northern
          (note 4(l)).(j)
        Other:The
          twenty-two other properties consist of several prospecting licences.
           The Company has options to acquire interests in these properties
          ranging from 51% to 100%.  To maintain these licences, the
          Company must make the following future payments to maintain its
          options:2005
        
        
        
        $  
            159,0002006
        
        
        
        164,0002007
        
        
        
        184,0002008
        
        
        
        204,0002009
        
        
        
        204,000Thereafter
        
        
        
        757,000$  1,672,000




| |  | 
| |  | 







13



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




4.
        Mineral
          properties and deferred exploration costs (continued):(k)
        Joint
          venture with Barrick Exploration Africa Ltd. ("BEAL"):On
          December 14, 2001, including subsequent modifications, Barrick
          Exploration Africa Ltd. ("BEAL") closed an agreement with
          Tanzam 2000 granting BEAL the option to acquire the total rights,
          titles and interests of the Company in twelve prospecting licences in
          different properties, herein called the BEAL project.  In
          exchange for this option, BEAL was required to pay US$100.  To
          maintain and exercise the option, BEAL was required to incur
          US$250,000 in exploration and development on the BEAL project within a
          year of closing the agreement (completed), and thereafter, BEAL must
          expend US$50,000 each year for each retained prospecting licence.
           In addition, BEAL must make the following annual payments to the
          Company for each retained prospecting licence:December
          2002
        
        
        US$
        10,000December
          2003
        
        
        
        20,000December
          2004
        
        
        
        30,000December
          2005 and subsequent years
        
        
        
        40,000Within
          thirty days after commercial production, BEAL must pay the Company
          US$1,000,000 and an additional US$1,000,000 on each of the next two
          years. BEAL will also pay the owner of the licence 1.5% of net smelter
          returns.During
          the years ended August 31, 2003 and 2002, BEAL filed a notice of
          relinquishment for all rights, titles, and interests in eight
          prospecting licenses included in the option agreement.As
          at August 31, 2004, of the four remaining prospecting licences in the
          BEAL project, two are located in Ushirombo, one licence is located in
          Mbogwe and one in Itetemia.(l)
        Option
          Agreement with Northern Mining Explorations Ltd. ("Northern"):On
          January 20, 2003, as amended on March 18, 2003, the Company entered
          into an agreement with Northern granting Northern the exclusive option
          to acquire the total rights, titles and interests of the Company in
          nine prospecting licences.  In exchange for this option, Northern
          was required to pay US$80,000.  In addition, to maintain and
          exercise the option, Northern must make annual payments for each
          retained prospecting licence, incur minimum exploration and
          development expenditures and certain drilling requirements, undertake
          all obligations of the Company in respect of the licences and complete
          a feasibility study by December 31, 2008.  Upon exercise of
          the option, the Company shall retain a net smelter return royalty
          fluctuating between 0.5% to 2% depending on the price of gold.As
          at August 31, 2004, of the nine prospecting licences optioned to
          Northern, four are located in Biharamulu, four are located in Tulawaka
          and one is located in Ushirombo.


| |  | 
| |  | 







14



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002


5.
        Equipment
          and leasehold improvements:-2004
        -
      
      Cost
      -
      Accumulated
        amortization
      -
      Net
        book
        ValueMachinery
        and equipment
      $
      88,386
      $
      33,854
      $
      54,532Automotive
      
      169,300
      
      111,231
      
      58,069Computer
        equipment
      
      101,471
      
      44,262
      
      57,209Leasehold
        improvements
      
      10,770
      
      7,076
      
      3,694$
      369,927
      $
      196,423
      $
      173,504-2003
      
      Cost
      
      Accumulated
        amortization
      
      Net
        book
        ValueMachinery
        and equipment
      $
      256,294
      $
      190,330
      $
      65,964Automotive
      
      275,582
      
      182,095
      
      93,487Computer
        equipment
      
      113,929
      
      78,349
      
      35,580Leasehold
        improvements
      
      26,828
      
      21,652
      
      5,176$
    672,633
    $
    472,426
    $
    200,2076.
      Income
        taxes:Income
        tax expense (recovery) differs from that calculated by applying
        statutory rates for the following reasons:2004
      
      2003
      
      2002Expected
        combined Canadian federal and provincial income tax rate
      
      35.6%
      
      37.6%
      
      39.6%Expected
        recovery of income taxes
    
    $
    575,000
    $
    1,299,000
    $
    532,000Tanzanian
        tax rate differential
      
      (38,000)
      
      (68,000)
      
      (38,000)Substantively
        enacted change in Canadian tax rates
      
      -
      
      (51,000)
      
      (38,000)Non-deductible
        foreign exploration costs
      
      (133,000)
      
      (112,000)
      
      (409,000)Write-off
        of mineral properties
      
      -
      
      (254,000)
      
      (23,000)Other
      
      53,000
      
      (7,000)
      
      (17,000)Recognition
        of previously unrecognized tax pools
      
      -
      
      1,299,000
      
      -Change
        in valuation allowance
      
      (457,000)
      
      (1,666,000)
      
      (7,000)Income
        tax recovery
      $
      -
      $
      440,000
      $
      -


| |  | 
| |  | 





15





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




6.
        Income
          taxes (continued):The
          tax effects of significant temporary differences which would comprise
          tax assets and liabilities at August 31, 2004 and 2003 are as
          follows:2004
        
        2003Future
          income tax assets:Equipment
        
        
        $
        173,000
        $
        136,000Non-capital
          losses for tax purposes
        
        
        
        3,911,000
        
        3,358,000Capital
          losses for tax purposes
        
        
        
        45,000
        
        45,000Resource related deductions carried forward
        
      
      1,130,000
      1,263,0005,259,000
        
        4,802,000Valuation
          allowance
        
        
        
        (5,259,000)
        
        (4,802,000)Net
          future income tax assets
        
        
        $
        -
        $
        -Future
          income tax liabilities:Mineral
          properties
        
        
        $
        647,565
        $
        647,565Net
          future income tax liabilities
        
        
        $
        647,565
        $
        647,565At
          August 31, 2004, the Company has approximately $7,279,000 of Canadian
          non-capital losses available for income tax purposes to reduce
          Canadian taxable income in future years that expire as follows:2005
        
        
        $
        2,266,0002006
        
        
        
        625,0002007
        
        
        
        602,0002008
        
        
        
        694,0002009
        
        
        
        733,0002010
        
        
        
        1,508,0002011
        
        
        
        851,000$
        7,279,000The
          Company has a capital loss carry forward of approximately $250,000
          which is available indefinitely to reduce future capital gains for tax
          purposes.In
          assessing the recoverability of future tax assets, management
          considers whether it is more likely than not that some portion or all
          of the future tax assets will not be realized.  The ultimate
          realization of future tax assets is dependent upon the generation of
          future taxable income during the periods in which the temporary
          differences become deductible.  As the Company's future income
          tax liabilities are situated in a different tax jurisdiction than its
          future tax assets, the Company is not able to utilize the future tax
          assets as a reduction of the future tax liabilities.


| |  | 
| |  | 





16





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






7.
        Share
          capital:(a)
        Authorized:91,000,000
          common voting shares (2003 - 91,000,000; 2002 - unlimited number of
          common voting shares)(b)
        Issued
          common shares and warrants:Number
          of shares
        
        AmountBalance,
          August 31, 2001
        
        50,760,978
        $
        26,747,161Stock
          options exercised
        
        1,756,000
        
        795,995Issued
          on exercise of warrants
        
        2,197,225
        
        1,380,550Issued
          on acquisition
        
        20,000,000
        
        7,000,000Subscription
          receivable
        
        -
        
        (102,000)Balance,
          August 31, 2002
        
        74,714,203
        
        35,821,706Issued
          for cash
        
        474,064
        
        700,000Collection
          of previous year's subscription receivable
        
        -
        
        102,000Stock
          options exercised
        
        2,454,000
        
        1,255,700Issued
          on exercise of warrants
        
        2,549,275
        
        1,544,565Balance,
          August 31, 2003
        
        80,191,542
        
        39,423,971Issued
          for cash
        
        1,477,050
        
        2,250,000Issued
          for share subscription previously received
        
        65,445
        
        125,000Stock
          options exercised
        
        730,000
        
        346,500Balance,
          August 31, 2004
        
        82,464,037
        $
        42,145,471The
          Company had no share purchase warrants outstanding at August 31, 2004.
           A continuity of share purchase warrants for the year ending
          August 31, 2003 is as follows:




Balance,
        
        -
        -
        -
        Balance,
        -
        
        -August
          31,
        
        
        
        
        August
          31,
        Exercise2002
        
        Exercised
        
        Expired
        2003
        
        price
        Expiry
          date150,000
        
        150,000
        
        -
        -
        $
        0.70
        October
          9, 20022,362,275
        
        2,237,275
        
        125,000
        -
        
        0.60
        September
          5,2002162,000
        
        162,000
        
        -
        -
        
        0.60
        May
          30, 20032,674,275
        
        2,549,275
        
        125,000
        -
        -
        -
        -












| |  | 
| |  | 





17





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






7.
        Share
          capital (continued):(b)
        Issued
          common shares and warrants (continued):On
          March 5, 2003, the Company completed a private placement subscription
          agreement with the Company's chairman and CEO for the purchase of
          between $1,500,000 to $3,000,000 worth of common shares of the Company
          in 24 separate monthly closings.  The purchase price of the
          common shares will be equal to the five day weighted average trading
          price for the last five consecutive trading days of each month
          immediately preceding the closing date.  Each closing was to be
          between $62,500 to $125,000.  As at August 31, 2004, the Company
          has issued in total 1,394,281 common shares and received $2,075,000
          pursuant to this subscription agreement.  During the year ended
          August 31, 2004, in addition to the monthly private placements,
          the chairman and CEO also subscribed for an additional 622,278 common
          shares at $1.607 per share, resulting in gross proceeds of $1,000,000
          to the Company.(c)
        Stock
          options:The
          Company has a stock option plan which is administered by the board of
          directors and options are granted at their discretion.  The
          number of shares reserved, set aside and available for issue under the
          plan should not exceed 8,109,132 or such greater number of shares as
          may be determined by the board and approved, if required, by the
          shareholders of the Company and by any relevant stock exchange or
          regulatory authority.  Options must expire no later than five
          years from the date such options are granted.  The purpose of
          granting such options is to assist the Company in compensating,
          attracting, retaining and motivating directors, officers and employees
          of the Company and to closely align the personal interests of those
          directors, officers and employees with those of the shareholders.
           Stock option activity during the three years ended
          August 31, 2004 was as follows:Number
          of shares
        
        Weighted
          average priceOutstanding,
          August 31, 2001
        
        5,985,000
        
        $  0.53Granted
        
        885,000
        
        0.80Exercised
        
        (1,756,000)
        
        0.45Cancelled
        
        (1,030,000)
        
        0.72Outstanding,
          August 31, 2002
        
        4,084,000
        
        0.56Exercised
        
        (2,454,000)
        
        0.51Cancelled
        
        (375,000)
        
        0.79Outstanding,
          August 31, 2003
        
        1,255,000
        
        0.59Exercised
        
        (730,000)
        
        0.47Outstanding,
          August 31,2004
        
        525,000
        
        0.76


| |  | 
| |  | 





18





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






7.
        Share
          capital (continued):(c)
        Stock
          options:At
          August 31, 2004, the following director and employee stock options
          were outstanding and exercisable:Number
          of
          common shares
        
        Exercise
          price
        
        Expiry
          date50,000
        
        $  0.50
        
        January
          19, 200515,000
        
        0.51
        
        August
          7, 2006400,000
        
        0.79
        
        May
          3, 200710,000
        
        0.96
        
        May
          23, 200750,000
        
        0.83
        
        June
          20, 2007525,000(d)
        Employee
          stock ownership plan:On
          May 1, 2003, the Company established a non-leveraged employee stock
          ownership plan ("ESOP") for all eligible employees, consultants, and
          directors.  The Company matches 100 percent of participants'
          contributions up to 5 percent of the participants' salaries and 50
          percent of participants' contributions between 5 percent and 30
          percent of the participants' salaries.  All contributions fully
          vest immediately.  ESOP compensation expense for the year ended
          August 31, 2004 was $47,897 and is included in salaries and benefits
          expense.(e)
        Escrow
          shares:As
          of August 31, 2004, nil (2003 - nil; 2002 - 5,000,000) of the Company's
          issued and outstanding shares were held in escrow pursuant to an
          Escrow Agreement dated April 30, 2002 relating to the acquisition of
          Tanzam 2000 (note 3).  The escrowed shares were to be released
          upon the Company receiving a minimum gross amount of $3,000,000 from
          the sale of securities pursuant to one or more public financings or
          pursuant to the exercise of a pre-existing right to acquire securities
          of the Company before April 30, 2003.  The conditions were met
          and the shares were released from escrow during the year ended
          August 31, 2003.8.
        Related
          party transactions:In
          addition, to related party transactions disclosed elsewhere in these
          consolidated financial statements, during the year ended August 31,
          2004 $22,435, (2003 - $178,894; 2002 - $143,635) was paid or payable
          by the Company to certain directors and a former director for
          consulting fees.  Directors were paid $88,470 (2003 - $5,600) for
          director fees.Accounts
          and other receivables include $21,000 (2003 - nil) receivable from an
          entity related to a director.Accounts
          payable and accrued liabilities include $15,291 (2003 - $16,081)
          payable to certain directors and a former director for consulting
          fees.


| |  | 
| |  | 







19



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






9.
        Commitments:The
          Company is committed to lease rental payments of $15,700 for the year
          ending August 31, 2005.  In addition, the Company is committed to
          property payments to maintain options in certain prospecting and
          mining option agreements (note 4).10.
        Subsequent
          events:(a)
        From
          September 1, 2004 to November 9, 2004, the Company entered into 28 new
          prospecting licenses.  Twelve of these represent renewals of past
          licenses.  Three require option payments totaling US$207,700 over
          eight years ($8,700 paid to date), and the remaining were acquired
          from the government with no option payments.(b)
        Subsequent
          to August 31, 2004, the Company entered into a new royalty agreement
          with Northern (note 4(l)) whereby Northern will be entitled to earn
          100% of the Company's interest in three prospecting licences in the
          Tulawaka area.  Northern is required to make staged cash payments
          to the Company and incur certain exploration expenditures and complete
          drilling on a staged basis.  The Company retains a net smelter
          return royalty fluctuating between 0.5% and 2.0% depending on the
          price of gold.(c)
        Subsequent
          to August 31, 2004, the Company issued 319,518 common shares, to the
          chairman and CEO of the Company for cash proceeds of $375,000.(d)
        On
          November 23, 2004, the Company was informed that Barrick intends to
          return to the Company its rights in respect of the prospecting
          licences covered by the Itetemia project (note 4(a)), and that BEAL
          intends to return its rights in respect of the two prospecting
          licences in Ushirombo (note 4(k)).  The Company plans to continue
          exploring these properties.(e)
        On
          January 13, 2005, the Company completed a private placement
          subscription agreement with the Company's Chairman and CEO for the
          purchase of an aggregate of $3,000,000 worth of common shares of the
          Company in eight separate quarterly tranches of $375,000 each.
           The price to be paid per share on each quarterly closing shall
          be equal to the five day weighted average trading price of the Company's
          common shares for the last five consecutive trading days of each
          quarterly period immediately preceding such closing.  The initial
          quarterly period is to commence February 1, 2005.


| |  | 
| |  | 





20





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles:These
          financial statements have been prepared in accordance with Canadian
          generally accepted accounting principles ("Canadian GAAP").  A
          description of United States generally accepted accounting principles
          ("US GAAP") and rules prescribed by the United States Securities and
          Exchange Commission ("SEC") that result in material measurement
          differences from Canadian GAAP follows:(a)
        Mineral
          property and deferred exploration cost:Under
          Canadian GAAP, the Company capitalizes mineral property acquisition
          and exploration costs as described in note 2(e).For
          US GAAP purposes, exploration and land use costs (including option
          payments) on mineral properties are expensed as incurred for US GAAP
          purposes, until commercially minable deposits are determined to exist
          within a particular property.  Property acquisition costs are
          capitalized as incurred and are subject to impairment analysis on
          occurrence of a triggering event, which is effectively a negative
          event that differs from the Company's original expectations made at
          the time of the acquisition.  During the year ended August 31,
          2004, the Company determined that it had previously incorrectly
          applied its accounting policy for US GAAP purposes and had included
          property acquisition costs in the amounts to be expensed under US GAAP.
           Such acquisition costs are now capitalized and will be amortized
          on a unit of production basis once production commences.  The
          correction of the error in the application of the Company's US GAAP
          accounting policy has been applied retroactively and has changed the
          amounts previously reported for US GAAP purposes as follows:
           increased the mineral property and total assets amounts by
          $8,009,146, increased the future income tax liability and total
          liabilities by $515,159 and decreased the deficit by $7,493,987, all
          as at August 31, 2003; decreased the loss for the year ended August
          31, 2003 by $416,854 or nil per share; and decreased the loss for the
          year ended August 31, 2002 by $7,077,133 or $0.12 per share.For
          Canadian GAAP purposes, cash flows relating to mineral property
          exploration and land use costs are reported as investing activities in
          the consolidated statements of cash flows.  For US GAAP purposes,
          these costs would be characterized as operating activities in the
          consolidated statements of cash flows.During
          the years ended August 31, 2003 and 2002, the Company wrote down
          mineral property and deferred exploration costs in its consolidated
          financial statements prepared in accordance with Canadian GAAP (note
          4).  The mineral property exploration costs incurred would
          previously have been expensed for US GAAP and, as such, have been
          added back to loss from operations under US GAAP for the years ended
          August 31, 2003 and 2002.(b)
        Income
          taxes:As
          described in note 2(h), the Company follows the asset and liability
          method of accounting for income taxes.  This is consistent with
          the method used for US GAAP purposes.  However, differences to
          amounts recorded for future income taxes arise on the application of
          US GAAP to the financial statements due to the differences in
          accounting for mineral property exploration and land use costs under
          the different GAAPs.


| |  | 
| |  | 





21





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles (continued):(c)
        Stock-based
          compensation:The
          Company adopted the new recommendations of the Canadian Institute of
          Chartered Accountants with respect to the accounting for stock-based
          compensation on September 1, 2002.  Financial Accounting
          Standards Board Statement No. 123, "Accounting for Stock-Based
          Compensation" ("SFAS 123") became effective for US GAAP purposes
          for fiscal years beginning after December 15, 1995.  The
          statement encourages entities to adopt a fair value methodology of
          accounting for all stock-based compensation.As
          allowed by SFAS 123, the Company continues to follow the intrinsic
          value principles of APB Opinion 25, "Accounting for Stock Issued to
          Employees", in measuring compensation expense for employee
          options.  Under the intrinsic value method, compensation cost is
          the excess, if any, of the quoted market value of the stock at the
          measurement date, which is generally the grant date, over the amount
          an employee must pay to acquire the stock. The application of APB 25
          resulted in compensation expense of $61,850 being recognized for
          stock-based compensation plans for employees prior to August 31, 2001,
          and no material expense for any of the other periods presented.SFAS
          123 requires the fair value of the stock options granted to
          non-employees to be expensed.  During the years ended August 31,
          2004, 2003 and 2002, this expense was estimated using the Black-Scholes
          option-pricing model and the following weighted average assumptions:Years
          ended August 31,2004
        
        2003
        
        2002Expected
          dividend yield
        -
        
        -
        
        NilExpected
          stock price volatility
        -
        
        -
        
        109%Risk-free
          interest rate
        -
        
        -
        
        3.6%Expected
          life of options
        -
        
        -
        
        2
          yearsThe
          cumulative effect of stock options granted to non-employees for the
          period from implementation of SFAS 123 to August 31, 2001 would have
          been a $351,555 increase in the deficit and share capital and an
          expense for each of the years ended August 31, 2004, 2003 and 2002 of
          nil, nil and $41,523, respectively.


| |  | 
| |  | 



22







---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles (continued):(c)
        Stock-based
          compensation (continued):With
          respect to escrowed shares, US GAAP generally considers escrowed
          shares to be a compensatory arrangement between the Company and the
          holder of the shares.  Accordingly, the difference between the
          market value of escrowed shares at the time the shares are eligible
          for release from escrow and the consideration paid or payable on the
          issue of the shares is recognized and charged to operations as
          compensation expense in the period the escrowed shares are eligible
          for release from escrow.5,000,000
          common shares of the Company held in escrow at August 31, 2002 became
          eligible for release during fiscal 2003 (note 7(e)).  Based on
          the market price at that time, $2,300,000 has been charged to
          operations for US GAAP purposes in 2003.  No charge was made or
          required under Canadian GAAP.(d)
        Reconciliation:The
          effect of the measurement differences between Canadian GAAP and US
          GAAP on the consolidated balance sheets and statements of operations
          and cash flows is summarized as follows:(i)
          Assets:


-
        -
        
        2004
        
        
        2003(Restated
          -note
          11(a))Assets,
          under Canadian GAAP
        $
        22,092,373
        
        $
        21,424,565Adjustment
          for mineral properties and deferred exploration(note
          11(a))
        
        (11,844,150)
        
        
        (10,663,300)Assets,
          under US GAAP
        $
        10,248,223
        
        $
        10,761,265(ii)
        Liabilities:-
        --
        -
        
        2004
        
        
        2003(Restated
          -note
          11(a))Liabilities,
          under Canadian GAAP
        $
        794,237
        
        $
        1,106,565Adjustment
          for future income taxes (note 11(b))
        
        (150,106)
        
        
        (132,406)Liabilities,
          under US GAAP
        $
        644,131
        
        $
        974,159




23





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002






11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles (continued):(d)
        Reconciliation
          (continued):


|-                                                                      |   | 2004         |  |   | 2003                | 
|---------------------------------------------------------------------- | - | ------------ |  | - | ------------------- | 
|                                                                       |   |              |  |   |                     | 
|Share
        capital, under Canadian GAAP                             | $ | 42,145,471   |  | $ | 39,423,971          | 
|Adjustment
        for stock-based compensation for employees          |   |              |  |   |                     | 
|(note
        11(c))                                                   |   | 61,850       |  |   | 61,850              | 
|Adjustment
        for stock-based compensation for non-               |   |              |  |   |                     | 
|employees
        (note 11(c))                                         |   | 393,078      |  |   | 393,078             | 
|Adjustment
        for escrow shares (note 11(c))                      |   | 2,300,000    |  |   | 2,300,000           | 
|                                                                       |   |              |  |   |                     | 
|Share
        capital, under US GAAP                                   | $ | 44,900,399   |  | $ | 42,178,899          | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|(iv)
        Deficit:                                                  |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   | 2004         |  |   | 2003                | 
|                                                                       |   |              |  |   | (Restated
        - | 
|                                                                       |   |              |  |   | note
        11(a)) | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|Deficit,
        under Canadian GAAP                                   | $ | (20,847,335) |  | $ | (19,230,971)        | 
|Adjustment
        for stock-based compensation for employees          |   |              |  |   |                     | 
|(note
        11(c))                                                   |   | (61,850)     |  |   | (61,850)            | 
|Adjustment
        for stock-based compensation for non-               |   |              |  |   |                     | 
|employees
        (note 11(c))                                         |   | (393,078)    |  |   | (393,078)           | 
|Adjustment
        for escrow shares (note 11(c))                      |   | (2,300,000)  |  |   | (2,300,000)         | 
|Adjustment
        for mineral property exploration costs (note 11(a)) |   | (11,844,150) |  |   | (10,663,300)        | 
|Adjustment
        for future income taxes (note 11(b))                |   | 150,106      |  |   | 132,406             | 
|                                                                       |   |              |  |   |                     | 
|Deficit,
        under US GAAP                                         | $ | (35,296,307) |  | $ | (32,516,793)        | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 
|                                                                       |   |              |  |   |                     | 



24





---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles (continued):(d)
        Reconciliation
          (continued):(v)
          Loss
          and loss per share:




Years ended
          August 31,2004
        
        
        2003
        
        
        2002(Restated
          -
        
        
        (Restated
          -note
          11(a))
        
        
        note
          11(a))Loss
          for the year, under Canadian GAAP
        $
        (1,616,364)
        
        $
        (3,014,778)
        
        $
        (1,343,958)Adjustment
          for mineral propertyexploration
          costs (note 11(a))
        
        (1,180,850)
        
        
        (261,619)
        
        
        (1,326,552)Adjustment
          for future income taxes(note
          11(b))
        
        17,700
        
        
        118,582
        
        
        13,824Adjustment
          for stock-based compensationfor
          non-employees (note 11(c))
        
        -
        
        
        -
        
        
        (41,523)Adjustment
          for escrow shares (note 11(c))
        
        -
        
        
        (2,300,000)
        
        
        -Loss
          for the year, under US GAAP
        $
        (2,779,514)
        
        $
        (5,457,815)
        
        $
        (2,698,209)Basic
          and diluted loss per share, underUS
          GAAP
        $
        (0.03)
        
        $
        (0.07)
        
        $
        (0.05)Weighted
          average number of sharesoutstanding
        
        81,056,126
        
        
        78,839,344
        
        
        56,759,051(vi)
          Cash flows:-
        
        Years ended August
          31,-
        
        2004
        
        
        2003
        
        
        2002Cash
          used in operating activities, underCanadian
          GAAP
        $
        (2,379,377)
        
        $
        (2,046,233)
        
        $
        (1,471,969)Adjustment
          for mineral properties anddeferred
          exploration (note 11(a))
        
        (1,180,850)
        
        
        (1,151,327)
        
        
        (1,370,148)Cash
          used in operating activities, underUS
          GAAP
        $
        (3,560,227)
        
        $
        (3,197,560)
        
        $
        (2,842,117)Cash
          used in investing activities, underCanadian
          GAAP
        $
        (699,747)
        
        $
        (2,158,232)
        
        $
        (1,140,097)Adjustment
          for mineral properties anddeferred
          exploration (note 11(a))
        
        1,180,850
        
        
        1,151,327
        
        
        1,370,148Cash
          provided by (used in) investingactivities,
          under US GAAP
        $
        481,103
        
        $
        (1,006,905)
        
        $
        230,051












| |  | 
| |  | 







25



---

TAN
          RANGE EXPLORATION CORPORATION
          (An
          Exploration Stage Company)
          Notes
          to Consolidated Financial Statements
          (Expressed
          in Canadian dollars)
          
          Years
          ended August 31, 2004, 2003 and 2002




11.
        Reconciliation
          between Canadian and United States generally accepted accounting
          principles (continued):(e)
        Recent
          pronouncements:In
          May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
          Financial Instruments with Characteristics of both Liabilities and
          Equity" ("SFAS No. 150").  SFAS 150 requires that certain
          financial instruments issued in the form of shares that are
          mandatorily redeemable as well as certain other financial instruments
          be classified as liabilities in the financial statements.  SFAS
          No. 150 is effective for financial instruments entered into or
          modified after May 31, 2003.  The adoption of SFAS 150 has not
          had a material affect on the Company's consolidated financial
          statements.In
          addition, the FASB and Emerging Issues Task Force ("EITF") have issued
          a variety of interpretations including the following interpretations
          with wide applicability:Financial
              Interpretation No. 46 ("FIN 46R"), "Consolidation of Variable
              Interest Entities", which addresses the consolidation of
              variable interest entities (formerly referred to as "Special-Purpose
              Entities").  The Interpretation is generally effect for
              interim or annual periods ending after March 15, 2004.
            November
              2002, the EITF reached a consensus on Issue 00-21, "Revenue
              Arrangements with Multiple Deliverables" ("EITF 00-21").
               This consensus addresses issues related to separating and
              allocating value to the individual elements of a single customer
              arrangement involving obligations regarding multiple products,
              services, or rights which may be fulfilled at different points in
              time or over different periods of time.  EITF 00-21 guidance
              is applicable for arrangements entered into in fiscal periods
              beginning after June 15, 2003To
          date, the adoption of FIN 46 and EITF 00-21 has not impacted the
          Company's consolidated financial statements.In
          December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
          Payment" ("SFAS No. 123R"), which replaces FASB's SFAS No.
          123, "Accounting for Stock-Based Compensation", and supercedes
          APB Opinion No. 25, "Accounting for Stock Issued to Employees".
           SFAS No. 123R requires a public entity to measure the cost
          of employee services received in exchange for an award of equity
          instruments based on the grant-date fair value of the award (with
          limited exceptions).  That cost will be recognized over the
          period during which an employee is required to provide service in
          exchange for the award - the requisite service period (usually the
          vesting period).  No compensation cost is recognized for equity
          instruments for which employees do not render the requisite service.
           Employee share purchase plans will not result in recognition of
          compensation cost if certain conditions are met; those conditions are
          much the same as the related conditions in SFAS No. 123.  SFAS
          No. 123R will be effective for the Company commencing September
          1, 2005.  The Company does not expect the adoption of SFAS
          No. 123R to have a material effect on its consolidated financial
          statements as the Company presently has a policy of not granting stock
          options.




| |  | 
| |  | 



26









---

Item
18.

Financial
Statements



Not
Applicable.



Item
19.

Exhibits



(a)

Exhibits



(4)(a)

-

Option
Agreement dated September 7, 2004 between the Company and Northern Mining
Explorations Ltd.

Subscription
Agreement dated January 13, 2005 between the Company and James E. Sinclair.

75



---







12.1

Certification
of the Principal Executive Officer under the Sarbanes-Oxley Act



12.2

Certification
of the Principal Financial Officer under the Sarbanes-Oxley Act



13.

Certificate
under section 906.

76



---





SIGNATURE



The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that it has duly caused and authorized the undersigned to sign
this Annual Report on its behalf.





Dated:

January
17, 2005





TAN
RANGE EXPLORATION CORPORATION











By:

"James
E. Sinclair"



James
E. Sinclair,

Chairman
and Chief Executive Officer













---

EXHIBIT
12.1

CERTIFICATIONS



I,
James E. Sinclair, certify that:



1.

I
have reviewed this annual report on Form 20-F of Tan Range Exploration
Corporation;



2.

Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;



3.

Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of, and for,
the periods presented in this report;



4.

The
Company's other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and have:



(a)

Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period
in which this report is being prepared;



(b)

Omitted;



(c)

Evaluated
the effectiveness of the Company's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and



(d)

Disclosed
in this report any change in the Company's internal control over financial
reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting; and



5.

The
Company's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the Company's
auditors and the audit committee of the Company's board of directors (or persons
performing the equivalent functions):



(a)

All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; and



(b)

Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting.



Date:
 January 17, 2005





"James
E. Sinclair"



James
E. Sinclair,

Chairman
and Chief Executive Officer

(Principal
Executive Officer)



---

EXHIBIT
12.2

CERTIFICATION

I,
Victoria Luis, certify that:



1.

I
have reviewed this annual report on Form 20-F of Tan Range Exploration
Corporation;



2.

Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;



3.

Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of, and for,
the periods presented in this report;



4.

The
Company's other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and have:



(a)

Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period
in which this report is being prepared;



(b)

Omitted;



(c)

Evaluated
the effectiveness of the Company's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and



(d)

Disclosed
in this report any change in the Company's internal control over financial
reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting; and



5.

The
Company's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the Company's
auditors and the audit committee of the Company's board of directors (or persons
performing the equivalent functions):



(a)

All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; and



(b)

Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting.



Date:
 January 17, 2005





"Victoria
Luis"



Victoria
Luis,

Chief
Financial Officer and Secretary

(Principal
Financial Officer)



---



Exhibit
13



CERTIFICATION

PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS
(a) AND (b) OF SECTION 1350, CHAPTER 63 OF

TITLE
18,UNITED STATES CODE)





Pursuant
to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of
section 1350, chapter 63 of Title 18, United States Code), each of the
undersigned officers of Tan Range Exploration Corporation (the "Company"),
does hereby certify with respect to the Annual Report of the Company on Form
20-F for the year ended August 31, 2004 as filed with the Securities and
Exchange Commission (the "Form 20-F") that, to the best of their knowledge:



(1)

the
Form 20-F fully complies with the requirements of section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and



(2)

the
information contained in the Form 20-F fairly presents, in all material
respects, the financial condition and results of operations of the Company.



Dated:
 January 17, 2005









"James
E. Sinclair"



James
E. Sinclair,

Chairman
and Chief Executive Officer

(Principal
Executive Officer)









"Victoria
Luis"



Victoria
Luis,

Chief
Financial Officer and Secretary

(Principal
Financial Officer)